HUD HCV Guidebook § 2.4

PHAs must10 not approve HAP contracts in which a “covered individual” has any direct or indirect
interest in the HAP contract or in any benefits or payments under the contract while that person is a
covered individual or for one year thereafter. This includes the interest of an immediate family
member of a covered individual. “Immediate family member” means the spouse, parent (including
stepparent), child (including stepchild), grandparent, grandchild, sister or brother (including
stepsister or stepbrother) of any covered individual.

8 24 CFR § 982.306 (c)
9 24 CFR § 982.306(d)
10 24 CFR § 982.161 (a)

A “covered individual” is defined as a person or entity who is a member of any of the following
classes:

       Present or former member or officer of the PHA, except a participant commissioner;
       Employee of the PHA or any contractor, subcontractor, or agent of the PHA who formulates
        policy or influences program decisions;
       Public official, member of a governing body, or state or local legislator who exercises
        functions or responsibilities related to the program; or
       Member of the U.S. Congress.

The owner certifies that no person or entity has or will have a prohibited interest at execution of the
HAP contract or at any time during the term of the HAP contract. If a prohibited interest occurs, the
owner is required to fully disclose this interest to the PHA and to HUD.

When the PHA encounters such a situation, the PHA needs to consider whether a waiver request is
appropriate before approving the HAP contract. If the PHA decides to submit a request to waive the
conflict of interest regulation,11 the PHA must12 submit the waiver request demonstrating the good
cause to waive the regulation to the HUD field office, which in turn, submits the waiver to HUD
Headquarters for consideration. HUD Headquarters may waive the conflict-of-interest prohibition for
good cause.