Housing Choice Voucher

Today, HUD released its fourth notice on implementation of the Housing Opportunities Through Modernization Act of 2016 (HOTMA), bipartisan legislation passed unanimously and enacted in July 2016 to streamline PHA operations and regulations.

The new notice seeks comment on several HOTMA provisions, including income calculations, occupancy standards, and asset limits. Sections 102, 103, and 104 of HOTMA contain many statutory changes to the United States Housing Act of 1937.

The statutory changes proposed in the notice would apply to public housing, Section 8, HOME, HOPWA, and HTF programs. The main issues for which HUD is seeking comment that apply to public housing and Section 8 programs are summarized below.

Income Reviews and Calculations (Section 102)

• In revising the definition of family income, HUD asks for input on the challenges of instituting HOTMA provisions on income definitions for public housing, the HCV program, and PBVs, but not for PBRA.
• HOTMA states that if a family’s adjusted income increases by 10% or more, the PHA must conduct a reexamination of the family’s income within a “reasonable amount of time” after the PHA is made aware of the change. HUD is seeking comment on what constitutes a “reasonable amount of time.”
• For interim income reexaminations, HUD is also seeking comment on whether it should require that PHAs use the Enterprise Income Verification (EIV) system for interim reexaminations, or only for initial and annual reviews.
• HUD is seeking comment on the administrative impacts of the safe harbor provision that allows PHAs to use income determinations from other types of public assistance. The Department is also seeking feedback on developing rules for using other income determinations when a household has income determinations from multiple types of public assistance, and whether it should expand the list of public assistance programs that can be used for income determinations.
• In the HOTMA provision stating that a PHA will not be out of compliance for income review and calculation due to any “de minimis error” made by the PHA, HUD is seeking comment on its proposed definition of a “de minimis error” as one where the PHA’s calculation of a family’s income varies from the correct income by 5% or less.
• While a HOTMA provision would eliminate the disallowance of earned income (EID) for rent determinations, HUD is seeking comment on allowing households currently receiving the EID benefit to continue to do so until their allowed time expires.
• HOTMA includes a simplified definition of annual income, and HUD is seeking comment on redefining it to include the imputed return on assets over $50,000 of actual income for assets that cannot be calculated.
• HUD is seeking comment on whether certain other income sources, such as payments from a nonrevocable trust fund and insurance payments, should be considered income in the simplified definition of annual income.
• HOTMA creates new income exclusions and grants HUD the authority to name additional exclusions. HUD is seeking comment on whether other income sources should be excluded, such as income for all veteran’s disability benefits.
• HUD is seeking comment on the hardship exemption for health and medical expenses, and how a PHA should determine that a family is unable to pay their rent due to changes in these expenses. HUD also asks for comment as to whether PHAs should be allowed to establish their own policies for making this determination.
• Under HOTMA, PHAs may allow additional deductions so long as the deductions do not “materially” increase federal expenditures. HUD proposes that PHAs adopting additional deductions would not be eligible to receive any additional program funding to cover the increased costs attributable to the additional deductions, and HUD is seeking comment on this definition of “material.” HUD is also seeking comment on whether additional deductions, such as work-related income, could be used as an employment incentive.

Income Limitations (Section 103)

• While HUD is not specifically requesting comment on HOTMA’s provisions for terminating over-income families, the notice states that because HOTMA requires PHAs to submit annual reports on over-income families in public housing, HUD is developing a tool and process that will allow PHAs to submit these data.

Income Assets (Section 104)

• Under HOTMA, families receiving housing assistance may not have net assets exceeding $100,000, including real property suitable for occupancy that the family owns or partially owns. HUD proposes if a family owns or partially owns property suitable for occupancy, the family would need to demonstrate that it does not have the right to occupy or sell the property, which would exclude the property from the asset test. HUD is seeking comment on the test to exempt the property, and how families would demonstrate that one of the conditions apply.
• HOTMA also excludes domestic violence victims from the real property restriction, and HUD is seeking comment on how this provision should be administered.
• HUD proposes some clarifying changes regarding items excluded through HOTMA for the asset test. Specifically, they ask whether the asset test should exclude personal property items valued at $50,000 or less, such as a car or medical equipment.

Comments are due on November 18. CLPHA will be submitting comments and scheduling a member call to solicit feedback on the notice. For questions about the notice, please contact Senior Research & Policy Analyst Emily Warren at ewarren@clpha.org.