Legal Alert

$200 Million in New Housing Vouchers Awarded by HUD

by Georgi Banna
September 1, 2022

Summary

The U.S. Department of Housing and Urban Development (HUD) recently awarded approximately 19,700 Housing Choice Vouchers (HCVs) to Public Housing Agencies (PHAs) across the country. The HCVs are funded by $200 million appropriated by Congress and signed into law by President Biden in March 2022 as part of the Consolidated Appropriations Act.

The Upshot

  • HUD is not requiring any separate reporting on these new vouchers.
  • The new HCVs can be used to house families from PHAs’ current waiting lists.
  • HUD notified eligible PHAs on August 26, 2022, of their specific HCV allocation and provided instructions if the PHA wants to decline their allocation.

The Bottom Line

These new vouchers must be reported as regular vouchers monthly into the Voucher Management System (VMS). The voucher will be renewed as part of the PHA’s regular voucher renewal after the first year. The only caveat for these vouchers is that they cannot initially be used for HCV renewals or for the accumulation of reserves and their initial use must be for leasing to a new admission.

The U.S. Department of Housing and Urban Development (HUD) recently awarded approximately 19,700 Housing Choice Vouchers (HCVs) to Public Housing Agencies (PHAs) across the country. Notice PIH 2022-29, Allocation and Special Administrative Fee for New Incremental Housing Choice Vouchers, was issued on August 26, 2022, and discusses the process of making these HCVs available. The 19,700 HCVs are funded by $200 million appropriated by Congress and signed into law by President Biden on March 15, 2022, as part of the Consolidated Appropriations Act, 2022 (P.L. 117-103). They are regular HCVs and not considered special purpose vouchers.

PHAs must currently administer the HCV program with an existing Consolidated Annual Contributions Contract (CACC) with HUD to be eligible to receive an allocation of new HCVs. HUD is not requiring any separate reporting on these new vouchers. The new HCVs can be used to house families from PHAs’ current waiting lists. HUD encourages PHAs to adopt local preferences in accordance to HUD regulations and statutes to serve survivors of domestic violence, and individuals and families that are homeless or at risk of homelessness, but adoption of local preferences is not a requirement to receive new vouchers.

Eligible PHAs were awarded a minimum of three vouchers to a maximum of 450 vouchers. This range is intended to encourage small, rural PHAs to accept vouchers while not overwhelming the capacity of each PHA to quickly lease up these new vouchers. The non-competitive allocation formula is designed to focus on areas with a demonstrated need of extremely low income (ELI) and very low income (VLI) renter householders and takes into account three factors:

  1. 75 percent formula weight to the number of 0 to 30 percent Area Median Income (AMI) (ELI) households that are severely cost burdened, living in overcrowded conditions, and/or living without a kitchen or plumbing in the PHA’s area (ELI target);
  2. 15 percent formula weight to the number of 30 to 50 percent AMI (VLI above ELI) households in the area (VLI target); and
  3. 10 percent formula weight to the number of 0 to 50 percent AMI (ELI plus VLI) households overcrowded in the area (Homelessness target).

HUD notified eligible PHAs on August 26, 2022, of their specific HCV allocation and provided instructions if the PHA wants to decline their allocation. If PHAs wish to decline their HCV allocation award, they must contact HUD at NewHCVs@hud.gov by September 2, 2022. PHAs do not have to contact HUD to accept their award; PHAs only need to contact HUD to decline their voucher award. PHAs may be contacted by HUD in the future to accept additional HCVs based on the number of declined HCV awards.

Additional funding for administrative fees was not provided in the 2022 Consolidated Appropriations Act, however these new vouchers will receive on-going Administrative Fees based on leasing and are calculated as part of the administrative fee formula. HUD is also providing a one-time start-up fee of $750 per allocated HCV with this funding coming from a portion of a $30 million administrative fee set-aside.

These new vouchers must be reported as regular vouchers monthly into the Voucher Management System (VMS). The voucher will be renewed as part of the PHA’s regular voucher renewal after the first year. The only caveat for these vouchers is that they cannot initially be used for HCV renewals or for the accumulation of reserves and their initial use must be for leasing to a new admission.

Ballard Spahr is a national leader working at the forefront of the legal and business elements of affordable housing and community development. Our attorneys ensure that clients get the most benefit from transactions and help navigate shifts in the market, regulatory obligations, and government incentive programs. Please reach out if you have questions or visit us at the Affordable Housing and Community Development web page.

Subscribe to Ballard Spahr Mailing Lists

Get the latest significant legal alerts, news, webinars, and insights that affect your industry. 
Subscribe

Copyright © 2022 by Ballard Spahr LLP.
www.ballardspahr.com
(No claim to original U.S. government material.)

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, including electronic, mechanical, photocopying, recording, or otherwise, without prior written permission of the author and publisher.

This alert is a periodic publication of Ballard Spahr LLP and is intended to notify recipients of new developments in the law. It should not be construed as legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult your own attorney concerning your situation and specific legal questions you have.