[Federal Register Volume 77, Number 94 (Tuesday, May 15, 2012)]
[Proposed Rules]
[Pages 28741-28755]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-11638]
[[Page 28741]]
Vol. 77
Tuesday,
No. 94
May 15, 2012
Part IV
Department of Housing and Urban Development
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24 CFR Parts 5, 982, and 983
The Housing and Economic Recovery Act of 2008 (HERA): Changes to the
Section 8 Tenant-Based Voucher and Section 8 Project-Based Voucher
Programs; Proposed Rule
Federal Register / Vol. 77 , No. 94 / Tuesday, May 15, 2012 /
Proposed Rules
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
24 CFR Parts 5, 982, and 983
[Docket No. FR-5242-P-01]
The Housing and Economic Recovery Act of 2008 (HERA): Changes to
the Section 8 Tenant-Based Voucher and Section 8 Project-Based Voucher
Programs
AGENCY: Office of the Assistant Secretary for Public and Indian
Housing, HUD.
ACTION: Proposed rule.
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SUMMARY: HERA, enacted into law on July 30, 2008, made comprehensive
and significant reforms to several HUD programs, including HUD's Public
Housing, Section 8 Tenant-Based Voucher, and Project-Based Voucher
programs. On November 24, 2008, HUD published a notice that provided
information about the applicability of certain HERA provisions to these
programs. The notice identified: (1) Those statutory provisions that
are self-executing and required no action on the part of HUD for the
program changes made by HERA to be implemented; and (2) those statutory
provisions that require new regulations or regulatory changes by HUD
for the HERA provisions to be implemented. The notice also offered the
opportunity for public comment on the guidance provided.
This proposed rule follows the November 24, 2008, notice for the
purpose of establishing, in regulation, the reforms made to HERA as
discussed in that notice, and to make other related regulatory changes.
This proposed rule would make conforming changes to the regulations of
the Section 8 Tenant-Based Voucher and Section 8 Project-Based Voucher
programs to reflect the self-executing provisions of HERA, and would
also amend the regulations required to implement those statutory
provisions of HERA that are not self-implementing. Additionally, this
rule would make such other changes for the purposes of updating certain
regulations to reflect current practices, and clarifying other
regulations which, based on experience, HUD determined would benefit
from clarification. While the conforming and clarifying changes are not
implementing new policy, HUD nevertheless welcomes comment on the
clarity and comprehensibility of the language proposed to be codified.
This rule also takes into consideration the two public comments
received in response to issuance of the November 2008 notice, and
solicits additional public comment.
HERA changes affecting the public housing program are being
addressed by separate rulemaking.
DATES: Comment Due Date: July 16, 2012.
ADDRESSES: Interested persons are invited to submit comments regarding
this proposed rule to the Regulations Division, Office of General
Counsel, 451 7th Street SW., Room 10276, Department of Housing and
Urban Development, Washington, DC 20410-0500. Communications must refer
to the above docket number and title. There are two methods for
submitting public comments. All submissions must refer to the above
docket number and title.
1. Submission of Comments by Mail. Comments may be submitted by
mail to the Regulations Division, Office of General Counsel, Department
of Housing and Urban Development, 451 7th Street SW., Room 10276,
Washington, DC 20410-0500.
2. Electronic Submission of Comments. Interested persons may submit
comments electronically through the Federal eRulemaking Portal at
www.regulations.gov. HUD strongly encourages commenters to submit
comments electronically. Electronic submission of comments allows the
commenter maximum time to prepare and submit a comment, ensures timely
receipt by HUD, and enables HUD to make them immediately available to
the public. Comments submitted electronically through the
www.regulations.gov Web site can be viewed by other commenters and
interested members of the public. Commenters should follow the
instructions provided on that site to submit comments electronically.
Note: To receive consideration as public comments, comments
must be submitted through one of the two methods specified above.
Again, all submissions must refer to the docket number and title of
the rule.
No Facsimile Comments. Facsimile (FAX) comments are not acceptable.
Public Inspection of Public Comments. All properly submitted
comments and communications submitted to HUD will be available for
public inspection and copying between 8 a.m. and 5 p.m. weekdays at the
above address. Due to security measures at the HUD Headquarters
building, an advance appointment to review the public comments must be
scheduled by calling the Regulations Division at 202-708-3055 (this is
not a toll-free number). Individuals with speech or hearing impairments
may access this number through TTY by calling the Federal Relay Service
at 800-877-8339. Copies of all comments submitted are available for
inspection and downloading at www.regulations.gov.
FOR FURTHER INFORMATION CONTACT: For information about HUD's Public
Housing and Voucher programs, contact Danielle Bastarache, Director,
Office of Voucher Programs, Office of Public and Indian Housing, Room
4226, telephone number 202-401-3882. The address is the Department of
Housing and Urban Development, 451 7th Street SW., Washington, DC
20410. The listed telephone number is not a toll-free number. Persons
with hearing or speech impairments may access this number through TTY
by calling the toll-free Federal Relay Service at 1-800-877-8339.
SUPPLEMENTARY INFORMATION:
I. Background
HERA (Pub. L. 110-289, 122 Stat. 2654, approved July 30, 2008) made
several changes to the U.S. Housing Act of 1937 (42 U.S.C. 1437 et
seq.) (1937 Act) that affect programs administered by HUD's Office of
Public and Indian Housing (PIH), including, but not limited to, changes
to the definition of income, which also affect the Office of Housing's
project-based assistance programs; the public housing agency (PHA)
plan; the voucher program; and the capital and operating funds with
respect to emergency funds.
HUD published a notice in the Federal Register on November 24,
2008, at 72 FR 71037, that provided information about the applicability
of the 1937 Act provisions amended by HERA to HUD's Public Housing,
Section 8 Tenant-Based Voucher, and Section 8 Project-Based Voucher
programs. To assist PHAs and assisted housing providers, the notice
identified those provisions that are self-executing and required no
action on the part of HUD for the program changes to be implemented,
and those provisions that require new regulations or regulatory changes
by HUD to be implemented. The notice also solicited public comment.
This proposed rule follows the November 24, 2008, notice for the
purpose of: (1) Establishing, in regulation, the reforms made by HERA
to the Section 8 Tenant-Based Voucher and Section 8 Project-Based
Voucher programs as discussed in the notice, taking into consideration
public comment received on the notice, and (2) making other related
regulatory changes, as discussed below.
Whether the HERA program changes are self-executing or not self-
executing, a rule is necessary to ensure that the
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codified regulations for the programs affected reflect the HERA
changes. In some cases, the regulatory change is simply a conforming
change; that is, the regulatory revisions conform the language of the
regulation to the language of the 1937 Act, as amended by HERA. In
other cases, however, HUD was required to exercise some discretionary
authority to determine how the statutory change should be implemented.
With respect to the conforming regulatory changes, a conforming
change does not necessarily mean that HUD is adopting in regulation the
statutory language verbatim. For purposes of clarity or to give
precision to the statutory language or statutory intent, the conforming
regulatory change may be worded differently than the statutory
language. However, any regulatory change to the statutory language
should not be interpreted as any reversal in HUD's position that the
statutory language is self-executing. Nevertheless, once promulgated in
final, the regulatory language, with any precision given to the
statutory language, will govern implementation of these statutory
provisions by PHAs.
In discussing the regulatory changes proposed to be made by this
rule, the preamble to this rule follows the HERA overview provided in
the November 24, 2008, notice, which, as noted earlier, identified the
HERA provisions that would require conforming rule changes and those
that would require implementing regulations.
II. This Proposed Rule
Income Regulations in 24 CFR Part 5
Annual Income (24 CFR 5.609(c)(14))--Conforming Change. Section
2608 of Title VI of Division B of HERA amends the definition of
``annual income'' in section 3(b)(4) of the 1937 Act to exclude, from
the definition of income, any deferred Department of Veterans Affairs
(VA) disability benefits that are received in a lump-sum amount or in
prospective monthly amounts. The November 24, 2008, notice advised that
this provision was self-executing; that is, as of the effective date of
HERA, July 30, 2008, such benefits are not to be included for purposes
of determining the annual income of an applicant for or recipient of
benefits under the 1937 Act.
This income exclusion made by HERA is similar to the existing
exclusion for deferred periodic amounts from Supplemental Security
Income and Social Security benefits under 24 CFR 5.609(c)(14). Although
the full amount of periodic Social Security payments is included in the
amounts that constitute annual income in 24 CFR 5.609(b)(4), the
deferred amount resulting from the delayed start of the periodic
payment is not included in annual income. Accordingly, the full amount
of periodic VA disability benefit payments continues to be included in
amounts that constitute annual income in 24 CFR 5.609(b)(4), but the
deferred amount resulting from the delayed start of the disability
payments will not be included in annual income.
The November 24, 2008, notice advised that a payment qualifies as a
VA disability benefit if it is identified as a disability benefit in
the VA benefit award letter, regardless of whether or not the family
member who is the beneficiary of the award would qualify as a person
with disabilities under HUD's regulations. The November 24, 2008,
notice also advised that for existing residents or tenants, including
those residing in project-based assisted housing administered by HUD's
Office of Housing, the new exclusion for deferred payments will be made
applicable at the time of annual reexamination of income, or at the
time of interim reexamination of income.
This rule makes a conforming change to 24 CFR 5.609 to include the
VA disability benefits with the exclusion from income for deferred
Social Security benefits in Sec. 5.609(c)(14).
Section 8 Tenant-Based Assistance: Housing Choice Voucher Program
Regulations
Rent to Owner: Reasonable Rent (24 CFR 982.507)--Conforming and
Correcting Change. Subtitle B of Title VIII of HERA (sections 2831
through 2835) makes several changes to coordinate tax incentives for
private housing and federal housing programs, including the Section 8
voucher program. As one of these changes, the procedure for determining
the rent reasonableness standard applicable to dwelling units receiving
low-income housing tax credits (LIHTC) or assistance under the HOME
Investments Partnerships (HOME) program is streamlined by section
2835(a)(2) of HERA, which adds section 8(o)(10)(F) to the 1937 Act.
Under this new section of the 1937 Act, a rent comparison with
unassisted local market units is not required for such dwelling units,
if the rent does not exceed the rent for other LIHTC or HOME-assisted
units in the project, that are not occupied by families with tenant-
based assistance. The rent is to be considered reasonable if it does
not exceed the greater of: (1) The rent for other LIHTC- or HOME-
assisted units in the project not occupied by families with tenant-
based assistance, and (2) the payment standard established by a PHA for
a unit of the size involved.
Because HUD is undertaking separate rulemaking for the HOME
program, Sec. 982.507 makes only a conforming change to the
regulations with respect to LIHTC-assisted units. Following the
addressing of this issue through a HOME program rulemaking, namely,
HOME rents for nonvoucher families in the HOME program regulations,
Sec. 982.507(c) will be amended accordingly. With this rule, Sec.
982.507(c) provides that if the rent requested by the owner exceeds the
LIHTC rents for nonvoucher families, the PHA must perform a rent
comparability study in accordance with program regulations, and the
rent shall not exceed the lesser of the: (1) Reasonable rent as
determined pursuant to a rent comparability study, and (2) the payment
standard established by the PHA for the unit size involved.
Section 8 Project-Based Voucher Program Regulations
Section 2835(a)(1) of HERA makes several changes to the section 8
project-based voucher (PBV) program established by section 8(o)(13) of
the 1937 Act (42 U.S.C. 1437f(o)(13)) and for which the regulations are
found at 24 CFR part 983. The changes are as follows:
Applicability of the Tenant-Based Voucher Rule (24 CFR 983.2)--
Conforming Change. This proposed rule would remove the reference to
cooperative housing from Sec. 983.2. Section 983.2(b) lists regulatory
provisions under the tenant-based rule at 24 CFR part 982 that do not
apply to the PBV program, including special housing types. Since,
pursuant to section 2835(a)(1)(F) of HERA, cooperative housing is an
eligible housing type under the PBV program, the inclusion of
cooperative housing under Sec. 983.2(b) and Sec. 983.2(c)(7)(ii) is
outdated. Additionally, this proposed rule would correct a citation
error in Sec. 983.2(c)(2)(i): The reference to owner termination of
tenancy, should be Sec. 982.310, not Sec. 982.10. The proposed rule
would include additional references to regulations in 24 CFR part 982,
subpart M, that are not applicable to PBV assistance in Sec.
983.2(c)(7)(i).
PBV Definitions (24 CFR 983.3)--Proposed New Definitions and
Clarifying Changes. This proposed rule would add definitions for the
following terms: ``housing credit agency'', ``project'', ``project-
based certificate program'', and ``release of funds''. The proposed
rule would revise the
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definitions of ``excepted units (units in a multifamily building not
counted against the 25 percent cap)'', ``existing housing'',
``partially assisted building'', ``premises'', and ``qualifying
families (for purposes of exception to the 25 percent per building
cap)''. The reasons for revising the definition of ``existing housing''
are discussed below. The other terms are revised in order to reflect
HERA's amendment to section 8(o) of the 1937 Act to substitute the term
``project'' for ``building''. The definition of ``special housing
type'' is also proposed to be revised, for the same reasons provided
concerning the conforming change made to Sec. 983.2; namely, in order
to remove reference to cooperative housing from the applicability of
the regulations of 24 CFR part 982, subpart M.
The definition of ``existing housing'' is proposed to be revised
for the purpose of establishing clear and measurable standards in
determining whether a proposed project is eligible for selection as
existing housing. The definition is intended to address the potential
circumvention of rehabilitation program requirements by selecting a
project as existing housing when rehabilitation will be performed on
the project shortly after execution of the housing assistance payment
(HAP) contract. This rule proposes to revise the definition of
``existing housing'' to read as follows:
Existing housing. A housing unit is considered an existing unit
for purposes of the PBV program, if at the time of notice of PHA
selection, the unit:
(1) Will comply with HQS within 60 days of the date of such
selection, and the total amount of work that must be performed to
cause the unit to comply with HQS does not exceed $1,000 per
assisted unit (including the unit's prorated share of any work to be
accomplished on common areas or systems); and
(2) There is no plan to perform rehabilitation work on the unit
within one year after HAP contract execution that would cause the
unit to be in noncompliance with HQS and that would total more than
$1,000 per assisted unit (including the unit's prorated share of any
work to be accomplished on common areas or systems).
This rule proposes to remove the definition of ``state-certified
appraiser''. As discussed later in this preamble under the discussion
of proposed changes to Sec. 983.59, HUD determined that a formal
appraisal of the property is no longer necessary.
Description of the PBV Program (24 CFR 983.5)--Transparency and
Information Collection Change. This rule amends Sec. 983.5(c) to
provide that although a PHA has the discretion to decide whether to
operate a PBV program (and this rule does not remove that authority),
the PHA must notify HUD of its intent to project-base its vouchers. The
notification requirement is added to Sec. 983.6, as discussed
immediately below. The advance notification is consistent with the
transparency/notification requirements found in Sec. 983.6(c) and
Sec. 983.51 (Owner Proposal Selections Procedures).
Maximum Amount of PBV Assistance (24 CFR 983.6)--Transparency and
Information Collection Change. As noted above, Sec. 983.6 is amended
to require the PHA to provide advance notification to HUD of the PHA's
intent to project-base its vouchers. The purposes of this proposed
amendment is to ensure that PHAs do not exceed the 20 percent
limitation on project-basing vouchers that is imposed by statute.
Special Housing Types (24 CFR 983.9)--Conforming Change. Consistent
with the regulatory changes to Sec. 983.3 described above, the
proposed rule makes a conforming amendment to Sec. 983.9 to clarify
that cooperative housing is an eligible special housing type under the
PBV program in accordance with 24 CFR part 982, subpart M. Section
983.9 is also amended to clarify which regulatory provisions in part
982, subpart M, are not applicable to cooperative housing under the PBV
program.
Project-Based Certificate (PBC) Program (24 CFR 983.10)--Conforming
Change. Section 6904 of the U.S. Troop Readiness, Veterans' Care,
Katrina Recovery, and Iraq Accountability Appropriations Act, 2007
(Pub. L. 110-28, approved May 7, 2007) provides that a PHA may renew or
extend (hereafter, collectively referred to as renew) PBC HAP contracts
as PBV HAP contracts, under certain conditions. Specifically, such
renewals are permitted provided that the initial PBV HAP contract is
for a term of up to 15 years \1\ and that the rents for the renewed
contract are calculated in accordance with section 8(o)(13)(H) of the
1937 Act and HUD's regulations at 24 CFR 983.301 through 983.305. In
addition, section 8(o)(13(C) of the 1937 Act (entitled ``Consistency
with PHA Plan and Other Goals) and section 8(o)(13)(D) of the 1937 Act
(entitled ``Income Mixing Requirements'') do not apply to renewal of
PBC contracts as PBV contracts, and this proposed rule would make this
conforming change.\2\
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\1\ Section 8(o)(13)(F), entitled ``Contract Term,'' was amended
by section 2835(a)(1)(B) of HERA, which extended the contract term
eligible for renewal from up to 10 years to up to 15 years. (See 42
U.S.C. 1473(o)(13)(F).)
\2\ HUD issued PIH Notices 2008-14 and 2010-08 implementing the
provisions of Public Law 110-28. PHAs are currently renewing PBC HAP
contracts in accordance with the HUD directives. Therefore, the
regulatory change is conforming in nature, reflecting practices
already in effect.
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Owner Proposal Selection Procedures (24 CFR 983.51)--Conforming
Change. This proposed rule would revise paragraph (a) of this section
to substitute the term ``project'' for ``building'', consistent with
the statutory change made by HERA to section 8(o) of the 1937 Act.
Additionally, the proposed rule slightly rewords paragraph (b)(2) of
this section to further clarify that a PHA may select, without
competition, a proposal for housing assisted under a federal, state, or
local government housing assistance, community development, or
supportive services program that required a competition for the
selection of proposals; that is, the PHA need not conduct another
competition.
HUD notes that Sec. 983.51(e) provides, in relevant part, that
``under no circumstances may PBV assistance be used with a public
housing unit.'' HUD makes no changes to this section but finds that it
is important to reiterate the basis for this requirement as provided by
HUD in the PBV program final rule published on October 13, 2005, at 70
FR 59892. HUD stated in relevant part as follows:
The Department believes that Congress' adoption of disparate or
parallel statutory provisions for the public housing and voucher
programs affirms that public housing and voucher programs are
intended to operate as separate, and mutually exclusive, subsidy
systems under the U.S. Housing Act of 1937. It is not permissible by
law to combine voucher funds with public housing funds. * * * If
Capital Funds (including Replacement Housing Factor Fund Grants) or
Section 24 funds are used in the development of affordable housing,
pro-ration must occur. For example, if a project receives $2,000 in
non-public housing HOPE VI funds and $1,000 in Capital Funds and
there are 60 units in the development, 20 of the units (one-third)
are being funded with capital funds and, therefore, cannot be
combined with project-based vouchers. Provided that the remaining 40
units (two-thirds) are not receiving any Public Housing funds, the
units may be assisted under the PBV program. (See 70 FR 59900.)
Housing Type (24 CFR 983.52)--Proposed Change. This regulatory
section provides standards by which a unit will be considered an
existing unit for purposes of the PBV program. This section, as
proposed to be revised, would provide that a unit must satisfy Housing
Quality Standards (HQS) requirements within 60 days of the date of
selection by a PHA. This section would also limit the total amount of
work that must be performed to
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facilitate compliance with HQS to $1,000 per assisted unit.
Additionally, the proposed rule provides that to be considered an
existing unit for purposes of the PBV program, the owner must not plan
to perform rehabilitation work on the units within one year after HAP
contract execution that would cause the units to be in noncompliance
with HQS and that would total more than $1,000 per assisted unit. The
reason for the proposed change to Sec. 983.52 is to provide a clear
and measurable standard as to what constitutes ``existing housing'' as
discussed above under the changes to the PBV Definitions (24 CFR
983.3).
Prohibition of Assistance for Ineligible Units (24 CFR 983.53)--
Conforming Change. Section 2835(a)(1)(F) of HERA added a new section
8(o)(13)(L) to the 1937 Act to allow PHAs to enter into HAP contracts
with respect to units in cooperative housing and in high-rise elevator
projects. The authority for units in high-rise elevator projects
specifically states it may be exercised without review and approval by
HUD. The November 24, 2008, notice advised that the provision is self-
implementing. This proposed rule would make conforming changes to Sec.
983.53 to remove the requirement of advance HUD approval for HAP
contracts with respect to units in high-rise elevators projects and to
make cooperative housing an eligible housing type.
Prohibition of Excess Public Assistance (24 CFR 983.55)--Conforming
Change. Section 2835(a)(1)(F) of HERA provides relief from certain
review requirements by adding section 8(o)(13)(M) to the 1937 Act. New
section 8(o)(13)(M)(i) removes the requirement to conduct a subsidy
layering review in the case of a HAP contract for an existing structure
or if such a review has been conducted by the applicable state or local
agency. The November 24, 2008, notice advised that the provision is
self-implementing for existing housing, but not for newly constructed
or rehabilitated housing.
This proposed rule would make a conforming change to Sec. 983.55
to clarify that the subsidy layering requirements are not applicable to
existing housing. The November 24, 2008, notice further advised that
HUD would be issuing guidance on how such reviews must be conducted for
newly constructed or rehabilitated housing. The Office of Public and
Indian Housing (PIH) has issued guidelines on subsidy layering
requirements for the PBV program. (See HUD's notice published in the
Federal Register on July 9, 2010, at 75 FR 39561.)
Applicability of 25 Percent Cap on Number of PBV Units (24 CFR
983.56)--Conforming Change. Prior to amendment by section 2835(a)(1)(A)
of HERA, PBV assistance was limited to 25 percent of the units in a
building. This cap in section 8(o)(13)(D)(i) of the 1937 Act is amended
by replacing the term ``building'' with the term ``project,'' which is
defined to mean a single building, multiple contiguous buildings, or
multiple buildings on contiguous parcels of land. The November 24,
2008, notice advised that this substitution in terminology was self-
implementing and that HUD would make a conforming change to its
regulations at 24 CFR 983.56 to reflect the new terminology.
This proposed rule would make a conforming change to Sec. 983.56,
and HUD is also adding the statutory definition of ``project'' to the
definitions in 24 CFR 983.3, as discussed earlier in this preamble.
Additionally, this proposed rule would clarify that the exception to
the 25 percent cap on the number of PBV units in a project includes
units for the elderly and/or persons with disabilities; that is, a
project for the elderly, a project for persons with disabilities, or a
project that serves both categories of tenants.
With respect to the definition of ``project'', HUD specifically
requested comment in the November 24, 2008, notice on the impact on
deconcentration efforts concerning the change in terms from
``building'' to ``project''. One of the commenters requested that HUD's
conforming rule clarify that a PHA has the discretion to apply the
definition of ``project'' to mean a single building, multiple
contiguous buildings, or multiple buildings on contiguous parcels of
land. HUD interprets ``project'' to apply to all of these structures,
and a PHA must consider the entire definition and apply this definition
to the proposed PBV units. HUD also interprets the term ``contiguous''
in the statutory definition of ``project'' to include ``adjacent to'',
as well as touching along a boundary or a point.
Another commenter expressed concern that the change in definition
to ``project'' would allow PBV owners to set aside separate floors of
mixed-occupancy buildings solely for PBV residents with disabilities.
The commenter noted that the civil rights authorities prohibit unlawful
segregation, not only of race but of disability as well. The commenter
requested that HUD issue regulations directing PHAs to adopt written
policies to forbid segregation in PBV projects.
It is HUD's view that nothing in HERA or in this proposed rule
would alter a PHA's responsibility to adhere to nondiscrimination
requirements. Given that PHAs already have the responsibility to adhere
to civil rights and nondiscrimination requirements, including, but not
limited to, the express integration mandate set forth at 24 CFR 8.4(d),
HUD determined that further regulation is not necessary in this area.
However, HUD will remain diligent in its oversight responsibilities
regarding compliance with civil rights requirements.
In addition to the foregoing changes, the proposed rule would add a
new paragraph (b)(3) to make explicit that exception categories in a
multifamily housing project may be combined. The exception categories
in a multifamily housing project refers to those units that are
occupied by elderly families and/or families with disabilities and/or
families receiving supportive services and that are exempt from the
overall 25 percent cap. New paragraph (b)(3) is intended to remove any
ambiguity that the exception categories can be combined in determining
the number of units that are exempt from the 25 percent cap.
Environmental Review (24 CFR 983.58)--Informational Change. As
stated in the November 24, 2008, notice, in addition to removal of the
requirement for a subsidy layering review for existing housing, section
8(o)(13)(M)(ii) of the 1937 Act relieves a PHA from undertaking an
environmental review for an existing structure, except to the extent
that such a review is otherwise required by law or regulation. HUD
specifically solicited comment on this HERA amendment in the November
2008 notice, but did not receive any public comment on this issue.
HUD notes that any federally required environmental review is
``required by law or regulation.'' Given this, there do not appear to
be any federally required environmental reviews that would be
eliminated by this provision. HUD also notes that under its regulations
in 24 CFR part 58, federal environmental reviews are undertaken by
responsible entities (usually units of general local governments), and
not by PHAs.
Accordingly, no changes are proposed to Sec. 983.58, except to
make a minor change to paragraph (d) of Sec. 983.58 to note that the
term ``release of funds'' is defined in the definition section, Sec.
983.3, as discussed earlier in this preamble.
PHA-Owned Units (24 CFR 983.59)--Clarifying Change. In this
regulatory section, a paragraph is proposed to be added to clarify the
term of the initial and renewal HAP contract. This proposed revision is
consistent with
[[Page 28746]]
section 8(o)(13)(F) of the 1937 Act, which provides that the PHA and
the independent HUD-approved entity must agree on the term of the HAP
contract and any HAP contract renewal for PHA-owned units.
Additionally, this rule proposes to remove the requirement that the
independent entity approved by HUD to determine initial contract rents
to owner must be based on an appraisal by a licensed, state-certified
appraiser. This requirement was not statutory but has been
administratively imposed by HUD. HUD has now determined that the
requirement is no longer practical or necessary. Rent reasonableness is
based on rent comparability and, given the method by which rent
reasonableness is now determined, such determination does not require a
state-certified appraiser. Additionally, in practice, HUD has
determined that the state-certified appraiser requirement has resulted
in increased delays in the execution of ``agreements to enter into a
housing assistance payment'' (AHAPs), due to lack of availability of
state-certified appraisers. PHAs have also experienced significant
increased expense in order to acquire state-certified appraisers. The
1937 Act requires that an independent entity establish rents based on
program requirements, and the independence of such entity, which is an
entity approved by HUD, sufficiently ensure that rents are set
appropriately.
Housing Quality Standards (24 CFR 983.101)--Conforming and
Clarifying Change. This proposed rule would revise the regulatory
section to exclude cooperative housing from the list of special housing
types that are inapplicable to the PBV program, for the reasons
previously discussed in this preamble.
Purpose and Content of the Agreement to Enter into a HAP Contract
(24 CFR 983.152)--Clarifying Change. The preamble to the proposed rule
for the Section 8 Project-Based Voucher program published on March 18,
2004 (69 FR 12949), states, at 69 FR 12951, that an ``agreement is
executed for units to be constructed or rehabilitated before the
beginning of construction or rehabilitation.'' The fact that the
existing regulation speaks in terms of the owner agreeing, in the
agreement, to ``develop'' (defined as construction or rehabilitation of
project-based voucher housing after the proposal selection date) ``the
contract units'' supports the fact that execution of the agreement is
required prior to the start of construction or rehabilitation. This
proposed rule would clarify the existing regulation by striving to
establish a bright-line definition of ``commencement of construction''
to ensure there is no confusion concerning the requirement that a PHA
must enter into an agreement with the owner prior to the start of
construction or rehabilitation on a project. This section, as proposed
to be revised, would provide that construction commences when
excavation or site preparation (including clearing of the land) begins
for the housing. The preamble to the March 18, 2004, proposed rule also
describes construction in this manner. Therefore, the new rule would
simply clarify HUD's policy regarding when construction commences. In
addition, this proposed rule would clarify that rehabilitation begins
with the physical commencement of rehabilitation activity on the
housing.
This proposed rule seeks comment on the applicability of this
requirement to projects receiving other federal funds, including
LIHTCs, on which construction has already started. Other federal
programs may require commencement of construction before the AHAP can
be formalized by HUD. HUD is exploring other means of establishing
compliance with AHAP requirements through other federal programs.
When Agreement Is Executed (24 CFR 983.153)--Clarifying Change.
Similar to the change made to Sec. 983.152, the proposed change to
Sec. 983.153 would clarify when the Agreement, referenced in Sec.
983.153, must be executed.
Purpose of HAP contract (24 CFR 983.202)--Clarifying Change. The
proposed revision to this section would make explicit the existing
practice authorized by regulation, which is that a HAP contract covers
a single project, with the exception of single-family scattered site
projects. If an owner has multiple projects, then each project must be
covered by a separate HAP contract under the proposed clarification.
HAP Contract Information (24 CFR 983.203)--Conforming Change. This
proposed rule would revise Sec. 983.203 to substitute the term
``project'' for ``building'', consistent with the statutory change.
Extension of Term of Initial Housing Assistance Payment (HAP)
Contract (24 CFR 983.205(a))--Conforming Change. The maximum term of
the initial HAP contract provided in section 8(o)(13)(F) of the 1937
Act is extended from 10 to 15 years as a result of the amendment to the
1937 Act made by section 2835(a)(1)(B) of HERA. In the November 24,
2008, notice, HUD advised that the provision could be implemented,
commencing with the date of enactment of HERA, July 30, 2008. This
proposed rule would make a conforming change to 24 CFR 983.205 to
reflect the new HAP term.
Extension of Initial Term (24 CFR 983.205)--Conforming Change. This
proposed rule would make a conforming change to 24 CFR 983.205(b) to
reflect the new HAP term. Section 8(o)(13)(G) of the 1937 Act, as
amended by section 2835(a)(1)(C) of HERA, provides that the maximum
term for an extension of the HAP contract is 15 years, at the election
of the PHA and owner. A PHA may provide for multiple extensions;
however, under no circumstances may extensions exceed 15 years
cumulatively. The November 24, 2008, notice advised that this provision
was self-implementing and could be utilized, commencing with the date
of enactment of HERA, July 30, 2008, but also advised that a contract
extension may not exceed 15 years cumulatively. Additionally, the
November 2008 notice advised that a PHA must still determine that the
extension of the contract is appropriate to achieve long-term
affordability of the housing or to expand housing opportunities. One of
the commenters found HUD's direction that the contract extension ``may
not exceed 15 years cumulatively'' to be ambiguous and requested that
the conforming rule clarify that the initial contract may be up to 15
years and that one or more extensions may be up to 15 years. The
proposed rule makes the additional clarifying change requested by the
commenter. For further clarity, HUD adds a cross-reference to Sec.
983.59 to address the initial term of the HAP for PHA-owned housing.
This proposed rule would make a clarifying change to 24 CFR
983.205(d) to require HUD approval when an owner seeks to terminate a
HAP contract when the rent for any contract unit is adjusted below the
initial rent level.
Proposed Statutory Notice Requirements: Contract Termination or
Expiration (Adding a New 24 CFR 983.206). This proposed rule would add
a new Sec. 983.206 to assist PHAs in addressing the notification
requirements established by section 8(c)(8)(A) of the 1937 Act that the
owner must meet. Accordingly, the regulatory sections following Sec.
983.206 are redesignated accordingly.
HAP Contract Amendments (To Add or Substitute Units) (Redesignated
24 CFR 983.207)--Conforming Change. Section 983.207 (formerly Sec.
983.206) is proposed to be revised to substitute the term ``project''
for ``building'', consistent with the statutory change made by HERA.
[[Page 28747]]
Owner Certification (Redesignated 24 CFR 983.210)--Conforming
Change. Consistent with the change to Sec. 983.53 (Prohibition of
Assistance for Ineligible Units), discussed earlier, the proposed
change to paragraph (i) in Sec. 983.210 (formerly Sec. 983.209) would
clarify that the owner's certification does not apply in the case of an
assisted family's membership in a cooperative.
This proposed rule would add a new paragraph (j) to Sec. 983.210,
consistent with the revised definition of ``existing housing'', to
reflect what constitutes existing PBV housing. This revision requires
the owner of PBV property to certify that there are no plans to perform
rehabilitation work on the existing units within one year after
execution of the HAP contract.
Removal of Unit from HAP Contract (24 CFR 983.211)--Clarifying
Change. This proposed rule would add a new section, Sec. 983.211, to
clarify for PHAs when units are to be removed from the HAP contract.
This requirement has always existed, but it was referenced only in the
owner certification section of the regulations in part 983. The
inclusion of this requirement in 24 CFR 983.211 will eliminate any
possible ambiguity about the application of this requirement.
How Participants Are Selected (983.251(a) and (d))--Clarifying
Change. In Sec. 983.251(a), this proposed rule would clarify the pre-
existing policy that restricts owners from leasing to family members or
relatives. Specifically, this section is proposed to be revised to
remove any ambiguity that a PHA may not approve the tenancy of a family
if the owner (including a principal or other interested party) of the
unit to be leased is the parent, child, grandparent, grandchild,
sister, or brother of any member of the family, unless the PHA
determines that approving the unit would provide reasonable
accommodation for a family member who is a person with a disability. In
this regard, this proposed rule would also provide that the owner
certification, already required under Sec. 983.209, would include
language that makes explicit that the unit will not be rented to the
enumerated list of relatives.
With respect to accommodating a family member who is a person with
disability, this rule proposes to amend Sec. 983.251(d) by removing
the third preference limit, which restricted the preference to
individuals with disabilities interfering with daily activities so
severely that adequate services were available only in a segregated
setting. The amendment is intended to give, to persons qualifying for a
preference for services, the option of receiving community-based
services that may be offered outside of the particular project.
The Lease: Provisions Governing Term of Lease and Governing Absence
From Unit (24 CFR 983.256)--Clarifying Change. The proposed rule would
revise Sec. 983.256(f) pertaining to the initial term of lease to more
fully address the requirements pertaining to the lease, and not simply
the initial term. For example, revised paragraph (f) provides that the
lease must allow for automatic renewal after the initial term of the
lease and the conditions under which the lease terminates. The effect
of this change is to put in place, for the PBV program, a reliable
long-term lease for a tenant unless the owner provides good cause for
termination of the lease or nonrenewal of the lease.
In Sec. 983.256, this proposed rule would substitute the term
``family'' for ``tenant'' in Sec. 983.256(g). The substitution of
``family'' for ``tenant'' is for consistency purposes, since the
regulation more frequently refers to ``family'' rather than tenant. The
proposed rule would also clarify that it is the HAP contract ``for the
unit'' that is being referred to in the parenthetical sentence in
paragraph (g).
Owner Termination of Tenancy and Eviction (24 CFR 983.257)--
Conforming Change and Proposed Change. With respect to the conforming
change, this proposed rule would revise Sec. 983.257 to substitute the
term ``project'' for ``building'', consistent with the statutory
change. With respect to the proposed change, this rule proposes to
remove paragraph (b)(3) from Sec. 983.257, which allows an owner to
refuse to renew a lease without good cause upon lease expiration. This
change is made for the same reasons the change is made in Sec.
983.256(f), which is to put in place, for the PBV program, a reliable
long-term lease for a tenant unless the owner provides good cause for
termination of the lease or nonrenewal of the lease. This change is
consistent with the purposes of the PBV program. In the project-based
context, the owner, in executing the project-based voucher HAP
contract, makes a long-term commitment to providing affordable housing.
This provision will preclude an owner from effectively reneging on this
commitment for the term of the contract by terminating tenant leases at
the end of the initial term without good cause.
Continuation of Housing Assistance Payments (24 CFR 983.258)--
Clarifying Change. This proposed rule would add a new Sec. 983.258
that would clarify that housing assistance payments will continue until
the tenant rent equals the rent to owner. After 180 days of no subsidy
payments being made on behalf of the family, the unit will be removed
from the HAP contract pursuant to Sec. 983.211.
Redesignated Regulatory Sections. With the addition of a new Sec.
983.258, existing Sec. 983.258 (Security deposit; amounts owed by
tenant) would be redesignated as Sec. 983.259, and no changes are
proposed to be made to Sec. 983.258 as redesignated. Existing
Sec. Sec. 983.259, 983.260, and 983.261 would be redesignated,
respectively, as Sec. Sec. 983.260, 983.261, and 983.262.
Overcrowded, Under-Occupied, and Accessible Units (Redesignated 24
CFR 983.260)--Conforming Change. This proposed rule would revise Sec.
983.260 (formerly Sec. 983.259) to include the term ``project'' in
paragraph (b)(2)(i) of this section.
Clarifying Change. This proposed rule would revise Sec. 983.260 to
clarify that, if a PHA offers the family tenant-based rental assistance
under the PBV program, a PHA must terminate the HAP contract for a
wrong-sized or accessible unit, the earlier of the expiration of the
term of the family's voucher (including any extension granted by the
PHA) or the date upon which the family vacates the unit.
When Occupancy May Exceed 25 Percent Cap on the Number of PBV Units
in Each Project (Redesignated 24 CFR 983.262)--Conforming Change.
Section 983.262 (formerly Sec. 983.261) would revise paragraph (d) to
substitute the term ``project'' for ``building'', consistent with the
HERA change in terminology, and to correct an incorrect regulatory
reference. Section 983.262 allows for the HAP contract to be amended to
substitute a different unit in the project, in accordance with Sec.
983.206(a). The correct reference is Sec. 983.207(a). Paragraph (b) of
this section would also be revised to clarify existing policy that a
PHA, in giving a preference to excepted units, need not choose between
the elderly or disabled families, but may give a preference to both.
Determination of Rent to Owner (24 CFR 983.301)--Clarifying
Changes. Section 2835(a)(1)(D) of HERA amended section 8(o)(13)(H) of
the 1937 Act to permit a PHA to use the higher section 8 rent for
certain tax credit units if the LIHTC rent is less than the amount that
would be permitted under section 8. The amendment made to Sec.
983.301(d) reflects this discretion granted to PHAs. The November 24,
2008, notice advised that this statutory provision could be utilized
commencing with the date of enactment of HERA, July 30, 2008. The
[[Page 28748]]
statute, however, did not alter the rent reasonableness requirements of
section 8(o)(10)(A). These requirements must continue to be met. In
addition, this proposed rule would revise Sec. 983.301(e) to provide
that the rent to owner shall not be reduced below the initial rent,
with certain limitations, in accordance with Sec. 983.302(c)(2).
Redetermination of Rent to Owner (24 CFR 983.302)--Implementing
Change. This proposed rule would add a new paragraph (2) to Sec.
983.302(c) to provide that rent paid to the owner shall not be reduced
below the initial rent to owner for dwelling units under the initial
HAP, except in the following situations: (1) To correct errors in
calculations in accordance with HUD requirements; (2) if additional
housing assistance has been combined with PBV assistance after
execution of the initial HAP contract and a rent decrease is required
pursuant to a subsidy layering review; or (3) if a decrease in rent to
owner is required based on changes in the allocation of responsibility
for utilities between the owner and the tenant.
Reasonable Rent (24 CFR 983.303)--Conforming Changes. Paragraph (a)
of this section would be revised to include the exception to the
comparability requirement of rent reasonableness, provided by the
amendment to section 8(o)(13)(I)(i) made by HERA. This revision will
provide that the rent to owner for a contract may not exceed the
reasonable rent as determined by the PHA, except that the rent to owner
shall not be reduced below the initial rent in accordance with Sec.
983.302(c)(2). Paragraph (b)(2) of this section would be revised to
include the term ``project''. Also, in paragraph (f), an incorrect
reference to Sec. 983.58 is corrected to refer to Sec. 983.59.
Other Subsidy: Effect on Rent to Owner (24 CFR 983.304)--Clarifying
Change. This proposed rule would revise paragraph (e) of this section
to clarify that rent reduction is mandatory when the results of a
subsidy layering review disclose the need for rent reduction.
III. Regulatory Review
Executive Order 13563--Improving Regulations and Regulatory Review
The President's Executive Order (EO) 13563, entitled ``Improving
Regulation and Regulatory Review,'' was signed by the President on
January 18, 2011, and published on January 21, 2011 (76 FR 3821). This
EO requires executive agencies to analyze regulations that are
``outmoded, ineffective, insufficient, or excessively burdensome, and
to modify, streamline, expand, or repeal them in accordance with what
has been learned.'' Section 4 of the EO, entitled ``Flexible
Approaches,'' provides, in relevant part, that where relevant,
feasible, and consistent with regulatory objectives, and to the extent
permitted by law, each agency shall identify and consider regulatory
approaches that reduce burdens and maintain flexibility and freedom of
choice for the public.
As noted earlier in this preamble, this proposed rule would make
conforming changes to the regulations of the Section 8 Tenant-Based
Voucher and Section 8 Project-Based Voucher programs to reflect the
self-executing provisions of HERA, and would also amend the regulations
required to implement those statutory provisions of HERA that are not
self-implementing. Additionally, the rule would make such other changes
for the purposes of updating certain regulations to reflect current
practices, and clarifying other regulations which, based on experience,
HUD determined would benefit from clarification. The amendments to be
made by this rule bring the Section 8 Tenant-Based Voucher and Section
8 Project-Based Voucher programs up-to-date with statutory requirements
and existing policies and practices.
IV. Findings and Certifications
Executive Order 13132, Federalism
Executive Order 13132 (entitled ``Federalism'') prohibits an agency
from publishing any rule that has federalism implications if the rule
either: (1) Imposes substantial direct compliance costs on state and
local governments and the rule is not required by statute, or (2) the
rule preempts state law, unless the agency meets the consultation and
funding requirements of section 6 of the Order. This rule does not have
federalism implications and would not impose substantial direct
compliance costs on state and local governments nor preempt state law
within the meaning of the Order.
Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq.)
generally requires an agency to conduct a regulatory flexibility
analysis of any rule subject to notice and comment rulemaking
requirements, unless the agency certifies that the rule will not have a
significant economic impact on a substantial number of small entities.
This proposed rule largely makes conforming amendments to HUD
regulations that govern the public and assisted housing programs, for
which changes were recently made by the Housing and Economic Recovery
Act of 2008. As advised in the November 24, 2008, notice that preceded
this rule, the statutory changes made to these programs were largely
self-executing, and required only conforming regulatory amendments.
This proposed rule makes those conforming amendments. The statutory
changes to the programs, as reflected in the conforming amendments,
impose no significant economic impact on a substantial number of small
entities.
This proposed rule would make such other changes for the purposes
of updating certain regulations to reflect current practices, and
clarifying other regulations which, based on experience, HUD determined
would benefit from clarification. Therefore, the undersigned certifies
that this rule will not have a significant impact on a substantial
number of small entities.
Notwithstanding HUD's view that this rule will not have a
significant effect on a substantial number of small entities, HUD
specifically invites comments regarding any less burdensome
alternatives to this rule that will meet HUD's objectives as described
in this preamble.
Environmental Impact
A Finding of No Significant Impact (FONSI) with respect to the
environment was made in accordance with HUD regulations in 24 CFR part
50 that implement section 102(2)(C) of the National Environmental
Policy Act of 1969 (42 U.S.C. 4332). The FONSI is available for public
inspection during regular business hours in the Regulations Division,
Office of General Counsel, Department of Housing and Urban Development,
451 7th Street SW., Room 10276, Washington, DC 20410-0500. Due to
security measures at the HUD Headquarters building, please schedule an
appointment to review the FONSI by calling the Regulations Division at
202-402-3055 (this is not a toll-free number).
Unfunded Mandates Reform Act
Title II of the Unfunded Mandates Reform Act of 1995 (2 U.S.C.
1531-1538) (UMRA) establishes requirements for federal agencies to
assess the effects of their regulatory actions on state, local, and
tribal governments and the private sector. This rule does not impose
any federal mandates on any state, local, or tribal government or the
private sector within the meaning of UMRA.
Paperwork Reduction Act
The information collection requirements contained in this interim
rule have been submitted to the Office
[[Page 28749]]
of Management and Budget (OMB) under the Paperwork Reduction Act of
1995 (44 U.S.C. 3501-3520). In accordance with the Paperwork Reduction
Act, an agency may not conduct or sponsor, and a person is not required
to respond to, a collection of information, unless the collection
displays a currently valid OMB control number.
The burden of the information collections in this proposed rule is
estimated as follows:
Reporting and Recordkeeping Burden
----------------------------------------------------------------------------------------------------------------
Response
Information collection Number of frequency Total annual Burden hours Total annual
respondents (average) responses per response hours
----------------------------------------------------------------------------------------------------------------
24 CFR 983.6(d)--the requirement 218 1 218 0.5 109
that a PHA must notify HUD of
intent to project-base its
vouchers.......................
24 CFR 983.205(d)--requirement 15 1 15 1.0 15
that HUD approval must be
obtained when an owner seeks to
terminate a HAP contract when
rent is adjusted below the
initial rent...................
24 CFR 983.206(b)--the 20 30 600 0.25 150
requirement that not less than
one year before termination of
a PBV or PBC contact, the owner
must notify the PHA and
assisted tenants of the
termination....................
-------------------------------------------------------------------------------
Total....................... .............. .............. .............. .............. 274
----------------------------------------------------------------------------------------------------------------
Total estimated burden hours:
In accordance with 5 CFR 1320.8(d)(1), HUD is soliciting comments
from members of the public and affected agencies concerning this
collection of information to:
(1) Evaluate whether the proposed collection of information is
necessary for the proper performance of the functions of the agency,
including whether the information will have practical utility;
(2) Evaluate the accuracy of the agency's estimate of the burden of
the proposed collection of information;
(3) Enhance the quality, utility, and clarity of the information to
be collected; and
(4) Minimize the burden of the collection of information on those
who are to respond, including through the use of appropriate automated
collection techniques or other forms of information technology; e.g.,
permitting electronic submission of responses.
Interested persons are invited to submit comments regarding the
information collection requirements in this rule. Comments must refer
to the proposal by name and docket number (FR-5242-P-01) and must be
sent to:
HUD Desk Officer, Office of Management and Budget, New Executive Office
Building, Washington, DC 20503, Fax: (202) 395-6947,
and
Collette Pollard, Reports Liaison Officer, Office of the Assistant
Secretary for Public and Indian Housing, Department of Housing and
Urban Development, Room 4160, 451 Seventh Street SW., Washington, DC
20410-4000.
As an alternative to the above, interested persons may submit
comments regarding the information collection requirements
electronically through the Federal eRulemaking Portal at http://www.regulations.gov. HUD strongly encourages commenters to submit
comments electronically. Electronic submission of comments allows the
commenter maximum time to prepare and submit a comment, ensures timely
receipt by HUD, and enables HUD to make them immediately available to
the public. Comments submitted electronically through the http://www.regulations.gov Web site can be viewed by other commenters and
interested members of the public. Commenters should follow the
instructions provided on that site to submit comments electronically.
Catalog of Federal Domestic Assistance
The Catalog of Federal Domestic Assistance numbers applicable to
the programs that would be affected by this rule are: 14.195, 14.850,
14.856, and 14.871.
List of Subjects
24 CFR Part 5
Administrative practice and procedure, Aged, Claims, Drug abuse,
Drug traffic control, Grant programs--housing and community
development, Grant programs--Indians, Individuals with disabilities,
Loan programs--housing and community development, Low and moderate
income housing, Mortgage insurance, Pets, Public housing, Rent
subsidies, Reporting and recordkeeping requirements.
24 CFR Part 982
Grant programs--housing and community development, Housing, Low-
and moderate-income housing, Rent subsidies, Reporting and
recordkeeping requirements.
24 CFR Part 983
Grant programs--housing and community development, Housing, Low-
and moderate-income housing, Rent subsidies, Reporting and
recordkeeping requirements.
Accordingly, for the reasons stated in the preamble, HUD propose to
amend 24 CFR parts 5, 982, and 983, as follows.
PART 5--GENERAL HUD PROGRAM REQUIREMENTS; WAIVERS
1. The authority citation for part 5 continues to read as follows:
Authority: 42 U.S.C. 1437a, 1437c, 1437d, 1437f, 1437n,
3535(d), Sec. 327, Public Law 109-115, 119 Stat. 2936, and Sec. 607,
Pub. L. 109-162, 119 Stat. 3051.
2. In Sec. 5.609, paragraph (c)(14) is revised to read as follows:
Sec. 5.609 Annual income.
* * * * *
(c) * * *
(14) Deferred periodic amounts from supplemental security income
and Social Security benefits that are received in a lump sum amount or
in prospective monthly amounts, or any deferred Department of Veterans
Affairs disability benefits that are received in a lump sum amount or
in prospective monthly amounts.
* * * * *
[[Page 28750]]
PART 982--SECTION 8 TENANT BASED ASSISTANCE: HOUSING CHOICE VOUCHER
PROGRAM
3. The authority citation for part 982 continues to read as
follows:
Authority: 42 U.S.C. 1437f and 3535(d).
4. In Sec. 982.507, paragraph (a)(1) and the introductory text to
paragraph (b) are revised, a new paragraph (c) is added, and existing
paragraph (c) is redesignated as paragraph (d).
Sec. 982.507 Rent to owner: Reasonable rent.
(a) PHA determination. (1) Except as provided in paragraph (c) of
this section, the PHA may not approve a lease until the PHA determines
that the initial rent to owner is a reasonable rent.
* * * * *
(b) Comparability. The PHA must determine whether the rent to owner
is a reasonable rent in comparison to rent for other comparable
unassisted units. To make this determination, the PHA must consider:
* * * * *
(c) Units assisted by low-income housing tax credits or assistance
under HUD's HOME Investment Partnerships (HOME) program. (1) For a unit
receiving low-income housing tax credits (LIHTCs) pursuant to section
42 of the Internal Revenue Code of 1986 or receiving assistance under
HUD's HOME Program (for which the regulations are found in 24 CFR part
92), a rent comparison with unassisted units is not required if the
voucher rent does not exceed the rent for other LIHTC- or HOME-assisted
units in the project that are not occupied by families with tenant-
based assistance.
(2) If the rent requested by the owner exceeds the LIHTC rents for
nonvoucher families, the PHA must perform a rent comparability study in
accordance with program regulations and the rent shall not exceed the
lesser of the: (i) Reasonable rent as determined pursuant to a rent
comparability study and (ii) the payment standard established by the
PHA for the unit size involved.
* * * * *
PART 983--PROJECT-BASED VOUCHER (PBV) PROGRAM
5. The authority citation for part 983 continues to read as
follows:
Authority: 42 U.S.C. 1437f and 3535(d).
6. In Sec. 983.2, paragraphs (b)(3), (c)(2)(i), and (c)(7) are
revised to read as follows:
Sec. 983.2 When the tenant-based voucher rule (24 CFR part 982)
applies.
* * * * *
(b) * * *
(3) Provisions on the following special housing types: shared
housing, manufactured home space rental, and the homeownership option.
(c) * * *
(2) * * *
(i) Section 982.310 (owner termination of tenancy) applies to the
PBV program, but to the extent that those provisions differ from Sec.
983.257, the provisions of Sec. 983.257 govern; and
* * * * *
(7) In subpart M of part 982: (i) Sections 982.603, 982.607,
982.611, 982.613(c)(2), 982.619(a), (b)(1), (b)(4), (c); and
(ii) Provisions concerning shared housing (Sec. 982.615 through
Sec. 982.618), manufactured home space rental (Sec. 982.622 through
Sec. 982.624), and the homeownership option (Sec. 982.625 through
Sec. 982.641).
7. In Sec. 983.3(b):
a. Definitions for ``housing credit agency'', ``project'',
``project-based certificate (PBC) program'', and ``release of funds
(for purposes of environmental review)'' are added; and
b. The following definitions are revised: ``excepted units (units
in a multifamily building not counted against the 25 percent cap),''
``existing housing'', ``partially assisted building,'' ``premises,''
``qualifying families (for purposes of exception to 25 percent building
cap),'' ``special housing type,'' and ``wrong-size unit''.
c. The definition for ``state certified appraiser'' is removed.
Sec. 983.3 PBV definitions.
* * * * *
(b) * * *
Excepted units (units in a multifamily project not counted against
the 25 percent per-project cap). See Sec. 983.56(b)(2)(i).
Existing housing. A housing unit is considered an existing unit for
purposes of the PBV program, if at the time of notice of PHA selection,
the units:
(1) Will comply with HQS within 60 days of the date of such
selection, and the total amount of work that must be performed to cause
the units to comply with HQS does not exceed $1,000 per assisted unit
(including the unit's prorated share of any work to be accomplished on
common areas or systems); and
(2) There is no plan to perform rehabilitation work on the units
within one year after HAP contract execution that would cause the units
to be in noncompliance with HQS and that would total more than $1,000
per assisted unit (including the unit's prorated share of any work to
be accomplished on common areas or systems).
Housing credit agency. For purposes of performing subsidy layering
reviews for proposed PBV projects, a housing credit agency includes a
State housing finance agency, a participating jurisdiction under HUD's
HOME program (see 24 CFR part 92), or other State housing agencies that
meet the definition of ``housing credit agency'' as defined by section
42 of the Internal Revenue Code of 1986.
* * * * *
Partially assisted project. A project in which there are fewer
contract units than residential units.
* * * * *
Premises. The project in which the contract unit is located,
including common areas and grounds.
Project. A project is a single building, multiple contiguous
buildings, or multiple buildings on contiguous parcels of land.
Contiguous in this definition includes ``adjacent to'', as well as
touching along a boundary or a point.
Project-based certificate (PBC) program. The program in which
project-based assistance is attached to units pursuant to an Agreement
executed by a PHA and owner before January 16, 2001 (see Sec. 983.10).
* * * * *
Qualifying families (for purpose of exception to 25 percent per-
project cap). See Sec. 983.56(b)(2)(ii).
Release of Funds (for purposes of environmental review). Release of
funds in the case of the project-based voucher program, under 24 CFR
58.1(b)(6)(iii) and Sec. 983.58, means that HUD approves the local
PHA's Request for Release of Funds and Certification by issuing a
Letter to Proceed (in lieu of using form HUD-7015.16) that authorizes
the PHA to execute an ``agreement to enter into housing assistance
payment'' (AHAP) contract or, for existing housing, to directly enter
into a HAP with an owner of units selected under the PBV program.
* * * * *
Wrong-size unit. A unit occupied by a family that does not conform
to the PHA's subsidy guideline for family size, by being either too
large or too small compared to the guideline.
8. In Sec. 983.5, paragraph (c) is revised to read as follows:
Sec. 983.5 Description of the PBV program.
* * * * *
(c) PHA discretion to operate PBV program. A PHA has discretion
whether to operate a PBV program. HUD approval is not required, except
that the
[[Page 28751]]
PHA must notify HUD of its intent to project-base its vouchers, in
accordance with Sec. 983.6(d).
9. In Sec. 983.6, a new paragraph (d) is added to read as follows:
Sec. 983.6 Maximum amount of PBV assistance.
* * * * *
(d) Before implementing a PBV program, the PHA must submit the
following information to a HUD field office for review:
(1) The total amount of annual budget authority;
(2) The percentage of annual budget authority available to be
project-based; and
(3) The total amount of annual budget authority the PHA is planning
to project-base under this part and the number of units that such
budget authority will support.
10. In Sec. 983.9, paragraph (a)(2) is revised and a new paragraph
(c) is added to read as follows:
Sec. 983.9 Special housing types.
(a) * * *
(2) In the PBV program, the PHA may not provide assistance for
shared housing, manufactured home space rental, or the homeownership
option.
* * * * *
(c) Cooperative housing. (1) Applicability of part 983. Assistance
under this housing type is subject to the requirements of part 983,
except that following, Sec. Sec. 983.256(b) and (c) 983.258, and
983.259 of part 983, subpart F, do not apply.
(2) Applicability of part 982. (i) Cooperative housing under the
PBV program is also subject to the requirements of 24 CFR
982.619(b)(2), (b)(3), (b)(5), (d), and (e).
(ii) Cooperative housing under the PBV program is not subject to
the requirements of 24 CFR 982.619(a), (b)(1), (b)(4), and (c).
(3) Assistance in cooperative housing. The regulations under 24 CFR
982.619 that are applicable to rental assistance for a family that
leases a cooperative housing unit under the PBV program from the
cooperative. All requirements of 24 CFR 983, subpart F, apply where a
family leases a cooperative unit under the PBV program from a
cooperative.
(4) Rent to owner. The regulations of 24 CFR part 983, subpart G,
apply to PBV housing under paragraph (c) of this section. The
reasonable rent for a cooperative unit is determined in accordance with
Sec. 983.303. For cooperative housing, the rent to owner is the
monthly carrying charge under the occupancy agreement/lease between the
member and the cooperative.
(5) Other fees and charges. Fees such as application fees, credit
report fees, and transfer fees shall not be included in the rent to
owner.
11. In Sec. 983.10, paragraph (b) is revised and a new paragraph
(c) is added to read as follows:
Sec. 983.10 Project-based certificate (PBC) program.
* * * * *
(b) What rules apply? Units under the PBC program are subject to
the provisions of 24 CFR part 983, codified as of May 1, 2001, with the
following exceptions:
(1) PBC renewals. (i) General. Consistent with the PBC HAP
contract, at the sole option of the PHA, HAP contracts may be renewed
for terms for an aggregate total (including the initial and any renewal
terms) of 15 years, subject to the availability of appropriated funds.
(ii) Renewal of PBC as PBV. At the sole discretion of the PHA, upon
the request of an owner, PHAs may renew a PBC HAP contract as a PBV HAP
contract. All PBV regulations (including 24 CFR part 983, subpart G--
Rent to Owner) apply to a PBC HAP contract renewed as a PBV HAP
contract with the exception of Sec. Sec. 983.51, 983.56, and
983.57(b)(1). In addition, the following conditions apply:
(A) The term of the HAP contract for PBC contracts renewed as PBV
contracts shall be consistent with Sec. 983.205 of this PBV
regulation.
(B) A PHA must make the determination, within one year before
expiration of a PBC HAP contract, that renewal of the contract under
the PBV program is appropriate to continue providing affordable housing
for low-income families.
(C) The renewal of PBC assistance as PBV assistance is effectuated
by the execution of a PBV HAP contract addendum as prescribed by HUD
and a PBV HAP contract for existing housing.
(2) Housing quality standards. The regulations in 24 CFR 982.401
(housing quality standards) (HQS) apply to units assisted under the PBC
program.
(i) Special housing types. HQS requirements for eligible special
housing types, under this program, apply (See 24 CFR 982.605. 982.609
and 982.614).
(ii) Lead-based paint requirements. (A) The lead-based paint
requirements at 24 CFR 982.401(j) do not apply to the PBV program.
(B) The Lead-based Paint Poisoning Prevention Act (42 U.S.C.
48214846), the Residential Lead-based Paint Hazard Reduction Act of
1992 (42 U.S.C. 48514856), and implementing regulations at 24 CFR part
35, subparts A, B, H, and R, apply to the PBV program.
(iii) HQS enforcement. The regulations in 24 CFR parts 982 and 983
do not create any right of the family or any party, other than HUD or
the PHA, to require enforcement of the HQS requirements or to assert
any claim against HUD or the PHA for damages, injunction, or other
relief for alleged failure to enforce the HQS.
(c) Statutory notice requirements. In addition to provisions of 24
CFR part 983 codified as of May 1, 2001, Sec. 983.206 of this part
applies to the PBC program.
12. In Sec. 983.51:
a. Paragraph (a) is revised by substituting the term ``project''
for ``building'' in the last sentence; and
b. Paragraph (b)(2) is revised to read as follows:
Sec. 983.51 Owner proposal selection procedures.
* * * * *
(b) * * *
(2) Selection based on previous competition. The PHA may select,
without competition, a proposal for housing assisted under a federal,
State, or local government housing assistance, community development,
or supportive services program that required competitive selection of
proposals (e.g., HOME, and units for which competitively awarded low-
income housing tax credits (LIHTCs) have been provided), where the
proposal has been selected in accordance with such program's
competitive selection requirements within 3 years of the PBV proposal
selection date, and the earlier competitively selected housing
assistance proposal did not involve any consideration that the project
would receive PBV assistance.
* * * * *
13. In Sec. 983.52, paragraph (a) is revised to read as follows.
Sec. 983.52 Housing type.
* * * * *
(a) Existing housing. (1) A housing unit is considered an existing
unit for purposes of the PBV program, if at the time of notice of PHA
selection, the units:
(i) Will comply with HQS within 60 days of such selection, and the
total amount of work that must be performed to cause the units to
comply with HQS does not exceed $1,000 per assisted unit (including the
unit's prorated share of any work to be accomplished on common areas or
systems); and
(ii) There is no plan to perform rehabilitation work on the units
within
[[Page 28752]]
one year after HAP contract execution that would cause the units to be
in noncompliance with HQS and that would total more than $1,000 per
assisted unit (including the unit's prorated share of any work to be
accomplished on common areas or systems).
(2) Units for which rehabilitation or new construction was started,
prior to the PHA's notice of selection, in accordance with subpart D of
this part, do not qualify as existing housing.
* * * * *
14. In Sec. 983.53:
a. The word ``and'' is inserted after paragraph (a)(5);
b. Paragraph (a)(6) is removed;
c. Paragraph (a)(7) is redesignated as paragraph (a)(6);
d. Paragraph (b) is removed;
e. Paragraph (c) is redesignated as paragraph (b), and is revised
to read as follows; and
f. Paragraph (d) is redesignated as paragraph (c).
Sec. 983.53 Prohibition of assistance for ineligible units.
* * * * *
(b) Prohibition against assistance for owner-occupied unit. The PHA
may not attach or pay PBV assistance for a unit occupied by an owner of
the housing. A member of a cooperative who owns shares in the project
assisted under the PBV program shall not be considered an owner for
purposes of participation in the PBV program.
* * * * *
15. In Sec. 983.55, paragraphs (a) and (b) are revised to read as
follows:
Sec. 983.55 Prohibition of excess public assistance.
(a) Subsidy layering requirements. The PHA may provide PBV
assistance only in accordance with HUD subsidy layering regulations (24
CFR 4.13) and other requirements. The subsidy layering review is
intended to prevent excessive public assistance for the housing by
combining (layering) housing assistance payment subsidy under the PBV
program with other governmental housing assistance from federal, state,
or local agencies, including assistance such as tax concessions or tax
credits. The subsidy layering requirements are not applicable to
existing housing, nor applicable to housing selected as new
construction or rehabilitation of housing, if HUD's designee has
conducted a review, including a review of PBV assistance, in accordance
with HUD's PBV subsidy layering review guidelines.
(b) When subsidy layering review is conducted. The PHA may not
enter into an Agreement or HAP contract until HUD or a housing credit
agency approved by HUD has conducted any required subsidy layering
review and determined that the PBV assistance is in accordance with HUD
subsidy layering requirements.
* * * * *
16. In Sec. 983.56:
a. In the heading of Sec. 983.56, the word ``project'' is
substituted for ``building.''
b. The word ``project'' is substituted for ``building'' everywhere
``building'' appears in paragraph (a), including the heading of
paragraph (a), and in paragraph (b), including the heading of paragraph
(b);
c. Paragraph (b)(2)(A) is revised to read as follows;
d. The reference to Sec. 983.261(d) in paragraph (b)(2)(B) is
changed to Sec. 962.262(d);
e. A new paragraph (b)(3) is added to read as follows, and existing
paragraph (b)(3) becomes paragraph (b)(4);
f. The word ``projects'' is substituted for the word ``building''
in the introductory text to paragraph (c), including the heading of
paragraph (c); and
g. The word ``project'' is substituted for the word ``building''
everywhere ``building'' appears in paragraphs (c)(1) and (c)(3).
Sec. 983.56 Cap on number of PBV units in each project.
* * * * *
(b)(2)
* * * * *
Elderly and/or disabled families; and/or
* * * * *
(3) Combining exception categories. Exception categories in a
multifamily housing project may be combined.
* * * * *
17. In Sec. 983.58, paragraph (d)(1)(i) is revised to read as
follows:
Sec. 983.58 Environmental review.
* * * * *
(d)(1) * * *
(i) The responsible entity has completed the environmental review
procedures required by 24 CFR part 58, and HUD has approved the
environmental certification and HUD has given a release of funds, as
defined in Sec. 983.3(b);
* * * * *
18. In Sec. 983.59:
a. Paragraph (b)(1) is revised;
b. Paragraph (b)(2) is redesignated as paragraph (b)(3), and a new
paragraph (b)(2) is added; and
c. The heading of paragraph (d) and paragraph (d) are revised to
read as follows:
Sec. 983.59 PHA-owned units.
* * * * *
(b) * * *
(1) Determination of rent to owner for the PHA-owned units. Rent to
owner for PHA-owned units is determined pursuant to Sec. Sec. 983.301
through 983.305 in accordance with the same requirements as for other
units, except that the independent entity approved by HUD must
establish the initial contract rents based on PBV program requirements;
(2) Initial and renewal HAP contract term. The term of the HAP
contract and any HAP contract renewal for PHA-owned units must be
agreed upon by the PHA and the independent entity approved by HUD. Any
costs associated with implementing this requirement must be paid for by
the PHA; and
(3) Inspection of PHA-owned units as required by Sec. 983.103(f).
* * * * *
(d) Payment to independent entity. (1) The PHA may compensate the
independent entity from PHA ongoing administrative fee income
(including amounts credited to the administrative fee reserve). The PHA
may not use other program receipts to compensate the independent entity
for its services.
(2) The PHA, and the independent entity, may not charge the family
any fee for the services provided by the independent entity.
19. In Sec. 983.101, paragraph (b) is revised to read as follows:
Sec. 983.101 Housing quality standards.
* * * * *
(b) HQS for special housing types. For special housing types
assisted under the PBV program, HQS in 24 CFR part 982 apply to the PBV
program. (Shared housing, manufactured home space rental, and the
homeownership option are not assisted under the PBV program.) HQS
contained within 24 CFR part 982 that are inapplicable to the PBV
program pursuant to Sec. 983.2 are also inapplicable to special
housing types under the PBV program.
* * * * *
20. In Sec. 983.152, paragraph (a) is revised, a new paragraph (b)
is added, and existing paragraphs (b) and (c) are redesignated as
paragraphs (c) and (d), respectively:
Sec. 983.152 Purpose and content of the Agreement to enter into HAP
contract.
(a) Requirement. The PHA must enter into an Agreement with the
owner prior to the start of construction or rehabilitation. The
Agreement must be in the form required by HUD headquarters (see 24 CFR
982.162).
[[Page 28753]]
(b) Commencement of construction or rehabilitation.
(1) Construction begins when excavation or site preparation
(including clearing of the land) begins for the housing;
(2) Rehabilitation begins with the physical commencement of
rehabilitation activity on the housing.
* * * * *
21. In Sec. 983.153, paragraph (c) is revised to read as follows:
Sec. 983.153 When Agreement is executed.
* * * * *
(c) Prompt execution of Agreement. The Agreement must be executed
as promptly as possible after the subsidy layering review is completed
(see Sec. 983.55) and the environmental review has been completed and
the PHA has received the environmental approval (see Sec. 983.58).
22. In Sec. 983.202, paragraph (a) is revised to read as follows:
Sec. 983.202 Purpose of HAP contract.
(a) Requirement. The PHA must enter into a HAP contract with the
owner. With the exception of single family scattered site projects, a
HAP contract shall cover a single project. If multiple projects exist,
each project shall be covered by a separate HAP contract. The HAP
contract must be in such form as may be prescribed by HUD.
* * * * *
23. In Sec. 983.203, paragraph (h) is revised to read as follows:
Sec. 983.203 HAP contract information.
* * * * *
(h) The number of units in any project that will exceed the 25
percent per-project cap (as described in Sec. 983.56), which will be
set-aside for occupancy by qualifying families (elderly and/or disabled
families and families receiving supportive services); and
* * * * *
24. In Sec. 983.205, paragraphs (a), (b), and (d) are revised to
read as follows:
Sec. 983.205 Term of HAP contract.
(a) 15-year initial term. The PHA may enter into a HAP contract
with an owner for an initial term of up to 15 years for each contract
unit. The length of the term of the HAP contract for any contract unit
may not be less than one year, nor more than 15 years. In the case of
PHA-owned units, the term of the initial HAP contract shall be
determined in accordance with Sec. 983.59.
(b) Extension of term. A PHA may agree to enter into an extension
at the time of the initial HAP contract term or any time before
expiration of the contract, for an additional term of up to 15 years if
the PHA determines an extension is appropriate to continue providing
affordable housing for low-income families. A HAP contract extension
may not exceed 15 years. A PHA may provide for multiple extensions;
however, in no circumstance may such extensions exceed 15 years,
cumulatively. Subsequent extensions are subject to the same
limitations. Any extension of the term must be on the form and subject
to the conditions prescribed by HUD at the time of the extension. In
the case of PHA-owned units, any extension of the initial term of the
HAP contract shall be determined in accordance with Sec. 983.59.
* * * * *
(d) Termination by owner--reduction below initial rent. The owner
may terminate the HAP contract, upon notice to the PHA and HUD and
approval by HUD, if the amount of the rent to owner for any contract
unit, as adjusted in accordance with Sec. 983.302, is reduced below
the amount of the initial rent to owner (rent to owner at the beginning
of the HAP contract term). In this case, the assisted families residing
in the contract units will be offered tenant-based voucher assistance.
25. A new Sec. 983.206 is added to read as follows, and Sec. Sec.
983.206, 983.207, 983.208, and 983.209 are redesignated, respectively,
as Sec. Sec. 983.207, 983.208, 983.209, and 983.210.
Sec. 983.206 Statutory notice requirements: Contract termination or
expiration.
(a) Notices required in accordance with this section must be
provided in the form prescribed by HUD.
(b) Not less than one year before termination of a PBV or PBC HAP
contract, the owner must notify the PHA and assisted tenants of the
termination.
(c) For purposes of this section, the term ``termination'' means
the expiration of the HAP contract or an owner's refusal to renew the
HAP contract.
(d)(1) If an owner does not give timely notice of termination, the
owner must permit the tenants in assisted units to remain in their
units for the required notice period with no increase in the tenant
portion of their rent, and with no eviction as a result of an owner's
inability to collect an increased tenant portion of rent.
(2) An owner may renew the terminating contract for a period of
time sufficient to give tenants one-year advance notice under such
terms as HUD may require.
Sec. 983.207 HAP contract amendments (to add or substitute contract
units).
26. In redesignated Sec. 983.207, paragraph (b) is revised by
substituting the word ``project'' for ``building'' everywhere the word
``building'' appears:
27. In redesignated Sec. 983.210, paragraph (i) is revised and a
new paragraph (j) is added to read as follows:
Sec. 983.210 Owner certification.
* * * * *
(i) The family does not own or have any interest in the contract
unit. The certification required by this section does not apply in the
case of an assisted family's membership in a cooperative.
(j) The owner of a PBV project selected as an existing project does
not plan to perform rehabilitation work on the units, within one year
after HAP contract execution, that would cause the units to be in
noncompliance with HQS and that would total more than $1,000 per
assisted unit (including the unit's prorated share of any work to be
accomplished on common areas or systems).
28. A new Sec. 983.211 is added to read as follows:
Sec. 983.211 Removal of unit from HAP contract.
Units occupied by families whose income has increased during their
tenancy resulting in the tenant rent equaling the rent to the owner,
shall be removed from the HAP Contract 180 days following the last HAP.
If the project is partially assisted, and it is possible for the HAP
contract to be amended to substitute a different unit in the project,
the PHA may substitute a different unit for the unit removed from the
Contract, in accordance with Sec. 983.207.
29. In Sec. 983.251, a new paragraph (a)(4) is added, paragraph
(d)(1)(iii) is removed and the introductory text of paragraph (d) is
revised to read as follows:
Sec. 983.251 How participants are selected.
(a) * * *
(4) A PHA may not approve a tenancy if the owner (including a
principal or other interested party) of a unit is the parent, child,
grandparent, grandchild, sister, or brother of any member of the
family, unless the PHA determines that approving the unit would provide
reasonable accommodation for a family member who is a person with
disabilities.
* * * * *
(d) Preference for services offered. In selecting families, PHAs
may give preference to disabled families who
[[Page 28754]]
qualify for services offered at a particular project or in conjunction
with specific unit(s), in accordance with the limits under this
paragraph. The prohibition on granting preferences to persons with a
specific disability at 24 CFR 982.207(b)(3) continues to apply.
* * * * *
30. In Sec. 983.256, paragraphs (f) and (g) are revised to read as
follows:
Sec. 983.256 Lease.
* * * * *
(f) Term of lease. (1) The initial lease term must be for at least
one year.
(2) The lease must provide for automatic renewal after the initial
term of the lease. The lease may provide either:
(i) For automatic renewal for successive definite terms (e.g.,
month-to-month or year-to-year); or
(ii) For automatic indefinite extension of the lease term.
(3) The term of the lease terminates if any of the following
occurs:
(i) The owner terminates the lease;
(ii) The tenant terminates the lease;
(iii) The owner and the tenant agree to terminate the lease;
(iv) The PHA terminates the HAP contract; or
(v) The PHA terminates assistance for the family.
(g) Lease provisions governing absence from the unit. The lease may
specify a maximum period of family absence from the unit that may be
shorter than the maximum period permitted by PHA policy. (PHA
termination-of-assistance actions due to family absence from the unit
are subject to 24 CFR 982.312, except that the unit is not terminated
from the HAP contract if the family is absent for longer than the
maximum period permitted.)
Sec. 983.257 Owner termination of tenancy and eviction.
31. In Sec. 983.257, paragraph (b) is removed and paragraph (c) is
redesignated as paragraph (b) and revised by substituting the word
``project'' for ``building''.
32. A new Sec. 983.258 is added, and existing Sec. Sec. 983.258,
983.259, 983.260, and 983.261 are redesignated as Sec. Sec. 983.259,
983.260, 983.261, and 983.262, respectively.
Sec. 983.258 Continuation of housing assistance payments.
HAPs shall continue until the tenant rent equals the rent to owner.
The cessation of HAPs at such point will not affect the family's other
rights under its lease, nor will such cessation preclude the resumption
of payments as a result of later changes in income, rents, or other
relevant circumstances if such changes occur within 180 days following
the date of the last HAP by the PHA. After the 180-day period, the unit
shall be removed from the HAP contract pursuant to Sec. 983.211.
33. In redesignated Sec. 983.260:
a. The word ``project'' is substituted for ``building'' everywhere
the word ``building'' appears in paragraph (b)(2)(i), and paragraph (c)
is revised to read as follows:
Sec. 983.260 Overcrowded, under-occupied, and accessible units.
* * * * *
(c) PHA termination of housing assistance payments. (1) If the PHA
offers the family the opportunity to receive tenant-based rental
assistance under the voucher program, the PHA must terminate the HAP
contract for a wrong-sized or accessible unit at the earlier of the
expiration of the term of the family's voucher (including any extension
granted by the PHA) or the date upon which the family vacates the unit.
* * * * *
34. In redesignated Sec. 983.262, paragraph (b) is revised to read
as follows, and the word ``project'' is substituted for ``building''
everywhere the word ``building'' appears in paragraph (d), and the
reference to Sec. 983.206(a) in paragraph (d) is changed to Sec.
983.207(a).
Sec. 983.262 When occupancy may exceed 25 percent cap on the number
of PBV units in each project.
* * * * *
(b) In referring families to the owner for admission to excepted
units, the PHA must give preference to elderly and/or disabled
families, or to families receiving supportive services.
* * * * *
35. In Sec. 983.301, paragraphs (d) and (e) are revised to read as
follows:
Sec. 983.301 Determining the rent to owner.
* * * * *
(d) Rent to owner for other tax credit units. Except in the case of
a tax-credit unit described in paragraph (c)(1) of this section, the
rent to owner for all other tax credit units may be determined by the
PHA pursuant to paragraph (b) of this section.
(e) Reasonable rent. The PHA shall determine the reasonable rent in
accordance with Sec. 983.303. The rent to the owner for each contract
unit may at no time exceed the reasonable rent, except in cases where,
upon redetermination of the rent to owner, the reasonable rent would
result in a rent below the initial rent.
* * * * *
36. In Sec. 983.302, paragraph (c) is revised to read as follows,
and the reference to Sec. 983.206(c) is changed toSec. 983.207(c):
Sec. 983.302 Redetermination of rent to owner.
* * * * *
(c) Rent decrease. (1) If there is a decrease in the rent to owner,
as established in accordance with Sec. 983.301, the rent to owner must
be decreased, regardless of whether the owner requested a rent
adjustment.
(2) The rent to owner shall not be reduced below the initial rent
to owner for dwelling units under the initial HAP contract, except:
(i) To correct errors in calculations in accordance with HUD
requirements;
(ii) If additional housing assistance has been combined with PBV
assistance after the execution of the initial HAP contract and a rent
decrease is required pursuant to Sec. 983.55; or
(iii) If a decrease in rent to owner is required based on changes
in the allocation of responsibility for utilities between the owner and
the tenant.
* * * * *
37. In Sec. 983.303, paragraphs (a), (b)(3), and (f)(1) are
revised to read as follows:
Sec. 983.303 Reasonable rent.
(a) Comparability requirement. At all times during the term of the
HAP contract, the rent to the owner for a contract unit may not exceed
the reasonable rent as determined by the PHA, except that the rent to
owner shall not be reduced below the initial rent in accordance with
Sec. 983.302(e)(2).
(b) * * *
(3) Whenever the HAP contract is amended to substitute a different
contract unit in the same building or project; and
(f) Determining reasonable rent for PHA-owned units. (1) For PHA-
owned units, the amount of the reasonable rent must be determined by an
independent agency approved by HUD in accordance with Sec. 983.59,
rather than by the PHA. The reasonable rent must be determined in
accordance with this section.
* * * * *
38. In Sec. 983.304, paragraph (e) is revised to read as follows:
Sec. 983.304 Other subsidy: effect on rent to owner.
* * * * *
(e) Other subsidy: rent reduction. To comply with HUD subsidy
layering requirements, at the direction of HUD or its designee, a PHA
shall reduce the rent
[[Page 28755]]
to owner because of other governmental subsidies, including tax credits
or tax exemptions, grants, or other subsidized financing.
Dated: April 12, 2012.
Sandra B. Henriquez,
Assistant Secretary for Public and Indian Housing.
[FR Doc. 2012-11638 Filed 5-14-12; 8:45 am]
BILLING CODE 4210-67-P