HUD Issues Interim Rule Implementing FAST Act

HUD published an interim rule on December 12 that amends March 8, 2016 regulatory language for public housing, vouchers, and HUD Multifamily rental housing assistance programs (see Memo, 3/7/16). The interim rule aligns the March 2016 regulatory flexibilities with those provided in the 2015 “Fixing America’s Surface Transportation” (FAST) Act. In addition, the interim rule extends to Multifamily programs two of the administrative streamlining changes that were adopted in the March 8, 2016 final rule for public housing and vouchers.

The interim rule implements FAST Act provisions that allow public housing agencies (PHAs) and owners of multifamily housing (Section 8 Project-Based Rental Assistance or PBRA, Section 202 housing for elderly people, and Section 811 housing for people with disabilities) to conduct full income recertification for households with 90% or more of their income from fixed-income (such as Social Security) every three years instead of annually. (The March 8, 2016 rule did not have the FAST Act’s 90% provision; it merely applied to any fixed-income.) The interim rule also modifies the March 8, 2016 streamlining regulations so that the procedures for families meeting the 90% fixed-income threshold of the FAST Act are as similar as possible to those for families who receive some, but less than 90%, of their income from fixed-income sources.

During years two and three after a full income review, PHAs and owners in the public housing, voucher, and Multifamily programs may determine a family’s fixed-income by using a verified cost of living adjustment (COLA) or rate of interest on the individual sources of fixed-income. In the case of a family with at least 90% of the family’s unadjusted income from fixed-income, an owner or PHA using streamlined income verification may, but is not required to, adjust the non-fixed income. For families with at least one source of fixed-income but for which less than 90% of the family’s income is from fixed-sources, owners and PHAs must verify and adjust non-fixed sources annually.

On January 6, 2015, HUD issued a proposed rule to implement several statutory changes made in the FY14 appropriations act and to make multiple administrative streamlining changes across several HUD programs (see Memo, 1/12/15). In that proposed rule, some of the additional streamlining changes applied only to the public housing and voucher programs, not to Multifamily programs. Given feedback on the rule, HUD issued the December 2017 interim rule to expand to Multifamily programs the utility reimbursement and asset declaration flexibilities finalized for the public housing and voucher programs in the March 8, 2016 final rule. The interim rule allows an owner to:

  • Make utility reimbursements of $45 or less on a quarterly basis. If an owner chooses this flexibility it must also have a policy to assist residents for whom quarterly reimbursements would pose a financial hardship.
  • Accept family declarations of assets under $5,000.  Third-party verification of all family assets would be required every three years.