HUD PIH Notice § 2025-28

Special Attention of:                                      Notice PIH 2025-28
Public Housing Agencies
Public Housing Directors                                   Issued: November 17, 2025
Regional Public Housing Directors
                                                           Expires: This notice remains in effect until
                                                           amended, superseded, or rescinded.

                                                           Supersedes: Notices PIH 2011-28 and
                                                           2017-21 Attachment H

                                                           Cross References: Notices PIH 2011-28,
                                                           2013-28, 2014-25, 2016-09, 2017-21, 2018-
                                                           26, and 2024-34


Subject: Cost-Savings Measures in the Housing Choice Voucher (HCV) and Project Based
Voucher (PBV) Programs


I.    PURPOSE
This notice provides a menu of options for public housing agencies (PHA), including Moving to
Work (MTW) PHAs, that need to reduce housing assistance payment (HAP) expenses to prevent
shortfalls. This notice also can be a reference for PHAs working with the Department of Housing
and Urban Development’s (HUD) Shortfall Prevention Team (SPT). This notice supersedes
Notice PIH 2011-28 and Attachment H to Notice PIH 2017-21.1

II. BACKGROUND
Congress funds the HCV program annually through an appropriations act. HUD then obligates
this funding to PHAs based on a calendar year (CY). PHAs are responsible for managing this
funding and ensuring that program costs do not exceed the amount of federal funds available to
them (including any HAP reserves, which is the Restricted Net Position and HUD-held reserves)
for the CY.

HUD recommends PHAs monitor their HAP spending using HUD’s Two-Year Tool, which can
help PHAs identify whether they are projected to face a shortfall in federal funding. A shortfall is
when a PHA is projected to have insufficient funds (including HAP reserves) to support all HCV
participant families through the end of the CY. PHAs that are at risk of shortfall are encouraged
to contact and consult with their local HUD Public Housing Field Office or the Shortfall
Prevention Team.
1
 Attachment H to Notice PIH 2017-21 provided guidance on the requirement that PHAs must implement cost-
savings measures before terminating any PBV HAP contract as a result of the Housing Opportunity Through
Modernization Act of 2016 (HOTMA), Pub. L. 114–201, 130 Stat. 782, which was signed into law on July 29, 2016.
                                                                                                  2


When a PHA faces a shortfall, the PHA has several options to reduce costs, which are described
in this notice. In addition, MTW PHAs are encouraged to evaluate approved MTW activities for
possible cost savings (e.g., reduce amounts obligated to activities like landlord incentives or
deposit assistance). If a PHA’s cost-savings actions are insufficient to prevent the termination of
assistance to existing HCV and PBV families, HUD may provide available Shortfall Funding to
those PHAs who have exhausted all other feasible cost-cutting measures. Requirements for
Shortfall Funding are set annually in the HCV Funding Implementation Notice, which can be
found on HUD’s Public and Indian Housing Notices webpage.

III. PHA ACTIONS TO REDUCE HCV PROGRAM COSTS
The following non-exhaustive list of PHA cost-savings actions is divided into three categories:
(1) standard regulatory compliance and sound program management practices that may also
reduce program costs; (2) additional actions PHAs may consider to lower costs; and (3) further
cost-savings actions that require HUD approval.

Potential cost saving measures in category 1 are current mandatory program requirements that, if
used proactively, may assist in better managing HAP expenses. Cost-savings measures in
categories 2 and 3 are optional, except when required by HUD prior to terminating HAP
contracts (see Section IV) or as a condition of receiving Shortfall Funding.

These measures have varying degrees of effects on applicant and participant families. HUD
recommends that the effect of each action be considered prior to implementation, particularly on
assisted families. If an action adversely impacts program participants, such as by increasing a
family’s rent burden, HUD strongly recommends that the PHA first consider taking other actions
having no or a lesser effect on families, including the use of administrative fee reserves to pay
for HAP expenses.

A. Category 1: Standard Regulatory Compliance and Sound Program Management
   Practices
   1. Ensuring Correct Voucher Size. PHAs must ensure the payment standard used to
      calculate the family share is based on the lower of the voucher size for which the family
      is eligible or the actual unit size leased.2 For example, a single-member household living
      in a three-bedroom unit must have a zero- or one-bedroom payment standard, not a three-
      bedroom payment standard.3 If the family composition changes after admission, the PHA
      must ensure the correct payment standard is used in calculating the family rent portion.

        In the PBV program, the PBV contract unit leased to each family must be appropriate for
        the size of the family under the PHA's subsidy standards.4 If the PHA determines that a
        family is occupying a wrong-size unit for any reason, including following a change to the
        family composition, then the PHA must follow the requirements in 24 CFR 983.260 to
        offer the family continued housing assistance.



2
  24 CFR 982.505(c)(1)
3
  24 CFR 982.402(b)(1)
4
  24 CFR 983.253(b)
                                                                                                                 3


        PHAs may use data analytic tools available in their respective PHA software system,
        HUD’s Inventory Management System/Public and Indian Housing (PIH) Information
        Center (IMS/PIC), or its successor system, to help detect and monitor over-subsidized
        households. A PHA’s Form HUD-50058 Ad-Hoc Report in IMS/PIC and the PIC
        Drilldown Report in PIH’s Tool of Tools may enable the PHA to monitor the factors that
        would indicate over subsidization and other improper payments.

        Using the 50058 Ad-Hoc Report, PHAs can ensure that the voucher size and payment
        standard, or PBV unit size, are correct for each family and make corrections where
        necessary. PHAs are encouraged to review these reports on a regular basis (e.g., monthly
        or quarterly) to ensure families that do not have an approved reasonable accommodation
        for a larger unit size are not being mistakenly over-subsidized. See Notice PIH 2014-25
        for additional information.

    2. Reviewing Payment Standards. PHAs must review their payment standard amounts and
       schedule and adopt any updates to remain within the basic range of 90 to 110 percent of
       the applicable fair market rents (FMR) no later than 3 months following the effective date
       of the HUD-published FMR, which generally takes effect each Federal fiscal year on
       October 1. PHAs are not required to increase (or decrease) the dollar amount of their
       payment standards based on changes in applicable FMRs unless the change in FMR
       results in the PHA’s payment standard being outside the basic range.5 PHAs with current
       payment standards that will be below 90 percent of the new FMRs and that do not wish to
       increase their payment standards to contain costs must request HUD approval in advance
       (per the procedure in Section III.C).

        The Department recommends PHAs regularly monitor local market rent trends, leasing
        success rates, and rent burdens of the families they serve, all of which are important
        indicators of whether their payment standards are adequate. As a result of such reviews,
        PHAs may opt to lower (or raise) payment standards for all or some unit sizes.6 In the
        tenant-based HCV program, a decrease in the payment standard applies immediately to
        all new admissions and all movers. For all other tenant-based HCV participants, a
        decrease in payment standard amounts may not be applied earlier than 2 years after the
        effective date of the decrease in payment standard, and the PHA must provide the family
        with at least 12 months’ written notice of any reduction in the payment standard amount
        that will affect the family if the family remains in place.7

        The Department recommends PHAs experiencing HAP funding difficulties that have
        adopted increased exception payment standards under Notice PIH 2024-34 consider
        whether those exception payment standards are still necessary to help families lease units.



5
  24 CFR 982.503(c)(3). For MTW PHAs, this is applicable except where an approved MTW waiver is in place to
set payment standards outside the basic range.
6
  Payment standards do not apply to the PBV program, except to the extent that exception payment standards may
impact a PHA’s determination of the rent to owner for a PBV project (24 CFR 983.2(c)(7), 983.301(b)(1), (c)(f)(3)).
See Section III.A.6 of this notice for information about PBV rent to owner cost savings.
7
  24 CFR 982.505(c)(3)
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        PHAs may discontinue the use of exception payment standards without notification to
        HUD.

        A Payment Standard Tool (PST) is available within the Tool of Tools on HUD’s HCV
        Utilization Tools webpage. The PST allows PHAs to determine the impact of potential
        payment standard changes on both program costs and participant rent burden. Your local
        HUD Public Housing Field Office is available to provide training and assistance on this
        tool.

    3. Utility Allowances.
           i. Reviewing Utility Rates. PHAs must review utility allowances at least annually.8
               PHAs may review their utility allowances more frequently to determine if they are
               higher than the typical cost. Changes in utility allowances may be applied
               immediately but not later than the next regularly scheduled reexamination of
               family income. A utility allowance category must be changed if there is an
               increase or decrease of 10 percent or more in the utility rate since the last time the
               utility allowance schedule was revised.9

             ii. Ensuring Accuracy of Individual Utility Allowances. As a reminder, PHAs
                 must ensure that the utility allowance used to calculate the housing assistance
                 payment for a tenant-based HCV is for the lesser of the size of dwelling unit
                 leased by the family or the family unit size as determined under the PHA subsidy
                 standards.10 In cases where the unit size leased exceeds the family unit size as
                 determined under the PHA subsidy standards as a result of a reasonable
                 accommodation, the PHA must use the appropriate utility allowance for the size
                 of the dwelling unit actually leased by the family.

             iii. Implementing Utility Allowance Flexibilities. PHAs may also maintain an area-
                  wide, energy-efficient utility allowance schedule to be used for units that are in a
                  building that meets Leadership in Energy and Environmental Design (LEED) or
                  Energy Star standards,11 which could result in cost savings. Additionally, the PHA
                  may base its utility allowance payments on actual flat fees charged by an owner
                  for utilities that are billed directly, but only if the flat fee charged by the owner is
                  no greater than the PHA's applicable utility allowance for the utilities covered by
                  the fee. If an owner charges a flat fee for only some of the utilities, then the PHA
                  must pay a separate allowance for any tenant-paid utilities that are not covered in
                  the flat fee. For more information, see 24 CFR 982.517(b)(2).

    4. Conducting Rent Reasonableness. The PHA must determine whether the rent to owner
       is a reasonable rent in comparison to rent for other comparable unassisted units and in



8
  24 CFR 982.517(c)(1)
9
  24 CFR 982.517(c)
10
   24 CFR 982.517(d)
11
   24 CFR 982.517(b)(2)(ii)
                                                                                                                    5


        accordance with the HAP contract.12 The PHA must ensure that owner rents do not
        exceed amounts charged for unassisted units in the same building or complex.13 The
        initial rent and all rent increases must comply with any applicable State or local rent
        control limits.14 As a cost-savings measure, PHAs do not have to wait until the HAP
        contract anniversary date to review and make adjustments to the owner rents, which may
        include reducing them if warranted.

        In accordance with the HAP contract, the PHA must provide written notice to owners
        before reducing unreasonable rents.15 Rents may be reduced as early as the first of the
        following month.

        If the rent to the owner for a unit assisted with a tenant-based HCV is not reasonable as
        most recently determined by the PHA, the owner must reduce the rent to the reasonable
        amount determined by the PHA or the HAP contract must be terminated. In such cases,
        the family will be issued an HCV to find a new unit. Movers, like new participants, are
        subject to a PHA’s current payment and subsidy standards.

        In the PBV program, a single HAP contract may cover multiple units with different rents
        to owner (for example, one-bedroom units will have a different rent to owner than two-
        bedroom units). During the term of a PBV HAP contract, the rent to owner for each
        contract unit may not exceed the reasonable rent, except that in cases where the PHA has
        elected in the HAP contract to not reduce rents below the initial rent, the rent to owner
        shall not be reduced below the initial rent.16 Therefore, if the rent to owner for any of the
        PBV contract units is not reasonable as most recently determined by the PHA, the PHA
        must reduce the rent for all such units to the reasonable amount except as provided in 24
        CFR 983.302(c)(2). If the rent for any PBV contract unit is reduced below the initial rent,
        the owner may terminate the HAP contract,17 and the PHA must issue each family
        residing in a contract unit a tenant-based HCV.18

        Even if an owner’s rent is reasonable, a PHA could request owners to voluntarily agree to
        a temporary rent reduction or defer rent increases to help the PHA avoid the termination
        of HAP contracts due to shortfalls in HCV funding.19 It is the owner’s option to agree to
        such measures. However, a PHA may not “freeze” rents due to insufficient funding when
        an owner requests an increase,20 if the PHA determines the increased rent to be
        reasonable (and the PHA determines the increase is consistent with the provisions

12
   24 CFR 982.507(b), 24 CFR 983.303. See Notice PIH 2020-19 and HUD’s Rent Reasonableness Guidebook
Chapter for more information.
13
   24 CFR 982.507(d), 983.210(g), 983.301(e)
14
   24 CFR 982.509, 983.305
15
   For requirements specific to the PBV program, see 24 CFR 983.302(d).
16
   24 CFR 983.303(a), 24 CFR 983.302(c)(2)
17
   24 CFR 983.206(d)
18
   The requirement that, subject to certain conditions, each assisted family may elect to use its tenant-based
assistance to remain in the same project applies (24 CFR 983.206(b)).
19
   For the PBV program, the owner would effectuate the reduction or deferral by submitting a lower rent requested
by the owner pursuant to 24 CFR 983.301(b)(3).
20
   For the PBV program, an owner request is not required if the HAP contract provides for automatic adjustment by
an operating cost adjustment factor (OCAF) (24 CFR 983.302(b)(2)).
                                                                                                                     6


         governing maximum rent in the case of PBV21) and the owner does not agree to defer a
         rent increase.

     5. Evaluating Entering New PBV HAP Contracts. PHAs’ PBV programs are funded with
        a portion of appropriated funding (budget authority) available under the PHA’s voucher
        Consolidated Annual Contributions Contract (CACC).22 Each PHA is responsible for
        determining the amount of budget authority that is available for PBVs and for ensuring
        that the amount of assistance that is attached to units is within the amounts available
        under the CACC.23 Generally, a PHA in a shortfall may not issue new requests for
        proposals or undertake new selection processes, except for new PBV conversions under
        the Rental Assistance Demonstration. PHAs may cancel requests for proposals (RFP) or
        other selection processes that are underway but have not yet resulted in a proposal or
        project selection if the PHA determines it does not have budget authority available to pay
        the HAP for PBV contract units. A best practice is to include information in RFPs stating
        that factors outside the PHA’s control may result in cancellation of the RFP. PHAs may
        also include a condition in the written notice of proposal or project selection24 that allows
        the PHA to rescind the selection if the PHA determines it does not have sufficient budget
        authority. If a PHA has executed an Agreement to Enter into a HAP Contract (AHAP)
        covering a project, the PHA must execute a new PBV HAP contract if the owner
        completes the units and otherwise fulfills all AHAP terms. If a PHA subsequently needs
        to terminate a HAP contract in effect, the PHA would proceed as discussed in Section IV
        below.

     6. Determining PBV Rent to Owner. PHAs determine the amount (within maximum
        limits)25 at which they set the rent to owner at each PBV project, though the amount must
        not exceed the rent requested by the owner (if applicable)26 or the reasonable rent.27 A
        PHA’s policy regarding the PHA-determined amount it will use to calculate rent to owner
        must be in the PHA’s Administrative Plan.28 The PHA’s policy must establish the level at
        which the PHA will set the rent to owner for PBV projects by bedroom size and/or any
        criteria or methodology the PHA will use to determine any different rent amounts that

21
   24 CFR 983.301, 983.302
22
   24 CFR 983.5(b)
23
   24 CFR 983.6(c)
24
   24 CFR 983.51(f)
25
   Under the applicable regulation at 24 CFR 983.301, the PHA-determined amount must not exceed 110 percent of
the applicable FMR (which may be the Small Area FMR in accordance with 24 CFR 888.113(c)(5) and (h)), minus
any applicable utility allowance, with two exceptions. First, if an exception payment standard applies to the PBV
project in accordance with 24 CFR 983.301(f), or 89 FR 65769 for projects comprised solely of units exclusively
made available to HUD-Veterans Affairs Supportive Housing (VASH) families, and the project is not a tax credit
project that meets the criteria of 24 CFR 983.301(c)(1), then the PHA-determined amount must not exceed the
exception payment standard minus any applicable utility allowance. Second, if the project is a tax credit project that
meets the criteria of 24 CFR 983.301(c)(1), then the PHA-determined amount must not exceed the tax credit rent
minus any applicable utility allowance. There is no minimum PHA-determined amount; for example, the PHA-
determined amount may be less than 90 percent of the FMR, the exception payment standard, or the tax credit rent,
as applicable.
26
   The owner need not request an amount of rent to owner if the rent is redetermined by OCAF (24 CFR
983.302(b)(2)-(3)).
27
   24 CFR 983.301(b)-(c)
28
   24 CFR 982.54(a), 983.10(b)(19), 983.301(b)(1), (c)(2)(i)
                                                                                                                   7


         will apply to different PBV projects or units, in accordance with program requirements.
         PHAs may change their Administrative Plan policies regarding the PHA-determined
         amount they will use to calculate rent to owner prospectively, with respect to any future
         PBV HAP contracts they may enter into, as a cost-savings measure.

         As a reminder, changes to the PBV rent to owner have no effect on the tenant rent, which
         is the total tenant payment minus the utility allowance.29

         PHAs may also consider whether to elect within PBV HAP contracts to not reduce rents
         below the initial rent to owner.30 PHAs may be able to achieve cost-savings during the
         term of a PBV HAP contract if they preserve the option to reduce the rent to owner to a
         level lower than the initial rent to owner.

B. Category 2: Additional Actions PHAs May Consider to Lower Program Costs
   1. Reducing or Stopping Voucher Issuance to Applicants.31 PHAs may reduce or stop
      issuing turnover vouchers to new applicants.32

         Voucher issuance is not applicable to the PBV program,33 under which the PHA attaches
         vouchers to specific units under a HAP contract.34 Families are referred to PBV units for
         occupancy and are not issued a voucher. PHAs must make every reasonable effort to
         refer families for occupancy from a PHA-maintained waiting list and make final
         eligibility determinations for families selected from an owner-maintained waiting list
         within 30 calendar days.35 PHAs are not permitted to stop filling vacancies in PBV units
         solely as a result of insufficient funding. Rather, when facing a shortfall that may impact
         funds for PBV units, the PHA must first take cost-savings measures, with termination of
         PBV HAP contracts being a last resort, as discussed in Section IV of this notice.

     2. Increasing the Minimum Rent. PHAs may increase the minimum rent up to $50 (or
        higher for MTW PHAs with an approved MTW waiver to increase the minimum rent
        above $50).36 The effective date for the increased minimum rent is dependent upon PHA
        policy.37 PHAs could institute a policy for increases in family contribution to be effective
        immediately (i.e., once the change is adopted, it can be applied with an interim

29
   24 CFR 983.353(b)(1). See 24 CFR 5.520(c)(1) for additional provisions regarding prorated assistance.
30
   24 CFR 983.302(c)(2)
31
   Families seeking to move from PBV units with tenant-based HCVs are not applicants. After admission, and so
long as the family is continuously assisted with tenant-based or PBV assistance from the PHA, a shift from tenant-
based or project-based assistance to the other form of voucher assistance is not a new admission (24 CFR 983.3(b)).
32
   With respect to PHA eligibility for any available shortfall funding, HUD states the relevant requirements in its
annual “implementation of federal fiscal year funding provisions for the HCV program” notice. PHAs should review
the most recent notice for information on the requirement to reduce or stop voucher issuances to applicants and other
relevant requirements with respect to eligibility for shortfall funding. For Federal fiscal year 2025, see Notice PIH
2025-13.
33
   24 CFR 983.2(b)(1)
34
   24 CFR 983.5(a)
35
   24 CFR 983.254(a)
36
   24 CFR 5.630(a)(2). See Notices PIH 2019-12 and 2001-41, or any successor notices, for minimum rent
requirements for enhanced vouchers.
37
   24 CFR 982.516(e)(1)
                                                                                                                8


        reexamination) rather than at the next annual reexamination. PHAs may choose to charge
        a lower minimum rent (including a minimum rent of $0) specifically for their HUD-
        Veterans Affairs Supportive Housing (VASH) program.38

     3. Stopping Portability Absorption. A receiving PHA can always stop absorbing new
        portable families and elect to bill the initial PHA as a cost-savings measure. An initial
        PHA may also request that a receiving PHA absorb portable families for which the initial
        PHA is billed. This request may include asking the receiving PHA to retroactively absorb
        families for which the initial PHA was already billed and made payments. In these cases,
        the receiving PHA reimburses the initial PHA for payments made back to the effective
        date of the absorption but only for the current calendar year. Both the receiving PHA and
        initial PHAs must agree to this arrangement. Refer to Notice PIH 2016-09, Section 16.

        As a reminder, a receiving PHA cannot “absorb” a family into its HCV program until it
        executes a HAP contract on behalf of the family that moves to a new unit. If the family is
        not placed under a HAP contract for a new unit in the receiving PHA’s jurisdiction, the
        receiving PHA cannot absorb the family.

     4. Reducing Subsidy Standards. Subsidy standards are established by a PHA to determine
        the appropriate number of bedrooms and amount of subsidy (voucher size) for families of
        different sizes and compositions. PHAs may revise subsidy standards that exceed
        minimum HUD requirements to reduce voucher size eligibility.39 Subsidy standards must
        be consistent with the space requirements, which provide that units assisted under the
        HCV or PBV program must have at least one bedroom or living/sleeping room for each
        two persons.40

        In the case of tenant-based HCVs, irrespective of any increase or decrease in the payment
        standard amount, if the family voucher size increases or decreases during the HAP
        contract term, due to change in family composition or change in PHA subsidy standard
        policy, PHAs may use the new voucher size to determine the payment standard amount
        for the family immediately but no later than the family's first regular reexamination
        following the change in eligible voucher size.41

        In the case of PBVs, if a PHA determines that a family is occupying a wrong-size unit
        following a change to the PHA’s subsidy standards, then the PHA must follow the
        requirements in 24 CFR 983.260 to offer the family continued housing assistance in
        another unit.

C. Category 3: Further Cost Savings Actions that Require HUD Approval
   1. Denying Portability and Moves within the PHA Jurisdiction. Under limited
      circumstances, PHAs may deny requests from families receiving tenant-based HCVs to

38
   See 89 FR 65769 for more information.
39
   24 CFR 982.402
40
   24 CFR 5.703(d)(5). See Notice PIH 2016-02, or any successor notice, for subsidy standard requirements for
enhanced vouchers.
41
   24 CFR 982.505(c)(6)
                                                                                                    9


        move if the PHA does not have sufficient funding for continued assistance.42 See Notice
        PIH 2016-09 for the requirements on when a PHA may deny a tenant-based HCV
        family’s request to move and instances when a PHA must not deny a family’s request to
        move, as well as other pertinent information related to moves and portability.
        For PBV families, if continued tenant-based rental assistance, such as a tenant-based
        HCV, is not immediately available due to insufficient funding at the time the family is
        requesting to move with tenant-based rental assistance,43 then the family must wait until
        funding is available, and the PHA must give the family priority to receive the next
        available opportunity for continued tenant-based rental assistance (regardless of where
        the family will move).

        Once a family is eligible to move from a PBV unit with a tenant-based HCV,44 PHAs
        may only deny the family’s request to move until the next opportunity for continued
        tenant-based rental assistance is available.45 First, the PHA must determine that: (1) no
        comparable tenant-based rental assistance that may be provided pursuant to the
        Administrative Plan is available, and (2) the PHA has insufficient funds to pay for and/or
        insufficient CACC unit authority to issue an additional tenant-based HCV without having
        to terminate assistance of current program participants during the current CY.

        PHAs may make reasonable estimates when projecting whether there is sufficient
        funding available for the remainder of the CY to support the additional voucher that
        would be issued to a family exiting PBV (the family’s current voucher would remain
        attached to the PBV unit for occupancy by a new family).46 The PHA may factor in the
        following conditions:

                Pending rent increases that would affect the subsidy
                Attrition rate for families leaving the program
                Costs for vouchers issued to families from the waiting list but not yet leased

     2. Rescinding Vouchers Issued to Applicants. PHAs may consider pulling back vouchers
        issued to applicants searching for housing that have not yet resulted in an executed HAP
        contract. The PHA must work with HUD’s SPT and the local HUD Public Housing Field
        Office prior to pulling back outstanding vouchers, because of the detrimental effect this
        would have on impacted families. HUD recommends PHAs not consider pulling back
        vouchers unless they are in shortfall, and they have determined, in consultation with the
        HUD SPT, that this step is necessary to mitigate terminations of assistance.

     3. Request a Waiver to Apply Decreases in Payment Standards During the HAP
        Contract Term Immediately. As explained above, while a reduced payment standard
        applies immediately to all households that are newly admitted or have moved, the
        application of the reduced payment standard is delayed for all other households. The

42
   24 CFR 982.354(e)(1)
43
   24 CFR 983.261
44
   24 CFR 983.261
45
   24 CFR 983.261(c)
46
   24 CFR 983.5(a)(1)
                                                                                                   10


           delayed applicability of a lower payment standard is a regulatory, not statutory,
           requirement. PHAs experiencing financial difficulties and working with the SPT may
           request a regulatory waiver for good cause so that reduced payment standards may be
           applied immediately with notice to the family in accordance with their Administrative
           Plan policies. HUD will only consider waiver requests to apply reductions immediately
           as part of the action plan established by the SPT.

           HUD recommends that PHA waiver requests to apply reductions immediately include the
           calculation used to arrive at the projected shortfall in funding and cost-savings measures
           the PHA has already taken or will take in the future as part of their good cause
           justification.

       4. Request Approval to Establish Payment Standards Below 90 Percent of the
          Applicable FMR. The regulations allow PHAs to request approval from HUD to
          establish a payment standard below 90 percent of the applicable published FMR by
          following the requirements in 24 CFR 982.503(e), which are also described in Notice
          PIH 2024-34. However, HUD will not approve such payment standard amounts if the
          family share for more than 40 percent of the PHA’s voucher participants exceeds 30
          percent of monthly adjusted income unless it is necessary to prevent termination of
          program participants. This is a regulatory requirement. PHAs experiencing financial
          difficulties may request that HUD waive this requirement for good cause.

           In determining whether to approve a PHA’s request to establish payment standards below
           the basic range, HUD will review and take into consideration the PHA’s current rent
           burden and the impact of the proposed change on the PHA’s participants. In addition, as a
           condition of the approval, HUD may require the PHA to raise payment standards and
           apply the new payment standard amounts immediately at such time that the PHA receives
           additional funding.

IV. TERMINATION OF ASSISTANCE DUE TO INSUFFICIENT FUNDING
As a last resort, PHAs may terminate HAP contracts for families assisted with tenant-based
HCVs, in accordance with HUD requirements and their Administrative Plan (as discussed further
below), if the PHA determines that funding under the CACC is insufficient to support continued
assistance for families in the program.47

In the PBV program, consistent with the policies in the PHAs’ Administrative Plans, PHAs have
the option of terminating a PBV HAP contract based on insufficient funding only if:48

          The PHA determines in accordance with HUD requirements that it lacks sufficient HAP
           funding (including HAP reserves) to continue to make housing assistance payments for
           all voucher units currently under a HAP contract;
          The PHA has taken cost-saving measures specified by HUD;
          The PHA notifies HUD of its determination and provides the information required by
           HUD; and
47
     24 CFR 982.454
48
     24 CFR 983.206(c)(1)
                                                                                                             11


        HUD determines that the PHA lacks sufficient funding and notifies the PHA it may
         terminate HAP contracts as a result.

For both tenant-based HCV and PBV HAP contracts, PHAs must notify HUD’s SPT and local
Public Housing Field Office prior to issuing notices of termination actions due to insufficient
funding. The notice to HUD must be in writing and must include all measures taken to date to
reduce or eliminate the shortfall and the number and date(s) of proposed termination. PHAs are
encouraged to utilize alternative sources of unrestricted non-Federal funding that may be
available to prevent the termination of rental assistance, consistent with the terms of Notice PIH
2013-28 and any subsequent HUD guidance on this matter.

Prior to terminating any HAP contract based on insufficient funding, the PHA must comply with
the instructions from the SPT and local HUD Public Housing Field Office to implement all
additional cost-savings measures other than termination of any tenant-based rental assistance or
project-based voucher HAP contract. If a PHA implements all these cost-savings measures and
still has insufficient funds to cover its housing assistance payments, then, upon written HUD
approval, the PHA may choose to terminate payments under its tenant-based HCV or PBV
programs.49

PHA termination policies due to insufficient funding must be included in the Administrative
Plan. Such policies must describe how the PHA will determine which HAP contracts will be
terminated, and the factors it considered in making this determination.50 If the PHA chooses to
have a policy to terminate a specific type of assistance first, such as tenant-based HCV or PBV,
the policy must be in the PHA’s Administrative Plan. PHAs with families enrolled in the PHA’s
Family Self-Sufficiency (FSS) program are encouraged to consider the impacts of terminating
FSS families in their termination policy and make every effort to graduate FSS families prior to
any termination or terminate with escrow disbursement in accordance with 24 CFR 984.303(k) if
applicable. PHAs may seek a waiver to allow for escrow disbursement for families that do not
meet the requirements in 24 CFR 984.303(k). PHAs are encouraged to consider policies that
would minimize the impact of contract terminations on assisted families, such as terminating
new PBV HAP contracts covering units that are not yet occupied first. Any PHA policies with
respect to the resumption of assistance for the impacted families must also be included in the
Administrative Plan.

V. REASONABLE ACCOMMODATIONS
Regardless of a PHA’s adoption of policies to deny portability or moves within a PHA’s
jurisdiction or revision of payment standards or subsidy standards, PHAs must consider requests
for reasonable accommodations that are necessary for a qualified individual with a disability to
benefit from the program (in accordance with the Fair Housing Act, Section 504 of the
Rehabilitation Act, title II of the Americans with Disabilities Act and HUD’s implementing

49
   The requirement to implement cost-savings measures other than contract termination before terminating any HAP
contract is a statutory requirement of HOTMA. HUD implemented this statutory provision by notice in Housing
Opportunity Through Modernization Act of 2016: Implementation of Various Section 8 Voucher Provisions, 82 FR
5458, 5469 (Jan. 18, 2017). HUD provided guidance in Notice PIH 2017-21, Attachment H. Subsequently, HUD
amended the PBV regulations at 24 CFR 983.206(c)(1) to codify this provision of HOTMA.
50
   24 CFR 982.54(d)(26)
                                                                                                      12


regulations at 24 CFR 100.204, 24 CFR 8.33, and 28 CFR 35.130). An individual with a
disability can request a reasonable accommodation to any rules, policies, practices or services at
any time.

The reasonable accommodation determination is made on a case-by-case basis. The PHA must
grant the accommodation unless doing so would impose an undue financial and administrative
burden to the PHA. The determination of undue financial and administrative burden must be
made by the PHA or HUD on a case-by-case basis involving various factors, such as the cost of
the requested accommodation, the financial resources of the PHA, the benefits that the
accommodation would provide to the individual with the disability, and the availability of
alternative accommodations that would effectively meet the individual's disability-related
needs.

When a PHA denies a reasonable accommodation due to the reasons stated above, the PHA
should discuss with the family whether there is an alternative accommodation that would
effectively address the family's disability-related needs. If an alternative accommodation would
effectively meet the family's disability-related needs and is reasonable, the provider must grant it.
An interactive process in which the PHA and the family discuss the family's disability-related
need for the requested accommodation and possible alternative accommodations is helpful to
all concerned, because it often results in an effective accommodation for the family that does
not pose an undue financial and administrative burden for the PHA.

VI. PHA PLAN REQUIREMENTS
Any measures referenced in this notice that constitute a significant amendment or modification51
to the PHA Plan or MTW Plan, as determined by the PHA, are subject to the requirements of 24
CFR 903.13, 903.15, and 903.17, which include a public hearing and comment period.

VII. PHA REQUEST FOR REGULATORY WAIVER(S)
The regulatory waiver process of the Office of Public and Indian Housing requires PHAs to first
send their request to the appropriate local HUD Public Housing Field Office; the field office then
forwards the waiver request to the appropriate program office at HUD Headquarters along with a
field office recommendation. If more than one cost-savings waiver is requested, which may be in
a single submission, the PHA must demonstrate how both/all waivers are necessary to avoid a
shortfall that would result in the termination of families. Each regulatory waiver request must
identify the regulation from which relief is sought and present justification pursuant to 24 CFR
5.110. See Notice PIH 2018-16 for additional information.

VIII. FURTHER INFORMATION
For further information about this notice, PHAs may contact their local HUD Public Housing
Field Office.52 In addition, PHAs that are experiencing funding difficulties, or that believe they
may experience funding difficulties in the future, should contact their local HUD Public Housing
Field Office.



51
     24 CFR 903.7(s)(2)
52
     Go to HUD’s Local Office Directory to find your local HUD Public Housing Field Office contact.
                                                                                                  13


IX. PAPERWORK REDUCTION ACT
The information collection requirements contained in this notice have been approved by the
Office of Management and Budget (OMB) under the Paperwork Reduction Act (PRA) of 1995
(44 U.S.C. 3520). In accordance with the PRA, HUD may not conduct or sponsor, and a person
is not required to respond to a collection of information unless the collection displays a currently
valid OMB control number. The information collection contained in this notice has been
approved under the PRA OMB Control Number 2577-0169.




                                                      ____________________________________
                                                      Benjamin Hobbs
                                                      Principal Deputy Assistant Secretary
                                                      Public and Indian Housing