HUD’s Office of Multifamily Housing Programs (Multifamily) posted Notice H 2021-05 on September 16 announcing the continued availability of “COVID-19 Supplemental Payments” (CSP) for Section 8, Section 202, and Section 811 properties to prevent, prepare for, and respond to the coronavirus. The purpose of CSP is to help owners incurring additional operational costs during the pandemic maintain their properties in decent, safe, and sanitary conditions. The notice establishes a fourth and likely final request window, adds eligible expenditures, updates priority eligibility, and revises the process for property owners to apply for CSP funds to cover expensed incurred through October 31, 2021. Property owners have until November 19 to request funds.
Congress appropriated supplemental funds for Multifamily programs through the CARES Act: $1 billion for the Project-Based Rental Assistance program (PBRA), $50 million for Section 202 Supportive Housing for the Elderly, and $15 million for Section 811 Supportive Housing for Persons with Disabilities (see Memo, 3/30/20). Multifamily had initially issued Notice 2020-08 on July 23, 2020, making up to $190 million available for Section 8 properties, $25 million for Section 202 properties, and $9 million for Section 811 properties (see Memo, 8/3/20). Multifamily subsequently posted Notice H 2020-11 on November 24, 2020 announcing a second request period (see Memo, 12/7/20). A third round was announced in Notice H 2021-01on April 13, 2021 (see Memo, 4/19).
Most of the CARES Act funding for Section 8 PBRA (see Memo, 6/8/20), along with smaller portions of Section 202 and Section 811 CARES Act funding, was used to offset decreased tenant rent payments as tenants experienced reduced or lost income due to the coronavirus pandemic. As a tenant’s income decreases, the tenant may request an interim income recertification which lowers their rent obligation.
New eligible expenditures under Notice H 2021-05 include:
- Incremental costs for HVAC system ventilation and filtration upgrades
- Emergency generators to protect vulnerable elderly residents from exposure risk associated with evacuations or displacement
- Broadband Wi-Fi infrastructure
- Incremental costs of upgrading disposable HVAC air filters to include those with higher Minimum Efficiency Reporting Value (MERV) ratings
Notice H 2021-05 changes the formula for CSP funding caps. Previous notices used the term “Tier I” for most requests; the new notice changes the term to “Standard CSP.” The base amount per property is increased to $2,500 (from $2,000) and the amount per assisted unit is increased to $75 (from $60). For properties with an ongoing service coordinator program funded from operating income, the allowance is reduced to $1,250 (from $3,000). The maximum amount for a Standard CSP request is $25,000, regardless of property size or characteristics.
Some smaller requests covering multiple operating periods may be combined on a single Combined Request. An owner may choose to combine all expenses if: 1) the owner has not previously received CSP for expenses incurred in a particular prior period; 2) the owner is now seeking reimbursement for multiple operating periods; and 3) the total expenses are less than the single period Standard CSP cap.
In prior CSP rounds, Multifamily would not provide CSP for expenses incurred in an operating period for which CSP was previously approved. For Round IV, Multifamily will permit owners to amend approved prior round CSP requests to include additional expenses that they may have inadvertently omitted or that are now eligible by the Round IV notice.
For Round IV, Multifamily has developed a new funding prioritization plan that will be applied if CARES Act appropriations are insufficient to fund all eligible CSP requests. HUD will fund all eligible requests through a process indicated in a table in the notice until all CARES Act funds are exhausted. If any funding allocation in one of the priority steps in the table cannot be funded in full, Multifamily will prorate remaining funds within that step.
The notice retains financial need requirements consistent with prior rounds but waives certain criteria for Standard CSP requests made for expenses incurred only in Operating Period 4 (April 1 - October 31, 2021) to encourage beneficial expenditures by owners. CSPs will be approved only for critical funding needs that cannot be addressed with other project funds or external resources. For expenses incurred only during Operating Period 4, Multifamily will approve Standard CSP requests without regard to a property’s projected surplus cash or residual receipt account balances.
Read Notice H 2021-05 at: https://bit.ly/3AxRBtS
Access a Multifamily fact sheet about Round IV at: https://bit.ly/2XOmVX3
More information about CPS is on page 10-1 of NLIHC’s 2021 Advocates’ Guide.
More information about Project-Based Section 8 is on page 4-64 of NLIHC’s 2021 Advocates’ Guide.
More information about Section 202 Housing for the Elderly is on page 4-70 of NLIHC’s 2021 Advocates’ Guide.
More information about Section 811 Housing for Persons with Disabilities is on page 4-71 of NLIHC’s 2021 Advocates’ Guide.