HUD PIH Notice § 2021-07

 Special Attention of:                                    Notice PIH 2021-07 (HA)
 Public Housing Agencies (PHAs)
 Public Housing Directors                                 Issued: January 19, 2021
 Resident Management Corporations
                                                          This notice supersedes and replaces
                                                          Notice PIH 2018-04. 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                                                          superseded or rescinded.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; 2020-04; RAD Final Implementation Notice Revision 4 (H-2019-09 PIH-2019-23
(HA)


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.

The contents of this notice, except when based on statutory or regulatory authority or law, do not
have the force and effect of law and are not meant to bind the public in any way. This document
is intended only to provide clarity to the public regarding existing requirements under the law or
agency policies.




                                 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. 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. All PHAs, including qualified PHAs, must
discuss the demolition or disposition at a public hearing, as required by 24 CFR 903.17.2

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.3
The site re-use is not limited to future actions by the PHA, but includes any future known re-use.
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 to individuals with disabilities and take reasonable steps to provide
meaningful access to persons with Limited English Proficiency (LEP). 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) must 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
consulted and approve all material parts of the SAC application including the justification;


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.
3
    See 24 CFR 58.32 and 24 CFR 50.21.

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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 buildings in later phases remain eligible for Operating Funds. 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); and (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). 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 Dwelling 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 two reasons:

   1. Retention of the property is not in the best interests of the residents or the PHA.
      HUD will approve a request for disposition by sale or other transfer of a public housing
      project or other real property if the PHA certifies that the retention of the property is not
      in the best interests of the residents, relative to:

       a. Surrounding Area (24 CFR 970.17(a)): 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:

           (1) 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



                                                 3
           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

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

   b. Improved Efficiency/Effectiveness Through Off-Site Development of Low-
      income Housing (24 CFR 970.17(b)). The 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.

2. PHA certifies that it has determined the disposition to be appropriate (24 CFR
   970.17(c)). A PHA has determined the disposition to be appropriate for reasons that are
   in the best interests of the residents and the PHA; consistent with the PHA goals and
   plans; and otherwise consistent with the 1937 Act. In making such a certification, a PHA
   considers its need for public housing units, 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:

   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



                                            4
             PHA to close out its Section 9 public housing program in accordance with Notice PIH
             2016-23.

         c. Improved Efficiency/Effectiveness Through On-Site Development of Low-
            income Housing (24 CFR 970.17(c)). The requirements of Section 3)A.1.b of this
            notice apply except that 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).4

         d. 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.

         e. Blending Section 18 Disposition Approvals with Rental Assistance
            Demonstration (RAD) Conversion. The PHA is converting a portion of the public
            housing units within a Converting Project and is replacing the units proposed for
            disposition with project-based Section 8 assistance within the Covered Project, as the
            terms “Converting Project” and “Covered Project” are defined in the RAD Final
            Implementation Notice Revision 4 (H-2019-09 PIH-2019-23 (HA)), as amended from
            time to time (the “RAD Notice”). The aggregate number of replacement units (RAD
            and project-based Section 8) must meet the RAD “substantial conversion of
            assistance” requirements.

             (1) RAD/Section 18 Construction Blend. The percentage of units eligible for
                 disposition within the Converting Project is based on the hard construction costs,
                 including general requirements, overhead and profit, and payment and
                 performance bonds, proposed for the new construction or rehabilitation of the
                 Covered Project. To be eligible, the proposed transaction may not use 9% Low
                 Income Housing Tax Credits. The following sets forth the percentage of units
                 eligible for disposition within the Converting Project based on the level of
                 construction activity:

                  (a) If the hard construction costs are equal to or exceed ninety percent (90%) of
                      the Housing Construction Costs as published by HUD for the given market
                      area, at the PHA’s discretion up to sixty percent (60%) of the units in the
                      Converting Project may be disposed of under Section 18. For high-cost areas,
                      defined as those where HCC exceeds 120% of the national average,5 at the
                      PHA’s discretion up to eighty percent (80%) of the units in the Converting
                      Project may be disposed of under Section 18.

4
  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 part 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.
5
  To calculate the national average HCC and the HCC for each jurisdiction, HUD used the average of the 2-BR HCC
for Elevator and Walk-up structures.

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              (b) If the hard construction costs are equal to or exceed sixty percent (60%) but
                  are less than ninety percent (90%) of the Housing Construction Costs as
                  published by HUD for the given market area, at the PHA’s discretion up to
                  forty percent (40%) of the units in the Converting Project may be disposed of
                  under Section 18.
              (c) If the hard construction costs are equal to or exceed thirty percent (30%) but
                  are less than sixty percent (60%) of the Housing Construction Costs as
                  published by HUD for the given market area, at the PHA’s discretion up to
                  twenty percent (20%) of the units in the Converting Project may be disposed
                  of Section 18.

           (2) RAD/Section 18 Small PHA Blend. For any PHA with 250 or fewer public
               housing units under its ACC, at the PHA’s discretion up to eighty percent (80%)
               of the units in a Converting Project may be disposed of under Section 18. The
               PHA is not required to remove all of its remaining public housing units through a
               Small PHA Blend transaction. However, to be eligible for the Small PHA blend,
               the PHA must submit to HUD a feasible repositioning plan approved by the
               PHA’s board of commissioners and acceptable to HUD that removes all of a
               PHA’s public housing ACC units, reflects that the PHA will not develop
               additional public housing units under otherwise available Faircloth authority, and
               will not transfer that Faircloth authority to another PHA and will result in the
               closeout of the PHA’s Section 9 public housing program and termination of its
               Section 9 ACC. Any PBV contract created under this subparagraph must be
               administered by an HCV contract administrator with at least 250 HCV units under
               its HCV ACC prior to creation of such PBV contract.

           Please see Section 1.5.B of the RAD Notice relating to the applicability of RAD
           relocation requirements to residents of the Section 18 units and Section 1.6 of the
           RAD Notice relating to the applicability of RAD requirements to non-RAD units to
           facilitate the uniform treatment of residents where specified in the RAD Notice.

           RAD/Section 18 blends are primarily processed by the Office of Recapitalization and
           are subject to RAD requirements and processes related to Financing Plan submission
           requirements, underwriting, DOT releases, terms of the disposition (e.g., treatment of
           proceeds), and placement of a long-term use agreement at the Covered Project.
           Notwithstanding processing by the Office of Recapitalization, in addition to RAD
           requirements, the PHA must also comply with Section 18 submission requirements.

B. Justification Criteria of Non-Dwelling Buildings and Vacant Land. The PHA certifies,
by narrative statement and supporting documentation, that disposition of 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.

                                                6
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 (such that
it survives foreclosure of mortgages and other liens) and publicly recorded in the land records.
As 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 (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: (1) the project or portion of a project is obsolete as to physical condition,
location, or other factors, making it unsuitable for housing purposes; and no reasonable
program of modifications is cost-effective to return the public housing project or portion of
the project to useful life; and (2) in the case of an application for demolition of a portion of a
project, the demolition will help to ensure the viability of the remaining portion of the
project.

    1. Physical Condition (24 CFR 970.15(b)(1)(i) and (b)(2)). PHAs must demonstrate
       substantial physical issues of the buildings/units (e.g., 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.6 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

6
 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.


                                                         7
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 (e.g., 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;

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:

                                          8
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; tankless 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 in 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, 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.




                                          9
           The following fees are maximum amounts for soft costs associated with public housing
           rehabilitation.7 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 subcontractor (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 which jeopardize the suitability of the site or a portion of
         the site and its housing structures for 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 flood 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 do not apply to de minimis demolitions. Prior to

7
    HUD may consider higher percentages for soft costs for compelling reasons on a case-by-case basis.


                                                          10
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).

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 may be eligible to receive.

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.1.b or
3)A.2.c 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.

   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.

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   The Field Office conducts a threshold review of the TPV request prior to sending the request
   to HUD’s Financial Management Division (FMD) for processing. HUD’s Financial
   Management Center (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, is 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.

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1. PHA Certification. As part of the SAC application, PHAs certify they will carry out the
   removal action in 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 Americans with Disabilities Act of 1990, all
   regulations implementing these authorities, other applicable Federal, State, and local civil
   rights laws, and the duty to affirmatively further fair housing. A PHA’s certification
   means that it will fulfill the requirements set out in HUD regulations found at Title 24 of
   the Code of Federal Regulations, including regulations in place at the time of this
   certification, and any subsequently promulgated regulations governing the obligation to
   affirmatively further fair housing. The PHA is always responsible for understanding and
   implementing the requirements of HUD regulations and policies, and has a continuing
   obligation to affirmatively further fair housing in compliance with the 1968 Fair Housing
   Act, the Housing and Community Development Act of 1974, The Cranston-Gonzalez
   National Affordable Housing Act, and the Quality Housing and Work Responsibility Act
   of 1998. (See 42 U.S.C. 3608, 5304(b)(2), 5306(d)(7)(B), 12705(b)(15), and 1437C–
   1(d)(16)). 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 part 75, recipients of certain HUD financial assistance must
   provide employment, training, and economic opportunities to the greatest extent feasible

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       to Section 3 residents or business concerns. Recipients of HUD funds have Section 3
       obligations regardless of the amount of funds (see 24 CFR 75.3).

   5. Resident Consultation for Persons with Disabilities and Persons with Limited
      English Proficiency. 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, and the Americans with Disabilities Act of 1990, 28 CFR parts
      35.160-35.163. 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-assisted real time transcription of meetings, Brailled
      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, conducting
      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, meeting 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 part 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.

7) 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.

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




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9) 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, 2502-0612 and
2577-0075.



                                   _______________/s/_________________________
                                   Dominique Blom
                                   General Deputy Assistant Secretary for Public and Indian
                                   Housing




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