HUD Handbook 7465.1 § 5-5

a.      POLICY

            (1)   PHAs which adopt tenant selection preferences must
                  rank those preferences according to the importance
                  the PHA wants them to have in determining who will
                  be offered an available unit.

            (2)   PHAs may rank selection preferences according to
                  an absolute hierarchy, often called a branch
                  system, or a modified hierarchy, often called a
                  point system.

            (3)   Unless required to do so by a compliance agreement
                  or court order, PHAs may not establish a ranking
                  system based on quotas, i.e., admit only so many
                  applicants who have a particular selection
                  preference (such as applicants who have an
                  emergency housing need), then consider only
                  applicants not having that selection preference.

   b.       DISCUSSION

            (1)   PHAs have a responsibility to serve a socially and
                  economically diverse portion of the eligible
                  population. If the PHA determines that a very
                  high selection preference precludes the admission
                  of applicants not having that preference, the PHA
                  may want to modify its tenant selection policy to
                  give that preference a relatively lower position
                  in its ranking system.

            (2)   In an absolute hierarchy or branch system, each
                  preference always outweighs all the preferences
                  that are lower. Therefore, the highest preference
                  would always outweigh the cumulative effect of all
                  the lower ones.

                     For example, a PHA might rank its preferences
             as follows:

                        1)   Resident
                        2)   Income range project needs
                        3)   Involuntarily displaced or living in
                             substandard housing
                        4)   Veteran

                  In this example:

                  (a)   A resident would be selected over a
                        nonresident even if the nonresident had

                        income in the needed range, was involuntarily
                        displaced, and was a veteran--and the
                        resident did not qualify for any of these
                        preferences.

(b)   A resident with the income range needed would
                        be selected over a resident with a different
                        income range even if the latter was
                        involuntarily displaced and a veteran and the
                        former was not.

            3)    In a modified hierarchy or point system, the
                  cumulative effect of lower preferences may
                  outweigh a higher preference.

                  For example, a PHA might rank its preferences as
follows:

                        1)   100 points - Resident
                        2)   70 points - Income range project needs
                        3)   50 points - Involuntarily displaced or
                             living in substandard housing
                        4)   40 points - Veteran

                        In this example:

                  (a)   A nonresident would be selected over a
                        resident if the nonresident had income within
                        the range the project needed, was
                        involuntarily displaced, and was a veteran
                        (70 + 50 + 40 = 160 points) and the resident
                        did not qualify for any of the other
                        preferences (100 points).

                  (b)   If the resident was a veteran (100 + 40 = 140
                        points) and the nonresident had an income
                        within the needed range, was involuntarily
                        displaced, but was not a veteran (70 + 50 =
                        120 points), the resident would be offered
                        the unit.

            (4)   PHAs may want to give two or more selection
                  preferences equal weight. In the previous
                  examples, the PHA gave the same weight to being
                  involuntarily displaced as to living in
                  substandard housing.