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HUD Modifies Enhanced Voucher Policy for “Over-Housed” Families

HUD’s Office of Public and Indian Housing (PIH) issued Notice PIH-2016-02 on March 4, amending policies regarding “over-housed” families receiving enhanced vouchers. A family is considered over-housed if it is living in a unit with more bedrooms than the family is qualified for according to a public housing agency’s (PHA’s) subsidy standard.

Enhanced Vouchers (EVs) are provided to tenants living in properties with private, project-based assistance when a “conversion action” takes place, such as when a project-based Section 8 contract expires and the owner decides to “opt out” and not renew the contract. Prepayment of certain unrestricted HUD-insured mortgages (generally Section 236 and Section 221(d)(3) projects) is another type of conversion action.

Enhanced Vouchers have two special features that make them “enhanced” for residents:

  1. 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 as rental property. Instead of accepting an EV, a household may move right away with a regular voucher. If a household accepting an EV chooses to move later, its EV converts to a regular voucher.
  2. 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 the PHA’s basic voucher payment standard. A PHA’s regular voucher payment standard is between 90% and 110% of the Fair Market Rent (FMR). EV payment standards must be adjusted in response to future rent increases.

PHAs must issue EVs based on a PHA’s subsidy standard, not the size of the unit the family is occupying at the time of the conversion action. The subsidy standard is the “family unit size,” the smallest number of bedrooms a PHA determines that a family needs without being overcrowded. New in Notice PIH-2016-02 is a requirement that a PHA approve requests for a larger bedroom size if necessary as a reasonable accommodation for a household with a family member who has a disability.

If an over-housed family wishes to remain at a property with an EV after a conversion action, the property owner must identify all available appropriate-size units at the property and the family must move to one of those units. If a family refuses to move, the family must pay the difference in rent.

New in Notice PIH-2016-02, if an appropriate size unit is not available, but a unit with fewer bedrooms sufficient for the family is available, the family must move to the smaller unit within a reasonable time. The PHA determines “reasonable time,” but it must not be longer than 30 days. If a family refuses to move, the family will have to pay the difference in rent.  

If there are no appropriate size units, the family may remain in their over-sized unit and the value of their EV will be based on rent of the over-sized unit. Once an appropriate size unit becomes available, the family must move to it, again within a reasonable time not to exceed 30 days.

Notice PIH-2016-02 adds that a PHA must develop a policy and amend its administrative plan regarding “reasonable time.” This policy must include a detailed procedure regarding exceptions to allow for an extension of time when moves within the established timeframe would create an extreme hardship.

Also new with Notice PIH-2016-02 is a requirement that a PHA take appropriate steps to ensure effective communication with people who have disabilities and take reasonable steps to ensure meaningful access by people with limited English proficiency.

Notice PIH-2016-02 supersedes Notice PIH-2008-12 and the over-housed provisions in PIH Notice 2001-41.

Notice PIH-2016-02 is at http://portal.hud.gov/hudportal/documents/huddoc?id=PIH-2016-02.pdf

More information about enhanced vouchers is on page 4-50 of NLIHC’s 2015 Advocates’ Guide, http://nlihc.org/sites/default/files/Sec4.15_Vouchers-Tenant-Protection_2015.pdf