HUD’s Office of Public and Indian Housing (PIH) issued Notice PIH 2017-21 providing guidance to public housing agencies (PHAs) regarding changes to the Project-Based Voucher (PBV) program made by the Housing Opportunity Through Modernization Act of 2016 (HOTMA). The Notice provides greater detail than that of the Federal Register notice issued on January 18, 2017 that implemented these and other HOTMA provisions (see Memo, 1/23). The 66-page Notice also consolidates content from previous PBV Notices.
Key changes that HOTMA made to the PBV program include:
Limits to Project-Basing of Vouchers
Prior to HOTMA, a PHA could choose to use up to 20% of its HCV funding to project-base vouchers. HOTMA changed the limit to 20% of a PHA’s authorized number of vouchers. The statute also allows PHAs to project-base an additional 10% of its authorized number of vouchers (above the 20% base limit) if these PBVs are tied to units that serve households who are homeless or include a veteran, provide supportive housing for persons who have a disability or who are elderly, or are in a census tract with a poverty rate of 20% or less.
HOTMA does not count toward the 20% limit PBVs attached to units that were previously subject to rent restrictions or that received another type of long-term HUD housing subsidy. Examples of such exceptions include public housing, Section 8 project-based rental assistance, Section 202 elderly housing, Section 811 housing for persons with disabilities, Section 236 Preservation program, Section 221(d)(3) Below Market Interest Rate, Rental Assistance Demonstration (RAD), and HUD-VASH PBV set-aside vouchers, among others.
Prior to HOTMA, no more than 25% of the units in a project could be assisted with PBVs. Exceptions to this cap included units occupied by someone who was elderly, disabled, or receiving a qualifying supportive service.
HOTMA changes the cap to the greater of 25 units or 25% of the units in a project. The statute also amended the exception criteria by:
- Eliminating the separate provision for people with disabilities.
- Modifying the supportive services provision by eliminating the requirement that someone in the household actually receive supportive services, instead requiring that supportive services be available to all assisted households without an obligation by a household to accept services. Households eligible for supportive services could include someone with a disability.
- Adding as a new exception that projects in a census tract with a poverty rate of 20% or less may project-base up to 40% of a development’s units.
The cap does not apply to PBVs attached to units that were previously subject to rent restrictions or that received another type of long-term HUD housing subsidy.
The Notice makes clear that supportive services need not be provided by the owner on-site, but must be “reasonably” available. Also, a PHA may not require participation in supportive services as a condition of living in an excepted unit.
PBV Contract Terms
HOTMA extended the initial Housing Assistance Payment (HAP) contract for PBV units from 15 to 20 years. In addition, a PHA may agree to extend a HAP contract for an additional 20 years, for a maximum of 40 years.
HAP contracts must specify that upon termination or expiration, a household is entitled to receive a tenant-based voucher (the voucher that was previously tied to the property). In addition, the household must have the option to remain in their home with the tenant-based voucher, and the owner may not terminate the household’s tenancy.