HUD PIH Notice § 2023-29

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


OFFICE OF PUBLIC AND INDIAN HOUSING


SPECIAL ATTENTION OF:                               NOTICE PIH 2023-29

Office Directors of Public Housing;                 Issued: October 12, 2023
Regional Directors; Public Housing
Agencies                                            Expires: This notice remains in effect until
                                                    amended, superseded, or rescinded.

                                                    Cross References: Notices PIH 2022-30, 2022-09;
                                                    PIH 2022-04; 2021-34; 2021-14; PIH 2018-16; and
                                                    82 FR 5458 (January 18, 2017).


Subject: Certain Regulatory Waivers for the Housing Choice Voucher (including Mainstream)
Program and Streamlined Review Process.

1. Purpose

This Notice provides a streamlined submission and review process for regulatory waivers for (1)
new payment standard amounts through December 31, 2024 and (2) increasing the payment
standard during the HAP contract term. This streamlined process greatly simplifies and expedites
the process Public Housing Agencies (PHAs) undertake to receive approval of regulatory
waivers for these purposes. These regulatory waivers specifically relate to assisting PHAs in
responding to ongoing fluctuations and disruptions in the rental market by providing more
flexibility with establishing and applying payment standards.

Under this streamlined process, PHAs submit a simple email to HUD requesting a regulatory
waiver(s). HUD anticipates that this email generally will be one paragraph in length. Once
approved by HUD, the PHA may exercise the flexibility offered under the waiver(s) for its
Housing Choice Voucher program, including its Project-based Voucher program. PHAs that
previously were approved for a streamlined or expedited regulatory waiver under similar PIH
notices (2022-30, 2022-09, 2022-04, 2021-34 or 2021-14), and PHAs that have never applied
under those notices, must submit a new request following the instructions under Section 4 of this
notice. PHAs that have questions on how to submit a request may contact
PIH_Expedited_Waivers@hud.gov.

PHAs must use the process set forth in this Notice to submit waiver requests and justification of
good cause to receive a streamlined HUD review. HUD has developed a streamlined process to
respond to these waiver requests in accordance with Section 106 of the Department of Housing
and Urban Development Reform Act of 1989. This streamlined review process only applies to
the waivers under this notice.

Requests under this Notice must be received by 11:59 p.m. eastern time on June 3, 2024.


2. Background

                                      www.hud.gov         espanol.hud.gov
PIH notices 2022-30, 2022-09, 2022-04, 2021-34, and 2021-14 provided an expedited or
streamlined process for PHAs requesting certain regulatory waivers in order to provide flexibility
to PHAs in administering their programs. Under these notices, PHAs may have received a
regulatory waiver of 24 CFR 982.503(b)(1)(i), allowing for an increase of the payment standard
basic range up to 120 percent of the fair market rent, 24 CFR 982.503(b)(1)(iii), allowing certain
PHAs to increase an exception payment standard to up to 120 percent of the small area fair
market rent (SAFMR) for a ZIP code area, and/or 24 CFR 982.505(c)(4), allowing payment
standard increases to be applied earlier than the annual reexamination. Those waiver approvals
expire on the date provided in the PHA’s approval response from HUD.

3. Regulatory Waivers Eligible for Streamlined Waiver Process

To assist PHAs in managing ongoing challenges related to rental market fluctuations, HUD has
created a streamlined waiver process for four payment standard related waivers. PHAs may
submit streamlined waiver requests through June 3, 2024. The four payment standard waivers,
which are further described in this section, are:

   A. Exception payment standards up to 120 percent of the SAFMRs for PHAs that are in
      mandatory SAFMR areas or have voluntarily chosen to adopt SAFMRs (“Opt-In PHAs”)
   B. Exception payment standards up to 120 percent of the FMR
   C. Exception payment standards up to 120 percent for PHAs that are currently approved for
      exception payment standard SAFMRs
   D. Applying an increase in the payment standard during the HAP contract term


HUD notes that waivers A and B offered under this Notice are different than those offered under
PIH Notice 2022-30 and its predecessor notices. In the prior notices, the regulatory waiver of 24
CFR 982.503(b)(1)(i) allowed PHAs to adjust the fair market rent basic range up to 120 percent.
Under this notice, PHAs will apply for regulatory waivers related to exception payment
standards.

The three exception payment standard waivers generally are only applicable to the FY 2024
FMRs. However, PHAs with a pending FMR reevaluation that elect to continue to use the FY
2023 FMRs may request to use this waiver to establish payment standards of up to 120 percent
of the FY 2023 FMR. PHAs are reminded that all rent reasonableness requirements at 24 CFR
982.507 apply to HCV units, regardless of whether the PHA has established an exception
payment standard.

Consistent with the waiver authority in 24 CFR 5.110, HUD will consider requests to approve
the following regulatory waivers based on a PHA’s statement of good cause.

       A. Exception payment standards up to 120 percent of the SAFMRs for PHAs that are in a
       mandatory SAFMR area or Opt-In PHAs

PHAs that are located in a mandatory SAFMR area, or have voluntarily chosen to use SAFMRs
for their entire jurisdiction, may apply for a regulatory waiver under this section to increase their
payment standards up to 120 percent of the SAFMRs for their area. Based on the PHA’s

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statement of good cause discussed below, HUD may waive 24 CFR 982.503(b)(1)(iv) which
provides “At the request of a PHA administering the HCV program under Small Area FMRs
under § 888.113(c)(3), HUD may approve an exception payment standard for a Small Area FMR
area above the 110 percent of the published FMR in accordance with conditions set forth by
Notice in the Federal Register. The requirements of paragraph (c) of this section do not apply to
these exception payment standard requests and approvals.”

In order to receive this waiver, a PHA must meet at least one of the following criteria:

       Fewer than 80 percent of the families to whom the PHA issued tenant-based rental
        vouchers during the most recent 12-month period for which there is success rate data
        available have become participants in the voucher program; or
       More than 40 percent of families with tenant-based rental assistance administered by the
        agency pay more than 30 percent of adjusted income as the family share.
For these calculations, the PHA should include all tenant-based vouchers, including all special
purpose vouchers. The PHA must identify which of the criteria it meets as part of its good cause
justification in its submission. If HUD approves the waiver, the PHA may establish exception
payment standards up to 120 percent of its applicable FY 2024 SAFMRs.

The PHA may use the exception payment standards for its tenant-based program. Under 24 CFR
888.113(h), SAFMRs do not apply to project-based vouchers (PBV), unless one of the
exceptions in 24 CFR 888.113(h)(1) or (2) applies.

   B. Exception payment standards up to 120 percent of the FMR
PHAs that set their payment standards using the Fair Market Rent may apply for a regulatory
waiver under this section to increase their payment standards up to the 120 percent of the FMR,
as applicable. Based on the PHA’s statement of good cause discussed below, HUD may waive
the following program regulations:

       24 CFR 982.503(c)(1) which says, “HUD discretion. At HUD's sole discretion, HUD
        may approve a payment standard amount that is higher than the basic range for a
        designated part of the fair market rent area (called an “exception area”). HUD may
        approve an exception payment standard amount in accordance with this paragraph (c) of
        this section for all units, or for all units of a given unit size, leased by program families
        in the exception area. Any PHA with jurisdiction in the exception area may use the
        HUD-approved exception payment standard amount.”
       24 CFR 982.503(c)(2) which says, “Above 110 percent of FMR to 120 percent of
        published FMR. The HUD Field Office may approve an exception payment standard
        amount from above 110 percent of the published FMR to 120 percent of the published
        FMR (upper range) if the HUD Field Office determines that approval is justified by the
        median rent method or the 40th percentile rent or the Small Area FMR method as
        described in paragraph (c)(2)(ii) of this section (and that such approval is also supported
        by an appropriate program justification in accordance with paragraph (c)(4) of this
        section). (i) Median rent method. In the median rent method, HUD determines the
        exception payment standard amount by multiplying the FMR times a fraction of which
        the numerator is the median gross rent of the exception area and the denominator is the

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         median gross rent of the entire FMR area. In this method, HUD uses median gross rent
         data from the most recent decennial United States census, and the exception area may be
         any geographic entity within the FMR area (or any combination of such entities) for
         which median gross rent data is provided in decennial census products. (ii) 40th
         percentile rent or Small Area FMR method. In this method, HUD determines that the
         area exception payment standard amount equals application of the 40th percentile of
         rents for standard quality rental housing in the exception area or the Small Area FMR.
         HUD determines whether the 40th percentile rent or Small Area FMR applies in
         accordance with the methodology described in 24 CFR 888.113 for determining FMRs.
         A PHA must present statistically representative rental housing survey data to justify
         HUD approval.”
        24 CFR 982.503(c)(4) which says, “Program justification. (i) HUD will only approve an
         exception payment standard amount (pursuant to paragraph (c)(2) or paragraph (c)(3) of
         this section) if HUD determines that approval of such higher amount is needed either:
         (A) To help families find housing outside areas of high poverty, or (B) Because voucher
         holders have trouble finding housing for lease under the program within the term of the
         voucher. (ii) HUD will only approve an exception payment standard amount (pursuant to
         paragraph (c)(3) of this section) after six months from the date of HUD approval of an
         exception payment standard pursuant to paragraph (c)(2) of this section for the area.”
        24 CFR 982.503(c)(5) which says, “Population. The total population of HUD-approved
         exception areas in an FMR area may not include more than 50 percent of the population
         of the FMR area, except when applying Small Area FMR exception areas under
         paragraph (b)(1)(iii) of this section.”

In order to receive this waiver, a PHA must meet at least one of the following criteria:

        Fewer than 80 percent of the families to whom the PHA issued tenant-based rental
         vouchers during the most recent 12-month period for which there is success rate data
         available have become participants in the voucher program; or
        More than 40 percent of families with tenant-based rental assistance administered by the
         agency pay more than 30 percent of adjusted income as the family share.
For these calculations, the PHA should include all tenant-based vouchers, including all special
purpose vouchers. The PHA must identify which of the criteria (which are calculated for the
PHA’s entire program) it meets as part of its good cause justification in its submission. If HUD
approves the waiver, the PHA may establish exception payment standards up to 120 percent of
their applicable FY 2024 FMRs.

The PHA may use the exception payment standards for its tenant-based voucher program
throughout the entire FMR area(s) within its jurisdiction.1



1
  If the PHA has a HUD-approved HCV exception payment standard, the applicable PBV rent cap is the HUD
approved exception payment standard instead of the normally applicable cap of 110 percent of FMR. If the PHA
administers PBVs, the amount of rent to owner under 24 CFR 983.301(b) must not exceed the lowest of the rent
requested by the owner, the reasonable rent, or an amount determined by the PHA, not to exceed 110 percent of the
applicable FMR or any exception payment standard approved by the Secretary, minus utility allowance (see 24 CFR
983.301(c) for calculations applicable to certain tax credit units.
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A PHA that uses the FMR to establish payment standards for some portion of its jurisdiction in
combination with SAFMR exception payment standards for another portion of its jurisdiction
and wishes to establish payment standards up to 120% for both, must apply for waiver B and
waiver C.

   C. Exception payment standards up to 120 percent of the SAFMR for PHAs that are
      currently approved for exception payment standard SAFMRs

PHAs that are currently approved for exception payment standard SAFMRs for certain zip codes
only under 24 CFR 982.503(b)(1)(iii) and PIH Notice 2018-01, may apply for a regulatory
waiver under this section to increase their payment standards up to the 120 percent of the
SAFMR, as applicable. PHAs that currently use exception payment standard SAFMRs in
combination with the FMR may apply for this waiver and waiver B. Based on the PHA’s
statement of good cause discussed below, HUD may waive the following program regulations:

       24 CFR 982.503(b)(1)(iii) which says, “A PHA that is not in a designated Small Area
        FMR area or has not opted to voluntarily implement Small Area FMRs under 24 CFR
        888.113(c)(3) may establish exception payment standards for a ZIP code area above the
        basic range for the metropolitan FMR based on the HUD published Small Area FMRs.
        The PHA may establish an exception payment standard up to 110 percent of the HUD
        published Small Area FMR for that ZIP code area. The PHA must notify HUD if it
        establishes an exception payment standard based on the Small Area FMR. The exception
        payment standard must apply to the entire ZIP code area.”

In order to receive this waiver, a PHA must meet at least one of the following criteria:

       Fewer than 80 percent of the families to whom the PHA issued tenant-based rental
        vouchers during the most recent 12-month period for which there is success rate data
        available have become participants in the voucher program; or
       More than 40 percent of families with tenant-based rental assistance administered by the
        agency pay more than 30 percent of adjusted income as the family share.
For these calculations, the PHA should include all tenant-based vouchers, including all special
purpose vouchers. The PHA must identify which of the criteria it meets as part of its good cause
justification in its submission. If HUD approves the waiver, the PHA may establish exception
payment standards up to 120 percent of its applicable FY 2024 SAFMRs. Please note that the
PHA must have first properly adopted SAFMRs in accordance with PIH Notice 2018-01 to apply
for this waiver.

A PHA that uses the FMR to establish payment standards for some portion of its jurisdiction in
combination with SAFMR exception payment standards for another portion of its jurisdiction
and wishes to establish payment standards up to 120% for both, must apply for this waiver B and
waiver C.

   D. Applying an increase in the payment standard during the HAP contract term
Based on the PHA’s statement of good cause, HUD may approve a waiver of 24 CFR
982.505(c)(4) which says, “Increase in the payment standard amount during the HAP contract

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term. If the payment standard amount is increased during the term of the HAP contract, the
increased payment standard amount shall be used to calculate the monthly housing assistance
payment for the family beginning at the effective date of the family's first regular reexamination
on or after the effective date of the increase in the payment standard amount.”

Examples of good cause for this waiver include, but are not limited to:

      PHA has experienced an increase in family rent burdens
      PHA anticipates potential negative impacts to tenants or the onset of housing instability

The PHA will describe its good cause justification in its submission. If HUD approves its waiver
request, the PHA may increase the payment standard for the family at any time after the effective
date of the increase, rather than waiting for the next regular reexamination.

4. Submission Requirements

Requests must be received by HUD on or before 11:59 pm eastern time on June 3, 2024, to
receive streamlined processing.

To ensure streamlined processing, PHAs should email its waiver requests to
PIH_Expedited_Waivers@hud.gov with a copy to their local field office public housing
directors. Each request must include:

    (1) An email subject line of: “Streamlined Regulatory Waiver Request, [PHA name and
        code]”.
    (2) Body of email should include:
           PHA business address and name and email for point of contact.
           Name of the regulatory waiver(s) being requested.
           A PHA-specific justification for the waiver(s) that shows good cause.
                 o The good cause justification must include (a) why a PHA needs the waiver
                    and (b) the impact on PHA operations or applicants if the waiver is not
                    provided
           Requested duration of the waiver(s).
                 o Waiver duration may not exceed December 31, 2024. HUD may provide
                    a shorter timeframe or other conditions as a part of an approval.
Prior to submission, the PHA must determine the budgetary impacts on its program and ensure
they have the available budget authority to support these payment standard related waivers.
PHAs are encouraged to use the “Payment Standard Tool” to help determine the budgetary
impacts.

Following submission, PIH will reply via email confirming that the request has been received.
The PIH Program Office prepares a final determination for approval by its Assistant Secretary
and PHAs receive the signed response to the waiver request via email.

No waiver(s) requested may be implemented unless written approval from HUD has been
obtained.


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PHAs may continue to request other regulatory waivers as necessary to operate its HCV
program; however, they will not be subject to the streamlined process. PHA waivers submitted
under the streamlined process in this Notice should not be combined with waivers submitted
under the standard process described in PIH Notice 2018-16. PHAs requesting exception
payment standard SAFMRs under PIH Notice 2018-01 also should not combine those requests
with requests under this Notice.


7. For further information: Contact Alison Bell, Housing Voucher Management and
Operations Division, Office of Public and Indian Housing, Department of Housing and Urban
Development, 451 7th Street, SW, Room 4214, Washington, DC 20410-5000, or email to
PIH_Expedited_Waivers@hud.gov.




                                                     _____________________________
                                                     Richard J. Monocchio
                                                     Principal Deputy Assistant Secretary
                                                      for Public and Indian Housing




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