HUD PIH Notice § 2017-21
Implementation Guidance: Housing Opportunity Through Modernization Act of 2016 (HOTMA) -- Housing Choice Voucher (HCV) and Project-Based Voucher (PBV) Provisions (HUD PIH Notices)
HUD guidance — not codified law
In Force
Verified 10/14/2026 · Next check 10/21/2026
effective 10/6/2026FederalAffordable Housing ProgramsOperative Text
HUD PIH Notice § 2017-21
U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
WASHINGTON, DC 20410-5000
OFFICE OF PUBLIC AND INDIAN HOUSING
SPECIAL ATTENTION OF: NOTICE PIH 2017–21 (HA)
Public Housing Agencies Issued: October 30, 2017
Public Housing Agencies that This notice remains in effect until amended,
Administer the Housing Choice superseded, or rescinded
Voucher Program; Owners;
Other Grantees CROSS REFERENCES
Notice PIH 2009–51
Notice PIH 2011–28
Notice PIH 2011–65 (HA)
Notice PIH 2012–21 (HA)
Notice PIH 2012–32 (HA) H 2017–03, REV-3
Notice PIH 2013–27
Notice PIH 2015–18
Notice PIH 2016–05
SUPERSEDES
Notice PIH 2002–22
Notice PIH 2006–16
Notice PIH 2011–54
Notice PIH 2015–05
Notice PIH 2015–10
Subject: Implementation Guidance: Housing Opportunity Through Modernization Act of
2016 (HOTMA) — Housing Choice Voucher (HCV) and Project-Based Voucher (PBV)
Provisions
I. Purpose
The Housing Opportunity Through Modernization Act of 2016 (HOTMA) made
changes to both the definition of PHA-owned housing (for project-based and tenant-
based vouchers) and the project-based voucher (PBV) program. This notice provides
guidance on those changes. The provisions covered by this notice were implemented
through a Federal Register (FR) notice (82 FR 5458) published on January 18, 2017.
HUD then published a follow-up notice at 82 FR 32461 on July, 14, 2017, with
technical corrections and clarifications to the January 18, 2017, notice (see Part IV
below). The January 18, 2017, notice, as revised by the technical correction notice, is
referred to as the “January 18, 2017, implementation notice” throughout this notice.
To consolidate PBV guidance, HUD has incorporated content from previous PBV
notices into this notice. See Section V, below, for a list of such notices.
II. Background
On July 29, 2016, HOTMA was signed into law (Public Law 114–201, 130 Stat. 782).
HOTMA made numerous changes to statutes that govern HUD programs, including
section 8 of the United States Housing Act of 1937 (“the Act”) (42 U.S.C. 1437f). On
January 18, 2017, HUD published a notice (82 FR 5458) to implement various HCV
provisions, including a new statutory definition of PHA-owned housing (§105 of
HOTMA) and changes to the PBV program (§106 of HOTMA). The provisions went
into effect on April 18, 2017. This PIH notice provides further guidance on the
implementation of these provisions.
The January 18, 2017, implementation notice also implemented two provisions related
to inspections for HCV tenant-based and PBV assistance (§101(a)(1) of HOTMA) (see
Notice PIH 2017–20, issued October 27, 2017) and a change to the HCV housing
assistance payment (HAP) calculation for families who own manufactured housing
and are renting the manufactured home space (§112 of HOTMA) (guidance will be
published separately).
The following HOTMA provisions relating to the PBV program were not implemented
by the January 18, 2017, implementation notice and consequently are not covered in
this notice:
1. Section 106(a)(4)(iii), authorizing a PHA to enter into a PBV HAP Contract for
any unit that does not qualify as existing housing and is under construction or
recently has been constructed regardless of whether the PHA and owner executed
an Agreement to Enter a Housing Assistance Payments Contract (AHAP);
2. Section 106(a)(6), authorizing for the use of an operating cost adjustment factor to
adjust PBV contract rents;
3. Section 106(a)(7), authorizing the use of owner-maintained, site-based waiting lists
for PBV units; and
4. Section 106(a)(8), concerning the environmental review requirements for existing
housing.
III. Structure
This notice is comprised of attachments and appendices. Each attachment follows a
uniform structure:
1. Title
2. Regulation
3. HOTMA Reference
4. Applicable Program(s)
5. Summary of Change
6. Content
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IV. Summary of Technical Corrections
The July, 14, 2017, notice published at 82 FR 32461 (“technical correction notice”)
corrected several typographic errors and made the following technical corrections and
clarifications to the January 18, 2017, implementation notice. All of the corrections
and clarifications are reflected in the respective attachments to this PIH notice and are
summarized here in the order in which they appear in this notice solely for the sake of
convenience:
1. PHA-Owned Units (Attachment A). The original notice used the phrase “50
percent or more” to define a level of control that constitutes a controlling
interest and would thus indicate PHA ownership. The technical correction
notice replaces that phrase with “more than 50 percent.”
2. Percentage Limitation (Program Cap) (Attachment C). The original notice
stated that new construction units will qualify for replacement housing if they
are located on the “site of the original public housing development.” The
technical correction notice strikes the phrase “public housing,” making clear
that the requirement applies broadly to all covered forms of housing assistance
that are excluded from the percentage limitation.
3. Income-Mixing Requirement (Project Cap) (Attachment E).
a. Supportive services. HOTMA provides that a family can no longer be
required to participate in supportive services as a condition of living in
a unit in order for that unit to meet the supportive services exception.
The technical correction clarifies therefore that a PHA may not rely
solely on a supportive services program that requires a family to engage
in supportive services, such as the Family Self-Sufficiency (FSS)
program, in order for the unit to meet the supportive services exception.
Also, the original noticed stated that if a family “fails to successfully
complete the FSS contract of participation or supportive services
objective and consequently is no longer eligible for the supportive
services, the family must vacate the unit…and the PHA shall cease
paying housing assistance payments.” HUD determined that this
provision could be wrongly construed in a way that conflicts with
current FSS requirements, which do not allow termination from the
housing assistance program for failure to complete the FSS contract.
b. 25 percent cap. The technical correction notice clarifies that the
income-mixing cap for projects that are in a census tract with a poverty
rate of 20 percent or less is increased from 25 to 40 percent.
c. Definition of new construction. The technical correction notice makes
the definition of new construction units that qualify for an exception to
the project cap the same as the definition for new construction that
applies to the exception for the PBV percentage limitation.
4. Units Not Subject to Percentage Limitation or Income-Mixing Requirement
(Attachment F). The original notice excluded from the list of excepted units
those units that received assistance under section 201 of the Housing and
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Community Development Amendments of 1978 (Flexible Subsidy program).
The technical correction notice clarifies that such units are excepted from both
the percentage limitation and the income-mixing requirement.
5. Attaching PBV to Certain PHA-Owned Projects Without Following a
Competitive Process (Attachment L). The original notice applied a per-unit
cost rehabilitation threshold to all replacement housing, including existing
housing. The technical correction notice makes clear that there is no per-unit
cost requirement for existing housing owned or controlled by a PHA.
V. Notices Superseded by this Notice
To consolidate PBV guidance, the Department has incorporated content from previous
PBV notices into this notice. Specifically, this notice supersedes PIH Notices 2002–
22, 2006–16, 2011–54, 2015–05, and 2015–10 in their entirety, as described below:
1. Notice PIH 2002–22 (Units with Low-Income Housing Tax Credit Allocations
Combined with Housing Choice Voucher Assistance under the Tenant-Based
and Project-Based Programs). This notice is rescinded. The provisions of PIH
2002–22 (which were promulgated before HUD had implemented a PBV
regulation) align with current PBV regulations, and are thus no longer
necessary in a notice. PBV rents for Low Income Housing Tax Credit (LIHTC)
units under existing and prospective PBV HAP contracts are determined in
accordance with PBV regulations at 24 CFR §983.301.
2. Notice PIH 2006–16 (Project-Based Voucher Units with Low-Income Housing
Tax Credit Allocations). This notice is rescinded. The “grandfathering” of PBV
projects under PIH 2006–16 is no longer necessary, because PBV rents are no
longer capped at the LIHTC rent as they once were. PBV rents for LIHTC
units under existing and prospective PBV HAP contracts are determined in
accordance with PBV regulations at 24 CFR §983.301.
3. Notice PIH 2011–54 (Guidance on the Project-Based Voucher Program):
a. “PHA-owned units” is revised by HOTMA, in which a statutory
definition of such units was enacted. (Attachment A)
b. “Proposal Selection Process” is revised by HOTMA to authorize a PHA
to attach PBV assistance to certain PHA-owned projects without
following a competitive process. (Attachment L)
c. Most remaining portions of Notice PIH 2011–54 are unchanged by
HOTMA and are included as an appendix to this notice. Note that
additional PBV provisions not covered in PIH 2011–54 are also
included as part of Appendix II. (Appendix II)
4. Notice PIH 2015–05 (Project-Based Voucher (PBV) Guidance):
a. “Section I – Timely Reporting of the Family Report (form HUD-50058
and form HUD 50058 MTW) into the Inventory Management
System/Public Indian Housing Information Center (IMS/PIC) and
Timely Submission Into the Voucher Management System (VMS) for
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Project Based Vouchers” is adopted with updates to VMS reporting per
VMS User’s Manual release 8.9.0.0 (April 2016). (Appendix III)
b. “Section II – Maximum Amount of PBV Assistance (20 Percent Limit)
in the PBV Program and PHA Submission requirements under 24 CFR
983.6(d)” is superseded by HOTMA, under which a PHA may project-
base up to 20 percent of its Consolidated Annual Contributions
Contract authorized units, instead of 20 percent of its voucher budget
authority. This notice revises the requirements for PHA notification to
HUD of the intent to project-base. (Attachments C and D)
c. “Section III – PHA-Owned Units under the PBV Program” is
superseded by HOTMA, which revises the definition of PHA-owned
units. This notice also covers the role of the independent entity with
respect to PHA-owned units. (Attachments A and B)
5. Notice PIH 2015–10 (Project-Basing HUD-Veterans Affairs Supportive
Housing (VASH) Vouchers. HOTMA authorizes PHAs to project-base Family
Unification Program (FUP) and HUD-Veterans Affairs Supportive Housing
(VASH) vouchers without requiring additional HUD approval. Prior to
HOTMA, PHAs were prohibited from project-basing vouchers awarded for
FUP. HUD-VASH vouchers could be project-based, but required HUD review
and approval in accordance with Notice PIH 2015–10 (this applied to HUD-
VASH vouchers the PHA chose to project-base and not to HUD-VASH units
awarded under a HUD-VASH PBV allocation as described in Attachment F of
this notice). This notice supersedes PIH 2015–10 in its entirety.
VI. Applicability to Moving to Work (MTW) Agencies
This notice applies generally to MTW agencies. With respect to any individual MTW
agency that is required to submit an Annual MTW Plan to HUD for approval, any
specific regulatory provisions addressed in this notice that have been waived as part of
the agency’s approved Annual MTW Plan do not apply to that agency.
VII. Paperwork Reduction Act
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3501–3520), an
agency 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 collection requirements of this notice were assigned OMB
Control Number 2577–0169.
____________________________
Dominique Blom
General Deputy Assistant Secretary
for Public and Indian Housing
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Table of Contents
Table of Contents ........................................................................................................................ 6
Attachments ................................................................................................................................ 8
Attachment A: PHA-Owned Units ............................................................................................. 9
PHA-Owned Project: Example ......................................................................................... 10
Attachment B: PHA-Owned Units and Independent Entities ................................................... 12
Table 1: Overview of Independent Entity Functions ........................................................ 13
Attachment C: Percentage Limitation (Program Cap) and
PHA Submission Requirements .......................................................................................... 18
Attachment D: PBV Percentage Limitation — 10 Percent Increase for Eligible Units ........... 20
Attachment E: Income-Mixing Requirement (Project Cap) ..................................................... 25
Project Cap: Example ........................................................................................................ 25
Exceptions to Project Cap: Example ................................................................................. 26
Increased Project Cap: Example........................................................................................ 29
Effect on Existing Contracts: Example ............................................................................. 29
Attachment F: Units Not Subject to Percentage Limitation (Program Cap) or
Income-Mixing Requirement (Project Cap) ....................................................................... 31
Attachment G: PBV HAP Contract: Initial Term and Extensions ............................................ 36
Scenario 1 .......................................................................................................................... 37
Scenario 2 .......................................................................................................................... 38
Scenario 3 .......................................................................................................................... 38
Scenario 4 .......................................................................................................................... 39
Attachment H: Priority of PBV HAP Contracts ....................................................................... 41
Attachment I: PBV Biennial Inspections .................................................................................. 42
Attachment J: Adding Units to PBV HAP Contract Without Competition .............................. 43
Attachment K: PBV Contract Termination or Expiration without Extension .......................... 45
Attachment L: Attaching PBVs to Certain PHA-Owned Projects Without Following a
Competitive Process............................................................................................................ 48
Attachment M: Project-Basing Family Unification Program and
HUD-VASH Vouchers ....................................................................................................... 50
Appendices ................................................................................................................................ 52
Appendix I. PBV Program Cap Calculation Instructions ..................................................... 53
Appendix II. PHA Plan, Administrative Plan, and Other PBV Topics ................................ 56
Appendix III. Reporting ........................................................................................................ 61
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Appendix IV. HCV, Homeownership, and PBV Inspection Requirements ......................... 64
Table 1: HCV Inspection Requirements Not Applicable to the PBV Program ................ 64
Table 2: HCV Inspection Requirements Not Applicable to the Homeownership Option 65
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Attachments
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Attachment A: PHA-Owned Units
Regulation: 24 CFR §983.3, 24 CFR §982.352, and 24 CFR §982.628(d)
HOTMA Reference: Sec. 105, which amends Sec. 8(o)(11) of the Act
Applicable Programs: HCV (including the Homeownership Option) and PBV
Summary of Change: HOTMA defines the term “owned by a PHA,” overriding the
definition of PHA-owned units previously established in regulation under 24 CFR §983.3, 24
CFR §982.352, and 24 CFR §982.628(d). This Attachment A and Attachment B supersede
Notice PIH 2015–05, Section III, in its entirety.
Content: For a unit that is PHA-owned according to the HOTMA definition, a PHA must
identify and use an independent entity to perform certain functions. Attachment B of this
notice discusses the responsibilities of independent entities for PHA-owned units.
The provisions of this Attachment A apply to the PBV program and to the HCV program
(including the Homeownership Option), except where otherwise noted.
(1) Definition of PHA-owned units. In accordance with HOTMA, a unit is “owned by a
PHA” if the unit is in a project that is:
(a) Owned by the PHA (which includes a PHA having a “controlling interest” in
the entity that owns the unit);
(b) Owned by an entity wholly controlled by the PHA; or
(c) Owned by a limited liability company (LLC) or limited partnership in which
the PHA (or an entity wholly controlled by the PHA) holds a controlling
interest in the managing member or general partner.
“Controlling interest” means:
(a) Holding more than 50 percent of the stock of any corporation; or
(b) Having the power to appoint more than 50 percent of the members of the board
of directors of a non-stock corporation (such as a non-profit corporation); or
(c) Where more than 50 percent of the members of the board of directors of any
corporation also serve as directors, officers, or employees of the PHA; or
(d) Holding more than 50 percent of all managing member interests in an LLC; or
(e) Holding more than 50 percent of all general partner interests in a partnership;
or
(f) Having equivalent levels of control in other ownership structures. Most
ownership structures are already covered in the categories listed above. This
last category is meant to cover any ownership structure not already listed in the
categories above. Also, under this category (f), a PHA must have more than 50
percent control in that ownership structure (an equivalent level of control) for
the project to be considered PHA-owned.
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PHA-Owned Project: Example
PHA A holds more than 50 percent of the stock in ABC
Projects, and ABC Projects is a corporation that owns the
project to which PBV assistance will be attached. In this case,
the project is considered PHA-owned.
(2) Units not PHA-owned. The previous definition of PHA-owned (as established in
regulation) was more expansive than the HOTMA definition. Under the previous
definition, if a PHA held any interest (direct or indirect) in a project, then the project
was considered to be PHA-owned. The following list offers examples of scenarios
under which a unit is not considered to be PHA-owned under the HOTMA definition:
(a) The PHA holds a fee interest as ground lessor of the property on which the
building is situated, but no ownership interest in the building or unit itself.
(b) The PHA holds only a security interest under a mortgage or deed of trust on the
unit; or
(c) The PHA has only a non-controlling interest in an entity that owns the unit or
in the managing member or general partner of an entity that owns the unit.
Following the example above, assume PHA A holds only 45 percent of ABC
Project’s stocks, which is below the threshold that constitutes a controlling
interest in the corporation that owns the project. In this case, the project is not
considered to be PHA-owned.
As it relates to the PBV program, the new section 8(o)(13)(N) of the Act allows a PHA
to attach PBVs to a project in which the PHA has an ownership interest or over which
the PHA has control, without following a competitive process, but only in cases in
which the PHA is engaged in an initiative to improve, develop, or replace a public
housing property or site. In this context, the PHA’s ownership interest does not have to
meet the definition of the term “owned by a PHA” established by section 105 of
HOTMA. Information on what constitutes an ownership interest or control for
purposes of section 8(o)(13)(N) is found in Attachment L of this notice.
(3) Classifying a unit as not PHA-owned. The new definition of PHA-owned is in effect
as of April 18, 2017, and applies to all PBV projects. An opinion from the PHA’s legal
counsel that a unit is not PHA-owned is required under the following two scenarios:
(a) The change in definition results in a project that was PHA-owned under the
previous definition and was under HAP or AHAP before April 18, 2017, to no
longer be PHA-owned.
(b) A change in ownership structure results in a project no longer meeting the
definition of PHA-owned in effect as of April 18, 2017.
The project remains classified as PHA-owned for purposes of program requirements
and monitoring until the PHA obtains an opinion from its legal counsel that the project
is no longer PHA-owned for a project that fits into one of the above two categories.
Except for the two instances described above, a PHA is not required to obtain a legal
opinion when determining if a unit is PHA-owned. Once the legal opinion has been
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obtained, the PHA is no longer required to use an independent entity to perform the
applicable responsibilities (as described in Attachment B) concerning the project. The
PHA must keep the legal opinion in its files for the length of the PBV HAP contract,
the HCV HAP contract, or Homeownership assistance, as applicable.
(4) Classifying a PBV project as PHA-owned due to a change in ownership. If an
ownership structure changes in a manner that would cause a project to become
classified as PHA-owned (e.g., the PHA ownership interest is increased to an amount
greater than 50 percent), then the PHA must identify to the local HUD Field Office of
Public Housing, in writing, within 30 days of the change in ownership, the proposed
independent entity that will perform the applicable independent entity responsibilities.
See Attachment B of this notice for more information on independent entities.
(5) Contract requirements for PHA-owned units. Because the HAP contract administrator
and the owner cannot be the same legal entity (i.e., the PHA acting as contract
administrator cannot execute a contract with itself as the owner of the PBV or HCV
units), the PHA must establish a separate legal entity to serve as the owner. Such entity
may be one of the following:
(a) A non-profit affiliate or instrumentality of the PHA;
(b) A limited liability corporation;
(c) A limited partnership;
(d) A corporation; or
(e) Any other legally acceptable entity recognized under State law.
Such an entity would serve as the owner only for purposes of execution of the HAP
contract. In cases where the independent entity is required to notify the PHA, the
notification requirement is satisfied by notifying the PHA itself. The entity that is
serving as the owner for purposes of contract execution does not need to be notified as
well.
(6) Rental Assistance Demonstration (RAD). As it pertains to conversions to the PBV
program under RAD, the definition of control/ownership provided under the RAD
notice (PIH–2012–32 (HA) H–2017–03, REV-3 or successor) is used specifically to
determine whether a PHA retains sufficient control over a project for purposes of
HUD’s requirement for ownership or control of the Covered Project by a public or
non-profit entity for RAD conversions.
For purposes of determining whether the PHA will be required to use an independent
entity to perform certain functions concerning the project, the provisions of this notice
apply to RAD PBV conversions. This means that, under certain circumstances (such as
when the PHA holds only a fee interest as ground lessor in the property in which the
unit is situated), a project may meet the RAD definition of ownership or control, but
may not be considered to be PHA-owned under this notice. In such a circumstance, the
PHA would not be required to use an independent entity.
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Attachment B: PHA-Owned Units and Independent Entities
Regulation: 24 CFR §983.59, 24 CFR §982.352, and 24 CFR §982.628(d)
HOTMA Reference: Not applicable
Applicable Programs: HCV (including the Homeownership Option) and PBV
Summary of Change: HUD is changing the existing policy for independent entity review and
approval by superseding the requirements established under Section III of Notice PIH 2015–
05. Notice PIH 2015–05 required a PHA to submit documentation that demonstrated or
supported the independent nature of the parties’ relationship. With the publication of this
notice, PHAs must, instead, submit a joint certification as explained in paragraph 3, HUD
independent entity approval, below.
The requirement to submit a joint certification is a change to HUD policy as laid out in the
aforementioned PIH notice; it is not a change resulting from the enactment of HOTMA. HUD
expects that this change will ease PHA administrative burden because PHAs will no longer
need to produce documentation (such as financial statements, legal documents showing the
structure of each organization, etc.) showing the independent nature of the parties. While
HUD retains the right to request more information, HUD expects that this will be unnecessary
in the majority of cases. This attachment also provides some examples of independent entities
and includes tables that provide a visual representation of independent entity functions.
Content: If a unit is considered PHA owned (based on the definition of PHA-owned unit, as
explained in Attachment A of this notice), then Section 8(o)(11) of the Act requires that the
unit of general local government or a HUD-approved independent entity perform certain
functions for such units. If the PHA itself is the unit of general local government or an agency
of such government, then the next level of general local government may perform such
functions without HUD approval. For example, if the PHA itself is the city or an agency of the
city, then the county or state government may perform the functions without HUD approval.
In cases where there is no next level of general local government (e.g., the PHA is an agency
of the state) or the PHA opts not to have independent-entity functions performed by the next
level of general local government, then the PHA must retain the services of an independent,
HUD-approved public or private entity.
For purposes of this attachment, the term “independent entity” refers to either the unit of
general local government or the HUD-approved independent entity, as applicable. The
provisions of this attachment apply to the HCV program (including the Homeownership
Option) and the PBV program, except where otherwise noted.
PHAs are encouraged to maintain all documentation related to independent entity functions
and approvals in the project file for the duration of the HAP contract.
(1) Relationship between the PHA and the independent entity. As stated in previous HUD
guidance, the independent entity and PHA must be autonomous. That is, the parties
must not be connected legally, financially (except with regard to compensation for
services performed for PHA-owned units), or in any other manner that could cause
either party to be improperly influenced by the other. For example, the independent
entity must not include individuals who have a relationship with the PHA or the
project that would interfere with the entity’s exercise of independent judgment in
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carrying out responsibilities as they relate to the PHA-owned units.
Further, the independent entity must have the ability to perform its responsibilities in
an unbiased manner, and the PHA must not take any action that could prevent the
independent entity from making unbiased determinations related to its responsibilities.
Examples of independent entities include, but are not limited to: PHA vendors, real
estate agencies, non-profit social services agencies with affordable housing
experience, and law firms specializing in affordable housing law (for example, to
perform the review of the PBV selection process).
(2) Independent entity functions. The independent entity is responsible for performing
certain functions for PHA-owned units. The table below provides an overview of each
function to be performed by the independent entity, and its regulatory basis, under the
PBV program and the HCV program (including the Homeownership Option). Any
additional information on a particular function is discussed following the overview
table.
Table 1: Overview of Independent Entity Functions
Applicable Program:
Function
Regulatory Basis
Review the PHA’s PBV selection process. PBV: 24 CFR §983.51(e)
Establish PBV contract rents (initial rent to owner and PBV: 24 CFR §983.59(b)(1)
redetermined rent to owner). PBV: 24 CFR §983.301(g)
PBV: 24 CFR §983.303(f)(1)
Determine rent reasonableness. HCV: 24 CFR
§982.352(b)(1)(iv)(A)(1)
Determine reasonableness of the sales price and any PHA- Homeownership: 24 CFR
provided financing under the Homeownership Option. §982.628 (d)(3)(iv)
Provide a copy of the rent reasonableness determination to the
PBV: 24 CFR §983.303(f)(2)
PHA and the HUD field office where the project is located.
Notify the PHA and the family of the rent reasonableness HCV: 24 CFR
determination. §982.352(b)(1)(iv)(A)(1)
HCV: 24 CFR
Assist the family in negotiating the rent with the owner.
§982.352(b)(1)(iv)(A)(2)
Establish term of initial and any renewal HAP contract as
PBV: 24 CFR §983.59(b)(2)
required in 24 CFR §983.205.
Inspect units. PBV: 24 CFR §983.59(b)(3)
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Applicable Program:
Function
Regulatory Basis
PBV: 24 CFR §983.103(f)(1)
HCV: 24 CFR
§982.352(b)(1)(iv)(A)(3)
Homeownership: 24 CFR
§982.628 (d)(3)(i)
Provide a copy of the inspection report to PHA and HUD field PBV: 24 CFR §983.103(f)(2) and
office where the project is located. (3)
Communicate the results of the inspection to the family and the HCV: 24 CFR
PHA. §982.352(b)(1)(iv)(A)(3)
Review the inspection report prepared by the independent
Homeownership: 24 CFR
inspector designated by the family under the Homeownership
§982.628 (d)(3)(ii)
Option.
Homeownership: 24 CFR
Review the contract of sale under the Homeownership Option.
§982.628 (d)(3)(iii)
(a) Review of the PHA’s PBV selection process. As it relates to the PBV selection
process, the PHA may either choose to use an independent entity or request
that the local HUD Office of Public Housing perform the review. Non-
competitive selections must also be reviewed to ensure that the selection was
done properly. At a minimum, the PHA must submit the following to the HUD
Field Office or the independent entity, as applicable:
(i) All proposals submitted for PBV assistance in connection with the
particular selection, including proposals submitted for selection in
accordance with 24 CFR §983.51(b)(2);
(ii) A copy of the relevant section of the PHA’s Administrative Plan;
(iii) A copy of any standard operating procedures, worksheets, checklists, or
any other work product used in the selection of PBV proposals; and
(iv) If the proposal was selected pursuant to a request for proposals in
accordance with 24 CFR §983.51(b)(1), a copy of the solicitation; or
(v) If the proposal was selected pursuant to a qualifying previous
competition in accordance with 24 CFR §983.51(b)(2), a copy of the
proposal for the previous competition, and any award letter provided in
connection with the previous competition. If proposals from a previous
competition are not retrievable, other documentation that demonstrates
that the requirements of 24 CFR §983.51(b)(2) are met (e.g., proposal
selected within 3 years of the PBV proposal selection date, proposal
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selected in accordance with the applicable program’s competitive
selection requirements, etc.).
The HUD Field Office or HUD-approved independent entity may request from
the PHA additional documentation necessary to complete the review process.
The PHA’s selection procedures must apply to all PBV proposals and must be
designed in a manner that does not effectively eliminate the submission of
proposals for non-PHA-owned units or give undue preferential treatment (e.g.,
additional points) to PHA-owned units. The HUD Field Office or HUD-
approved independent entity must provide a letter stating that the PHA-owned
units were appropriately selected based on the selection procedures specified in
the PHA’s Administrative Plan before the PHA may finalize the selection
process.
Under HOTMA, certain PBV units may be attached to a project without a
competitive selection process. More information may be found in Attachment
L of this notice.
The review of the PHA selection process is waived for RAD PBV conversions.
(b) PBV rent determinations. The independent entity determines rent (initial rent to
owner and redetermined rent to owner) for PHA-owned units in accordance
with the same requirements as for other PBV units. PBV rent determination
requirements are found at 24 CFR Part 983, Subpart G.
Rent to owner is redetermined by written notice from the independent entity to
the PHA specifying the amount of the redetermined rent. The independent
entity notice of the rent adjustment constitutes an amendment of the rent to
owner specified in the HAP contract. Such amendments must be documented
by a signed exhibit to the HAP contract.
The independent entity redetermines rent for RAD PBV units. That is, the
independent entity is responsible for conducting the rent reasonableness
determination and for processing Operating Cost Adjustment Factor (OCAF)
adjustments for RAD PBV units.
(c) Term of existing PBV HAP contracts. The term of a HAP contract and any
HAP contract extension for PHA-owned units must be agreed upon by the
PHA and the independent entity. HOTMA provides that the initial term of a
HAP contract may be up to 20 years (increased from 15 years) and that a HAP
contract may be extended for an additional 20 years (again, increased from 15
years). See Attachment G of this notice for more information about this
change.
(d) Inspection requirements. Independent entities are responsible for conducting all
required inspections for PHA-owned units in accordance with program
requirements. The PHA must provide families with up-to-date contact
information for the independent entity and explain that a family requesting an
inspection of the unit makes such a request directly to the independent entity.
See Appendix IV of this notice for more information on HCV,
Homeownership, and PBV inspection requirements.
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(3) HUD independent entity approval. This section discusses what information must be
submitted, when it must be submitted, and other requirements related to the HUD
independent entity approval process.
(a) What information to submit. The PHA must include in its submission to the
local HUD Office of Public Housing a joint PHA and independent entity
certification, which certifies that the PHA and the proposed entity have no
legal, financial, or any other connection that could cause either party to be
improperly influenced by the other and that the proposed independent entity
will perform its responsibilities as it relates to the PHA-owned units in an
unbiased manner. The certification must be dated and signed by the executive
director, or equivalent position, of the PHA and the independent entity. The
certification must clearly state the name, address, and point of contact for both
the PHA and the proposed independent entity.
The HUD Office of Public Housing retains the discretion to accept the
certification on its face or to request additional information, or to use
information available to the HUD Office, to question the validity of the
certification.
(b) When to submit. The PHA must submit the independent entity for approval
before the function to be performed by the entity takes place. In determining
when to submit the independent entity for approval, a PHA must consider the
functions that are required to be performed by the independent entity, whether
the PHA will use more than one independent entity for different functions, the
HUD processing time, and how all of these elements interplay with the
expected action (HCV HAP contract execution, homeownership closing, PBV
proposal selection, etc.).
(c) Using different independent entities. If the PHA plans to use different
independent entities to perform different functions, or different independent
entities at different projects, the PHA must submit for approval each
independent entity it plans to use and identify the function the entity will
perform. PHAs are not required to submit all independent entities at the same
time.
(d) Previously approved independent entities. Once an independent entity has been
approved by HUD, the PHA may use that same independent entity for other
PHA-owned units or for other functions. If the PHA will use an independent
entity to perform a function other than the function for which the independent
entity was previously approved, then the PHA must certify in writing to HUD
that it will use a previously HUD-approved independent entity to perform a
new function, which must be identified in the certification. The certification
must include the name of the independent entity and be dated and signed by the
executive director, or equivalent position, of the PHA. The certification must
clearly state the name, address, and point of contact for both the PHA and the
independent entity. The entity must be qualified to perform the function or the
local HUD Office of Public Housing may deny approval. For example, a law
firm that was previously approved to review a PBV selection review process
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may not be an appropriate independent entity for the purpose of conducting
inspections.
(4) Payment for independent entity services. Payment for services performed by the
independent entity are the responsibility of the PHA (24 CFR 983.59(d)). The PHA
may compensate the independent entity from PHA ongoing administrative fee income
(including amounts credited to the administrative fee reserve (i.e., Unrestricted Net
Position)). The PHA may not use other HUD program receipts to compensate the
independent entity for its services. MTW agencies may use other sources of funds for
these purposes provided that such use is consistent with the MTW agency’s HUD-
approved MTW plan. Neither the PHA nor the independent entity may charge any
family that occupies or will occupy a PHA-owned unit any fee for the services
provided by the independent entity.
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Attachment C: Percentage Limitation (Program Cap) and PHA Submission
Requirements
Regulation: 24 CFR §983.6
HOTMA Reference: Sec. 106(a)(2), which amends Sec. 8(o)(13)(B) of the Act
Applicable Program: PBV
Summary of Change: Under HOTMA, a PHA may project-base up to 20 percent of its
Consolidated Annual Contributions Contract (ACC) authorized units, instead of 20 percent of
its voucher budget authority. HOTMA also establishes a 10 percent exception to this program
cap (discussed in Attachment D), for units that meet the exception criteria. The changes
implemented by the January 18, 2017, implementation notice supersede the reporting
requirements at 24 CFR §983.6 and are explained in detail in paragraph (2), below. This
Attachment C supersedes Notice PIH 2015–05, Section II, in its entirety.
Content: As described below, HOTMA authorizes a PHA to attach PBV assistance to not
more than 20 percent of its ACC authorized units instead of 20 percent of its voucher budget
authority. For purposes of this provision, the term “authorized units” means the number of
units under the PHA’s current ACC. A PHA may confirm this number in the Inventory Detail
feature of the Inventory Management System/PIH Information Center (IMS/PIC). IMS/PIC
may be accessed at the following HUD webpage: Inventory Management System (IMS)/PIH
Information Center (PIC).
HOTMA did not change the requirement that a PHA provide advance notice to its HUD field
office of its intent to project-base vouchers. While a PHA is no longer required to submit
evidence of sufficient budget authority as part of this advance notice, it must still ensure that it
will have budget authority sufficient to cover the PBV HAP contract at the point of contract
execution.
Among other things, this Attachment describes what must be submitted to HUD, when it must
be submitted, how it must be submitted, and how HUD will respond.
(1) Calculations. Appendix I provides PBV program cap calculation instructions that
complement a sample PBV Program Cap Calculation Worksheet. The sample
worksheet is available at the following webpage: PBV Program Cap Calculation
Worksheet. Use of the sample worksheet is optional, and submission to HUD is not
required.
(2) Revised requirements for notification to HUD.
(a) What must be submitted. The PHA must submit to the local HUD Office of
Public Housing all of the following information:
(i) The number of units authorized under the ACC for the PHA;
(ii) The number of PBV units entirely excluded from the percentage
limitation (as described in Attachment F of this notice);
(iii) The number of units qualifying under the 10 percent program cap
exception category (as described in Attachment D of this notice);
(iv) The number of units currently committed to PBV (excluding those PBV
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units meeting an exception under Attachment D or F of this notice). To
arrive at the “number of units committed to PBV,” total the number of
units that are:
(I) Currently under PBV HAP contract;
(II) Under an Agreement to Enter into HAP contract (AHAP);
and/or
(III) Covered by a notice of proposal selection (24 CFR §983.51(d));
and
(v) The number of units to which the PHA is proposing to attach project-
based assistance through the new RFP or selection.
(b) When a PHA must submit information to HUD. The above information must
be submitted no later than 14 calendar days prior to undertaking any of the
following actions:
(i) Issuing a request for proposals (RFP) (24 CFR §983.51(b)(1));
(ii) Selecting a project based on a previous competition (24 CFR
§983.51(b)(2)); or
(iii) If applicable, selecting a project without following a competitive
process (see Attachment L of this notice).
(c) How to submit information to HUD. The required information must be
submitted by email to pbvsubmission@hud.gov.
(d) HUD response. HUD will respond to the submission by email, identifying
whether HUD has identified any issues with the submission. For example, if
there is a material error in the PHA’s calculations that would result in the PHA
exceeding the 20 percent percentage limitation, HUD will inform the PHA of
this via email. A PHA must await a response from HUD prior to proceeding
with the proposal.
HUD’s review and approval of the submission does not mean that it has
confirmed availability of the PHA’s budget authority, as this is the
responsibility of the PHA.
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Attachment D: PBV Percentage Limitation — 10 Percent Increase for Eligible Units
Regulation: 24 CFR §983.6
HOTMA Reference: Sec. 106(a)(2), which amends Sec. 8(o)(13)(B) of the Act
Applicable Program: PBV
Summary of Change: Under HOTMA a PHA may project-base an additional 10 percent of
its ACC authorized units above the 20 percent program limit, provided the additional units fall
into one of the eligible exception categories.
Content: In this Attachment, the eligible exception categories are explained. The units
eligible for inclusion in this 10 percent exception category may be distributed among one, all,
or a combination of the categories as long as the total number of units does not exceed the 10
percent cap. For example, if 10 percent of ACC authorized units is 100, the PHA may project
base 50 units for homeless families and 50 units for units providing supportive housing to
persons with disabilities or elderly persons.
(1) Exception Categories.
(a) Homeless. The units are specifically made available to house individuals and
families who meet the definition of homeless under section 103 of the
McKinney-Vento Homeless Assistance Act (42 U.S.C. 11302) and contained
in the Continuum of Care Interim Rule at 24 CFR §578.3. The definition of
homeless is included below for convenience:1
(i) An individual or family who lacks a fixed, regular, and adequate
nighttime residence, meaning:
• An individual or family with a primary nighttime residence that
is a public or private place not designed for or ordinarily used as
a regular sleeping accommodation for human beings, including
a car, park, abandoned building, bus or train station, airport, or
camping ground;
• An individual or family living in a supervised publicly or
privately operated shelter designated to provide temporary
living arrangements (including congregate shelters, transitional
housing, and hotels and motels paid for by charitable
organizations or by federal, state, or local government programs
for low-income individuals); or
• An individual who is exiting an institution where he or she
resided for 90 days or less and who resided in an emergency
shelter or place not meant for human habitation immediately
before entering that institution;
(ii) An individual or family who will imminently lose their primary
1
See Homeless Emergency Assistance and Rapid Transition to Housing: Continuum of Care Program; Interim
Final Rule.
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nighttime residence, provided that:
• The primary nighttime residence will be lost within 14 days of
the date of application for homeless assistance;
• No subsequent residence has been identified; and
• The individual or family lacks the resources or support
networks, e.g., family, friends, faith-based or other social
networks needed to obtain other permanent housing;
(iii) Unaccompanied youth under 25 years of age, or families with children
and youth, who do not otherwise qualify as homeless under this
definition, but who:
• Are defined as homeless under section 387 of the Runaway and
Homeless Youth Act (42 U.S.C. 5732a), section 637 of the
Head Start Act (42 U.S.C. 9832), section 41403 of the Violence
Against Women Act of 1994 (42 U.S.C. 1437e-2), section
330(h) of the Public Health Service Act (42 U.S.C. 254b(h)),
section 3 of the Food and Nutrition Act of 2008 (7 U.S.C.
2012), section 17(b) of the Child Nutrition Act of 1966 (42
U.S.C. 1786(b)), or section 725 of the McKinney-Vento
Homeless Assistance Act (42 U.S.C. 11434a);
• Have not had a lease, ownership interest, or occupancy
agreement in permanent housing at any time during the 60 days
immediately preceding the date of application for homeless
assistance;
• Have experienced persistent instability as measured by two
moves or more during the 60-day period immediately preceding
the date of applying for homeless assistance; and
• Can be expected to continue in such status for an extended
period of time because of chronic disabilities, chronic physical
health or mental health conditions, substance addiction, histories
of domestic violence or childhood abuse (including neglect), the
presence of a child or youth with a disability, or two or more
barriers to employment, which include the lack of a high school
degree or General Education Development (GED), illiteracy,
low English proficiency, a history of incarceration or detention
for criminal activity, and a history of unstable employment; or
(iv) Any individual or family who:
• Is fleeing, or is attempting to flee, domestic violence, dating
violence, sexual assault, stalking, or other dangerous or life-
threatening conditions that relate to violence against the
individual or a family member, including a child, that has either
taken place within the individual's or family's primary nighttime
residence or has made the individual or family afraid to return to
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their primary nighttime residence;
• Has no other residence; and
• Lacks the resources or support networks, e.g., family, friends,
faith-based or other social networks, to obtain other permanent
housing.
(b) Veterans. The units are specifically made available to house families that are
comprised of or include a veteran. A veteran is an individual who has served in
the United States armed forces. The PHA may further define “veteran” in its
Administrative Plan for purposes of determining if the units are eligible for this
exception. For example, a PHA may choose to include in its definition of
“veteran” an individual with an “other than dishonorable” discharge status who
is ineligible for healthcare provided through the Veterans Health
Administration. PHAs have discretion in establishing verification of eligibility.
HUD-awarded vouchers specifically designated for project-based assistance
out of HUD-VASH appropriated funding are already excluded from the
program cap and are not to be included under this 10 percent exception
category. See Attachment F of this notice for additional information.
(c) Supportive services. The units provide supportive housing to persons with
disabilities or to elderly persons. For the purpose of this exception, supportive
housing means: A project that makes supportive services available for all of the
assisted families in the project and provides a range of services tailored to the
needs of the residents occupying such housing. Such services may include (but
are not limited to):
• meal service adequate to meet nutritional need;
• housekeeping aid;
• personal assistance;
• transportation services;
• health-related services;
• case management;
• child care;
• educational and employment services;
• job training;
• counseling; or
• other services designed to help the recipient live in the community as
independently as possible.
A PHA must include in its Administrative Plan the types of services offered to
families for a project to qualify for the exception and the extent to which such
services will be provided (e.g., length of time services will be provided to a
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family, frequency of services, and depth of services). Such supportive services
need not be provided by the owner or on-site, but must be reasonably available
to the families receiving PBV assistance in the project. A PHA must not
require participation in the supportive services as a condition of living in an
excepted unit.
In accordance with 24 CFR §983.354, with the exception of an assisted living
facility, the owner of a PBV project may not require the assisted family to pay
charges for meals or supportive services, and non-payment of such charges by
the family is not grounds for termination of tenancy. In the case of an assisted
living facility (as defined in 24 CFR §983.3) receiving PBV assistance, owners
may charge families for meals or supportive services. These charges may not
be included in the rent to owner or the calculation of reasonable rent.
(d) Poverty rate of 20 percent or less. The units are located in a census tract with a
poverty rate of 20 percent or less, as determined in the most recent American
Community Survey 5-Year Estimates. A project that qualifies for the increased
project cap at the time of HAP contract execution continues to qualify for the
exception for the length of the contract regardless of changes in the poverty rate
for the census tract in which the project is located. To view poverty rates by census
tract, click here.
The above categories are separate and distinct from exceptions to the income-mixing
requirement (project cap), which limits the number and percentage of units within a
particular project to which PBV assistance may be attached. These exceptions are
discussed in Attachment E of this notice. (Units that are exempt from both the program
cap and the project cap are discussed in Attachment F.)
(2) Impact on existing contracts. PBV units that fall into one of the four categories listed
above may be covered by this 10 percent exception authority only if the units are
covered under a HAP contract that was first executed on or after April 18, 2017 (the
effective date of the January 18, 2017, implementation notice).
Units added on or after April 18, 2017, through an amendment of a HAP contract that
was first executed prior to April 18, 2017, are not eligible for this 10 percent exception
authority.
A PHA need not meet the 20 percent program cap before it can designate eligible units
for the 10 percent exception category. For example, if a PHA has project-based 10
percent of its units under the percentage limitation and wants to project-base 5 percent
of its units under the 10 percent exception category, it may do so. This PHA would
have 10 percent remaining under the percentage limitation and 5 percent remaining
under the 10 percent exception authority.
A PHA proposal that would result in the PHA exceeding either the 20 percent program
cap or the 10 percent exception from the program cap will be rejected by the HUD
field office. As long as a PHA has not exceeded the 30 percent limit, it may correct its
proposal by moving units from one category to the other, as long as only eligible units
are counted toward the 10 percent exception from the program cap.
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(3) Submission requirements. See Appendix I on calculating the number of voucher units
that may be project-based. If a PHA wishes to add PBV units under this exception
authority, then the PHA must identify the exception category for which the additional
units will be project-based and the specific number of units that qualify under the
exception category in its transmittal of the submission requirements described in
Attachment C of this notice.
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Attachment E: Income-Mixing Requirement (Project Cap)
Regulation: 24 CFR §983.56(a), 24 CFR §983.56(b)(1) and (2), 24 CFR §983.261(c) and (d)
HOTMA Reference: Sec. 106(a)(3), which amends Sec. 8(o)(13)(D) of the Act
Applicable Program: PBV
Summary of Change: HOTMA amends the income-mixing requirement for an individual
project (i.e., the project cap) so that the limitation on the number of PBVs in a project is now
the greater of 25 units or 25 percent of the units in a project. Previously, the limitation was 25
percent of the units in a project.
HOTMA also makes changes to the exceptions to the project cap. The following units are
excluded from the 25 percent or 25-unit project cap:
• Units exclusively serving elderly families.
• Units housing households eligible for supportive services available to all families
receiving PBV assistance in the project.
Also, units in projects that are in a census tract with a poverty rate of 20 percent or less are
subject to a higher (40%) cap.
Lastly, HOTMA provides that HUD may establish additional requirements for monitoring and
oversight of projects in which more than 40 percent of the dwelling units are assisted under a
PBV HAP contract.
The previous statutory definition of project for these purposes remains the same. That is, a
project may be a single building, multiple contiguous buildings, or multiple buildings on
contiguous parcels of land. See Appendix II, paragraph (7), of this notice for more
information.
Content:
(1) Project cap. The limitation on the number of units that may be project-based in an
individual project is now the greater of 25 units or 25 percent of the units in a project.
Below is an example to help illustrate this change. This example is meant only to
illustrate this change, and does not take into account the exceptions discussed later in
this section.
Project Cap: Example
Total Units in ABC Project 60
Post-HOTMA Project Cap (greater of 25 units or 25 percent of units in project) 25
Pre-HOTMA Project Cap (25 percent of units in project) 15
If a project contains 25 or fewer units, the PHA may place every unit in the project
under the PBV HAP contract.
page 25 of 66
(2) Exceptions to project cap. An exception to the project cap means that a particular
category of units is excluded altogether from the 25 percent or 25-unit project cap. As
of April 18, 2017, the exceptions to the project cap are:
• Units exclusively serving elderly families.
• Units housing households eligible for one or more supportive services
available to all families receiving PBV assistance in the project.
A PHA is not limited with respect to the number of units in a project it can make
available for an excepted category or categories. A PHA may designate 100 percent of
the units in a project for occupancy by an excepted category (or categories).
Prior to HOTMA, dwelling units specifically made available for households comprised
of elderly families, families with a household member with disabilities, and families
receiving supportive services were excepted from the project cap. HOTMA retains the
exception for elderly families. It modifies the exception for families receiving
supportive services so that such families must simply be “eligible for” supportive
services (see section (3)(b) of this attachment). HOTMA eliminates the exception for
families with a household member with disabilities.
With respect to PBV units that were excepted from the income mixing requirement
under the pre-HOTMA exception for families with a household member with
disabilities, the PHA must generally continue to operate under the terms of that
existing contract. In other words, the pre-HOTMA exception for families with a
household member with disabilities continues to apply for those units and the PHA
would refer families with a household member with disabilities to the owner to fill
vacancies for units covered by this pre-HOTMA exception under the HAP contract.
See section 6 of this attachment for information on the impact of the HOTMA changes
on excepted units for existing contracts and how changes can be made to serve
additional populations.
Exceptions to Project Cap: Example
ABC Project has a total of 60 units. Twenty of the 60 units are
PBV units specifically for elderly families. Units exclusively
serving elderly families are excepted from the project cap.
The project cap for ABC Project is 25 units (greater of 25 units
or 15 units (25 percent of units in project)). A total of 45 units
may be project-based in ABC Project (project cap of 25 plus
the 20 excepted units).
(3) Qualifying families. With respect to units excepted from the income mixing
requirement under the HOTMA exception categories, the PHA may refer only
qualifying families for occupancy of excepted units under (a) and (b) below.
(a) Units for elderly families. Units that are exclusively made available to elderly
families are excepted from the project cap. The term elderly family is defined
in 24 CFR §5.403 as follows: “Elderly family means a family whose head
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(including co-head), spouse, or sole member is a person who is at least 62
years of age. It may include two or more persons who are at least 62 years of
age living together, or one or more persons who are at least 62 years of age
living with one or more live-in aides.”
It is not necessary that the entire project or buildings within the project be
designated as elderly in order for the exception to apply. Under the PBV
program, projects are not “designated” as elderly as is the case in other
programs, such as the Public Housing or Section 202 Elderly Programs. The
owner must identify under the HAP contract, however, the particular number
of units that are exclusively made available for elderly families. As each unit
turns over, the PHA may amend the HAP contract to transfer the exception
status from one unit to another, provided it is possible to substitute a different
unit for the formerly excepted unit in the project in accordance with 24 CFR
§983.207(a).
As provided under 24 CFR §983.262(e), a PHA may allow a family that
initially qualified for occupancy of an excepted unit based on elderly family
status to continue to reside in a unit, where through circumstances beyond the
control of the family (e.g., death or long-term or permanent hospitalization or
nursing care of the elderly family member), the elderly family member no
longer resides in the unit. In this case, the unit may continue to count as an
excepted unit for as long as the family resides in that unit. Once the family
vacates the unit, in order to continue as an excepted unit under the HAP
contract, the unit must be made available to and occupied by a qualifying
family, unless it is possible to transfer the exception status to another unit as
described in the paragraph above.
(b) Units for households eligible for supportive services. Under HOTMA, dwelling
units that are exclusively made available to “households eligible for supportive
services that are made available to the assisted residents of the project,
according to the standards for such services the Secretary may establish” are
excepted from the project cap. Previously, the supportive services exception
applied only if the family was receiving supportive services.
In order for the supportive services exception to apply to a unit, the project
must make supportive services available to all assisted families in the project,
and the family must be eligible for one or more of the services. The family
may, but is not required to, participate in the services. A PHA may not require
participation in supportive services as a condition of living in an excepted unit,
which means that a PHA may not rely solely on a supportive services program
that would require the family to engage in the services once enrolled, such as
the Family Self-Sufficiency (FSS) program, for the unit to qualify for the
supportive services exception.
The exception applies to any household eligible for the supportive services and
is not limited to households with a family member with a disability. The
supportive services do not need to be provided by the owner or on-site, but the
services must be reasonably available to the families receiving PBV assistance
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in the project and designed to help the families in the project achieve self-
sufficiency or live in the community as independently as possible.
A PHA must include in its Administrative Plan the type of services offered to
families for the units to qualify under the exception and the extent to which
such services will be provided (e.g., length of time services will be provided to
a family, frequency of services, and depth of services). A PHA may offer FSS
as part of the supportive services package, but must not rely solely on FSS to
meet the exception.
HUD encourages PHAs to consider how the structure of their supportive
services package may impact a family’s continued eligibility for the supportive
services and the unit’s excepted status. The unit loses its excepted status if the
family becomes ineligible for the supportive services during its tenancy,
provided that: (i) the family becomes ineligible for all supportive services
available to the family, and (ii) the family becomes ineligible for reasons other
than successfully completing the supportive services objective. A family that
becomes ineligible for the supportive services during its tenancy cannot be
terminated from the program or evicted from the unit. If the unit loses its
excepted status, and the PHA does not want to reduce the number of excepted
units in its project-based portfolio, the PHA may:
(i) Substitute the excepted unit for a non-excepted unit if it is possible to
do so in accordance with 24 CFR §983.207(a). A PHA may wish to
consider whether adding units to the HAP contract is an appropriate
strategy to allow for the substitution of units. For example, Bay View
Project has a total of 100 units. 50 of those units are under a PBV HAP
contract and are all excepted units. In this case, the PHA may add non-
excepted units to the contract (provided it is possible to do so under
PBV requirements) to allow for the substitution of the excepted unit for
the non-excepted unit. See section 6 of this attachment for more
information on adding units to existing HAP contracts.
(ii) Remove the unit from the PBV HAP contract, and provide the family
with tenant-based assistance. Once the family has moved from the unit,
add the unit back to the contract in accordance with 24 CFR
§983.207(b), as amended by HOTMA. Any family newly admitted to
the unit must be eligible for supportive services in order for the unit to
retain its excepted status.
In the case of a family that chooses to participate in the supportive services, as
described by the PHA in the Administrative Plan, and successfully completes
the supportive services objective, as defined by the PHA in its Administrative
Plan, the unit will continue to be an excepted unit under this category for as
long as the family resides in the unit.
(4) Other units not subject to the percentage limitation and project cap. The details and
requirements of this exception category are described in Attachment F of this notice.
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(5) Increased project cap. Up to the greater of 25 units or 40 percent (instead of the greater
of 25 units or 25 percent) of the units in a project may be project-based when the
project is located in a census tract with a poverty rate of 20 percent or less, as
determined in the most recent American Community Survey 5-Year Estimates. A
project that qualifies for the increased project cap at the time of HAP contract
execution continues to qualify for the exception for the length of the contract
regardless of changes in the poverty rate for the census tract in which the project is
located. To view poverty rates by census tract, click here.
HOTMA also provides that the 40 percent unit exception applies to projects in areas
where vouchers are difficult to use, as determined by HUD. HUD has not yet defined
and implemented the exception authority for these “difficult to use” areas. Therefore,
the 40 percent exception applies only to census tracts with poverty rates of 20 percent
or less until further notice.
Increased Project Cap: Example
ABC Project has a total of 80 units. ABC Project is located in a
census tract with a poverty rate of 20 percent or less. The
project cap for ABC Project is 32 units (greater of 25 units or
32 units (40 percent of units in project)).
(6) Effect on existing contracts. Owners under HAP contracts in effect prior to April 18,
2017, the effective date of the January 18, 2017, implementation notice, remain
obligated by the terms of those HAP contracts with respect to the requirements that
apply to the number and type of excepted units in a project. That is, the owner must
continue to designate the same number of contract units and assist the same number
and type of excepted units as provided under the HAP contract during the remaining
term of the HAP contract, unless the owner and the PHA mutually agree to change
those requirements.
Effect on Existing Contracts: Example
An owner has a PBV HAP contract for a 20-unit project, and
the HAP contract provides that 15 of those units were
excepted from the 25 percent income-mixing requirement,
because the units are designated for elderly families. The
owner must continue to designate those units for occupancy
by elderly families, notwithstanding the fact that the
statutory limit on PBV has been increased to 25 units, unless
the owner and the PHA mutually agree to change the terms
of the assistance contract.
The PHA and owner may agree to change such HAP contract requirements as it
pertains to the exception categories of elderly families and families eligible for
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supportive services. The PHA and owner must not change the terms of an existing
HAP contract to add a new category of excepted unit (such as those under a rent
restriction as defined in Attachment F of this notice), because those provisions may
only be applied to contracts that become effective on or after April 18, 2017, the
effective date of the January 18, 2017, implementation notice.
For projects that are using the former supportive services statutory exemption (which
required that the family be receiving the supportive services) and /or the exemption for
families with a household member with disabilities, the PHA and the owner will
continue to operate under the pre-HOTMA requirements and will continue to renew
their HAP contracts under the old requirements, unless the PHA and the owner agree
by mutual consent to change the conditions to conform with the HOTMA requirement.
The PBV HAP contract may not be changed to conform with the HOTMA
requirement if the change would jeopardize an assisted family’s eligibility for
continued assistance at the project (e.g., the excepted units at the project include units
designated for families with a household member with disabilities, and changing to the
HOTMA standard would result in those units no longer being eligible as excepted
units unless the owner makes supportive services available to all assisted families in
the project).
A HAP contract may be amended, at the discretion of the PHA, to add additional PBV
units in the same project. PHAs may use this amendment process to add units where
applying the new project cap definition results in more PBV units. For example, ABC
Project has a total of 60 units. The pre-HOTMA project cap was 15 units. The post-
HOTMA project cap is 25 (greater of 25 units or 15 units (25 percent of units in
project)). The existing PBV HAP contract had no excepted units. The PHA, at its
discretion, may amend the HAP contract to add the 10 additional units that result from
the HOTMA project cap definitional change.
As it pertains to the amendment process to add new units to an existing HAP contract,
HOTMA overrides existing regulation, so that new units may be added at any time
during the term of the HAP contract without being subject to competitive selection
procedures. See Attachment J for more information about this change. All other
requirements of 24 CFR §983.207(b) must be met, including not exceeding the 20
percent program cap (see Attachment C of this notice for more information on the 20
percent program cap).
(7) No HUD notification requirement. Unlike the program cap, there is no requirement to
submit PBV project cap information to HUD.
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Attachment F: Units Not Subject to Percentage Limitation (Program Cap) or Income-
Mixing Requirement (Project Cap)
Regulation: 24 CFR §983.6, 24 CFR §983.56(a), 24 CFR §983.56(b)(1) and (2)
HOTMA Reference: Sec. 106(a)(2), which amends Sec. 8(o)(13)(B) of the Act, and Sec.
106(a)(3), which amends Sec. 8(o)(13)(D) of the Act
Applicable Program: PBV
Summary of Change: HOTMA provides that certain units do not count toward the PBV
percentage limitation and are exempt from the income-mixing requirement when PBV
assistance is attached to them.
Content: The following categories of units are excluded from both the percentage limitation
and the income-mixing requirement if placed under HAP contract on or after April 18, 2017:
(1) Excepted units. Units that were previously subject to certain federal rent restrictions or
receiving another type of long-term housing subsidy provided by HUD do not count
toward the percentage limitation or the income-mixing requirement.
The following categories of units in (a) or (b) are eligible for this exception provided
they also meet the conditions described in (c) below:
(a) The unit received one of the following forms of HUD assistance:
(i) Public Housing Capital or Operating Funds (section 9 of the Act);
(ii) Project-Based Rental Assistance (section 8 of the Act), including units
assisted under the section 8 moderate rehabilitation (Mod. Rehab.)
program and Mod. Rehab. single-room occupancy (SRO) program;
(iii) Housing for the Elderly (section 202 of the Housing Act of 1959);
(iv) Housing for Persons with Disabilities (section 811 of the Cranston-
Gonzalez National Affordable Housing Act);
(v) The Rent Supplement (Rent Supp) program (section 101 of the Housing
and Urban Development Act of 1965);
(vi) Rental Assistance Program (RAP) (section 236(f)(2) of the National
Housing Act); or
(vii) Flexible Subsidy Program (section 201 of the Housing and Community
Development Amendments of 1978).
or
(b) The unit was subject to a rent restriction as a result of one of the following
HUD loan or insurance programs:
(i) Section 236;
(ii) Section 221(d)(3) or (d)(4) BMIR;
(iii) Housing For the Elderly (section 202 of the Housing Act of 1959);
(iv) Housing for Persons With Disabilities (section 811 of the Cranston-
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Gonzalez National Affordable Housing Act); or
(v) Flexible Subsidy Program (section 201 of the Housing and Community
Development Amendments of 1978).
Units that were previously receiving PBV assistance or HCV tenant-based
assistance are not covered by this exception.
(c) In addition to having received HUD assistance or having been subject to rent
restrictions as described in parts (a) and (b) above, the unit must meet the
following applicable conditions to qualify for this exception:
(i) PBV Existing and Rehabilitated Units.
For units that will be placed under PBV as existing or rehabilitated
units:
(I) The unit must be covered under a PBV HAP contract that first
became effective on or after April 18, 2017; and
(II) In the 5 years prior to the date the PHA either (aa) issued the
RFP under which the project was selected, or (bb) selected the
project based on a prior competition or without competition, the
unit met at least one form of assistance or was subject to a rent
restriction as described above. If the existing/rehabilitated
project was selected based on a prior competition or without
competition, then the date of selection used to determine if the
5-year threshold has been met is the date of the PHA written
notice of owner selection under 24 CFR §983.51(d).
(ii) PBV New Construction.
A newly constructed unit developed under the PBV program may also
be excluded from the limitation, provided the unit qualifies as a
replacement unit. The unit must meet all of the following requirements
to meet this exception to the limitation:
(I) The unit that the PBV newly constructed unit is replacing (i.e.,
the original unit) must have received one of the forms of HUD
assistance or must have been subject to a rent restriction as a
result of one of the HUD loan or insurance programs listed
above no more than 5 years from the date the PHA either:
(aa) Issued the RFP under which the PBV new construction
project was selected; or
(bb) Selected the PBV new construction project based on a
prior competition or without competition. If the PBV
new construction project was selected based on a prior
competition or without competition, then the date of
selection used to determine if the 5-year threshold has
been met is the date of the PHA written notice of owner
selection under 24 CFR §983.51(d).
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(II) The newly constructed unit is located on the same site as the
unit it is replacing. An expansion of or modification to the prior
project’s site boundaries as a result of the design of the newly
constructed project qualifies as the same site as long as a
majority of the replacement units is built back on the site of the
original development, and any units that are not built on the
existing site share a common border with, are across a public
right of way from, or touch that site.
(III) One of the primary purposes of the planned development of the
PBV new construction project is or was to replace the
affordable rental units that previously existed at the site, as
evidenced by at least one of the following:
(aa) Former residents of the original project are provided
with a selection preference that provides the residents
with the right of first occupancy at the PBV new
construction project; or
(bb) Prior to the demolition of the original project, the PBV
new construction project was specifically identified as
replacement housing for that original project as part of a
documented plan for the redevelopment of the site.
(IV) The HAP contract first became effective on or after April 18,
2017.
(2) Unit-size configuration, number of units. The unit-size configuration of a PBV new
construction or rehabilitation project may differ from the unit-size configuration of the
original project that the PBV units are replacing. In addition, the total number of PBV
assisted units may differ from the number of units in the original project. However,
under no circumstances may the percentage limitation exception be applied to units
that exceed the total number of covered units in the original project. For example, a
PBV new construction project will consist of a total of 50 PBV units and is replacing a
former section 236 project consisting of 40 units. The maximum number of PBV units
that would meet the program and project limitation exception would be 40 units. The
remaining 10 PBV units would count against the program and the project limitation.
(3) Applicability of PBV project-selection requirements. For owner proposals involving
excepted units for existing, rehabilitated, and newly constructed properties, the
standard requirements for selecting projects and the units for PBV assistance —
including consistency with the PHA Plan, the goals of deconcentrating poverty and
expanding housing and economic opportunities, site selection, and all civil rights
requirements — remain in effect. The only difference is that any PBV assistance
provided to these properties does not count against the 20 percent program cap and
may be used to project-base up to 100 percent of the units in the project. The
provisions of Notice PIH 2013–27 that concern the voluntary relinquishment by
families of enhanced voucher assistance for PBV assistance remain in effect. This
means that, in the event of a Housing Conversion Action at a project, HCV assistance
may be project-based at the project, but only if the requirements of Notice PIH 2013–
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27 are met. Units at the project for which a family has voluntarily relinquished
enhanced voucher assistance for PBV assistance do not count against a PHA’s
program cap, nor the income-mixing requirement.
These exceptions may be applied only to projects that were not already under HAP
contract as of April 18, 2017 (the effective date of the January 18, 2017,
implementation notice). The exception may not be applied retroactively to projects
under HAP contracts that commenced before April 18, 2017, or subsequently applied
at the extension of those HAP contracts.
(4) Other units not subject to the percentage limitation or income-mixing requirement.
(a) RAD. HUD has waived the statutory and regulatory provisions regarding the
20 percent percentage limitation for RAD PBV units. Under HOTMA, neither
are such units subject to the income-mixing requirement, as long as they meet
the conditions in section (1) of this attachment. This means that a PHA that is
administering RAD PBV assistance does not take the voucher units attributable
to the RAD PBV contracts into consideration when calculating the 20 percent
limitation. In other words, the units committed to RAD PBV are excluded from
both the numerator and the denominator when calculating the number of
voucher units that may be project-based. This exception applies regardless of
the effective date of the HAP contract.
(b) HUD-VASH. HUD has awarded vouchers specifically designated for project-
based assistance out of the HUD-VASH appropriated funding made available
from the FY 2016, FY 2015, FY 2014, FY 2013, FY 2011, and FY 2010
Appropriations Acts. Since these PBV HUD-VASH set-aside voucher
allocations were made specifically for PBV assistance, HUD has determined
that the PBV units supported by those vouchers will not count against the
PHA’s PBV program cap, for as long as the vouchers remain under PBV HAP
contract at the designated project.. This means that a PHA will exclude these
PBV HUD-VASH units from both the numerator and the denominator when
calculating the number of authorized ACC units that are available for project-
basing.
All other HUD-VASH vouchers, including non–set aside HUD-VASH
vouchers that a PHA chooses to project-base, are subject to the percentage
limitation.
Calculations. See Appendix I for instructions on how to calculate the number
of voucher units that may be project-based when certain units no longer count
toward the percentage limitation.
(5) Reporting requirement. If a PHA wishes to add PBV units under the program cap
exceptions described above, then the PHA must provide the number of PBV units to
which it will be attaching PBV assistance under this exception authority to HUD no
later than 14 calendar days prior to the date that the PHA intends to issue the RFP or
make the selection. The PHA must indicate the specific exception that covers the units.
This information must be submitted by email to pbvsubmission@hud.gov.
A PHA is not required to report future RAD projects for which it will be attaching
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PBV assistance, or future HUD-VASH awarded vouchers specifically designated by
HUD for project-based assistance. Unlike the program cap, there is no requirement to
submit PBV project cap information to HUD.
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Attachment G: PBV HAP Contract: Initial Term and Extensions
Regulation: 24 CFR §983.205
HOTMA Reference: Sec. 106(a)(4) & (5), which amend Secs. 8(o)(13)(F) & (G) of the Act
Applicable Program: PBV
Summary of Change: HOTMA amends Sec. 8(o)(13)(F) of the Act to provide that the initial
term of a Housing Assistance Payments (HAP) contract may be up to 20 years (increased
from 15 years) and Sec. 8(o)(13)(G) to provide that a contract may be extended for an
additional 20 years (again, increased from 15 years).
Content: This section overrides 24 §CFR 983.205(a) and (b) only with respect to the length
of the initial term and the extension of the term of the HAP contract. Otherwise, all of the
other requirements of those regulations remain in effect, including the requirement on the
timing of extensions following the initial extension of the contract term. (The timing of when
extensions of the term may be approved is described in detail below.)
(1) Initial term. As of April 18, 2017, a PHA may enter into a new PBV HAP contract
with an owner with an initial term of up to 20 years. As was the case previously, the
length of the initial term of the HAP contract may not be less than one year.
(2) Maximizing the initial term. For any PBV HAP contract that is still within the initial
term, the PHA and the owner may mutually agree to extend the contract for up to the
maximum initial term of 20 years.
For example, if the HAP contract has an initial term of 15 years with an effective date
of January 1, 2015, the initial term of the contract ends on December 31, 2029. At any
time before the end of the initial term, the PHA and owner may mutually agree to
extend the initial term for an additional 5 years to reach the 20 year maximum initial
term. For instance, in this example the PHA and owner may extend the initial term to
December 31, 2034, provided they do so no later than December 31, 2029.
However, if the HAP contract is no longer in the initial term, the PHA and owner
cannot extend the initial term, although they may enter into an extension beyond the
initial term (see below).
Assume the PHA and owner entered into a HAP contract with a 10 year initial contract
term on January 1, 2000. The initial term ended on December 31, 2009. During the
initial term, the PHA and owner extended the contract term for 10 additional years. As
a result, the HAP contract remains in effect until December 31, 2019. In this case, the
PHA and owner are not able to extend the initial term of this HAP contract to 20 years
because the contract already is beyond the initial term. (However, the PHA and owner
may mutually agree to further extend the current 10 year extension as discussed
below.)
(3) Extension of the term. The PHA may extend the term of the contract for up to 20 years
at any time during the initial HAP contract term, provided the PHA determines an
extension is appropriate to continue providing affordable housing for low-income
families.
The PHA may extend the term multiple times at any time during the term of the
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contract, provided that extension beyond the initial term does not exceed 20 years,
cumulatively. (See examples below.)
(4) Subsequent extensions beyond 20 years. A PHA may further extend the HAP contract
beyond 20 years from the end of the initial term as long as the following conditions are
met:
(a) The PHA must determine such extension is appropriate to continue providing
affordable housing for low-income families or to expand housing
opportunities;
(b) This determination must be made no earlier than 24 months prior to the
expiration of the HAP contract.
(c) The term of the new extension may not exceed 20 years.
Regardless of the length of the extension, all such extensions must meet these same
conditions.
(5) PHA owned units. In the case of PHA-owned units, any changes to the term of an
initial HAP contract or any contract extension must be agreed upon by the PHA and
the independent entity, in accordance with 24 CFR §983.59.
(6) Initial Term and Extension Examples. The following examples are intended to
illustrate a number of common scenarios regarding HAP contract initial terms and
extensions.
Scenario 1
The PHA and owner wish to enter into a new PBV HAP contract effective January 1,
2018, for the maximum time period that is permitted under the PBV program. The
maximum contract term that the PHA may commit is 40 years.
Contract Term Start Date End Date Notes
Initial Term 20 yrs 1/1/18 12/31/37 Maximum 20 year term.
Extension 20 yrs 1/1/38 12/31/57 PHA may extend at any time
before 12/31/37.
Total Term 40 yrs 1/1/18 12/31/57 Any further extension may not
be determined prior to 12/31/55
(24 months prior to expiration
date of the 20-year extension.)
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Scenario 2
HAP contract is currently in effect with the following term:
Current Term Term Start Date End Date Comments
Initial Term 15 yrs 1/1/16 12/31/30 PHA and owner entered into a 15
year initial term, which was the
maximum initial term at the time.
Extension 15 yrs 1/1/31 12/31/45 PHA and owner have previously
agreed to 15 year extension.
Total Term 30 yrs 1/1/16 12/31/45 Contract is at pre-HOTMA
maximum term of 30 years.
Following the implementation of the HOTMA provision, for example in July 2017, the
PHA and owner mutually agreed to extend this contract’s initial term and the
extension to the maximum term that is permitted under HOTMA.
Revised Term Term Start Date End Date Comments
Initial Term 20 yrs 1/1/16 12/31/35 Because the HAP contract is still
in the initial term, the initial term
may be adjusted. It is now the
maximum 20 years.
Extension 20 yrs 1/1/36 12/31/55 PHA and owner also revised the
length of the existing extension to
the 20 year maximum.
Total Term 40 yrs 1/1/16 12/31/55 Contract is at post-HOTMA
maximum term of 40 years. PHA
may consider further extension
but not until 12/31/53.
Scenario 3
The HAP contract has the following terms.
Current Term Term Start Date End Date Comments
Initial Term 10 yrs 1/1/05 12/31/14 Initial term is over.
Extension 15 yrs 1/1/15 12/31/29 PHA and owner have previously
agreed to 15 year extension.
Total Term 25 yrs 1/1/05 12/31/29 Contract is currently for 25 years.
Following the implementation of the HOTMA provision, the PHA decides it wants to
extend the contract so that the term is 40 years. However, the PHA cannot extend the
initial term since it has already been completed. The PHA is also limited to extending
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the contract beyond the initial term to no more than 20 years at the present time. The
maximum term the PHA could provide at this time is 30 years, with the understanding
that the PHA will consider further extending the contract when the contract is within
24 months of the revised expiration date.
Revised Term Term Start Date End Date Comments
Initial Term 10 yrs 1/1/05 12/31/14 No change – the initial term is
already over and may not be
extended.
Extension 20 yrs 1/1/15 12/31/34 After April 18, 2017, the PHA and
owner have now increased the
extension from 15 years to the
maximum of 20 years beyond the
end of the initial term.
Total Term 30 yrs 1/1/05 12/31/34 Contract has maximum term of 30
years.
Future May not 1/1/35 TBD PHA may consider further
Extension exceed extension no earlier than 12/31/32
20 years (24 month requirement).
Scenario 4
The PHA enters into a new HAP contract effective 1/1/18 for the maximum 20 year
initial term. The PHA wishes to extend the contract but for no more than 10 years at a
time.
Contract Term Term Start Date End Date Comments
Initial Term 20 yrs 1/1/18 12/31/37
Potential 10 yrs 1/1/38 12/31/47 PHA may approve this first
Extension #1 extension anytime before the initial
term expires on 12/31/37.
Potential 10 yrs 1/1/48 12/31/57 PHA may approve this second
Extension #2 extension anytime before the first
extension expires on 12/31/47.
Potential 10 yrs 1/1/58 12/31/67 PHA may not make the
Extension #3 determination to approve this
extension earlier than 12/31/55 (24
months prior to the expiration of
the previous extension), because
any further extension will exceed
the 20-year limit from the end of
initial term.
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Contract Term Term Start Date End Date Comments
Potential 10 yrs 1/1/68 12/31/77 PHA may not make the
Extension #4 determination to approve this
future extension earlier than
12/31/65 (24 months prior to the
expiration of the previous
extension), because the contract is
now more than 20 years beyond
the end of the initial term.
Once the extension beyond the initial term has reached 20 years, cumulatively, the
PHA may not further extend the contract without first determining such extension is
appropriate to continue providing affordable housing for low-income families or to
expand housing opportunities, and the PHA may not make that determination more
than 24 months prior to the expiration of the previous extension. In this example, the
PHA must fulfill that requirement starting with the 3rd potential extension, since the
combination of the first and second extensions (each for 10 years) have reached the 20
year maximum.
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Attachment H: Priority of PBV HAP Contracts
Regulation: 24 CFR §983
HOTMA Reference: Sec. 106(a)(4), which provides for a new Sec. 8(o)(13)(F)(i)(I) of the
Act
Applicable Program: PBV
Summary of Change: HOTMA establishes a new Sec. 8(o)(13)(F)(i)(I), which requires that,
in the event appropriated funds are insufficient to fund all vouchers administered by a PHA,
the PHA must implement cost-savings measures before terminating any PBV HAP contract.
Content: Cost-saving measures that must be taken prior to terminating assistance contracts
are found in Notice PIH 2011–28 (“Cost-Saving Measures in the Housing Choice Voucher
(HCV) Program”) or subsequent notices. If a PHA implements all of these cost-saving
measures and still has insufficient funds to cover its housing assistance payments, then the
PHA may choose to terminate payments under its HCV or PBV programs.
A PHA may identify in its Administrative Plan any additional cost-saving measures that it
will implement prior to terminating HCV or PBV assistance.
A PHA may determine which type of assistance (HCV or PBV) to terminate first and must
identify in its Administrative Plan the factors it considered in making this determination.
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Attachment I: PBV Biennial Inspections
Regulation: 24 CFR §983.103
HOTMA Reference: Sec. 106(a)(4), which amends Sec. 8(o)(13)(F) of the Act
Applicable Program: PBV
Summary of Change: HOTMA modifies the statutory language regarding the inspection of
PBV-assisted units to clarify that biennial inspections of PBV-assisted properties may be
conducted using a sample of units. There is no change to the regulatory requirements at 24
CFR §983.103.
Content: The HOTMA change merely clarifies that the use of sampling is authorized for
PBV-assisted units; it does not affect the guidance in Notice PIH 2016–05 (“Streamlining
Administrative Regulations for Programs Administered by Public Housing Agencies”), which
remains in effect. Additionally, HOTMA does not change 24 CFR §983.103(d), governing
biennial inspections. Attachment K to Notice PIH 2016–05 provides guidance to PHAs that
wish to adopt alternative inspection methods.
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Attachment J: Adding Units to PBV HAP Contract Without Competition
Regulation: 24 CFR §983.207(b)
HOTMA Reference: Sec. 106(a)(4), which provides for a new Sec. 8(o)(13)(F)(ii) of the Act
Applicable Program: PBV
Summary of Change: Prior to HOTMA, the regulation at §983.207(b) stipulated that a HAP
contract could be amended to add units only during the 3-year period following the HAP
execution date, and that, within this timeframe, a new PBV Request for Proposals would not
be required. HOTMA overrides the regulation, stating that new units may be added at any
time during the term of the HAP contract without being subject to competitive selection
procedures.
Content: As of April 18, 2017, any existing PBV HAP contract, including a contract entered
into prior to April 18, 2017, may be amended to add units by mutual agreement of the PHA
and owner without competitive selection. The amendment is subject to all PBV requirements,
including those requirements described below.
(1) Percentage limitation. The amendment must comply with Sec. 8(o)(13)(B) and 24
CFR §983.6, which require that a PHA may project-base not more than 20 percent of
its authorized units, with some types of units excepted from this program cap.
HOTMA changed how this percentage limitation is to be calculated. See Attachment C
and Appendix I of this notice for instructions on how to make the calculation and
report the results to HUD, both of which must be done prior to amending a contract to
add units.
(2) Income-mixing requirement (project cap). The amendment must comply with Sec.
8(o)(13)(D) and 24 CFR §983.56, which limit the number or percentage of units in any
one project to which PBV assistance may be attached, with exceptions for certain
types of units. HOTMA made changes to the income-mixing requirement. See
Attachment E of this notice for further information on the PBV income-mixing
requirement. Any units added on or after April 18, 2017, must fall under one of the
HOTMA exception categories in order for the unit to be excepted from the income-
mixing requirement.
(3) Rent reasonableness. The rents for the units added to the contract via amendment must
comply with Sec. 8(o)(10)(A) and §983.303, which require that rents be reasonable. If
the units newly added to the contract have rents that do not exceed the rents charged
for units under the original contract or for comparable unassisted units in the project,
then the rents for the newly added units will be considered to be reasonable.
(4) Administrative Plan. Whether to add units to a contract is an option that is available at
the discretion of a PHA. A PHA that intends to add PBV units in this manner must
state in its Administrative Plan that it will do so and must provide its rationale for
adding PBV units to specific projects.
(5) Amendment of RAD PBV HAP contract. A PHA may not amend a RAD PBV HAP
contract to add units above the number included in the initial contract.
A PHA may amend its PBV HAP contract to add units without competitive selection during
the term of an initial HAP contract or during the term of any extension of that contract. The
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amendment may also occur at the point of initial contract extension or at the point of any
subsequent extension, so that the contract extension will have a greater number of units than
the previous contract. However, the anniversary and expiration dates of the HAP contract for
the additional units must be the same as the anniversary and expiration dates of the HAP
contract term for the PBV units originally in place under the HAP contract.
24 CFR §983.58(c) does not apply when PBV units are added to a current PBV HAP contract.
In other words, an environmental review is not required, and there is therefore no need for any
sort of determination by a responsible entity.
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Attachment K: PBV Contract Termination or Expiration without Extension
Regulation: 24 CFR §983
HOTMA Reference: Sec. 106(a)(4), which provides for a new Sec. 8(o)(13)(F)(iv) of the Act
Applicable Program: PBV
Summary of Change: With respect to a PBV HAP contract, HOTMA requires the contract to
specify that, upon termination or expiration of the contract without extension, an assisted
family may elect to remain in its unit and use the assistance previously provided under the
contract, as long as the unit meets HUD’s housing quality standards and the rent for the unit is
reasonable. In such a circumstance, the family may choose to move or to remain in the unit. If
the family remains, it will pay its required share of the rent in addition to the amount, if any,
by which the gross rent exceeds the applicable payment standard. HOTMA also authorizes
HUD to establish additional contract conditions.
Content: This provision applies to all PBV HAP contracts in effect as of April 18, 2017, and
all contracts entered into on or after April 18, 2017. HOTMA establishes for PBV-assisted
families a right to remain in the project at the end of the PBV HAP contract with tenant-based
assistance for as long as the project is used for rental housing and the unit is otherwise eligible
for HCV assistance.
(1) Owner notification. For any contract entered into prior to April 18, 2017, that remains
in effect on that date, a PHA must notify the owner in writing that this provision is in
effect. The notice must contain the following language:
“Pursuant to Section 106(a)(4) of the Housing Opportunity Through
Modernization Act of 2016 and Paragraph 26.b. of Part 2 of the PBV HAP
Contract for Existing Housing or Paragraph 27.b. of Part 2 of the PBV HAP
Contract for New Construction or Rehabilitation, such contract is amended to
provide that, upon termination or expiration of the contract without extension,
each family assisted under the contract may elect to use its assistance to remain
in the same project if the family’s unit complies with the inspection
requirements under section 8(o)(8) (42 U.S.C. 1437f(o)(8)) of the U.S.
Housing Act of 1937 (“the 1937 Act”), the rent for the unit is reasonable as
required by section 8(o)(10)(A) of the 1937 Act, and the family pays its
required share of the rent and the amount, if any, by which the unit rent
(including the amount allowed for tenant-based utilities) exceeds the applicable
payment standard.”
Any contract entered into on or after April 18, 2017, must include this language.
(2) Statutory notice. Per the statutory notice requirements at Sec. 8(c)(8) and 24 CFR
§983.206, not less than 1 year prior to the termination or expiration without extension
of a HAP contract, an owner must provide notice to both the PHA and affected
tenants. An owner who fails to provide such notice must permit tenants to remain in
their units for the required notice period with no increase in the tenant portion of the
rent. During this time period, an owner may not evict a tenant as a result of the
owner’s inability to collect an increased tenant portion of rent. With PHA agreement,
an owner may renew the terminating contract for a period of time sufficient to give
tenants 1 year’s advance notice. For families who wish to remain at the property, the
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HCV assistance does not commence until the end of the owner’s required notice
period.
(3) Housing quality standards. In order for the family to remain at the project with tenant-
based HCV assistance, the unit must meet the HQS requirements of the HCV tenant-
based program, including initial inspection requirements. HOTMA made a number of
changes related to the initial inspection requirements. (See Notice PIH 2017–20,
issued October 27, 2017.)
(4) Effective date of HCV HAP and family leases. The transition from PBV HAP units to
HCV HAP units will require the PHA and owner to plan to assure continued payments
for families under lease and continued payments to the owner of units under HAP. The
following requirements apply:
(1) A PHA may execute an HCV HAP contract before the PBV HAP contract
terminates, but the HCV HAP contract may not be effective prior to the PBV
contract termination or expiration date.
(2) A PHA may not commence the tenant-based HCV housing assistance payment
to an owner until the HCV tenant-based HAP contract has been executed.
(3) The HCV HAP contract may not be executed before the PHA approves the
assisted tenancy in accordance with 982.305. An HCV HAP contract for a
family must be executed no later than 60 calendar days from the start of the
family’s lease. PHAs are encouraged to approve the assisted tenancy and
execute the HCV HAP contract without need for the 60-day grace period. If
this is not possible, then, as long as the HCV HAP contract is executed during
the 60-day grace period, once it has been executed, the PHA may pay the
owner retroactively to the start date of the family’s lease term.
(4) If the HCV HAP contract has a different rent than did the PBV HAP contract,
and the new rent is determined by the PHA to be reasonable, then the PHA will
use the new gross rent to calculate the family’s HCV HAP going forward. The
family will be responsible for paying the new family rent to owner starting
from the effective date of the HCV HAP contract.
(5) Inapplicability of HCV eligibility requirements. Per the current definition of
“admission” in 24 CFR §983.3, a family that receives a tenant-based HCV pursuant to
this newly enacted provision is not a new admission to the HCV program and is not
subject to income-eligibility or any other admission requirement. The family does not
count toward the PHA’s income-targeting requirements at 24 CFR §982.201(b)(2)(i).
(6) Termination of tenancy by owner. An owner may not terminate the tenancy of a family
that exercises its right to remain except for in response to serious or repeated lease
violations, or other good cause.
(7) Family payment toward rent. A family that remains in its unit with continued tenant-
based HCV assistance must pay the total tenant payment (determined under 24 CFR
part 5 subpart F) and any additional amount by which the unit rent exceeds the
applicable payment standard. The family’s initial share of the rent may exceed 40
percent of the family’s adjusted monthly income, irrespective of the normally
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applicable restriction on the amount a family may pay when initially assisted in any
unit at 24 CFR §982.305(a)(5).
(8) HCV program rules. All other HCV program rules apply to families who remain in the
project.
With respect to additional contract conditions, HUD has chosen not to adopt any such
conditions at this time.
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Attachment L: Attaching PBVs to Certain PHA-Owned Projects Without Following a
Competitive Process
Regulation: 24 CFR § 983.51(b)
HOTMA Reference: Sec. 106 (a)(9), which adds Sec. 8(o)(13)(N) to the Act
Applicable Program: PBV
Summary of Change: HOTMA adds section 8(o)(13)(N) to the Act, which allows a PHA to
attach PBV assistance to units in a project in which the PHA has an ownership interest or over
which the PHA has control without following a competitive process. In order to exercise this
authority, the PHA must be engaged in an initiative to improve, develop, or replace a public
housing property or site.
Content:
(1) PHA ownership interest. A project does not have to meet the definition of PHA-owned
in order for the PHA to have an ownership interest in the project and to be covered by
this HOTMA provision. An ownership interest means that the PHA or its officers,
employees, or agents are in an entity that holds any direct or indirect interest in the
project in which the units are located, including, but not limited to, an interest as:
titleholder; lessee; stockholder; member, or general or limited partner; or member of a
limited liability corporation. For purposes of this authority, a PHA ownership interest
also includes a scenario in which the PHA is the lessor of the ground lease for the land
upon which the PBV project to improve, develop, or replace the public housing
property is located or will be constructed. Units that meet the definition of “PHA-
owned” as defined here qualify for this exception. Alternatively, just having an
ownership interest for the purpose of this provision does not equate with meeting the
definition of PHA-owned as defined in Attachment A.
(2) Conditions for non-competitive selection. In order to be subject to this non-
competitive exception, the following conditions must be met:
(a) The PHA must be engaged in an initiative to improve, develop, or replace the
public housing properties or sites. The public housing properties or sites may
be in the public housing inventory or they may have been removed from the
public housing inventory through any available legal removal tool (which may
include but is not limited to disposition or demolition under Section 18 of the
Act, voluntary conversion under Section 22 of the Act, or required conversion
under Section 33 of the Act) within 5 years2 of the date on which the PHA
entered into the AHAP or HAP pursuant to the non-competitive selection.
(b) If the PHA plans rehabilitation or new construction, a minimum threshold of
$25,000 in hard costs per-unit is required.
(c) If a PHA plans to replace public housing by attaching project-based assistance
to existing housing in which the PHA has an ownership interest or over which
the PHA has control, then the $25,000 per-unit minimum threshold does not
2
The date on which the unit was removed from IMS/PIC serves as the start date for the 5-year window.
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apply as long as the existing housing substantially complies with HUD’s
housing quality standards. The PHA’s Administrative Plan must describe what
it means to “substantially comply with HUD’s housing quality standards.”
(d) The PHA must explain in its Administrative Plan the work it plans to do on the
property or site and how many units of PBV it plans to add. See Administrative
Plan requirements in the Appendix II to this notice.
(3) Other PBV requirements. In order to be non-competitively selected under this
provision, the units must be eligible for PBV assistance in accordance with 24 CFR
§983.53, and the selection of the units must satisfy all other statutory and regulatory
requirements of the PBV program. Unless otherwise exempt, units non-competitively
selected under this section are subject to the program cap and income-mixing
requirements and exceptions discussed in Attachment F.
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Attachment M: Project-Basing Family Unification Program and HUD-VASH Vouchers
Regulation: 24 CFR §983
HOTMA Reference: Sec. 106(a)(9), which added a new Sec. §8(o)(13)(O) of the Act
Applicable Programs: HCV and PBV
Summary of Change: HOTMA allows PHAs to project-base Family Unification Program
(FUP) and HUD-Veterans Affairs Supportive Housing (VASH) vouchers without requiring
additional HUD approval. Prior to HOTMA, PHAs were prohibited from project-basing
vouchers awarded for FUP. HUD-VASH vouchers could be project-based, but required HUD
review and approval in accordance with Notice PIH 2015–10 (this applied to HUD-VASH
vouchers the PHA chose to project-base and not to HUD-VASH units awarded under a HUD-
VASH PBV allocation as described in Attachment F of this notice). This notice supersedes
Notice PIH 2015–10 in its entirety.
PHAs conduct their HUD-VASH programs in conjunction with the Veterans Affairs Medical
Center (VAMC). The VAMC must make supportive services available to individuals
receiving HUD-VASH assistance. Thus, when a PHA chooses to project-base its HUD-VASH
vouchers, it must ensure the VAMC will continue to make supportive services available to the
HUD-VASH families.
Content: HOTMA authorizes PHAs to project-base FUP and HUD-VASH vouchers in
accordance with the statutory and regulatory requirements of the PBV program.
(1) Considerations. HUD encourages PHAs wishing to project-base FUP or HUD-VASH
vouchers to include in their considerations whether the activity:
• Will yield significant benefit to participants;
• Will impact the availability of tenant-based FUP or HUD-VASH vouchers;
• Will impact voucher utilization; and
In determining whether project-basing will yield significant benefit to FUP or HUD-
VASH participants, HUD encourages PHAs to consider:
• The impact on choice and access to areas of higher opportunity.
• The success of FUP and HUD-VASH participants with tenant-based vouchers.
• How project-basing will improve FUP or HUD-VASH participants’ access to
supportive services.
In determining the impact of project-basing on the availability of tenant-based FUP or
HUD-VASH vouchers, HUD encourages PHAs to consider:
• The extent of FUP or HUD-VASH vouchers to be project-based (percent of total
FUP or HUD-VASH allocation).
• Unit size. FUP youth and HUD-VASH veterans typically require a smaller unit
size, while FUP families typically require a larger unit size. Unit size
determination will impact the availability of budget authority to issue vouchers
(i.e., a large unit may cost more than a small unit).
• The 36-month time limit on youth FUP vouchers and whether youth will be less or
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more likely to request a voucher to move.
Project-basing FUP vouchers may be a part of a PHA strategy to provide supportive
housing to youth and families. PHAs may leverage the project-based units with
community based services and supports. Following this model would also allow a
PHA to project-base additional units as a result of the service provision. (See
Attachment E.)
When a PHA chooses to project-base their HUD-VASH vouchers, they must ensure
they have the support of the partnering VAMC. The PHA should maintain this
documentation of support for their records.
(2) Coordinated entry and referrals. PHAs may work with their local Continuum of Care
(CoC), in cooperation with their local Public Child Welfare Agency (PCWA), to
prioritize entry into FUP PBV units to ensure that the units are targeted to people who
most need supportive housing. For HUD-VASH, VA partners would ensure that the
units are targeted to people who most need supportive housing.
For FUP, PCWAs and PHAs may accept referrals from CoCs for eligible youth in
support of a community’s effort to prioritize assistance in FUP PBV units. Referrals
from CoCs must be signed off on by the PCWA. For HUD-VASH, all referrals come
from the partnering VAMC.
(3) Limiting FUP vouchers to one category of FUP eligible families. A PHA that chooses
to project-base FUP vouchers may limit the project-based vouchers to one category of
FUP eligible participants (families or youth) or a combination of the two. FUP
vouchers that are limited to youth cannot exclude eligible youth with children
consistent with the nondiscrimination requirements under the Fair Housing Act. For
example, a PHA may project-base vouchers at a service-rich site for youth. PHAs
generally do not similarly limit HUD-VASH project-based vouchers to a category of
eligible participants, unless the units are specifically for elderly HUD-VASH families.
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U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
WASHINGTON, DC 20410-5000
OFFICE OF PUBLIC AND INDIAN HOUSING
Appendices
Appendix I. PBV Program Cap Calculation Instructions
This appendix provides step-by-step instructions that complement a sample PBV Program
Cap Calculation Worksheet that may be found here: PBV Program Cap Calculation
Worksheet. The instructions and sample worksheet follow the same organizational structure.
As applicable, the instructions reference corresponding step and line numbers of the
worksheet.
Use of the worksheet is optional. PHAs may use another form to calculate and submit the
program cap information to HUD.
Summary Table
PHAs are advised to complete Steps 1 through 5 of the worksheet first and then review the
“Summary Table.” This table contains embedded formulas that automatically calculate,
among other things, the 20 percent program cap and the 10 percent program cap exception
category, based on the information entered by the PHA in Steps 1 through 5. PHAs will be
unable to enter information in the Summary Table.
Based on the number of units a PHA has already project-based, the number it proposes to
project-base, the number of such units that are part of the exception category, and the number
that are excluded entirely from the program cap, the Summary Table will show whether the
PHA’s proposal will push it above the applicable program cap(s).
In cases where a PHA’s submission will place the PHA above a program cap, the Summary
Table will display in red the percent available under the respective cap. For example, if a PHA
proposes to project-base 11 percent of its available ACC units under the 10 percent exception
category, then the 10 percent program cap field in the summary table will be highlighted in
red. The PHA must then either reduce the number of exception units it proposes to project-
base or, if the 20 percent cap has not been met, it may move units to the 20 percent program
cap category. Likewise, if the PHA’s proposal will cause it exceed the 20 percent cap, then it
may move units to the 10 percent exception category, but only if the units are eligible and
there is room within the 10 percent category for additional units.
General Instructions for Completing Steps 1 through 5
In the column titled “HUD Approved,” enter the total number of units currently under a PBV
HAP contract, under an Agreement to Enter into a HAP contract (AHAP), and/or covered by a
notice of proposal selection.
In the column titled “Proposed,” enter the number of units proposed for project-basing.
In Steps 2 through 5, enter a zero in each category that is not applicable to your agency.
A unit that qualifies under more than one exception category must be recorded in only one
such category.
PHA Information – (lines 2-6):
Instruction: Enter the PHA number in line 2 and the PHA name in line 3.
Enter the name of the person most familiar with the information on the worksheet in line 4
and that person’s email in line 5.
Enter the date the PBV Program Cap Calculation Worksheet is being completed in line 6.
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Step 1: Number of ACC Authorized Units (Baseline) – (line 17)
Instruction: In line 17, record the number of authorized units (as described in Attachment C
of this notice). This number may be found in the Inventory Management System/PIH
Information Center (IMS/PIC).
As Steps 2 and 3 are completed, the number in line 17 may be reduced. This is because Steps
2 and 3 involve tabulating units that are exempt from the program cap.
Step 2: PBV Units that Previously Received Long-Term HUD Housing Subsidies, or
were Subject to a Rent Restriction as a Result of Certain HUD Loan Insurance
Programs (For PBV HAP Contracts that First Became Effective on or After April 18,
2017) – (lines 20-28)
Instruction: Record units that were previously subject to certain federal rent restrictions or
that received another type of long-term housing subsidy provided by HUD that do not count
toward the program cap when PBV assistance is attached (as described in Attachment F of
this notice). Lines 20-28 of the PBV Program Cap Calculation Worksheet lists the categories
applicable under this step. Units entered in any of the categories under this step must fully
comply with the conditions described in Attachment F of this notice.
Line 29 automatically calculates the total based on the information entered in lines 20-28.
PHAs will be unable to enter information in line 29.
Step 3: Other PBV units excluded from program cap calculation – (lines 32-35)
Instruction: Record other units excluded from the program cap (as described in Attachment F
of this notice). There are two categories under this step: RAD units (components 1 and 2) and
HUD-VASH units awarded under a HUD-VASH PBV set-aside allocation as described in
Attachment F of this notice. These categories are listed in lines 32 through 34.
Line 35 automatically calculates the total based on the information entered in lines 32-34.
PHAs will be unable to enter information in line 35.
Step 4: PBV Units Categorized Under 10% Increase for Eligible Units (For PBV HAP
Contracts First Executed On or After April 18, 2017) – (lines 38-41)
Instruction: Record units that qualify under the 10 percent program cap exception (as
described in Attachment D of this notice). Lines 38-41 of the PBV Program Cap Calculation
Worksheet list the categories applicable under this step.
Any PBV units awarded under a HUD-VASH PBV set-aside allocation will not qualify under
this step. They must instead be entered under Step 3, above. Any HUD-VASH vouchers the
PHA chooses to project-base as described in Attachment M of this notice may be recorded
here if they qualify for the 10 percent exception category described in Attachment D of this
notice.
Line 42 automatically calculates the total based on the information entered in lines 38-41.
PHAs will be unable to enter information in line 42.
Units added on or after April 18, 2017, through an amendment of a HAP contract that was
first executed prior to April 18, 2017, are not eligible for this 10 percent exception authority.
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Step 5: Total PBVs not Meeting an Exception (not contained in steps 2-4 above) – (lines
45-46)
Instruction: In line 45, record the number of HUD-approved units that do not meet the
criteria for being included under Steps 2, 3, or 4, above. In line 46, record such units that the
PHA proposes to project-base.
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Appendix II. PHA Plan, Administrative Plan, and Other PBV Topics
This appendix addresses PHA Plan requirements, Administrative Plan requirements, and other
PBV topics. It contains provisions of Notice PIH 2011–54 that are unchanged by HOTMA,
provisions that are added or changed by HOTMA, and additional guidance on the PBV
program that HUD is implementing via this appendix.
PHA Plan Requirements
In accordance with Section 7.0 of the PHA Plan Template (see Notice PIH 2015–18
(Availability of New and Revised Public Housing Agency (PHA) Five-Year and Annual Plan
Templates and Other Forms)) and the requirements of HOTMA, if a PHA intends to use the
PBV program, it must provide the projected number of PBV units, their general locations, the
work it plans to do on the property or site, how many units of PBV it is planning on adding to
the site, and how project-basing is consistent with its PHA Plan. Any amendment to the PHA
Plan regarding PBVs must be in accordance with 24 CFR 903.7(r)(2)(ii), which requires the
PHA to identify the basic criteria for determining a significant amendment or modification to
its 5-year or annual PHA Plan. When amending a PHA Plan, the agency must follow 24 CFR
903.21 which, in part, provides for adoption by the board of directors or similar governing
body and public notice and comment.
Administrative Plan Requirements
Listed below are those policies and procedures that must be addressed in the PHA’s
Administrative Plan.
(1) Unchanged by HOTMA:
(a) The procedures for owner submission of PBV proposals and for selection of
those proposals, such as method of providing public notice, deadline for
submission and selection factors. See 24 CFR 983.51(a), (b) and (c). If the
PHA intends to use both competitive and non-competitive procedures, it must
describe under what conditions it will use each method of selection. It is
acceptable for a PHA to state that it will only use competitive selection
procedures when non-competitive selection is not applicable. However, if the
PHA intends to use both competitive and non-competitive selection of
proposals, the procedures above must be described in the Administrative Plan.
(b) The standard for deconcentrating poverty and expanding housing and
economic opportunities must be described in the Administrative Plan in
accordance with 24 CFR 983.57(b)(1). In addition, the PHA must establish its
policy for selection of PBV sites and describe how the site selection policy
promotes PBV goals.
(c) Applicants for PBV units must be selected from the PHA’s waiting list. The
PHA’s Administrative Plan must describe how applicants will be selected.
There are various options for a PHA in establishing PBV waiting lists. It may
use separate lists for tenant-based assistance and PBV assistance or it can use
one list for both. The PHA may establish separate waiting lists for different
PBV projects or buildings (or for sets of such units). Different preferences may
be established for each PBV waiting list. PHAs may take referrals from PBV
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owners. However, all new applicants and families currently on the PHA’s
tenant-based waiting list must be provided with the option to have their names
placed on all/any open waiting lists that the PHA maintains for assisted
housing. See 24 CFR 983.251. PHAs do not have to notify each family on the
tenant-based waiting list by individual notice. A PHA could notify these
applicants by the same means it would use in opening its waiting list under 24
CFR §982.206(a). A non-exclusive or exhaustive list of suggestions are: (1)
advertising through local and minority newspapers and the internet; (2) local
postings at post offices, libraries, and community centers; and (3) an outreach
to social service organizations that may serve the same clientele that will be
occupying the PBV units.
(d) Any tenant screening done by the PHA must be stated in the Administrative
Plan. See 24 CFR 983.255(a).
(e) The PHA must have a policy in its Administrative Plan regarding family
occupancy of wrong-size or accessible units. In cases where, after initial
tenancy, the family is occupying a wrong-sized unit or a unit that has
accessibility features not required by the family, it must describe the form(s) of
continued assistance it will offer the family. See 24 CFR 983.260(b).
(f) At the PHA’s discretion, the PBV HAP contract may provide for vacancy
payments to the owner. Therefore, the PHA must decide if it will pay such
vacancy payments as defined under 24 CFR 983.352. The maximum vacancy
payment can be no more than two full months of monthly rent to owner under
the assisted lease after the month the family moves out minus any portion of
the rental payment received by the owner (including amounts available from
the tenant’s security deposit). Vacancy payments can only cover the portion of
time the unit remains vacant during the period defined.
(2) Added or Changed by HOTMA:
(a) If a PHA plans to exceed the cap on the number of units in a project that may
have PBV attached for non-elderly families (i.e., the greater of 25 dwelling
units or 25 percent of the dwelling units in any project), the Administrative
Plan must describe the types of services offered to families for a project to
qualify for the exception and to the extent to which such services will be
provided. Such supportive services need not be provided by the owner or on-
site, but must be reasonably available to the families receiving PBV assistance
in the project. A PHA may not require participation as a condition of living in
an excepted unit for HAP contracts executed on or after April 18, 2017.
although such services may be offered. See Attachment E of this notice for
more information.
(b) A PHA must detail its intent to add PBV units without competition to an
existing HAP contract along with its rationale for adding PBVs to the specific
project.
(c) If A PHA has insufficient funds to cover its housing assistance payments, then
the PHA must take cost-saving measures prior to terminating assistance
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contracts. The list of cost-saving measures is found in Notice PIH 2011–28
(“Cost-Saving Measures in the Housing Choice Voucher (HCV) Program”) or
subsequent notices. If a PHA implements all of these cost-saving measures and
still has insufficient funds to cover its housing assistance payments, then the
PHA may choose to terminate payments under its HCV or PBV programs. A
PHA may identify in its Administrative Plan any additional cost-saving
measures that it will implement prior to terminating HCV or PBV assistance. A
PHA may decide which type of assistance (HCV or PBV) to terminate first and
must therefore identify in its Administrative Plan the factors it will take into
consideration when deciding which type of assistance to terminate first. A
PHA may identify in its Administrative Plan any additional cost-saving
measures that it will implement prior to terminating HCV or PBV assistance
and must identify in its Administrative Plan the factors it will take into
consideration when deciding which type of assistance to terminate first.
(d) A PHA that will, without following a competitive process, attach PBVs to a
public housing project in which it has an ownership interest or over which it
has control, must detail the work it plans to do on the public housing property
or site that it is improving, developing, or replacing and must state how many
units it plans to project-base at the property or site. If the PHA plans to replace
public housing by attaching PBVs to existing housing in which the PHA has an
ownership interest or over which the PHA has control, then the existing
housing must substantially comply with HUD’s housing quality standards, and
the PHA must describe in its Administrative Plan what it means to
“substantially comply with HUD’s housing quality standards.”
(e) A PHA making PBV units (not HUD-VASH) specifically available to house
families that are comprised of or include a veteran under the exception
category described in Attachment D of this notice must define “veteran.”
Additional administrative policies regarding HQS will be addressed in another notice.
(3) Additional PBV Guidance Implemented via this Appendix:
(a) A PHA may adopt a policy in its FSS Action Plan that allows families that
have left the FSS program without completing the FSS contract to re-enroll in
the FSS program. If the PHA would like to adopt such a policy for non-FSS
families that have failed to complete their supportive services requirements,
then that policy must be included in the PHA’s Administrative Plan.
(b) The PHA’s Administrative Plan must define the term “project.” See paragraph
(7) of this Appendix II for more information.
(c) The Administrative Plan must address the effective dates of the Small Area
FMR designation, if applicable, and how this will apply to PBV units in
accordance with 24 CFR 888.113(h).
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Other PBV Topics
(1) Agreement to Enter into a Housing Assistance Payments (AHAP) Contract.3 For any
projects involving new construction or rehabilitation, an AHAP must be executed prior
to the start of any construction or rehabilitation. An AHAP is not required for existing
units. The requirements regarding an AHAP are detailed in 24 CFR §983.152. A PHA
may not execute an AHAP until a subsidy layering review and an environmental
review are completed.
(2) Subsidy Layering Review (SLR). The purpose of an SLR is to avoid excess subsidy.
See 24 CFR §983.55 and 79 Fed. Reg. 57955 (Sept. 26, 2014). SLRs are required only
for projects involving new construction and rehabilitation. The Federal Register
notice, Administrative Guidelines; Subsidy Layering Reviews for Section 8 Project-
Based Voucher Housing Assistance Payments Contracts and Mixed-Finance
Development, issued on September 26, 2014, provides that qualified housing credit
agencies (HCA) must follow certain administrative guidelines in performing subsidy
layering reviews in accordance with the requirements of the Housing and Economic
Recovery Act (HERA) of 2008 in those cases where the HCA elects to conduct such
reviews for mixed-finance public housing projects and for newly constructed and
rehabilitated structures combining other forms of government assistance with project-
based voucher assistance.
(3) Environmental Review. In accordance with 24 CFR 983.58, an environmental review
is required for all PBV units including existing units. A PHA, an owner, or its
contractors may not acquire, rehabilitate, convert, lease, repair, dispose of, demolish,
or construct real property or commit or expend program or local funds for PBV
activities until an environmental review is completed. Specifically, no AHAP for
rehabilitated or new construction units may be executed until the environmental
review is complete and no housing assistance payments (HAP) contract may be
executed for existing units until the environmental review is completed.
(4) Physical Accessibility. PBV projects must meet program accessibility requirements of
24 CFR 983.102. A PHA must ensure compliance with the accessibility requirements
of Section 504 of the Rehabilitation Act (Section 504) and Title II of the Americans
with Disabilities Act (ADA), as well as the design and construction requirements of
the Fair Housing Act, as applicable. 24 CFR part 8 (Section 504); 24 CFR part 100
(Fair Housing Act); 28 CFR part 35 (Title II of the ADA).
(5) Equal Opportunity and Civil Rights Requirements. A PBV program must comply with
all applicable equal opportunity and nondiscrimination requirements as required by 24
CFR 983.8. The PHA must certify that it will carry out its 5-Year and Annual Plan in
conformity with all applicable fair housing and civil rights laws and that it will
affirmatively further fair housing, which means that it will take meaningful actions to
further the goals identified in its Assessment of Fair Housing (AFH) conducted in
accordance with the requirements of 24 CFR §5.150 through §5.180, that it will take
3
This provision has been changed by HOTMA, but HUD has not yet implemented the change. The information in
this section still applies until further notice.
page 59 of 66
no action that is materially inconsistent with its obligation to affirmatively further fair
housing, and that it will address fair housing issues and contributing factors in its
programs. 24 CFR 903.7(o). Under HUD’s AFFH regulation, PHAs receiving
assistance under Section 8 or Section 9 of the 1937 U.S. Housing Act are required to
conduct and submit an AFH. 24 CFR §§5.150 et eq. See also 82 Fed. Reg. 4373 (Jan.
13, 2017).
(6) Special Housing Types. Special housing types that are eligible to be assisted under the
PBV program (i.e., single room occupancy units, congregate housing, group homes,
and cooperative housing) are subject to the same inspection requirements and
exceptions as any other PBV units. Of the special housing types, shared housing,
manufactured home space rental, and the homeownership option are ineligible to be
assisted under the PBV program. PHAs must consider requests for reasonable
accommodations that may be necessary for a qualified individual with disabilities to
benefit from the program (in accordance with the Fair Housing Act, Section 504 of the
Rehabilitation Act, title II of the Americans with Disabilities Act and implementing
regulations at 24 CFR 100.204, 24 CFR 8.33, and 28 CFR 35.130). For example,
approval of a live-in aide may be necessary as a reasonable accommodation.
Reasonable accommodations are determined on a case-by-case basis.
(7) Definition of Project. The PBV statute defines project as a single building, multiple
contiguous buildings, or multiple buildings on contiguous parcels of land. This
definition was unchanged by HOTMA. PHAs have discretion to define a project
within the parameters of the statutory definition. That is, a PHA may define a project
as a single building, or as multiple contiguous buildings, or as multiple buildings on
contiguous parcels of land.
PBV HAP contracts are executed for projects based on how the PHA has defined the
term in its Administrative Plan. For example, if the PHA defines “project” as a single
building, then one HAP contract is executed for each building being project-based.
page 60 of 66
Appendix III. Reporting
The content of this appendix comes from Section I of Notice PIH 2015–05. It is unchanged
(with the exception of VMS reporting) and is simply included here in order to consolidate
PBV guidance. Sections II and III of Notice PIH 2015–05 were changed by HOTMA and are
therefore revised in the respective applicable attachments of this notice.)
Timely Reporting Requirements of the Family Report (form HUD-50058 and form HUD-
50058 MTW) into the Inventory Management System/Public and Indian Housing Information
Center (IMS/PIC) and Timely Submissions into the Voucher Management System (VMS) for
Project-Based Vouchers.
(1) Reporting PBV in IMS/PIC. To ensure that families occupying PBV units are recorded
properly in IMS/PIC, PHAs must complete section 11 (Section 8: Project Based
Certificates and Vouchers), lines 11b through 11an, as applicable, of the form HUD-
50058. The remaining sections of the form HUD-50058 must be completed the same
as for regular Housing Choice Voucher (HCV) participants with the following
exceptions:
(a) Action Codes 10, Issuance of a Voucher and 11, Expiration of Voucher. Action
codes 10 and 11 do not apply to the PBV program. PHAs do not need to enter
action code 10 or 11 on the form HUD-50058 for participants that will occupy
PBV units.
(b) Payment Standards. Payment standards do not apply to the PBV program.
(c) Portability. Since portability does not apply to the PBV program, action codes
4 (portability move-in) and 5 (portability move-out) must not be used on line
2a. Also, lines 11d through 11f must be left blank.
MTW PHAs administering PBV must complete section 21, MTW Tenant-Based or
Project-Based Assistance, of the form HUD-50058 MTW. The remaining sections of
the form HUD-50058 MTW must be completed as normal except for 21m, Flat
Subsidy Amount, which does not apply to the PBV program.
(2) Correcting the Form HUD-50058 Report when Section 12 was Incorrectly Used. In
cases where a PHA has reported a PBV participant in section 12, Housing Choice
Vouchers: Tenant Based Vouchers, of the form HUD-50058 in error, the PHA must
correct the record by entering the family data in section 11 no later than the family’s
next recertification. Section 11 must be used for families participating in the PBV
program since, under the PBV program, families never pay more than TTP (as
reflected in section 11 of the 50058).
PHAs that correct an error must determine if the participant has been paying an
incorrect rent amount. If so, the PHA must correct the errors starting from the time the
incorrect reporting began and reimburse any amounts owed to the family.
(3) Reporting Voucher Issuance. A family participating in the PBV program is eligible for
tenant-based voucher assistance under the HCV program after the family’s first year in
occupancy in the PBV unit, if and when such assistance (or other comparable
assistance) becomes available. When the PHA issues a family receiving PBV
assistance a HCV, it must enter action code 10 on the form HUD-50058. The PHA
page 61 of 66
continues to record the participant as VO on line 1c of the form HUD-50058 and does
not enter an End of Participation (EOP) entry for the participant. If the PHA cannot
enter a portability move out (action code 5) on the form HUD-50058 (line 2a) for a
PBV family that wants to port, the PHA should contact its PIC coach. HUD is aware
that this is an issue with PBV family reports and will work with PHAs to resolve this
issue until the PIC system can be modified to accept this action code for PBV families
who want to port.
(4) Timely IMS/PIC Reporting. Through Notice PIH 2011–65, HUD established the
requirement of timely submission of form HUD-50058 and form HUD-50058 MTW.
The Department requires that form HUD-50058 must be submitted no later than 60
calendar days from the effective date of any action recorded on line 2b.
(5) Timely VMS Submissions. Notice PIH 2012–21 is applicable to all PHAs
administering the voucher program and establishes submission requirements for the
VMS. The Department uses VMS data for budget formulation, cash management,
monitoring, determining renewal funding levels, and funding-related factors under the
Section Eight Management Assessment Program (SEMAP). Therefore, it is imperative
that PHAs comply with VMS reporting requirements and timelines, ensuring that the
information submitted is both timely and accurate. The data submitted in the VMS is
subject to verification and review by the PIH Office of Housing Voucher Programs
Quality Assurance Division. PHAs are required to submit leasing and cost data in the
VMS on a monthly basis; each month’s data is submitted during the subsequent
month. The VMS is available for regular submissions from the 4th through the 22nd of
each month. Adjustments to previous months' reported VMS data may be entered at
any time by utilizing the Prior Month Correction (PMC) module. Additional
information such as how to use the system, prior month corrections, viewing data and
generating reports is found in the VMS User’s Manual.4
VMS data reporting is time sensitive, and requests to extend submission deadlines will
not be considered. However, PHAs that are not able to meet reporting deadlines due to
circumstances beyond their control must notify the FMC at
Financial_Management_Center@hud.gov. PHAs that do not submit the required data
by the reporting deadline may be subject to a withholding or offset of administrative
fees.
(a) Reporting the number of PBVs under an AHAP, but not under a HAP. In this
field, the PHA reports the number of PBVs under an AHAP only. These units
are not reported in any other field.
(b) Reporting the number of PBVs under a HAP and leased. In this field, the PHA
reports the total number of PBVs that are under a HAP contract and leased.
These units and associated expenses are also reported in the field that best
describes the type of voucher being used (Tenant Protection, All Other
Vouchers (AOV), etc.)
4
Click here to be taken to the online version of the VMS User’s Manual.
page 62 of 66
(c) Reporting the number of PBVs under a HAP contract that are not leased and
not receiving vacancy payments. These vouchers are not reported in any other
field, but are eligible for administrative fees.
(d) Reporting the number of PBVs under a HAP contract and not leased with
Vacancy Payments and Associated Vacancy HAP expenses. In this field, the
total number of PBVs that are under a HAP contract and are not leased, but are
receiving vacancy payments. These vouchers are not reported in any other field
but are eligible for administrative fees.
(e) Reporting HAP Expenses. Include the number of PBVs under a HAP contract
and not leased with Vacancy Payments and Associated Vacancy HAP
Expenses. The total HAP expense associated with PBVs under a HAP contract
and not leased with vacancy payments. These expenses are also reported in the
AOV HAP expense field. NOTE: RAD Rehab Assistance payments should not
be reported in the field, but should be reported in the RAD 1 HAP expense
field.
(6) Non-Compliance. Pursuant to 24 CFR §982.152(d), HUD may reduce or offset any
administrative fee to the PHA, in the amount determined by HUD, if the PHA fails to
perform PHA administrative responsibilities correctly or adequately under the program
(for example, failure to submit form HUD-50058 or to complete VMS data reporting
on a timely basis or at all).
If the PHA fails to comply with reporting requirements, HUD may reduce the PHA’s
administrative fees. The reduction will be calculated beginning the first day of the
month following the submission closing due date. The monthly reduction will continue
until such time as the PHA complies with the reporting requirements or a waiver is
granted. The imposition of such reductions will be communicated under separate cover
and may represent a permanent reduction in funding for administrative fees for the
current calendar year that shall not be reversed. However, this will not impact the
baseline administrative fee calculations.
page 63 of 66
Appendix IV. HCV, Homeownership, and PBV Inspection Requirements
(1) Overview. HCV program inspection requirements are governed by 24 CFR Part 982,
Subpart I. Most HCV inspection requirements are applicable to the PBV program and
to the Homeownership Option, but there are a number of HCV inspection
requirements that do not apply to either of these programs:
• Table 1 lists the HCV inspection requirements that do not apply to the PBV
program. The provisions not applicable to the PBV program are found at 24
CFR §983.2(c)(4) and 24 CFR §983.101(a).
• Table 2 lists the HCV inspection requirements that do not apply to the
Homeownership Option. The provisions not applicable to the Homeownership
Option are found at 24 CFR §982.641(d).
Table 1: HCV Inspection Requirements Not Applicable to the PBV Program
Regulation HCV Provision Reason
24 CFR Lead-based paint requirements under While 24 CFR §982.401(j) does not apply to
§982.401(j) the Lead-Based Paint Poisoning the PBV program, lead-based paint
Prevention Act (42 U.S.C. 4821–4846), requirements apply to the PBV requirement
the Residential Lead-Based Paint by virtue of 24 CFR §983.4 and 24 CFR
Hazard Reduction Act of 1992 (42 §983.101(c).
U.S.C. 4851–4856), and implementing
Part 35, subparts A, B, H, and R (instead of
regulations at part 35, subparts A, B,
subpart M) of the lead-based paint
M, and R.
implementing regulations apply to the PBV
program.
24 CFR Entering the unit size on the voucher Not applicable to the PBV program — unlike
§982.402(a)(3) issued to the family. the HCV program, PBV families are not issued
a Housing Choice Voucher.
24 CFR Effect of family unit size in the Not applicable to the PBV program — unlike
§982.402(c) amount of subsidy. the HCV program, payment standards are not
used to determine the amount of rent paid
by a family under the PBV program.
24 CFR Size of unit occupied by the family. Not applicable to the PBV program — unlike
§982.402(d) the HCV program, payment standards are not
used to determine the amount of rent paid
by a family under the PBV program.
24 CFR Terminating the HAP contract when PBV requirements for family occupancy of
§982.403 the unit is too small. wrong-size units are found at 24 CFR
§983.260.
page 64 of 66
24 CFR PHA requirement for initial and Requirements on timing of inspections for
§982.405(a) periodic unit inspection. the PBV program are found at 24 CFR
§983.103.
24 CFR Enforcement of HQS — neither the HQS enforcement provisions related to the
§982.406 family nor any other party other than PBV program are found in 24 CFR
the PHA or HUD, has the right to §983.101(d).
require enforcement of the HQS
requirements by HUD or the PHA, or
to assert any claim against HUD or the
PHA for alleged failure to enforce
HQS.
Table 2: HCV Inspection Requirements Not Applicable to the Homeownership Option
Regulation HCV Provision Reason
24 CFR Terminating the HAP contract when the Not applicable to the Homeownership Option
§982.403 unit is too small. — unlike the HCV program, there is no HAP
contract between the PHA and the landlord
under the Homeownership Option.
24 CFR Owner and family responsibility for Not applicable to the Homeownership Option
§982.404 maintenance of the unit and PHA — unlike the HCV program, the family is not
remedies. under a lease but is rather the owner of the
unit. Family obligations under the
Homeownership Option are found at 24 CFR
§982.633.
24 CFR PHA requirement for initial and periodic Not applicable to the Homeownership Option
§982.405 unit inspection. — unlike the HCV program, the PHA is not
required to conduct periodic inspections after
the initial inspection, although the PHA may
establish a policy in its Administrative Plan
that periodic inspections will be conducted.
PBV program-specific inspection requirements, which supplement the HCV inspection
requirements that do apply to the PBV program, are found at 24 CFR Part 983,
Subpart C. Likewise, program-specific inspection requirements specific to the
Homeownership Option are found at 24 CFR §982.631(a).
See Attachment I of this notice for more information on PBV biennial inspection
requirements.
page 65 of 66
(2) PBV Pre-Selection Inspections. PHAs are required to inspect the proposed site before
the selection proposal date. This requirement is applicable to all housing types
(existing, new, and rehabilitated housing). Pre-selection inspection considerations
include, but are not limited to, adequacy of streets and utilities, and whether the size,
contour, and exposure of the property is suitable for the planned development.
page 66 of 66
Source: Legislative text reproduced verbatim
Plain English
PIH Notice 2017-21 provides implementation guidance for changes made by the Housing Opportunity Through Modernization Act of 2016 (HOTMA) to the Housing Choice Voucher (HCV) and Project-Based Voucher (PBV) programs. The notice revises how PHA-owned housing is defined, adjusts program and project caps on the number of units that can receive PBV assistance, extends maximum HAP contract terms from 15 to 20 years, and consolidates prior PBV guidance into a single reference document. It also establishes new rules for independent entity oversight of PHA-owned units, non-competitive PBV attachments, and the project-basing of FUP and HUD-VASH vouchers.
Written by anthropic/claude-sonnet-4.6 · Reviewed on October 7, 2026
Plain English — not legal advice.
For Property Managers
Under PIH Notice 2017-21, property owners participating in the PBV program should be aware that HAP contract terms may now extend up to 20 years initially, with an additional 20-year extension available. Owners of PHA-owned units must work with a HUD-approved independent entity for rent determinations, inspections, and contract term agreements. Owners are also required to provide at least one year's advance written notice to the PHA and tenants before a HAP contract terminates or expires without extension, per the notice's Attachment K.
General guidance for property managers — not legal advice for your specific situation. Consult an attorney for advice on your case.
For Tenants
PIH Notice 2017-21 strengthens protections for families assisted under the PBV program, most notably by establishing that when a PBV HAP contract expires or terminates without extension, assisted families generally have the right to remain in their unit using tenant-based HCV assistance, provided the unit meets housing quality standards and the rent is reasonable. Tenants in PHA-owned units have the added protection of an independent entity conducting inspections and rent determinations under Attachment B of this notice. Tenants who believe their rights under this notice are not being honored may contact their local Public Housing Agency, reach out to a HUD field office, or consult a tenant-rights organization for guidance.
General guidance for tenants — not legal advice for your specific situation. Consult a tenant-rights organization or attorney for advice on your case.
Generated October 7, 2026 — auto-generated, not yet human-reviewed. See /transparency for methodology.
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