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Fourth Update of Coronavirus FAQs from HUD’s Office of Multifamily Housing

HUD’s Office of Multifamily Housing Programs (Multifamily), which oversees contracts with private owners of HUD-assisted properties, made a fourth update to its “Questions and Answers for Office of Multifamily Housing Stakeholders: Coronavirus (COVID-19)” (see Memo, 4/6) on April 16. Thirty-one more Questions/Answers are in the April 16 update. (Multifamily posted an April 14 update but it was quickly supplanted by the April 16 update that added two Q&As.) This Memo article summarizes key new items that might be of greatest interest to residents and advocates.

HUD Multifamily also distributed the second recording from staff describing some of the new Q&A updates. The agenda of the recording is as follows:

0:00-0:25         Introduction by Bob Iber

0:25-4:40         FHA Commissioner & Acting Deputy Secretary Brian Montgomery

4:40-10:50       Toby Halliday with asset management updates

10:50-15:00     Bob Iber addressing forbearance

15:00-21:50     Pat Burke & Tom Bernaciak with production updates

21:50- 25:11    Tom Davis with recapitalization updates

Most of the new questions addressed were spurred by the “Coronavirus Aid, Relief, and Economic Security (CARES) Act”

In the “CARES Act and Additional Resources Available for Response” section of the updated document, Q4 (page 9) clarifies that the household stimulus payments of up to $1,200 (which are technically advance tax credits) and the temporary $600 per week federal enhancement to unemployment insurance provided by the CARES Act are not to be included in calculations of tenant income. HUD notes that regular payments of unemployment insurance (issued by the state) are, however, treated as income.

Several issues address relate to the CARES Act moratorium on evictions of residents for nonpayment of rent in certain HUD-assisted multifamily properties as well as multifamily properties with mortgages that are insured by the Federal Housing Administration (FHA).

Q7 (page 10) states that all covered properties that receive housing assistance payments under a HUD Multifamily-assisted housing program or those with FHA-insured mortgages are subject to the eviction moratorium provisions of Section 4024 of the CARES Act (see Memo, 4/13 for list of properties that are “covered”). Regarding the applicability of Section 4024 of the CARES Act to the Low Income Housing Tax Credit (LIHTC) program, HUD notes that the Internal Revenue Service (IRS) administers the LIHTC program and recommends that owners and agents consult the IRS for guidance on evictions under the CARES Act. (Section 4024 states that all properties subject to the Violence Against Women Act (VAWA) are subject to the eviction moratorium. The National Housing Law Project (NHLP) states that the LIHTC program is subject to VAWA, see Memo, 4/13.)

NLIHC reminds readers that Section 4024 of the CARES Act states that during the 120-day period beginning on the date of enactment of the CARES Act (March 27) the owner of a covered home may not make or cause to be made any filing with a court to initiate a legal action to recover possession of a covered home from a tenant for nonpayment of rent or other fees or charges. Nor can an owner charge fees, penalties, or other charges to a tenant related to nonpayment of rent.

Q8 (page 10) states that if a HUD Multifamily-assisted housing property or HUD Multifamily property with an FHA-insured mortgage receives mortgage forbearance under Section 4023 of the CARES Act, the owner may not, for the duration of the forbearance, evict or initiate the eviction of a tenant solely for nonpayment of rent or other fees or charges, or charge any late fees, penalties, or other charges to a tenant for late payment of rent.

In addition, a multifamily borrower that receives a forbearance under Section 4023 may not require a tenant to vacate a home until 30 days after the borrower provides a tenant with a notice to vacate. Nor may a borrower issue a notice to vacate until after the expiration of the forbearance. HUD urges owners to review the “Renter Protections During Forbearance” section of Mortgagee Letter 2020-09 for additional information (see article about Mortgagee Letter 2020-09 in this issue of Memo).

Q9 (page 11) clarifies that the ban on evictions for nonpayment of rent applies to all tenants, not just those whose employment has been affected by the coronavirus pandemic.

Q10 states that the CARES Act does not prohibit an owner from sending to a tenant a reminder notice of the late rent, but that notice cannot be a notice to vacate. The reminder notice must not include fees, charges, or penalties for the nonpayment of rent.

Q11 Clarifies that owners may undertake an eviction/termination of assistance action against a tenant for criminal activity, domestic violence, or other lease violations.

Q12 (page 12) addresses situations in which a home might appear to be abandoned because a household decided to quarantine with other family members, might be hospitalized, or might be prevented from returning to the home due to an emergency declaration by the state. In such a situation an owner must take additional steps to ensure that the unit is in fact “abandoned” by the household.

In the Asset Management Section, Q10 (page 17) addresses owners concerned about accepting and processing new applications and the resulting move-in to units. HUD indicates that instead of conducting in-person interviews during the application process, owners may choose to conduct interviews remotely using available technology or barriers (e.g., windows). Owners may accept electronic signatures on owner-adopted verification forms in order to perform both owner-adopted and HUD-required screening criteria as long as they obtain original signatures on the verification forms at a later date.

Q28 (page 22) states that owners may have the authority to restrict visitors from HUD-assisted Multifamily housing properties but should review state and local laws to determine the permissibility of banning visitors. If an owner plans to implement a visitor restriction or ban through amended policies or house rules, HUD recommends it be done as part of a broader, publicly announced plan to respond to the pandemic. Owners should consider that residents will still need to receive essential services, such as food deliveries, medications, and personal care assistants. Restrictions should conform with CDC guidance and recommendations from state or local health officials.

“Questions and Answers for Office of Multifamily Housing Stakeholders: Coronavirus (COVID-19” is at: https://bit.ly/2RJEUaO