HUD’s Office of Public and Indian Housing (PIH) announced on September 27 the 18 public housing agencies (PHAs) selected to participate in the Asset Building Cohort of the so-called Moving to Work Demonstration (MTW). PIH posted Notice PIH 2022-11 on April 26, 2022, inviting PHAs to apply for this fourth and final MTW cohort (see Memo, 5/2). NLIHC has created a summary of the key features of the MTW Asset Building Cohort.
PIH’s Asset Building Cohort webpage provides two- or three-sentence summaries provided by the 18 PHAs that will implement the asset building MTW flexibilities. In short, these summaries do not provide any insight into how the PHAs will implement the demonstration. Most merely provide generic descriptions of what PHAs are supposed to do on a regular basis. Three of the PHAs indicate that they will focus on the three MTW statutory objectives of increasing PHA cost effectiveness, promoting resident self-sufficiency, and increasing housing choice. Another three PHAs claim that they will use “the additional resources and regulatory and budget flexibility that comes with MTW”; however, MTW does not provide any additional resources. Only four of the PHAs refer to asset building even in passing, two fairly directly and two indirectly.
The PIH notice defined asset building as comprising activities that encourage the growth of assisted residents’ savings accounts and/or that aim to build credit for assisted households. PIH offered three asset building options for PHAs that wanted to participate in the Asset Building Cohort:
- Opt-Out Savings Account Option. A PHA must deposit at least $10 per month for at least one year into an escrow account for the benefit of assisted households (either public housing or Housing Choice Voucher (HCV) households) with the goal of increasing the number of households that have bank accounts, thereby strengthening household stability.
- Credit Building Option. For residents who have given their informed consent, a PHA must report public housing rent payments for at least one year to credit bureaus. The goal is to increase the credit scores of public housing households. A household may withdraw at any time. (This option is not available for HCV households, probably because of the difficulty of having individual landlords report to credit bureaus.)
- PHA-Designed Asset Building Option. This option allows a PHA to design its own local asset building program that encourages the growth of savings accounts and/or aims to build credit for assisted households
Prior to PIH’s implementation of the Asset Building Cohort, NLIHC and consumer advocates conveyed to PIH concern that the credit building option for the demonstration would require PHAs to report public housing residents’ rent payment using “full file reporting,” meaning that not only will on-time rent payments be reported, but late and missed payments would also be reported (see Memo, 5/16). NLIHC and others had urged PIH to only require PHAs to report on-time rent payments, which the three major credit reporting entities can accommodate. Full file reporting can harm residents if they encounter only one or two slightly late or small missed payments that are episodic due to unforeseen circumstances and otherwise not indicative of serious rent payment problems. NLIHC also urged PIH to define “small” unpaid balances so that participating PHAs do not report minor unpaid rent balances, resulting in damage to a household’s credit. As one potential definition of “small,” NLIHC informed PIH that starting in 2023, the major credit reporting agencies will not include medical collection debt under $500.
Brief MTW Background
Under MTW, HUD can waive nearly all provisions of the “United States Housing Act of 1937” and the accompanying regulations, including most of the main rules and standards governing HCVs and public housing. MTW agencies are also allowed to shift public housing Capital and Operating Funds and HCV assistance (including Administrative Fees as well as Housing Assistance Payment (HAP) funds) to purposes other than those for which they were originally appropriated (referred to as “fungibility”). More information about the MTW Demonstration expansion can be found on NLIHC’s public housing website.
Find PIH’s MTW Asset Building Cohort webpage at: https://bit.ly/3wjH18S
Find PIH’s MTW Expansion webpage at: https://bit.ly/3LWbelF
Read NLIHC’s “Summary of the Key Features of the MTW Asset Building Cohort” at: https://bit.ly/3vnSS6A