HUD HCV Guidebook § 5.2

As mentioned earlier in the chapter, if a PHA lowers its payment standards, the payment standard applies
immediately to all new admissions and moves. When a PHA’s payment standard decreases while the family
continues to reside in the unit for which the family is receiving assistance, and there is no change in family
unit size (voucher size) during the HAP contract term, the PHA may adopt one of three policy options:81

76
   24 CFR 982.508
77
   24 CFR 982.309(a)(3)
78
   24 CFR 982.505(c)(4)
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   MTW PHAs may have an approved MTW activity in its Annual MTW Plan or MTW Supplement to the Annual PHA
Plan to apply the increased payment standard at a different time
80
   24 CFR 982.505(c)(5)
81
   24 CFR 982.505(c)(3)

•   Hold harmless: The PHA may choose not to reduce the payment standard amount used to calculate
          the subsidy for a family for as long as the family continues to reside in the unit for which the family is
          receiving assistance.
      •   Gradual reduction: Upon proper notification (as described below) to the family, the PHA may gradually
          reduce the payment standard amount used to calculate the family’s subsidy, phasing in the reduction.
          The initial reduction in payment standard cannot take place earlier than two years following the
          effective date of the decrease in the payment standard.
      •   Two years after effective date: Upon proper notification to the family, the PHA may choose to reduce
          the payment standard amount used to calculate such a family’s subsidy no earlier than two years
          following the effective date of the decrease in the payment standard.
A PHA’s Administrative Plan must indicate how it will handle decreases in the payment standard amount for
families under HAP contract and be applied consistently to all families.82
If a PHA chooses to reduce the payment standard for a family under HAP contract, the initial reduction in
payment standard cannot take place earlier than two years following the effective date of the decrease in
payment standard and then only if the family has received the notice required under 24 CFR
982.505(c)(3)(iii). In accordance with 24 CFR 982.516(a), PHAs must conduct a reexamination of family
income and composition at least annually. The requirement to conduct an annual reexamination is in effect
even if the PHA implements a streamlined income determination for fixed-income families, as is currently
permitted under 24 CFR 982.516(b). Even if the PHA conducts a full income recertification only every three
years, the PHA will review the family’s payment standard annually as part of the streamlined annual
reexamination.
If a new HAP contract is executed due to changes in the lease requirements that require a new HAP contract,
such as change in utility responsibility, the provisions in 24 CFR 982.505(c)(3) on applying decreases in
payment standard apply as long as the family continues to reside in the unit for which the family is receiving
assistance, and there is no change in the family’s voucher size. This means, if the PHA adopts a hold
harmless policy, they must continue to use the higher payment standard. If the PHA plans to apply decreases
in payment standards two years after the effective date of the decrease or implement a gradual reduction, any
reduction to the family’s payment standard amount cannot be applied earlier than two years after the
payment standard decrease.83
If the PHA has an established policy to reduce the payment standard, the PHA must provide the family with at
least 12 months’ written notice of any reduction in the payment standard amount that will affect the family if
the family remains in place. This notice is required for any reduction in payment standard, even if the PHA
chooses to reduce the payment standard gradually. In the written notice, the PHA must state the new
payment standard amount, explain that the family’s new payment standard amount will be the greater of the
amount listed in the current written notice or the new amount (if any) on the PHA’s payment standard
schedule at the end of the 12-month period, and make clear where the family will find the PHA’s payment
standard schedule.84
Listed below are tips for PHAs on the language to include in any written notice to families who will experience
a reduction in subsidy due to a decrease in the payment standard.

82
     24 CFR 982.505(c)(3)(iv)
83
   24 CFR 982.505(c)(3)(i)
84
   24 CFR 982.505(c)(3)(iii)

•   Provide a simple, clear letter, mailed directly to the family. This approach is preferable to a general
       meeting or training, even if all families are invited.
   •   Provide the notice at least one year in advance of the effective date of the lower payment standard
       and change in the HAP calculation for the family.
   •   In the letter, clearly define and explain the term “payment standard,” and explain how a change in the
       payment standard is likely to affect the family’s subsidy. Do not assume that the family understands
       what is meant by “payment standard” or the connection between a change in the payment standard
       and a change in their subsidy. Include a sample calculation to illustrate the likely effect of the change.
   •   Identify a point of contact for families who have questions or wish to seek new housing, given the
       change. Make clear whom families may contact if they have questions, as well as how to contact that
       person.
All materials provided to residents communicating a change in their subsidy must be presented in a manner
that is accessible for those with hearing and/or vision impairment, in addition to those with limited English
proficiency, as described below.
   •   Effective Communication Requirements - All notices and communications must be provided in a
       manner that is effective for persons with hearing, visual, and other communication-related disabilities
       consistent with Section 504 of the Rehabilitation Act, Title II of the ADA, and implementing regulations.
       Effective communication is generally provided through the use of appropriate auxiliary aids and
       services, such as interpreters, computer-assisted real time transcription (CART), captioned videos with
       audible video description, visual alarm devices, a talking thermostat, accessible electronic
       communications and websites, documents in alternative formats (e.g., Braille, large print), or
       assistance in reading or completing a form, etc.
       This requirement applies to all oral, written, audible, visual, and electronic communications, including
       letters, notices, emails, social media, internet websites, forms, leases, rules, and other written
       documents and electronic media, as well as oral communications that occur in person, over the
       telephone, over the internet, and in interviews, meetings, training classes, hearings, and public
       presentations, when communicating with an individual with a disability or when such communications
       are expected.
       Under the effective communication requirement, steps must be taken to ensure that communications
       are provided in the most integrated setting appropriate for the individual with a disability. It is also
       necessary to give primary consideration to the means of communication preferred by the individual
       with a disability. See 24 CFR 8.6, 28 CFR 35.160 for additional information.
   •   Limited English Proficiency (LEP) Requirements - Recipients of HUD funds must take reasonable steps
       to ensure meaningful access to their programs and activities to LEP individuals. See HUD’s published
       Final Guidance to Federal Financial Assistance Recipients: Title VI Prohibition Against National Origin
       Discrimination Affecting Limited English Proficient Persons (LEP Guidance), 72 Fed. Reg. 2732, and
       HUD’s FHEO website on Limited English Proficiency for more information.