HUD PIH Notice § 2012-24

                     U.S. Department of Housing and Urban Development
                             Office of Public and Indian Housing

   ________________________________________________________________________
   Special Attention of: Section 8 Public    Notice PIH-2012-24
   Housing Agencies; HUD Office of
   Public Housing Directors; Section 8       Issued: May 22, 2012
   Financial Management Center; Multi-
   Family Program Centers
                                             Expires: Effective until amended,
                                                      superseded, or rescinded

                                                      __________________________
                                                     Cross References: 2011-1
   ________________________________________________________________________
   Subject: Rent to Owners in subsidized projects under the Housing Choice Voucher
   (HCV) program1

1. Purpose:
   The purpose of this Notice is to provide guidance to Public Housing Authorities (PHAs)
   when determining the rent to owner for an HCV tenancy when the participant family
   chooses to lease a unit under the HCV program in any of the following types of federally
   subsidized projects:

                  An insured or non-insured Section 236 project
                  A Section 202 project2
                  A Section 221(d)(3)3 below market interest rate (BMIR) project; or
                  A Section 515 project of USDA’s Rural Development Program

   This Notice supersedes PIH Notice 2011-1.

2. Background:
   In an audit conducted by the Office of the Inspector General (OIG), significant
   inaccuracies were found in the calculation of the rent to owner for HCV participants
   residing in subsidized multifamily properties.




   1
     http://www.hud.gov/offices/pih/programs/hcv/
   2
     http://www.hud.gov/offices/hsg/mfh/progdesc/eld202.cfm
   3
     http://www.hud.gov/offices/hsg/mfh/progdesc/rentcoophsg221d3n4.cfm
     Owners of units subsidized by the above federal housing subsidy programs receive lower
     mortgage interest rates or other subsidies in order to maintain the affordability of the
     units at a below market rate. As such, when an HCV participant leases a unit in one of
     the enumerated projects listed above, the rent to owner should be set at the subsidized
     rental rate, rather than the market rent for the area, provided the rent is reasonable in
     accordance with 24 CFR §982.507 as determined by the HCV administering agency.
     This guidance is intended to remind PHAs of the manner in which the rent to owner is
     determined when an HCV participant leases a unit in a subsidized property.

3. Rent to Owner in Subsidized Projects:
   As stated in 24 CFR §982.521, when a family leases a unit under the HCV program in an
   insured or non-insured Section 236 project, Section 202 project, Section 221(d)(3) BMIR
   project, or a Section 515 project of the Rural Development Program, the rent to owner
   must equal the rent set by the respective subsidy programs and be reasonable in
   comparison to rent for other unassisted units, as determined by the HCV administering
   agency, in accordance with 24 CFR §982.507.

     In order to confirm the subsidized rental rate for Sections 236, 202, 221(d)(3) BMIR or
     Section 515 projects, contact your local Multifamily Hub or Program Center.4

4. Prohibition Against Other Housing Subsidy:
   The federally subsidized projects discussed above may, in some circumstances, contain
   units that also receive the benefit of a State, local, or federal, housing subsidy (e.g.,
   Section 8 project-based housing assistance payments contract). Such units are ineligible
   units under the HCV program. In accordance with program regulations at 24 CFR
   §982.352 (c), a HCV family may not receive the benefit of tenant-based assistance under
   the HCV program for a unit in which there is any other duplicative federal, State or local
   housing subsidy.

5. Paperwork Reduction Act:
   The information collection requirements contained in this Notice have been approved by
   the Office of Management and Budget (OMB) under the Paperwork Reduction Act
   (PRA) of 1995 (44 U.S.C. 3520). In accordance with the PRA, HUD may not conduct or
   sponsor, and a person is not required to respond to, a collection of information unless the
   collection displays a currently valid OMB control number. The information contained in
   this Notice has been approved under the PRA OMB Control Number 2577-0169.

6.    Questions:
     Inquiries about this Notice should be directed to staff in the Housing Voucher
     Management and Operations Division,5 Office of Public Housing and Voucher Programs,




     4
         http://portal.hud.gov/portal/page/portal/HUD/localoffices
     5
         http://www.hud.gov/offices/pih/programs/hcv/mod.cfm
at (202) 708-0477. Persons with hearing or speech impairments may access this number
through TTY by calling the toll-free Federal Information Relay Service at (800)
877-8339.




                                          ______________/s/___________________
                                          Sandra B. Henriquez, Assistant Secretary for
                                          Public and Indian Housing