HUD issued Notice PIH 2019-12 revising how enhanced voucher (EV) minimum rents are calculated when a household’s income increases after previously decreasing.
If a household with an EV experiences a decline in income of 15% or greater, its EV minimum rent is adjusted to the greater of 30% of adjusted income or the percentage of adjusted income the household was paying at the time of an “eligibility event” (in most cases when a private owner opts out of a Section 8 contract). Under previous HUD guidance (Notice PIH 2001-41), that reduced EV minimum rent remained pegged to the percentage of rent at the time of the eligibility event even if the household’s income subsequently decreased further or increased.
PIH 2019-12 changes the policy for circumstances when a household’s income increases to an amount such that the dollar value of the EV minimum rent established by the percent-of-income calculation is more than the original (pre-15% income decline) EV minimum rent. In such instances the household’s EV minimum rent reverts back to the EV minimum rent the family was paying at the time of the eligibility event. PIH 2019-12 provides an example to clarify the new policy.
Enhanced Vouchers (EVs) are provided to tenants living in properties with private, project-based rental assistance when an eligibility event takes place. The most typical eligibility event is when a project-based Section 8 contract expires and the owner decides not to renew (“opts out” of) the contract. Owners’ prepayment of certain unrestricted HUD-insured mortgages (generally Section 236 and Section 221(d)(3) projects) is another type of eligibility event. HUD must provide EVs for opt-outs and qualifying mortgage prepayments.
EVs have two special features that make them “enhanced” for residents:
- Right to Remain. A household receiving an EV has the right to remain in their previously assisted home, and the owner must accept the EV as long as the home:
- Continues to be used by the owner as a rental property
- Meets HUD’s “reasonable rent” criteria, basically rent comparable to unassisted units in the development or in the private market
- Meets HUD’s Housing Quality Standards
Instead of accepting an EV, a household may move right away with a regular voucher. A household accepting an EV may choose to move later, but their EV then converts to a regular voucher.
- Higher Voucher Payment Standard. An EV pays the difference between a tenant’s required contribution toward rent and the new market-based rent charged by the owner after the housing conversion action, even if that new rent is greater than a public housing agency’s (PHA’s) basic voucher payment standard. A PHA’s regular voucher payment standard is between 90% and 110% of the Fair Market Rent. EV payment standards must be adjusted in response to future rent increases.
Notice PIH 2019-12 is at: https://bit.ly/2F7TVwR
Notice PIH 2001-41 is at: https://bit.ly/2XGkKQ5
More about EVs and other tenant protection vouchers is on page 4-11 of NLIHC’s 2019 Advocates’ Guide.