The Department of Housing and Urban Development's (HUD) November 24 notice provides guidance on a number of provisions in the Housing and Economic Recovery Act of 2008 (HERA) that affect public housing and housing choice voucher (HCV) programs. As discussed below, many provisions of HERA are self-implementing, without further guidance from HUD:

  • Income Definition.   Annual income for public housing and HCV tenants (as well as those tenants residing in project-based Section 8 housing) shall exclude deferred Department of Veteran Affairs disability benefits received in a lump sum amount or in prospective monthly amounts. This provision is self-implementing.

  • Qualified Public Housing Agencies.   Paperwork relief will be available to small public housing agencies that are not troubled and have less than 550 total public housing units and HCVs combined. This provision is self-implementing but HUD will issue guidance, as may be necessary, to address further qualified public housing authorities.

  • Tenant-Based HCV Rent Reasonableness.   Rent for HCV units receiving low-income housing tax credit (LIHTC) or HOME assistance will 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 or (2) the payment standard established by the PHA for a unit of the applicable size. This provision is self-implementing.

  • Project-Based HCVs.   The following reforms shall be self-implementing for the project-based HCV program (PBV program): 
  1. Up to 25% of units in a project may now be project-based.
  2. HAP contracts may have initial terms of 15 years rather than 10 years.
  3. Under HERA, HAP contracts may extend for terms of up to 15 years; however, the HUD notice creates some ambiguity about the number of extensions, and further clarification should be sought from HUD.
  4. Subject to rent reasonableness, a housing authority may use the higher Section 8 rent for a tax credit unit if the LIHTC rent is less than the amount that would be permitted under Section 8.
  5. The maximum PBV contract rent for a unit may not be lower than the initial rent for that unit.
  6. PBVs may now be used in cooperative housing and elevator buildings.
  7. Applicable state or local agencies may conduct subsidy layering reviews for existing PBV units in lieu of a HUD subsidy layering review.

HERA also permits an applicable state or local agency to conduct subsidy layering reviews for newly constructed or rehabilitated PBV units in lieu of HUD, but the notice states that HUD must issue guidance prior to implementation of this provision.

  • LIHTC Tenant Information.   HUD will publish a notice establishing standards and definitions for tenant information required to be collected by state agencies administering LIHTC programs. 

HUD's notice solicits comments, questions, or proposals for consideration in areas where the implementation of HERA requires more detailed guidance or rule-making. The deadline for comments is December 24, 2008. 

For more information, contact Amy Glassman at or 202.661.7680.


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