HUD issued a Notice implementing the $5 million set-aside in the “FY16 Appropriations Act” for tenant protection vouchers for low income households who may have to pay more than 30% of their income for rent if they are living certain HUD-assisted multifamily housing in a low-vacancy area. The $5 million is a set-aside from the $130 million FY16 appropriation for all tenant protection vouchers. The Notice is a joint Notice H 2016-7 from the Office of Multifamily Housing Programs and PIH 2016-12 from the Office of Public and Indian Housing.
To be eligible, one of three potential events must have taken place before or during FY16 (which ends on September 30, 2016):
- The maturation of a HUD-insured, HUD-held, or Section 202 loan that would have required HUD permission prior to loan prepayment. These include Section 236, 221(d)(3) Below Market Interest Rate (BMIR) and Section 202 Direct Loans.
- The expiration of a rental assistance contract for which the tenants are not eligible for enhanced voucher or tenant protection assistance under existing law. These include properties with a Rental Assistance Payment (RAP) contract that expired before FY12 or a property with a Rent Supplement (Rent Supp) contract that expired before FY2000.
- The expiration of affordability restrictions accompanying a mortgage or preservation program administered by HUD. These include Section 236, Section 221(d)(3) BMIR, or Section 202 Direct Loan mortgages for which permission from HUD is not required, but the underlying affordability restrictions expired with the maturation of the mortgages. This category also includes properties with stand-alone “Affordability Restrictions” that expired or will expire in FY16.
Other key provisions in the Notice include:
- Owners of eligible properties must apply for the assistance for residents.
- Requests from owners will be accepted on a rolling basis until funding has been exhausted. To prevent significant delay in funding of applications in subsequent fiscal years, applications will also be accepted on a rolling basis after September 30, 2016, but will only be funded subject to the availability of appropriations.
- The tenant protection assistance may be either an enhanced voucher or a project-based voucher.
- Public housing agencies (PHAs) must administer the vouchers. A PHA may decline to participate; if so, HUD will attempt to identify an alternative PHA willing to administer the vouchers.
Attachment A of the Notice shows which areas are deemed low-vacancy areas.
The National Housing Law Project (NHLP) recently identified more than 32,274 unassisted units in 314 properties in 45 states at risk of mortgage maturation or the expiration of use restrictions or assistance. Of this total, 16,831 unassisted units in 150 properties are at risk and eligible for tenant protections. A further 15,708 unassisted units in 164 properties are also at risk but are not eligible for tenant protection vouchers because they are not located in HUD-defined low-vacancy areas. NHLP has created a list of these properties along with a Google map of their locations. A memorandum from NHLP also explains how advocates can identify properties that might warrant tenant protection vouchers.
The joint Notice H 2016-7/Notice PIH 2016-12 is at: http://bit.ly/2bpBojd
NHLP’s materials are at: http://nhlp.org/node/15844