HUD PIH Notice § 2018-04

                                 U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
                                                WASHINGTON, DC 20410-5000


OFFICE OF PUBLIC AND INDIAN HOUSING




  Special Attention of:                                        Notice PIH 2018-04 (HA)
  Public Housing Agencies (PHAs)
  Public Housing Directors                                     Issued: March 22, 2018
  Resident Management Corporations                             Revised: July 3, 2018 to update
                                                               Section 6(F)1 and 6(F)3
                                                               Revised: December 14, 2018 to add
                                                               2018-09 and minor corrections

                                                               This notice supersedes and replaces
                                                               Notice PIH 2012-7. This notice
                                                               remains in effect until amended,
                                                               superseded or rescinded.

Cross-References: Notices: PIH 2011-7; 2016-13; 2016-20; 2016-22, 2016-23, 2017-10, 2017-
22, 2017-24, 2018-09


Subject: Demolition and/or disposition of public housing property, eligibility for tenant-
protection vouchers and associated requirements.

1) Purpose. This notice explains application requirements to request HUD approval to
demolish and/or dispose of public housing property under Section 18 of the United States
Housing Act of 1937 (42 U.S.C. 1437p) (1937 Act) and related Tenant Protection Voucher
(TPV) eligibility for such actions. This notice is used in conjunction with HUD’s implementing
regulations at 24 CFR part 970, and related rules and applies to all SAC applications, including
those under review or already approved by HUD if the PHA is requesting an amendment of
HUD’s approval.

For purposes of this notice, public housing or public housing property means low-income
housing, and all necessary appurtenances thereto, assisted under the 1937 Act, other than
assistance under 42 U.S.C. 1437f of the 1937 Act (section 8), and includes public housing units
developed pursuant to the mixed-finance development method. The term “project” is defined by
section 3(b)(1) of the 1937 Act and means housing developed, acquired, or assisted by a PHA
under the 1937 Act, and the improvements of any such housing. Public housing includes non-
dwelling property (e.g., vacant land, administrative buildings and community buildings)
acquired, developed, modernized, operated or maintained with 1937 Act funds.




                                      www.hud.gov        espanol.hud.gov
2) SAC Application Requirements.1
A. Processing. HUD’s Special Applications Center (SAC) reviews applications for demolition
and disposition (SAC applications) in accordance with the requirements of 24 CFR part 970.
SAC only reviews complete SAC applications. If a PHA submits a SAC application that is
substantially incomplete or deficient (e.g., missing required supporting documentation), SAC
returns the SAC application to the PHA and informs the PHA of the deficiencies.2 Prior to re-
submitting the SAC application, the PHA must consult residents and resident groups and secure
a new board resolution on any material changes from the original submission. Pursuant to 24
CFR 970.29, HUD disapproves a SAC application if HUD determines: (1) a certification made
by the PHA under 24 CFR part 970 is clearly inconsistent with the PHA Plan or any information
and data available to or requested by HUD; or (2) the application was not developed in
consultation with residents, resident groups, and local government officials.
B. PHA Plan. Proposed demolition or disposition must be included in a PHA Annual Plan,
Significant Amendment or MTW Annual Plan. Qualified PHAs must discuss the demolition or
disposition at a public hearing, as required by 24 CFR 903.7.3
C. Environmental Requirements. Proposed demolitions and disposition must comply with 24
CFR 970.13 and have environmental clearance, which means final approval from a HUD
Approving Official or the Responsible Entity of an environmental review conducted under 24
CFR part 50 or 58. See Notice PIH 2016-22. PHAs are responsible for providing the
Responsible Entity or local Office of Public Housing (Field Office) with a full description of the
activities in connection with the demolition and/or disposition (including relocation, known
future use of the site, use of disposition proceeds) to comply with aggregation requirements.4
The site re-use is not limited to future actions by the PHA, but includes any future known reuse.
See 24 CFR 970.13(b) for factors in determining what constitutes a known future use.
D. Resident Consultation. In addition to resident consultation for PHA Plans, PHAs must
comply with resident consultation requirements under 24 CFR 970.9, including consultation
with: (i) residents who may be affected by the demolition or disposition action; (ii) resident
organizations for the affected project, if any; (iii) PHA-wide resident organizations, if any; and
(iv) the Resident Advisory Board or equivalent body. PHAs must ensure communications and
materials are accessible. See section 6)F.5.
E. Offer of Sale to Resident Organizations (Disposition Only). PHAs must, in appropriate
circumstances as determined by the Assistant Secretary, provide resident entities the opportunity
to purchase the project, subject to certain exceptions. See 24 CFR 970.9(b)(3). A PHA
requesting consideration of exceptions to 24 CFR 970.9(b)(1) follow the process stated at 24
CFR 970.9(b)(4).
F. Board Resolution. A PHA must obtain a signed and dated resolution from its Board of
Commissioners authorizing the PHA to submit the SAC application. The Board must be

1
  Note that these items are not a substitute for the SAC application requirements described in 24 CFR part 970 or
HUD-52860. Rather, the below provide additional guidance and clarification on certain requirements.
2
  SAC currently returns applications to PHAs by changing the status of the application to DRAFT status in the
Inventory Management System/PIH Information Center (PIC) (IMS/PIC).
3
  Qualified PHAs are defined by the Housing and Economic Recovery Act (HERA) as a PHA that (1) has a
combined unit total of 550 or less public housing units and section 8 vouchers; (2) is not designated troubled under
section 6(j)(2) of the 1937 Act, the Public Housing Assessment System (PHAS), as a troubled public housing
agency during the prior 12 months; and (3) does not have a failing score under the Section 8 Management
Assessment Program (SEMAP) during the prior 12 months.
4
  See 24 CFR 58.32 and 24 CFR 50.21

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consulted and approve all material parts of the SAC application including the justification;
method of disposition (if applicable); use of proceeds; and relocation plan. The authorizing
resolution must be dated after all local government and resident consultations are conducted.
G. Phased Applications. PHAs may submit SAC applications through a “phased” method with
staggered timelines, so that units in later phases remain eligible for operating subsidy. A PHA
submits a SAC application in IMS/PIC for each phase, with different relocation start timelines.
The same supporting documentation (e.g., board resolution, resident consultation, government
consultation) may be used for its all phases. See 24 CFR 970.7(a).
H. Amendments. PHAs must comply with all material terms of the SAC application. If after
receiving HUD approval, a PHA’s plan changes on material terms, SAC approval of the change
is required. Material terms include (i) method of disposition; (ii) public bid sale where offer is
less than 80% of fair market value (FMV) appraisal submitted in the SAC application (the PHA
must describes its due diligence in offering the public housing property for sale on the open and
competitive market and its rationale for accepting an offer that is less than 80% of appraised
FMV. Alternatively, the PHA may submit an updated appraisal); (iii) terms of commensurate
public benefit disposition (the PHA must describe the revised future use of the property so HUD
can confirm the commensurate public benefit); and (iv) use of proceeds. PHAs request
amendments by sending an email to SACTA@hud.gov with the information noted above and a
board resolution approving the change. On a case-by-case basis, SAC may require additional
supporting documentation to support an amendment (e.g., evidence of local government and/or
resident consultation; confirmation of environmental clearance).

3) Disposition.
A. Justification Criteria for Units. HUD reviews PHA certifications and narratives, along with
other information available to or requested by HUD, on a case-by-case basis. HUD approves
SAC applications for dispositions based on at least one of the following three reasons:

   1. Surrounding Area: 24 CFR 970.17(a). Retention of units is not in the best interests of
      the residents or the PHA because the conditions in the area surrounding the project (e.g.,
      density, industrial or commercial development) adversely affect the health or safety of
      the residents or the feasible operation of the project by the PHA. The PHA supports its
      application with at least one of the following:
      a. To support a SAC application based on health or safety, PHAs demonstrate
          conditions that present serious obstacles in maintaining the units as healthy or safe
          housing and why the PHA cannot cure or mitigate those conditions in a cost-effective
          manner. HUD encourages PHAs to submit supporting third-party documentation,
          which include environmental reviews conducted under 24 CFR part 58. HUD may
          consider other available information, including analyses of land development,
          socioeconomic, community facilities and services, and natural features. In
          accordance with Notice PIH 2016-22, HUD may elect to perform an environmental
          review under 24 CFR part 50; or
      b. To support a SAC application based on infeasible operation, PHAs demonstrate a
          lack of demand for the units. Supporting documentation includes evidence the units
          have long-term vacancy issues, notwithstanding due diligence in marketing (e.g.,
          census tract data on declining population in the jurisdiction; units located in an
          isolated area with limited access to transportation and infrastructure; high turnover

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       rates). On a case-by-case basis, HUD may require a PHA to submit a market analysis
       or HUD may perform one.


2. Improved Efficiency/Effectiveness Through Off-Site Development of Low-income
   Housing: 24 CFR 970.17(b). Retention of the units is not in the best interests of
   residents or the PHA because disposition allows for the development of other properties
   that will be more efficiently or effectively operated as low-income housing projects. For
   purposes of this notice, “low-income housing” is limited to public housing units, project-
   based voucher (PBV) units, or Section 8 PBRA units and does not include housing where
   tenants are using tenant-based Section 8 Housing Choice Vouchers (HCV). Development
   may include acquisition (with or without rehabilitation) or new construction. PHAs must
   demonstrate why the replacement low-income housing units are preferable (e.g., more
   energy efficient; better unit configuration; better location in terms of transportation, jobs,
   or schools; furthers minority or economic de-concentration where units are relocated
   from an area of minority concentration to one that is not concentrated). The units being
   acquired, developed, or rehabilitated must be off-site. In providing the statement
   justifying the proposed disposition pursuant to 24 CFR 970.7(a)(5), PHAs explain their
   intention to acquire, develop, or rehabilitate low-income housing projects. For public
   housing units, the PHA submits the development proposal to HUD under 24 CFR part
   905. For PBV units, the PHA submits an “intent to project-base” notification to the Field
   Office.

3. Best Interests and Consistency: 24 CFR 970.17(c). A PHA certifies it has determined
   the disposition to be appropriate for reasons that are in the best interests of the residents
   and the PHA, consistent with the goals of the PHA and the PHA Plan and are otherwise
   consistent with the 1937 Act. In making such a certification, a PHA considers the
   tremendous need for public housing units nationwide, the purpose and mandate of the
   1937 Act, the mission and obligations of the PHA to maintain and operate projects as
   decent and safe housing in accordance with its ACC, and other tools available to the PHA
   to preserve and reposition its public housing stock. SAC applications are reviewed on a
   case-by-case basis. Below are examples of what HUD generally approves under this
   section:
           a. Unit obsolescence. The units are obsolete as to physical condition in
               accordance with applicable demolition criteria described at section 4)A.1 of
               this notice.
           b. Very Small PHAs. The PHA owns and operates 50 or fewer public housing
               units under its ACC and has determined that it is in the best interests of the
               residents and PHA to close out its Section 9 public housing program in
               accordance with Notice PIH 2016-23.
           c. Comprehensive Rehabilitation or Replacement through Rental Assistance
               Demonstration (RAD). The PHA is converting at least 75 percent of the
               public housing units within a project (as project is defined by RAD) under
               RAD and meets the requirements of the RAD Final Implementation Notice
               REV-3, H-2017-3, and is replacing the units proposed for disposition (up to
               25 percent of the public housing units within a project) with Section 8 project-
               based voucher (PBV) assistance in accordance with 24 CFR part 983. The

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                     aggregate number of replacement units (RAD and PBVs) must meet the RAD
                     “substantial conversion of assistance” requirements. To qualify, the project-
                     based Section 8 units (RAD and PBV) must be newly constructed or
                     substantially rehabilitated (defined for purposes of this clause as hard
                     construction costs, including general requirements, overhead and profit, and
                     payment and performance bonds, in excess of 60% of the Housing
                     Construction Costs as published by HUD for a given market area) without
                     using 9% Low Income Housing Tax Credits.
                  d. Improved Efficiency/Effectiveness Through On-Site Development of
                     Low-income Housing: 24 CFR 970.17(c). The requirements of Section
                     3)A.2 of this notice apply except the replacement low-income housing units
                     are located on-site. The replacement low-income housing units may be newly
                     constructed or the same public housing units after modernization
                     (rehabilitation).5
                  e. Scattered Site Units. Due to distance between units and lack of uniformity of
                     systems (e.g. HVAC, utilities) the PHA demonstrates an unsustainability to
                     operate and/or maintain the units as public housing. For purposes of this
                     notice, scattered site units generally mean units in non-contiguous buildings
                     with four or fewer total units.

B. Disposition Criteria of Non-Dwelling Buildings and Vacant Land. The PHA certifies, by
narrative statement and supporting documentation, that non-dwelling buildings or vacant land
meets the criteria of 24 CFR 970.17(d) because the property exceeds the needs of the project
after the date of full availability (DOFA); or the disposition of the property is incidental to, or
does not interfere with, continued operation of the remaining portion of the project.

C. Commensurate Public Benefit. In accordance with 24 CFR 970.19, dispositions proposed
below FMV require a finding of commensurate public benefit, which HUD determines on a case-
by-case basis. Generally, the disposed property is developed for affordable housing purposes
serving low-income families (incomes at or below 80% of area median). Such affordable
housing may include, but is not limited to, public housing, project-based Section 8 housing, and
housing developed with low-income housing tax credits (LIHTCs). HUD encourages PHAs to
maximize economic opportunities available to residents (as described in section 6)F.5 of this
notice) when requesting HUD approval of a below FMV disposition based on commensurate
public benefit. PHAs should specifically describe these economic opportunity benefits in their
SAC applications as part of the commensurate public benefit description. To ensure compliance
with a HUD-approved commensurate public benefit, a use restriction may be required (that
survives foreclosure of mortgages and other liens) publicly recorded in the land records. As the
part of the SAC application, a PHA may propose a preferred form of use restriction (e.g., LIHTC
extended use agreement, HOME agreement, reversion clause in transfer documents, provision in
ground lease, separate use agreement). The use restriction must be in a form acceptable to HUD.
Field Offices will not release the Declaration of Trust/Declaration of Restricted Covenants

5
  If the PHA is proposing to dispose of public housing units to allow the same units to be modernized (rehabilitated)
under mixed-finance public housing development rules of 24 CFR 905, the PHA submits the SAC application under
the “MF-MOD” disposition application type in IMS/PIC. This ensures Capital Fund and Operating Fund subsidy
are accurate.

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(DOT/DORC) (HUD-52190) (4/2018) (or previous versions) until the PHA evidences
compliance.

4) Demolition.
A. Justification Criteria. HUD reviews demolition requests in accordance with the
following criteria:6
    1. Physical Condition: 24 CFR 970.15(b)(1)(i) and (b)(2). PHAs must demonstrate
    substantial physical issues of the buildings/units (i.e., critical structural issues,
    deficiencies in major systems, deterioration due to prolonged deferred maintenance) that
    cannot be corrected in a cost-effective manner. PHAs may submit Physical Needs
    Assessments (PNAs), government inspections (including condemnation orders), and/or
    independent architect or engineer’s reports as supporting documentation.7 HUD may
    consider other available information, including REAC scores; Capital Fund Program Five
    Year Action Plans, Energy Performance Contracting (EPC) information; and/or on-site
    inspections by HUD staff. To support a certification of physical obsolescence and cost-
    ineffectiveness, the PHA submits form HUD-52860-A (4/2018) and HUD-52860-B
    (4/2018), along with a list of specific and detailed work-items that require rehabilitation
    or repair, preferably prepared by an outside engineer or architect, in two components:
    scope of work and cost-estimates. The following generally applies to the scope of work:
        a. Estimates based on the standards outlined in the most recent International
            Building Code (IBC) and National Fire Protection Association (NFPA) 5000
            standards. PHAs may include local code requirements (i.e., fire codes;
            requirements for natural disasters such as flooding or wildfires);
        b. Building systems (e.g., HVAC, plumbing, electric), external amenities (e.g.,
            roofs, doors, windows), and internal amenities (e.g., kitchens, bathrooms,
            flooring) limited to those that address immediate capital needs for a maximum of
            three years. Replacement costs are restricted to the remaining useful life of an
            item for three years or less. Actual service life may depend on initial quality of
            the item, local environmental factors, use/abuse, and levels of routine
            maintenance. Age of an item alone is not evidence of need to repair or replace.
            Each item is individually estimated and may reference life cycle values per the
            R.S. Means Facilities Maintenance and Repair Cost Data book;
        c. Underground utilities (e.g., sewer, water, gas, electric), regardless of distances,
            provided the PHA owns the utility and evidences the need for replacement;
        d. Mitigation costs of asbestos, lead-based paint, or other environmental issues
            supported by reports submitted with the SAC application;

6
 PHAs do not need demolition approval from HUD if PHAs are proposing to dispose of public housing units or
other property before such property will be demolished (e.g., by a LIHTC acquiring entity). Instead, PHAs must
comply with the disposition criteria in Section 3 of this notice.
7
 In accordance with 24 CFR 905.314(g), PHAs are permitted to rehabilitate and address the capital needs of
projects provided the rehabilitation costs do not exceed 90% of total development cost TDC. Accordingly, per 24
CFR 970.15(b)(2), if a project’s rehabilitation costs are between 57.14% (or 62.5% if elevator) and 90% of TDC, the
PHA may either voluntarily pursue a demolition or disposition action for the project or may rehabilitate the project
with Capital Funds. However, if rehabilitation costs for a project exceed 90% of TDC, the PHA’s only choice is to
pursue a demolition or disposition or use funds other than Capital Funds to address the project’s capital needs.


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   e. Structural defects when supported by reports from a licensed professional
      engineer;
   f. Accessibility improvements for persons with mobility, vision, hearing or other
      impairments, provided improvements are consistent with standards, regulations,
      and other requirements under Section 504 of the Rehabilitation Act of 1973
      (including the Uniform Federal Accessibility Standards (UFAS)), Fair Housing
      Act, Americans with Disabilities Act, other applicable federal authorities, state or
      local requirements that exceed federal baseline requirements, and accessibility
      requirements in remedial agreements or orders;
   g. Imminent health and/or safety issues even if such costs are otherwise not eligible
      provided the PHA provides supporting documentation from an independent party
      evidencing the occurrence and resulting health and/or safety risks.

HUD reserves the right to disallow items in a scope of work if HUD determines there are
more cost-effective alternatives to address the rehabilitation or replacement needs. If
PHAs complete major capital work after the scope of work is prepared, the PHA must
include a description of that work in the SAC application. HUD generally does not
allow the following costs to be included in a rehabilitation scope of work:
    a. Work associated with enhancements or improvements of working systems or
        fixtures at the project (including energy efficiency “green” improvements);
    b. Amenities not currently existing at the project (e.g., solar panels; tank-less water
        heaters; trash enclosures, washer/dryer hook-ups; garbage disposals; central air-
        conditioning; addition of new porches);
    c. Work items that address a project’s needs beyond three years;
    d. Local code compliance if the building code requirements are otherwise not
        triggered by the rehabilitation/repair;
    e. Landscaping or other site work beyond five feet of the exterior walls of a
        building;
    f. Upgrading utility lines that are otherwise in working condition;
    g. Work items associated with site improvements and appurtenances (e.g., parking
        lots, security cameras, playgrounds, community centers), even if those site
        improvements or appurtenances exist and need of repairs; and
    h. Replacing PHA personal property (e.g., replacing appliances or other removable
        fixtures such as refrigerators, ovens, and window treatments).

The following generally applies to cost-estimates of the eligible scope of work items:
   a. Total development costs (TDC) comparisons per HUD-posted costs for the year
       the rehabilitation estimate is made. See 24 CFR 905.314.
   b. R.S. Means cost index, Marshall and Swift cost index, or other accurate and
       reliable cost-estimates (e.g., actual and competitive bids).
   c. Hard construction costs (HCC) as defined in 24 CFR part 905 (including existing
       items inside a building or within five feet of the exterior walls; and costs to repair
       landscaping damaged due to rehabilitation).

PHAs may not include additional costs attributable to inflation or “cost escalation.” For
example, if a PNA completed in 2017 indicates a roof replacement is necessary in 2019,

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      the PHA must use current estimated costs without any escalation, cost adjustments or
      other means of adjusting for inflation for work projected to be undertaken/completed in
      2019. Instead, the PHA uses 2017 cost-index information.

      The following fees are maximum amounts for soft costs associated with public housing
      rehabilitation.8 PHAs may flexibly determine costs for each item provided the total cost does
      not exceed the maximum. Percentages are based on hard construction and will vary based on
      the project size:
          a. Construction contingency: 7.5 percent
          b. Architectural/Engineer’s design and construction monitoring fees: 5.5 percent
          c. Profit and overhead fees for specialty sub-contractor (e.g. HVAC, Electric,
              Plumbing, Elevator): 10 percent
          d. General Condition fees (e.g. Permit, Insurance, Bonds): 5 percent
          e. PHA administrative costs: 2 percent

      2. Location: 24 CFR 970.15(b)(1)(ii) and (b)(2). PHA demonstrates the location of the
      units causes obsolescence, including physical deterioration of the neighborhood; change
      in neighborhood from residential to industrial or commercial; or environmental
      conditions of the site, a portion of the site, or the housing jeopardize the residential use.
      The cost-test for obsolescence based on location includes the PHA’s cost to cure the
      obsolescence (e.g., buffering nearby industrial or commercial development; mitigating
      environmental conditions) and whether these costs exceed applicable TDC percentages.
      In some cases, there may be no way to cure the obsolescence, regardless of cost (e.g.,
      project is in a Federal Emergency Management Agency (FEMA) designated floodway).
      In other cases, the obsolescence may be curable with a mitigation cost (e.g., flood-
      proofing and FEMA-insurance for designated floodplains).

      3. Other Factors: 24 CFR 970.15(b)(1)(iii) and (b)(2). PHA demonstrates factors
      impacting the marketability, usefulness, or management of the units that seriously impede
      operations for residential use supported by third party documentation. The cost-test for
      obsolescence based on other factors includes the PHA’s cost to cure the cause and
      whether these costs exceed applicable TDC percentages. In some cases, curing the
      obsolescence is not possible regardless of costs. In cases where the obsolescence may be
      curable, include the PHA’s cost of due diligence in marketing and to cure obsolete factors
      (e.g., cost to add a second bathroom to units with a high number of bedrooms).

B. De Minimis Demolition. In any 5-year period, a PHA may demolish the lesser of 5
dwelling units or 5 percent of the total public housing dwelling units without the need to
obtain HUD approval under 24 CFR part 970, provided the resulting space is used to meet
the service or other needs of the residents or the PHA determines the unit(s) are beyond
repair. Demolition criteria of 970.15 does not apply to de minimis demolitions. Prior to
demolishing units under this authority, the PHA must submit information to HUD via
IMS/PIC, including a description of the proposed units and other items required by 24 CFR
970.7(a)(1), (2), (12), (13), and (14).

8
    HUD may consider higher percentages for soft costs for compelling reasons on a case-by-case basis.


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5) Eligibility and Application Process for Tenant-Protection Vouchers (TPVs).
A. TPV Eligibility. As part of HUD’s approval of a SAC application, a PHA may be eligible to
receive Section 8 HCV assistance from HUD in the form of TPVs. The issuance of TPVs to a
PHA does not occur with SAC approval of an application. Instead, the PHA must apply
separately for TPVs in accordance with the current PIH funding notice for the HCV program.

HUD determines a PHA’s TPV award based on the relevant appropriations and other HUD-
issued guidance (including the applicable year’s HCV funding notice). HUD’s approval of the
SAC application indicates the maximum number of both relocation and replacement TPVs that a
PHA is eligible to receive.

Notice PIH 2018-09 states a PHA’s final replacement TPV award for Public Housing actions is
based on the occupancy of the units at the time HUD approves the SAC application. A PHA’s
replacement TPV will not change unless the PHA’s redevelopment plan has been revised to
reduce the number of eligible replacement TPVs. See Section 6.C.1.b.ii.

Notice PIH 2018-09 states a PHA’s final relocation TPV award for Public Housing actions is
based on the occupancy of the units at the time the TPV application is submitted to HUD. This
number may be less (but not more) than the maximum number of relocation TPVs identified in
HUD’s approval of the SAC application. See Section 6.C.1.b.i.

Based on limited availability of TPV funding, HUD is limiting the maximum TPV awards
for dispositions based on improved efficiency or effectiveness under Section 3) A.2 or 3)
A.3.d of this notice to 25 percent of the occupied units at the project. However, even if a
PHA is not eligible to receive TPVs in a SAC-approved disposition, the PHA must still
comply with relocation requirements of 24 CFR 970.21.

B. TPV Application Process. A PHA must submit the following to the Field Office:
    1. Name and IMS/PIC number for the units approved in the SAC application. Number of
       TPVs (both relocation and replacement) requested which must equal or be less than the
       maximum number of TPVs identified in the SAC approval and address relevant
       appropriation limits including HUD TPV guidance. See Notice PIH 2017-10 (or the
       current replacement PIH funding notice for the HCV program) concerning the
       differences between replacement and relocation TPVs.
    2. Form HUD-52515 (Voucher Funding Application). If lease-up covers more than one
       calendar year, the PHA must submit a separate Form HUD-52515 for each calendar
       year.
    3. Leasing schedule identifying the number of TPVs leased on a month-to-month basis. If
       lease-up covers more than one calendar year, the PHA must submit separate leasing
       schedules for each calendar year. If the PHA is approved for both replacement and
       relocation TPVs as part of the same SAC approval, the PHA must submit separate
       leasing schedule(s) for each type of TPV.
    4. SAC application approval as a PDF copy, signed and dated.



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    5. If the PHA is a Public Housing only PHA (and therefore cannot receive or administer
       TPVs), the name and PHA code of the PHA that has agreed to administer the TPVs,
       along with an agreement letter from that PHA. HUD does not allow Public Housing
       only PHAs to create Section 8 HCV programs based solely on TPV eligibility.

The Field Office conducts a threshold review of the TPV request prior to sending the request to
HUD’s Financial Management Center (FMC). HUD’s FMC notifies PHAs of final TPV awards.

6) Other Requirements.
A. Existing Financial Transactions. PHAs with an approved transaction through the Capital
Fund Financing Program (CFFP), Section 30 (including PHA Mortgaged Transaction (PMT)),
Energy Performance Contracting (EPC), or Operating Fund Financing Program (OFFP) must
comply with additional instructions provided by HUD regarding such financing and may not take
any steps to implement a SAC-approved application without receiving confirmation from HUD
that all applicable requirements of the financing are satisfied. PHAs must certify an existing
financial agreement is not at-risk because of the proposed demolition or disposition action.
B. Operating Fund Accuracy. Updating Days to Relocation. As part of the SAC application,
PHAs include an estimated number of days from a SAC-approved application that it plans to
start relocation. HUD recognizes relocation plans sometimes change. However, because HUD
relies on relocation information to determine Operating Funds, PHAs are responsible to ensure
the relocation information remain reasonably accurate. If days to relocation in a SAC
application is not reasonably accurate, Asset Repositioning Fee (ARF) payments under 24 CFR
990.190 will be affected. See Notice PIH 2017-22 on how to update relocation dates.
C. Re-occupying Units Proposed for Demolition or Disposition. 24 CFR 970.25(a) states a
PHA should not re-rent units at turnover while HUD is considering a SAC application.
However, due to community needs or for other reasons consistent with its PHA Plan, a PHA may
decide it is in the best interests of the PHA, its residents, and the community to re-occupy
vacated units that are under SAC review. If the PHA proposes demolition or disposition because
units are structurally unsound, located in a floodway, or otherwise uninhabitable, the PHA
cannot reoccupy the units. PHAs cannot re-occupy units after issuance of the 90-day relocation
notice.
D. Reporting Requirements. Within seven days of completion of the demolition or disposition
(e.g., execution of the sale or lease contract for disposition), PHAs must report the action in
IMS/PIC. On a case-by-case basis, HUD may require other reporting information.
E. False Certifications and HUD Enforcement. Any person knowingly presenting a false,
fictitious or fraudulent statement or claim in a HUD matter, including certifications and
supporting documentation submitted with SAC applications, are subject to criminal penalties,
civil liability, or administrative actions which HUD may prosecute. HUD may pursue
debarment/suspensions of principals and PHAs, and any enforcement actions available including,
but not limited to, injunctive relief and other equitable remedies.
F. Civil Rights Requirements. This notice does not modify a PHA’s fair housing, civil rights,
or accessible housing obligations. It does clarify those obligations with respect to public housing
demolition/disposition under Section 18.
        1. PHA Certification. As part of the SAC application, PHAs certify compliance with all
            applicable civil rights requirements, including Title VI of the Civil Rights Act of 1964,
            the Fair Housing Act, Section 504 of the Rehabilitation Act of 1973, Title II of the

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     Americans with Disabilities Act of 1990 and the duty to affirmatively further fair
     housing. A PHA’s certification that it will affirmatively further fair housing means:
     (1) for a PHA that has completed an Assessment of Fair Housing (AFH) which has
     been accepted by HUD, that it will take meaningful actions to further the goals
     identified in the AFH conducted in accordance with 24 CFR 5.150 through 5.180, and
     that it will take no action that is materially inconsistent with its obligation to
     affirmatively further fair housing; or (2) for a PHA that is not yet required to and has
     not submitted an AFH, that it must continue complying with the requirements that
     existed prior to August 17, 2015, with respect to affirmatively furthering fair housing.
     PHAs also certify that if HUD approves the SAC application, subsequent
     implementation complies with all applicable civil rights requirements, including
     environmental determinations for environmental justice.
2.   HUD Civil Rights Review. HUD’s Office of Fair Housing and Equal Opportunity
     (FHEO) conducts a civil rights review of SAC applications, which may include
     applications for non-dwelling property. Pursuant to 24 CFR 970.7(a)(17), HUD may
     request additional information, including information about the PHA’s compliance
     with nondiscrimination requirements in relocations under 24 CFR 970.21(a) and the
     PHA’s affirmatively furthering fair housing certification under 24 CFR 903.7(o).
3.   Disclosure of Remedial Orders and Compliance Agreements. In its SAC
     application, the PHA provides a certification that the demolition or disposition does
     not violate any remedial civil rights order or agreement, voluntary compliance
     agreement, final judgment, consent decree, settlement agreement, or other court order
     or agreement (per 24 CFR § 970.9(a)(16)). In addition, the PHA states whether it is
     operating under any federal, state, or local remedial order, compliance agreement, final
     judgment, consent decree, settlement agreement or other court order or agreement,
     including but not limited to those related to a fair housing or other civil rights finding
     of noncompliance. If the PHA is operating under such a document, it must provide a
     citation to the document and attach a narrative description explaining how the
     proposed demolition or disposition is consistent with such document.
4.   Federal Labor Standards and Economic Opportunity. PHAs using HUD funds for
     demolition or disposition must comply with all applicable federal labor standards of
     section 12 of the 1937 Act (42 U.S.C. 1437j) (Davis-Bacon) and requirements of
     Section 3 of the Housing and Urban Development Act of 1968 (12 U.S.C 1701u), as
     amended. Activities include but are not limited to demolition and resident relocation.
     Under Section 3 and 24 CFR 135, recipients of certain HUD financial assistance must
     provide employment, training, and economic opportunities to the greatest extent
     feasible to Section 3 residents or business concerns. Recipients of HUD funds have
     Section 3 obligations regardless of the amount of funds (24 CFR 135.3(a)(3)).
5.   Accessible Resident Consultation. To ensure individuals with disabilities have
     reasonable opportunities to consult on the SAC application, PHAs must ensure
     communications and materials are accessible and in compliance with Section 504 of
     the Rehabilitation Act of 1973, 24 CFR 8.6, 49 CFR 24.5, the Americans with
     Disabilities Act of 1990, and 28 CFR 35 and 36. This includes ensuring written and
     oral communications, including resident meetings, are provided in appropriate
     alternative formats as needed, e.g., Braille, audio, large type, accessible electronic
     communications, assistive listening devices, sign language interpreters, computer-

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          assisted real time transcription of meetings, brailed materials, large print documents,
          accessible web-based and email communications, and when providing materials via
          the Web. In selecting locations for consultation with residents, the PHA must provide
          equal access for persons with disabilities, conducing sessions at locations that are
          physically accessible to persons with disabilities, including individuals who use
          wheelchairs. Individuals with disabilities must receive services in the most integrated
          setting appropriate to their needs, meaning the needs of qualified individuals with
          disabilities that enables interactions to the fullest extent possible. The PHA is guided
          by the goal of maximizing participation in an integrated setting so that residents with
          disabilities and residents without disabilities may hear and consider each other’s
          views. Priority shall be given to on-site accessible locations (e.g., TV rooms or
          informal gathering places) even if to do so requires multiple sessions with smaller
          groups of residents. Title VI of the Civil Rights Act of 1964 and regulations at 24
          CFR 1, require PHAs to take reasonable steps to ensure meaningful access to their
          programs and activities for persons who have limited ability to read, speak, or
          understand English (i.e., individuals who have limited English proficiency or LEP
          persons). Written materials provided in English are to be provided in regularly
          encountered languages among the residents. PHAs may need to provide interpreters to
          communicate between different languages to ensure LEP persons have meaningful
          access. PHAs hold meetings in languages other than English to provide direct
          communication and participation.

6) Relocation of Residents. If residents are relocated due to a demolition and/or disposition, the
PHA must follow relocation requirements at 24 CFR 970.21, and not the relocation requirements
at 49 CFR part 24, which implements the Uniform Relocation Assistance and Real Property
Acquisition Policies Act of 1970 (URA), as amended. However, if subsequent acquisition,
rehabilitation or demolition carried out with HUD funds or carried out with other HUD-funded
activities causes residents to relocate, the URA may apply to those relocations. Additionally, if
CDBG or HOME funds are used in the demolition or with conversion of lower-income dwelling
units to a use other than lower-income dwelling units, the project may be subject to section
104(d) of the Housing and Community Development Act of 1974, including relocation
assistance and one-for-one replacement provisions under 24 CFR part 42 subpart C.

7) Technical Assistance. Contact SACTA@hud.gov.

8) Paperwork Reduction Act. Information collection requirements contained in this notice are
approved by the Office of Management and Budget (OMB) under the Paperwork Reduction Act
of 1995 (44 U.S.C. 3501-3520). The OMB control numbers are 2577-0029 and 2577-0075.



                                     _________________________________________
                                     Dominique Blom
                                     General Deputy Assistant Secretary for
                                     Public and Indian Housing



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