HUD HCV Guidebook § 8

The PHA Administrative Plan must address:96
        •   The process for establishing and revising payment standards, including policies on administering
            increases and decreases in the payment standard during the HAP contract term.
        •   PHA policy on payment standard increases if the PHA chooses to adopt a policy to apply a payment
            standard increase at any time earlier than the date calculated according to 24 CFR 982.505(c)(4).
        •   Criteria used to determine the designated areas and payment standard amounts for those areas.
        •   A PHA that chooses to adopt SAFMRs must amend its administrative plan to state that it will
            employ SAFMRs in the operation of its HCV program. A PHA that is required to adopt SAFMRs
            need not amend its administrative plan solely for this purpose.
        •   Protection of in-place participants. The adoption of SAFMRs may have the effect of pushing current
            payment standards outside of the basic range. For example, if the FMR is high relative to the
            SAFMR, the adoption of the SAFMR may result in the current payment standard amount exceeding
            110 percent of the SAFMR. When the PHA’s payment standard decreases while the family
            continues to reside in the unit for which the family is receiving assistance, the PHA has three
            options:
                o 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.97
                o 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.98
                o 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.99
        •   Applicability to PBV program. All PHAs have discretion regarding whether to employ SAFMRs in its
            project-based voucher (PBV) program, if they operate such a program.

96
   24 CFR 982.54, 983.10(b)(23) and (b)(19)
97
   24 CFR 982.505(c)(3)
98
   24 CFR 982.505(c)(3)(i) and (ii)
99
   24 CFR 982.505(c)(3)(i)