HUD’s Office of Public and Indian Housing Implements $400 Million CARES Act Supplemental Funds

HUD’s Office of Public and Indian Housing (PIH) posted Notice PIH 2020-17 on July 31 implementing the $400 million CARES Act supplemental Housing Assistance Payment (HAP) funding for the Housing Choice Voucher (HCV) program. The Act makes supplemental HAP funding available for public housing agencies (PHAs) that experience a significant increase in voucher per-unit costs due to “extraordinary circumstances” or that would otherwise be required to terminate vouchers as a result of insufficient funding (Shortfall Funds). PIH will give priority to the Shortfall Funds category.

The CARES Act appropriated $1.25 billion in supplemental funding for the HCV program to prepare for, prevent, and respond to the coronavirus pandemic, and to help PHAs maintain normal operations and take other necessary actions during the pandemic. Of the $1.25 billion, $850 million was set aside for additional administrative fee funding and other expenses PHAs might incur with their HCV programs. PIH posted Notice PIH-2020-18 on July 31 implementing the second and final administrative fee funding set-aside (see companion article in this issue of Memo). Of the remaining $1.25 billion, $400 million was set aside for HAP payments.

Under the first category in Notice PIH 2020-17, “Extraordinary Circumstances,” PHAs that experience a significant increase in voucher per-unit costs in calendar year (CY) 2020 may apply for assistance until October 31, 2020. PHAs are likely experiencing such increased costs because many residents are experiencing reduced income due to fewer hours at their jobs or to losing their jobs as a result of the pandemic. PIH will have two application designations: “priority status” and “regular status.” Priority status is for PHAs that have a HAP reserve less than the amount needed to cover three months of HAP expenses; their applications will be funded shortly after PIH processes their applications. Regular status PHAs will not receive funds until November, if set-aside funds are available. PHAs have until June 30, 2021 to spend these funds.

Under the second category, “Shortfall Funds,” assistance is provided to PHAs that would otherwise have to terminate voucher assistance due to insufficient funds. If the CARES Act funds are not sufficient to cover shortfall needs, PIH will use any remaining CY20 HAP renewal set-aside funds. The Shortfall Funding guidance in Notice PIH 2020-17 supersedes that in Notice PIH 2020-04, which announced $100 million set aside within PIH’s overall appropriation for various purposes such as shortfall funding, extraordinary circumstances, portability costs, and Project-Based Vouchers.

PIH identifies two Shortfall Scenarios. Shortfall Scenario 1 applies to PHAs already in a Shortfall Prevention Team (SPT) confirmed shortfall on March 31, 2020, the date Notice 2020-04 was issued. Shortfall Scenario 2 applies to PHAs that were not in an SPT-confirmed shortfall as of March 31, 2020 but are confirmed to be in one after that date. PIH will accept Shortfall Fund applications on a rolling basis. While there is no deadline to submit applications, PHAs have until December 31, 2020 to spend the funds.

Appendix D is the form that a PHA must use to apply for Shortfall Funds. A PHA must certify that it has stopped issuing new vouchers. However, that restriction does not apply for a number of voucher uses, including:

  • Reissuance of turnover vouchers lost to attrition.
  • Vouchers issued to current households to allow them to move.
  • Vouchers issued to households under special-purpose voucher (SPV) increments awarded in CY19 or CY20. These special-purpose vouchers include Family Unification Program (FUP) and Tenant Protection Vouchers initially awarded in 2019 and/or 2020. Turnover SPVs may be also be reissued under the exception in the first bullet point above.
  • Vouchers issued to households moving into Project-Based Voucher (PBV) units to allow the PHA to meet its contractual obligation to fill PBV Agreement to Enter Into a HAP (AHAP) units being placed under HAP for the first time, and PBV units currently under HAP that are vacated by a household. However, tenant-based vouchers are not to be issued to households living in PBV units who are requesting a voluntary move with a tenant-based voucher after the date of notification by the SPT of a potential shortfall.

Notice PIH 2020-17 is at:

More information about the Housing Choice Voucher program is on page 4-1 of NLIHC’s 2020 Advocates’ Guide.

More information about Project-Based Vouchers is on page 4-8 of NLIHC’s 2020 Advocates’ Guide.