HUD PIH Notice § 2016-02

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


Special Attention of:                                       Notice PIH-2016-02 (HA)
Regional and Field Office Directors of Public
Housing; Section 8 Financial Management Center;             Issued:    March 4, 2016
Multifamily Hub Directors; Multifamily Program
Center Directors; Public Housing Agencies
Administering Housing Choice Voucher                        Expires:  Effective until
Programs; Owners/Agents; Regional Directors;                          amended, superseded,
and State and Area Coordinators                                        or rescinded
                                                    ______________________________
                                                    Cross References:
                                                    HUD Notice PIH 2001-41(HA); 2008-12


Subject: Enhanced Voucher Requirements for Over-housed Families

1. Purpose. This Notice supersedes Notice PIH 2008-12 which sets forth the enhanced
   voucher policies that are applicable to families residing in units where the actual number
   of bedrooms exceeds the family unit size for which the family qualifies under the public
   housing agency (PHA) subsidy standards (i.e., “over-housed families”). (PIH Notice
   2001-41 provides comprehensive policy on Housing Conversion Actions and includes
   outdated policy on over-housed families. PHAs should refer to this Notice for policy on
   over-housed enhanced voucher families and strike the obsolete policy stated in PIH
   Notice 2001-41).

   The policies described within this Notice are effective prospectively from the issuance
   date and supersede previous policies on over-housed enhanced voucher families. These
   policies apply to both enhanced voucher families that are determined to be in an over-
   housed situation at any point during the voucher tenancy as well as any over-housed
   family where the enhanced voucher subsidy is currently based on the gross rent of the
   over-sized unit.

2. Background. HUD provides tenant-based rental assistance in order to assist eligible
   residents that are affected by several different types of owner or HUD actions in HUD’s
   Office of Multifamily Housing programs (collectively referred to as “Housing conversion
   actions”). Depending on the Housing conversion action and subject to the availability of
   appropriations, eligible families receive either regular voucher assistance or enhanced
   voucher assistance to mitigate the impact of the conversion action on the family’s rent.
    Enhanced vouchers are primarily provided in the case of preservation prepayments and
    Section 8 project-based contract opt-outs.1

    Enhanced voucher assistance under Section 8(t) of the United States Housing Act of 1937
    is calculated differently from regular housing choice voucher assistance if the family
    remains in the project. A higher “enhanced” payment standard is used to determine the
    amount of the monthly subsidy in cases where the gross rent of the unit exceeds the
    normally applicable PHA payment standard. In such instances, the gross rent for the unit
    is used in the monthly subsidy calculation instead of the normally applicable payment
    standard.2

3. Voucher Issuance and PHA Determination of the Family’s Over-housed Status.
   Under a Housing conversion action, the PHA issues an eligible family an enhanced
   voucher based on the PHA subsidy standards (see 24 CFR §982.402), not the actual size
   of the unit the family is currently occupying. A PHA must approve requests for a larger
   bedroom size to permit additional bedrooms if it may be necessary as a reasonable
   accommodation for a household with a family member with a disability, such as for
   example, to accommodate the need for a live-in aide or for medical equipment (see 24
   CFR part 8). If the bedroom size of the family’s unit exceeds the number of bedrooms
   for which the family qualifies under the PHA subsidy standards, the family is an over-
   housed family unless the family qualifies for a reasonable accommodation because one or
   more family member(s) need an additional bedroom.

    If an over-housed family chooses to move from the project at any time, the normal
    tenant-based voucher program rules apply to the subsidy calculation for the new unit. In
    such a case, the payment standard is the lower of the payment standard for the family unit
    size under the PHA subsidy standards or the payment standard for the actual size of the
    unit rented by the family (see 24 CFR §982.402(c)). However, if an over-housed family
    wishes to remain at the project, the regular voucher program requirements regarding the
    payment standard are not applicable and the provisions of this notice apply.

4. Availability of Appropriate Size Units in the Project. Once the PHA determines the
   family is over-housed, the PHA must inform the family and explain the requirements
   under this notice. If the family indicates it wishes to remain at the project with enhanced
   voucher assistance, the PHA must inform the owner of the project that the family is in an
   over-sized unit. The PHA must also provide the owner with the bedroom size for which
   the family actually qualifies under the PHA subsidy standards (i.e., the appropriate size
   unit). The owner must then identify all appropriate size units that are available in the

1
  Preservation prepayments are cases where the owner of a preservation eligible property (generally section 236
and section 221(d)(3) projects) is prepaying the mortgage or voluntarily terminating the mortgage insurance.
Section 8 project-based opt-outs are situations where an owner chooses to end participation in certain programs
by either opting-out of or not renewing certain expiring Section 8 project-based contracts.
2
  The housing assistance payment calculation for an enhanced voucher family remaining in the project is the
gross rent of the unit minus the greatest of (a) 30 percent of adjusted monthly income; (b) 10 percent of monthly
income; (c) the welfare rent in as-paid states; (d) the enhanced voucher minimum rent (see HUD Notice PIH
2001-41, section II.c.3 for further details); or (e) such other minimum rent established by the PHA (see 24 CFR
§5.630).




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    project. (Throughout this notice, when an appropriate size unit does not physically exist
    at the project, the term “appropriate size unit” also includes an available bedroom size
    unit that is smaller than the family’s current unit but is not smaller than the appropriate
    size unit for which the family qualifies under the PHA’s subsidy standards (see paragraph
    5 for further information)).

    The over-housed family must move to an appropriate size unit in the project if one is
    available in order to receive enhanced voucher assistance.3 The family and owner will
    enter into a lease and the PHA will execute a voucher housing assistance payments
    (HAP) contract on behalf of the family for the appropriate size unit to which the family
    moves. The enhanced voucher housing assistance payment calculation is based on the
    gross rent of the appropriate size unit.

    If an over-housed enhanced voucher family refuses to move to the appropriate size unit,
    and one exists and is available for occupancy, the PHA will calculate the family’s
    housing assistance payment for the over-sized unit based on the normally applicable
    voucher subsidy formula using the applicable payment standard established by the PHA
    for its voucher program (see 24 CFR §982.402(c) and (d)). The family will be
    responsible for any amount of the gross rent not covered by the housing assistance
    payment.

5. Appropriate Size Unit does not Physically Exist in the Project. If the family wishes to
   remain at the project with enhanced voucher assistance, and an appropriate size unit does
   not physically exist at the project, but a bedroom size unit is available that is smaller than
   the family’s current unit but not smaller than the unit size for which the family qualifies
   under the PHA subsidy standards, the family must move to the smaller bedroom size unit
   within a reasonable time, as determined by the PHA but not to exceed 30 days. The
   family and owner will enter into a new lease and the PHA will execute a new voucher
   HAP contract with the owner for the smaller bedroom size unit. The enhanced voucher
   subsidy calculation is based on the gross rent for the smaller bedroom size unit.

    If an over-housed enhanced voucher family refuses to move to the smaller bedroom size
    unit, and one exists and is available for occupancy, the PHA will calculate the family’s
    housing assistance payment for the over-sized unit based on the normally applicable
    voucher subsidy formula using the applicable payment standard established by the PHA
    for its voucher program (see 24 CFR §982.402(c) and (d)). The family will be
    responsible for any amount of the gross rent not covered by the housing assistance
    payment.

6. No Appropriate Size Units Currently Available in the Project. If an appropriate size
   unit is not currently available for the family in the project, the PHA executes a voucher
   HAP contract on behalf of the family for the over-sized unit, provided the rent is
   reasonable and the unit complies with all other voucher program requirements such as

3
 In order to be considered an available unit, the unit must not only be available for occupancy by the family but
must meet all voucher program requirements, including but not limited to rent reasonableness and housing
quality standards.




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    the housing quality standards. The enhanced voucher housing subsidy calculation is
    based on the gross rent for the over-sized unit. The subsidy calculation will continue to
    be based on the gross rent (including subsequent rent increases) for the over-sized unit4
    until an appropriate size unit in the project becomes available for occupancy by the
    family.

    The PHA must maintain a record of enhanced voucher families living in over-sized units
    and monitor the availability of appropriate size units at the project. The PHA shall
    monitor the availability by periodically contacting the owner but not less than once per
    quarter. The PHA may also consult other sources such as real estate agencies, periodicals
    that advertise rentals, or any other applicable sources. The PHA must keep record of
    contact made with owners (or other sources) concerning the availability or expected
    availability of units.

7. Owner and PHA Responsibilities when Appropriate Size Units Subsequently
   Become Available in the Project. The owner must immediately inform the PHA and the
   family when an appropriate size unit will become available in the project. The owner is
   subject to possible financial penalties or other enforcement actions if the owner fails to
   notify the PHA immediately. If the PHA learns of available units at the project for which
   the owner failed to notify the PHA, the PHA must report such information to HUD by
   sending an email to OverhousedEVs@hud.gov with the subject line Over-housed
   Enhanced Voucher Families. Within the email, the PHA must provide the following:
   PHA code; name and address of the project; the name of the project owner if known; the
   approximate date the appropriate size units became available; and whether the units are
   currently leased to market rate or voucher families. The PHA must also copy the relevant
   local HUD Office of Public Housing (PH) Director on the email.

8. PHA and Family Actions when Appropriate Size Units Subsequently Become
   Available in the Project. When the PHA is informed that an appropriate size unit is
   available, the PHA must immediately notify the over-housed family of the availability of
   the unit and the family must move to the appropriate size unit in a reasonable time (as
   determined by the PHA, but not to exceed 30 days) to continue to receive enhanced
   voucher assistance. The family and owner will enter into a new lease and the PHA will
   execute a new voucher HAP contract with the owner for the appropriate size unit. The
   enhanced voucher subsidy calculation is based on the gross rent for the appropriate size
   unit.

    The PHA must develop a policy and amend its administrative plan to include its policy
    concerning what constitutes a reasonable time (that does not exceed 30 days, absent any
    extension granted) in which the family must move to an appropriate size unit. Such
    policy must include a detailed procedure where exceptions may be granted upon request
    by the family that would allow for an extension of time when moves within the
    established timeframe would create extreme hardship (as defined within the PHA’s
    policy). The PHA’s policy must balance the family’s need for an extension to the

4
  This is assuming the unit remains under the voucher HAP contract and all program requirements (such as rent
reasonableness) continue to be met.




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   established timeframe and the economic need for the owner to re-lease the unit. If the
   family does not move to the appropriate size unit within the established timeframe or any
   extension granted, the PHA shall notify the owner that the unit may be re-leased to a
   family chosen by the owner and the over housed family’s subsidy is recalculated as
   described below.

   If an over-housed enhanced voucher family refuses to move to the appropriate size unit or
   does not move within the established timeframe as determined by the PHA, the PHA will
   recalculate the family’s housing assistance payment for the oversized unit based on the
   normally applicable voucher subsidy formula using the applicable payment standard
   established by the PHA for its voucher program (see 24 CFR §982.402(c) and (d)). The
   family will be responsible for any amount of the gross rent not covered by the housing
   assistance payment.

9. Number of Over-housed Families Exceeds the Availability of Appropriate Size Units
   in the Project. If more than one over-housed enhanced voucher family residing at the
   project qualifies for the same size unit under the PHA’s subsidy standards, and the
   number of appropriate size units that become available at any given time is less than the
   number of units necessary to accommodate the number of over-housed families, the PHA
   must develop a fair method by which to offer the units to families. The PHA may wish to
   consider such methods as date and time, (i.e,. families living in over-sized units for the
   longest period of time are offered appropriate sized units first); lottery for families with
   the same voucher anniversary date; request that families volunteer to move; age; frailty or
   any other fair nondiscriminatory method the PHA chooses to implement.

10. Decrease in Family Size or Change in Family Composition. If, as a result of a
    decrease in family size or change in family composition, an enhanced voucher family
    subsequently becomes over-housed, the family must move to an appropriate size unit in
    accordance with paragraphs 4 and 5 above. Until such time that an appropriate size unit
    becomes available for occupancy by the family in the project, the family would continue
    to receive enhanced voucher assistance in the oversized unit.

11. Effective Communication and Limited English Proficiency. Under Section 504 of the
    Rehabilitation Act and Title II of the Americans with Disabilities Act, in implementing
    these policies PHAs must take appropriate steps to ensure effective communication with
    individuals with disabilities through the use of appropriate auxiliary aids and services,
    which may include large print and Brailled notifications, depending on what is effective
    for the family member with a disability. In addition, under Title VI of the Civil Rights
    Act, PHAs must take reasonable steps to ensure meaningful access by limited English
    proficient persons (LEP).




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12. Questions. Inquiries about this Notice should be directed to staff in the Housing
    Voucher Management and Operations Division, Office of Public Housing and Voucher
    Programs, at (202) 708-0477.




                                           /s/
                              Lourdes Castro Ramírez
                              Principal Deputy Assistant Secretary
                                for Public and Indian Housing




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