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Home My WebLink About20060898.tiff Chapter 7 VERIFICATION [24 CFR 982.516, 24 CFR 982.551, 24 CFR 5.230] INTRODUCTION The PHA must verify all information that is used to establish the family's eligibility and level of assistance and is required to obtain the family's consent to collect the information. Applicants and program participants must cooperate with the verification process as a condition of receiving assistance. The PHA must not pass on the cost of verification to the family. The PHA will follow the verification guidance provided by HUD in PIH Notice 2004-01 Verification Guidance and any subsequent guidance issued by HUD. This chapter summarizes those requirements and provides supplementary PHA policies. Part I describes the general verification process. More detailed requirements related to individual factors are provided in subsequent parts including family information (Part II), income and assets (Part III), and mandatory deductions (Part IV). Verification policies, rules and procedures will be modified as needed to accommodate persons with disabilities. All information obtained through the verification process will be handled in accordance with the records management policies of the PHA. PART I. GENERAL VERIFICATION REQUIREMENTS 7-I.A. FAMILY CONSENT TO RELEASE OF INFORMATION [24 CFR 982.516 AND 982.551,24 CFR 5.230] The family must supply any information that the PHA or HUD determines is necessary to the administration of the program and must consent to PHA verification of that information [24 CFR 982.551]. Consent Forms It is required that all adult applicants and participants sign form HUD-9886, Authorization for Release of Information. The purpose of form HUD-9886 is to facilitate automated data collection and computer matching from specific sources and provides the family's consent only for the specific purposes listed on the form. HUD and the PHA may collect information from State Wage Information Collection Agencies (SWICAs) and current and former employers of adult family members. Only HUD is authorized to collect information directly from the Internal Revenue Service (IRS) and the Social Security Administration(SSA). Adult family members must sign other consent forms as needed to collect information relevant to the family's eligibility and level of assistance. Penalties for Failing to Consent [24 CFR 5.2321 If any family member who is required to sign a consent form fails to do so, the PHA will deny admission to applicants and terminate assistance of participants. The family may request an informal review(applicants) or informal hearing (participants) in accordance with PHA procedures. ®Copyright 2005 Nan McKay&Associates,Inc. Page 7-1 Adminplan 9/1/05 Unlimited copies may be made for internal use. 2006-0898 7-I.B. OVERVIEW OF VERIFICATION REQUIREMENTS HUD's Verification Hierarchy HUD authorizes the PHA to use five methods to verify family information and specifies the circumstances in which each method will be used. In general HUD requires the PHA to use the most reliable form of verification that is available and to document the reasons when the PHA uses a lesser form of verification. PHA Policy • In order of priority, the forms of verification that the PHA will use are: Up-front Income Verification(UIV) whenever available Third-party Written Verification Third-party Oral Verification Review of Documents Self-Certification Each of the verification methods is discussed in subsequent sections below. Exhibit 7-1 at the end of the chapter contains an excerpt from the notice that provides guidance with respect to how each method may be used. Requirements for Acceptable Documents PHA Policy Any documents used for verification must be the original (not photocopies) and generally must be dated within 60 calendar days of the date they are provided to the PHA. The documents must not be damaged, altered or in any way illegible. The PHA will accept documents dated up to 6 months before the effective date of the family's reexamination if the document represents the most recent scheduled report from a source. For example, if the holder of a pension annuity provides semi-annual reports, the PHA would accept the most recent report. Print-outs from web pages are considered original documents. The PHA staff member who views the original document must make a photocopy, annotate the copy with the name of the person who provided the document and the date the original was viewed, and sign the copy. Any family self-certifications must be made in a format acceptable to the PHA and must be signed in the presence of a PHA representative or PHA notary public. ®Copyright 2005 Nan McKay&Associates,Inc. Page 7-2 Adminplan 9/1/05 Unlimited copies may be made for internal use. File Documentation The PHA must document in the file how the figures used in income and rent calculations were determined. All verification attempts, information obtained, and decisions reached during the verification process will be recorded in the family's file in sufficient detail to demonstrate that the PHA has followed all of the verification policies set forth in this plan. The record should be sufficient to enable a staff member or HUD reviewer to understand the process followed and conclusions reached. 7-I.C. UP-FRONT INCOME VERIFICATION (UIV) Up-front income verification(UIV)refers to the PHA's use of the verification tools available from independent sources that maintain computerized information about earnings and benefits. UIV will be used to the extent that these systems are available to the PHA. PHA Policy The PHA will inform all applicants and participants of its use of the following UIV resources during the admission and reexamination process: HUD's EIV system (when it is available to the PHA) State of Colorado Department of Labor The PHA must restrict access to and safeguard UIV data in accordance with HUD guidance on security procedures, as issued and made available by HUD. There may be legitimate differences between the information provided by the family and UIV- generated information. No adverse action can be taken against a family until the PHA has independently verified the UIV information and the family has been granted an opportunity to contest any adverse findings through the informal review/hearing process of the PHA. Definition of Substantial Difference UIV information is used differently depending upon whether there is a substantial difference between information provided by the family and the UIV information. In "HUD Guidelines for Projecting Annual Income When UIV Data is Available" [HUD website, April 2004], HUD recommends using $200 per month as the threshold for a substantial difference. The PHA will therefore use $200 per month as the threshold for a substantial difference. See Chapter 6 for the PHA's policy on the use of UIV to project annual income and for the PHA's threshold for substantial difference. When No Substantial Difference Exists If UIV information does not differ substantially from family information, the UIV documentation may serve as third-party written verification. When a Substantial Difference Exists When there is a substantial difference between the information provided by the UIV source and the family,the PHA must request another form of third-party written verification and use any other verification methods (in priority order)to reconcile the difference(s). ©Copyright 2005 Nan McKay&Associates,Inc. Page 7-3 Adminplan 9/1/05 Unlimited copies may be made for internal use. Use of HUD's Enterprise Income Verification (EIV) System HUD's EIV system contains data showing earned income, unemployment benefits, Social Security and SSI benefits for participant families. HUD requires the PHA to use the EIV system when available. The following policies will apply when the PHA has access to HUD's EIV system. The EIV system contains two main components: tenant income data reports and"exceeds threshold"reports. Tenant Income Data (TID) Reports The data shown on TID reports is updated quarterly. Data may be between 3 and 6 months old at the time reports are generated. PHA Policy The PHA will obtain TID reports for annual reexaminations on a monthly basis. Reports will be generated as part of the regular reexamination process. TID reports will be compared to family-provided information as part of the annual reexamination process. TID reports may be used in the calculation of annual income, as described in Chapter 6.I.C. TID reports may also be used to meet the regulatory requirement for third party verification, as described above. Policies for resolving discrepancies between TID reports and family-provided information will be resolved as described in Chapter 6.I.C. and in this chapter. TID reports will be used in interim reexaminations when it is necessary to verify and calculate earned income, unemployment benefits, Social Security and/or SSI benefits. TID reports will be retained in participant files with the applicable annual or interim • reexamination documents. When the PHA determines through TID reports and third party verification that a family has concealed or under-reported income, corrective action will be taken pursuant to the policies in Chapter 14, Program Integrity. ©Copyright 2005 Nan McKay&Associates,Inc. Page 74 Adminplan 9/1/05 Unlimited copies may be made for internal use. Exceeds Threshold Reports (ETRs) The ETR is a tool for identifying families who may have concealed or under-reported income. Data in the ETR represents income for past reporting periods and may be between 6 months and 30 months old at the time ETRs are generated. Families who have not concealed or under-reported income may appear on the ETR in some circumstances, such as loss of a job or addition of new family members. PHA Policy The PHA will generate and review ETRs on a monthly basis. The ETR threshold percentage will be adjusted as necessary based on the findings in the ETRs. In reviewing ETRs, the PHA will begin with the largest discrepancies. When the PHA determines that a participant appearing on the ETR has not concealed or under-reported income, the participant's name will be placed on a list of"false positive" reviews. To avoid multiple reviews in this situation, participants appearing on this list will be eliminated from ETR processing until a subsequent interim or annual reexamination has been completed. When it appears that a family may have concealed or under-reported income,the PHA will request third-party written verification of the income in question. When the PHA determines through ETR review and third party verification that a family has concealed or under-reported income, corrective action will be taken pursuant to the policies in Chapter 14, Program Integrity. EIV Identity Verification The EIV system verifies tenant identities against SSA records. These records are compared to PIC data for a match on Social Security number, name, and date of birth. When identity verification for a participant fails, a message will be displayed within the EIV system and no income information will be displayed. PHA Policy The PHA will identify participants whose identity verification has failed as part of the annual reexamination process. The PHA will attempt to resolve PIC/SSA discrepancies by reviewing file documents. When the PHA determines that discrepancies exist due to PHA errors such as spelling errors or incorrect birth dates, the errors will be corrected promptly. ©Copyright 2005 Nan McKay&Associates,Inc. Page 7-5 Adminplan 9/1/05 Unlimited copies may be made for internal use. 7-LD. THIRD-PARTY WRITTEN AND ORAL VERIFICATION Reasonable Effort and Timing Unless third-party verification is not required as described below, HUD requires the PHA to make at least two unsuccessful attempts to obtain third-party verification before using another form of verification [VG, p. 15]. PHA Policy The PHA will diligently seek third-party verification using a combination of written and oral requests to verification sources. Information received orally from third parties may be used either to clarify information provided in writing by the third party or as independent verification when written third-party verification is not received in a timely fashion. The PHA may mail, fax, e-mail, or hand deliver third-party written verification requests and will accept third-party responses using any of these methods. The PHA will send a written request for verification to each required source within 5 business days of securing a family's authorization for the release of the information and give the source 10 business days to respond in writing. If a response has not been received by the 11th business day, the PHA will request third-party oral verification. The PHA will make a minimum of two attempts, one of which may be oral, to obtain third-party verification. A record of each attempt to contact the third-party source (including no-answer calls) and all contacts with the source will be documented in the file. Regarding third-party oral verification, PHA staff will record in the family's file the name and title of the person contacted,the date and time of the conversation(or attempt), the telephone number used, and the facts provided. When any source responds verbally to the initial written request for verification the PHA will accept the verbal response as oral verification but will also request that the source complete and return any verification forms that were provided. If a third party agrees to confirm in writing the information provided orally, the PHA will wait no more than 5 business days for the information to be provided. If the information is not provided by the 6th business day, the PHA will use any information provided orally in combination with reviewing family-provided documents. ©Copyright 2005 Nan McKay&Associates,Inc. Page 7-6 Adminplan 9/1/05 Unlimited copies may be made for internal use. When Third-Party Information is Late When third-party verification has been requested and the timeframes for submission have been exceeded,the PHA will use the information from documents on a provisional basis. If the PHA later receives third-party verification that differs from the amounts used in income and rent determinations and it is past the deadline for processing the reexamination, the PHA will conduct an interim reexamination to adjust the figures used for the reexamination, regardless of the PHA's interim reexamination policy. When Third-Party Verification is Not Required Primary Documents Third-party verification is not required when legal documents are the primary source, such as a birth certificate or other legal documentation of birth. Certain Assets and Expenses The PHA will accept a self-certification from a family as verification of assets disposed of for less than fair market value [HCV GB, p. 5-28]. The PHA will determine that third-party verification is not available if the asset or expense involves an insignificant amount, making it not cost-effective or reasonable to obtain third-party verification [VG, p. 15]. PHA Policy The PHA will use review of documents in lieu of requesting third-party verification when the market value of an individual asset or an expense is less than $500 annually and the family has original documents that support the declared amount. ©Copyright 2005 Nan McKay&Associates,Inc. Page 7-7 Adminplan 9/1/05 Unlimited copies may be made for internal use. Certain Income,Asset and Expense Sources The PHA will determine that third-party verification is not available when it is known that an income source does not have the ability to provide written or oral third-party verification [VG,p. 15]. For example, the PHA will rely upon review of documents when the PHA determines that a third party's privacy rules prohibit the source from disclosing information. PHA Policy The PHA also will determine that third-party verification is not available when there is a service charge for verifying an asset or expense and the family has original documents that provide the necessary information. If the family cannot provide original documents, the PHA will pay the service charge required to obtain third-party verification, unless it is not cost effective in which case a self-certification will be acceptable as the only means of verification. The cost of verification will not be passed on to the family. The cost of postage and envelopes to obtain third-party verification of income, assets, and expenses is not an unreasonable cost [VG, p. 18]. C Copyright 2005 Nan McKay&Associates,Inc. Page 7-8 Adminplan 9/1/05 Unlimited copies may be made for internal use. 7-I.E. REVIEW OF DOCUMENTS Using Review of Documents as Verification PHA Policy If the PHA has determined that third-party verification is not available or not required, the PHA will use documents provided by the family as verification. The PHA may also review documents when necessary to help clarify information provided by third parties. In such cases the PHA will document in the file how the PHA arrived at a final conclusion about the income or expense to include in its calculations. 7-I.F. SELF-CERTIFICATION PHA Policy When information cannot be verified by a third party or by review of documents, family members will be required to submit self-certifications attesting to the accuracy of the information they have provided to the PHA. The PHA may require a family to certify that a family member does not receive a particular type of income or benefit. The self-certification must be made in a format acceptable to the PHA and must be signed by the family member whose information or status is being verified. All self- certifications must be signed in the presence of a PHA representative or PHA notary public. Copyright 2005 Nan McKay&Associates,Inc. Page 7-9 Adminplan 9/1/05 Unlimited copies may be made for internal use. C Copyright 2005 Nan McKay&Associates,Inc. Page 7-10 Adminplan 9/1/05 Unlimited copies may be made for internal use. PART II. VERIFYING FAMILY INFORMATION 7-II.A. VERIFICATION OF LEGAL IDENTITY PHA Policy The PHA will require families to furnish verification of legal identity for each household member. Verification of Legal Identity for Adults Verification of Legal Identity for Children Certificate of birth, naturalization papers Certificate of birth Church issued baptismal certificate Adoption papers Current, valid driver's license or Custody agreement Department of Motor Vehicles Health and Human Services ID identification card U.S. military discharge (DD 214) School records U.S. passport Employer identification card If a document submitted by a family is illegible or otherwise questionable, more than one of these documents may be required. If none of these documents can be provided and at the PHA's discretion, a third party who knows the person may attest to the person's identity. The certification must be provided in a format acceptable to the PHA and be signed in the presence of a PHA representative or PHA notary public. Legal identity will be verified on an as needed basis. C Copyright 2005 Nan McKay&Associates,Inc. Page 7-11 Adminplan 9/1/05 Unlimited copies may be made for internal use. 7-II.B. SOCIAL SECURITY NUMBERS [24 CFR 5.216 and HCV GB, p. 5-12] For every family member age 6 or older, the family must provide documentation of a valid social security number (SSN), or a self-certification stating that no SSN has been issued. The self- certification must be executed personally by any family member 18 or older, or by a parent or guardian for a minor. PHA Policy The PHA will also accept the following documents as evidence if the SSN is provided on the document: Driver's license Other identification card issued by a federal, state, or local agency, a medical insurance company or provider, or employer or trade union Payroll stubs Benefit award letters from government agencies; retirement benefit letters; life insurance policies Court records (real estate,tax notices, marriage and divorce,judgment or bankruptcy records) If the family reports an SSN but cannot provide acceptable documentation of the number, the PHA will require a self-certification stating that documentation of the SSN cannot be provided at this time. The PHA will require documentation of the SSN within 60 calendar days from the date of the family member's self-certification mentioned above. If the family is an applicant, assistance cannot be provided until proper documentation of the SSN is provided. PHA Policy The PHA will instruct the family to obtain a duplicate card from the local Social Security Administration(SSA) office. For individuals who are at least 62 years of age and are unable to submit the required documentation of their SSN within the initial 60-day period, the PHA will grant an additional 60 calendar days to provide documentation. Social security numbers must be verified only once during continuously-assisted occupancy. If any family member obtains an SSN after admission to the program, the new SSN must be disclosed at the next regularly scheduled reexamination. In addition, if a child reaches the age of 6 and has no SSN,the parent or guardian must execute a self-certification stating that the child has no SSN at the next regularly scheduled reexamination. The social security numbers of household members, such as live-in aids, must be verified for the purpose of conducting criminal background checks. ®Copyright 2005 Nan McKay&Associates,Inc. Page 7-12 Adminplan 9/1/05 Unlimited copies may be made for internal use. 7-II.C. DOCUMENTATION OF AGE A birth certificate or other official record of birth is the preferred form of age verification for all family members. For elderly family members an original document that provides evidence of the receipt of social security retirement benefits is acceptable. PHA Policy If an official record of birth or evidence of social security retirement benefits cannot be provided,the PHA will require the family to submit other documents that support the reported age of the family member(e.g., school records, driver's license if birth year is recorded) and to provide a self-certification. Age must be verified only once during continuously-assisted occupancy. ®Copyright 2005 Nan McKay&Associates,Inc. Page 7-13 Adminplan 9/1/05 Unlimited copies may be made for internal use. 7-II.D. FAMILY RELATIONSHIPS Applicants and program participants are required to identify the relationship of each household member to the head of household. Definitions of the primary household relationships are provided in the Eligibility chapter. PHA Policy Family relationships are verified only to the extent necessary to determine a family's eligibility and level of assistance. Certification by the head of household normally is sufficient verification of family relationships. Marriage PHA Policy Certification by the head of household is normally sufficient verification. If the PHA has reasonable doubts about a marital relationship,the PHA will require the family to document the marriage. A marriage certificate generally is required to verify that a couple is married. In the case of a common law marriage, the couple must demonstrate that they hold themselves to be married (e.g., by telling the community they are married, calling each other husband and wife, using the same last name, filing joint income tax returns). Separation or Divorce PHA Policy Certification by the head of household is normally sufficient verification. If the PHA has reasonable doubts about a separation or divorce, the PHA will require the family to document the divorce, or separation. A certified copy of a divorce decree, signed by a court officer, is required to document that a couple is divorced. A copy of a court-ordered maintenance or other court record is required to document a separation. If no court document is available, documentation from a community-based agency will be accepted. ®Copyright 2005 Nan McKay&Associates,Inc. Page 7-14 Adminplan 9/1/05 Unlimited copies may be made for internal use. Absence of Adult Member PHA Policy If an adult member who was formerly a member of the household is reported to be permanently absent, the family must provide evidence to support that the person is no longer a member of the family (e.g., documentation of another address at which the person resides such as a lease or utility bill). Foster Children and Foster Adults PHA Policy Third-party verification from the state or local government agency responsible for the placement of the individual with the family is required. ®Copyright 2005 Nan McKay&Associates,Inc. Page 7-15 Adminplan 9/1/05 Unlimited copies may be made for internal use. 7-II.E.VERIFICATION OF STUDENT STATUS PHA Policy The PHA requires families to provide information about the student status of all students who are 18 years of age or older. This information will be verified only if: The family claims full-time student status for an adult other than the head, spouse, or cohead, or The family claims a child care deduction to enable a family member to further his or her education. ®Copyright 2005 Nan McKay&Associates,Inc. Page 7-16 Adminplan 9/1/05 Unlimited copies may be made for internal use. 7-ILF. DOCUMENTATION OF DISABILITY The PHA must verify the existence of a disability in order to allow certain income disallowances and deductions from income. The PHA is not permitted to inquire about the nature or extent of a person's disability [24 CFR 100.202(c)]. The PHA may not inquire about a person's diagnosis or details of treatment for a disability or medical condition. If the PHA receives a verification document that provides such information,the PHA will not place this information in the tenant file. Under no circumstances will the PHA request a participant's medical record(s). For more information on health care privacy laws, see the Department of Health and Human Services' website at www.os.dhhs.gov. The above cited regulation does not prohibit the following inquiries, provided these inquiries are made of all applicants, whether or not they are persons with disabilities [VG, p. 24]: • Inquiry into an applicant's ability to meet the requirements of ownership or tenancy • Inquiry to determine whether an applicant is qualified for a dwelling available only to persons with disabilities or to persons with a particular type of disability • Inquiry to determine whether an applicant for a dwelling is qualified for a priority available to persons with disabilities or to persons with a particular type of disability • Inquiring whether an applicant for a dwelling is a current illegal abuser or addict of a controlled substance • Inquiring whether an applicant has been convicted of the illegal manufacture or distribution of a controlled substance ©Copyright 2005 Nan McKay&Associates,Inc. Page 7-17 Adminplan 9/1/05 Unlimited copies may be made for internal use. Family Members Receiving SSA Disability Benefits Verification of the receipt of disability benefits from the Social Security Administration (SSA) is sufficient verification of disability for the purpose of qualifying for waiting list preferences (if applicable) or certain income disallowances and deductions [VG, p. 23]. PHA Policy For family members claiming disability who receive disability benefits from the SSA, the PHA will attempt to obtain information about disability benefits through the HUD Enterprise Income Verification (EIV) system when it is available, or HUD's Tenant Assessment Subsystem(TASS). If documentation from HUD's EIV System or TASS is not available,the PHA will request a current(dated within the last 60 days) SSA benefit verification letter from each family member claiming disability status. If the family is unable to provide the document(s), the PHA will ask the family to request a benefit verification letter by either calling SSA at 1-800-772-1213, or by requesting it from www.ssa.gov. Once the applicant or participant receives the benefit verification letter they will be required to provide it to the PHA. Family Members Not Receiving SSA Disability Benefits Receipt of veteran's disability benefits, worker's compensation, or other non-SSA benefits based on the individual's claimed disability are not sufficient verification that the individual meets HUD's definition of disability in 24 CFR 5.603. PHA Policy For family members claiming disability who do not receive disability benefits from the SSA, a knowledgeable professional must provide third-party verification that the family member meets the HUD definition of disability. See the Eligibility chapter for the HUD definition of disability. The knowledgeable professional will verify whether the family member does or does not meet the HUD definition. ©Copyright 2005 Nan McKay&Associates,Inc. Page 7-18 Adminplan 9/1/05 Unlimited copies may be made for internal use. 7-II.G. CITIZENSHIP OR ELIGIBLE IMMIGRATION STATUS [24 CFR 5.508] Overview Housing assistance is not available to persons who are not citizens, nationals, or eligible immigrants. Prorated assistance is provided for "mixed families" containing both eligible and ineligible persons. A detailed discussion of eligibility requirements is in the Eligibility chapter. This verifications chapter discusses HUD and PHA verification requirements related to citizenship status. The family must provide a certification that identifies each family member as a U.S. citizen, a U.S. national, an eligible noncitizen or an ineligible noncitizen and submit the documents discussed below for each family member. Once eligibility to receive assistance has been verified for an individual it need not be collected or verified again during continuously-assisted occupancy [24 CFR 5.508(g)(5)] U.S. Citizens and Nationals HUD requires a declaration for each family member who claims to be a U.S. citizen or national. The declaration must be signed personally by any family member 18 or older and by a guardian for minors. The PHA may request verification of the declaration by requiring presentation of a birth certificate, United States passport or other appropriate documentation. PHA Policy Family members who claim U.S. citizenship or national status will not be required to provide additional documentation unless the PHA receives information indicating that an individual's declaration may not be accurate. ®Copyright 2005 Nan McKay&Associates,Inc. Page 7-19 Adminplan 9/1/05 Unlimited copies may be made for internal use. Eligible Immigrants Documents Required All family members claiming eligible immigration status must declare their status in the same manner as U.S. citizens and nationals. The documentation required for eligible noncitizens varies depending upon factors such as the date the person entered the U.S., the conditions under which eligible immigration status has been granted, age, and the date on which the family began receiving HUD-funded assistance. Exhibit 7-2 at the end of this chapter summarizes documents family members must provide. PHA Verification [HCV GB, pp. 5-3 and 5-7] For family members age 62 or older who claim to be eligible immigrants, proof of age is required in the manner described in 7-II.C. of this plan. No further verification of eligible immigration status is required. For family members under the age of 62 who claim to be eligible immigrants, the PHA must verify immigration status with the United States Citizenship and Immigration Services (USCIS). The PHA will follow all USCIS protocols for verification of eligible immigration status. 7-II.H. VERIFICATION OF PREFERENCE STATUS The PHA must verify any preferences claimed by an applicant. PHA Policy The PHA will offer a preference to any family that has been terminated from its HCV program due to insufficient program funding. The PHA will verify this preference using the PHA's termination records. ®Copyright 2005 Nan McKay&Associates,Inc. Page 7-20 Adminplan 9/1/05 Unlimited copies may be made for internal use. PART III.VERIFYING INCOME AND ASSETS Chapter 6, Part I of this plan describes in detail the types of income that are included and excluded and how assets and income from assets are handled. Any assets and income reported by the family must be verified. This part provides PHA policies that supplement the general verification procedures specified in Part I of this chapter. 7-III.A. EARNED INCOME Tips PHA Policy Unless tip income is included in a family member's W-2 by the employer, persons who work in industries where tips are standard will be required to sign a certified estimate of tips received for the prior year and tips anticipated to be received in the coming year. 7-III.B.BUSINESS AND SELF EMPLOYMENT INCOME PHA Policy Business owners and self-employed persons will be required to provide: An audited financial statement for the previous fiscal year if an audit was conducted. If an audit was not conducted, a statement of income and expenses must be submitted and the business owner or self-employed person must certify to its accuracy. All schedules completed for filing federal and local taxes in the preceding year. If accelerated depreciation was used on the tax return or financial statement, an accountant's calculation of depreciation expense, computed using straight-line depreciation rules. The PHA will provide a format for any person who is unable to provide such a statement to record income and expenses for the coming year. The business owner/self-employed person will be required to submit the information requested and to certify to its accuracy at all future reexaminations. At any reexamination the PHA may request documents that support submitted financial statements such as manifests, appointment books, cash books, or bank statements. If a family member has been self-employed less than three (3) months, the PHA will accept the family member's certified estimate of income and schedule an interim reexamination in three (3) months. If the family member has been self-employed for three (3)to twelve (12) months the PHA will require the family to provide documentation of income and expenses for this period and use that information to project income. ©Copyright 2005 Nan McKay&Associates,Inc. Page 7-21 Adminplan 9/1/05 Unlimited copies may be made for internal use. 7-IILC. PERIODIC PAYMENTS AND PAYMENTS IN LIEU OF EARNINGS Social Security/SSI Benefits PHA Policy To verify the SS/SSI benefits of applicants, the PHA will request a current(dated within the last 60 days) SSA benefit verification letter from each family member that receives social security benefits. If the family is unable to provide the document(s), the PHA will ask the family to request a benefit verification letter by either calling SSA at 1-800-772- 1213, or by requesting it from www.ssa.gov. Once the applicant has received the benefit verification letter they will be required to provide it to the PHA. To verify the SS/SSI benefits of participants,the PHA will obtain information about social security/SSI benefits through the HUD EIV System or the Tenant Assessment Subsystem (TASS). If benefit information is not available in HUD systems, the PHA will request a current SSA benefit verification letter from each family member that receives social security benefits. If the family is unable to provide the document(s) the PHA will ask the family to request a benefit verification letter by either calling SSA at 1-800-772- 1213, or by requesting it from www.ssa.gov. Once the participant has received the benefit verification letter they will be required to provide it to the PHA. C Copyright 2005 Nan McKay&Associates,Inc. Page 7-22 Adminplan 9/1/05 Unlimited copies may be made for internal use. 7-IILD. ALIMONY OR CHILD SUPPORT PHA Policy The way the PHA will seek verification for alimony and child support differs depending on whether the family declares that it receives regular payments. If the family declares that it receives regular payments, verification will be sought in the following order. If payments are made through a state or local entity, the PHA will request a record of payments for the past 12 months and request that the entity disclose any known information about the likelihood of future payments. Third-party verification from the person paying the support Copy of a separation or settlement agreement or a divorce decree stating amount and type of support and payment schedules Copy of the latest check and/or payment stubs Family's self-certification of amount received and of the likelihood of support payments being received in the future, or that support payments are not being received. If the family declares that it receives irregular or no payments, in addition to the verification process listed above,the family must provide evidence that it has taken all reasonable efforts to collect amounts due. This may include: A statement from any agency responsible for enforcing payment that shows the family has requested enforcement and is cooperating with all enforcement efforts If the family has made independent efforts at collection, a written statement from the attorney or other collection entity that has assisted the family in these efforts Note: Families are not required to undertake independent enforcement action. ®Copyright 2005 Nan McKay&Associates,Inc. Page 7-23 Adminplan 9/1/05 Unlimited copies may be made for internal use. 7-III.E.ASSETS AND INCOME FROM ASSETS Assets Disposed of for Less than Fair Market Value The family must certify whether any assets have been disposed of for less than fair market value in the preceding two years. The PHA needs to verify only those certifications that warrant documentation [HCV GB,p. 5-28]. PHA Policy The PHA will verify the value of assets disposed of only if: The PHA does not already have a reasonable estimation of its value from previously collected information, or The amount reported by the family in the certification appears obviously in error. Example 1: An elderly participant reported a$10,000 certificate of deposit at the last annual reexamination and the PHA verified this amount.Now the person reports that she has given this $10,000 to her son. The PHA has a reasonable estimate of the value of the asset;therefore, reverification of the value of the asset is not necessary. Example 2: A family member has disposed of its 1/4 share of real property located in a desirable area and has valued her share at approximately 5,000. Based upon market conditions,this declaration does not seem realistic. Therefore, the PHA will verify the value of this asset. 7-III.F. NET INCOME FROM RENTAL PROPERTY PHA Policy The family must provide: A current executed lease for the property that shows the rental amount or certification from the current tenant A self-certification from the family members engaged in the rental of property providing an estimate of expenses for the coming year and the most recent IRS Form 1040 with Schedule E (Rental Income). If schedule E was not prepared,the PHA will require the family members involved in the rental of property to provide a self-certification of income and expenses for the previous year and may request documentation to support the statement including: tax statements, insurance invoices, bills for reasonable maintenance and utilities, and bank statements or amortization schedules showing monthly interest expense. ®Copyright 2005 Nan McKay&Associates,Inc. Page 7-24 Adminplan 9/1/05 Unlimited copies may be made for internal use. 7-III.G. RETIREMENT ACCOUNTS PHA Policy When third-party verification is not available the type of original document that will be accepted depends upon the family member's retirement status. Before retirement, the PHA will accept an original document from the entity holding the account with a date that shows it is the most recently scheduled statement for the account but in no case earlier than 6 months from the effective date of the examination. Upon retirement, the PHA will accept an original document from the entity holding the account that reflects any distributions of the account balance, any lump sums taken and any regular payments. After retirement, the PHA will accept an original document from the entity holding the account dated no earlier than 12 months before that reflects any distributions of the account balance, any lump sums taken and any regular payments. 7-III.H. INCOME FROM EXCLUDED SOURCES A detailed discussion of excluded income is provided in Chapter 6, Part I. The PHA must obtain verification for income exclusions only if, without verification,the PHA would not be able to determine whether the income is to be excluded. For example: If a family's 16 year old has a job at a fast food restaurant, the PHA will confirm that PHA records verify the child's age but will not send a verification request to the restaurant. However, if a family claims the earned income disallowance for a source of income, both the source and the income must be verified. PHA Policy The PHA will reconcile differences in amounts reported by the third party and the family only when the excluded amount is used to calculate the family share (as is the case with the earned income disallowance). In all other cases,the PHA will report the amount to be excluded as indicated on documents provided by the family. 7-III.I. ZERO ANNUAL INCOME STATUS Families claiming to have no annual income will be required to execute verification forms to determine that certain forms of income such as unemployment benefits, TANF, SSI, etc. are not being received by the household. In addition families with zero who claim zero income will be required to fill out a zero income verification form every 90 days. ®Copyright 2005 Nan McKay&Associates,Inc. Page 7-25 Adminplan 9/1/05 Unlimited copies may be made for internal use. CD Copyright 2005 Nan McKay&Associates,Inc. Page 7-26 Adminplan 9/1/05 Unlimited copies may be made for internal use. PART IV. VERIFYING MANDATORY DEDUCTIONS 7-IV.A. DEPENDENT AND ELDERLY/DISABLED HOUSEHOLD DEDUCTIONS The dependent and elderly/disabled family deductions require only that the PHA verify that the family members identified as dependents or elderly/disabled persons meet the statutory definitions. No further verifications are required. Dependent Deduction See Chapter 6 (6-II.B.) for a full discussion of this deduction. The PHA will verify that: • Any person under the age of 18 for whom the dependent deduction is claimed is not the head, spouse, or cohead of the family and is not a foster child • Any person age 18 or older for whom the dependent deduction is claimed is not a foster adult or live-in aide, and is a person with a disability or a full time student Elderly/Disabled Family Deduction See Eligibility chapter for a definition of elderly and disabled families and Chapter 6 (6-II.C.) for a discussion of the deduction. The PHA will verify that the head, spouse, or cohead is 62 years of age or older or a person with disabilities. C Copyright 2005 Nan McKay&Associates,Inc. Page 7-27 Adminplan 9/1/05 Unlimited copies may be made for internal use. 7-IV.B. MEDICAL EXPENSE DEDUCTION Policies related to medical expenses are found in 6-II.D. The amount of the deduction will be verified following the standard verification procedures described in Part I. Amount of Expense PHA Policy The PHA will provide a third-party verification form directly to the medical provider requesting the needed information. Medical expenses will be verified through: Third-party verification form signed by the provider, when possible If third-party is not possible, copies of cancelled checks used to make medical expense payments and/or printouts or receipts from the source will be used. In this case the PHA will make a best effort to determine what expenses from the past are likely to continue to occur in the future. The PHA will also accept evidence of monthly payments or total payments that will be due for medical expenses during the upcoming 12 months. If third-party or document review is not possible, written family certification as to costs anticipated to be incurred during the upcoming 12 months In addition,the PHA must verify that: • The household is eligible for the deduction. • The costs to be deducted are qualified medical expenses. • The expenses are not paid for or reimbursed by any other source. • • Costs incurred in past years are counted only once. ®Copyright 2005 Nan McKay&Associates,Inc. Page 7-28 Adminplan 9/1/05 Unlimited copies may be made for internal use. Eligible Household The medical expense deduction is permitted only for households in which the head, spouse, or cohead is at least 62, or a person with disabilities. The PHA will verify that the family meets the definition of an elderly or disabled family provided in the Eligibility chapter and as described in Chapter 7 (7-IV.A.) of this plan. Qualified Expenses To be eligible for the medical expenses deduction,the costs must qualify as medical expenses. See Chapter 6 (6-II.D.) for the PHA's policy on what counts as a medical expense. Unreimbursed Expenses To be eligible for the medical expenses deduction,the costs must not be reimbursed by another source. PHA Policy The family will be required to certify that the medical expenses are not paid or reimbursed to the family from any source. Expenses Incurred in Past Years PHA Policy When anticipated costs are related to on-going payment of medical bills incurred in past years, the PHA will verify: The anticipated repayment schedule The amounts paid in the past, and Whether the amounts to be repaid have been deducted from the family's annual income in past years .-. ®Copyright 2005 Nan McKay&Associates,Inc. Page 7-29 Adminplan 9/1/05 Unlimited copies may be made for internal use. 7-IV.C. DISABILITY ASSISTANCE EXPENSES Policies related to disability assistance expenses are found in 6-II.E. The amount of the deduction will be verified following the standard verification procedures described in Part I. Amount of Expense Attendant Care PHA Policy The PHA will provide a third-party verification form directly to the care provider requesting the needed information. Expenses for attendant care will be verified through: Third-party verification form signed by the provider, when possible If third-party is not possible, copies of cancelled checks used to make attendant care payments and/or receipts from care source If third-party or document review is not possible, written family certification as to costs anticipated to be incurred for the upcoming 12 months Auxiliary Apparatus PHA Policy Expenses for auxiliary apparatus will be verified through: Third-party verification of anticipated purchase costs of auxiliary apparatus If third-party is not possible, billing statements for purchase of auxiliary apparatus, or other evidence of monthly payments or total payments that will be due for the apparatus during the upcoming 12 months If third-party or document review is not possible, written family certification of estimated apparatus costs for the upcoming 12 months In addition, the PHA must verify that: • The family member for whom the expense is incurred is a person with disabilities (as described in 7-II.F above). • The expense permits a family member, or members, to work (as described in 6-II.E.). • The expense is not reimbursed from another source (as described in 6-II.E.). o Copyright 2005 Nan McKay&Associates,Inc. Page 7-30 Adminplan 9/1/05 Unlimited copies may be made for internal use. Family Member is a Person with Disabilities To be eligible for the disability assistance expense deduction,the costs must be incurred for attendant care or auxiliary apparatus expense associated with a person with disabilities. The PHA will verify that the expense is incurred for a person with disabilities (See 7-II.F.). Family Member(s) Permitted to Work The PHA must verify that the expenses claimed actually enable a family member, or members, (including the person with disabilities)to work. PHA Policy The PHA will seek third-party verification from a Rehabilitation Agency or knowledgeable medical professional indicating that the person with disabilities requires attendant care or an auxiliary apparatus to be employed, or that the attendant care or auxiliary apparatus enables another family member, or members, to work(See 6-II.E.). If third-party and document review verification has been attempted and is either unavailable or proves unsuccessful, the family must certify that the disability assistance expense frees a family member, or members (possibly including the family member receiving the assistance), to work. Unreimbursed Expenses To be eligible for the disability expenses deduction,the costs must not be reimbursed by another source. PHA Policy An attendant care provider will be asked to certify that, to the best of the provider's knowledge, the expenses are not paid by or reimbursed to the family from any source. The family will be required to certify that attendant care or auxiliary apparatus expenses are not paid by or reimbursed to the family from any source. ©Copyright 2005 Nan McKay&Associates,Inc. Page 7-31 Adminplan 9/1/05 Unlimited copies may be made for internal use. 7-IV.D. CHILD CARE EXPENSES Policies related to child care expenses are found in Chapter 6 (6-II.F). The amount of the deduction will be verified following the standard verification procedures described in Part I of this chapter. In addition, the PHA must verify that: • The child is eligible for care. • The costs claimed are not reimbursed. • The costs enable a family member to pursue an eligible activity. • The costs are for an allowable type of child care. • The costs are reasonable. Eligible Child To be eligible for the child care deduction,the costs must be incurred for the care of a child under the age of 13. The PHA will verify that the child being cared for (including foster children) is under the age of 13 (See 7-II.C.). Unreimbursed Expense To be eligible for the child care deduction, the costs must not be reimbursed by another source. PHA Policy The child care provider will be asked to certify that, to the best of the provider's knowledge,the child care expenses are not paid by or reimbursed to the family from any source. The family will be required to certify that the child care expenses are not paid by or reimbursed to the family from any source. C Copyright 2005 Nan McKay&Associates,Inc. Page 7-32 Adminplan 9/1/05 Unlimited copies may be made for internal use. Pursuing an Eligible Activity The PHA must verify that the family member(s)that the family has identified as being enabled to seek work, pursue education, or be gainfully employed, are actually pursuing those activities. PHA Policy Information to be Gathered The PHA will verify information about how the schedule for the claimed activity relates to the hours of care provided, the time required for transportation, the time required for study(for students),the relationship of the family member(s) to the child, and any special needs of the child that might help determine which family member is enabled to pursue an eligible activity. Seeking Work Whenever possible the PHA will use documentation from a state or local agency that monitors work-related requirements (e.g.,welfare or unemployment). In such cases the PHA will request verification from the agency of the member's job seeking efforts to date and require the family to submit to the PHA any reports provided to the other agency. In the event third-party verification is not available, the PHA will provide the family with a form on which the family member must record job search efforts. The PHA will review this information at each subsequent reexamination for which this deduction is claimed. Furthering Education The PHA will ask that the academic or vocational educational institution verify that the person permitted to further his or her education by the child care is enrolled and provide information about the timing of classes for which the person is registered. Gainful Employment The PHA will seek verification from the employer of the work schedule of the person who is permitted to work by the child care. In cases in which two or more family members could be permitted to work,the work schedules for all relevant family members may be verified. ®Copyright 2005 Nan McKay&Associates,Inc. Page Adminplan 9/1/05 Unlimited copies may be made for internal use. 7-33 Allowable Type of Child Care The type of care to be provided is determined by the family, but must fall within certain guidelines, as discussed in Chapter 6. PHA Policy The PHA will verify that the type of child care selected by the family is allowable, as described in Chapter 6 (6-II.F). The PHA will verify that the fees paid to the child care provider cover only child care costs (e.g.,no housekeeping services or personal services) and are paid only for the care of an eligible child (e.g., prorate costs if some of the care is provided for ineligible family members). The PHA will verify that the child care provider is not an assisted family member. Verification will be made through the head of household's declaration of family members who are expected to reside in the unit. Reasonableness of Expenses Only reasonable child care costs can be deducted. PHA Policy The actual costs the family incurs will be compared with the PHA's established standards of reasonableness for the type of care in the locality to ensure that the costs are reasonable. If the family presents a justification for costs that exceed typical costs in the area, the PHA will request additional documentation, as required, to support a determination that the higher cost is appropriate. ®Copyright 2005 Nan McKay&Associates,Inc. Page 7-34 Adminplan 9/1/05 Unlimited copies may be made for internal use. EXHIBIT 7-1: EXCERPT FROM HUD VERIFICATION GUIDANCE NOTICE (PIH 2004-01, pp. 11-14) 1• � r,, 1; Cilkrt- ati; i 1':i''a:<iYc�i�:..4ckitilit �l1'fJ'g��..; 1.iLi�:t3 iti t p.a._ite [ t3Ei:lt .4-;.�a�.�9.S r,.... ..f . .. � :,h�z... GGfrN{.. .a_.......r.tl ..... L:... .tY_.`l W't4tten 3" P=toy High (.Mandatory if upfront income verification is not available or if UI'' data differs substantially from tenant-re i orted information .. rt i f ilm'4rr7 t!1U1 1/n r to co+i r Incolne;f}pc 1Jpfrant Written Third' •,.`Orartlitid tarry 'I)ocutncnt tenant I2eclarlatioit;'. r Pa ty Review ° za r (LEVEL 4) (Z ILL 2) Wages/Salaries Use of computer The MIA mails, In the event the When neither The PEA may accept matching faxes,or a-mails independent source form of third a notarized statement agreements with a a verification does not respond to party verification or affidavit from the State Wage form directly to the PHA's written can be obtained, tenant that declares Information the independent request for the PISA may the family's total Collection Agency sources to obtain information,the accept original annual income from (SWICA)to obtain wage PHA may contact documents such earnings. Note: The wage information information. the independent as consecutive PHA must document electronically,by source by phone or pay stubs (HUD in the tenant file,the mail or fax or in make an in person recommends the reason third party person. visit to obtain the PI1A review at verification was not Agreements with The PHA may requested least three available. private vendor have the tenant information. months of pay agencies,such as sign a Request stubs,if The Work Number for Earnings employed by the or ChoicePoint to Statement from same employer obtain wage and the SSA to for three months salary information. confirm past or more),W-2 earnings. The forms,etc.from Use of HUD PHA mails the the tenant. Note: systems,when form to SSA and The PHA must available. the statement will document in the be sent to the tenant file,the address the PHA reason third party specifies on the verification was font not available. Verification of Employment Income: The PIIA should always obtain as much information as possible about the employment, such as start date(new employment),termination date(previous employment),pay frequency,pay rate,anticipated pay increases in the next twelve months,year-to-date earnings,bonuses,overtime,company name,address and telephone number,name and position of the person completing the employment verification form. Effective Date of Employment: The PHA should always confirm start and termination dates of employment C Copyright 2005 Nan McKay&Associates,Inc. Page 7-35 AdminpIan 9/1/05 Unlimited copies may be made for internal use. Incotne Typr Upfront Wrf f#e$T'Ltrd t)tytt$'li)t rrt xlQoumetit. Tenant, Qration Part • t.eview (LEVEL 4) 4? ,EYEL 2) Self- Not Available The PHA mails The PHA may call The PHA may The PHA may accept Employment or faxes a the source to obtain accept any a notarized statement verification form income information documents(i.e. or affidavit from the directly to tax returns, tenant that declares sources identified invoices and the family's total by the family to letters from annual income from obtain income customers) self-employment information. provided by the Note: The PHA must tenant to verify document in the self-employment tenant tile,the reason income. Note: third party The PHA must verification was not document in the available. tenant file,the reason third party verification was not obtained. Verification of Self-Employment Income: Typically,it is a challenge for PHAs to obtain third party verification of self- employment income. When third party verification is not available,the PHA should always request a notarized tenant declaration that includes a perjury statement. Social Security Use of IIUI)Tenant The PHA mails The PHA may call The PHA may The PHA may accept Benefits Assessment System or faxes a SSA,with the tenant accept an original a notarized statement (TASS)to obtain verification form on the line,to obtain SSA Notice from or affidavit from the current benefit directly to the current benefit the tenant. Note: tenant that declares history and local SSA office amount.(Not The PHA must monthly social. discrepancy reports. to obtain social Available in some document in the security benefits. security benefit areas because SSA tenant file,the Note: The PHA must information. makes this data reason third party document in the (Not Available available through verification was tenant file,the reason in some areas TASS. SSA not available. third party because SSA encourages PHAs verification was not makes this data to use'f ASS.) available, available through TASS. SSA encourages PHAs to use TASS.) Welfare Use of computer The PHA mails, The PHA may call The PHA may The PHA may accept Benefits matching faxes,or a-mails the local Social review an a notarized statement agreements with the a verification Services Agency to original award or affidavit from the local Social Services form directly to obtain current notice or printout tenant that declares Agency to obtain the local Social benefit amount from the local m onthly welfare current benefit Services Agency Social Services benefits. Note: The amount to obtain welfare Agency provided PHA must document electronically,by benefit by the tenant. in the tenant file,the mail or fax or in information. Note: The PHA reason third party person: must document in verification was not the tenant file, available. the reason third party verification was not available. O Copyright 2005 Nan McKay&Associates,Inc. Page 7-36 Adminplan 9/1/05 Unlimited copies may be made for internal use. 2 ,414), xtiiridr 3. 4 r:iiAtiilrtld';F�'i t10 1'd 110. DoF,`Ii. tf Tedant 1)!g&�aratlon', •� ; "a.. .,,.rrs �t�,rr �i.:-:;t;'.].:!1;',5.,,,, clzt_ .: elVff ' - ", } (LEVEL 4) E ) Child Support Use of agreement The PHA mails, The PHA may call The PHA may The PHA may accept with the local Child faxes,or a-mails the local Child review an a notarized statement Support a verification Support original court or affidavit from the Enforcement. form directly to Enforcement order,notice or tenant that declares Agency to obtain the local. Child Agency or child printout from the current child support current child support Support support payer to local Child amount and payment amount and payment Enforcement obtain current child Support. status.Note: The status electronically, Agency or child support amount and Enforcement PHA must document by mail or fax or in support payer to payment status. Agency provided in the tenant file,the person. obtain current by the tenant to reason third party child support verify current verification was not amount and child support available. payments tatus. amount and payment status. Note: The PHA must document in the tenant file, the reason third party verification was not available. Unemployment Use of computer The PHA mails, The PHA may call The PHA may The PHA may accept. Benefits matching faxes,or a-mails the State Wage review an a notarized statement agreements with a a verification information original benefit or affidavit from the State Wage form directly to Collection Agency notice or tenant that declares Information the State Wage to obtain current unemployment unemployment Collection Agency Information benefit amount. check stub,or benefits. Note: The to obtain Collection printout from the PHA must document unemployment Agency to obtain local State Wage in the tenant file,the compensation unemployment Information reason third party electronically,by compensation Collection verification was not mail or fax or in information. Agency tmrvided available. person. by the tenant. Note: The PHA Use of HUD must document in systems,when the tenant file, available. the reason third party verification was not available. Pensions Use of computer The PHA mails, The PHA may call The PHA may The PHA may accept matching faxes,or a-mails the pension provider review an a notarized statement agreements with a a verification to obtain current original benefit or affidavit from the Federal,State,or form directly to benefit amount notice from the tenant that declares Local Government the pension pension provider monthly pension Agency to obtain provider to obtain provided by the amounts.Note: The pension information pension tenant.Note: PHA must document electronically,by information. The PHA must. in the tenant file,the mail or fax or in document in the reason third party person tenant file,the verification was not reason third party available. verification was not available. ........ C Copyright 2005 Nan McKay&Associates,Inc. Page 7-37 Adminplan 9/1/05 Unlimited copies may be made for internal use. b lxyI & j ,Jy, i IS MI--:- .�{.•��d c�i r -. 1x �y ( W �!"i Y t ....,....--::,t„,,.. 1 • �.. •1 s P€O1 e,1 1 lt-eilSt'i ` 7ailD a. $ ` t" -- ..• F { w i H. .0[410Y,$.•t.4) Assets Use of cooperative The PHA mails, The PHA may call The PHA May The PHA may-accept agreements with faxes,or emails a the-source to obtain review original a notarized statement sources to obtain verification.fform asset and asset documents or affidavit from the asset and asset directly to the income information provided by the tenant that declares inoome information source to obtain tenant Note:The assets and asset electronically,by asset and asset PHA must income. Note: The mailer fax or in income document in the PHA must document person. information. tenant file,the in the tenant file,the reason third reason third party party verification was not verification was available. not available. Comments Whenever HUD Note: The The PHA Should The PHA should use makes available independent document in the this verification wage, source oompletes tenant file, the date method as a last unemployment, and the.form and and time of the resort,when all other SSA information, returns the form telephone call or in verification methods the PHA should use directly to the person visit,along are not possible or the information as PHA, Agency. with the name and have been part of the The tenant should title of the person unsuccessful. reexamination not hand carry that yen fled the Notarized statement process.Failure to documents to or current income should include a do so may result in from the amount perjury penalty disallowed costs independent statement. during a RIM source. review. Note: The PHA must not pass verification costs along to the participant. Note: In cases where the PHA cannot reliably project annual income,the PHA may elect to complete regular interim reexaminations(this policy should be apart of the PHA's written policies.) ®Copyright 2005 Nan McKay&Associates,Inc. Page 7-38 Adminpian 9/1/05 Unlimited copies may be made for internal use. EXHIBIT 7-2: SUMMARY OF DOCUMENTATION REQUIREMENTS FOR NONCITIZENS [HCV GB, pp. 5-9 and 5-10] • All noncitizens claiming eligible status must sign a declaration of eligible immigrant status on a form acceptable to the PHA. • Except for persons 62 or older, all noncitizens must sign a verification consent form • Additional documents are required based upon the person's status. Elderly Noncitizens • A person 62 years of age or older who claims eligible immigration status also must provide proof of age such as birth certificate, passport, or documents showing receipt of SS old-age benefits. All other Noncitizens • Noncitizens that claim eligible immigration status also must present the applicable USCIS document. Acceptable USCIS documents are listed below. • Form I-551 Alien Registration Receipt • Form I-94 Arrival-Departure Record with Card (for permanent resident aliens) no annotation accompanied by: • Form I-94 Arrival-Departure Record • A final court decision granting asylum annotated with one of the following: (but only if no appeal is taken); • "Admitted as a Refugee Pursuant to • A letter from a USCIS asylum officer Section 207" granting asylum (if application is filed • "Section 208" or"Asylum" on or after 10/1/90) or from a USCIS district director granting asylum • "Section 243(h)" or"Deportation (application filed before 10/1/90); stayed by Attorney General" • A court decision granting withholding • "Paroled Pursuant to Section 221 (d)(5) of deportation; or of the USCIS" • A letter from an asylum officer granting withholding or deportation(if application filed on or after 10/1/90). • Form I-688 Temporary Resident Card Form I-688B Employment Authorization Card annotated "Section 245A" or Section 210". annotated "Provision of Law 274a. 12(11)" or "Provision of Law 274a.12". • A receipt issued by the USCIS indicating that an application for issuance of a replacement document in one of the above listed categories has been made and the applicant's entitlement to the document has been verified; or • Other acceptable evidence. If other documents are determined by the USCIS to constitute acceptable evidence of eligible immigration status, they will be announced by notice published in the Federal Register ®Copyright 2005 Nan McKay&Associates,Inc. Page 7-39 Adminplan 9/1/05 Unlimited copies may be made for internal use. C Copyright 2005 Nan McKay&Associates,Inc. Page 7-40 Adminplan 9/1/05 Unlimited copies may be made for internal use. Chapter 8 .-- HOUSING QUALITY STANDARDS AND RENT REASONABLENESS DETERMINATIONS [24 CFR 982 Subpart I and 24 CFR 982.507] INTRODUCTION HUD requires that all units occupied by families receiving Housing Choice Voucher(HCV) assistance meet HUD's Housing Quality Standards (HQS) and permits the PHA to establish additional requirements. The use of the term "HQS" in this plan refers to the combination of both HUD and PHA-established requirements. HQS inspections are required before the Housing Assistance Payments (HAP) Contract is signed and at least annually during the term of the contract. HUD also requires PHAs to determine that units rented by families assisted under the HCV program have rents that are reasonable when compared to comparable unassisted units in the market area. This chapter explains HUD and PHA requirements related to housing quality and rent reasonableness as follows: Part I. Physical Standards. This part discusses the physical standards required of units occupied by HCV-assisted families and identifies decisions about the acceptability of the unit that may be made by the family based upon the family's preference. It also identifies life-threatening conditions that must be addressed on an expedited basis. Part II. The Inspection Process. This part describes the types of inspections the PHA will make and the steps that will be taken when units do not meet HQS. Part III. Rent Reasonableness Determinations. This part discusses the policies the PHA will use to make rent reasonableness determinations. Special HQS requirements for homeownership,manufactured homes, and other special housing types are discussed in Chapter 15 to the extent that they apply in this jurisdiction. ®Copyright 2005 Nan McKay&Associates,Inc. Page 8-1 Adminplan 9/1/05 Unlimited copies may be made for internal use. PART I: PHYSICAL STANDARDS 8.I.A. GENERAL HUD REQUIREMENTS HUD Performance and Acceptability Standards HUD's performance and acceptability standards for HCV-assisted housing are provided in 24 CFR 982.401. These standards cover the following areas: • Sanitary facilities • Food preparation and refuse disposal • Space and Security • Thermal Environment • Illumination and electricity • Structure and materials • Interior Air Quality • Water Supply • Lead-based paint • Access • Site and neighborhood • Sanitary condition • Smoke Detectors A summary of HUD performance criteria is provided in Attachment 8-1. Additional guidance on these requirements is found in the following HUD resources: • Housing Choice Voucher Guidebook, Chapter 10. • HUD Housing Inspection Manual for Section 8 Housing • HUD Inspection Form, form HUD-52580 (3/01) and Inspection Checklist, form HUD-52580-A (9/00) • HUD Notice 2003-31,Accessibility Notice: Section 504 of the Rehabilitation Act of 1973; the Americans with Disabilities Act of 1990; the Architectural Bathers Act of 1968 and the Fair Housing Act of 1988. Tenant Preference Items HUD requires the PHA to enforce minimum HQS but also requires that certain judgments about acceptability be left to the family. For example,the PHA must ensure that the unit contains the required sanitary facilities, but the family decides whether the cosmetic condition of the facilities is acceptable. Attachment 8-2 summarizes those items that are considered tenant preferences. ®Copyright 2005 Nan McKay&Associates,Inc. Page 8-2 Adminplan 9/1/05 Unlimited copies may be made for internal use. Modifications to Provide Accessibility Under the Fair Housing Act of 1988 an owner must not refuse the request of a family that contains a person with a disability to make necessary and reasonable modifications to the unit. Such modifications are at the family's expense. The owner may require restoration of the unit to its original condition if the modification would interfere with the owner or next occupant's full enjoyment of the premises. The owner may not increase a customarily required security deposit. However,the landlord may negotiate a restoration agreement that requires the family to restore the unit and, if necessary to ensure the likelihood of restoration, may require the tenant to pay a • reasonable amount into an interest bearing escrow account over a reasonable period of time. The interest in any such account accrues to the benefit of the tenant. The owner may also require reasonable assurances that the quality of the work will be acceptable and that any required building permits will be obtained.[24 CFR 100.203;Notice 2003-31]. Modifications to units to provide access for a person with a disability must meet all applicable HQS requirements and conform to the design, construction, or alteration of facilities contained in the UFAS and the ADA Accessibility Guidelines (ADAAG) [28 CFR 35.151(c) and Notice 2003-31] See Chapter 2 of this plan for additional information on reasonable accommodations for persons with disabilities. PHA Policy Any owner that intends to negotiate a restoration agreement or require an escrow account must submit the agreement(s)to the PHA for review. ®Copyright 2005 Nan McKay&Associates,Inc. Page 8-3 Adminplan 9/1/05 Unlimited copies may be made for internal use. 8.I.B. ADDITIONAL LOCAL REQUIREMENTS The PHA may impose additional quality standards as long as the additional criteria are not likely to adversely affect the health or safety of participant families or severely restrict housing choice. HUD approval is required if more stringent standards are imposed. HUD approval is not required if the PT-TA additions are clarifications of HUD's acceptability criteria or performance standards [24 CFR 982.401(a)(4)]. Thermal Environment [HCV GB p.10-71 The PHA must define a"healthy living environment" for the local climate. This may be done by establishing a temperature that the heating system must be capable of maintaining, that is appropriate for the local climate. PHA Policy The heating system must be capable of maintaining an interior temperature of 65 degrees Fahrenheit between October 1 and May 1. ®Copyright 2005 Nan McKay&Associates,Inc. Page 8-4 Adminplan 9/1/05 Unlimited copies may be made for internal use. Clarifications of HUD Requirements PHA Policy As permitted by HUD, the PHA has adopted the following specific requirements that elaborate on HUD standards. Walls In areas where plaster or drywall is sagging, severely cracked, or otherwise damaged, it must be repaired or replaced. • Windows Window sashes must be in good condition, solid and intact, and properly fitted to the window frame. Damaged or deteriorated sashes must be replaced. Window screens must be in good condition (applies only if screens are present). Doors All exterior doors must be weather-tight to avoid any air or water infiltration,be lockable, have no holes, have all trim intact, and have a threshold. All interior doors must have no holes, have all trim intact, and be openable without the use of a key. Floors All wood floors must be sanded to a smooth surface and sealed. Any loose or warped boards must be resecured and made level. If they cannot be leveled, they must be replaced. All floors must be in a finished state. Raw wood or unsealed concrete is not permitted. All floors should have some type of baseshoe,trim, or sealing for a "finished look." Vinyl baseshoe is permitted. Sinks All sinks and commode water lines must have shut off valves, unless faucets are wall mounted. All worn or cracked toilet seats and tank lids must be replaced and toilet tank lid must fit properly. All sinks must have functioning stoppers. Security If window security bars or security screens are present on emergency exit windows, they must be equipped with a quick release system. The owner is responsible for ensuring that the family is instructed on the use of the quick release system. ®Copyright 2005 Nan McKay&Associates,Inc. Page 8-5 Adminplan 9/1/05 Unlimited copies may be made for internal use. 8.I.C. LIFE THREATENING CONDITIONS [24 CFR 982.404(a)] HUD requires the PHA to define life threatening conditions and to notify the owner or the family (whichever is responsible) of the corrections required. The responsible party must correct life threatening conditions within 24 hours of PHA notification. PHA Policy The following are considered life threatening conditions: Any condition that jeopardizes the security of the unit Major plumbing leaks or flooding, waterlogged ceiling or floor in imminent danger of falling Natural or LPgas or fuel oil leaks Any electrical problem or condition that could result in shock or fire Absence of a working heating system when outside temperature is below 60 degrees Fahrenheit. Utilities not in service, including no running hot water Conditions that present the imminent possibility of injury Obstacles that prevent safe entrance or exit from the unit Absence of a functioning toilet in the unit Inoperable smoke detectors If an owner fails to correct life threatening conditions as required by the PHA, the housing assistance payment will be abated and the HAP contract will be terminated. See 8-II-G. If a family fails to correct a family caused life threatening condition as required by the PHA, the PHA may terminate the family's assistance. See 8-II.H. The owner will be required to repair an inoperable smoke detector unless the PHA determines that the family has intentionally disconnected it (by removing batteries or other means). In this case, the family will be required to repair the smoke detector within 24 hours. ®Copyright 2005 Nan McKay&Associates,Inc. Page 8-6 Adminplan 9/I/05 Unlimited copies may be made for internal use. 8-I.D. OWNER AND FAMILY RESPONSIBILITIES [24 CFR 982.404] Family Responsibilities The family is responsible for correcting the following HQS deficiencies: • Tenant-paid utilities not in service • Failure to provide or maintain family-supplied appliances • Damage to the unit or premises caused by a household member or guest beyond normal wear and tear. "Normal wear and tear" is defined as items which could not be charged against the tenant's security deposit under state law or court practice. Owner Responsibilities The owner is responsible for all HQS violations not listed as a family responsibility above, even if the violation is caused by the family's living habits (e.g., vermin infestation). However, if the family's actions constitute a serious or repeated lease violation the owner may take legal action to evict the family. ®Copyright 2005 Nan McKay&Associates,Inc. Page 8-7 Adminplan 9/1/05 Unlimited copies may be made for internal use. 8-I-E. SPECIAL REQUIREMENTS FOR CHILDREN WITH ENVIRONMENTAL INTERVENTION BLOOD LEAD LEVEL [24 CFR 35.1225] If a PHA is notified by a public health department or other medical health care provider, or verifies information from a source other than a public health department or medical health care provider,that a child of less than 6 years of age, living in an HCV-assisted unit has been identified as having an environmental intervention blood lead level,the PHA must complete a risk assessment of the dwelling unit. The risk assessment must be completed in accordance with program requirements, and the result of the risk assessment must be immediately provided to the owner of the dwelling unit. In cases where the public health department has already completed an evaluation of the unit, this information must be provided to the owner. Within 30 days after receiving the risk assessment report from the PHA, or the evaluation from the public health department, the owner is required to complete the reduction of identified lead- based paint hazards in accordance with the lead-based paint regulations [24 CFR 35.1325 and 35.1330]. If the owner does not complete the "hazard reduction" as required,the dwelling unit is in violation of HQS and the PHA will take action in accordance with Section 8-II.G. PHA reporting requirements, and data collection and record keeping responsibilities related to children with an environmental intervention blood lead level are discussed in Chapter 16. 8-I-F. VIOLATION OF HQS SPACE STANDARDS [24 CFR 982.403] If the PHA determines that a unit does not meet the HQS space standards because of an increase in family size or a change in family composition,the PHA must issue the family a new voucher, and the family and PHA must try to find an acceptable unit as soon as possible. If an acceptable unit is available for rental by the family, the PHA must terminate the HAP contract in accordance with its terms. ®Copyright 2005 Nan McKay&Associates,Inc. Page 8-8 Adminplan 9/1/05 Unlimited copies may be made for internal use. PART II: THE INSPECTION PROCESS 8-II.A. OVERVIEW [24 CFR 982.405] Types of Inspections The PHA conducts the following types of inspections as needed. Each type of inspection is discussed in the paragraphs that follow. • Initial Inspections. The PHA conducts initial inspections in response to a request from the family to approve a unit for participation in the HCV program. The unit must pass the HQS inspection before the effective date of the HAP Contract. • Annual Inspections. HUD requires the PHA to inspect each unit under lease at least annually to confirm that the unit still meets HQS. The inspection may be conducted in conjunction with the family's annual reexamination but also may be conducted separately. • Special Inspections. A special inspection may be requested by the owner, the family, or a third party as a result of problems identified with a unit between annual inspections. • Quality Control Inspections. HUD requires that a sample of units be reinspected by a supervisor or other qualified individual to ensure that HQS are being enforced correctly and uniformly by all inspectors. Inspection of PHA-owned Units [24 CFR 982.352(b)] The PHA must obtain the services of an independent entity to perform all HQS inspections in cases where an HCV family is receiving assistance in a PHA-owned unit. A PHA-owned unit is �— defined as a unit that is owned by the PHA that administers the assistance under the consolidated ACC (including a unit owned by an entity substantially controlled by the PHA). The independent agency must communicate the results of each inspection to the family and the PHA. The independent agency must be approved by HUD, and may be the unit of general local government for the PHA jurisdiction (unless the PHA is itself the unit of general local government or an agency of such government). Inspection Costs The PHA may not charge the family or owner for unit inspections [24 CFR 982.405(e)]. In the case of inspections of PHA-owned units,the PHA may compensate the independent agency from ongoing administrative fee for inspections performed. The PHA and the independent agency may not charge the family any fee or charge for the inspection [24 CFR.982.352(b)]. C Copyright 2005 Nan McKay&Associates,Inc. Page 8-9 Adminplan 9/1/05 Unlimited copies may be made for internal use. Notice and Scheduling The family must allow the PHA to inspect the unit at reasonable times with reasonable notice [24 CFR 982.551(d)]. PHA Policy Both the family and the owner will be given reasonable notice of all inspections. Except in the case of a life threatening emergency, reasonable notice is considered to be not less than 48 hours. Inspections may be scheduled between 8:00 a.m. and 4:30 p.m. Generally inspections will be conducted on business days only. In the case of a life threatening emergency, the PHA will give as much notice as possible, given the nature of the emergency. Attendance at inspections by owner and family. HUD permits the PHA to set policy regarding family and owner presence at the time of inspection [HCV GB p. 10-27]. PHA Policy When a family occupies the unit at the time of inspection an adult family member must be present for the inspection. The presence of the owner or the owner's representative is encouraged but is not required. At initial inspection of a vacant unit, the PHA will inspect the unit in the presence of the owner or owner's representative. The presence of a family representative is permitted,but is not required. ©Copyright 2005 Nan McKay&Associates,Inc. Page 8-10 Adminplan 9/1/05 Unlimited copies may be made for internal use. 8-II.B. INITIAL HQS INSPECTION [24 CFR 982.401(a)] Timing of Initial Inspections HUD requires the unit to pass HQS before the effective date of the lease and HAP Contract. HUD requires PHAs with fewer than 1,250 budgeted units to complete the initial inspection, determine whether the unit satisfies HQS, and notify the owner and the family of the determination within 15 days of submission of the Request for Tenancy Approval (RTA). For PHAs with 1,250 or more budgeted units, to the extent practicable such inspection and determination must be completed within 15 days. The 15-day period is suspended for any period during which the unit is not available for inspection [982.305(b)(2)]. PHA Policy The PHA will complete the initial inspection, determine whether the unit satisfies HQS, and notify the owner and the family of the determination within 15 days of submission of the Request for Tenancy Approval (RTA). Inspection Results and Reinspections PHA Policy If any HQS violations are identified, the owner will be notified of the deficiencies and be given a time frame to correct them. If requested by the owner, the time frame for correcting the deficiencies may be extended by the PHA for good cause. The PHA will reinspect the unit within 5 business days of the date the owner notifies the PHA that the required corrections have been made. If the time period for correcting the deficiencies (or any PHA-approved extension) has elapsed, or the unit fails HQS at the time of the reinspection, the PHA will notify the owner and the family that the unit has been rejected and that the family must search for another unit. The PHA may agree to conduct a second reinspection, for good cause, at the request of the family and owner. Following a failed reinspection,the family may submit a new Request for Tenancy Approval for the unit if the family has not found another unit by the time the owner completes all repairs and the family continues to wish to live in the unit. ®Copyright 2005 Nan McKay&Associates,Inc. Page 8-11 Adminplan 9/1/05 Unlimited copies may be made for internal use. Utilities Generally, at initial lease-up the owner is responsible for demonstrating that all utilities are in working order including those utilities that the family will be responsible for paying. PHA Policy If utility service is not available for testing at the time of the initial inspection,the PHA will allow the utilities to be placed in service after the unit has met all other HQS requirements. The PHA will reinspect the unit to confirm that utilities are operational before the HAP contract is executed by the PHA. Appliances PHA Policy If the family is responsible for supplying the stove and/or refrigerator, the PHA will allow the stove and refrigerator to be placed in the unit after the unit has met all other HQS requirements. The required appliances must be in place before the HAP contract is executed by the PHA. The PHA will execute the HAP contract based upon a certification from the family that the appliances have been installed and are working. A confirmatory inspection will be scheduled within 30 days of HAP contract approval. ®Copyright 2005 Nan McKay&Associates,Inc. Page 8-12 Adminplan 9/1/05 Unlimited copies may be made for internal use. 8.II.C. ANNUAL HQS INSPECTIONS [24 CFR 982.405(a)] Scheduling the Inspection Each unit under HAP contract must have an annual inspection no more than 12 months after the most recent inspection. PHA Policy If an adult family member cannot be present on the scheduled date,the family should request that the PHA reschedule the inspection. The PHA and family will agree on a new inspection date that generally should take place within 5 business days of the originally- scheduled date. The PHA may schedule an inspection more than 5 business days after the original date for good cause. If the family misses the first scheduled appointment without requesting a new inspection date,the PHA will automatically schedule a second inspection. If the family misses two scheduled inspections without PHA approval,the PHA will consider the family to have violated its obligation to make the unit available for inspection. This may result in termination of the family's assistance in accordance with Chapter 12. 8-II.D. SPECIAL INSPECTIONS [HCV GB p. 10-30] The PHA will conduct a special inspection if the owner, family, or another source reports HQS violations in the unit. PHA Policy During a special inspection,the PHA generally will inspect only those deficiencies that were reported. However, the inspector will record any additional HQS deficiencies that are observed and will require the responsible party to make the necessary repairs. If the annual inspection has been scheduled or is due within 90 days of the date the special inspection is scheduled the PHA may elect to conduct a full annual inspection. 8-II.E. QUALITY CONTROL INSPECTIONS [24 CFR 982.405(b), HCV GB p. 10-32] HUD requires a PHA supervisor or other qualified person to conduct quality control inspections of a sample of units to ensure that each inspector is conducting accurate and complete inspections and that there is consistency in the application of the HQS. The unit sample must include only units that have been inspected within the preceding 3 months. The selected sample will include (1) each type of inspection(initial, annual, and special), (2) inspections completed by each inspector, and(3) units from a cross-section of neighborhoods. ®Copyright 2005 Nan McKay&Associates,Inc. Page 8-13 Adminplan 9/1/05 Unlimited copies may be made for internal use. 8.II.F. INSPECTION RESULTS AND REINSPECTIONS FOR UNITS UNDER HAP CONTRACT Notification of Corrective Actions The owner and the family will be notified in writing of the results of all inspections. When an inspection identifies HQS failures, the PHA will determine (1) whether or not the failure is a life threatening condition and (2) whether the family or owner is responsible. PHA Policy When life threatening conditions are identified,the PHA will immediately notify both parties by telephone, facsimile, or email. The notice will specify who is responsible for correcting the violation. The corrective actions must be taken within 24 hours of the PHA's notice. When failures that are not life threatening are identified, the PHA will send the owner and the family a written notification of the inspection results within 5 business days of the inspection. The written notice will specify who is responsible for correcting the violation, and the time frame within which the failure must be corrected. Generally not more than 30 days will be allowed for the correction. The notice of inspection results will inform the owner that if life threatening conditions are not corrected within 24 hours, and non-life threatening conditions are not corrected within the specified time frame (or any PHA-approved extension),the owner's HAP will be abated in accordance with PHA policy (see 8-II.G.). Likewise, in the case of family caused deficiencies, the notice will inform the family that if corrections are not made within the specified time frame (or any PHA-approved extension, if applicable)the family's assistance will be terminated in accordance with PHA policy(see Chapter 12). C'Copyright 2005 Nan McKay&Associates,Inc. Page 8-14 Adminplan 9/1/05 Unlimited copies may be made for internal use. Extensions For conditions that are life-threatening,the PHA cannot grant an extension to the 24 hour corrective action period. For conditions that are not life-threatening, the PHA may grant an exception to the required time frames for correcting the violation, if the PHA determines that an extension is appropriate [24 CFR 982.404]. PHA Policy Extensions will be granted in cases where the PHA has determined that the owner has made a good faith effort to correct the deficiencies.and is unable to for reasons beyond the owner's control. Reasons may include,but are not limited to: A repair cannot be completed because required parts or services are not available. A repair cannot be completed because of weather conditions. A reasonable accommodation is needed because the family includes a person with disabilities. The length of the extension will be determined on a case by case basis,but will not exceed 60 days, except in the case of delays caused by weather conditions. In the case of weather conditions, extensions may be continued until the weather has improved sufficiently to make repairs possible. The necessary repairs must be made within 15 calendar days, once the weather conditions have subsided. Reinspections PHA Policy The PHA will conduct a reinspection immediately following the end of the corrective period, or any PHA approved extension. The family and owner will be given reasonable notice of the reinspection appointment. If the deficiencies have not been corrected by the time of the reinspection, the PHA will send a notice of abatement to the owner, or in the case of family caused violations, a notice of termination to the family, in accordance with PHA policies. If the PHA is unable to gain entry to the unit in order to conduct the scheduled reinspection, the PHA will consider the family to have violated its obligation to make the unit available for inspection. This may result in termination of the family's assistance in accordance with Chapter 12. ®Copyright 2005 Nan McKay&Associates,Inc. Page 8-15 Adminplan 9/1/05 Unlimited copies may be made for internal use. 8.II.G. ENFORCING OWNER COMPLIANCE If the owner fails to maintain the dwelling unit in accordance with HQS, the PHA must take prompt and vigorous action to enforce the owner obligations. HAP Abatement If an owner fails to correct HQS deficiencies by the time specified by the PHA, HUD requires the PHA to abate housing assistance payments no later than the first of the month following the specified correction period(including any approved extension) [24 CFR 985.3(O]. No retroactive payments will be made to the owner for the period of time the rent was abated. Owner rents are not abated as a result of HQS failures that are the family's responsibility. PHA Policy The PHA will make all HAP abatements effective the first of the month following the expiration of the PHA specified correction period (including any extension). The PHA will inspect abated units within 5 business days of the owner's notification that the work has been completed. Payment will resume effective on the day the unit passes inspection. During any abatement period the family continues to be responsible for its share of the rent. The owner must not seek payment from the family for abated amounts and may not use the abatement as cause for eviction. HAP Contract Termination The PHA must decide how long any abatement period will continue before the HAP contract will be terminated. The PHA should not terminate the contract until the family finds another unit, provided the family does so in a reasonable time [HCV GB p. 10-29] and must give the owner reasonable notice of the termination. The PHA will issue a voucher to permit the family to move to another unit as described in Chapter 10. PHA Policy The maximum length of time that a HAP may be abated is 90 days. However, if the owner completes corrections and notifies the PHA before the termination date of the HAP contract, the PHA may rescind the termination notice if(1) the family still resides in the unit and wishes to remain in the unit and (2) the unit passes inspection. Reasonable notice of HAP contract termination by the PHA is 30 days. 8.II.H. ENFORCING FAMILY COMPLIANCE WITH HQS [24 CFR 982.404(b)] Families are responsible for correcting any HQS violations listed in paragraph 8.I.D. If the family fails to correct a violation within the period allowed by the PHA (and any extensions), the PHA will terminate the family's assistance, according to the policies described in Chapter 12. If the owner carries out a repair for which the family is responsible under the lease, the owner may bill the family for the cost of the repair. ®Copyright 2005 Nan McKay&Associates,Inc. Page 8-16 Adminplan 9/1/05 Unlimited copies may be made for internal use. PART III: RENT REASONABLENESS [24 CFR 982.507] 8-III.A. OVERVIEW No HAP contract can be approved until the PHA has determined that the rent for the unit is reasonable. The purpose of the rent reasonableness test is to ensure that a fair rent is paid for each unit rented under the HCV program. HUD regulations define a reasonable rent as one that does not exceed the rent charged for comparable, unassisted units in the same market area. HUD also requires that owners not charge more for assisted units than for comparable units on the premises. This part explains the method used to determine whether a unit's rent is reasonable. PHA-owned Units [24 CFR 982.352(b)] In cases where an HCV family is receiving assistance in a PHA-owned unit, the PHA must obtain the services of an independent entity to determine rent reasonableness in accordance with program requirements, and to assist the family in negotiating the contract rent when the family requests assistance. A PHA-owned unit is defined as a unit that is owned by the PHA that administers the assistance under the consolidated ACC (including a unit owned by an entity substantially controlled by the PHA). The independent agency must communicate the results of the rent reasonableness determination to the family and the PHA. The independent agency must be approved by HUD, and may be the unit of general local government for the PHA jurisdiction (unless the PHA is itself the unit of general local government or an agency of such government). ®Copyright 2005 Nan McKay&Associates,Inc. Page 8-17 Adminplan 9/1/05 Unlimited copies may be made for internal use. 8-III.B. WHEN RENT REASONABLENESS DETERMINATIONS ARE REQUIRED Owner-initiated Rent Determinations The PHA must make a rent reasonableness determination at initial occupancy and whenever the owner requests a rent adjustment. The owner and family first negotiate the rent for a unit. The PHA (or independent agency in the case of PHA-owned units) will assist the family with the negotiations upon request. At initial occupancy the PHA must determine whether the proposed rent is reasonable before a HAP Contract is signed. The owner must not change the rent during the initial lease term. Subsequent requests for rent adjustments must be consistent with the lease between the owner and the family. Rent increases will not be approved unless any failed items identified by the most recent HQS inspection have been corrected. PHA Policy After the initial occupancy period, the owner may request a rent adjustment in accordance with the owner's lease. For rent increase requests after initial lease-up, the PHA may request owners to provide information about the rents charged for other units on the premises, if the premises include more than 4 units. In evaluating the proposed rents in comparison to other units on the premises the PHA will consider unit size and length of tenancy in the other units. The PHA will determine whether the requested increase is reasonable within 10 business days of receiving the request from the owner. The owner will be notified of the determination in writing. All rents adjustments will be effective the first of the month following 30 days after the PHA's receipt of the owner's request or on the date specified by the owner, whichever is later. PHA-and HUD-Initiated Rent Reasonableness Determinations HUD requires the PHA to make a determination of rent reasonableness (even if the owner has not requested a change) if there is a 5 percent decrease in the Fair Market Rent that goes into effect at least 60 days before the contract anniversary date. HUD also may direct the PHA to make a determination at any other time. The PHA may decide that a new determination of rent reasonableness is needed at any time. PHA Policy In addition to the instances described above, the PHA will make a determination of rent reasonableness at any time after the initial occupancy period if: (1) the PHA determines that the initial rent reasonableness determination was in error or(2) the PHA determines that the information provided by the owner about the unit or other units on the same premises was incorrect. O Copyright 2005 Nan McKay&Associates,Inc. Page 8-18 Adminplan 9/1/05 Unlimited copies may be made for internal use. 8-IH.C.HOW COMPARABILITY IS ESTABLISHED Factors to Consider HUD requires PHAs to take into consideration the factors listed below when determining rent comparability. The PHA may use these factors to make upward or downward adjustments to the rents of comparison units when the units are not identical to the HCV-assisted unit. • Location and age • Unit size including the number of rooms and square footage of rooms • The type of unit including construction type (e.g., single family, duplex, garden, low-rise, high-rise) • The quality of the units including the quality of the original construction, maintenance and improvements made. • Amenities, services, and utilities included in the rent Units that Must Not be Used as Comparables Comparable units must represent unrestricted market rents. Therefore, units that receive some form of federal, state, or local assistance that imposes rent restrictions cannot be considered comparable units. These include units assisted by HUD through any of the following programs: Section 8 project-based assistance, Section 236 and Section 221(d)(3) Below Market Interest Rate (BMIR) projects, HOME or Community Development Block Grant (CDBG) program- assisted units in which the rents are subsidized; units subsidized through federal, state, or local tax credits; units subsidized by the Department of Agriculture rural housing programs, and units that are rent-controlled by local ordinance. Rents Charged for Other Units on the Premises The Request for Tenancy Approval (HUD-52517) requires owners to provide information, on the form itself, about the rent charged for other unassisted comparable units on the premises if the premises include more than 4 units. By accepting the PHA payment each month the owner certifies that the rent is not more than the rent charged for comparable unassisted units on the premises. If asked to do so, the owner must give the PHA information regarding rents charged for other units on the premises. ©Copyright 2005 Nan McKay&Associates,Inc. Page 8-19 Adminplan 9/1/05 Unlimited copies may be made for internal use. 8-IH.D. PHA RENT REASONABLENESS METHODOLOGY How Market Data is Collected PHA Policy The PHA will collect and maintain data on market rents in the PHA's jurisdiction. Information sources include newspapers, realtors, market surveys, inquiries of owners and other available sources. The data will be maintained by bedroom size and market areas. Market areas may be defined by zip codes, census tract, neighborhood, and identifiable natural or man-made boundaries. The data will be updated on an ongoing basis and rent information that is more than 12 months old will be eliminated from the database. How Rents are Determined PHA Policy The rent for a unit proposed for HCV assistance will be compared to the rent charged for comparable units in the same market area. The PHA will develop a range of prices for comparable units by bedroom size within defined market areas. Units proposed for HCV assistance will be compared to the units within this rent range. Because units may be similar, but not exactly like the unit proposed for HCV assistance, the PHA may make adjustments to the range of prices to account for these differences. The adjustment must reflect the local market. Not all differences in units require adjustments (e.g.,the presence or absence of a garbage disposal may not affect the rent in some market areas). Adjustments may vary by unit type (e.g., a second bathroom may be more valuable in a three-bedroom unit than in a two-bedroom). The adjustment must reflect the rental value of the difference—not its construction costs (e.g., it might cost $20,000 to put on a new roof, but the new roof might not make any difference in what a tenant would be willing to pay because rents units are presumed to have functioning roofs).When a comparable project offers rent concessions (e.g., first month rent-free, or reduced rent)reported monthly rents will be adjusted accordingly. For example, if a comparable project reports rents of$500/month but new tenants receive the first month's rent free,the actual rent for the unit would be calculated as follows: $500 x 11 months = 5500/12 months =actual monthly rent of$488. The PHA will notify the owner of the rent the PHA can approve based upon its analysis of rents for comparable units. The owner may submit information about other comparable units in the market area. The PHA will confirm the accuracy of the information provided and consider this additional information when making rent determinations. The owner must submit any additional information within 5 business days of the PHA's request for information or the owner's request to submit information. C Copyright 2005 Nan McKay&Associates,Inc. Page 8-20 Adminplan 9/1/05 Unlimited copies may be made for internal use. EXHIBIT 8-1: OVERVIEW OF HUD HOUSING QUALITY STANDARDS Note: This document provides an overview of HQS. For more detailed information see the following documents: • 24 CFR 982.401, Housing Quality Standards (HQS) • Housing Choice Voucher Guidebook, Chapter 10. • HUD Housing Inspection Manual for Section 8 Housing • HUD Inspection Form, form HUD-52580 (3/01) and Inspection Checklist, form HUD-52580-A (9/00) Sanitary Facilities The dwelling unit must include sanitary facilities within the unit. The sanitary facilities must be usable in privacy and must be in proper operating condition and adequate for personal cleanliness and disposal of human waste. Food Preparation and Refuse Disposal The dwelling unit must have space and equipment suitable for the family to store,prepare, and serve food in a sanitary manner. Space and Security The dwelling unit must provide adequate space and security for the family. This includes having at least one bedroom or living/sleeping room for each two persons. Thermal Environment The unit must have a safe system for heating the dwelling unit. Air conditioning is not required but if provided must be in proper operating condition. The dwelling unit must not contain unvented room heaters that burn gas, oil, or kerosene. Portable electric room heaters or kitchen stoves with built-in heating units are not acceptable as a primary source of heat for units located in climatic areas where permanent heat systems are required. Illumination and Electricity Each room must have adequate natural or artificial illumination to permit normal indoor activities and to support the health and safety of occupants. The dwelling unit must have sufficient electrical sources so occupants can use essential electrical appliances. Minimum standards are set for different types of rooms. Once the minimum standards are met,the number, type and location of electrical sources are a matter of tenant preference. Structure and Materials The dwelling unit must be structurally sound. Handrails are required when four or more steps (risers) are present, and protective railings are required when porches, balconies, and stoops are thirty inches or more off the ground. The elevator servicing the unit must be working [if there is one]. Manufactured homes must have proper tie-down devices capable of surviving wind loads common to the area. ®Copyright 2005 Nan McKay&Associates,Inc. Page 8-21 Adminplan 9/1/05 Unlimited copies may be made for internal use. Interior Air Quality The dwelling unit must be free of air pollutant levels that threaten the occupants' health. There must be adequate air circulation in the dwelling unit. Bathroom areas must have one openable window or other adequate ventilation. Any sleeping room must have at least one window. If a window was designed to be opened, it must be in proper working order. Water Supply The dwelling unit must be served by an approved public or private water supply that is sanitary and free from contamination. Plumbing fixtures and pipes must be free of leaks and threats to health and safety. Lead-Based Paint Lead-based paint requirements apply to dwelling units built prior to 1978 that are occupied or can be occupied by families with children under six years of age, excluding zero bedroom dwellings. Owners must: • Disclose known lead-based paint hazards to prospective tenants before the lease is signed, • provide all prospective families with "Protect Your Family from Lead in Your Home", • Stabilize deteriorated painted surfaces and conduct hazard reduction activities when identified by the PHA • Notify tenants each time such an activity is performed • Conduct all work in accordance with HUD safe practices • As part of ongoing maintenance ask each family to report deteriorated paint. For units occupied by environmental intervention blood lead level (lead poisoned) children under six years of age, a risk assessment must be conducted(paid for by the PHA). If lead hazards are identified during the risk assessment, the owner must complete hazard reduction activities. See HCV GB p. 10-15 for a detailed description of these requirements. For additional information on lead-based paint requirements see 24 CFR 35, Subparts A, B, M, and R. Access Use and maintenance of the unit must be possible without unauthorized use of other private properties. The building must provide an alternate means of exit in case of fire. Site and Neighborhood The site and neighborhood must be reasonably free from disturbing noises and reverberations, excessive trash or vermin, or other dangers to the health, safety, and general welfare of the occupants. ®Copyright 2005 Nan McKay&Associates,Inc. Page 8-22 Adminplan 9/1/05 Unlimited copies may be made for internal use. Sanitary Condition The dwelling unit and its equipment must be in sanitary condition and free of vermin and rodent infestation. The unit must have adequate barriers to prevent infestation. Smoke Detectors Smoke detectors must be installed in accordance with and meet the requirements of the National Fire Protection Association Standard(NFPA) 74 (or its successor standards). If the dwelling unit is occupied by any person with a hearing impairment, smoke detectors must have an appropriate alarm system as specified in NFPA 74 (or successor standards). • Hazards and Heath/Safety The unit, interior and exterior common areas accessible to the family,the site, and the surrounding neighborhood must be free of hazards to the family's health and safety. ©Copyright 2005 Nan McKay&Associates,Inc. Page 8-23 Adminplan 9/1/05 Unlimited copies may be made for internal use. CI Copyright 2005 Nan McKay&Associates,Inc. Page 8-24 Adminplan 9/1/05 Unlimited copies may be made for internal use. EXHIBIT 8-2: SUMMARY OF TENANT PREFERENCE AREAS RELATED TO HOUSING QUALITY Note: This document provides an overview of unit and site characteristics and conditions for which the family determines acceptability. For more detailed information see the following documents: • Housing Choice Voucher Guidebook, Chapter 10. • HUD Housing Inspection Manual for Section 8 Housing • HUD Inspection Form, form HUD-52580 (3/01) and Inspection Checklist, form HUD-52580-A(9/00) Provided the minimum housing quality standards have been met, HUD permits the family to determine whether the unit is acceptable with regard to the following characteristics. • Sanitary Facilities. The family may determine the adequacy of the cosmetic condition and quality of the sanitary facilities, including the size of the lavatory, tub, or shower; the location of the sanitary facilities within the unit; and the adequacy of the water heater. • Food Preparation and Refuse Disposal. The family selects size and type of equipment it finds acceptable. When the family is responsible for supplying cooking appliances,the family may choose to use a microwave oven in place of a conventional oven, stove, or range. When the owner is responsible for providing cooking appliances, the owner may offer a microwave oven in place of an oven, stove, or range only if other subsidized and unsubsidized units on the premises are furnished with microwave ovens only. The adequacy of the amount and type of storage space, the cosmetic conditions of all equipment, and the size and location of the kitchen are all determined by the family. • Space and Security. The family may determine the adequacy of room sizes and room locations. The family is also responsible for deciding the acceptability of the type of door and window locks. • Energy conservation items. The family may determine whether the amount of insulation, presence of absence of storm doors and windows and other energy conservation items are acceptable. • Illumination and Electricity. The family may determine whether the location and the number of outlets and fixtures (over and above those required to meet HQS standards) are acceptable or if the amount of electrical service is adequate for the use of appliances, computers, or stereo equipment. ®Copyright 2W5 Nan McKay&Associates,Inc. Page 8-25 Adminplan 9/1/05 Unlimited copies may be made for internal use. (6) Structure and Materials. Families may determine whether minor defects, such as lack of paint, or worn flooring or carpeting will affect the livability of the unit. (7) Indoor Air. Families may determine whether window and door screens, filters, fans, or other devices for proper ventilation are adequate to meet the family's needs. However, if screens are present they must be in good condition. (8) Sanitary Conditions. The family determines whether the sanitary conditions in the unit, including minor infestations, are acceptable. (9) Neighborhood conditions. Families may determine whether neighborhood conditions such as the presence of drug activity, commercial enterprises, and convenience to shopping will affect the livability of the unit. Families have no discretion with respect to lead-based paint standards and smoke detectors. ®Copyright 2005 Nan McKay&Associates,Inc. Page 8-26 Adminplan 9/1/05 Unlimited copies may be made for internal use. Chapter 9 GENERAL LEASING POLICIES INTRODUCTION Chapter 9 covers the lease-up process from the family's submission of a Request for Tenancy Approval to execution of the HAP contract. In order for the PHA to assist a family in a particular dwelling unit, or execute a Housing Assistance Payments (HAP) contract with the owner of a dwelling unit, the PHA must determine that all the following program requirements are met: • The unit itself must qualify as an eligible unit [24 CFR 982.305(a)] • The unit must be inspected by the PHA and meet the Housing Quality Standards (HQS) [24 CFR 982.305(a)] • The lease offered by the owner must be approvable and must include the required Tenancy Addendum [24 CFR 982.305(a)] • The rent to be charged by the owner for the unit must be reasonable [24 CFR 982.305(a)] • The owner must be an eligible owner, approvable by the PHA, with no conflicts of interest [24 CFR 982.306] • For families initially leasing a unit only: Where the gross rent of the unit exceeds the applicable payment standard for the family, the share of rent to be paid by the family cannot exceed 40 percent of the family's monthly adjusted income [24 CFR 982.305(a)] C Copyright 2005 Nan McKay&Associates,Inc. Page 9-1 Adminplan 1/I/05 Unlimited copies may be made for internal use. 9-I.A.TENANT SCREENING The PHA has no liability or responsibility to the owner or other persons for the family's behavior or suitability for tenancy [24 CFR 982.307(a)(1)]. The PHA may elect to screen applicants for family behavior or suitability for tenancy. See Chapter 3 for a discussion of the PHA's policies with regard to screening applicant families for program eligibility [24 CFR 982.307(a)(1)]. The owner is responsible for screening and selection of the family to occupy the owner's unit. At or before PHA approval of the tenancy, the PHA must inform the owner that screening and selection for tenancy is the responsibility of the owner [24 CFR 982.307(a)(2)]. The PHA must provide the owner with the family's current and prior address (as shown in the PHA records); and the name and address (if known to the PHA) of the landlord at the family's current and prior address. [24 CFR 982.307(b)(1)]. The PHA is permitted,but not required,to offer the owner other information in the PHA's possession about the family's tenancy [24 CFR 982.307(b)(2)]. The PHA's policy on providing information to the owner must be included in the family's briefing packet [24 CFR 982.307(b)(3)]. PHA Policy The PHA will not screen applicants for family behavior or suitability for tenancy. The PHA will not provide additional screening information to the owner. ®Copyright 2005 Nan McKay&Associates,Inc. Pa a 9-2 Adminplan I/1/05 Unlimited copies may be made for internal use. g 9-LB. REQUESTING TENANCY APPROVAL [Form HUD-52517] After the family is issued a voucher, the family must locate an eligible unit, with an owner or landlord willing to participate in the voucher program. Once a family finds a suitable unit and the owner is willing to lease the unit under the program,the owner and the family must request the PHA to approve the assisted tenancy in the selected unit. The owner and the family must submit two documents to the PHA: • Completed Request for Tenancy Approval (RTA) —Form HUD-52517 • Copy of the proposed lease, including the HUD-prescribed Tenancy Addendum—Form HUD-52641-A The RTA contains important information about the rental unit selected by the family, including the unit address, number of bedrooms, structure type, year constructed, utilities included in the rent, and the requested beginning date of the lease, necessary for the PHA to determine whether to approve the assisted tenancy in this unit. Owners must certify to the most recent amount of rent charged for the unit and provide an explanation for any difference between the prior rent and the proposed rent. Owners must certify that they are not the parent, child, grandparent, grandchild, sister or brother of any member of the family, unless the PHA has granted a request for reasonable accommodation for a person with disabilities who is a member of the tenant household. For units constructed prior to 1978, owners must either 1)certify that the unit, common areas, and exterior have been found to be free of lead-based paint by a certified inspector; or 2) attach a lead-based paint disclosure statement. ®Copyright 2005 Nan McKay&Associates,Inc. Pa a 9-3 Adminptan I/1/05 Unlimited copies may be made for internal use. g Both the RTA and the proposed lease must be submitted no later than the expiration date stated on the voucher. [HCV GB p.8-15]. PHA Policy The RTA must be signed by both the family and the owner. The owner may submit the RTA on behalf of the family. Completed RTA(including the proposed dwelling lease) must be submitted as hard copies,in-person, by mail, or by fax. The family may not submit, and the PHA will not process, more than one (1) RTA at a time. When the family submits the RTA the PHA will review the RTA for completeness. If the RTA is incomplete (including lack of signature by family, owner, or both), or if the dwelling lease is not submitted with the RTA, the PHA will notify the family and the owner of the deficiencies. Missing information and/or missing documents will only be accepted as hard copies, in-person, by mail, or by fax. The PHA will not accept missing information over the phone. When the family submits the RTA and proposed lease, the PHA will also review the terms of the RTA for consistency with the terms of the proposed lease. If the terms of the RTA are not consistent with the terms of the proposed lease, the PHA will notify the family and the owner of the discrepancies. Corrections to the terms of the RTA and/or the proposed lease will only be accepted as hard copies, in-person, by mail or by fax. The PHA will not accept corrections by phone. Because of the time sensitive nature of the tenancy approval process,the PHA will attempt to communicate with the owner and family by phone, fax, or email. The PHA will use mail when the parties can't be reached by phone, fax, or email. 9-I.C. OWNER PARTICIPATION The PHA does not formally approve an owner to participate in the HCV program. However, there are a number of criteria where the PHA may deny approval of an assisted tenancy based on past owner behavior, conflict of interest, or other owner-related issues. No owner has a right to participate in the HCV program [24 CFR 982.306(e)] See Chapter 13 for a full discussion of owner qualification to participate in the HCV program. ®Copyright 2005 Nan McKay&Associates,Inc. Page 94 Adminplan 1/1/05 Unlimited copies may be made for internal use. 9-I.D.ELIGIBLE UNITS There are a number of criteria that a dwelling unit must meet in order to be eligible for assistance under the voucher program. Generally, a voucher-holder family may choose any available rental dwelling unit on the market in the PHA's jurisdiction. This includes the dwelling unit they are currently occupying. Ineligible Units [24 CFR 982.352(a)] The PHA may not assist a unit under the voucher program if the unit is a public housing or Indian housing unit; a unit receiving project-based assistance under section 8 of the 1937 Act(42 U.S.C. 14370;nursing homes,board and care homes, or facilities providing continual psychiatric, medical, or nursing services; college or other school dormitories; units on the grounds of penal, reformatory, medical, mental, and similar public or private institutions; a unit occupied by its owner or by a person with any interest in the unit. PHA-Owned Units [24 CFR 982.352(b)] Otherwise eligible units that are owned or substantially controlled by the PHA issuing the voucher may also be leased in the voucher program. In order for a PHA-owned unit to be leased under the voucher program,the unit must not be ineligible housing and the PHA must inform the family,both orally and in writing,that the family has the right to select any eligible unit available for lease and that the family is free to select a PHA-owned unit without any pressure or steering by the PHA. PHA Policy The PHA has eligible PHA-owned units available for leasing under the voucher program. The PHA will inform the family of this housing at the time of the briefing. The PHA will also inform the family ,both orally and in writing,that the family has a right to select any eligible unit available for lease and that the family is free to select a PHA-owned unit without any pressure or steering by the PHA Special Housing Types [24 CFR 982 Subpart M] HUD regulations permit,but do not generally require,the PHA to permit families to use voucher assistance in a number of special housing types in accordance with the specific requirements applicable to those programs. These special housing types include single room occupancy (SRO) housing, congregate housing, group home, shared housing, manufactured home space(where the family owns the manufactured home and leases only the space), cooperative housing and homeownership option. See Chapter 15 for specific information and policies on any of these housing types that the PHA has chosen to allow. The regulations do require the PHA to permit use of any special housing type if needed as a reasonable accommodation so that the program is readily accessible to and usable by persons with disabilities. ©Copyright 2005 Nan McKay&Associates,Inc. Page 9-5 Adminplan 1/1/05 Unlimited copies may be made for internal use. Duplicative Assistance [24 CFR 982.352(c)] A family may not receive the benefit of HCV tenant-based assistance while receiving the benefit of any of the following forms of other housing subsidy, for the same unit or for a different unit: • Public or Indian housing assistance; • Other Section 8 assistance (including other tenant-based assistance); • Assistance under former Section 23 of the United States Housing Act of 1937 (before amendment by the Housing and Community Development Act of 1974); • Section 101 rent supplements; • Section 236 rental assistance payments; • Tenant-based assistance under the HOME Program; • Rental assistance payments under Section 521 of the Housing Act of 1949 (a program of the Rural Development Administration); • Any local or State rent subsidy; • Section 202 supportive housing for the elderly; • Section 811 supportive housing for persons with disabilities; (11) Section 202 projects for non-elderly persons with disabilities (Section 162 assistance); or • Any other duplicative federal, State, or local housing subsidy, as determined by HUD. For this purpose, 'housing subsidy' does not include the housing component of a welfare payment, a social security payment received by the family, or a rent reduction because of a tax credit. Housing Quality Standards (HQS) [24 CFR 982.305 and 24 CFR 982.401] In order to be eligible,the dwelling unit must be in decent, safe and sanitary condition. This determination is made using HUD's Housing Quality Standards (HQS) and/or equivalent state or local standards approved by HUD. See Chapter 8 for a full discussion of the HQS standards, as well as the process for HQS inspection at initial lease-up. ®Copyright 2005 Nan McKay&Associates,Inc. Page 9-6 Adminplan 1/1/05 Unlimited copies may be made for internal use. Unit Size In order to be eligible,the dwelling unit must be appropriate for the number of persons in the household. A family must be allowed to lease an otherwise acceptable dwelling unit with fewer bedrooms than the number of bedrooms stated on the voucher issued to the family, provided the unit meets the applicable HQS space requirements [24 CFR 982.402(d)]. The family must be allowed to lease an otherwise acceptable dwelling unit with more bedrooms than the number of bedrooms stated on the voucher issued to the family. See Chapter 5 for a full discussion of subsidy standards. Rent Reasonableness [24 CFR 982.305 and 24 CFR 982.507] In order to be eligible,the dwelling unit must have a reasonable rent. The rent must be reasonable in relation to comparable unassisted units in the area and must not be in excess of rents charged by the owner for comparable, unassisted units on the premises. See Chapter 8 for a full discussion of rent reasonableness and the rent reasonableness determination process. Rent Burden [24 CFR 982.508] Where a family is initially leasing a unit and the gross rent of the unit exceeds the applicable payment standard for the family, the dwelling unit rent must be at a level where the family's share of rent does not exceed 40 percent of the family's monthly adjusted income. See Chapter 6 for a discussion of calculation of gross rent, the use of payment standards, and calculation of family income, family share of rent and HAP. C Copyright 2005 Nan McKay&Associates,Inc. Page 9-7 Adminplan 1/1/05 Unlimited copies may be made for internal use. 9-I.E. LEASE AND TENANCY ADDENDUM The family and the owner must execute and enter into a written dwelling lease for the assisted unit. This written lease is a contract between the tenant family and the owner; the PHA is not a party to this contract. The tenant must have legal capacity to enter a lease under State and local law. 'Legal capacity' means that the tenant is bound by the terms of the lease and may enforce the terms of the lease against the owner [24 CFR 982.308(a)] Lease Form and Tenancy Addendum [24 CFR 982.308] If the owner uses a standard lease form for rental to unassisted tenants in the locality or the premises,the lease must be in such standard form. If the owner does not use a standard lease form for rental to unassisted tenants, the owner may use another form of lease. The HAP contract prescribed by HUD contains the owner's certification that if the owner uses a standard lease form for rental to unassisted tenants, the lease is in such standard form. All provisions in the HUD-required Tenancy Addendum must also be added word-for-word to the owner's standard lease form, for use with the assisted family. The Tenancy Addendum includes the tenancy requirements for the program and the composition of the household as approved by the PHA. As a part of the lease, the tenant shall have the right to enforce the Tenancy Addendum against the owner and the terms of the Tenancy Addendum shall prevail over any other provisions of the lease. PHA Policy The PHA does not provide a model or standard dwelling lease for owners to use in the HCV program. Lease Information [24 CFR 982.308(d)] The assisted dwelling lease must contain all of the required information as listed below: • The names of the owner and the tenant: • The unit rented (address, apartment number, and any other information needed to identify the contract unit) • The term of the lease (initial term and any provisions for renewal) • The amount of the monthly rent to owner • A specification of what utilities and appliances are to be supplied by the owner, and what utilities and appliances are to be supplied by the family C Copyright 2005 Nan McKay&Associates,Inc. Page 9-8 Adminplan 1/1/05 Unlimited copies may be made for internal use. Term of Assisted Tenancy The initial term of the assisted dwelling lease must be for at least one year [24 CFR 982.309]. The initial lease term is also stated in the HAP contract. The HUD program regulations permit the PHA to approve a shorter initial lease term if certain conditions are met. PHA Policy The PHA will not approve an initial lease term of less than one(1) year. During the initial term of the lease, the owner may not raise the rent to owner [24 CFR 982.309]. Any provisions for renewal of the dwelling lease will be stated in the dwelling lease [HCV Guidebook,pg. 8-22]. There are no HUD requirements regarding any renewal extension terms, except that they must be in the dwelling lease if they exist. The PHA may execute the HAP contract even if there is less than one year remaining from the beginning of the initial lease term to the end of the last expiring funding increment under the consolidated ACC. [24 CFR 982.309(b)]. Security Deposit [24 CFR 982.313 (a) and (b)] The owner may collect a security deposit from the tenant. The PHA may prohibit security deposits in excess of private market practice, or in excess of amounts charged by the owner to unassisted tenants. However, if the PHA chooses to do so, language to this effect must be added to Part A of the HAP contract [Form HUD-52641}. PHA Policy The PHA will allow the owner to collect any security deposit amount the owner determines is appropriate. Therefore, no modifications to the HAP contract will be necessary. ©Copyright 2005 Nan McKay&Associates,Inc. Pa a 9-9 Adminplan 1/I/05 Unlimited copies may be made for internal use. g Separate Non-Lease Agreements between Owner and Tenant Owners may not demand or accept any rent payment from the family in excess of the rent to the owner minus the PHA's housing assistance payments to the owner [24 CFR 982.451(b)(4)]. The owner may not charge the tenant extra amounts for items customarily included in rent in the locality, or provided at no additional cost to unsubsidized tenants in the premises [24 CFR 982.510(c)]. PHA Policy The PHA permits owners and families to execute separate, non-lease agreements for services, appliances (other than range and refrigerator) and other items that are not included in the lease. Any items, appliances, or other services that are customarily provided to unassisted families as part of the dwelling lease with those families, or are permanently installed in the dwelling unit must be included in the dwelling lease for the assisted family. These items, appliances or services cannot be placed under a separate non-lease agreement between the owner and family. Side payments for additional rent, or for items,appliances or services customarily provided to unassisted families as part of the dwelling lease for those families, are prohibited. Any items, appliances, or other services that are not customarily provided to unassisted families as part of the dwelling lease with those families, are not permanently installed in the dwelling unit and where the family has the sole option of not utilizing the item, appliance or service, may be included in a separate non-lease agreement between the owner and the family. The family is not liable and cannot be held responsible under the terms of the assisted dwelling lease for any charges pursuant to a separate non-lease agreement between the owner and the family. Non-payment of any charges pursuant to a separate non-lease agreement between the owner and the family cannot be a cause for eviction or termination of tenancy under the terms of the assisted dwelling lease. Separate non-lease agreements that involve additional items, appliances or other services may be considered amenities offered by the owner and may be taken into consideration when determining the reasonableness of the rent for the property. ®Copyright 2005 Nan McKay&Associates,Inc. Page 9-10 Adminplan I/1/05 Unlimited copies may be made for internal use. PHA Review of Lease The PHA will review the dwelling lease for compliance with all applicable requirements. PHA Policy If the dwelling lease is incomplete or incorrect,the PHA will notify the family and the owner of the deficiencies. Missing and corrected lease information will only be accepted as hard copies, in-person, by mail, or by fax. The PHA will not accept missing and corrected information over the phone Because the initial leasing process is time-sensitive,the PHA will attempt to communicate with the owner and family by phone, fax, or email. The PHA will use mail when the parties can't be reached by phone, fax, or email. The PHA is permitted, but is not required,to review the lease to determine if the lease complies with State and local law and is permitted to decline to approve the tenancy if the PHA determines that the lease does not comply with State or local law [24 CFR 982.308(c)] PHA Policy The PHA will not review the owner's lease for compliance with state/local law. ®Copyright 2005 Nan McKay&Associates,Inc. Page 9-11 Adminplan 1/1/05 Unlimited copies may be made for internal use. • 9-I.F. TENANCY APPROVAL [24 CFR 982.305] After receiving the family's Request for Tenancy Approval,with proposed dwelling lease, the PHA must promptly notify the family and owner whether the assisted tenancy is approved. Prior to approving the assisted tenancy and execution of a HAP contract, the PHA must ensure that all required actions and determinations, discussed in Part I of this chapter have been completed. These actions include ensuring that the unit is eligible; the unit has been inspected by the PHA and meets the Housing Quality Standards (HQS);the lease offered by the owner is approvable and includes the required Tenancy Addendum; the rent to be charged by the owner for the unit must is reasonable; where the family is initially leasing a unit and the gross rent of the unit exceeds the applicable payment standard for the family,the share of rent to be paid by the family does not exceed 40 percent of the family's monthly adjusted income [24 CFR 982.305(a)];the owner is an eligible owner, not disapproved by the PHA, with no conflicts of interest [24 CFR 982.306]; the family and the owner have executed the lease, including the Tenancy Addendum, and the lead-based paint disclosure information [24 CFR 982.305(b)]. PHA Policy The PHA will complete its determination within 10 business days of receiving all required information. If the terms of the RTA/proposed lease are changed for any reason, including but not limited to negotiation with the PHA,the PHA will obtain corrected copies of the RTA and proposed lease, signed by the family and the owner. Corrections to the RTA/proposed lease will only be accepted as hard copies, in- person, by mail, or by fax. The PHA will not accept corrections over the phone. If the PHA determines that the tenancy cannot be approved for any reason, the owner and the family will be notified in writing and given the opportunity to address any reasons for disapproval. The PHA will instruct the owner and family of the steps that are necessary to approve the tenancy. Where the tenancy is not approvable because the unit is not approvable,the family must continue to search for eligible housing within the timeframe of the issued voucher. If the tenancy is not approvable due to rent affordability(including rent burden and rent reasonableness), the PHA will attempt to negotiate the rent with the owner. If a new, approvable rent is negotiated, the tenancy will be approved. If the owner is not willing to negotiate an approvable rent,the family must continue to search for eligible housing within the timeframe of the issued voucher. ®Copyright 2005 Nan McKay&Associates,Inc. Page 9-12 Adminplan 1/1/05 Unlimited copies may be made for internal use. 9-I.G. HAP CONTRACT EXECUTION [24 CFR 982.305] The HAP contract is a written agreement between the PHA and the owner of the dwelling unit occupied by a housing choice voucher assisted family. Under the HAP contract,the PHA agrees to make housing assistance payments to the owner on behalf of a specific family occupying a specific unit and obliges the owner to comply with all program requirements. The HAP contract format is prescribed by HUD. If the PHA has given approval for the family of the assisted tenancy, the owner and the PHA execute the HAP contract. The term of the HAP contract must be the same as the term of the lease [24 CFR 982.451(a)(2)]. The PHA is permitted to execute a HAP contract even if the funding currently available does not extend for the full term of the HAP contract. The PHA must make a best effort to ensure that the HAP contract is executed before the beginning of the lease term. Regardless, the HAP contract must be executed no later than 60 calendar days from the beginning of the lease term. The PHA may not pay any housing assistance payment to the owner until the HAP contract has been executed. If the HAP contract is executed during the period of 60 calendar days from the beginning of the lease term, the PHA will pay housing assistance payments after execution of the HAP contract(in accordance with the terms of the HAP contract), to cover the portion of the lease term before execution of the HAP contract(a maximum of 60 days). Any HAP contract executed after the 60 day period is void, and the PHA may not pay any housing assistance payment to the owner. PHA Policy The owner and the assisted family will execute the dwelling lease and the owner must provide a copy to the PHA. The PHA will ensure that both the owner and the assisted family receive copies of the dwelling lease. The owner and the PHA will execute the HAP contract. The PHA will not execute the HAP contract until the owner has submitted IRS form W-9. The PHA will ensure that the owner receives a copy of the executed HAP contract. See Chapter 13 for a discussion of the HAP contract and contract provisions. ®Copyright 2005 Nan McKay&Associates,Inc. Pa a 9-13 Adminplan 1/1/05 Unlimited copies may be made for internal use. g 9-I.11. CHANGES IN LEASE OR RENT [24 CFR 982.308] If the tenant and the owner agree to any changes in the lease, such changes must be in writing, and the owner must immediately give the PHA a copy of such changes. The lease, including any changes,must remain in accordance with the requirements of this chapter. Generally,PHA approval of tenancy and execution of a new HAP contract are not required for changes in the lease. However, under certain circumstances, voucher assistance in the unit shall not be continued unless the PHA has approved a new tenancy in accordance with program requirements and has executed a new HAP contract with the owner. These circumstances include: • Changes in lease requirements governing tenant or owner responsibilities for utilities or appliances • Changes in lease provisions governing the term of the lease • The family moves to a new unit, even if the unit is in the same building or complex In these cases, if the HCV assistance is to continue, the family must submit a new Request for Tenancy Approval (RTA) along with a new dwelling lease containing the altered terms. A new tenancy must then be approved in accordance with this chapter. Where the owner is changing the amount of rent,the owner must notify the PHA of any changes in the amount of the rent to owner at least 30 days before any such changes go into effect [24 ,CFR 982.308(g)(4)]. The PHA will agree to such an increase only if the amount of the rent to owner is considered reasonable according to the rent reasonableness standards discussed in Chapter 8. If the requested rent is not found to be reasonable, the owner must either reduce the requested rent increase, or give the family notice in accordance with the terms of the lease. No rent increase is permitted during the initial term of the lease [24 CFR 982.309(a)(3)]. PHA Policy Where the owner is requesting a rent increase, the PHA will determine whether the requested increase is reasonable within 10 business days of receiving the request from the owner. The owner will be notified of the determination in writing. Rent increases will go into effect on the first of the month following the 60 day period after the owner notifies the PHA of the rent change or on the date specified by the owner, whichever is later. ®Copyright 2005 Nan McKay&Associates,Inc. Pa Adminplan 1/1/05 a 9-14 Unlimited copies may be made for internal use. g Chapter 10 MOVING WITH CONTINUED ASSISTANCE AND PORTABILITY INTRODUCTION Freedom of choice is a hallmark of the housing choice voucher(HCV)program. In general, therefore, HUD regulations impose few restrictions on where families may live or move with HCV assistance. This chapter sets forth HUD regulations and PHA policies governing moves within or outside the PHA's jurisdiction in two parts: Part I: Moving with Continued Assistance. This part covers the general rules that apply to all moves by a family assisted under the PHA's HCV program, whether the family moves to another unit within the PHA's jurisdiction or to a unit outside the PHA's jurisdiction under portability. Part II: Portability. This part covers the special rules that apply to moves by a family under portability, whether the family moves out of or into the PHA's jurisdiction. This part also covers the special responsibilities that the PHA has under portability regulations and procedures. PART I. MOVING WITH CONTINUED ASSISTANCE 10-LA. ALLOWABLE MOVES HUD regulations list five conditions under which an assisted family is allowed to move to a new unit with continued assistance. Permission to move is subject to the restrictions set forth in section 10-I.B. • The family has a right to terminate the lease on notice to the owner (for the owner's breach or otherwise)and has given a notice of termination to the owner in accordance with the lease [24 CFR 982.314(b)(3)]. If the family terminates the lease on notice to the owner, the family must give the PHA a copy of the notice at the same time [24 CFR 982.314(d)(1)]. • The lease for the family's unit has been terminated by mutual agreement of the owner and the family [24 CFR 982.314(b)(1)(ii)]. PHA Policy If the family and the owner mutually agree to terminate the lease for the family's unit, the family must give the PHA a copy of the termination agreement. ©Copyright 2005 Nan McKay&Associates,Inc. Page 10-1 Adminplan 9/1/05 Unlimited copies may be made for internal use. • The owner has given the family a notice to vacate, has commenced an action to evict the family, or has obtained a court judgment or other process allowing the owner to evict the family [24 CFR 982.314(b)(2)]. The family must give the PHA a copy of any owner eviction notice [24 CFR 982.551(g)]. • The PHA has terminated the assisted lease for the family's unit for the owner's breach [24 CFR 982.314(b)(1)(i)]. • The PHA determines that the family's current unit does not meet the HQS space standards because of an increase in family size or a change in family composition. In such cases, the PHA must issue the family a new voucher, and the family and PHA must try to find an acceptable unit as soon as possible. If an acceptable unit is available for the family, the PHA must terminate the HAP contract for the family's old unit in accordance with the HAP contract terms and must notify both the family and the owner of the termination. The HAP contract terminates at the end of the calendar month that follows the calendar month in which the PHA gives notice to the owner. [24 CFR 982.403(a) and (c)] ©Copyright 2005 Nan McKay&Associates,Inc. Page 10-2 Adminplan 9/1/05 Unlimited copies may be made for internal use. 10-I.B. RESTRICTIONS ON MOVES A family's right to move is generally contingent upon the family's compliance with program requirements [24 CFR 982.1(b)(2)]. HUD specifies two conditions under which a PHA may deny a family permission to move and two ways in which a PHA may restrict moves by a family. Denial of Moves HUD regulations permit the PHA to deny a family permission to move under the following conditions: Insufficient Funding The PHA may deny a family permission to move if the PHA does not have sufficient funding for continued assistance [24 CFR 982.314(e)(1)]. PHA Policy The PHA will deny a family permission to move on grounds that the PHA does not have sufficient funding for continued assistance if(a)the move is initiated by the family,not the owner or the PHA; (b)the PHA can demonstrate that the move will, in fact, result in higher subsidy costs; and(c)the PHA can demonstrate, in accordance with the policies in Part VIII of Chapter 16,that it does not have sufficient funding in its annual budget to accommodate the higher subsidy costs. This policy applies to moves within the PHA's jurisdiction as well as to moves outside it under portability. Grounds for Denial or Termination of Assistance The PHA has grounds for denying or terminating the family's assistance [24 CFR 982.314(e)(2)]. PHA Policy If the PHA has grounds for denying or terminating a family's assistance,the PHA will act on those grounds in accordance with the regulations and policies set forth in Chapters 3 and 12, respectively. In general, it will not deny a family permission to move for this reason; however, it retains the discretion to do so under special circumstances. ®Copyright 2005 Nan McKay&Associates,Inc. Page 10-3 Adminplan 9/1/05 Unlimited copies may be made for internal use. Restrictions on Elective Moves [24 CFR 982.314(c)] HUD regulations permit the PHA to prohibit any elective move by a participant family during the family's initial lease term. They also permit the PHA to prohibit more than one elective move by a participant family during any 12-month period. PHA Policy The PHA will deny a family permission to make an elective move during the family's initial lease term. This policy applies to moves within the PHA's jurisdiction or outside it under portability. The PHA will also deny a family permission to make more than one elective move during any 12-month period. This policy applies to all assisted families residing in the PHA's jurisdiction. The PHA will consider exceptions to these policies for the following reasons: to protect the health or safety of a family member(e.g., lead-based paint hazards, domestic violence, witness protection programs),to accommodate a change in family circumstances (e.g., new employment, school attendance in a distant area), or to address an emergency situation over which a family has no control. In addition, the PHA will allow exceptions to these policies for purposes of reasonable accommodation of a family member who is a person with disabilities (see Chapter 2). ®Copyright 2005 Nan McKay&Associates,Inc. Page 10-4 Adminplan 9/1/05 Unlimited copies may be made for internal use. 10-I.C. MOVING PROCESS Notification If a family wishes to move to a new unit, the family must notify the PHA and the owner before moving out of the old unit or terminating the lease on notice to the owner [24 CFR 982.314(d)(2)]. If the family wishes to move to a unit outside the PHA's jurisdiction under portability, the notice to the PHA must specify the area where the family wishes to move [24 CFR 982.314(d)(2),Notice PIH 2004-12]. The notices must be in writing [24 CFR 982.5]. Approval PHA Policy Upon receipt of a family's notification that it wishes to move,the PHA will determine whether the move is approvable in accordance with the regulations and policies set forth in sections 10-I.A and 10-I.B. The PHA will notify the family in writing of its determination within 10 business days following receipt of the family's notification. Reexamination of Family Income and Composition PHA Policy For families approved to move to a new unit within the PHA's jurisdiction,the PHA will perform a new annual reexamination in accordance with the policies set forth in Chapter 11 of this plan. For families moving into or families approved to move out of the PHA's jurisdiction under portability, the PHA will follow the policies set forth in Part II of this chapter. Voucher Issuance and Briefing PHA Policy For families approved to move to a new unit within the PHA's jurisdiction,the PHA will issue a new voucher within 10 business days of the PHA's written approval to move. No briefing is required for these families. The PHA will follow the policies set forth in Chapter 5 on voucher term, extension, and expiration. If a family does not locate a new unit within the term of the voucher and any extensions,the family may remain in its current unit with continued voucher assistance if the owner agrees and the PHA approves. Otherwise, the family will lose its assistance. For families moving into or families approved to move out of the PHA's jurisdiction under portability,the PHA will follow the policies set forth in Part II of this chapter. ®Copyright 2005 Nan McKay&Associates,Inc. Page 10-5 Adminplan 9/1/05 Unlimited copies may be made for internal use. Housing Assistance Payments [24 CFR 982.311(d)] When a family moves out of an assisted unit, the PHA may not make any housing assistance payment to the owner for any month after the month the family moves out. The owner may keep the housing assistance payment for the month when the family moves out of the unit. If a participant family moves from an assisted unit with continued tenant-based assistance, the term of the assisted lease for the new assisted unit may begin during the month the family moves out of the first assisted unit. Overlap of the last housing assistance payment(for the month when the family moves out of the old unit) and the first assistance payment for the new unit, is not considered to constitutea duplicative housing subsidy. ®Copyright 2005 Nan McKay&Associates,Inc. Page 10-6 Adminplan 9/1/05 Unlimited copies may be made for internal use. PART II: PORTABILITY 10-II.A. OVERVIEW Within the limitations of the regulations and this plan, a participant family or an applicant family that has been issued a voucher has the right to use tenant-based voucher assistance to lease a unit anywhere in the United States providing that the unit is located within the jurisdiction of a PHA administering a tenant-based voucher program [24 CFR 982.353(b)]. The process by which a family obtains a voucher from one PHA and uses it to lease a unit in the jurisdiction of another PHA is known as portability. The first PHA is called the initial PHA. The second is called the receiving PHA. The.receiving PHA has the option of administering the family's voucher for the initial PHA or absorbing the family into its own program. Under the first option,the receiving PHA bills the initial PHA for the family's housing assistance payments and the fees for administering the family's voucher. Under the second option,the receiving PHA pays for the family's assistance out of its own program funds, and the initial PHA has no further relationship with the family. The same PHA commonly acts as the initial PHA for some families and as the receiving PHA for others. Each role involves different responsibilities. The PHA will follow the rules and policies in section 10-II.B when it is acting as the initial PHA for a family. It will follow the rules and policies in section 10-II.C when it is acting as the receiving PHA for a family. ©Copyright 2005 Nan McKay&Associates,Inc. Page 10-7 Adminplan 9/1/05 Unlimited copies may be made for internal use. 10-II.B. INITIAL PHA ROLE Allowable Moves under Portability A family may move with voucher assistance only to an area where there is at least one PHA administering a voucher program [24 CFR 982.353(b)]. If there is more than one PHA in the area, the initial PHA may choose the receiving PHA [24 CFR 982.355(b)]. Applicant families that have been issued vouchers as well as participant families may qualify to lease a unit outside the PHA's jurisdiction under portability. The initial PHA, in accordance with HUD regulations and PHA policy, determines whether a family qualifies. Applicant Families Under HUD regulations, most applicant families qualify to lease a unit outside the PHA's jurisdiction under portability. However, HUD gives the PHA discretion to deny a portability move by an applicant family for the same two reasons that it may deny any move by a participant family: insufficient finding and grounds for denial or termination of assistance. PHA Policy In determining whether or not to deny an applicant family permission to move under portability because the PHA lacks sufficient funding or has grounds for denying assistance to the family, the initial PHA will follow the policies established in section 10- I.B of this chapter. In addition, the PHA may establish a policy denying the right to portability to nonresident applicants during the first 12 months after they are admitted to the program [24 CFR 982.353(c)]. PHA Policy If neither the head of household nor the spouse/cohead of an applicant family had a domicile (legal residence) in the PHA's jurisdiction at the time the family's application for assistance was submitted, the family must live in the PHA's jurisdiction with voucher assistance for at least 12 months before requesting portability. The PHA will consider exceptions to this policy for purposes of reasonable accommodation(see Chapter 2). However, any exception to this policy is subject to the approval of the receiving PHA [24 CFR 982.353(c)(3)]. Participant Families The Initial PHA must not provide portable assistance for a participant if a family has moved out of its assisted unit in violation of the lease. [24 CFR 982.3539b).] PHA Policy The PHA will determine whether a participant family may move out of the PHA's jurisdiction with continued assistance in accordance with the regulations and policies set forth here and in sections 10-I.A and 10-I.B of this chapter. The PHA will notify the family of its determination in accordance with the approval policy set forth in section 10- I.C of this chapter. C Copyright 2005 Nan McKay&Associates,Inc. Page 10-8 Adminplan 9/1/05 Unlimited copies may be made for internal use. Determining Income Eligibility Applicant Families An applicant family may lease a unit in a particular area under portability only if the family is income eligible for admission to the voucher program in that area [24 CFR 982.353(d)(3)]. The family must specify the area to which the family wishes to move [Notice 2004-12]. The initial PHA is responsible for determining whether the family is income eligible in the area to which the family wishes to move [24 CFR 982.355(c)(1)]. If the applicant family is not income eligible in that area, the PHA must inform the family that it may not move there and receive voucher assistance [Notice PIH 2004-12]. Participant Families The income eligibility of a participant family is not redetermined if the family moves to a new jurisdiction under portability [24 CFR 982.353(d)(2), 24 CFR 982.355(c)(1)]. Reexamination of Family Income and Composition No new reexamination of family income and composition is required for an applicant family. PHA Policy For a participant family approved to move out of its jurisdiction under portability, the PHA generally will conduct a reexamination of family income and composition only if the family's annual reexamination must be completed on or before the initial billing deadline specified on form HUD-52665, Family Portability Information. The PHA will make any exceptions to this policy necessary to remain in compliance with HUD regulations. Briefing The regulations and policies on briefings set forth in Chapter 5 of this plan require the PHA to provide information on portability to all applicant families that qualify to lease a unit outside the PHA's jurisdiction under the portability procedures. Therefore, no special briefing is required for these families. PHA Policy No formal briefing will be required for a participant family wishing to move outside the PHA's jurisdiction under portability. However,the PHA will provide the family with the same oral and written explanation of portability that it provides to applicant families selected for admission to the program(see Chapter 5). The PHA will provide the name, address, and phone of the contact for the PHA in the jurisdiction to which they wish to move. The PHA will advise the family that they will be under the RHA's policies and procedures, including subsidy standards and voucher extension policies. ©Copyright 2005 Nan McKay&Associates,Inc. Page 10-9 Adminplan 9/1/05 Unlimited copies may be made for internal use. Voucher Issuance and Term An applicant family has no right to portability until after the family has been issued a voucher [24 CFR 982.353(b)]. In issuing vouchers to applicant families, the PHA will follow the regulations and procedures set forth in Chapter 5. A new voucher is not required for portability purposes. PHA Policy For families approved to move under portability, the PHA will issue a new voucher within 10 business days of the PHA's written approval to move. The initial term of the voucher will be 60 days. Voucher Extensions and Expiration PHA Policy The PHA will approve no extensions to a voucher issued to an applicant or participant family porting out of the PHA's jurisdiction except under the following circumstances: (a) the initial term of the voucher will expire before the portable family will be issued a voucher by the receiving PHA, (b)the family decides to return to the initial PHA's jurisdiction and search for a unit there, or(c) the family decides to search for a unit in a third PHA's jurisdiction. In such cases, the policies on voucher extensions set forth in Chapter 5, section 5-II.E, of this plan will apply, including the requirement that the family apply for an extension in writing prior to the expiration of the initial voucher term. To receive or continue receiving assistance under the initial PHA's voucher program,a family that moves to another PHA's jurisdiction under portability must be under HAP contract in the receiving PHA's jurisdiction within 60 days following the expiration date of the initial PHA's voucher term(including any extensions). (See below under"Initial Billing Deadline" for one exception to this policy.) C Copyright 2005 Nan McKay&Associates,Inc. Page 10-10 Adminplan 9/1/05 Unlimited copies may be made for internal use. Initial Contact with the Receiving PHA After approving a family's request to move under portability,the initial PHA must promptly notify the receiving PHA to expect the family [24 CFR 982.355(c)(2)]. This means that the initial PHA must contact the receiving PHA directly on the family's behalf[Notice PIH 2004- 12]. The initial PHA must also advise the family how to contact and request assistance from the receiving PHA [24 CFR 982.355(c)(2)]. PHA Policy Because the portability process is time-sensitive, the PHA will notify the receiving PHA by phone, fax, or e-mail to expect the family. The initial PHA will also ask the receiving PHA to provide any information the family may need upon arrival, including the name, fax, email and telephone number of the staff person responsible for business with incoming portable families and procedures related to appointments for voucher issuance. The PHA will pass this information along to the family. The PHA will also ask for the name, address, telephone number, fax and email of the person responsible for processing the billing information. Sending Documentation to the Receiving PHA The initial PHA is required to send the receiving PHA the following documents: • Form HUD-52665, Family Portability Information, with Part I filled out [Notice PIH 2004- 12] • A copy of the family's voucher [Notice PIH 2004-12] • A copy of the family's most recent form HUD-50058, Family Report, or, if necessary in the case of an applicant family, family and income information in a format similar to that of form HUD-50058 [24 CFR 982.355(c)(4),Notice PIH 2004-12] • Copies of the income verifications backing up the form-HUD-50058 [24 CFR 982.355(c)(4), Notice PIH 2004-12] PHA Policy In addition to these documents, the PHA will provide the following information, if available, to the receiving PHA: Social security numbers (SSNs) Documentation of SSNs for all family members age 6 and over Documentation of legal identity Documentation of citizenship or eligible immigration status Documentation of participation in the earned income disallowance (EID) benefit Documentation of participation in a family self-sufficiency (FSS)program The PHA will notify the family in writing regarding any information provided to the receiving PHA [HCV GB,p. 13-3]. ©Copyright 2005 Nan McKay&Associates,Inc. Page 10-11 Adminplan 9/1/05 Unlimited copies may be made for internal use. Initial Billing Deadline [Notice PIH 2004-12] When the initial PHA sends form HUD-52665 to the receiving PHA, it specifies in Part I the deadline by which it must receive the initial billing notice from the receiving PHA. This deadline is 60 days following the expiration date of the voucher issued to the family by the initial PHA. If the initial PHA does not receive a billing notice by the deadline and does not intend to honor a late billing submission, it must contact the receiving PHA to determine the status of the family. If the receiving PHA reports that the family is not yet under HAP contract, the initial PHA may refuse to accept a late billing submission. If the receiving PHA reports that the family is under HAP contract and the receiving PHA cannot absorb the family,the initial PHA must accept a late billing submission; however, it may report to HUD the receiving PHA's failure to comply with the deadline. PHA Policy If the PHA has not received an initial billing notice from the receiving PHA by the deadline specified on form HUD-52665, it will contact the receiving PHA by phone, fax, or e-mail on the next business day. If the PHA reports that the family is not yet under HAP contract, the PHA will inform the receiving PHA that it will not honor a late billing submission and will return any subsequent billings that it receives on behalf of the family. The PHA will send the receiving PHA a written confirmation of its decision by mail. The PHA will allow an exception to this policy if the family includes a person with disabilities and the late billing is a result of a reasonable accommodation granted to the family by the receiving PHA. Monthly Billing Payments [24 CFR 982.355(e), Notice PIH 2004-12] If the receiving PHA is administering the family's voucher, the initial PHA is responsible for making billing payments in a timely manner. The first billing amount is due within 30 calendar days after the initial PHA receives Part II of form HUD-52665 from the receiving PHA. Subsequent payments must be received by the receiving PHA no later than the fifth business day of each month. The payments must be provided in a form and manner that the receiving PHA is able and willing to accept. The initial PHA may not terminate or delay making payments under existing portability billing arrangements as a result of overleasing or funding shortfalls. The PHA must manage its tenant- based program in a manner that ensures that it has the financial ability to provide assistance for families that move out of its jurisdiction under portability and are not absorbed by receiving PHAs as well as for families that remain within its jurisdiction. PHA Policy The initial PHA will utilize check by mail. ©Copyright 2005 Nan McKay&Associates,Inc. Page 10-12 Adminplan 9/1/05 Unlimited copies may be made for internal use. Annual Updates of Form HUD-50058 If the initial PHA is being billed on behalf of a portable family, it should receive an updated form HUD-50058 each year from the receiving PHA. If the initial PHA fails to receive an updated 50058 by the family's annual reexamination date,the initial PHA should contact the receiving PHA to verify the status of the family. Subsequent Family Moves Within the Receiving PHA's Jurisdiction[24 CFR 314(e)(1), Notice PIH 2005-11 The initial PHA has the authority to deny subsequent moves by portable families whom it is assisting under portability billing arrangements if it does not have sufficient funding for continued assistance. PHA Policy If the PHA determines that it must deny moves on the grounds that it lacks sufficient funding (see section 10-I.B), it will notify all receiving PHAs with which it has entered into portability billing arrangements that they,too, must deny moves to higher cost units by portable families from the PHA's jurisdiction. The PHA will allow exceptions to this policy for purposes of reasonable accommodation of a family member who is a person with disabilities. Outside the Receiving PHA's Jurisdiction[Notice PIH 2004-12] If the initial PHA is assisting a portable family under a billing arrangement and the family subsequently decides to move out of the receiving PHA's jurisdiction,the initial PHA is responsible for issuing the family a voucher while the family is either being assisted or has a voucher from the receiving PHA and, if the family wishes to port to another jurisdiction, sending form HUD-52665 and supporting documentation to the new receiving PHA. Any extensions of the initial PHA voucher necessary to allow the family additional search-time to return to the initial PHA's jurisdiction or to move to another jurisdiction would be at the discretion of the initial PHA. Denial or Termination of Assistance [24 CFR 982.355(c)(9)] If the initial PHA has grounds for denying or terminating assistance for a portable family that has not been absorbed by the receiving PHA, the initial PHA may act on those grounds at any time. (For PHA policies on denial and termination, see Chapters 3 and 12, respectively.) ®Copyright 2005 Nan McKay&Associates,Inc. Page 10-13 Adminplan 9/1/05 Unlimited copies may be made for internal use. 10-II.C. RECEIVING PHA ROLE If a family has a right to lease a unit in the receiving PHA's jurisdiction under portability, the receiving PHA must provide assistance for the family [24 CFR 982.355O0)]. The receiving PHA's procedures and preferences for selection among eligible applicants do not apply, and the receiving PHA's waiting list is not used [24 CFR 982.355O0)]. However, the family's unit, or voucher, size is determined in accordance with the subsidy standards of the receiving PHA [24 CFR 982.355(7)], and the amount of the family's housing assistance payment is determined in the same manner as for other families in the receiving PHA's voucher program [24 CFR 982.355(e)(2)]. Initial Contact with Family When a family moves into the PHA's jurisdiction under portability, the family is responsible for promptly contacting the PHA and complying with the PHA's procedures for incoming portable families [24 CFR 982.355(c)(3)]. If the voucher issued to the family by the initial PHA has expired, the receiving PHA does not process the family's paperwork but instead refers the family back to the initial PHA [Notice PIH 2004-12]. When a portable family requests assistance from the receiving PHA, the receiving PHA must promptly inform the initial PHA whether the receiving PHA will bill the initial PHA for assistance on behalf of the portable family or will absorb the family into its own program [24 CFR 982.355(c)(5)]. If the PHA initially bills the initial PHA for the family's assistance, it may later decide to absorb the family into its own program [Notice PIH 2004-12]. (See later under "Absorbing a Portable Family"for more on this topic.) PHA Policy Within 10 business days after a portable family requests assistance, the receiving PHA will notify the initial PHA whether it intends to bill the receiving PHA on behalf of the portable family or absorb the family into its own program. If for any reason the receiving PHA refuses to process or provide assistance to a family under the portability procedures, the family must be given the opportunity for an informal review or hearing [Notice PIH 2004-12]. (For more on this topic, see later under"Denial or Termination of Assistance.") ®Copyright 2005 Nan McKay&Associates,Inc. Page 10-14 Adminplan 9/I/05 Unlimited copies may be made for internal use. Briefing HUD allows the receiving PHA to require a briefing for an incoming portable family as long as the requirement does not unduly delay the family's search [Notice PIH 2004-12]. PHA Policy The PHA will not require the family to attend a briefing. The PHA will provide the family with a briefing packet(as described in Chapter 5) and, in an individual briefing, will orally inform the family about the PHA's payment and subsidy standards,procedures for requesting approval of a unit, the unit inspection process, and the leasing process. The PHA will suggest that the family attend a full briefing at a later date. Income Eligibility and Reexamination HUD allows the receiving PHA to conduct its own income reexamination of a portable family [24 CFR 982.355(c)(4)]. However,the receiving PHA may not delay voucher issuance or unit approval until the reexamination process is complete unless the reexamination is necessary to determine that an applicant family is income eligible for admission to the program in the area where the family wishes to lease a unit [Notice PIH 2004-12, 24 CFR 982.201(b)(4)]. The receiving PHA does not redetermine income eligibility for a portable family that was already receiving assistance in the initial PHA's voucher program [24 CFR 982.355(c)(1)]. PHA Policy For any family moving into its jurisdiction under portability, the PHA will conduct a new reexamination of family income and composition. However, the PHA will not delay issuing the family a voucher for this reason. Nor will the PHA delay approving a unit for the family until the reexamination process is complete unless the family is an applicant and the PHA cannot otherwise confirm that the family is income eligible for admission to the program in the area where the unit is located. In conducting its own reexamination, the PHA will rely upon any verifications provided by the initial PHA to the extent that they (a) accurately reflect the family's current circumstances and(b) were obtained within the last 120 days. Any new information may be verified by documents provided by the family and adjusted, if necessary, when third party verification is received. ®Copyright 2005 Nan McKay&Associates,Inc. Page 10-15 Adminplan 9/1/05 Unlimited copies may be made for internal use, Voucher Issuance When a family moves into its jurisdiction under portability, the receiving PHA is required to issue the family a voucher [24 CFR 982.355(b)(6)]. The family must submit a request for tenancy approval to the receiving PHA during the term of the receiving PHA's voucher [24 CFR 982.355(c)(6)]. Timing of Voucher Issuance HUD expects the receiving PHA to issue the voucher within two weeks after receiving the family's paperwork from the initial PHA if the information is in order, the family has contacted the receiving PHA, and the family complies with the receiving PHA's procedures [Notice PIH 2004-12]. PHA Policy When a family ports into its jurisdiction,the PHA will issue the family a voucher based on the paperwork provided by the initial PHA unless the family's paperwork from the initial PHA is incomplete, the family's voucher from the initial PHA has expired or the family does not comply with the PHA's procedures. The PHA will update the family's information when verification has been completed. Voucher Term The term of the receiving PHA's voucher may not expire before the term of the initial PHA's voucher [24 CFR 982.355(c)(6)]. PHA Policy The receiving PHA's voucher will expire on the same date as the initial PHA's voucher. Voucher Extensions[24 CFR 982.355(c)(6), Notice 2004-12/ • The receiving PHA may provide additional search time to the family beyond the expiration date of the initial PHA's voucher; however, if it does so, it must inform the initial PHA of the extension. It must also bear in mind the billing deadline provided by the initial PHA. Unless willing and able to absorb the family, the receiving PHA should ensure that any voucher expiration date would leave sufficient time to process a request for tenancy approval, execute a HAP contract, and deliver the initial billing to the initial PHA. PHA Policy The PHA generally will not extend the term of the voucher that it issues to an incoming portable family unless the PHA plans to absorb the family into its own program, in which case it will follow the policies on voucher extension set forth in section 5-II.E. The PI-Lk will consider an exception to this policy as a reasonable accommodation to a person with disabilities (see Chapter 2). ®Copyright 2005 Nan McKay&Associates,Inc. Page 10-16 Adminplan 9/1/05 Unlimited copies may be made for internal use. Notifying the Initial PHA The receiving PHA must promptly notify the initial PHA if the family has leased an eligible unit under the program or if the family fails to submit a request for tenancy approval for an eligible unit within the term of the receiving PHA's voucher [24 CFR 982.355(c)(8)]. The receiving PHA is required to use Part II of form HUD-52665, Family Portability Information, for this purpose [24 CFR 982.355(e)(5),Notice PIH 2004-12]. (For more on this topic and the deadline for notification, see below under"Administering a Portable Family's Voucher,") If an incoming portable family ultimately decides not to lease in the jurisdiction of the receiving PHA but instead wishes to return to the initial PHA's jurisdiction or to search in another jurisdiction, the receiving PHA must refer the family back to the initial PHA. In such a case the voucher of record for the family is once again the voucher originally issued by the initial PHA. Any extension of search time provided by the receiving PHA's voucher is only valid for the family's search in the receiving PHA's jurisdiction. [Notice PIH 2004-12] Administering a Portable Family's Voucher Initial Billing Deadline If a portable family's search for a unit is successful and the receiving PHA intends to administer the family's voucher, the receiving PHA must submit its initial billing notice (Part II of form HUD-52665) (a) no later than 10 business days following the date the receiving PHA executes a HAP contract on behalf of the family and (b) in time that the notice will be received no later than 60 days following the expiration date of the family's voucher issued by the initial PHA [Notice PIH 2004-12]. A copy of the family's form HUD-50058, Family Report, completed by the receiving PHA must be attached to the initial billing notice. The receiving PHA may send these documents by mail, fax, or e-mail. PHA Policy The PHA will send its initial billing notice by fax or e-mail, if necessary,to meet the billing deadline but will also send the notice by regular mail. If the receiving PHA fails to send the initial billing within 10 business days following the date the HAP contract is executed, it is required to absorb the family into its own program unless (a) the initial PHA is willing to accept the late submission or(b)HUD requires the initial PHA to honor the late submission(e.g., because the receiving PHA is overleased) [Notice PIH 2004-12]. ®Copyright 2005 Nan McKay&Associates,Inc. Page 10-17 Adminplan 9/1/05 Unlimited copies may be made for internal use. Ongoing Notification Responsibilities[Notice PIH 2004-12, HUD-526651 Annual Reexamination. The receiving PHA must send the initial PHA a copy of a portable family's updated form HUD-50058 after each annual reexamination for the duration of time the receiving PHA is billing the initial PHA on behalf of the family, regardless of whether there is a change in the billing amount. PHA Policy The PHA will send a copy of the updated HUD-50058 by regular mail at the same time the PHA and owner are notified of the reexamination results. • Change in Billing Amount. The receiving PHA is required to notify the initial PHA, using form HUD-52665, of any change in the billing amount for the family as a result of: • A change in the HAP amount(because of a reexamination, a change in the applicable payment standard, a move to another unit, etc.) • An abatement or subsequent resumption of the HAP payments • Termination of the HAP contract • Payment of a damage/vacancy loss claim for the family • Termination of the family from the program The timing of the notice of the change in the billing amount should correspond with the notification to the owner and the family in order to provide the initial PHA with advance notice of the change. Under no circumstances should the notification be later than 10 business days following the effective date of the change in the billing amount. Late Payments[Notice PIH 2004-12J If the initial PHA fails to make a monthly payment for a portable family by the fifth business day of the month, the receiving PHA must promptly notify the initial PHA in writing of the deficiency. The notice must identify the family, the amount of the billing payment, the date the billing payment was due, and the date the billing payment was received (if it arrived late). The receiving PHA must send a copy of the notification to the Office of Public Housing(OPH) in the HUD area office with jurisdiction over the receiving PHA. If the initial PHA fails to correct the problem by the second month following the notification,the receiving PHA may request by memorandum to the director of the OPH with jurisdiction over the receiving PHA that HUD transfer the unit in question. A copy of the initial notification and any subsequent correspondence between the PHAs on the matter must be attached. The receiving PHA must send a copy of the memorandum to the initial PHA. If the OPH decides to grant the transfer, the billing arrangement on behalf of the family ceases with the transfer, but the initial PHA is still responsible for any outstanding payments due to the receiving PHA. ®Copyright 2005 Nan McKay&Associates,Inc. Page 10-18 Adminplan 9/1/05 Unlimited copies may be made for internal use. Overpayments[Notice PIH 2004-121 In all cases where the receiving PHA has received billing payments for billing arrangements no longer in effect, the receiving PHA is responsible for returning the full amount of the overpayment(including the portion provided for administrative fees)to the initial PHA. In the event that HUD determines billing payments have continued for at least three months because the receiving PHA failed to notify the initial PHA that the billing arrangement was terminated, the receiving PHA must take the following steps: • Return the full amount of the overpayment, including the portion provided for administrative fees,to the initial PHA. • Once full payment has been returned, notify the Office of Public Housing in the HUD area office with jurisdiction over the receiving PHA of the date and the amount of reimbursement to the initial PHA. At HUD's discretion, the receiving PHA will be subject to the sanctions spelled out in Notice PIH 2004-12. Denial or Termination of Assistance At any time,the receiving PHA may make a determination to deny or terminate assistance to a portable family for family action or inaction [24 CFR 982.355(c)(9), 24 CFR 982.355(c)(10)]. In the case of a termination,the PHA should provide adequate notice of the effective date to the initial PHA to avoid having to return a payment. In no event should the receiving PHA fail to notify the initial PHA later than 10 business days following the effective date of the termination of the billing arrangement. [Notice PIH 2004-12] PHA Policy If the PHA elects to deny or terminate assistance for a portable family, the PHA will notify the initial PHA within 10 business days after the informal review or hearing if the denial or termination is upheld. The PHA will base its denial or termination decision on the policies set forth in Chapter 3 or Chapter 12, respectively. The informal review or hearing will be held in accordance with the policies in Chapter 16. The receiving PHA will furnish the initial PHA with a copy of the review or hearing decision. ©Copyright 2005 Nan McKay&Associates,Inc. Page 10-19 Adminplan 9/1/05 Unlimited copies may be made for internal use. Absorbing a Portable Family The receiving PHA may absorb an incoming portable family into its own program when the PHA executes a HAP contract on behalf of the family or at any time thereafter providing that(a) the PHA has funding available under its annual contributions contract(ACC) and (b) absorbing the family will not result in overleasing [24 CFR 982.355(d)(1), Notice PIH 2004-12]. If the receiving PHA absorbs a family from the point of admission,the admission will be counted against the income targeting obligation of the receiving PHA [24 CFR 982.201(b)(2)(vii)]. If the receiving PHA absorbs a family after providing assistance for the family under a billing arrangement with the initial PHA, HUD encourages the receiving PHA to provide adequate advance notice to the initial PHA to avoid having to return an overpayment. The receiving PHA must specify the effective date of the absorption of the family. [Notice PIH 2004-12] PHA Policy If the PHA decides to absorb a portable family upon the execution of a HAP contract on behalf of the family,the PHA will notify the initial PHA by the initial billing deadline specified on form HUD-52665. The effective date of the HAP contract will be the effective date of the absorption. If the PHA decides to absorb a family after that, it will provide the initial PHA with 30 days' advance notice. Following the absorption of an incoming portable family,the family is assisted with funds available under the consolidated ACC for the receiving PHA's voucher program [24 CFR 982.355(d)], and the receiving PHA becomes the initial PHA in any subsequent moves by the family under portability. ®Copyright 2005 Nan McKay&Associates,Inc. Page 10-20 Adminplan 9/1/05 Unlimited copies may be made for internal use. Chapter 11 REEXAMINATIONS INTRODUCTION The PHA is required to reexamine each family's income and composition at least annually, and to adjust the family's level of assistance accordingly. Interim reexaminations are also needed in certain situations. This chapter discusses both annual and interim reexaminations, and the recalculation of family share and subsidy that occurs as a result. HUD regulations and PHA policies concerning reexaminations are presented in three parts: Part I: Annual Reexaminations. This part discusses the process for conducting annual reexaminations. Part II: Interim Reexaminations. This part details the requirements for families to report changes in family income and composition between annual reexaminations. Part III: Recalculating Family Share and Subsidy Amount. This part discusses the recalculation of family share and subsidy amounts based on the results of annual and interim reexaminations. Policies governing reasonable accommodation, family privacy, required family cooperation, and program abuse, as described elsewhere in this plan, apply to both annual and interim reexaminations. PART I: ANNUAL REEXAMINATIONS [24 CFR 982.516] 11-I.A. OVERVIEW The PHA must conduct a reexamination of family income and composition at least annually. This includes gathering and verifying current information about family composition, income, and expenses. Based on this updated information,the family's income and rent must be recalculated. This part discusses the schedule for annual reexaminations,the information to be collected and verified,and annual reexamination effective dates. ©Copyright 2005 Nan McKay&Associates,Inc. Page 11-1 Adminplan I/1/05 Unlimited copies may be made for internal use. • 11-I.B. SCHEDULING ANNUAL REEXAMINATIONS The PHA must establish a policy to ensure that the annual reexamination for each family is completed within a 12-month period, and may require reexaminations more frequently [HCV GB p. 12-1]. PHA Policy The PHA will begin the annual reexamination process 120 days in advance of its scheduled effective date. Generally, the PHA will schedule annual reexamination effective dates to coincide with the family's anniversary date. Anniversary date is defined as 12 months from the effective date of the family's last annual reexamination or, during a family's first year in the program, from the effective date of the family's initial examination(admission). If the family moves to a new unit,the PHA will perform a new annual reexamination. The PHA also may schedule an annual reexamination for completion prior to the anniversary date for administrative purposes. Notification of and Participation in the Annual Reexamination Process The PHA is required to obtain the information needed to conduct annual reexaminations. How that information will be collected is left to the discretion of the PHA. PHA Policy Families generally are required to participate in an annual reexamination interview, which must be attended by the head of household, spouse, or cohead. If participation in an in-person interview poses a hardship because of a family member's disability,the family should contact the PHA to request a reasonable accommodation (see Chapter 2). Notification of annual reexamination interviews will be sent by first-class mail and will contain the date, time, and location of the interview. In addition, it will inform the family of the information and documentation that must be brought to the interview. If the family is unable to attend a scheduled interview, the family should contact the PHA in advance of the interview to schedule a new appointment. If a family does not attend the scheduled interview,the PHA will send a second notification with a new interview appointment time. If a family fails to attend two scheduled interviews without PHA approval, or if the notice is returned by the post office with no forwarding address, a notice of termination(see Chapter 12)will be sent to the family's address of record, and to any alternate address provided in the family's file. An advocate, interpreter, or other assistant may assist the family in the interview process. The family and the PHA must execute a certification attesting to the role and assistance of any such third party. ®Copyright 2005 Nan McKay&Associates,Inc. Page 11-2 Adminplan I/I/05 Unlimited copies may be made for internal use. • 11-I.C. CONDUCTING ANNUAL REEXAMINATIONS As part of the annual reexamination process, families are required to provide updated information to the PHA regarding the family's income, expenses, and composition [24 CFR 982.551(b)]. PHA Policy Families will be asked to bring all required information(as described in the reexamination notice) to the reexamination appointment. The required information will include a PHA-designated reexamination form, an Authorization for the Release of Information/Privacy Act Notice, as well as supporting documentation related to the family's income, expenses, and family composition. Any required documents or information that the family is unable to provide at the time of the interview must be provided within 10 business days of the interview. If the family is unable to obtain the information or materials within the required time frame, the family may request an extension. If the family does not provide the required documents or information within the required time frame (plus any extensions), the family will be sent a notice of termination(See Chapter 12). The information provided by the family generally must be verified in accordance with the policies in Chapter 7. Unless the family reports a change, or the agency has reason to believe a change has occurred in information previously reported by the family, certain types of information that are verified at admission typically do not need to be re-verified on an annual basis. These include: • Legal identity • Age • Social security numbers • A person's disability status • Citizenship or immigration status If adding a new family member to the unit causes overcrowding according to the Housing Quality Standards (HQS) (see Chapter 8), the PHA must issue the family a new voucher, and the family and PHA must try to find an acceptable unit as soon as possible. If an acceptable unit is available for rental by the family, the PHA must terminate the HAP contract in accordance with its terms [24 CFR 982.403]. ®Copyright 2005 Nan McKay&Associates,Inc. Page 11-3 Adminplan 1/1/05 Unlimited copies may be made for internal use. 11-I.D. EFFECTIVE DATES The PHA must establish policies concerning the effective date of changes that result from an annual reexamination [24 CFR 982.516]. PHA Policy In general, an increase in the family share of the rent that results from an annual reexamination will take effect on the family's anniversary date, and the family will be notified at least 30 days in advance. If less than 30 days remain before the scheduled effective date, the increase will take effect on the first of the month following the end of the 30-day notice period. If a family moves to a new unit, the increase will take effect on the effective date of the new lease and HAP contract, and no 30-day notice is required. If the PHA chooses to schedule an annual reexamination for completion prior to the family's anniversary date for administrative purposes, the effective date will be determined by the PHA, but will always allow for the 30-day notice period. If the family causes a delay in processing the annual reexamination, increases in the family share of the rent will be applied retroactively,to the scheduled effective date of the annual reexamination. The family will be responsible for any overpaid subsidy and may be offered a repayment agreement in accordance with the policies in Chapter 16. In general, a decrease in the family share of the rent that results from an annual reexamination will take effect on the family's anniversary date. If a family moves to a new unit, the decrease will take effect on the effective date of the new lease and HAP contract. If the PHA chooses to schedule an annual reexamination for completion prior to the family's anniversary date for administrative purposes, the effective date will be determined by the PHA. If the family causes a delay in processing the annual reexamination, decreases in the family share of the rent will be applied prospectively, from the first day of the month following completion of the reexamination processing. Delays in reexamination processing are considered to be caused by the family if the family fails to provide information requested by the PHA by the date specified, and this delay prevents the PHA from completing the reexamination as scheduled. ®Copyright 2005 Nan McKay&Associates,Inc. Page 11-4 Adminplan I/I/05 Unlimited copies may be made for internal use. PART II: INTERIM REEXAMINATIONS [24 CFR 982.516] 11-II.A. OVERVIEW Family circumstances may change throughout the period between annual reexaminations. HUD and PHA policies dictate what kinds of information about changes in family circumstances must be reported, and under what circumstances the PHA must process interim reexaminations to reflect those changes. HUD regulations also permit the PHA to conduct interim reexaminations of income or family composition at any time. When an interim reexamination is conducted, only those factors that have changed are verified and adjusted [HCV GB, p. 12-10]. In addition to specifying what information the family must report, HUD regulations permit the family to request an interim determination if other aspects of the family's income or composition changes. The PHA must complete the interim reexamination within a reasonable time after the family's request. This part includes HUD and PHA policies describing what changes families are required to report, what changes families may choose to report, and how the PHA will process both PHA- and family-initiated interim reexaminations. 11-II.B. CHANGES IN FAMILY AND HOUSEHOLD COMPOSITION The PHA must adopt policies prescribing when and under what conditions the family must report changes in family composition. However, due to family obligations under the program,the PHA has limited discretion in this area. PHA Policy The PHA will conduct interim reexaminations to account for any changes in household composition and income that occur between annual reexaminations. New Family Members Not Requiring Approval The addition of a family member as a result of birth, adoption, or court-awarded custody does not require PHA approval. However, the family is required to promptly notify the PHA of the addition [24 CFR 982.551(h)(2)]. PHA Policy The family must inform the PHA of the birth, adoption or court-awarded custody of a child within 10 business days. ®Copyright 2005 Nan McKay&Associates,Inc. Page 11-5 Adminplan I/I/05 Unlimited copies may be made for internal use. New Family and Household Members Requiring Approval With the exception of children who join the family as a result of birth, adoption, or court- awarded custody, a family must request PHA approval to add a new family member [24 CFR 982.551(h)(2)] or other household member(live-in aide or foster child) [24 CFR 982.551(h)(4)]. When any new family member is added, the PHA must conduct a reexamination to determine any new income or deductions associated with the additional family member, and to make appropriate adjustments in the family share of the rent and the HAP payment [24 CFR 982.516(e)]. If a change in family size causes a violation of Housing Quality Standards (HQS) space standards (see Chapter 8), the PHA must issue the family a new voucher, and the family and PHA must try to find an acceptable unit as soon as possible. If an acceptable unit is available for rental by the family, the PHA must terminate the HAP contract in accordance with its terms [24 CFR 982.403]. PHA Policy Families must request PHA approval to add a new family member, live-in aide, foster child, or foster adult. This includes any person not on the lease who is expected to stay in the unit for more than 30 consecutive days, or 90 cumulative days, within a twelve month period, and therefore no longer qualifies as a"guest." Requests must be made in writing and approved by the PHA prior to the individual moving in the unit. The PHA will not approve the addition of a new family or household member unless the individual meets the PHA's eligibility criteria(see Chapter 3). The PHA will not approve the addition of a foster child or foster adult if it will cause a violation of HQS space standards. If the PHA determines an individual meets the PHA's eligibility criteria as defined in Chapter 3, the PHA will provide written approval to the family. If the approval of a new family member or live-in aide will cause overcrowding according to HQS standards,the approval letter will explain that the family will be issued another voucher and will be required to move. If the PHA determines that an individual does not meet the PHA's eligibility criteria as defined in Chapter 3,the PHA will notify the family in writing of its decision to deny approval of the new family or household member and the reasons for the denial. The PHA will make its determination within 10 business days of receiving all information required to verify the individual's eligibility. ©Copyright 2005 Nan McKay&Associates,Inc. Page 11-6 Adminplan 1/1/05 Unlimited copies may be made for internal use. Departure of a Family or Household Member Families must promptly notify the PHA if any family member no longer lives in the unit [24 CFR 982.551(h)(3)]. Because household members are considered when determining the family unit(voucher) size [24 CFR 982.402], the PHA also needs to know when any live-in aide, foster child, or foster adult ceases to reside in the unit. PHA Policy If a household member ceases to reside in the unit,the family must inform the PHA within 10 business days. This requirement also applies to a family member who has been considered temporarily absent at the point that the family concludes the individual is permanently absent. If a live-in aide, foster child, or foster adult ceases to reside in the unit, the family must inform the PHA within 10 business days. ©Copyright 2005 Nan McKay&Associates,Inc. Page 11-7 Adminplan 1/1/05 Unlimited copies may be made for internal use. 11-II.C. CHANGES AFFECTING INCOME OR EXPENSES Interim reexaminations can be scheduled either because the PHA has reason to believe that changes in income or expenses may have occurred, or because the family reports a change. When a family reports a change, the PHA may take different actions depending on whether the family reported the change voluntarily, or because it was required to do so. PHA-Initiated Interim Reexaminations PHA-initiated interim reexaminations are those that are scheduled based on circumstances or criteria defined by the PHA. They are not scheduled because of changes reported by the family. PHA Policy The PHA will conduct interim reexaminations in each of the following instances: For families receiving the Earned Income Disallowance (EID), the PHA will conduct an interim reexamination at the start and conclusion of the second 12 month exclusion period(50 percent phase-in period). If the family has reported zero income,the PHA will conduct an interim reexamination every 3 months as long as the family continues to report that they have no income. If at the time of the annual reexamination, it is not feasible to anticipate a level of income for the next 12 months (e.g. seasonal or cyclic income), the PHA will schedule an interim reexamination to coincide with the end of the period for which it is feasible to project income. If at the time of the annual reexamination, tenant-provided documents were used on a provisional basis due to the lack of third-party verification, and third-party verification becomes available,the PHA will conduct an interim reexamination. The PHA may conduct an interim reexamination at any time in order to correct an error in a previous reexamination, or to investigate a tenant fraud complaint. ®Copyright 2005 Nan McKay&Associates,Inc. Page 11-8 Adminplan 1/1/05 Unlimited copies may be made for internal use. Family-Initiated Interim Reexaminations The PHA must adopt policies prescribing when and under what conditions the family must report changes in family income or expenses [24 CFR 982.516(c)]. In addition, HUD regulations require that the family be permitted to obtain an interim reexamination any time the family has experienced a change in circumstances since the last determination [24 CFR 982.516(b)(2)]. Required Reporting HUD regulations give the PHA the freedom to determine the circumstances under which families will be required to report changes affecting income. PHA Policy Families are required to report all increases in earned income, including new employment, within 10 business days of the date the change takes effect. The PHA will conduct an interim reexamination to recalculate the new family share of rent and new subsidy. Optional Reporting The family may request an interim reexamination any time the family has experienced a change in circumstances since the last determination [24 CFR 982.516(b)(2)]. The PHA must process the request if the family reports a change that will result in a reduced family income [HCV GB, p. 12-9]. If a family reports a decrease in income from the loss of welfare benefits due to fraud or non- compliance with a welfare agency requirement to participate in an economic self-sufficiency program,the family's share of the rent will not be reduced [24 CFR 5.615]. For more information regarding the requirement to impute welfare income see Chapter 6. PHA Policy If a family reports a change that it was not required to report and that would result in a decrease in the family share of rent the PHA will conduct an interim reexamination If a family reports a change that it was not required to report and that would result in a decrease in the family share of the rent. The PHA will conduct an interim reexamination. See Section 11-II. D. for effective dates. Families may report changes in income or expenses at any time. ®Copyright 2005 Nan McKay&Associates, Inc. Page 11-9 Adminplan I/l/05 Unlimited copies may be made for internal use. 11-II.D.PROCESSING THE INTERIM REEXAMINATION Method of Reporting PHA Policy The family may notify the PHA of changes either orally or in writing. If the family provides oral notice, the PHA may also require the family to submit the changes in writing. Generally, the family will not be required to attend an interview for an interim reexamination. However, if the PHA determines that an interview is warranted, the family may be required to attend. Based on the type of change reported,the PHA will determine the documentation the family will be required to submit. The family must submit any required information or documents within 10 business days of receiving a request from the PHA. This time frame may be extended for good cause with PHA approval. The PHA will accept required documentation by mail, by fax, or in person. Effective Dates The PHA must establish the time frames in which any changes that result from an interim reexamination will take effect [24 CFR 982.516(d)]. The changes may be applied either retroactively or prospectively, depending on whether there is to be an increase or a decrease in the family share of the rent, and whether the family reported any required information within the required time frames [HCV GB, p. 12-10]. PHA Policy If the family share of the rent is to increase: The increase generally will be effective on the first of the month following 30 days' notice to the family. If a family fails to report a change within the required time frames, or fails to provide all required information within the required time frames,the increase will be applied retroactively,to the date it would have been effective had the information been provided on a timely basis. The family will be responsible for any overpaid subsidy and may be offered a repayment agreement in accordance with the policies in Chapter 16. If the family share of the rent is to decrease: The decrease will be effective on the first day of the month following the month in which the change was reported and all required documentation was submitted. In cases where the change cannot be verified until after the date the change would have become effective, the change will be made retroactively. ®Copyright 2005 Nan McKay&Associates,Inc. Page 11-10 Adminplan 1/1/05 Unlimited copies may be made for internal use. PART III: RECALCULATING FAMILY SHARE AND SUBSIDY AMOUNT 11-III.A. OVERVIEW After gathering and verifying required information for an annual or interim reexamination, the PHA must recalculate the family share of the rent and the subsidy amount, and notify the family and owner of the changes [24 CFR 982.516(d)(2), HCV 12-6 and 12-10]. While the basic policies that govern these calculations are provided in Chapter 6, this part lays out policies that affect these calculations during a reexamination. 11-III.B. CHANGES IN PAYMENT STANDARDS AND UTILITY ALLOWANCES In order to calculate the family share of the rent and HAP amount correctly, changes in payment standards, subsidy standards, or utility allowances may need to be updated and included in the PHA's calculations. Specific policies governing how subsidy standards, payment standards, and utility allowances are applied are discussed below. Payment Standards [24 CFR 982.505] The family share of the rent and HAP calculations must use the correct payment standard for the family, taking into consideration the family unit size,the size of unit, and the area in which the unit is located [HCV GB, p. 12-5]. See Chapter 6 for information on how to select the appropriate payment standard. When the PHA changes its payment standards or the family's situation changes,new payment standards are applied at the following times: • If the PHA's payment standard amount changes during the term of the HAP contract, the date on which the new standard is applied depends on whether the standard has increased or decreased: - If the payment standard amount has increased, the increased payment standard will be applied at the first annual reexamination following the effective date of the increase in the payment standard. - If the payment standard amount has decreased, the decreased payment standard will be applied at the second annual reexamination following the effective date of the decrease in the payment standard. • If the family moves to a new unit, or a new HAP contract is executed due to changes in the lease (even if the family remains in place) the current payment standard applicable to the family will be used when the new HAP contract is processed. ©Copyright 2005 Nan McKay&Associates,Inc. Page 11-11 Adminplan I/1/OS Unlimited copies may be made for internal use. Subsidy Standards [24 CFR 982.505(c)(4)] If there is a change in the family unit size that would apply to a family during the HAP contract term, either due to a change in family composition, or a change in the PHA's subsidy standards (see Chapter 5), the new family unit size must be used to determine the payment standard amount for the family at the family's first annual reexamination following the change in family unit size. Utility Allowances [24 CFR 982.517(d)] The family share of the rent and HAP calculations must reflect any changes in the family's utility arrangement with the owner, or in the PHA's utility allowance schedule [HCV GB, p. 12-5]. Chapter 16 discusses how utility allowance schedules are established. When there are changes in the utility arrangement with the owner, the PHA must use the utility allowances in effect at the time the new lease and HAP contract are executed. At reexamination, the PHA must use the PHA current utility allowance schedule [24 CFR 982.517(d)(2)]. PHA Policy Revised utility allowances will be applied to a family's rent and subsidy calculations at the first annual reexamination after the allowance is adopted. 11-III.C. NOTIFICATION OF NEW FAMILY SHARE AND HAP AMOUNT The PHA must notify the owner and family of any changes in the amount of the HAP payment [HUD-52641, HAP Contract]. The notice must include the following information [HCV GB,p. 12-6]: • The amount and effective date of the new HAP payment • The amount and effective date of the new family share of the rent • The amount and effective date of the new tenant rent to owner The family must be given an opportunity for an informal hearing regarding the PHA's determination of their annual or adjusted income, and the use of such income to compute the housing assistance payment [24 CFR 982.555(a)(1)(i)] (see Chapter 16). PHA Policy The notice to the family will include the annual and adjusted income amounts that were used to calculate the family share of the rent and the housing assistance payment. The notice also will state the procedures for requesting an informal hearing. ©Copyright 2005 Nan McKay&Associates,Inc. Page 11-12 Adminplan 111/05 Unlimited copies may be made for internal use. 11-III.D. DISCREPANCIES During an annual or interim reexamination, the PHA may discover that information previously reported by the family was in error, or that the family intentionally misrepresented information. In addition,the PHA may discover errors made by the PHA. When errors resulting in the overpayment or underpayment of subsidy are discovered, corrections will be made in accordance with the policies in Chapter 13. ©Copyright 2005 Nan McKay&Associates,Inc. Page 11-13 Adminplan 1/1/05 Unlimited copies may be made for internal use. Chapter 12 TERMINATION OF ASSISTANCE AND TENANCY HUD regulations specify the reasons for which a PHA can terminate a family's assistance, and the ways in which such terminations must take place. They also dictate the circumstances under which an owner may terminate the tenancy of an assisted family. This chapter presents the policies that govern voluntary and involuntary terminations of assistance, and termination of tenancy by the owner. It is presented in three parts: • Part I: Grounds for Termination of Assistance. This part discusses various reasons that a family's assistance may be terminated, including voluntary termination by the family, termination because the family no longer qualifies to receive subsidy,and termination by the PHA based on the family's behavior. Part II: Approach to Termination of Assistance. This part describes the policies that govern how an involuntary termination takes place. It specifies the alternatives that the PHA may consider in lieu of termination,the criteria the PHA must use when deciding what action to take, and the steps the PHA must take when terminating a family's assistance. Part III: Termination of Tenancy by the Owner. This part presents the policies that govern the owner's right to terminate an assisted tenancy. PART I: GROUNDS FOR TERMINATION OF ASSISTANCE 12-I.A. OVERVIEW HUD requires the PHA to terminate assistance for certain offenses and when the family no longer requires assistance. HUD permits the PHA to terminate assistance for certain other actions family members take or fail to take. In addition, a family may decide to stop receiving HCV assistance at any time by notifying the PHA. 12-LB. FAMILY NO LONGER REQUIRES ASSISTANCE [24 CFR 982.455] As a family's income increases,the amount of PHA subsidy goes down. If the amount of HCV assistance provided by the PHA drops to zero and remains at zero for 180 consecutive calendar days the family's assistance terminates automatically. PHA Policy If a participating family receiving zero assistance experiences a change in circumstances that would cause the HAP payment to rise above zero, the family must notify the PHA of the changed circumstances and request an interim reexamination before the expiration of the 180-day period. ©Copyright 2005 Nan McKay&Associates,Inc. Page 12-1 Adminplan 911105 Unlimited copies may be made for internal use. 12-I.C. FAMILY CHOOSES TO TERMINATE ASSISTANCE The family may request that the PHA terminate the family's assistance at any time. PHA Policy The request to terminate assistance should be made in writing and signed by the head of household, spouse, or cohead. Before terminating the family's assistance, the PHA will follow the notice requirements in Section 12-II.E. 12-I.D. MANDATORY TERMINATION OF ASSISTANCE HUD requires the PHA to terminate assistance in the following circumstances. Eviction [24 CFR 982.552(b)(2)] The PHA must terminate assistance whenever a family is evicted from a unit assisted under the HCV program for a serious or repeated violation of the lease. PHA Policy A family will be considered evicted if the family moves after a legal eviction order has been issued, whether or not physical enforcement of the order was necessary. If a family moves after the owner has given the family an eviction notice for serious or repeated lease violations but before a legal eviction order has been issued,t ermination of assistance is not mandatory. However, the PHA will determine whether the family has committed serious or repeated violations of the lease based on available evidence and may terminate assistance or take any of the alternative measures described in Section 12- II.C. Serious and repeated lease violations will include, but not be limited to, nonpayment of rent, disturbance of neighbors, destruction of property, or living or housekeeping habits that cause damage to the unit or premises and criminal activity. Generally,the criteria to be used is whether the reason for the eviction was through no fault of the tenant or guests. Failure to Provide Consent [24 CFR 982.552(6)(3)] The PHA must terminate assistance if any family member fails to sign and submit any consent form they are required to sign for a reexamination. See Chapter 7 for a complete discussion of consent requirements. ®Copyright 2005 Nan McKay&Associates,Inc. Page 12-2 Adminplan 9/1/05 Unlimited copies may be made for internal use. Failure to Document Citizenship [24 CFR 982.552(b)(4) and [24 CFR 5.514(c)] The PHA must terminate assistance if(1) a family fails to submit required documentation within the required timeframe concerning any family member's citizenship or immigration status; (2) a family submits evidence of citizenship and eligible immigration status in a timely manner, but United States Citizenship and Immigration Services (USCIS)primary and secondary verification does not verify eligible immigration status of the family; or(3) a family member, as determined by the PHA, has knowingly permitted another individual who is not eligible for assistance to reside (on a permanent basis) in the unit. For(3) above, such termination must be for a period of at least 24 months. This does not apply to ineligible noncitizens already in the household where the family's assistance has been prorated. See Chapter 7 for a complete discussion of documentation requirements. Failure to Provide Social Security Documentation [24 CFR 5.218(c)] The PHA must terminate assistance if a participant family fails to provide the documentation or certification required for any family member who obtains a social security number,joins the family, or reaches 6 years of age. Methamphetamine Manufacture or Production [24 CFR 982.553(b)(1)(ii)] The PHA must terminate assistance if any household member has ever been convicted of the manufacture or production of methamphetamine on the premises of federally-assisted housing. 12-I.E. MANDATORY POLICIES AND OTHER AUTHORIZED TERMINATIONS Mandatory Policies [24 CFR 982.553(b) and 982.551(1)] HUD requires the PHA to establish policies that permit the PHA to terminate assistance if the PHA determines that: • Any household member is currently engaged in any illegal use of a drug, or has a pattern of illegal drug use that interferes with the health, safety, or right to peaceful enjoyment of the premises by other residents • Any household member's abuse or pattern of abuse of alcohol may threaten the health, safety, or right to peaceful enjoyment of the premises by other residents • Any household member has violated the family's obligation not to engage in any drug- related criminal activity • Any household member has violated the family's obligation not to engage in violent criminal activity ©Copyright 2005 Nan McKay&Associates,Inc. Page 12-3 Adminplan 9/1/05 Unlimited copies may be made for internal use. Use of Illegal Drugs and Alcohol Abuse PHA Policy The PHA will terminate a family's assistance if any household member is currently engaged in any illegal use of a drug,or has a pattern of illegal drug use that interferes with the health, safety, or right to peaceful enjoyment of the premises by other residents. The PHA will terminate assistance if any household member's abuse or pattern of abuse of alcohol threatens the health, safety, or right to peaceful enjoyment of the premises by other residents. Currently engaged in is defined as any use of illegal drugs during the previous six months. The PHA will consider all credible evidence, including but not limited to, any record of arrests, convictions, or eviction of household members related to the use of illegal drugs or abuse of alcohol. In making its decision to terminate assistance,the PHA will consider alternatives as described in Section 12-II.C and other factors described in Section 12-II.D. Upon consideration of such alternatives and factors,the PHA may, on a case-by-case basis, choose not to terminate assistance. Drug-Related and Violent Criminal Activity [24 CFR 5.100] Drug means a controlled substance as defined in section 102 of the Controlled Substances Act (21 U.S.C. 802). Drug-related criminal activity is defined by HUD as the illegal manufacture, sale, distribution, or use of a drug, or the possession of a drug with intent to manufacture, sell, distribute or use the drug. Violent criminal activity means any criminal activity that has as one of its elements the use, attempted use, or threatened use of physical force substantial enough to cause, or be reasonably likely to cause, serious bodily injury or property damage. PHA Policy The PHA will terminate a family's assistance if any household member has violated the family's obligation not to engage in any drug-related or violent criminal activity during participation in the HCV program. The PHA will consider all credible evidence, including but not limited to, any record of arrests and/or convictions of household members related to drug-related or violent criminal activity, and any eviction or notice to evict based on drug-related or violent criminal activity. In making its decision to terminate assistance, the PHA will consider alternatives as described in Section 12-II.C and other factors described in Section 12-II.D. Upon consideration of such alternatives and factors, the PHA may,on a case-by-case basis, choose not to terminate assistance. ®Copyright 2005 Nan McKay&Associates,Inc. Page 12-4 Adminplan 9/1/05 Unlimited copies may be made for internal use. Other Authorized Reasons for Termination of Assistance [24 CFR 982.552(c)] HUD permits the PHA to terminate assistance under a number of other circumstances. It is left to the discretion of the PHA whether such circumstances in general warrant consideration for the termination of assistance. PHA Policy The PHA will not terminate a family's assistance because of the family's failure to meet its obligations under the Family Self-Sufficiency or Welfare to Work voucher programs. The PHA will terminate a family's assistance if: The family has failed to comply with any family obligations under the program. See Exhibit 12-1 for a listing of family obligations and related PHA policies. Any family member has been evicted from federally-assisted housing in the last five years. Any PHA has ever terminated assistance under the program for any member of the family. Any family member has committed fraud, bribery, or any other corrupt or criminal act in connection with any federal housing program. The family currently owes rent or other amounts to any PHA in connection with the HCV, Certificate, Moderate Rehabilitation or public housing programs. The family has not reimbursed any PHA for amounts the PHA paid to an owner under a HAP contract for rent, damages to the unit, or other amounts owed by the family under the lease. The family has breached the terms of a repayment agreement entered into with the PHA. A family member has engaged in or threatened violent or abusive behavior toward PHA personnel. Abusive or violent behavior towards PHA personnel includes verbal as well as physical abuse or violence. Use of racial epithets, or other language, written or oral, that is customarily used to intimidate may be considered abusive or violent behavior. Threatening refers to oral or written threats or physical gestures that communicate intent to abuse or commit violence. In making its decision to terminate assistance,the PHA will consider alternatives as described in Section 12-II.C and other factors described in Section 12-II.D. Upon consideration of such alternatives and factors, the PHA may, on a case-by-case basis, choose not to terminate assistance. ©Copyright 2005 Nan McKay&Associates,Inc. Page 12-5 Adminplan 9/1/05 Unlimited copies may be made for internal use. Family Absence from the Unit[24 CFR 982.312] The family may be absent from the unit for brief periods. The PHA must establish a policy on how long the family may be absent from the assisted unit. However, the family may not be absent from the unit for a period of more than 180 consecutive calendar days for any reason. Absence in this context means that no member of the family is residing in the unit. PHA Policy If the family is absent from the unit for more than 90 consecutive calendar days, the family's assistance will be terminated. The family must inform the Authority of any absence of more than 30 days. Failure of the family to notify the Authority of any absence of more than 30 days is grounds for termination.Notice of termination will be sent in accordance with Section 12-II.E. Insufficient Funding[24 CFR 982.4541 The PHA may terminate HAP contracts if the PHA determines, in accordance with HUD requirements,that funding under the consolidated ACC is insufficient to support continued assistance for families in the program. PHA Policy The PHA will determine whether there is sufficient funding to pay for currently assisted families according to the policies in Part VIII of Chapter 16. If the PHA determines there is a shortage of funding, prior to terminating any HAP contracts, the PHA will determine if any other actions can be taken to reduce program costs. If after implementing all reasonable cost cutting measures there is not enough funding available to provide continued assistance for current participants, the PHA will terminate HAP contracts as a last resort. Prior to terminating any HAP contracts, the PHA will inform the local HUD field office. The PHA will terminate the minimum number needed in order to reduce HAP costs to a level within the PHA's annual budget authority. If the PHA must terminate HAP contracts due to insufficient funding, the PHA will do so in accordance with the following criteria and instructions: [Insert policy for HAP terminations due to insufficient funding] The PHA will terminate HAP contracts starting with Category 1 families. The PHA will only move to the next category when there are no families remaining in the current category and more HAP contract terminations are necessary. Category 1: Families who have committed program fraud or abuse within the past 6 months. Within each group below,the PHA will terminate HAP contracts according to the date the PHA first notified the family of the debt, starting with the most recent. If more than one family received notice on the same day,the PHA will rank the notices for that date using a random method. ®Copyright 2005 Nan McKay&Associates,Inc. Page 12-6 Adminplan 9/1/05 Unlimited copies may be made for internal use. First, the PHA will terminate families who owe the PHA money but are not yet under repayment agreement. Second, the PHA will terminate families who owe the PHA money, are under repayment agreement, but have made at least one late payment. Third, the PHA will terminate families who owe the PHA money, are under repayment agreement, and have made all payments in accordance with the repayment agreement. Category 2: Families who committed program fraud or abuse 6-12 months ago. ©Copyright 2005 Nan McKay&Associates,Inc. Page 12-7 Adminplan 9/1/05 Unlimited copies may be made for internal use. C Copyright 2005 Nan McKay&Associates,Inc. Page 12-8 Adminplan 9/1/05 Unlimited copies may be made for internal use. PART II: APPROACH TO TERMINATION OF ASSISTANCE 12-II.A. OVERVIEW The PHA is required by regulation to terminate a family's assistance if certain program rules are violated. For other types of offenses, the regulations give the PHA the discretion to either terminate the family's assistance or to take another action. This part discusses the various actions the PHA may choose to take when it has discretion, and outlines the criteria the PHA will use to make its decision about whether or not to terminate assistance. It also specifies the requirements for the notice that must be provided before terminating assistance. 12-ILB. METHOD OF TERMINATION [24 CFR 982.552(a)(3)J The way in which the PHA terminates assistance depends upon individual circumstances. HUD permits the PHA to terminate assistance by: • Terminating housing assistance payments under a current HAP contract, • Refusing to approve a request for tenancy or to enter into a new HAP contract, or • Refusing to process a request for or to provide assistance under portability procedures. 12-ILC. ALTERNATIVES TO TERMINATION OF ASSISTANCE Change in Household Composition As a condition of continued assistance,the PHA may require that any household member who participated in or was responsible for an offense no longer resides in the unit [24 CFR 982.552(c)(2)(ii)]. PHA Policy As a condition of continued assistance, the head of household must certify that the culpable family member has vacated the unit and will not be permitted to visit or to stay as a guest in the assisted unit. The family must present evidence of the former family member's current address upon PHA request. Repayment of Family Debts PHA Policy If a family owes amounts to the PHA, as a condition of continued assistance, the PHA will require the family to repay the full amount or to enter into a repayment agreement, within 30 days of receiving notice from the PHA of the amount owed. See Chapter 16 for policies on repayment agreements. ®Copyright 2005 Nan McKay&Associates,Inc. Page 12-9 Adminplan 9/1/05 Unlimited copies may be made for internal use. 12-II.D. CRITERIA FOR DECIDING TO TERMINATE ASSISTANCE Evidence For criminal activity, HUD permits the PHA to terminate assistance if a preponderance of the evidence indicates that a household member has engaged in the activity, regardless of whether the household member has been arrested or convicted [24 CFR 982.553(c)]. PHA Policy The PHA will use the concept of the preponderance of the evidence as the standard for making all termination decisions. Preponderance of the evidence is defined as evidence which is of greater weight or more convincing than the evidence which is offered in opposition to it; that is, evidence which as a whole shows that the fact sought to be proved is more probable than not. Preponderance of the evidence may not be determined by the number of witnesses, but by the greater weight of all evidence Consideration of Circumstances [24 CFR 982.552(c)(2)(i)] The PHA is permitted, but not required, to consider all relevant circumstances when determining whether a family's assistance should be terminated. PHA Policy The PHA will consider the following factors when making its decision to terminate assistance: The seriousness of the case, especially with respect to how it would affect other residents The effects that termination of assistance may have on other members of the family who were not involved in the action or failure The extent of participation or culpability of individual family members, including whether the culpable family member is a minor or a person with disabilities The length of time since the violation occurred,the family's recent history and the likelihood of favorable conduct in the future In the case of drug or alcohol abuse, whether the culpable household member is participating in or has successfully completed a supervised drug or alcohol rehabilitation program or has otherwise been rehabilitated successfully The PHA will require the participant to submit evidence of the household member's current participation in or successful completion of a supervised drug or alcohol rehabilitation program, or evidence of otherwise having been rehabilitated successfully. In the case of program abuse,the dollar amount of the overpaid assistance and whether or not a false certification was signed by the family. ®Copyright 2005 Nan McKay&Associates,Inc. Page 12-10 Adminplan 9/1/05 Unlimited copies may be made for internal use. Reasonable Accommodation [24 CFR 982.552(c)(2)(iv)] If the family includes a person with disabilities, the PHA's decision to terminate the family's assistance is subject to consideration of reasonable accommodation in accordance with 24 CFR Part 8. PHA Policy If a family indicates that the behavior of a family member with a disability is the reason for a proposed termination of assistance, the PHA will determine whether the behavior is related to the disability. If so, upon the family's request,the PHA will determine whether alternative measures are appropriate as a reasonable accommodation. The PHA will only consider accommodations that can reasonably be expected to address the behavior that is the basis of the proposed termination of assistance. See Chapter 2 for a discussion of reasonable accommodation. 12-II.E. TERMINATION NOTICE [HCV GB, p. 15-7] If a family's assistance is to be terminated, whether voluntarily or involuntarily,the PHA must give the family and the owner written notice that specifies: • The reasons for which assistance has been terminated • The effective date of the termination • The family's right to an informal hearing as described in Chapter 16 If a criminal record is the basis of the termination, a copy of the record must accompany the notice. A copy of the criminal record also must be provided to the subject of the record [24 CFR 982.553(d)]. PHA Policy When termination is initiated by the PHA, the notice to terminate will be sent to the family and the owner at least 30 calendar days prior to the effective date of the termination. However, if a family vacates the unit without informing the PHA, 30 days notice will not be given. In these cases,the notice to terminate will be sent at the time the PHA learns the family has vacated the unit. When a family requests to be terminated from the program they must do so in writing to the PHA (see section 12-I.C.). The PHA will then send a confirmation notice to the family and the owner within 10 business days of the family's request, but no later than the termination effective date (as requested by the family). C Copyright 2005 Nan McKay&Associates,Inc. Page 12-11 Adminplan 9/1/05 Unlimited copies may be made for internal use. Notice of Termination Based on Citizenship Status [24 CFR 5.514 (c) and (d)] The PHA must terminate assistance if(1) a family fails to submit required documentation within the required timeframe concerning any family member's citizenship or eligible immigration status; (2) evidence of citizenship and eligible immigration status is submitted timely, but USCIS primary and secondary verification does not verify eligible immigration status of a family; or(3) the PHA determines that a family member has knowingly permitted another individual who is not eligible for assistance to reside (on a permanent basis) in the unit. For(3) above, such termination must be for a period of at least 24 months. The notice of termination must advise the family of the reasons their assistance is being terminated, that they may be eligible for proration of assistance, the criteria and procedures for obtaining relief under the provisions for preservation of families,that they have the right to request an appeal to the USCIS of the results of secondary verification of immigration status and to submit additional documentation or a written explanation in support of the appeal, and that they have the right to request an informal hearing with the PHA either upon completion of the USCIS appeal or in lieu of the USCIS appeal. Informal hearing procedures are contained in Chapter 16. PHA Policy The notice to terminate will be sent to the family and the owner at least 30 calendar days prior to the effective date of the termination. 12-H.F. HOW TERMINATION OF ASSISTANCE AFFECTS THE HAP CONTRACT AND LEASE When the family's assistance is terminated, the lease and HAP contract terminate automatically [Form HUD-52641]. The owner may offer the family a separate unassisted lease [HCV GB,p. 15-8]. ®Copyright 2005 Nan McKay&Associates,Inc. Page 12-12 Adminplan 9/1/05 Unlimited copies may be made for internal use. PART III: TERMINATION OF TENANCY BY THE OWNER 12-III.A. OVERVIEW Termination of an assisted tenancy is a matter between the owner and the family; the PHA is not directly involved. However, the owner is under some constraints when terminating an assisted tenancy, and the reasons for which a tenancy is terminated dictate whether assistance also will be terminated. 12-III.13. GROUNDS FOR OWNER TERMINATION OF TENANCY [24 CFR 982.310 and Form HUD-52641-A, Tenancy Addendum] During the term of the lease, the owner is not permitted to terminate the tenancy except for serious or repeated violations of the lease, certain violations of state or local law, or other good cause. Serious or Repeated Lease Violations The owner is permitted to terminate the family's tenancy for serious or repeated violations of the terms and conditions of the lease. This includes failure to pay rent or other amounts due under the lease. However, the PHA's failure to make a HAP payment to the owner is not a violation of the lease between the family and the owner. Violation of Federal, State, or Local Law The owner is permitted to terminate the tenancy if a family member violates federal, state, or local law that imposes obligations in connection with the occupancy or use of the premises. Criminal Activity or Alcohol Abuse The owner may terminate tenancy during the term of the lease if any covered person, meaning any member of the household, a guest or another person under the tenant's control commits any of the following types of criminal activity(for applicable definitions see 24 CFR 5.100): • Any criminal activity that threatens the health or safety of, or the right to peaceful enjoyment of the premises by, other residents (including property management staff residing on the premises); • Any criminal activity that threatens the health or safety of, or the right to peaceful enjoyment of their residences by, persons residing in the immediate vicinity of the premises; • Any violent criminal activity on or near the premises; or • Any drug-related criminal activity on or near the premises. O Copyright 2005 Nan McKay&Associates,Inc. Page 12-13 Adminplan 9/1/05 Unlimited copies may be made for internal use. The owner may terminate tenancy during the term of the lease if any member of the household is: • Fleeing to avoid prosecution, custody, or confinement after conviction for a crime or an attempt to commit a crime that is a felony under the laws of the place from which the individual flees, or that, in the case of the State of New Jersey, is a high misdemeanor; or • Violating a condition of probation or parole imposed under federal or state law. The owner may terminate tenancy for criminal activity by a household member in accordance with this section if the owner determines that the household member has committed the criminal activity,regardless of whether the household member has been arrested or convicted for such activity. The owner may terminate tenancy during the term of the lease if any member of the household has engaged in abuse of alcohol that threatens the health, safety, or right to peaceful enjoyment of the premises by other residents. Evidence of Criminal Activity The owner may terminate tenancy and evict by judicial action a family for criminal activity by a covered person if the owner determines they have engaged in the criminal activity, regardless of arrest or conviction and without satisfying the standard of proof used for a criminal conviction. Other Good Cause During the initial lease term,the owner may not terminate the tenancy for"other good cause" unless the owner is terminating the tenancy because of something the family did or failed to do. During the initial lease term or during any extension term, other good cause includes the disturbance of neighbors, destruction of property, or living or housekeeping habits that cause damage to the unit or premises. After the initial lease term, "other good cause"for termination of tenancy by the owner includes: • Failure by the family to accept the offer of a new lease or revision; • The owner's desire to use the unit for personal or family use, or for a purpose other than as a residential rental unit; or • A business or economic reason for termination of the tenancy (such as sale of the property, renovation of the unit, or desire to lease the unit at a higher rent). After the initial lease term,the owner may give the family notice at any time, in accordance with the terms of the lease. ©Copyright 2005 Nan McKay&Associates,Inc. Page 12-14 Adminplan 9/1/05 Unlimited copies may be made for internal use. 12-III.C. EVICTION ]24 CFR 982.310(e) and (f) and Form HUD-52641-A, Tenancy Addendum] The owner must give the tenant a written notice that specifies the grounds for termination of tenancy during the term of the lease. The tenancy does not terminate before the owner has given this notice, and the notice must be given at or before commencement of the eviction action. The notice of grounds may be included in, or may be combined with, any owner eviction notice to the tenant. Owner eviction notice means a notice to vacate, or a complaint or other initial pleading used under state or local law to commence an eviction action. The owner may only evict the tenant from the unit by instituting a court action. The owner must give the PHA a copy of any eviction notice at the same time the owner notifies the family. The family is also required to give the PHA a copy of any eviction notice (see Chapter 5). PHA Policy If the eviction action is finalized in court, the owner must provide the PHA with documentation related to the eviction, including notice of the eviction date, as soon as possible, but no later than 5 business days following the court-ordered eviction. ®Copyright 2005 Nan McKay&Associates,Inc. Page 12-15 Adminplan 9/1/05 Unlimited copies may be made for internal use. 12-III.D. DECIDING WHETHER TO TERMINATE TENANCY [24 CFR 982.310(h)] An owner who has grounds to terminate a tenancy is not required to do so, and may consider all of the circumstances relevant to a particular case before making a decision. These might include: • The seriousness of the offending action; • The effect on the community of the termination, or of the owner's failure to terminate the tenancy; • The extent of participation by the leaseholder in the offending action; • The effect of termination of tenancy on household members not involved in the offending activity; • The demand for assisted housing by families who will adhere to lease responsibilities; • The extent to which the leaseholder has shown personal responsibility and taken all reasonable steps to prevent or mitigate the offending action; • The effect of the owner's action on the integrity of the program. The owner may require a family to exclude a household member in order to continue to reside in the assisted unit,where that household member has participated in or been culpable for action or failure to act that warrants termination. In determining whether to terminate tenancy for illegal use of drugs or alcohol abuse by a household member who is no longer engaged in such behavior, the owner may consider whether such household member is participating in or has successfully completed a supervised drug or alcohol rehabilitation program, or has otherwise been rehabilitated successfully(42 U.S.C. 13661). For this purpose, the owner may require the tenant to submit-evidence of the household member's current participation in, or successful completion of, a supervised drug or alcohol rehabilitation program or evidence of otherwise having been rehabilitated successfully. The owner's termination of tenancy actions must be consistent with the fair housing and equal opportunity provisions in 24 CFR 5.105. 12-III.E. EFFECT OF TERMINATION OF TENANCY ON THE FAMILY'S ASSISTANCE If a termination is not due to a serious or repeated violation of the lease, and if the PHA has no other grounds for termination of assistance, the PHA may issue a new voucher so that the family can move with continued assistance (see Chapter 10). s—. ®Copyright 2005 Nan McKay&Associates,Inc. Page 12-16 Adminplan 9/1/05 Unlimited copies may be made for internal use. EXHIBIT 12-1: STATEMENT OF FAMILY OBLIGATIONS Following is a listing of a participant family's obligations under the HCV program: • The family must supply any information that the PHA or HUD determines to be necessary, including submission of required evidence of citizenship or eligible immigration status. • The family must supply any information requested by the PHA or HUD for use in a regularly scheduled reexamination or interim reexamination of family income and composition. • The family must disclose and verify social security numbers and sign and submit consent forms for obtaining information. • Any information supplied by the family must be true and complete. • The family is responsible for any Housing Quality Standards (HQS) breach by the family caused by failure to pay tenant-provided utilities or appliances, or damages to the dwelling unit or premises beyond normal wear and tear caused by any member of the household or guest. PHA Policy Damages beyond normal wear and tear will be considered to be damages which could be assessed against the security deposit. • The family must allow the PHA to inspect the unit at reasonable times and after reasonable notice, as described in Chapter 8 of this plan. • The family must not commit any serious or repeated violation of the lease. PHA Policy The PHA will determine if a family has committed serious or repeated violations of the lease based on available evidence, including but not limited to, a court-ordered eviction, or an owner's notice to evict. Serious and repeated lease violations will include,but not be limited to, nonpayment of rent, disturbance of neighbors, destruction of property, or living or housekeeping habits that cause damage to the unit or premises and criminal activity. Generally, the criteria to be used is whether the reason for the eviction was through no fault of the tenant or guests. • The family must notify the PHA and the owner before moving out of the unit or terminating the lease. PHA Policy The family must comply with lease requirements regarding written notice to the owner. The family must provide written notice to the PHA at the same time the owner is notified. • The family must promptly give the PHA a copy of any owner eviction notice. • The family must use the assisted unit for residence by the family. The unit must be the family's only residence. r ®Copyright 2005 Nan McKay&Associates,Inc. Page 12-17 Adminplan 9/1/05 Unlimited copies may be made for internal use. • The composition of the assisted family residing in the unit must be approved by the PHA. The family must promptly notify the PHA in writing of the birth, adoption, or court-awarded -- custody of a child. The family must request PHA approval to add any other family member as an occupant of the unit. PHA Policy The request to add a family member must be submitted in writing and approved prior to the person moving into the unit. The PHA will determine eligibility of the new member in accordance with the policies in Chapter 3. • The family must promptly notify the PHA in writing if any family member no longer lives in the unit. • If the PHA has given approval, a foster child or a live-in aide may reside in the unit. The PHA has the discretion to adopt reasonable policies concerning residency by a foster child or a live-in aide, and to define when PHA consent may be given or denied. For policies related to the request and approval/disapproval of foster children, foster adults, and live-in aides, see Chapter 3 (Sections I.K and I.M), and Chapter 11 (Section II.B). • The family must not sublease the unit, assign the lease, or transfer the unit. PHA Policy Subleasing includes receiving payment to cover rent and utility costs by a person living in the unit who is not listed as a family member. • The family must supply any information requested by the PHA to verify that the family is living in the unit or information related to family absence from the unit. • The family must promptly notify the PHA when the family is absent from the unit. PHA Policy Notice is required under this provision only when all family members will be absent from the unit for an extended period. An extended period is defined as any period greater than 30 calendar days. Written notice must be provided to the PHA at the start of the extended absence. • The family must pay utility bills and provide and maintain any appliances that the owner is not required to provide under the lease [Form HUD-52646, Voucher]. • The family must not own or have any interest in the unit, (other than in a cooperative and owners of a manufactured home leasing a manufactured home space). • Family members must not commit fraud, bribery, or any other corrupt or criminal act in connection with the program. (See Chapter 14, Program Integrity for additional information). • Family members must not engage in drug-related criminal activity or violent criminal activity or other criminal activity that threatens the health, safety or right to peaceful enjoyment of other residents and persons residing in the immediate vicinity of the premises. See Chapter 12 for HUD and PHA policies related to drug-related and violent criminal activity. ©Copyright 2005 Nan McKay&Associates,Inc. Page 12-18 Adminplan 9/1/05 Unlimited copies may be made for internal use. • Members of the household must not engage in abuse of alcohol in a way that threatens the health, safety or right to peaceful enjoyment of the other residents and persons residing in the immediate vicinity of the premises. See Chapter 12 for a discussion of HUD and PHA policies related to alcohol abuse. • An assisted family or member of the family must not receive HCV program assistance while receiving another housing subsidy, for the same unit or a different unit under any other federal, state or local housing assistance program. • A family must not receive HCV program assistance while residing in a unit owned by a parent, child, grandparent, grandchild, sister or brother of any member of the family, unless. the PHA has determined (and has notified the owner and the family of such determination) that approving rental of the unit, notwithstanding such relationship, would provide reasonable accommodation for a family member who is a person with disabilities. [Form HUD-52646, Voucher] ®Copyright 2005 Nan McKay&Associates,Inc. Page 12-19 Adminplan 9/1/05 Unlimited copies may be made for internal use. • C Copyright 2005 Nan McKay&Associates,Inc. Page 12-20 Adminplan 9/1/05 Unlimited copies may be made for internal use. Chapter 13 OWNERS INTRODUCTION Owners play a central role in the HCV program by supplying decent, safe, and sanitary housing for participating families. The term"owner" refers to any person or entity with the legal right to lease or sublease a unit to a participant in the HCV program [24 CFR 982.4(b)]. The term"owner" includes a principal or other interested party [24 CFR 982.453; 24 CFR 982.306(f)], such as a designated agent of the owner. Owners have numerous responsibilities under the program, including screening and leasing to families, maintaining the dwelling unit, enforcing the lease, and complying with various contractual obligations. However,this chapter is not meant to be an overview of all aspects of owner participation in the HCV program. The chapter is organized in two parts: Part I: Owners in the HCV Program. This part discusses the role of an owner in the PHA's HCV program and highlights key owner rights and responsibilities. Part II: HAP Contracts. This part explains provisions of the HAP contract and the relationship between the PHA and the owner as expressed in the HAP contract. For detailed information about HCV program responsibilities and processes, including PHA policies in key areas, owners will need to refer to several other chapters in this plan. Where appropriate, Chapter 13 will reference the other chapters. ©Copyright 2005Nan McKay&Associates,Inc. Page 13-1 Adminplan 9/1/05 Unlimited copies may be made for internal use. C Copyright 2005 Nan McKay&Associates,Inc. Page 13-2 Adminplan l/t/05 Unlimited copies may be made for internal use. Retention In addition to recruiting owners to participate in the HCV program,the PHA must also provide the kind of customer service that will encourage participating owners to remain active in the program. PHA Policy All PHA activities that may affect an owner's ability to lease a unit will be processed as rapidly as possible, in order to minimize vacancy losses for owners. The PHA will provide owners with a handbook that explains the program, including HUD and PHA policies and procedures, in easy-to-understand language. The PHA will give special attention to helping new owners succeed through activities such as: Providing the owner with a designated PHA contact person. Coordinating inspection and leasing activities between the PHA, the owner, and the family. Initiating telephone contact with the owner to explain the inspection process, and providing an inspection booklet and other resource materials about HUD housing quality standards. Providing other written information about how the program operates, including answers to frequently asked questions. Additional services may be undertaken on an as-needed basis, and as resources permit. ®Copyright 2005 Nan McKay&Associates,Inc. Page 13-4 Adminplan 1/1/05 Unlimited copies may be made for internal use. 13-LB. BASIC HCV PROGRAM REQUIREMENTS HUD requires the PHA to aid families in their housing search by providing the family with a list of landlords or other parties known to the PHA who may be willing to lease a unit to the family, or to help the family find a unit. Although the PHA cannot maintain a list of owners that are pre- qualified to participate in the program, owners may indicate to the PHA their willingness to lease a unit to an eligible HCV family, or to help the HCV family find a unit [24 CFR 982.301(b)(11)]. PHA Policy Owners that wish to indicate their willingness to lease a unit to an eligible HCV family or to help the HCV family find a unit must notify the PHA. The PHA will maintain a listing of such owners and provide this listing to the HCV family as part of the informational briefing packet When a family approaches an owner to apply for tenancy, the owner is responsible for screening the family and deciding whether to lease to the family,just as the owner would with any potential tenant. The PHA has no liability or responsibility to the owner or other persons for the family's behavior or suitability for tenancy. See chapters 3 and 9 for more detail on tenant family screening policies and process. If the owner is willing, the family and the owner must jointly complete a Request for Tenancy Approval (RTA, Form HUD 52517), which constitutes the family's request for assistance in the specified unit, and which documents the owner's willingness to lease to the family and to follow the program's requirements. When submitted to the PHA,this document is the first step in the process of obtaining approval for the family to receive the financial assistance it will need in order to occupy the unit. Also submitted with the RTA is a copy of the owner's proposed dwelling lease, including the HUD-required Tenancy Addendum (Form HUD-52641-A). See Chapter 9 for more detail on request for tenancy approval policies and process. HUD regulations stipulate that an assisted tenancy can be approved only under certain conditions. The owner must be qualified to participate in the program [24 CFR 982.306]. Some owners are precluded from participating in the program, or from renting to a particular family, either because of their past history with this or another federal housing program, or because of certain conflicts of interest. Owner qualifications are discussed later in this chapter. The selected unit must be of a type that is eligible for the program [24 CFR 982.305(a)]. Certain types of dwelling units cannot be assisted under the HCV program. Other types may be assisted under certain conditions. In addition,the owner must document legal ownership of the specified unit. See chapter 9 for more detail on unit eligibility policies and process. The selected unit must meet HUD's Housing Quality Standards (HQS) and/or equivalent state or local standards approved by HUD [24 CFR 982.305(a)]. The PHA will inspect the owner's dwelling unit at various stages of HCV program participation, to ensure that the unit continues to meet HQS requirements. See chapter 8 for a discussion of the HQS standards, as well as the process for HQS inspections at initial lease-up and throughout the family's tenancy. ®Copyright 2005 Nan McKay&Associates,Inc. Page 13-5 Adminplan 1/1/05 Unlimited copies may be made for internal use. The PHA must determine that the cost of the unit is reasonable [24 CFR 982.305(a)]. The rent must be reasonable in relation to comparable unassisted units in the area and must not be in excess of rents charged by the owner for comparable, unassisted units on the premises. See chapter 8 for a discussion of requirements and policies on rent reasonableness, rent comparability and the rent reasonableness determination process. At initial lease-up of a unit, the PHA must determine that the share of rent to be paid by the family does not exceed 40 percent of the family's monthly adjusted income [24 CFR 982.305(a)]. See chapter 6 for a discussion of the calculation of family income, family share of rent and HAP. The dwelling lease must comply with all program requirements [24 CFR 982.308]. Owners are encouraged to use their standard leases when renting to an assisted family. However, the HCV program requires that the Tenancy Addendum,which helps standardize the tenancy requirements for all assisted families, be added word-for-word to that lease. See chapter 9 for a discussion of the dwelling lease and tenancy addendum, including lease terms and provisions. The PHA and the owner enter into a formal contractual relationship by executing the Housing Assistance Payment (HAP) Contract(Form HUD-52641). The HAP contract format is prescribed by HUD. See chapter 9 for a discussion of the HAP contract execution process. Specific HAP contract provisions and responsibilities are discussed later in this chapter 13. ®Copyright 2005 Nan McKay&Associates,Inc. Page 13-6 Adminplan 1/1/05 Unlimited copies may be made for internal use. 13-I.C. OWNER RESPONSIBILITIES [24 CFR 982.452] The basic owner responsibilities in the HCV program are outlined in the regulations as follows: • Performing all of the owner's obligations under the Housing Assistance Payments (HAP) contract and the lease • Performing all management and rental functions for the assisted unit, including selecting a voucher-holder to lease the unit, and deciding if the family is suitable for tenancy of the unit • Maintaining the unit in accordance with the Housing Quality Standards (HQS), including performance of ordinary and extraordinary maintenance • Complying with equal opportunity requirements • Preparing and furnishing to the PHA information required under the HAP contract • Collecting from the family any security deposit, the tenant's contribution to rent(that part of rent to owner not covered by the housing assistance payment from the PHA), and any charges for unit damage by the family. • Enforcing tenant obligations under the dwelling lease • Paying for utilities and services (unless paid by the family under the lease) • Making modifications to a dwelling unit occupied or to be occupied by a disabled person [24 CFR 100.203] ®Copyright 2005 Nan McKay&Associates,Inc. Page 13-7 Adminplan 1/1/05 Unlimited copies may be made for internal use. 13-I.D. OWNER QUALIFICATIONS The PHA does not formally approve an owner to participate in the HCV program. However, there are a number of criteria where the PHA may deny approval of an assisted tenancy based on past owner behavior, conflict of interest, or other owner-related issues. No owner has a right to participate in the HCV program [24 CFR 982.306(e)]. Owners Barred from Participation [24 CFR 982.306(a) and (b)] The PHA must not approve the assisted tenancy if the PHA has been informed that the owner has been debarred, suspended, or subject to a limited denial of participation under 24 CFR part 24. HUD may direct the PHA not to approve a tenancy request if a court or administrative agency has determined that the owner violated the Fair Housing Act or other federal equal opportunity requirements, or if such an action is pending. Leasing to Relatives [24 CFR 982.306(d), HCV GB p. 11-2] The PHA must not approve an RTA if the owner is the parent, child, grandparent, grandchild, sister, or brother of any member of the family. The PHA may make an exception as a reasonable accommodation for a family member with a disability. The owner is required to certify that no such relationship exists. This restriction applies at the time that the family receives assistance under the HCV program for occupancy of a particular unit. Current contracts on behalf of owners and families that are related may continue, but any new leases or contracts for these families may not be approved. Conflict of Interest [24 CFR 982.161; HCV GB p. 8-19] The PHA must not approve a tenancy in which any of the following classes of persons has any interest, direct or indirect, during tenure or for one year thereafter: • Any present or former member or officer of the PHA (except a participant commissioner) • Any employee of the PHA, or any contractor, subcontractor or agent of the PHA,who formulates policy or who influences decisions with respect to the programs • Any public official,member of a governing body, or State or local legislator, who exercises functions or responsibilities with respect to the programs • Any member of the Congress of the United States ©Copyright 2005 Nan McKay&Associates,Inc. Page 13-8 Adminplan 1/1/05 Unlimited copies may be made for internal use. HUD may waive the conflict of interest requirements, except for members of Congress, for good cause. The PHA must submit a waiver request to the appropriate HUD Field Office for determination. Any waiver request submitted by the PHA must include [HCV Guidebook pp.11-2 and 11-3]: • Complete statement of the facts of the case; • Analysis of the specific conflict of interest provision of the HAP contract and justification as to why the provision should be waived; • Analysis of and statement of consistency with state and local laws. The local HUD office,the PHA, or both parties may conduct this analysis. Where appropriate, an opinion by the state's attorney general should be obtained; • Opinion by the local HUD office as to whether there would be an appearance of impropriety if the waiver were granted; • Statement regarding alternative existing housing available for lease under the HCV program or other assisted housing if the waiver is denied; • If the case involves a hardship for a particular family, statement of the circumstances and discussion of possible alternatives; • If the case involves a public official or member of the governing body, explanation of his/her duties under state or local law, including reference to any responsibilities involving the HCV program; • If the case involves employment of a family member by the PHA or assistance under the HCV program for an eligible PHA employee, explanation of the responsibilities and duties of the position, including any related to the HCV program; • If the case involves an investment on the part of a member, officer, or employee of the PHA, description of the nature of the investment, including disclosure/divestiture plans. Where the PHA has requested a conflict of interest waiver,the PHA may not execute the HAP contract until HUD has made a decision on the waiver request. PHA Policy In considering whether to request a conflict of interest waiver from HUD, the PHA will consider factors the reasons for waiving the requirement; consistency with state and local laws; the existence of alternative housing available to families; the individual circumstances of a particular family;the specific duties of individuals whose positions present a possible conflict of interest; the nature of any financial investment in the property and plans for disclosure/divestiture; and the possible appearance of impropriety. ®Copyright 2005 Nan McKay&Associates,Inc. Page 13-9 Adminplan 1/1/05 Unlimited copies may be made for internal use. Owner Actions That May Result in Disapproval of a Tenancy Request [24 CFR 982.306(c)] HUD regulations permit the PHA, at the PHA's discretion, to refuse to approve a request for tenancy if the owner has committed any of a number of different actions. If the PHA disapproves a request for tenancy because an owner is not qualified, it may not terminate the HAP contract for any assisted families that are already living in the owner's properties unless the owner has violated the HAP contract for those units [HCV GB p. 11-4]. PHA Policy The PHA will refuse to approve a request for tenancy if the PHA becomes aware that any of the following are true: The owner has violated obligations under a HAP contract under Section 8 of the 1937 Act (42 U.S.C. 14371); The owner has committed fraud, bribery or any other corrupt or criminal act in connection with any federal housing program; The owner has engaged in any drug-related criminal activity or any violent criminal activity; The owner has a history or practice of non-compliance with the HQS for units leased under the tenant-based programs, or with applicable housing standards for units leased with project-based Section 8 assistance or leased under any other federal housing program; The owner has a history or practice of failing to terminate tenancy of tenants of units assisted under Section 8 or any other federally assisted housing program for activity engaged in by the tenant, any member of the household, a guest or another person under the control of any member of the household that: (i) Threatens the right to peaceful enjoyment of the premises by other residents; (ii) Threatens the health or safety of other residents, of employees of the PHA, or of owner employees or other persons engaged in management of the housing; (iii) Threatens the health or safety of, or the right to peaceful enjoyment of their residences, by persons residing in the immediate vicinity of the premises; or(iv) Is drug-related criminal activity or violent criminal activity; The owner has a history or practice of renting units that fail to meet state or local housing codes; or The owner has not paid state or local real estate taxes, fines, or assessment. In considering whether to disapprove owners for any of the discretionary reasons listed above,the PHA will consider any mitigating factors. Such factors may include,but are not limited to,the seriousness of the violation in relation to program requirements,the impact on the ability of families to lease units under the program,health and safety of participating families, among others. Upon consideration of such circumstances,the PHA may, on a case-by-case basis, choose to approve an owner. ®Copyright 2005 Nan McKay&Associates,Inc. Page 13-10 Adminplan 1/1/05 Unlimited copies may be made for internal use. Legal Ownership of Unit The following represents PHA policy on legal ownership of a dwelling unit to be assisted under the HCV program. PHA Policy • If the ownership or the agency of the management company is questioned the Authority may request proof of legal ownership or agency (e.g. deed of trust, annual tax bill or agency agreement). 13-I.E. NON-DISCRIMINATION [HAP Contract—Form HUD-52641] The owner must not discriminate against any person because of race, color, religion, sex, national origin, age, familial status, or disability, in connection with any actions or responsibilities under the HCV program and the HAP contract with the PHA. The owner must cooperate with the PHA and with HUD in conducting any equal opportunity compliance reviews and complaint investigations in connection with the HCV program and the HAP contract with the PHA. See Chapter 2 for a more thorough discussion of Fair Housing and Equal Opportunity requirements in the HCV program. ®Copyright 2005 Nan McKay&Associates,Inc. Page 13-11 Adminplan 1/1/05 Unlimited copies may be made for internal use. PART II. HAP CONTRACTS 13-II.A. OVERVIEW The HAP contract represents a written agreement between the PHA and the owner of the dwelling unit occupied by a HCV assisted family. The contract spells out the owner's responsibilities under the program, as well as the PHA's obligations. Under the HAP contract, the PHA agrees to make housing assistance payments to the owner on behalf of a specific family occupying a specific unit. The HAP contract is used for all HCV program tenancies except for assistance under the Section 8 homeownership program, and assistance to families that own a manufactured home and lease the space. See chapter 15 for a discussion of any special housing types included in the PHA's HCV program. If the PHA has given approval for the family of the assisted tenancy,the owner and the PHA execute the HAP contract. See chapter 9 for a discussion of the leasing process, including provisions for execution of the HAP contract. ®Copyright 2005 Nan McKay&Associates,Inc. Page 13-13 Adminplan 1/1/05 Unlimited copies may be made for internal use. 13-II.8. HAP CONTRACT CONTENTS The HAP contract format is required by HUD, specifically Housing Assistance Payment(HAP) Contract, Form HUD-52641. The HAP contract contains three parts. Part A of the contract includes basic contract information about the name of the tenant family, address of the contract unit, names of all household members, first and last dates of initial lease term, amount of initial monthly rent to owner, amount of initial housing assistance payment, utilities and appliances to be supplied by owner and tenant, signatures of PHA and owner [HCV Guidebook, pp 11-10 and 11-11]. In general, the HAP contract cannot be modified. However, PHAs do have the discretion to add language to Part A of the HAP contract which prohibits the owner from collecting a security deposit in excess of private market practices or in excess of amounts charged to unassisted tenants. PHA policy on the amount of security deposit an owner may collect is found in chapter 9. In addition, PHAs have the discretion to add language to Part A of the HAP contract that defines when the housing assistance payment by the PHA is deemed received by the owner(e.g., upon mailing by the PHA or actual receipt by the owner). PHA Policy The PHA has not adopted a policy that defines when the housing assistance payment by the PHA is deemed received by the owner. Therefore, no modifications to the HAP contract will be necessary. ©Copyright 2005 Nan McKay&Associates,Inc. Page 13-14 Adminplan I/1/05 Unlimited copies may be made for internal use. Part B is the body of the contract. It describes in detail program requirements affecting the owner and owner roles and responsibilities under the HCV program. Most of the requirements contained in Part B of the HAP contract are outlined elsewhere in this plan. Topics addressed in Part B include: • Lease of Contract Unit • Maintenance, Utilities, and Other Services • Term of HAP Contract • Provision and Payment of Utilities and Appliances • Rent to Owner: Reasonable Rent • PHA Payment to Owner • Prohibition of Discrimination • Owner's Breach of HAP Contract • PHA and HUD Access to Premises and Owner's Records • Exclusion of Third Party Rights • Conflict of Interest • Assignment of the HAP Contract • Written Notices • Entire Agreement Interpretation Part C of the contract includes the Tenancy Addendum (Form HUD-52641-A). The addendum sets forth the tenancy requirements for the program and the composition of the household, as approved by the PHA. The owner must sign the HUD Tenancy Addendum with the prospective tenant, and the tenant has the right to enforce the Tenancy Addendum against the owner. The terms of the Tenancy Addendum prevail over any other provisions of the lease. ®Copyright 2005 Nan McKay&Associates,Inc. Page 13-15 Adminplan 1/1/05 Unlimited copies may be made for internal use. 13-II.C. HAP CONTRACT PAYMENTS General During the term of the HAP contract, and subject to the provisions of the HAP contract,the PHA must make monthly HAP payments to the owner on behalf of the family, at the beginning of each month. If a lease term begins after the first of the month,the HAP payment for the first month is prorated for a partial month. The amount of the HAP payment is determined according to the policies described in Chapter 6, and is subject to change during the term of the HAP contract. The PHA must notify the owner and the family in writing of any changes in the HAP payment. HAP payments can be made only during the lease term, and only while the family is residing in the unit. The monthly HAP payment by the PHA is credited toward the monthly rent to owner under the family's lease. The total of the rent paid by the tenant,plus the PHA HAP payment, should be equal to the rent specified in the lease(the rent to owner). The family is not responsible for payment of the HAP payment, and the PHA is not responsible for payment of the family share of rent. The family's share of the rent cannot be more than the difference between the total rent to the owner and the HAP payment. The owner may not demand or accept any rent payment from the tenant in excess of this maximum [24 CFR 982.451(b)(4)]. The owner may not charge the tenant extra amounts for items customarily included in rent in the locality, or provided at no additional cost to unsubsidized tenants in the premises [24 CFR 982.510(c)]. See chapter 9 for a discussion of separate,non-lease agreements for services, appliances and other items that are not included in the lease. If the owner receives any excess HAP from the PHA,the excess amount must be returned immediately. If the PHA determines that the owner is not entitled to all or a portion of the HAP, the PHA may deduct the amount of overpayment from any amounts due to the owner, including amounts due under any other Section 8 HCV contract. See Chapter 16 for additional detail on owner reimbursement of HAP overpayments. Owner Certification of Compliance Unless the owner complies with all provisions of the HAP contract, the owner is not entitled to receive housing assistance payments under the HAP contract [HAP Contract—Form HUD-52641]. By endorsing the monthly check from the PHA, the owner certifies to compliance with the terms of the HAP contract. This includes certification that the owner is maintaining the unit and premises in accordance with HQS; that the contract unit is leased to the tenant family and, to the best of the owner's knowledge, the family resides in the unit as the family's only residence; the rent to owner does not exceed rents charged by the owner for comparable unassisted units on the premises; and that the owner does not receive (other than rent to owner) any additional payments or other consideration for rent of the contract unit during the HAP term. ©Copyright 2005 Nan McKay&Associates,Inc. Page 13-16 Adminplan 1/1/05 Unlimited copies may be made for internal use. Late HAP Payments [24 CFR 982.451(a)(5)] The PHA is responsible for making HAP payments promptly when due to the owner, in accordance with the terms of the HAP contract. After the first two calendar months of the HAP contract term,the HAP contract provides for penalties if the PHA fails to make the HAP payment on time. Penalties for late HAP payments can only be imposed if 1)the penalties are in accordance with generally accepted local rental market practices and law governing penalties for late payment by tenants; 2) it is the owner's normal business practice to charge late payment penalties for both assisted and unassisted families; and 3)the owner charges the assisted family for late payment of the family's share of the rent. The PHA is not required to pay a late payment penalty if HUD determines that the payment is late for reasons beyond the PHA's control. In addition, late payment penalties are not required if the PHA intentionally delays or denies payment as a remedy to an owner breach of the HAP contract [HCV Guidebook p. 11-7]. Termination of HAP Payments [24 CFR 982.311(b)] The PHA must continue making housing assistance payments to the owner in accordance with the HAP contract as long as the tenant continues to occupy the unit and the HAP contract is not violated. HAP payments terminate when the HAP contract terminates or when the tenancy is terminated in accordance with the terms of the lease. If the owner has initiated eviction proceedings against the family and the family continues to reside in the unit, the PHA must continue to make housing assistance payments to the owner until the owner has obtained a court judgment or other process allowing the owner to evict the tenant. PHA Policy The owner must inform the PHA when the owner has initiated eviction proceedings against the family and the family continues to reside in the unit. The owner must inform the PHA when the owner has obtained a court judgment or other process allowing the owner to evict the tenant, and provide the PHA with a copy of such judgment or determination. After the owner has obtained a court judgment or other process allowing the owner to evict the tenant, the PHA will continue to make HAP payments to the owner until the family actually moves from the unit or until the family is physically evicted from the unit, whichever is earlier. The owner must inform the PHA of the date when the family actually moves from the unit or the family is physically evicted from the unit. C Copyright 2005 Nan McKay&Associates,Inc. Page 13-17 Adminplan 1/1/05 Unlimited copies may be made for internal use. 13-II.D. BREACH OF HAP CONTRACT [24 CFR 982.453] Any of the following actions by the owner constitutes a breach of the HAP contract: • If the owner violates any obligations under the HAP contract including failure to maintain the unit in accordance with HQS • If the owner has violated any obligation under any other HAP contract under Section 8 • If the owner has committed fraud, bribery or any other corrupt or criminal act in connection with any federal housing program • For projects with mortgages insured by HUD or loans made by HUD, if the owner has failed to comply with the regulation ns for the applicable program; or if the owner has committed fraud,bribery or any other corrupt or criminal act in connection with the mortgage or loan • If the owner has engaged in drug-related criminal activity • If the owner has committed any violent criminal activity If the PHA determines that a breach of the HAP contract has occurred, it may exercise any of its rights and remedies under the HAP contract. The PHA rights and remedies against the owner under the HAP contract include recovery of any HAP overpayment, suspension of housing assistance payments, abatement or reduction of the housing assistance payment,termination of the payment or termination the HAP contract. The PHA may also obtain additional relief by judicial order or action. The PHA must notify the owner of its determination and provide in writing the reasons for the determination. The notice may require the owner to take corrective action by an established deadline. The PHA must provide the owner with written notice of any reduction in housing assistance payments or the termination of the HAP contract. PHA Policy Before the PHA invokes a remedy against an owner,the PHA will evaluate all information and documents available to determine if the contract has been breached. If relevant,the PHA will conduct an audit of the owner's records pertaining to the tenancy or unit. If it is determined that the owner has breached the contract, the PHA will consider all of the relevant factors including the seriousness of the breach, the effect on the family, the owner's record of compliance and the number and seriousness of any prior HAP contract violations. ©Copyright 2005 Nan McKay&Associates,Inc. Page 13-18 Adminplan I/1/05 Unlimited copies may be made for internal use. 13-1I.E.HAP CONTRACT TERM AND TERMINATIONS The term of the HAP contract runs concurrently with the term of the dwelling lease [24 CFR 982.451(a)(2)], beginning on the first day of the initial term of the lease and terminating on the last day of the term of the lease, including any lease term extensions. The HAP contract and the housing assistance payments made under the HAP contract terminate if[HCV Guidebook pp.11-4 and 11-5,pg. 15-3]: • The owner or the family terminates the lease; • The lease expires; • The PHA terminates the HAP contract; • The PHA terminates assistance for the family; • The family moves from the assisted unit. In this situation,the owner is entitled to keep the housing assistance payment for the month when the family moves out of the unit. • 180 calendar days have elapsed since the PHA made the last housing assistance payment to the owner; • The family is absent from the unit for longer than the maximum period permitted by the PHA; • The Annual Contributions Contract(ACC) between the PHA and HUD expires • The PHA elects to terminate the HAP contract. PHA Policy The PHA may elect to terminate the HAP contract in each of the following situations: Available program funding is not sufficient to support continued assistance for families in the program [24 CFR 982.454]; The unit does not meet HQS size requirements due to change in family composition [24 CFR 982.403] —see chapter 8; The unit does not meet HQS [24 CFR 982.404] —see chapter 8; The family breaks up [HUD Form 52641] — see chapter 3; The owner breaches the HAP contract [24 CFR 982.453(b)] —see Section 13-II.D. Copyright 2005 Nan McKay&Associates,Inc. Page 13-19 Adminplan 1/1/05 Unlimited copies may be made for internal use. If the PHA terminates the HAP contract, the PHA must give the owner and the family written notice. The notice must specify the reasons for the termination and the effective date of the termination. Once a HAP contract is terminated, no further HAP payments may be made under that contract [HCV Guidebook pg.15-4]. PHA Policy In all cases, the HAP contract terminates at the end of the calendar month that follows the calendar month in which the PHA gives written notice to the owner. The owner is not entitled to any housing assistance payment after this period, and must return to the PHA any housing assistance payment received after this period. If the family moves from the assisted unit into a new unit, even if the new unit is in the same building or complex as the assisted unit,the HAP contract for the assisted unit terminates. A new HAP contract would be required [HCV GB,p. 11-17]. When the family moves from an assisted unit into a new unit,the term of the HAP contract for the new unit may begin in the same month in which the family moves out of its old unit. This is not considered a duplicative subsidy [HCV GB, p. 8-22]. ®Copyright 2005 Nan McKay&Associates,Inc. Page 13-20 Adminplan 1/1/05 Unlimited copies may be made for internal use. 13-II.F. CHANGE IN OWNERSHIP/ASSIGNMENT OF THE HAP CONTRACT [HUD-52641] The HAP contract cannot be assigned to a new owner without the prior written consent of the PHA. An owner under a HAP contract must notify the PHA in writing prior to a change in the legal ownership of the unit. The owner must supply all information as requested by the PHA. Prior to approval of assignment to a new owner,the new owner must agree to be bound by and comply with the HAP contract. The agreement between the new owner and the former owner must be in writing and in a form that the PHA finds acceptable. The new owner must provide the PHA with a copy of the executed agreement. PHA Policy Assignment of the HAP contract will be approved only if the new owner is qualified to become an owner under the HCV program according to the policies in Section 13-I.D. of this chapter. The PHA must receive a signed, written request from the existing owner stating the name and address of the new HAP payee and the effective date of the assignment in order to change the HAP payee under an outstanding HAP contract. Within 10 business days of receiving the owner's request, the PHA will inform the current owner in writing whether the assignment may take place. The new owner must provide a written certification to the PHA that includes: A copy of the escrow statement or other document showing the transfer of title and recorded deed; A copy of the owner's IRS Form W-9, Request for Taxpayer Identification Number and Certification, or the social security number of the new owner; The effective date of the HAP contract assignment; A written agreement to comply with the terms of the HAP contract; and • Confirmation that the new owner is not a prohibited relative. If the new owner does not agree to an assignment of the HAP contract, or fails to provide the necessary documents, the PHA will terminate the HAP contract with the old owner. If the new owner wants to offer the family a new lease, and the family elects to stay with continued assistance,the PHA will process the leasing in accordance with the policies in chapter 9. ®Copyright 2005 Nan McKay&Associates,Inc. Page 13-21 Adminplan 1/1/05 Unlimited copies may be made for internal use. Chapter 14 PROGRAM INTEGRITY INTRODUCTION The PHA is committed to ensuring that subsidy funds made available to the PHA are spent in accordance with HUD requirements. This chapter covers HUD and PHA policies designed to prevent, detect, investigate and resolve instances of program abuse or fraud. It also describes the actions that will be taken in the case of unintentional errors and omissions. Part I: Preventing, Detecting, and Investigating Errors and Program Abuse. This part presents PHA policies related to preventing, detecting, and investigating errors and program abuse. Part II: Corrective Measures and Penalties. This part describes the corrective measures the PHA must and may take when errors or program abuses are found. • ©Copyright 2005 Nan McKay&Associates,Inc. Pa Adminplan 9/1/05 a 14-1 Unlimited copies may be made for internal use. g PART I: PREVENTING,DETECTING,AND INVESTIGATING ERRORS AND PROGRAM ABUSE 14-I.A. PREVENTING ERRORS AND PROGRAM ABUSE PI-IA Policy The PHA anticipates that the vast majority of families, owners, and PHA employees intend to and will comply with program requirements and make reasonable efforts to avoid errors. To ensure that the PHA's HCV program is administered effectively and according to the highest ethical and legal standards, the PHA will employ a variety of techniques to ensure that both errors and intentional program abuse are rare. The PHA will discuss program compliance and integrity issues during the voucher briefing sessions described in Chapter 5. The PHA will provide each applicant and participant with the publication Things You Should Know (HUD-1140-OIG) that explains the types of actions a family must avoid and the penalties for program abuse. The PHA will place a warning statement about the penalties for fraud(as described in the False Statement Act, U.S.C. 1001 and 1010) on key PHA forms and form letters that request information from a family or owner. PHA staff will be required to review and explain the contents of all HUD- and PHA-required forms prior to requesting family member signatures. The PHA will provide each PHA employee with the necessary training on program rules and the organization's standards of conduct and ethics. For purposes of this chapter the term error refers to an unintentional error or omission. Program abuse or fraud refers to a single act or pattern of actions that constitute a false statement, omission, or concealment of a substantial fact, made with the intent to deceive or mislead. ©Copyright 2005 Nan McKay&Associates,Inc. Page 14-3 Adminplan 9/1/05 Unlimited copies may be made for internal use. g 14-I.B. DETECTING ERRORS AND PROGRAM ABUSE In addition to taking steps to prevent errors and program abuse,the PHA will use a variety of activities to detect errors and program abuse. Quality Control and Analysis of Data Under the Section 8 Management Assessment Program(SEMAP), HUD requires the PHA to review a random sample of tenant records annually to determine if the records conform to program requirements and to conduct quality control inspections of a sample of units to ensure HQS compliance [24 CFR, Part 985]. (See Chapter 16 for additional information about SEMAP requirements). PHA Policy In addition to the SEMAP quality control requirements, the PHA will employ a variety of methods to detect errors and program abuse. The PHA routinely will use available sources of up-front income verification to compare with family-provided information. At each annual reexamination, current information provided by the family will be compared to information provided at the last annual reexamination to identify inconsistencies and incomplete information. The PHA will compare family-reported income and expenditures to detect possible unreported income. Independent Audits and HUD Monitoring OMB Circular A-133 requires all PHAs that expend $500,000 or more in federal awards annually to have an independent audit(IPA). In addition, HUD conducts periodic on-site and automated monitoring of PHA activities and notifies the PHA of errors and potential cases of program abuse. PHA Policy The PHA will use the results reported in any IPA or HUD monitoring reports to identify potential program abuses as well as to assess the effectiveness of the PHA's error detection and abuse prevention efforts. Individual Reporting of Possible Errors and Program Abuse PHA Policy The PHA will encourage staff, program participants, and the public to report possible program abuse. ®Copyright 2005 Nan McKay&Associates,Inc. P a Adminplan 9/1/05 a 14-4 Unlimited copies may be made for internal use. g 14-I.C. INVESTIGATING ERRORS AND PROGRAM ABUSE When the PHA Will Investigate PHA Policy The PHA will review all referrals, specific allegations, complaints, and tips from any source including other agencies, companies, and individuals,to determine if they warrant investigation. In order for the PHA to investigate, the allegation must contain at least one independently-verifiable item of information, such as the name of an employer or the name of an unauthorized household member. The PHA will investigate inconsistent information related to the family that is identified through file reviews and the verification process. Consent to Release of Information [24 CFR 982.516] The PHA may investigate possible instances of error or abuse using all available PHA and public records. If necessary,the PHA will require HCV families to give consent to the release of additional information. Analysis and Findings PHA Policy The PHA will base its evaluation on a preponderance of the evidence collected during its investigation. Preponderance of the evidence is defined as evidence which is of greater weight or more convincing than the evidence which is offered in opposition to it; that is, evidence that as a whole shows that the fact sought to be proved is more probable than not. Preponderance of evidence may not be determined by the number of witnesses, but by the greater weight of all evidence For each investigation the PHA will determine (1) whether an error or program abuse has occurred, (2) whether any amount of money is owed the PHA, and (3)what corrective measures or penalties will be assessed. ®Copyright 2005 Nan McKay&Associates,Inc. Pa e 14-5 Adminplan 9/I/05 Unlimited copies may be made for internal use. g Consideration of Remedies All errors and instances of program abuse must be corrected prospectively. Whether the PHA -- will enforce other corrective actions and penalties depends upon the nature of the error or program abuse. PHA Policy In the case of family-caused errors or program abuse, the PHA will take into consideration(1) the seriousness of the offense and the extent of participation or culpability of individual family members, (2) any special circumstances surrounding the case, (3) any mitigating circumstances related to the disability of a family member, (4) the effects of a particular remedy on family members who were not involved in the offense. In the case of owner-caused errors or program abuse, the PHA will take into consideration(1) the seriousness of the offense, (2) the length of time since the violation has occurred, and (3)the effects of a particular remedy on family members who were not involved in the offense. Notice and Appeals PHA Policy The PHA will inform the relevant party in writing of its findings and remedies within 10 business days of the conclusion of the investigation. The notice will include(1) a description of the error or program abuse, (2)the basis on which the PHA determined the error or program abuses, (3)the remedies to be employed, and(4) the family's right to appeal the results through the informal review or hearing process, if applicable (see Chapter 16). • ®Copyright 2005 Nan McKay&Associates,Inc. Adminplan 9/1/05 Unlimited copies may be made for internal use. Page 14-6 PART H: CORRECTIVE MEASURES AND PENALTIES 14-ILA. SUBSIDY UNDER-OR OVERPAYMENTS A subsidy under-or overpayment includes (1) an incorrect housing assistance payment to the owner, (2)an incorrect family share established for the family, and (3) an incorrect utility reimbursement to a family. Corrections Whether the incorrect subsidy determination is an overpayment or underpayment of subsidy,the PHA must promptly correct the HAP, family share, and any utility reimbursement prospectively. PHA Policy Increases in the family share will be implemented only after the family has received 30 days notice. Any decreases in family share will become effective the first of the month following the discovery of the error. Reimbursement Whether the family or owner is required to reimburse the PHA or the PHA is required to make retroactive subsidy payments to the owner or family depends upon which party is responsible for the incorrect subsidy payment and whether the action taken was an error or program abuse. Policies regarding reimbursement are discussed in the three sections that follow. • O Copyright 2005 Nan McKay&Associates,Inc. Page 14-7 Adminplan 9/1/05 Unlimited copies may be made for internal use. 14-1I.B. FAMILY-CAUSED ERRORS AND PROGRAM ABUSE Family obligations and general administrative requirements for participating in the program are discussed throughout this plan. This section deals specifically with errors and program abuse by family members. An incorrect subsidy determination caused by a family generally would be the result of incorrect reporting of family composition, income, assets, or expenses, but also would include instances in which the family knowingly allows the PHA to use incorrect information provided by a third party. Family Reimbursement to PHA [HCV GB pp. 22-12 to 22-13] PHA Policy In the case of family-caused errors or program abuse,the family will be required to repay any excess subsidy received. The PHA may, but is not required to, offer the family a repayment agreement in accordance with Chapter 16. If the family fails to repay the excess subsidy, the PHA will terminate the family's assistance in accordance with the policies in Chapter 12. PHA Reimbursement to Family [HCV GB p. 22-12] PHA Policy The PHA will not reimburse the family for any underpayment of assistance when the underpayment clearly is caused by the family. ©Copyright 2005 Nan McKay&Associates,Inc. Pa e 14-8 Adminplan 9/1/05 Unlimited copies may be made for internal use. g Prohibited Actions An applicant or participant in the HCV program must not knowingly: • Make a false statement to the PHA [Title 18 U.S.C. Section 1001]. • Commit fraud, bribery, or any other corrupt or criminal act in connection with any federal housing program [24 CFR 982.552(c)(iv)]. PHA Policy Any of the following will be considered evidence of family program abuse: Payment to the owner in excess of amounts authorized by the PHA for rent, security deposit, and additional services Offering bribes or illegal gratuities to the PHA Board of Commissioners, employees, contractors, or other PHA representatives Offering payments or other incentives to the owner or a third party as an inducement for the third party to make false or misleading statements to the PHA on the family's behalf Use of a false name or the use of falsified, forged, or altered documents Intentional misreporting of family information or circumstances (e.g. income, family composition) Omitted facts that were obviously known by a family member (e.g., not reporting employment income) Admission of program abuse by an adult family member The PHA may determine other actions to be program abuse based upon a preponderance of the evidence, as defined earlier in this chapter. Penalties for Program Abuse In the case of program abuse caused by a family the PHA may, at its discretion, impose any of the following remedies. • The PHA may require the family to repay excess subsidy amounts paid by the PHA, as described earlier in this section. • The PHA may require, as a condition of receiving or continuing assistance, that a culpable family member not reside in the unit. See policies in Chapter 3 (for applicants) and Chapter 12 (for participants). • The PHA may deny or terminate the family's assistance following the policies set forth in Chapter 3 and Chapter 12 respectively. • The PHA may refer the family for state or federal criminal prosecution as described in section 14-II.E. ©Copyright 2005 Nan McKay&Associates,Inc. Page 14-9 Adminplan 9/1/05 Unlimited copies may be made for internal use. g 14-I1.C. OWNER-CAUSED ERROR OR PROGRAM ABUSE Owner requirements that are part of the regular process of offering, leasing, and maintaining a unit(e.g., HQS compliance, fair housing) are addressed in the appropriate chapters of this plan. This section focuses on errors and program abuse by owners. An incorrect subsidy determination caused by an owner generally would be the result of an incorrect owner statement about the characteristics of the assisted unit (e.g.,the number of bedrooms,which utilities are paid by the family). It also includes accepting duplicate housing assistance payments for the same unit in the same month, or after a family no longer resides in the unit. Owner Reimbursement to the PHA In all cases of overpayment of subsidy caused by the owner, the owner must repay to the PHA any excess subsidy received. The PHA may recover overpaid amounts by withholding housing assistance payments due for subsequent months, or if the debt is large,the PHA may allow the owner to pay in installments over a period of time [HCV GB p. 22-13]. PHA Policy In cases where the owner has received excess subsidy,the PHA will require the owner to repay the amount owed in accordance with the policies in Section 16-IV.B. Prohibited Owner Actions An owner participating in the HCV program must not: • Make any false statement to the PHA [Title 18 U.S.C. Section 1001]. • Commit fraud,bribery, or any other corrupt or criminal act in connection with any federal housing program [24 CFR 982.453(a)(3)] including: PHA Policy Any of the following will be considered evidence of owner program abuse: Charging the family rent above or below the amount specified by the PHA Charging a security deposit other than that specified in the family's lease Charging the family for services that are provided to unassisted tenants at no extra charge Knowingly accepting housing assistance payments for any month(s) after the family has vacated the unit Knowingly accepting incorrect or excess housing assistance payments Offering bribes or illegal gratuities to the PHA Board of Commissioners, employees, contractors, or other PHA representatives Offering payments or other incentives to an HCV family as an inducement for the family to make false or misleading statements to the PHA Residing in the unit with an assisted family ©Copyright 2005 Nan McKay&Associates,Inc. Page 14-10 Adminplan 9/1/05 Unlimited copies may be made for internal use. Remedies and Penalties When the PHA determines that the owner has committed program abuse, the PHA may take any of the following actions: • Require the owner to repay excess housing assistance payments, as discussed earlier in this section and in accordance with the policies in Chapter 16. • Terminate the HAP contract(See Chapter 13). • Bar the owner from future participation in any PHA programs. • Refer the case to state or federal officials for criminal prosecution as described in section 14-II.E. C Copyright 2005 Nan McKay&Associates,Inc. Page 14-11 Adminplan 9/1/05 Unlimited copies may be made for internal use. 14-II.D. PHA-CAUSED ERRORS OR PROGRAM ABUSE The responsibilities and expectations of PHA staff with respect to normal program administration are discussed throughout this plan.This section specifically addresses actions of a PHA staff member that are considered errors or program abuse related to the HCV program. Additional standards of conduct may be provided in the PHA personnel policy. PHA-caused incorrect subsidy determinations include (1) failing to correctly apply HCV rules regarding family composition, income, assets, and expenses, (2) assigning the incorrect voucher size to a family, and (3) errors in calculation. Repayment to the PHA Neither a family nor an owner is required to repay an overpayment of subsidy if the error or program abuse is caused by PHA staff[HCV GB. 22-12]. PHA Reimbursement to Family or Owner The PHA must reimburse a family for any underpayment of subsidy, regardless of whether the underpayment was the result of staff-caused error or staff or owner program abuse. Funds for this reimbursement must come from the PHA's administrative fee reserves [HCV GB p. 22-12]. Prohibited Activities PHA Policy Any of the following will be considered evidence of program abuse by PHA staff: Failing to comply with any HCV program requirements for personal gain Failing to comply with any HCV program requirements as a result of a conflict of interest relationship with any applicant,participant, or owner Seeking or accepting anything of material value from applicants,participating families, vendors, owners, contractors, or other persons who provide services or materials to the PHA Disclosing confidential or proprietary information to outside parties Gaining profit as a result of insider knowledge of PHA activities, policies, or practices Misappropriating or misusing HCV funds Destroying, concealing, removing, or inappropriately using any records related to the HCV program Committing any other corrupt or criminal act in connection with any federal housing program ©Copyright 20O5 Nan McKay&Associates,Inc. Page 14-12 Adminplan 9/1/05 Unlimited copies may be made for internal use. g 14-II.E. CRIMINAL PROSECUTION PHA Policy When the PHA determines that program abuse by an owner, family, or PHA staff member has occurred and the amount of overpaid subsidy meets or exceeds the threshold for prosecution under local or state law,the PHA will refer the matter to the appropriate entity for prosecution. When the amount of overpaid assistance meets or exceeds the federal threshold, the case will also be referred to the HUD Office of Inspector General (OIG). Other criminal violations related to the HCV program will be referred to the appropriate local, state, or federal entity. ®Copyright 2005 Nan McKay&Associates,Inc. Page 14-13 Adminplan 9/1/05 Unlimited copies may be made for internal use. 14-II.F. FRAUD AND PROGRAM ABUSE RECOVERIES The PHA may retain a portion of program fraud losses that the PHA recovers from a family or owner through litigation, court order, or a repayment agreement [24 CFR 982.163]. The PHA must be the principal party initiating or sustaining the action to recover amounts due from tenants that are due as a result of fraud and abuse. 24 CFR 792.202 permits the PHA to retain the greater of: • 50 percent of the amount it actually collects from a judgment, litigation (including settlement of a lawsuit)or an administrative repayment agreement, or • Reasonable and necessary costs that the PHA incurs related to the collection including costs of investigation, legal fees, and agency collection fees. The family must be afforded the opportunity for an informal hearing in accordance with requirements in 24 CFR 982.555. If HUD incurs costs on behalf of the PHA related to the collection,these costs must be deducted from the amount retained by the PHA. • ®Copyright 2005 Nan McKay&Associates,Inc. Page 14-14 Adminplan 9/1/05 Unlimited copies may be made for internal use. g Chapter 15 SPECIAL HOUSING TYPES [24 CFR 982 Subpart M] INTRODUCTION The PHA may permit a family to use any of the special housing types discussed in this chapter. However,the PHA is not required to permit families receiving assistance in its jurisdiction to use these housing types, except that PHAs must permit use of any special housing type if needed as a reasonable accommodation for a person with a disability. The PHA also may limit the number of families who receive HCV assistance in these housing types and cannot require families to use a particular housing type. No special funding is provided for special housing types. PHA Policy Families will not be permitted to use any special housing types,unless use is needed as a reasonable accommodation so that the program is readily accessible to a person with disabilities. Special housing types include single room occupancy (SRO), congregate housing, group homes, shared housing, cooperative housing, manufactured homes where the family owns the home and leases the space, and homeownership [24 CFR 982.601]. This chapter consists of the following seven parts. Each part contains a description of the housing type and any special requirements associated with it. Except as modified by this chapter, the general requirements of the HCV program apply to special housing types. Part I: Single Room Occupancy Part II: Congregate Housing Part III: Group Homes Part IV: Shared Housing Part V: Cooperative Housing Part VI: Manufactured Homes (including manufactured home space rental) Part VII: Homeownership ®Copyright 2005 Nan McKay&Associates,Inc. Page 15-1 Adminplan 1/1/05 Unlimited copies may be made for internal use. PART I. SINGLE ROOM OCCUPANCY [24 CFR 982.602 through 982.605] 15-I.A. OVERVIEW A single room occupancy (SRO) unit provides living and sleeping space for the exclusive use of the occupant but requires the occupant to share sanitary and/or food preparation facilities with others. More than one person may not occupy an SRO unit. HCV regulations do not limit the number of units in an SRO facility, but the size of a facility may be limited by local ordinances. When providing HCV assistance in an SRO unit, a separate lease and HAP contract are executed for each assisted person,and the standard form of the HAP contract is used. 15-I.B. PAYMENT STANDARD, UTILITY ALLOWANCE, AND HAP CALCULATION The payment standard for SRO housing is 75 percent of the 0-bedroom payment standard amount on the PHA's payment standard schedule. The utility allowance for an assisted person residing in SRO housing is 75 percent of the zero bedroom utility allowance. The HAP for an assisted occupant in an SRO facility is the lower of the SRO payment standard amount minus the TTP or the gross rent for the unit minus the TTP. 15-I.C. HOUSING QUALITY STANDARDS (HQS) HQS requirements described in Chapter 8 apply to SRO housing except as modified below. • Access: Access doors to the SRO unit must have working locks for privacy. The occupant must be able to access the unit without going through any other unit. Each unit must have immediate access to two or more approved means of exit from the building, appropriately marked and leading to safe and open space at ground level. The SRO unit must also have any other means of exit required by State or local law. • Fire Safety: All SRO facilities must have a sprinkler system that protects major spaces. "Major spaces" are defined as hallways, common areas, and any other areas specified in local fire,building, or safety codes. SROs must also have hard-wired smoke detectors, and any other fire and safety equipment required by state or local law. Sanitary facilities and space and security standards must meet local code requirements for SRO housing. In the absence of local code standards the requirements discussed below apply [24 CFR 982.605]. O Copyright 2005 Nan McKay&Associates,Inc. Page 15-3 Adminplan I/1/05 Unlimited copies may be made for internal use. • Sanitary Facilities: At least one flush toilet that can be used in privacy, a lavatory basin, and a bathtub or shower in proper operating condition must be provided for each six persons(or fewer)residing in the SRO facility. If the SRO units are leased only to men, flush urinals may be substituted for up to one half of the required number of toilets. Sanitary facilities must be reasonably accessible from a common hall or passageway, and may not be located more than one floor above or below the SRO unit. They may not be located below grade unless the SRO units are located on that level. • Space and Security: An SRO unit must contain at least 110 square feet of floor space, and at least four square feet of closet space with an unobstructed height of at least five feet, for use • by the occupant. If the closet space is less than four square feet, the habitable floor space in the SRO unit must be increased by the amount of the deficiency. Exterior doors and windows accessible from outside the SRO unit must be lockable. Because no children live in SRO housing,the housing quality standards applicable to lead- based paint do not apply. ®Copyright 2005 Nan McKay&Associates,Inc. Page 15-4 Adminplan 1/1/05 Unlimited copies may be made for internal use. PART II. CONGREGATE HOUSING [24 CFR 982.606 through 982.609] 15-II.A. OVERVIEW Congregate housing is intended for use by elderly persons or persons with disabilities. A congregate housing facility contains a shared central kitchen and dining area and a private living area for the individual household that includes at least a living room, bedroom and bathroom. Food service for residents must be provided. • If approved by the PHA, a family member or live-in aide may reside with the elderly person or person with disabilities. The PHA must approve a live-in aide if needed as a reasonable accommodation so that the program is readily accessible to and usable by persons with disabilities. When providing HCV assistance in congregate housing, a separate lease and HAP contract are executed for each assisted family, and the standard form of the HAP contract is used. ®Copyright 2005 Nan McKay&Associates,Inc. Page 15-5 Adminplan I/1/05 Unlimited copies may be made for internal use. 15-II.B. PAYMENT STANDARD, UTILITY ALLOWANCE,AND HAP CALCULATION The payment standard for an individual unit in a congregate housing facility is based on the number of rooms in the private living area. If there is only one room in the unit(not including the bathroom or the kitchen, if a kitchen is provided), the PHA must use the payment standard for a 0-bedroom unit. If the unit has two or more rooms (other than the bathroom and the kitchen),the PHA must use the 1-bedroom payment standard. The HAP for an assisted occupant in a congregate housing facility is the lower of the applicable payment standard minus the TTP or the gross rent for the unit minus the TTP. • The gross rent for the unit for the purpose of calculating HCV assistance is the shelter portion (including utilities) of the resident's monthly housing expense only. The residents' costs for food service should not be included in the rent for a congregate housing unit. 15-II.C. HOUSING QUALITY STANDARDS HQS requirements as described in Chapter 8 apply to congregate housing except for the requirements stated below. Congregate housing must have (1) a refrigerator of appropriate size in the private living area of each resident; (2) a central kitchen and dining facilities located within the premises and accessible to the residents, and (3) food service for the residents, that is not provided by the residents themselves. The housing quality standards applicable to lead-based paint do not apply. ®Copyright 2005 Nan McKay&Associates,Inc. Page 15-6 Adminplan 1/1105 Unlimited copies may be made for internal use. PART III. GROUP HOME [24 CFR 982.610 through 982.614 and HCV GB p. 7-4] 15-III.A. OVERVIEW A group home is a state-licensed facility intended for occupancy by elderly persons and/or persons with disabilities. Except for live-in aides, all persons living in a group home, whether assisted or not,must be elderly persons or persons with disabilities. Persons living in a group home must not require continuous medical or nursing care. A group home consists of bedrooms for residents, which can be shared by no more than two people, and a living room, kitchen, dining area, bathroom, and other appropriate social, recreational, or community space that may be shared with other residents. No more than 12 persons may reside in a group home including assisted and unassisted residents and any live-in aides. If approved by the PHA, a live-in aide may live in the group home with a person with disabilities. The PHA must approve a live-in aide if needed as a reasonable accommodation so that the program is readily accessible to and usable by persons with disabilities. When providing HCV assistance in a group home, a separate lease and HAP contract is executed for each assisted family, and the standard form of the HAP contract is used. 15-III.B. PAYMENT STANDARD, UTILITY ALLOWANCE, AND HAP CALCULATION Unless there is a live-in aide, the family unit size for an assisted occupant of a group home must be 0- or 1-bedroom, depending on the PHA's subsidy standard. If there is a live-in aide, the aide must be counted in determining the household's unit size. The payment standard used to calculate the HAP is the lower of the payment standard for the family unit size or the prorata share of the payment standard for the group home size. The prorata share is calculated by dividing the number of persons in the assisted household by the number of persons(assisted and unassisted) living in the group home. The HAP for an assisted occupant in a group home is the lower of the payment standard minus the TTP or the gross rent minus the TTP. The utility allowance for an assisted occupant in a group home is the prorata share of the utility allowance for the group home. The rents paid for participants residing in group homes are subject to generally applicable standards for rent reasonableness. The rent for an assisted person must not exceed the prorata portion of the reasonable rent for the group home. In determining reasonable rent,the PHA should consider whether sanitary facilities and facilities for food preparation and service are common facilities or private facilities. CO Copyright 2005 Nan McKay&Associates,Inc. Page 15-7 Adminplan I/1/05 Unlimited copies may be made for internal use. 15-III.C. HOUSING QUALITY STANDARDS HQS requirements described in Chapter 8 apply to group homes except for the requirements stated below. • Sanitary Facilities: A group home must have at least one bathroom in the facility,with a flush toilet that can be used in privacy, a fixed basin with hot and cold running water, and a shower or bathtub with hot and cold running water. A group home may contain private or common bathrooms. However, no more than four residents can be required to share a bathroom. • Food Preparation and Service: Group home units must contain a kitchen and dining area with adequate space to store,prepare, and serve food. The facilities for food preparation and service may be private or may be shared by the residents. The kitchen must contain a range, an oven, a refrigerator, and a sink with hot and cold running water. The sink must drain into an approvable public or private disposal system. • Space and Security: Group homes must contain at least one bedroom of appropriate size for every two people, and a living room, kitchen, dining area, bathroom, and other appropriate social, recreational, or community space that may be shared with other residents. • Structure and Material: To avoid any threat to the health and safety of the residents, group homes must be structurally sound. Elevators must be in good condition. Group homes must be accessible to and usable by residents with disabilities. • Site and Neighborhood: Group homes must be located in a residential setting. The site and neighborhood should be reasonably free from hazards to the health, safety, and general welfare of the residents, and should not be subject to serious adverse conditions, such as: - Dangerous walks or steps - Instability - Flooding, poor drainage - Septic tank back-ups - Sewage hazards - Mud slides - Abnormal air pollution - Smoke or dust - Excessive noise - Vibrations or vehicular traffic - Excessive accumulations of trash - Vermin or rodent infestation, and - Fire hazards. The housing quality standards applicable to lead-based paint do not apply. ®Copyright 2005 Nan McKay&Associates,Inc. Page 15-8 Adminplan I/I/05 Unlimited copies may be made for internal use. PART IV. SHARED HOUSING [24 CFR 982.615 through 982.618] 15-IV.I. OVERVIEW Shared housing is a single housing unit occupied by an assisted family and another resident or residents. The shared unit consists of both common space for use by the occupants of the unit and separate private space for each assisted family. An assisted family may share a unit with other persons assisted under the HCV program or with other unassisted persons. The owner of a shared housing unit may reside in the unit, but housing assistance may not be paid on behalf of the owner. The resident owner may not be related by blood or marriage to the assisted family. If approved by the PHA, a live-in aide may reside with the family to care for a person with disabilities. The PHA must approve a live-in aide if needed as a reasonable accommodation so that the program is readily accessible to and usable by persons with disabilities. When providing HCV assistance in shared housing, a separate lease and HAP contract are executed for each assisted family, and the standard form of the HAP contract is used. 15-IV.B. PAYMENT STANDARD, UTILITY ALLOWANCE AND HAP CALCULATION The payment standard for a family in shared housing is the lower of the payment standard for the family unit size or the prorata share of the payment standard for the shared housing unit size. The prorata share is calculated by dividing the number of bedrooms available for occupancy by the assisted family in the private space by the total number of bedrooms in the unit. The HAP for a family in shared housing is the lower of the payment standard minus the Ti? or the gross rent minus the TTP. The utility allowance for an assisted family living in shared housing is the prorata share of the utility allowance for the shared housing unit. The rents paid for families living in shared housing are subject to generally applicable standards for rent reasonableness. The rent paid to the owner for the assisted family must not exceed the pro-rata portion of the reasonable rent for the shared unit. In determining reasonable rent, the PHA should consider whether sanitary and food preparation areas are private or shared. ®Copyright 2005 Nan McKay&Associates,Inc. Page 15-9 Adminplan 1/1/05 Unlimited copies may be made for internal use. 15-IV.C. HOUSING QUALITY STANDARDS The PHA may not give approval to reside in shared housing unless the entire unit, including the portion of the unit available for use by the assisted family under its lease, meets the housing quality standards. HQS requirements described in Chapter 8 apply to shared housing except for the requirements stated below. • Facilities Available for the Family: Facilities available to the assisted family, whether shared or private, must include a living room, a bathroom, and food preparation and refuse disposal facilities. • Space and Security: The entire unit must provide adequate space and security for all assisted and unassisted residents. The private space for each assisted family must contain at least one bedroom for each two persons in the family. The number of bedrooms in the private space of an assisted family must not be less than the family unit size. A 0-bedroom or 1-bedroom unit may not be used for shared housing. ®Copyright 2005 Nan McKay&Associates,Inc. Page 15-10 Adminplan 1/1/05 Unlimited copies may be made for internal use. PART V. COOPERATIVE HOUSING [24 CFR 982.619] 15-V.A. OVERVIEW This part applies to rental assistance for a cooperative member residing in cooperative housing. It does not apply to assistance for a cooperative member who has purchased membership under the HCV homeownership option, or to rental assistance for a family that leases a cooperative housing unit from a cooperative member. A cooperative is a form of ownership (nonprofit corporation or association) in which the residents purchase memberships in the ownership entity. Rather than being charged"rent"a cooperative member is charged a"carrying charge." When providing HCV assistance in cooperative housing, the standard form of the HAP contract is used. 15-V.B. PAYMENT STANDARD, UTILITY ALLOWANCE AND HAP CALCULATION The payment standard and utility allowance are determined according to regular HCV program requirements. The HAP for a cooperative housing unit is the lower of the payment standard minus the TTP or the monthly carrying charge for the unit,plus any utility allowance, minus the TTP. The monthly carrying charge includes the member's share of the cooperative debt service, operating expenses, and necessary payments to cooperative reserve funds. The carrying charge does not include down payments or other payments to purchase the cooperative unit or to amortize a loan made to the family for this purpose. 15-V.C. HOUSING QUALITY STANDARDS All standard HQS requirements apply to cooperative housing units. There are no additional HQS requirements. ®Copyright 2005 Nan McKay&Associates,Inc. Page 15-11 Adminplan 1/1/05 Unlimited copies may be made for internal use. PART VI. MANUFACTURED HOMES [24 CFR 982.620 through 982.624] 15-VI.A. OVERVIEW A manufactured home is a manufactured structure,transportable in one or more parts, that is built on a permanent chassis, and designed for use as a principal place of residence. HCV- assisted families may occupy manufactured homes in two different ways. (1) A family can choose to rent a manufactured home already installed on a space and the PHA must permit it. In this instance program rules are the same as when a family rents any other residential housing, except that there are special HQS requirements as provided in 15-VI.D below. (2)HUD also permits an otherwise eligible family that owns a manufactured home to rent a space for the manufactured home and receive HCV assistance with the rent for the space. PHAs may, but are not required to,provide assistance for such families. 15-VI.B. SPECIAL POLICIES FOR MANUFACTURED HOME OWNERS WHO LEASE A SPACE Family Income In determining the annual income of families leasing manufactured home spaces,the value of the family's equity in the manufactured home in which the family resides is not counted as a family asset. Lease and HAP Contract There is a separate Tenancy Addendum(Form 52642-a) and separate HAP Contract(Form 52642) for this special housing type. ®Copyright 2005 Nan McKay&Associates,Inc. Page 15-13 Adminplan 1/1/05 Unlimited copies may be made for internal use. 15-VI.C. PAYMENT STANDARD, UTILITY ALLOWANCE AND HAP CALCULATION Payment Standards The FMR for a manufactured home space is generally 40 percent of the published FMR for a 2- bedroom unit or,where approved by HUD,the 40th percentile of the rental distribution of manufactured home spaces for the FMR area. The PHA may establish a payment standard for manufactured home spaces that is between 90-110 percent of the FMR for manufactured home spaces. Utility Allowance The PHA must establish utility allowances for manufactured home space rental. For the first 12 months of the initial lease term only,the allowance must include an amount for a utility hook-up charge if the family actually incurred a hook-up charge because of a move. This allowance will not be given to a family that leases in place. Utility allowances for manufactured home space must not include the costs of digging a well or installing a septic system. Space Rent The space rent is the sum of the rent to the owner for the manufactured home space, any charges for maintenance and management provided by the owner, and the utility allowance for tenant- paid utilities. Housing Assistance Payment The HAP for a manufactured home space under the housing choice voucher program is the lower of the payment standard minus the TTP or the(gross)manufactured home space rent minus the r TTP. Rent Reasonableness Initially, and annually thereafter the PHA must determine that the rent for the manufactured home space is reasonable based on rents for comparable manufactured home spaces. The PHA must consider the location and size of the space, and any services and maintenance to be provided by the owner. By accepting the monthly HAP check, the owner certifies that the rent does not exceed rents charged by the owner for comparable unassisted spaces in the manufactured home park or elsewhere. ©Copyright 2005 Nan McKay&Associates,Inc. Page 15-14 Adminplan I/1/05 Unlimited copies may be made for internal use. 15-VLD. HOUSING QUALITY STANDARDS Under either type of occupancy described in 15-VI.A above, the manufactured home must meet all HQS performance requirements and acceptability criteria discussed in Chapter 8 of this plan. In addition,the following requirement applies: Manufactured Home Tie Down A manufactured home must be placed on the site in a stable manner, and must be free from hazards such as sliding or wind damage. The home must be securely anchored by a tie-down device that distributes and transfers the loads imposed by the unit to appropriate ground anchors to resist overturning and sliding. O Copyright 2005 Nan McKay&Associates,Inc. Page 15-15 Adminplan 1/I/05 Unlimited copies may be made for internal use. PART VII. HOMEOWNERSHIP [24 CFR 982.625 through 982.643] 15-VII.A. OVERVIEW [24 CFR 982.625] The homeownership option is used to assist a family residing in a home purchased and owned by one or more members of the family. A family assisted under this option may be newly admitted or an existing participant in the HCV program. The PHA must have the capacity to operate a successful HCV homeownership program as defined by the regulations. There are two forms of homeownership assistance a PHA may offer under this option: monthly homeownership assistance payments, or a single down payment assistance grant. PHAs may choose to offer either or both forms of homeownership assistance, or choose not to offer either. If a PHA offers both forms of assistance, a family must choose which form of assistance to receive. The PHA must offer either form of homeownership assistance if needed as a reasonable accommodation so that the program is readily accessible to and usable by persons with disabilities. It is the sole responsibility of the PHA to determine whether it is reasonable to implement a homeownership program as a reasonable accommodation. The PHA must determine what is reasonable based on the specific circumstances and individual needs of the person with a disability. The PHA may determine that it is not reasonable to offer homeownership assistance as a reasonable accommodation in cases where the PHA has otherwise opted not to implement a homeownership program. The PHA must approve a live-in aide if needed as a reasonable accommodation so that the program is readily accessible to and usable by persons with disabilities. This Authority currently does not offer Homeownership. ®Copyright 2005 Nan McKay&Associates,Inc. Page 15-17 Adminplan 1/1/05 Unlimited copies may be made for internal use. 15-VII.B. FAMILY ELIGIBILITY [24 CFR 982.627] The family must meet all of the requirements listed below before the commencement of homeownership assistance. The PHA may also establish additional initial requirements as long as they are described in the PHA administrative plan. • The family must have been admitted to the Housing Choice Voucher program. • The family must qualify as a first-time homeowner, or may be a cooperative member. • The family must meet the Federal minimum income requirement. The family must have a • gross annual income equal to the Federal minimum wage multiplied by 2000,based on the income of adult family members who will own the home. The PHA may establish a higher income standard for families. However, a family that meets the federal minimum income requirement(but not the PHA's requirement) will be considered to meet the minimum income requirement if it can demonstrate that it has been pre-qualified or pre-approved for financing that is sufficient to purchase an eligible unit. • For disabled families,the minimum income requirement is equal to the current SSI monthly payment for an individual living alone,multiplied by 12. • For elderly or disabled families, welfare assistance payments for adult family members who will own the home will be included in determining whether the family meets the minimum income requirement. It will not be included for other families. • The family must satisfy the employment requirements by demonstrating that one or more adult members of the family who will own the home at commencement of homeownership assistance is currently employed on a full-time basis (the term'full-time employment' means not less than an average of 30 hours per week); and has been continuously so employed during the year before commencement of homeownership assistance for the family. • The employment requirement does not apply to elderly and disabled families. In addition, if a family, other than an elderly or disabled family includes a person with disabilities, the PHA must grant an exemption from the employment requirement if the PHA determines that it is needed as a reasonable accommodation. • The family has not defaulted on a mortgage securing debt to purchase a home under the homeownership option • Except for cooperative members who have acquired cooperative membership shares prior to commencement of homeownership assistance, no family member has a present ownership interest in a residence at the commencement of homeownership assistance for the purchase of any home. • Except for cooperative members who have acquired cooperative membership shares prior to the commencement of homeownership assistance, the family has entered a contract of sale in accordance with 24 CFR 982.631(c). ®Copyright 2005 Nan McKay&Associates,Inc. Page 15-18 Adminplan 1/1/05 Unlimited copies may be made for internal use. 15-VII.C. SELECTION OF FAMILIES [24 CFR 982.626] Unless otherwise provided (under the homeownership option), the PHA may limit homeownership assistance to families or purposes defined by the PHA, and may prescribe additional requirements for commencement of homeownership assistance for a family. Any such limits or additional requirements must be described in the PHA administrative plan. If the PHA limits the number of families that may participate in the homeownership option,the PHA must establish a system by which to select families to participate. 15-VII.D. ELIGIBLE UNITS [24 CFR 982.628] In order for a unit to be eligible, the PHA must determine that the unit satisfies all of the following requirements: • The unit must meet HUD's"eligible housing"requirements. The unit may not be any of the following: - A public housing or Indian housing unit; - A unit receiving Section 8 project-based assistance; - A nursing home, board and care home, or facility providing continual psychiatric, medical or nursing services; - A college or other school dormitory; - On the grounds of penal, reformatory, medical,mental, or similar public or private institutions. • The unit must be under construction or already exist at the time the family enters into the contract of sale. • The unit must be a one-unit property or a single dwelling unit in a cooperative or condominium. • The unit must have been inspected by the PHA and by an independent inspector designated by the family. • The unit must meet Housing Quality Standards (see Chapter 8). • For a unit where the family will not own fee title to the real property(such as a manufactured home), the home must have a permanent foundation and the family must have the right to occupy the site for at least 40 years. ©Copyright 2005 Nan McKay&Associates,Inc. Page 15-19 Adminplan I/1/05 Unlimited copies may be made for internal use. • For PHA-owned units all of the following conditions must be satisfied: - The PHA informs the family, both orally and in writing, that the family has the right to purchase any eligible unit and a PHA-owned unit is freely selected by the family without PHA pressure or steering; - The unit is not ineligible housing; - The PHA obtains the services of an independent agency to inspect the unit for compliance with HQS, review the independent inspection report, review the contract of sale, determine the reasonableness of the sales price and any PHA provided financing. All of these actions must be completed in accordance with program requirements. The PHA must not approve the unit if the PHA has been informed that the seller is debarred, suspended, or subject to a limited denial of participation. 15-VILE.ADDITIONAL PHA REQUIREMENTS FOR SEARCH AND PURCHASE [24 CFR 982.629] It is the family's responsibility to find a home that meets the criteria for voucher homeownership assistance. The PHA may establish the maximum time that will be allowed for a family to locate and purchase a home, and may require the family to report on their progress in finding and purchasing a home. If the family is unable to purchase a home within the maximum time established by the PHA, the PHA may issue the family a voucher to lease a unit or place the family's name on the waiting list for a voucher. C Copyright 2005 Nan McKay&Associates,Inc. Page 15-20 Adminplan 1/1/05 Unlimited copies may be made for internal use. 15-VII.F. HOMEOWNERSHIP COUNSELING [24 CFR 982.630] Before commencement of homeownership assistance for a family,the family must attend and satisfactorily complete the pre-assistance homeownership and housing counseling program required by the PHA. HUD suggests the following topics for the PHA-required pre-assistance counseling: • Home maintenance (including care of the grounds); • Budgeting and money management; • Credit counseling; • How to negotiate the purchase price of a home; • How to obtain homeownership financing and loan pre-approvals, including a description of types of financing that may be available, and the pros and cons of different types of financing; • How to find a home, including information about homeownership opportunities, schools, and transportation in the PHA jurisdiction; • Advantages of purchasing a home in an area that does not have a high concentration of low- income families and how to locate homes in such areas; • Information on fair housing, including fair housing lending and local fair housing enforcement agencies; and • Information about the Real Estate Settlement Procedures Act(12 U.S.C. 2601 et seq.) (RESPA), state and Federal truth-in-lending laws, and how to identify and avoid loans with oppressive terms and conditions. The PHA may adapt the subjects covered in pre-assistance counseling (as listed) to local circumstances and the needs of individual families. The PHA may also offer additional counseling after commencement of homeownership assistance (ongoing counseling). If the PHA offers a program of ongoing counseling for participants in the homeownership option, the PHA shall have discretion to determine whether the family is required to participate in the ongoing counseling. If the PHA does not use a HUD-approved housing counseling agency to provide the counseling, the PHA should ensure that its counseling program is consistent with the counseling provided under HUD's Housing Counseling program. ©Copyright 2005 Nan McKay&Associates,Inc. Page 15-21 Adminplan I/1/05 Unlimited copies may be made for internal use. 15-VII.G. HOME INSPECTIONS, CONTRACT OF SALE, AND PHA DISAPPROVAL OF SELLER [24 CFR 982.631] Home Inspections The PHA may not commence monthly homeownership assistance payments or provide down payment assistance grants for a family until the PHA has inspected the unit and has determined that the unit passes HQS. An independent professional inspector selected by and paid for by the family must also inspect the unit.The independent inspection must cover major building systems and components, including foundation and structure, housing interior and exterior, and the roofing, plumbing, electrical, and heating systems. The independent inspector must be qualified to report on property conditions, including major building systems and components. The PHA may not require the family to use an independent inspector selected by the PHA. The independent inspector may not be a PHA employee or contractor, or other person under control of the PHA. However,the PHA may establish standards for qualification of inspectors selected by families under the homeownership option. The PHA may disapprove a unit for assistance based on information in the independent inspector's report, even if the unit was found to comply with HQS. Contract of Sale Before commencement of monthly homeownership assistance payments or receipt of a down payment assistance grant, a member or members of the family must enter into a contract of sale with the seller of the unit to be acquired by the family. The family must give the PHA a copy of the contract of sale. The contract of sale must: • Specify the price and other terms of sale by the seller to the purchaser; • Provide that the purchaser will arrange for a pre-purchase inspection of the dwelling unit by an independent inspector selected by the purchaser; • Provide that the purchaser is not obligated to purchase the unit unless the inspection is satisfactory to the purchaser; • Provide that the purchaser is not obligated to pay for any necessary repairs; and • Contain a certification from the seller that the seller has not been debarred, suspended, or subject to a limited denial of participation under CFR part 24. Disapproval of a Seller In its administrative discretion, the PHA may deny approval of a seller for the same reasons a PHA may disapprove an owner under the regular HCV program [see 24 CFR 982.306(c)]. ®Copyright 2005 Nan McKay&Associates,Inc. Page 15-22 Adminplan 1/1/05 Unlimited copies may be made for internal use. 15-VII.H. FINANCING [24 CFR 982.632] The PHA may establish requirements for financing purchase of a home under the homeownership option. This may include requirements concerning qualification of lenders, terms of financing, restrictions concerning debt secured by the home, lender qualifications, loan terms, and affordability of the debt. The PHA must establish policies describing these requirements in the administrative plan. A PHA may not require that families acquire financing from one or more specified lenders, thereby restricting the family's ability to secure favorable financing terms. 15-VII.I. CONTINUED ASSISTANCE REQUIREMENTS; FAMILY OBLIGATIONS [24 CFR 982.633] Homeownership assistance may only be paid while the family is residing in the home. If the family moves out of the home,the PHA may not continue homeownership assistance after the month when the family moves out. The family or lender is not required to refund to the PHA the homeownership assistance for the month when the family moves out. Before commencement of homeownership assistance,the family must execute a statement in which the family agrees to comply with all family obligations under the homeownership option. The family must comply with the following obligations: • The family must comply with the terms of the mortgage securing debt incurred to purchase the home, or any refinancing of such debt. • The family may not convey or transfer ownership of the home, except for purposes of financing, refinancing, or pending settlement of the estate of a deceased family member. Use and occupancy of the home are subject to 24 CFR 982.551 (h) and (i). • The family must supply information to the PHA or HUD as specified in 24 CFR 982.551(b). The family must further supply any information required by the PHA or HUD concerning mortgage financing or refinancing, sale or transfer of any interest in the home, or homeownership expenses. • The family must notify the PHA before moving out of the home. • The family must notify the PHA if the family defaults on the mortgage used to purchase the home. • No family member may have any ownership interest in any other residential property. • The family must comply with the obligations of a participant family described in 24 CFR 982.551,except for the following provisions which do not apply to assistance under the homeownership option: 24 CFR 982.551(c), (d), (e), (0, (g) and (j). ®Copyright 2005 Nan McKay&Associates,Inc. Page 15-23 Adminplan I/I/05 Unlimited copies may be made for internal use. 15-VII.J. MAXIMUM TERM OF HOMEOWNER ASSISTANCE [24 CFR 982.634] .-, Except in the case of a family that qualifies as an elderly or disabled family, other family members (described below) shall not receive homeownership assistance for more than: • Fifteen years, if the initial mortgage incurred to finance purchase of the home has a term of 20 years or longer; or • Ten years, in all other cases. The maximum term described above applies to any member of the family who: • Has an ownership interest in the unit during the time that homeownership payments are made; or • Is the spouse of any member of the household who has an ownership interest in the unit during the time homeownership payments are made. In the case of an elderly family,the exception only applies if the family qualifies as an elderly family at the start of homeownership assistance. In the case of a disabled family,the exception applies if at any time during receipt of homeownership assistance the family qualifies as a disabled family. If, during the course of homeownership assistance,the family ceases to qualify as a disabled or elderly family, the maximum term becomes applicable from the date homeownership assistance commenced. However, such a family must be provided at least 6 months of homeownership assistance after the maximum term becomes applicable (provided the family is otherwise eligible to receive homeownership assistance). If the family has received such assistance for different homes, or from different PHAs,the total of such assistance terms is subject to the maximum term described in this part. 15-VII.K. HOMEOWNERSHIP ASSISTANCE PAYMENTS AND HOMEOWNERSHIP EXPENSES [24 CFR 982.635] The monthly homeownership assistance payment is the lower of: the voucher payment standard minus the total tenant payment, or the monthly homeownership expenses minus the total tenant payment. In determining the amount of the homeownership assistance payment,the PHA will use the same payment standard schedule, payment standard amounts, and subsidy standards as those described in elsewhere in this plan for the Housing Choice Voucher program. The PHA may pay the homeownership assistance payments directly to the family, or at the PHA's discretion, to a lender on behalf of the family. If the assistance payment exceeds the amount due to the lender, the PHA must pay the excess directly to the family. Homeownership assistance for a family terminates automatically 180 calendar days after the last homeownership assistance payment on behalf of the family. The PHA must adopt policies for determining the amount of homeownership expenses to be allowed by the PHA in accordance with HUD requirements. ®Copyright 2005 Nan McKay&Associates,Inc. Page 15-24 Adminplan 1/1/05 Unlimited copies may be made for internal use. Homeownership expenses (not including cooperatives) only include amounts allowed by the PHA to cover: -. • Principal and interest on initial mortgage debt, any refinancing of such debt, and any mortgage insurance premium incurred to finance purchase of the home; • Real estate taxes and public assessments on the home; • Home insurance; • The PHA allowance for maintenance expenses; • The PHA allowance for costs of major repairs and replacements; • The PHA utility allowance for the home; • Principal and interest on mortgage debt incurred to finance costs for major repairs, replacements or improvements for the home. If a member of the family is a person with disabilities, such debt may include debt incurred by the family to finance costs needed to make the home accessible for such person, if the PHA determines that allowance of such costs as homeownership expenses is needed as a reasonable accommodation so that the homeownership option is readily accessible to and usable by such person; • Land lease payments where a family does not own fee title to the real property on which the home is located; [see 24 CFR 982.628(b)]. • For a condominium unit, condominium operating charges or maintenance fees assessed by the condominium homeowner association. Homeownership expenses for a cooperative member may only include amounts allowed by the ^ PHA to cover: • The cooperative charge under the cooperative occupancy agreement including payment for real estate taxes and public assessments on the home; • Principal and interest on initial debt incurred to finance purchase of cooperative membership shares and any refinancing of such debt; • Home insurance; • The PHA allowance for maintenance expenses; • The PHA allowance for costs of major repairs and replacements; • The PHA utility allowance for the home; and • Principal and interest on debt incurred to finance major repairs, replacements or improvements for the home. If a member of the family is a person with disabilities, such debt may include debt incurred by the family to finance costs needed to make the home accessible for such person, if the PHA determines that allowance of such costs as homeownership expenses is needed as a reasonable accommodation so that the homeownership option is readily accessible to and usable by such person. • Cooperative operating charges or maintenance fees assessed by the cooperative homeowner association. ®Copyright 2005 Nan McKay&Associates,Inc. Page 15-25 Adminplan 1/1/05 Unlimited copies may be made for internal use. 15-VII.. PORTABILITY [24 CFR 982.636, 982.637, 982.353(b) and(c), 982.552, 982.553] Subject to the restrictions on portability included in HUD regulations and PHA policies, a family may exercise portability if the receiving PHA is administering a voucher homeownership program and accepting new homeownership families. The receiving PHA may absorb the family into its voucher program, or bill the initial PHA. The family must attend the briefing and counseling sessions required by the receiving PHA. The receiving PHA will determine whether the financing for, and the physical condition of the unit, are acceptable. The receiving PHA must promptly notify the initial PHA if the family has purchased an eligible unit under the program, or if the family is unable to purchase a home within the maximum time established by the PHA. 15-VII.M. MOVING WITH CONTINUED ASSISTANCE [24 CFR 982.637] A family receiving homeownership assistance may move with continued tenant-based assistance. The family may move with voucher rental assistance or with voucher homeownership assistance. Continued tenant-based assistance for a new unit cannot begin so long as any family member holds title to the prior home. The PHA may deny permission to move to a new unit with continued voucher assistance as follows: • Lack of funding to provide continued assistance. • At any time, the PHA may deny permission to move with continued rental or homeownership assistance in accordance with 24 CFR 982.638, regarding denial or termination of assistance. • In accordance with the PHA's policy regarding number of moves within a 12-month period. The PHA must deny the family permission to move to a new unit with continued voucher rental assistance if: • The family defaulted on an FHA-insured mortgage; and • The family fails to demonstrate that the family has conveyed, or will convey, title to the home, as required by.HUD, to HUD or HUD's designee; and the family has moved, or will move, from the home within the period established or approved by HUD. co Copyright 2005 Nan McKay&Associates,Inc. Page 15-26 Adminplan I/1/05 Unlimited copies may be made for internal use. 15-VII.N. DENIAL OR TERMINATION OF ASSISTANCE [24 CFR 982.638] At any time, the PHA may deny or terminate homeownership assistance in accordance with HCV program requirements in 24 CFR 982.552 (Grounds for denial or termination of assistance) or 24 CFR 982.553 (Crime by family members). The PHA may also deny or terminate assistance for violation of participant obligations described in 24 CFR Parts 982.551 or 982.633. The PHA must terminate voucher homeownership assistance for any member of family receiving homeownership assistance that is dispossessed from the home pursuant to a judgment or order of foreclosure on any mortgage (whether FHA insured or non-FHA) securing debt incurred to purchase the home, or any refinancing of such debt. • ©Copyright 2005 Nan McKay&Associates,Inc. Page 15-27 Adminplan 1/1/05 Unlimited copies may be made for internal use. Chapter 16 PROGRAM ADMINISTRATION INTRODUCTION This chapter discusses administrative policies and practices that are relevant to the activities covered in this plan. The policies are discussed in seven parts as described below: Part I: Administrative Fee Reserve. This part describes the PHA's policies with regard to oversight of expenditures from its administrative fee reserve. Part II: Setting Program Standards and Schedules. This part describes what payment standards are, and how they are updated, as well as how utility allowances are established and revised. Part III: Informal Reviews and Hearings. This part outlines the requirements and procedures for informal reviews and hearings, and for informal hearings regarding citizenship status. Part IV: Owner or Family Debts to the PHA. This part describes policies for recovery of monies that the PHA has overpaid on behalf of families, or to owners, and describes the circumstances under which the PHA will offer repayment agreements to owners and families. Also discussed are the consequences for failure to make payments in accordance with a repayment agreement. Part V: Section 8 Management Assessment Program(SEMAP). This part describes what the SEMAP scores represent, how they are established, and how those scores affect a PHA. Part VI: Record-Keeping. All aspects of the program involve certain types of record- keeping. This part outlines the privacy rights of applicants and participants and record retention policies the PHA will follow. Part VII: Reporting and Record Keeping for Children with Environmental Intervention Blood Lead Level. This part describes the PHA's responsibilities for reporting, data collection, and record keeping relative to children with environmental intervention blood lead levels that are less than six years of age, and are receiving HCV assistance. Part VIII: Determination of Insufficient Funding. This part describes the PHA's policies for determining if there is sufficient funding to issue vouchers,to approve moves to higher cost units or areas, and to continue assistance for all participant families. ®Copyright 2005 Nan McKay&Associates,Inc. Page 16-1 Adminplan 9/1/05 Unlimited copies may be made for internal use. PART I: ADMINISTRATIVE FEE RESERVE [24 CFR 982.155] The PHA must maintain an administrative fee reserve for the program to pay program administrative expenses in excess of administrative fees paid by HUD for a PHA fiscal year. If funds in the administrative fee reserve are not needed to cover PHA administrative expenses, the PHA may use these funds for other housing purposes permitted by Federal, State and local law. If the PHA has not adequately administered any Section 8 program, HUD may prohibit use of funds in the administrative fee reserve, and may direct the PHA to use funds in the reserve to improve administration of the program or to reimburse ineligible expenses. HUD also may prohibit use of the funds for certain purposes. HUD requires the PHA Board of Commissioners or other authorized officials to establish the maximum amount that may be charged against the administrative fee reserve without specific approval. PHA Policy Expenditures from the administrative fee reserve will be made in accordance with all applicable Federal requirements. Expenditures will not exceed $10,000 per occurrence without the prior approval of the PHA's Board of Commissioners. ®Copyright 2005 Nan McKay&Associates,Inc. Page 16-3 Adminplan 9/1/05 Unlimited copies may be made for internal use. PART II: SETTING PROGRAM STANDARDS AND SCHEDULES 16-II.A. OVERVIEW Although many of the program's requirements are established centrally by HUD, the HCV program's regulations recognize that some flexibility is required to allow the PHA to adapt the program to local conditions. This part discusses how the PHA establishes and updates certain schedules and standards that are used to administer the program locally. Details about how these schedules are applied to individual families are provided in other chapters. The schedules and standards discussed here include: • Payment Standards, which dictate the maximum subsidy a family can receive (application of the payment standards is discussed in Chapter 6); and • Utility Allowances, which specify how a family's payment should be adjusted to account for tenant-paid utilities (application of utility allowances is discussed in Chapter 6). PHA Policy Copies of the payment standard and utility allowance schedules are available for review in the PHA's offices during normal business hours. Families, owners, and members of the public may submit written comments on the schedules discussed in this part, at any time, for consideration during the next revision cycle. The PHA will maintain documentation to support its annual review of payment standards and utility allowance schedules. This documentation will be retained for at least 3 years. 16-H.B. PAYMENT STANDARDS [24 CFR 982.503; HCV GB, Chapter 7] The payment standard sets the maximum subsidy payment a family can receive from the PHA each month [24 CFR 982.505(a)]. Payment standards are based on fair market rents (FMRs) published annually by HUD. FMRs are set at a percentile within the rent distribution of standard quality rental housing units in each FMR area. For most jurisdictions FMRs are set at the 40th percentile of rents in the market area. The PHA must establish a payment standard schedule that establishes payment standard amounts for each FMR area within the PHA's jurisdiction, and for each unit size within each of the FMR areas. For each unit size, the PHA may establish a single payment standard amount for the whole FMR area, or may set different payment standards for different parts of the FMR area. Unless HUD grants an exception,the PHA is required to establish a payment standard within a"basic range"established by HUD—between 90 and 110 percent of the published FMR for each unit size. ®Copyright 2005 Nan McKay&Associates,Inc. Page 16-5 Adminplan 9/1/05 Unlimited copies may be made for internal use. Updating Payment Standards When HUD updates its FMRs, the PHA must update its payment standards if the standards are no longer within the basic range [24 CFR 982.503(b)]. HUD may require the PHA to make further adjustments if it determines that rent burdens for assisted families in the PHA's jurisdiction are unacceptably high 24 CFR 982.503(g)]. PHA Policy The PHA will review the appropriateness of the payment standards on an annual basis when the new FMR is published. In addition to ensuring the payment standards are always within the "basic range"the PHA will consider the following factors when determining whether an adjustment should be made to the payment standard schedule: Funding Availability: The PHA will review the budget to determine the impact projected subsidy adjustments will have on funding available for the program and the number of families served. The PHA will compare the number of families who could be served under revised payment standard amounts with the number assisted under current payment standard amounts. Rent Burden of Participating Families: Rent burden will be determined by identifying the percentage of families, for each unit size, that are paying more than 30 percent of their monthly adjusted income as the family share. When 40 percent or more of families, for any given unit size, are paying more than 30 percent of adjusted monthly income as the family share, the PHA will consider increasing the payment standard. In evaluating rent burdens, the PHA will not include families renting a larger unit than their family unit size. Quality of Units Selected: The PHA will review the quality of units selected by participant families when making the determination of the percent of income families are paying for housing, to ensure that payment standard increases are only made when needed to reach the mid-range of the market. Changes in Rent to Owner: The PHA may review a sample of the units to determine how often owners are increasing or decreasing rents and the average percent of increases/decreases by bedroom size. Unit Availability: The PHA will review the availability of units for each unit size,particularly in areas with low concentrations of poor and minority families. Lease-up Time and Success Rate: The PHA will consider the percentage of families that are unable to locate suitable housing before the voucher expires and whether families are leaving the jurisdiction to find affordable housing. C Copyright 2005 Nan McKay&Associates,Inc. Page 16-6 Adminplan 9/1/05 Unlimited copies may be made for internal use. Changes to payment standard amounts will be effective on January 1st of every year unless, based on the proposed FMRs, it appears that one or more of the PHA's current -~� payment standard amounts will be outside the basic range when the final FMRs are published. In that case, the PHAs payment standards will be effective October 1st instead of January 1s`. If the PHA has already processed reexaminations that will be effective on or after October 1st, and the effective date of the payment standards is October 1st,the PHA will make retroactive adjustments to any such reexaminations if the new payment standard amount is higher than the one used by the PHA at the time the reexamination was originally processed. Exception Payment Standards [982.503(c)] The PHA must request HUD approval to establish payment standards that are higher than the basic range. At HUD's sole discretion, HUD may approve a payment standard amount that is higher than the basic range for a designated part of the FMR area. HUD may approve an exception payment standard amount (in accordance with program requirements) for all units,or for all units of a given size, leased by program families in the exception area. Any PHA with jurisdiction in the exception area may use the HUD-approved exception payment standard amount. The total population of all HUD-approved exception areas in an FMR area may not include more than 50 percent of the population of the FMR area. Unit-by-Unit Exceptions [24 CFR 982.503(c)(2)(ii)] Unit-by-unit exceptions to the PHA's payment standards generally are not permitted. However, an exception may be made as a reasonable accommodation for a family that includes a person with disabilities. (See Chapter 2 for a discussion of reasonable accommodations.) This type of exception does not affect the PHA's payment standard schedule. When needed as a reasonable accommodation, the PHA may make an exception to the payment standard without HUD approval if the exception amount does not exceed 110 percent of the applicable FMR for the unit size [HCV GB 7-9). The PHA may request HUD approval for an exception to the payment standard for a particular family if the required amount falls between 110 and 120 percent of the FMR. PHA Policy A family that requires a reasonable accommodation may request a higher payment standard at the time the Request for Tenancy Approval (RFTA) is submitted. The family must document the need for the exception. In order to approve an exception, or request an exception from HUD, the PHA must determine that: There is a shortage of affordable units that would be appropriate for the family; The family's TTP would otherwise exceed 40 percent of adjusted monthly income; and The rent for the unit is reasonable. ©Copyright 2005 Nan McKay&Associates,Inc. Page 16-7 Adminplan 9/1/05 Unlimited copies may be made for internal use. "Success Rate" Payment Standard Amounts [24 CFR 982.503(e)] If a substantial percentage of families have difficulty finding a suitable unit,the PHA may request a"success rate payment standard"that applies to the entire jurisdiction. If approved by HUD, a success rate payment standard allows the PHA to set its payment standards at 90-110 percent of a higher FMR(the 50th, rather than the 40th percentile FMR). To support the request, the PHA must demonstrate that during the most recent 6-month period for which information is available: • Fewer than 75 percent of families who were issued vouchers became participants; • The PHA had established payment standards for all unit sizes, and for the entire jurisdiction, at 110 percent of the published FMR; and • The PHA had a policy of allowing voucher holders who made sustained efforts to locate units at least 90 days to search for a unit. Although HUD approves the success rate payment standard for all unit sizes in the FMR area, the PHA may choose to adjust the payment standard for only some unit sizes in all, or a designated part, of the PHA's jurisdiction within the FMR area. Decreases in the Payment Standard Below the Basic Range [24 CFR 982.503(d)] The PHA must request HUD approval to establish a payment standard amount that is lower than the basic range. At HUD's sole discretion, HUD may approve establishment of a payment standard lower than the basic range. HUD will not approve a lower payment standard if the family share for more than 40 percent of program participants exceeds 30 percent of adjusted monthly income. ®Copyright 2005 Nan McKay&Associates,Inc. Page 16-8 Adminplan 9/1/05 Unlimited copies may be made for internal use. 16-II.C. UTILITY ALLOWANCES [24 CFR 982.517] A PHA-established utility allowance schedule is used in determining family share and PHA subsidy. The PHA must maintain a utility allowance schedule for(1) all tenant-paid utilities, (2) the cost of tenant-supplied refrigerators and ranges, and (3) other tenant-paid housing services such as trash collection. The utility allowance schedule must be determined based on the typical cost of utilities and services paid by energy-conservative households that occupy housing of similar size and type in the same locality. In developing the schedule,the PHA must use normal patterns of consumption for the community as a whole, and current utility rates. The utility allowance must include the utilities and services that are necessary in the locality to provide housing that complies with housing quality standards. Costs for telephone, cable/satellite television, and internet services are not included in the utility allowance schedule. In the utility allowance schedule, the PHA must classify utilities and other housing services according to the following general categories: space heating; air conditioning; cooking; water heating; water; sewer; trash collection; other electric; cost of tenant-supplied refrigerator; cost of tenant-supplied range; and other specified housing services. The cost of each utility and housing service must be stated separately by unit size and type. Chapter 18 of the HCV Guidebook provides detailed guidance to the PHA about establishing utility allowance schedules. Air Conditioning An allowance for air-conditioning must be provided when the majority of housing units in the market have central air-conditioning or are wired for tenant-installed air conditioners. PHA Policy The majority of housing units in the PHA's jurisdiction do not include central air conditioning and is not wired for tenant-installed air conditioners. Therefore, the PHA has not included an allowance for air-conditioning in its utility allowance schedule. Reasonable Accommodation HCV program regulations require a PHA to approve a utility allowance amount higher than shown on the PHA's schedule if a higher allowance is needed as a reasonable accommodation for a family member with a disability. For example, if a family member with a disability requires such an accommodation,the PHA will approve an allowance for air-conditioning, even if the PHA has determined that an allowance for air-conditioning generally is not needed (See Chapter 2 for policies regarding the request and approval of reasonable accommodations). Utility Allowance Revisions The PHA must review its schedule of utility allowances each year, and must revise the schedule if there has been a change of 10 percent or more in any utility rate since the last time the allowance for that utility was revised. The PHA must maintain information supporting its annual review of utility allowance and any revisions made in its utility allowance schedule. ®Copyright 2005 Nan McKay&Associates,Inc. Page 16-9 Adminplan 9/1/05 Unlimited copies may be made for internal use. PART III: INFORMAL REVIEWS AND HEARINGS 16-III.A. OVERVIEW When the PHA makes a decision that has a negative impact on a family, the family is often entitled to appeal the decision. For applicants, the appeal takes the form of an informal review; for participants, or for applicants denied admission because of citizenship issues,the appeal takes the form of an informal hearing. PHAs are required to include in their administrative plans, informal review procedures for applicants, and informal hearing procedures for participants [24 CFR 982.54(d)(12) and (13)]. 16-III.B. INFORMAL REVIEWS Informal reviews are provided for program applicants. An applicant is someone who has applied for admission to the program, but is not yet a participant in the program. Informal reviews are intended to provide a"minimum hearing requirement" [24 CFR 982.554], and need not be as elaborate as the informal hearing requirements. (Federal Register Volume 60,No. 127, p 36490). Decisions Subject to Informal Review The PHA must give an applicant the opportunity for an informal review of a decision denying assistance [24 CFR 982.554(a)]. Denial of assistance may include any or all of the following [24 CFR 982.552(a)(2)]: • Denying listing on the PHA waiting list • Denying or withdrawing a voucher • Refusing to enter into a HAP contract or approve a lease • Refusing to process or provide assistance under portability procedures Informal reviews are not required for the following reasons [24 CFR 982.554(c)]: • Discretionary administrative determinations by the PHA • General policy issues or class grievances • A determination of the family unit size under the PHA subsidy standards • A PHA determination not to grant approval of the tenancy • A PHA determination that the unit is not in compliance with the HQS • A PHA determination that the unit is not in accordance with the HQS due to family size or composition PHA Policy The PHA will only offer an informal review to applicants for whom assistance is being denied. Denial of assistance includes: denying listing on the PHA waiting list; denying or withdrawing a voucher; refusing to enter into a HAP contract or approve a lease; refusing to process or provide assistance under portability procedures. r ®Copyright 2005 Nan McKay&Associates,Inc. Page 16-11 Adminplan 9/1/05 Unlimited copies may be made for internal use. Notice to the Applicant [24 CFR 982.554(a)] The PHA must give an applicant prompt notice of a decision denying assistance. The notice must contain a brief statement of the reasons for the PHA decision, and must also state that the applicant may request an informal review of the decision. The notice must describe how to obtain the informal review. Scheduling an Informal Review PHA Policy A request for an informal review must be made in writing and delivered to the PHA either in person or by first class mail, by the close of the business day,no later than 10 business days from the date of the PHA's denial of assistance. The PHA must schedule and send written notice of the informal review within 10 business days of the family's request. Informal Review Procedures [24 CFR 982.554(b)] The informal review must be conducted by a person other than the one who made or approved the decision under review, or a subordinate of this person. The applicant must be provided an opportunity to present written or oral objections to the decision of the PHA. The person conducting the review will make a recommendation to the PHA, but the PHA is responsible for making the final decision as to whether assistance should be granted or denied. ©Copyright 2005 Nan McKay&Associates,Inc. Page 16-12 Adminplan 9/1/05 Unlimited copies may be made for internal use. Informal Review Decision [24 CFR 982.554(b)] The PHA must notify the applicant of the PHA's final decision, including a brief statement of the reasons for the final decision. PHA Policy In rendering a decision, the PHA will evaluate the following matters: Whether or not the grounds for denial were stated factually in the Notice. The validity of grounds for denial of assistance. If the grounds for denial are not specified in the regulations, then the decision to deny assistance will be overturned. The validity of the evidence. The PHA will evaluate whether the facts presented prove the grounds for denial of assistance. If the facts prove that there are grounds for denial, and the denial is required by HUD, the PHA will uphold the decision to deny assistance. If the facts prove the grounds for denial, and the denial is discretionary,the PHA will consider the recommendation of the person conducting the informal review in making the final decision whether to deny assistance. The PHA will notify the applicant of the final decision, including a statement explaining the reason(s) for the decision. The notice will be mailed within 10 business days of the informal review,to the applicant and his or her representative, if any, along with proof of mailing. If the decision to deny is overturned as a result of the informal review, processing for admission will resume. _ If the family fails to appear for their informal review,the denial of admission will stand and the family will be so notified. C Copyright 2005 Nan McKay&Associates,Inc. Page 16-13 Adminplan 9/1/05 Unlimited copies may be made for internal use. 16-III.C. INFORMAL HEARINGS FOR PARTICIPANTS [24 CFR 982.555] PHAs must offer an informal hearing for certain PHA determinations relating to the individual circumstances of a participant family. A participant is defined as a family that has been admitted to the PHA's HCV program and is currently assisted in the program. The purpose of the informal hearing is to consider whether the PHA's decisions related to the family's circumstances are in accordance with the law, HUD regulations and PHA policies. The PHA is not permitted to terminate a family's assistance until the time allowed for the family to request an informal hearing has elapsed, and any requested hearing has been completed: Termination of assistance for a participant may include any or all of the following: • Refusing to enter into a HAP contract or approve a lease • Terminating housing assistance payments under an outstanding HAP contract • Refusing to process or provide assistance under portability procedures Decisions Subject to Informal Hearing Circumstances for which the PHA must give a participant family an opportunity for an informal hearing are as follows: • A determination of the family's annual or adjusted income, and the use of such income to compute the housing assistance payment • A determination of the appropriate utility allowance(if any) for tenant-paid utilities from the PHA utility allowance schedule • A determination of the family unit size under the PHA's subsidy standards • A determination that a certificate program family is residing in a unit with a larger number of bedrooms than appropriate for the family unit size under the PHA's subsidy standards; or the PHA determination to deny the family's request for exception from the standards • A determination to terminate assistance for a participant family because of the family's actions or failure to act • A determination to terminate assistance because the participant has been absent from the assisted unit for longer than the maximum period permitted under PHA policy and HUD rules • A determination to terminate a family's Family Self Sufficiency contract, withhold supportive services, or propose forfeiture of the family's escrow account [24 CFR 984.303(i)] ®Copyright 2005 Nan McKay&Associates,Inc. Page 16-14 Adminplan 9/1/05 Unlimited copies may be made for internal use. Circumstances for which an informal hearing is not required are as follows: • Discretionary administrative determinations by the PHA • General policy issues or class grievances • Establishment of the PHA schedule of utility allowances for families in the program • A PHA determination not to approve an extension or suspension of a voucher term • A PHA determination not to approve a unit or tenancy • A PHA determination that a unit selected by the applicant is not in compliance with the HQS • A PHA determination that the unit is not in accordance with HQS because of family size • A determination by the PHA to exercise or not to exercise any right or remedy against an owner under a HAP contract PHA Policy The PHA will only offer participants the opportunity for an informal hearing when required to by the regulations. ©Copyright 2005 Nan McKay&Associates,Inc. Page 16-15 Adminplan 9/1/05 Unlimited copies may be made for internal use. Informal Hearing Procedures Notice to the Family [24 CFR 982.555(c)] When the PHA makes a decision that is subject to informal hearing procedures, the PHA must inform the family of its right to an informal hearing at the same time that it informs the family of the decision. For decisions related to the family's annual or adjusted income, the determination of the appropriate utility allowance, and the determination of the family unit size, the PHA must notify the family that they may ask for an explanation of the basis of the determination, and that if they do not agree with the decision, they may request an informal hearing on the decision. For decisions related to the termination of the family's assistance, or the denial of a family's request for an exception to the PHA's subsidy standards,the notice must contain a brief statement of the reasons for the decision, a statement that if the family does not agree with the decision, the family may request an informal hearing on the decision, and a statement of the deadline for the family to request an informal hearing. PHA Policy In cases where the PHA makes a decision for which an informal hearing must be offered, the notice to the family will include all of the following: The proposed action or decision of the PHA. A brief statement of the reasons for the decision including the regulatory reference. The date the proposed action will take place. A statement of the family's right to an explanation of the basis for the PHA's decision. A statement that if the family does not agree with the decision the family may request an informal hearing of the decision. A deadline for the family to request the informal hearing. To whom the hearing request should be addressed. A copy of the PHA's hearing procedures. ©Copyright 2005 Nan McKay&Associates,Inc. Page 16-16 Adminplan 9/1/05 Unlimited copies may be made for internal use. Scheduling an Informal Hearing [24 CFR 982.555(d)] When an informal hearing is required,the PHA must proceed with the hearing in a reasonably expeditious manner upon the request of the family. PHA Policy A request for an informal hearing must be made in writing and delivered to the PHA either in person or by first class mail, by the close of the business day, no later than 10 business days from the date of the PHA's decision or notice to terminate assistance. The PHA must schedule and send written notice of the informal hearing to the family within 10 business days of the family's request. The family may request to reschedule a hearing for good cause, or if it is needed as a reasonable accommodation for a person with disabilities. Good cause is defined as an unavoidable conflict which seriously affects the health, safety or welfare of the family. Requests to reschedule a hearing must be made orally or in writing prior to the hearing date. At its discretion, the PHA may request documentation of the "good cause" prior to rescheduling the hearing. If the family does not appear at the scheduled time, and was unable to reschedule the hearing in advance due to the nature of the conflict,the family must contact the PHA within 24 hours of the scheduled hearing date,excluding weekends and holidays. The PHA will reschedule the hearing only if needed as a reasonable accommodation for a person with disabilities. ©Copyright 2005 Nan McKay&Associates,Inc. Page 16-17 Adminplan 9/1/05 Unlimited copies may be made for internal use. Pre-Hearing Right to Discovery [24 CFR 982.555(e)] Participants and the PHA are permitted pre-hearing discovery rights. The family must be given the opportunity to examine before the hearing any PHA documents that are directly relevant to the hearing. The family must be allowed to copy any such documents at their own expense. If the PHA does not make the document available for examination on request of the family, the PHA may not rely on the document at the hearing. The PHA hearing procedures may provide that the PHA must be given the opportunity to examine at the PHA offices before the hearing, any family documents that are directly relevant to the hearing. The PHA must be allowed to copy any such document at the PHA's expense. If the family does not make the document available for examination on request of the PHA, the family may not rely on the document at the hearing. For the purpose of informal hearings,documents include records and regulations. PHA Policy The family will be allowed to copy any documents related to the hearing at a cost of$.25 per page. The family must request discovery of PHA documents no later than 12:00 p.m. on the business day prior to the scheduled hearing date The PHA must be given an opportunity to examine at the PHA offices before the hearing any family documents that are directly relevant to the hearing. Whenever a participant requests an informal hearing, the PHA will automatically mail a letter to the participant requesting a copy of all documents that the participant intends to present or utilize at the hearing. The participant must make the documents available no later than 12:00 pm on the business day prior to the scheduled hearing date. Participant's Right to Bring Counsel[24 CFR 982.555(e)(3)] At its own expense, the family may be represented by a lawyer or other representative at the informal hearing. Informal Hearing Officer (24 CFR 982.555(e)(4)] Informal hearings will be conducted by a person or persons approved by the PHA, other than the person who made or approved the decision or a subordinate of the person who made or approved the decision. PHA Policy The PHA has designated the following to serve as hearing officers: The Executive Director The Section 8 Administrators The Public Housing Manager A commissioner An Individual from outside the PHA ®Copyright 2005 Nan McKay&Associates,Inc. Page 16-18 Adminplan 9/1/05 Unlimited copies may be made for internal use. Attendance at the Informal Hearing PHA Policy Hearings may be attended by a hearing officer and the following applicable persons: A PHA representative(s) and any witnesses for the PHA The participant and any witnesses for the participant The participant's counsel or other representative Any other person approved by the PHA as a reasonable accommodation for a person with a disability Conduct at Hearings The person who conducts the hearing may regulate the conduct of the hearing in accordance with the PHA's hearing procedures [24 CFR 982.555(4)(ii)]. PHA Policy The hearing officer is responsible to manage the order of business and to ensure that hearings are conducted in a professional and businesslike manner. Attendees are expected to comply with all hearing procedures established by the hearing officer and guidelines for conduct. Any person demonstrating disruptive, abusive or otherwise inappropriate behavior will be excused from the hearing at the discretion of the hearing officer. ®Copyright 2005 Nan McKay&Associates,Inc. Page 16-19 Adminplan 9/1/05 Unlimited copies may be made for internal use. Evidence [24 CFR 982.555(e)(5)] The PHA and the family must be given the opportunity to present evidence and question any witnesses. In general, all evidence is admissible at an informal hearing. Evidence may be considered without regard to admissibility under the rules of evidence applicable to judicial proceedings. PHA Policy Any evidence to be considered by the hearing officer must be presented at the time of the hearing. There are four categories of evidence. Oral evidence: the testimony of witnesses Documentary evidence: a writing which is relevant to the case, for example, a letter written to the PHA. Writings include all forms of recorded communication or representation, including letters,words,pictures, sounds, videotapes or symbols or combinations thereof Demonstrative evidence: Evidence created specifically for the hearing and presented as an illustrative aid to assist the hearing officer, such as a model, a chart or other diagram. Real evidence: A tangible item relating directly to the case. Hearsay Evidence is evidence of a statement that was made other than by a witness while testifying at the hearing and that is offered to prove the truth of the matter. Even though evidence, including hearsay, is generally admissible, hearsay evidence alone cannot be used as the sole basis for the hearing officer's decision. If either the PHA or the family fail to comply with the discovery requirements described above, the hearing officer will refuse to admit such evidence. Other than the failure of a party to comply with discovery, the hearing officer has the authority to overrule any objections to evidence. Hearing Officer's Decision [24 CFR 982.555(e)(6)] The person who conducts the hearing must issue a written decision, stating briefly the reasons for the decision. Factual determinations relating to the individual circumstances of the family must be based on a preponderance of evidence presented at the hearing. A copy of the hearing must be furnished promptly to the family. PHA Policy In rendering a decision, the hearing officer will consider the following matters: PHA Notice to the Family: The hearing officer will determine if the reasons for the PHA's decision are factually stated in the Notice. Discovery: The hearing officer will determine if the PHA and the family were given the opportunity to examine any relevant documents in accordance with PHA policy. C Copyright 2005 Nan McKay&Associates,Inc. Page 16-20 Adminplan 9/I/05 Unlimited copies may be made for internal use. PHA Evidence to Support the PHA Decision: The evidence consists of the facts presented. Evidence is not conclusion and it is not argument. The hearing officer will evaluate the facts to determine if they support the PHA's conclusion. Validity of Grounds for Termination of Assistance (when applicable): The hearing officer will determine if the termination of assistance is for one of the grounds specified in the HUD regulations and PHA policies. If the grounds for termination are not specified in the regulations or in compliance with PHA policies, then the decision of the PHA will be overturned. The hearing officer will issue a written decision to the family and the PHA no later than 10 business days after the hearing. The report will contain the following information: Hearing information: Name of the participant; Date,time and place of the hearing; Name of the hearing officer; Name of the PHA representative; and Name of family representative(if any). Background: A brief, impartial statement of the reason for the hearing. Summary of the Evidence: The hearing officer will summarize the testimony of each witness and identify any documents that a witness produced in support of his/her testimony and that are admitted into evidence. Findings of Fact: The hearing officer will include all findings of fact,based on a preponderance of the evidence. Preponderance of the evidence is defined as evidence which is of greater weight or more convincing than the evidence which is offered in opposition to it; that is, evidence which as a whole shows that the fact sought to be proved is more probable than not. Preponderance of the evidence may not be determined by the number of witnesses, but by the greater weight of all evidence. Conclusions: The hearing officer will render a conclusion derived from the facts that were found to be true by a preponderance of the evidence. The conclusion will result in a determination of whether these facts uphold the PHA's decision. Order: The hearing report will include a statement of whether the PHA's decision is upheld or overturned. If it is overturned,the hearing officer will instruct the PHA to change the decision in accordance with the hearing officer's determination. In the case of termination of assistance,the hearing officer will instruct the PHA to restore the participant's program status. A-^ ®Copyright 2005 Nan McKay&Associates,Inc. Page 16-21 Adminplan 9/1/05 Unlimited copies may be made for internal use. Procedures for Rehearing or Further Hearing PHA Policy The hearing officer may ask the family for additional information and/or might adjourn the hearing in order to reconvene at a later date,before reaching a decision. If the family misses an appointment or deadline ordered by the hearing officer,the action of the PHA will take effect and another hearing will not be granted. PHA Notice of Final Decision [24 CFR 982.555(1)] The PHA is not bound by the decision of the hearing officer for matters in which the PHA is not required to provide an opportunity for a hearing, decisions that exceed the authority of the hearing officer, decisions that conflict with or contradict HUD regulations, requirements, or are otherwise contrary to Federal, State or local laws. If the PHA determines it is not bound by the hearing officer's decision in accordance with HUD regulations,the PHA must promptly notify the family of the determination and the reason for the determination. PHA Policy The PHA will mail a"Notice of Final Decision" including the hearing officer's report, to the participant and their representative. This Notice will be sent by first-class mail, postage pre-paid with an affidavit of mailing enclosed. The participant will be mailed the original "Notice of Final Decision"and a copy of the proof of mailing. A copy of the "Notice of Final Decision"along with the original proof mailing will be maintained in the PHA's file. ®Copyright 2005 Nan McKay&Associates,Inc. Page 16-22 Adminplan 9/1/05 Unlimited copies may be made for internal use. 16-III.D. HEARING AND APPEAL PROVISIONS FOR NON-CITIZENS [24 CFR 5.514] Denial or termination of assistance based on immigration status is subject to special hearing and notice rules. Applicants who are denied assistance due to immigration status are entitled to an informal hearing, not an informal review. Assistance to a family may not be delayed, denied, or terminated on the basis of immigration status at any time prior to a decision under the United States Citizenship and Immigration Services (USCIS) appeal process. Assistance to a family may not be terminated or denied while the PHA hearing is pending,but assistance to an applicant may be delayed pending the completion of the informal hearing. A decision against a family member, issued in accordance with the USCIS appeal process or the PHA informal hearing process, does not preclude the family from exercising the right, that may otherwise be available, to seek redress directly through judicial procedures. Notice of Denial or Termination of Assistance [24 CFR 5.514(d)] As discussed in Chapters 3 and 11,the notice of denial or termination of assistance for noncitizens must advise the family: • That financial assistance will be denied or terminated, and provide a brief explanation of the reasons for the proposed denial or termination of assistance. • The family may be eligible for proration of assistance. • In the case of a participant, the criteria and procedures for obtaining relief under the provisions for preservation of families [24 CFR 5.514 and 5.518]. • That the family has a right to request an appeal to the USCIS of the results of secondary verification of immigration status and to submit additional documentation or explanation in support of the appeal. • That the family has a right to request an informal hearing with the PHA either upon completion of the USCIS appeal or in lieu of the USCIS appeal. • For applicants, assistance may not be delayed until the conclusion of the USCIS appeal process, but assistance may be delayed during the period of the informal hearing process. ®Copyright 2005 Nan McKay&Associates,Inc. Page 16-23 Adminplan 9/1/05 Unlimited copies may be made for internal use. USCIS Appeal Process [24 CFR 5.514(e)] When the PHA receives notification that the USCIS secondary verification failed to confirm eligible immigration status,the PHA must notify the family of the results of the USCIS verification. The family will have 30 days from the date of the notification to request an appeal of the USCIS results. The request for appeal must be made by the family in writing directly to the USCIS. The family must provide the PHA with a copy of the written request for appeal and the proof of mailing. PHA Policy The PHA will notify the family in writing of the results of the USCIS secondary verification within 10 business days of receiving the results. The family must provide the PHA with a copy of the written request for appeal and proof of mailing within 10 business days of sending the request to the USCIS. The family must forward to the designated USCIS office any additional documentation or written explanation in support of the appeal. This material must include a copy of the USCIS document verification request(used to process the secondary request) or such other form specified by the USCIS, and a letter indicating that the family is requesting an appeal of the USCIS immigration status verification results. The USCIS will notify the family, with a copy to the PHA, of its decision. When the USCIS notifies the PHA of the decision,the PHA must notify the family of its right to request an informal hearing. PHA Policy The PHA will send written notice to the family of its right to request an informal hearing within 10 business days of receiving notice of the USCIS decision regarding the family's immigration status. Informal Hearing Procedures for Applicants [24 CFR 5.514(f)] After notification of the USCIS decision on appeal, or in lieu of an appeal to the USCIS, the family may request that the PHA provide a hearing. The request for a hearing must be made either within 30 days of receipt of the PHA notice of denial, or within 30 days of receipt of the USCIS appeal decision. The informal hearing procedures for applicant families are described below. Informal Hearing Officer The PHA must provide an informal hearing before an impartial individual, other than a person who made or approved the decision under review, and other than a person who is a subordinate of the person who made or approved the decision. See Section 16-III.C. for a listing of positions that serve as informal hearing officers. ©Copyright 2005 Nan McKay&Associates,Inc. Page 16-24 Adminplan 9/1/05 Unlimited copies may be made for internal use. Evidence • The family must be provided the opportunity to examine and copy at the family's expense, at a reasonable time in advance of the hearing, any documents in the possession of the PHA pertaining to the family's eligibility status, or in the possession of the USCIS (as permitted by USCIS requirements), including any records and regulations that may be relevant to the hearing. PHA Policy The family will be allowed to copy any documents related to the hearing at a cost of$.25 per page. The family must request discovery of PHA documents no later than 12:00 p.m. on the business day prior to the hearing. The family must be provided the opportunity to present evidence and arguments in support of eligible status. Evidence may be considered without regard to admissibility under the rules of evidence applicable to judicial proceedings. The family must also be provided the opportunity to refute evidence relied upon by the PHA, and to confront and cross-examine all witnesses on whose testimony or information the PHA relies. Representation and Interpretive Services The family is entitled to be represented by an attorney or other designee, at the family's expense, and to have such person make statements on the family's behalf. The family is entitled to arrange for an interpreter to attend the hearing, at the expense of the family, or the PHA, as may be agreed upon by the two parties. Recording of the Hearing The family is entitled to have the hearing recorded by audiotape. The PHA may, but is not required to provide a transcript of the hearing. PHA Policy The PHA will not provide a transcript of an audio taped hearing. Hearing Decision The PHA must provide the family with a written final decision, based solely on the facts presented at the hearing, within 14 calendar days of the date of the informal hearing. The decision must state the basis for the decision. P-. Copyright 2005 Nan McKay&Associates,Inc. Page 16-25 Adminplan 9/1/05 Unlimited copies may be made for internal use. Informal Hearing Procedures for Residents [24 CFR 5.514(f)] After notification of the USCIS decision on appeal, or in lieu of an appeal to the USCIS, the family may request that the PHA provide a hearing. The request for a hearing must be made either within 30 days of receipt of the PHA notice of termination, or within 30 days of receipt of the USCIS appeal decision. For the informal hearing procedures that apply to participant families whose assistance is being terminated based on immigration status, see Section 16-III.C. Retention of Documents [24 CFR 5.514(h)] The PHA must retain for a minimum of 5 years the following documents that may have been submitted to the PHA by the family, or provided to the PHA as part of the USCIS appeal or the PHA informal hearing process: • The application for assistance • The form completed by the family for income reexamination • Photocopies of any original documents, including original USCIS documents • The signed verification consent form • The USCIS verification results • The request for a USCIS appeal • The final USCIS determination • The request for an informal hearing • The final informal hearing decision m Copyright 2005 Nan McKay&Associates,Inc. Page 16-26 Adminplan 9/1/05 Unlimited copies may be made for internal use. _ PART IV: OWNER OR FAMILY DEBTS TO THE PHA / 16-I V.A. OVERVIEW PHAs are required to include in the administrative plan,policies concerning repayment by a family of amounts owed to the PHA [24 CFR 982.54]. This part describes the PHA's policies for recovery of monies that have been overpaid on behalf of families, or to owners. PHA Policy When an action or inaction of an owner or participant results in the overpayment of housing assistance,the PHA holds the owner or participant liable to return any overpayments to the PHA. The PHA will enter into repayment agreements in accordance with the policies contained in this part as a means to recover overpayments. When an owner or participant refuses to repay monies owed to the PHA,the PHA will utilize other available collection alternatives including, but not limited to,the following: Collection agencies Small claims court Civil law suit State income tax set-off program r ®Copyright 2005 Nan McKay&Associates,Inc. Page 16-27 Adminplan 9/1/05 Unlimited copies may be made for internal use. 16-IV.B. REPAYMENT POLICY Owner Debts to the PHA PHA Policy Any amount due to the PHA by an owner must be repaid by the owner within 30 days of the PHA determination of the debt. If the owner fails to repay the debt within the required time frame and is entitled to future HAP payments, the PHA will reduce the future HAP payments by the amount owed until the debt is paid in full. If the owner is not entitled to future HAP payments the PHA will offer to enter into a repayment agreement in accordance with the policies below. If the owner refuses to repay the debt, enter into a repayment agreement, or breaches a repayment agreement, the PHA will ban the owner from future participation in the program and pursue other modes of collection. Family Debts to the PHA PHA Policy Any amount due to the PHA by an HCV participant must be repaid by the family. If the family is unable to repay the debt within 30 days, the PHA will offer to enter into a repayment agreement in accordance with the policies below. If the family refuses to repay the debt, enter into a repayment agreement, or breaches a repayment agreement, the PHA will terminate the assistance upon notification to the family and pursue other modes of collection. Repayment Agreement [24 CFR 792.103] The term repayment agreement refers to a formal document signed by a tenant or owner and provided to the PHA in which a tenant or owner acknowledges a debt in a specific amount and agrees to repay the amount due at specific time periods. Repayment Agreement Guidelines Down Payment Requirement PHA Policy Prior to the execution of a repayment agreement,the owner or family must pay 10 percent of the balance owed to the PHA. ®Copyright 2005 Nan McKay&Associates,Inc. Page 16-28 Adminplan 9/1/05 Unlimited copies may be made for internal use. Payment Thresholds PHA Policy Amounts between$3,000 and the Federal or State threshold for criminal prosecution must be repaid within 36 months. Amounts between$2,000 and $2,999 must be repaid within 30 months. Amounts between $1,000 and $1,999 must be repaid within 24 months. Amounts under $1,000 must be repaid within 12 months. The PHA with good cause and at it's own discretion may set up a repayment agreement with longer terms if it allows the family to repay the debt. Execution of the Agreement PHA Policy The head of household and spouse/cohead (if applicable) must sign the repayment agreement. Due Dates PHA Policy All payments are due by the close of business on the 1St day of the month. If the 1St does not fall on a business day, the due date is the close of business on the first business day after the 1 st. Non-Payment • PHA Policy If a payment is not received by the end of the business day on the date due, and prior approval for the missed payment has not been given by the PHA, the PHA will send the family a delinquency notice giving the family 10 business days to make the late payment. If the payment is not received by the due date of the delinquency notice, it will be considered a breach of the agreement and the PHA will terminate assistance upon written notification to the family. If a family receives 3 delinquency notices for unexcused late payments in a 12 month period, the repayment agreement will be considered in default, and the PHA will terminate assistance upon written notification to the family. No Offer of Repayment Agreement PHA Policy The PHA will not enter into a repayment agreement if there is already a repayment agreement in place with the family or owner, or the amounts owed by the family or owner exceed the Federal or State threshold for criminal prosecution. r C Copyright 2005 Nan McKay&Associates,Inc. Page 16-29 Adminplan 9/1/05 Unlimited copies may be made for internal use. PART V: MANAGEMENT ASSESSMENT (SEMAP) 16-V.A. OVERVIEW The Section 8 Management Assessment Program (SEMAP) is a tool that allows HUD to measure PHA performance in key areas to ensure program integrity and accountability. SEMAP scores translate into a rating for each PHA as high performing, standard, or troubled. Scores on individual SEMAP indicators, as well as overall SEMAP ratings, can affect the PHA in several ways. • High-performing PHAs can be given a competitive advantage under notices of funding availability [24 CFR 985.103]. • PHAs with deficiencies on one or more indicators are required to correct the deficiencies and report to HUD [24 CFR 985.106]. • PHAs with an overall rating of"troubled"are subject to additional HUD oversight, including on-site reviews by HUD staff, a requirement to develop a corrective action plan, and monitoring to ensure the successful implementation of the corrective action plan. In addition, PHAs that are designated "troubled"may not use any part of the administrative fee reserve for other housing purposes [24 CFR 985.107]. • HUD may determine that a PHA's failure to correct identified SEMAP deficiencies or to prepare and implement a corrective action plan required by HUD constitutes a default under the ACC [24 CFR 985.109]. ®Copyright 2005 Nan McKay&Associates,Inc. Page 16-31 Adminplan 9/1/05 Unlimited copies may be made for internal use. 16-V.B. SEMAP CERTIFICATION 124 CFR 985.101] PHAs must submit the HUD-required SEMAP certification form within 60 calendar days after the end of its fiscal year. The certification must be approved by PHA board resolution and signed by the PHA executive director. If the PHA is a unit of local government or a state, a resolution approving the certification is not required, and the certification must be executed by the Section 8 program director. PHAs with less than 250 voucher units are only required to be assessed every other PHA fiscal year. HUD will assess such PHAs annually if the PHA elects to have its performance assessed on an annual basis; or is designated as "troubled" [24 CFR 985.105]. Failure of a PHA to submit its SEMAP certification within the required time frame will result in an overall performance rating of"troubled." A PHA's SEMAP certification is subject to HUD verification by an on-site confirmatory review at any time. Upon receipt of the PHA's SEMAP certification, HUD will rate the PHA's performance under each SEMAP indicator in accordance with program requirements. HUD Verification Method Several of the SEMAP indicators are scored based on a review of a quality control sample selected for this purpose. The PHA or the Independent Auditor must select an unbiased sample that provides an adequate representation of the types of information to be assessed, in accordance with SEMAP requirements [24 CFR 985.2]. If the HUD verification method for the indicator relies on data in the Form-50058 module (formerly known as MTCS) in the PIH Information Center(PIC), and HUD determines that those data are insufficient to verify the PHA's certification on the indicator due to the PHA's failure to adequately report family data, HUD will assign a zero rating for the indicator [24 CFR 985.3]. ©Copyright 2005 Nan McKay&Associates,Inc. Page 16-32 Adminplan 9/1/05 Unlimited copies may be made for internal use. 16-V.C. SEMAP INDICATORS [24 CFR 985.3 and form HUD-52648] The table below lists each of the SEMAP indicators, contains a description of each indicator, and explains the basis for points awarded under each indicator. A PHA that expends less than $300,000 in Federal awards and whose Section 8 programs are not audited by an independent auditor, is not be rated under SEMAP indicators 1-7. SEMAP Indicators Indicator 1: Selection from the waiting list Maximum Score: 15 • This indicator shows whether the PHA has written policies in its administrative plan for selecting applicants from the waiting list and whether the PHA follows these policies when selecting applicants for admission from the waiting list. • Points are based on the percent of families that are selected from the waiting list in accordance with the PHA's written policies, according to the PHA's quality control sample. Indicator 2: Rent reasonableness Maximum Score: 20 • This indicator shows whether the PHA has and implements a reasonable written method to determine and document for each unit leased that the rent to owner is reasonable based on current rents for comparable unassisted units • Points are based on the percent of units for which the PHA follows its written method to determine reasonable rent and has documented its determination that the rent to owner is reasonable, according to the PHA's quality control sample. Indicator 3: Determination of adjusted income Maximum Score: 20 • This indicator measures whether the PHA verifies and correctly determines adjusted income for each assisted family, and where applicable, uses the appropriate utility allowances for the unit leased in determining the gross rent. • Points are based on the percent of files that are calculated and verified correctly, according to the PHA's quality control sample. Indicator 4: Utility allowance schedule Maximum Score: 5 • This indicator shows whether the PHA maintains an up-to-date utility allowance schedule. • Points are based on whether the PHA has reviewed the utility allowance schedule and adjusted it when required, according to the PHA's certification. ®Copyright 2005 Nan McKay&Associates,Inc. Page 16-33 Adminplan 9/1/05 Unlimited copies may be made for internal use. Indicator 5: HQS quality control inspections Maximum Score: 5 • This indicator shows whether a PHA supervisor reinspects a sample of units under contract during the PHA fiscal year, which meets the minimum sample size requirements for quality control of HQS inspections. • Points are based on whether the required quality control reinspections were completed, according to the PHA's certification. Indicator 6: HQS enforcement Maximum Score: 10 • This indicator shows whether, following each HQS inspection of a unit under contract where the unit fails to meet HQS, any cited life-threatening deficiencies are corrected within 24 hours from the inspection and all other deficiencies are corrected within no more than 30 calendar days from the inspection or any PHA-approved extension. • Points are based on whether the PHA corrects all HQS deficiencies in accordance with required time frames, according to the PHA's certification. Indicator 7: Expanding housing opportunities Maximum Points: 5 • Only applies to PHAs with jurisdiction in metropolitan FMR areas. • This indicator shows whether the PHA has adopted and implemented a written policy to encourage participation by owners of units located outside areas of poverty or minority concentration; informs voucher holders of the full range of areas where they may lease units both inside and outside the PHA's jurisdiction; and supplies a list of landlords or .other parties who are willing to lease units or help families find units, including units outside areas of poverty or minority concentration. • Points are based on whether the PHA has adopted and implemented written policies in accordance with SEMAP requirements,according to the PHA's certification. Indicator 8: FMR limit and payment standards Maximum Points: 5 points • This indicator shows whether the PHA has adopted a payment standard schedule that establishes payment standard amounts by unit size for each FMR area in the PHA's jurisdiction,that are within the basic range of 90 to 110 percent of the published FMR. • Points are based on whether the PHA has appropriately adopted a payment standard schedule(s), according to the PHA's certification. Indicator 9: Annual reexaminations Maximum Points: 10 • This indicator shows whether the PHA completes a reexamination for each participating family at least every 12 months. • Points are based on the percent of reexaminations that are more than 2 months overdue, according to data from PIC. C Copyright 2005 Nan McKay&Associates,Inc. Page 16-34 Adminplan 9/1/05 Unlimited copies may be made for internal use. Indicator 10: Correct tenant rent calculations Maximum Points: 5 • This indicator shows whether the PHA correctly calculates the family's share of the rent to owner. • Points are based on the percent of correct calculations of family share of the rent, according to data from PIC. Indicator 11: Pre-contract HQS inspections Maximum Points: 5 • This indicator shows whether newly leased units pass HQS inspection on or before the effective date of the assisted lease and HAP contract. • Points are based on the percent of newly leased units that passed HQS inspection prior to the effective date of the lease and HAP contract, according to data from PIC. Indicator 12: Annual HQS inspections Maximum Points: 10 • This indicator shows whether the PHA inspects each unit under contract at least annually. • Points are based on the percent of annual HQS inspections of units under contract that are more than 2 months overdue, according to data from PIC. Indicator 13: Lease-up Maximum Points: 20 points • This indicator shows whether the PHA enters HAP contracts for the number of units or funding reserved under ACC for at least one year. • Points are basedion the percent of units leased during the last completed PHA fiscal year, or the percent of allocated budget authority that has been expended by the PHA, according to data from the PHA's last year-end operating statement that is recorded in HUD's accounting system. Indicator 14: Family self-sufficiency (FSS) enrollment and escrow account balances Maximum Points: 10 • Only applies to PHAs with mandatory FSS programs. • This indicator shows whether the PHA has enrolled families in the FSS program as required, and measures the percent of current FSS participants that have had increases in earned income which resulted in escrow account balances. • Points are based on the percent of mandatory FSS slots that are filled and the percent of families with escrow account balances, according to data from PIC. Copyright 2005 Nan McKay&Associates,Inc. Page 16-35 Adminplan 9/1/05 Unlimited copies may be made for internal use. Success Rate of Voucher Holders Maximum Points: 5 • Only applies to PHAs that have received approval to establish success rate payment standard amounts, and isn't effective until the second full PHA fiscal year following the date of HUD approval of success rate payment standard amounts. • This indicator shows whether voucher holders were successful in leasing units with voucher assistance. • Points are based on the percent of families that were issued vouchers, and that became participants in the voucher program. Deconcentration Bonus Indicator Maximum Points: 5 • Submission of data for this indicator is mandatory for a PHA using one or more payment standard amount(s)that exceed(s) 100 percent of the published FMR set at the 50 percentile rent, starting with the second full PHA fiscal year following initial use of payment standard amounts based on the FMRs set at the 50th percentile. • Additional points are available to PHAs that have jurisdiction in metropolitan FMR areas and that choose to submit the required data. • Points are based on whether the data that is submitted meets the requirements for bonus points. ®Copyright 2005 Nan McKay&Associates,Inc. Page 16-36 Adminplan 9/1/05 Unlimited copies may be made for internal use. PART VI: RECORD KEEPING 16-VI.A. OVERVIEW The PHA must maintain complete and accurate accounts and other records for the program in accordance with HUD requirements, in a manner that permits a speedy and effective audit. All such records must be made available to HUD or the Comptroller General of the United States upon request. In addition, the PHA must ensure that all applicant and participant files are maintained in a way that protects an individual's privacy rights. 16-VI.B. RECORD RETENTION [24 CFR 982.158] During the term of each assisted lease, and for at least three years thereafter,the PHA must keep: • A copy of the executed lease; • The HAP contract; and • The application from the family. In addition,the PHA must keep the following records for at least three years: • Records that provide income,racial, ethnic, gender, and disability status data on program applicants and participants; • An application from each ineligible family and notice that the applicant is not eligible; • HUD-required reports; • Unit inspection reports; • Lead-based paint records as required by 24 CFR 35, Subpart B. • Accounts and other records supporting PHA budget and financial statements for the program; • Records to document the basis for PHA determination that rent to owner is a reasonable rent (initially and during the term of a HAP contract); and • Other records specified by HUD. If an informal hearing to establish a family's citizenship status is held, longer retention requirements apply for some types of documents. For specific requirements, see Section 16- III.D., Retention of Documents. ®Copyright 2005 Nan McKay&Associates,Inc. Page 16-37 Adminplan 9/1/05 Unlimited copies may be made for internal use. 16-VI.C. RECORDS MANAGEMENT PHAs must maintain applicant and participant files and information in accordance with the regulatory requirements described below. PHA Policy All applicant and participant information will be kept in a secure location and access will be limited to authorized PHA staff. PHA staff will not discuss personal family information unless there is a business reason to do so. Inappropriate discussion of family information or improper disclosure of family information by staff will result in disciplinary action. Privacy Act Requirements [24 CFR 5.212 and Form-9886] The collection, maintenance, use, and dissemination of social security numbers(SSN), employer identification numbers (EIN), any information derived from these numbers, and income information of applicants and participants must be conducted, to the extent applicable, in compliance with the Privacy Act of 1974, and all other provisions of Federal, State, and local law. Applicants and participants, including all adults in the household, are required to sign a consent form, HUD-9886, Authorization for Release of Information. This form incorporates the Federal Privacy Act Statement and describes how the information collected using the form may be used, and under what conditions HUD or the PHA may release the information collected. Upfront Income Verification (UIV) Records PHAs that access UIV data through HUD's Enterprise Income Verification(EIV) System are required to adopt and follow specific security procedures to ensure that all EIV data is protected in accordance with Federal laws, regardless of the media on which the data is recorded (e.g. electronic, paper). These requirements are contained in Enterprise Income Verification (EIV) System PHA Security Procedures, Version 1.2, issued January 2005. PHA Policy Records will be kept in a secure location and access will be limited to PI-IA staff. ©Copyright 2005 Nan McKay&Associates,Inc. Page 16-38 Adminplan 9/1/05 Unlimited copies may be made for internal use. Criminal Records The PHA may only disclose the criminal conviction records which the PHA receives from a law enforcement agency to officers or employees of the PHA, or to authorized representatives of the PHA who have a job-related need to have access to the information [24 CFR 5.903(e)]. The PHA must establish and implement a system of records management that ensures that any criminal record received by the PHA from a law enforcement agency is maintained confidentially, not misused or improperly disseminated, and destroyed, once the purpose for which the record was requested has been accomplished, including expiration of the period for filing a challenge to the PHA action without institution of a challenge or final disposition of any such litigation [24 CFR 5.903(g)]. The PHA must establish and implement a system of records management that ensures that any sex offender registration information received by the PHA from a State or local agency is maintained confidentially, not misused or improperly disseminated, and destroyed,once the purpose for which the record was requested has been accomplished, including expiration of the period for filing a challenge to the PHA action without institution of a challenge or final disposition of any such litigation. This requirement does not apply to information that is public information, or is obtained by a PHA other than under 24 CFR 5.905. MedicaUDisability Records PHAs are not permitted to inquire about the nature or extent of a person's disability. The PHA may not inquire about a person's diagnosis or details of treatment for a disability or medical condition. If the PHA receives a verification document that provides such information,the PHA should not place this information in the tenant file. The PHA should destroy the document. C Copyright 2005 Nan McKay&Associates,Inc. Page 16-39 Adminplan 9/1/05 Unlimited copies may be made for internal use. PART VII: REPORTING AND RECORD KEEPING FOR CHILDREN WITH ENVIRONMENTAL INTERVENTION BLOOD LEAD LEVEL 16-VILA. OVERVIEW The PHA has certain responsibilities relative to children with environmental intervention blood lead levels that are receiving HCV assistance. The notification, verification, and hazard reduction requirements are discussed in Chapter 8. This part deals with the reporting requirements, and data collection and record keeping responsibilities that the PHA is subject to. 16-VII.B.REPORTING REQUIREMENT [24 CFR 35.1225(e)] The PHA must report the name and address of a child identified as having an environmental intervention blood lead level to the public health department within 5 business days of being so notified by any other medical health care professional. PHA Policy The PHA will provide the public health department written notice of the name and address of any child identified as having an environmental intervention blood lead level. 16-VII.C.DATA COLLECTION AND RECORD KEEPING [24 CFR 35.1225(01 At least quarterly,the PHA must attempt to obtain from the public health department(s)with a similar area of jurisdiction,the names and/or addresses of children less than 6 years old with an identified environmental intervention blood lead level. If the PHA obtains names and addresses of environmental intervention blood lead level children from the public health department(s),the PHA must match this information with the names and addresses of families receiving HCV assistance,unless the public health department performs such a procedure. If a match occurs, the PHA must carry out the notification, verification, and hazard reduction requirements discussed in Chapter 8, and the reporting requirement discussed above. At least quarterly, the PHA must also report an updated list of the addresses of units receiving assistance under the HCV program to the same public health department(s), unless the public health department(s) states that it does not wish to receive such a report. PHA Policy The public health department(s)has stated they do not wish to receive a report of an updated list of the addresses of units receiving assistance under the HCV program, on a quarterly basis. Therefore, the PHA is not providing such a report. C Copyright 2005 Nan McKay&Associates,Inc. Page 16-41 Adminplan 9/1/05 Unlimited copies may be made for internal use. PART VIII: DETERMINATION OF INSUFFICIENT FUNDING 16-VIII.A. OVERVIEW The HCV regulations allow PHAs to deny families permission to move and to terminate Housing Assistance Payments (HAP) contracts if funding under the consolidated ACC is insufficient to support continued assistance [24 CFR 982.314(e)(1) and 982.454]. Insufficient funding may also impact the PHA's ability to issue vouchers to families on the waiting list. This part discusses the methodology the PHA will use to determine whether or not the PHA has sufficient funding to issue vouchers, approve moves, and to continue subsidizing all families currently under a HAP contract. 16-VIII.B. METHODOLOGY PHA Policy The PHA will determine whether there is adequate funding to issue vouchers, approve moves to higher cost units and areas, and continue subsidizing all current participants by comparing the PHA's annual budget authority to the annual total HAP needs on a monthly basis. The total HAP needs for the calendar year will be projected by establishing the actual HAP costs year to date. To that figure, the PHA will add anticipated HAP expenditures for the remainder of the calendar year. Projected HAP expenditures will be calculated by multiplying the projected number of units leased per remaining months by the most current month's average HAP. The projected number of units leased per month will take into account the average monthly turnover of participant families. If the total annual HAP needs equal or exceed the annual budget authority, or if the PHA cannot support the cost of the proposed subsidy commitment(voucher issuance or move)based on the funding analysis, the PHA will be considered to have insufficient funding. Copyright 2005 Nan McKay&Associates,Inc. Page 16-43 Adminplan 9/1/05 Unlimited copies may be made for internal use. GLOSSARY A. ACRONYMS USED IN SUBSIDIZED HOUSING AAF Annual adjustment factor (published by HUD in the Federal Register and used to compute annual rent adjustments) ACC Annual contributions contract ADA Americans with Disabilities Act of 1990 BR Bedroom CDBG Community Development Block Grant(Program) CFR Code of Federal Regulations (published federal rules that define and implement laws; commonly referred to as "the regulations") CPI Consumer price index(published monthly by the Department of Labor as an inflation indicator) FDIC Federal Deposit Insurance Corporation FHA Federal Housing Administration FICA Federal Insurance Contributions Act(established Social Security taxes) FMR Fair market rent FR Federal Register FSS Family Self-Sufficiency (Program) FY Fiscal year FYE Fiscal year end GAO Government Accountability Office GR Gross rent HAP Housing assistance payment HCV Housing choice voucher HQS Housing quality standards. HUD Department of Housing and Urban Development HUDCLIPS HUD Client Information and Policy System IG (HUD Office of) Inspector General IPA Independent public accountant IRA Individual Retirement Account IRS Internal Revenue Service JTPA Job Training Partnership Act LBP Lead-based paint ©Copyright 2005 Nan McKay&Associates GL-1 Adminplan 9/1/05 Unlimited copies may be made for internal use. MSA Metropolitan statistical area (established by the U.S. Census Bureau) MTCS Multi-family Tenant Characteristics System (now the Form HUD-50058 submodule of the PIC system) NOFA Notice of funding availability OMB Office of Management and Budget PASS Plan for Achieving Self-Support PHA Public housing agency PHRA Public Housing Reform Act of 1998 (also known as the Quality Housing and Work Responsibility Act) PIC PIH Information Center PIH (HUD Office of) Public and Indian Housing PS Payment standard QC Quality control QHWRA Quality Housing and Work Responsibility Act of 1998 (also known as the Public Housing Reform Act) REAC (HUD) Real Estate Assessment Center RFP Request for proposals RFTA Request for tenancy approval RIGI Regional inspector general for investigation(handles fraud and program abuse matters for HUD at the regional office level) SEMAP Section 8 Management Assessment Program SRO Single room occupancy SSA Social Security Administration SSI Supplemental security income TANF Temporary assistance for needy families TR Tenant rent TTP Total tenant payment UA Utility allowance URP Utility reimbursement payment © Copyright 2005 Nan McKay&Associates GL-2 Adminplan 9/1/05 Unlimited copies may be made for internal use. B. GLOSSARY OF TERMS IN SUBSIDIZED HOUSING Absorption. In portability (under subpart H of this part 982): the point at which a receiving PHA stops billing the initial PHA for assistance on behalf of a portability family. The receiving PHA uses funds available under the receiving PHA consolidated ACC. Accessible. The facility or portion of the facility can be approached, entered, and used by individuals with physical handicaps. Adjusted Income. Annual income, less allowable HUD deductions. Adjusted Annual Income. Same as Adjusted Income. Administrative fee. Fee paid by HUD to the PHA for administration of the program. See §982.152. Administrative fee reserve (formerly"operating reserve"). Account established by PHA from excess administrative fee income. The administrative fee reserve must be used for housing purposes. See §982.155. Administrative fee reserves from FY 2004 and 2005 funding are further restricted to activities related to the provision of tenant-based rental assistance authorized under Section 8. Administrative plan. The plan that describes PHA policies for administration of the tenant-based programs. The Administrative Plan and any revisions must be approved by the PHA's board and included as a supporting document to the PHA Plan. See §982.54. Admission. The point when the family becomes a participant in the program. The date used for this purpose is the effective date of the first HAP contract for a family (first day of initial lease term) in a tenant-based program. Amortization payment. In a manufactured home space rental: The monthly debt service payment by the family to amortize the purchase price of the manufactured home. Annual contributions contract(ACC). The written contract between HUD and a PHA under which HUD agrees to provide funding for a program under the 1937 Act, and the PHA agrees to comply with HUD requirements for the program. Annual Income. The anticipated total income of an eligible family from all sources for the 12- month period following the date of determination of income, computed in accordance with the regulations. Applicant (applicant family). A family that has applied for admission to a program but is not yet a participant in the program. Area Exception Rent. An amount that exceeds the published FMR. See §982.504(b). "As paid"States. States where the welfare agency adjusts the shelter and utility component of the welfare grant in accordance with actual housing costs. Assets. (See Net Family Assets.) Auxiliary aids. Services or devices that enable persons with impaired sensory, manual, or speaking skills to have an equal opportunity to participate in, and enjoy the benefits of, programs or activities receiving Federal financial assistance. ©Copyright 2005 Nan McKay&Associates GL-3 Adminplan 9/1/05 Unlimited copies may be made for internal use. Budget authority. An amount authorized and appropriated by the Congress for payment to HAs under the program. For each funding increment in a PHA program, budget authority is the maximum amount that may be paid by HUD to the PHA over the ACC term of the funding increment. Child. A member of the family other than the family head or spouse who is under 18 years of age. Child care expenses. Amounts anticipated to be paid by the family for the care of children under 13 years of age during the period for which annual income is computed, but only where such care is necessary to enable a family member to actively seek employment;be gainfully employed, or to further his or her education and only to the extent such amounts are not reimbursed. The amount deducted shall reflect reasonable charges for child care. In the case of child care necessary to permit employment, the amount deducted shall not exceed the amount of employment income that is included in annual income. Citizen. A citizen or national of the United States. Co-head An individual in the household who is equally responsible for the lease with the head of household. A family may have a co-head or spouse but not both. A co-head never qualifies as a dependent. The co-head must have legal capacity to enter into a lease. Common space. In shared housing: Space available for use by the assisted family and other occupants of the unit. Computer match. The automated comparison of data bases containing records about individuals. Confirmatory review. An on-site review performed by HUD to verify the management performance of a PHA. Consent form. Any consent form approved by HUD to be signed by assistance applicants and participants to obtain income information from employers and SWICAs; return information from the Social Security Administration (including wages, net earnings from self- employment, and retirement income); and return information for unearned income from the IRS. Consent forms expire after a certain time and may authorize the collection of other information to determine eligibility or level of benefits. Congregate housing. Housing for elderly persons or persons with disabilities that meets the HQS for congregate housing. A special housing type: see §982.606 to §982.609. Contiguous MSA. In portability (under subpart H of part 982): An MSA that shares a common boundary with the MSA in which the jurisdiction of the initial PHA is located. Continuously assisted. An applicant is continuously assisted under the 1937 Act if the family is already receiving assistance under any 1937 Housing Act program when the family is admitted to the voucher program. Contract. (See Housing Assistance Payments Contract.) Contract authority. The maximum annual payment by HUD to a PHA for a funding increment. ©Copyright 2005 Nan McKay&Associates GL-4 Adminplan 9/1/05 Unlimited copies may be made for internal use. Cooperative (term includes mutual housing). Housing owned by a nonprofit corporation or association, and where a member of the corporation or association has the right to reside in a particular apartment, and to participate in management of the housing. A special housing type: see §982.619. Covered families. Statutory term for families who are required to participate in a welfare agency economic self-sufficiency program and who may be subject to a welfare benefit sanction for noncompliance with this obligation. Includes families who receive welfare assistance or other public assistance under a program for which Federal, State or local law requires that a member of the family must participate in an economic self-sufficiency program as a • condition for the assistance. Dependent. A member of the family (except foster children and foster adults) other than the family head or spouse, who is under 18 years of age, or is a.person with a disability, or is a full-time student. Disability assistance expenses. Reasonable expenses that are anticipated, during the period for which annual income is computed, for attendant care and auxiliary apparatus for a disabled family member and that are necessary to enable a family member(including the disabled member)to be employed, provided that the expenses are neither paid to a member of the family nor reimbursed by an outside source. Disabled family. A family whose head, spouse, or sole member is a person with disabilities; or two or more persons with disabilities living together; or one or more persons with disabilities living with one or more live-in aides. Disabled person. See Person with Disabilities. Displaced family. A family in which each member, or whose sole member, is a person displaced by governmental action, or a person whose dwelling has been extensively damaged or destroyed as a result of a disaster declared or otherwise formally recognized pursuant to Federal disaster relief laws. Domicile. The legal residence of the household head or spouse as determined in accordance with State and local law. Drug-related criminal activity. As defined in 42 U.S.C. 1437f(f)(5). Drug-trafficking. The illegal manufacture, sale, or distribution, or the possession with intent to manufacture, sell, or distribute, of a controlled substance as defined in section 102 of the Controlled Substances Act(21 U.S.C. 802). Economic Self-Sufficiency Program. Any program designed to encourage, assist, train or facilitate the economic independence of assisted families, or to provide work for such families. Can include job training, employment counseling, work placement, basic skills training, education, English proficiency, Workfare, financial or household management, apprenticeship, or any other program necessary to ready a participant to work (such as treatment for drug abuse or mental health treatment). Includes any work activities as defined in the Social Security Act(42 U.S.C. 607(d)). Also see §5.603(c). Elderly family. A family whose head, spouse, or sole member is a person who is at least 62 years of age; or two or more persons who are at least 62 years of age living together; or one or more persons who are at least 62 years of age living with one or more live-in aides. ©Copyright 2005 Nan McKay&Associates GL-5 Adminplan 9/1/05 Unlimited copies may be made for internal use. Elderly Person. An individual who is at least 62 years of age. Eligible Family (Family). A family that is income eligible and meets the other requirements of the Act and Part 5 of 24 CFR. Employer Identification Number (EIN). The nine-digit taxpayer identifying number that is assigned to an individual, trust, estate, partnership, association, company, or corporation. Evidence of citizenship or eligible status. The documents which must be submitted to evidence citizenship or eligible immigration status. (See §5.508(b).) Extremely Low Income Family. A family whose annual income does not exceed 30.percent of the median income for the area, as determined by HUD, with adjustments for smaller and larger families. HUD may establish income ceilings higher or lower than 30 percent of median income if HUD finds such variations are necessary due to unusually high or low family incomes. (CFR 5.603) Facility. All or any portion of buildings, structures, equipment, roads, walks, parking lots, rolling stock or other real or personal property or interest in the property. Fair Housing Act means title VIII of the Civil Rights Act of 1968, as amended by the Fair Housing Amendments Act of 1988 Fair market rent (FMR). The rent, including the cost of utilities (except telephone), as established by HUD for units of varying sizes (by number of bedrooms), that must be paid in the housing market area to rent privately owned, existing, decent, safe and sanitary rental housing of modest(non-luxury) nature with suitable amenities. See periodic publications in the Federal Register in accordance with 24 CFR part 888. Family. Includes but is not limited to the following, and can be further defined in PHA policy. - A family with or without children (the temporary absence of a child from the home due to placement in foster care is not considered in determining family composition and family size) - An elderly family or a near-elderly family - A displaced family - The remaining member of a tenant family - A single person who is not an elderly or displaced person, or a person with disabilities, or the remaining member of a tenant family. Family rent to owner. In the voucher program, the portion of rent to owner paid by the family. Family self-sufficiency program (FSS program). The program established by a PHA in accordance with 24 CFR part 984 to promote self-sufficiency of assisted families, including the coordination of supportive services (42 U.S.C. 1437u). Family share. The portion of rent and utilities paid by the family. For calculation of family share, see §982.515(a). Family unit size. The appropriate number of bedrooms for a family, as determined by the PHA under the PHA subsidy standards. Federal agency. A department of the executive branch of the Federal Government. ©Copyright 2005 Nan McKay&Associates GL-6 Adminplan 9/1/05 Unlimited copies may be made for internal use. Foster Child Care Payment. Payment to eligible households by state, local, or private agencies appointed by the State, to administer payments for the care of foster children. Full-time Student A person who is attending school or vocational training on a full-time basis (carrying a subject load that is considered full-time for day students under the standards and practices of the educational institution attended). (CFR 5.603) Funding increment Each commitment of budget authority by HUD to a PHA under the consolidated annual contributions contract for the PHA program. Gross rent The sum of the rent to owner plus any utility allowance. Group home. A dwelling unit that is licensed by a State as a group home for the exclusive residential use of two to twelve persons who are elderly or persons with disabilities (including any live-in aide). A special housing type: see §982.610 to §982.614. Handicap. Any condition or characteristic that renders a person an individual with handicaps. See 24CFR 8.3. Handicap Assistance Expense. See "Disability Assistance Expense." HAP contract. Housing assistance payments contract. (Contract). A written contract between the PHA and an owner for the purpose of providing housing assistance payments to the owner on behalf of an eligible family. Head of household. The adult member of the family who is the head of the household for purposes of determining income eligibility and rent. Housing assistance payment. The monthly assistance payment by a PHA, which includes: (1) A payment to the owner for rent to the owner under the family's lease; and (2) An additional payment to the family if the total assistance payment exceeds the rent to owner. Housing agency (HA). A State, county, municipality or other governmental entity or public body (or agency or instrumentality thereof) authorized to engage in or assist in the development or . operation of low-income housing. ("PHA" and"HA" mean the same thing.) Housing Quality Standards. The HUD minimum quality standards for housing assisted under the voucher program. HUD. The Department of Housing and Urban Development. Imputed Asset Asset disposed of for less than Fair Market Value during two years preceding examination or reexamination. Imputed Income. HUD passbook rate multiplied by the total cash value of assets. Calculation used when net family assets exceed $5,000. Imputed welfare income. An amount of annual income that is not actually received by a family as a result of a specified welfare benefit reduction, but is included in the family's annual income and therefore reflected in the family's rental contribution. Income. Income from all sources of each member of the household, as determined in accordance with criteria established by HUD. Income For Eligibility. Annual Income. ,r © Copyright 2005 Nan McKay&Associates GL-7 Adminplan 9/1/05 Unlimited copies may be made for internal use. Income information means information relating to an individual's income, including: - All employment income information known to current or previous employers or other income sources - All information about wages, as defined in the State's unemployment compensation law, including any Social Security Number; name of the employee; quarterly wages of the employee; and the name, full address, telephone number, and, when known, Employer Identification Number of an employer reporting wages under a State unemployment compensation law • - Whether an individual is receiving, has received, or has applied for unemployment compensation, and the amount and the period received - Unearned IRS income and self-employment, wages and retirement income - Wage, social security, and supplemental security income data obtained from the Social Security Administration. Individual with handicaps. Any person who has a physical or mental impairment that substantially limits one or more major life activities; has a record of such an impairment; or is regarded as having such an impairment. Initial PHA. In portability, the term refers to both: (1)A PHA that originally selected a family that later decides to move out of the jurisdiction of the selecting PHA; and (2) A PHA that absorbed a family that later decides to move out of the jurisdiction of the absorbing PHA. Initial payment standard The payment standard at the beginning of the HAP contract term. Initial rent to owner. The rent to owner at the beginning of the HAP contract term. Jurisdiction. The area in which the PHA has authority under State and local law to administer the program. Landlord. Either the owner of the property or his/her representative or the managing agent or his/her representative, as shall be designated by the owner. Lease. A written agreement between an owner and a tenant for the leasing of a dwelling unit to the tenant. The lease establishes the conditions for occupancy of the dwelling unit by a family with housing assistance payments under a HAP contract between the owner and the PHA. Live-in aide. A person who resides with one or more elderly persons, or near-elderly persons, or persons with disabilities, and who: - Is determined to be essential to the care and well-being of the persons; - Is not obligated for the support of the persons; and - Would not be living in the unit except to provide the necessary supportive services. Local Preference. A preference used by the PHA to select among applicant families. Low Income Family. A family whose income does not exceed 80% of the median income for the area as determined by HUD with adjustments for smaller or larger families, except that HUD may establish income limits higher or lower than 80% for areas with unusually high or low incomes. © Copyright 2005 Nan McKay&Associates GL-8 Adminplan 9/1/05 Unlimited copies may be made for internal use. Manufactured home. A manufactured structure that is built on a permanent chassis, is designed for use as a principal place of residence, and meets the HQS. A special housing type: see §982.620 and §982.621. Manufactured home space. In manufactured home space rental: A space leased by an owner to a family. A manufactured home owned and occupied by the family is located on the space. See §982.622 to §982.624. Medical expenses. Medical expenses, including medical insurance premiums, that are anticipated during the period for which annual income is computed, and that are not covered by insurance. (A deduction for elderly or disabled families only.) These allowances are given when calculating adjusted income for medical expenses in excess of 3% of annual income. Merger Date. October 1, 1999. Minor. A member of the family household other than the family head or spouse, who is under 18 years of age. Mixed family. A family whose members include those with citizenship or eligible immigration status, and those without citizenship or eligible immigration status. Monthly adjusted income. One twelfth of adjusted income. Monthly income. One twelfth of annual income. Mutual housing. Included in the definition of"cooperative." National. A person who owes permanent allegiance to the United States, for example, as a result of birth in a United States territory or possession. Near-elderly family. A family whose head, spouse, or sole member is a person who is at least 50 years of age but below the age of 62; or two or more persons, who are at least 50 years of age but below the age of 62, living together; or one or more persons who are at least 50 years of age but below the age of 62 living with one or more live-in aides. ©Copyright 2005 Nan McKay&Associates GL-9 Adminplan 9/1/05 Unlimited copies may be made for internal use. Net family assets. (I)Net cash value after deducting reasonable costs that would be incurred in disposing of real property, savings, stocks, bonds, and other forms of capital investment, excluding interests in Indian trust land and excluding equity accounts in HUD homeownership programs. The value of necessary items of personal property such as furniture and automobiles shall be excluded. - In cases where a trust fund has been established and the trust is not revocable by, or under the control of, any member of the family or household, the value of the trust fund will not be considered an asset so long as the fund continues to be held in trust. Any income distributed from the trust fund shall be counted when determining annual income under §5.609. - In determining net family assets, PHAs or owners, as applicable, shall include the value of any business or family assets disposed of by an applicant or tenant for less than fair market value (including a disposition in trust, but not in a foreclosure or bankruptcy sale) during the two years preceding the date of application for the program or reexamination, as applicable, in excess of the consideration received therefore. In the case of a disposition as part of a separation or divorce settlement,the disposition will not be considered to be for less than fair market value if the applicant or tenant receives important consideration not measurable in dollar terms. Noncitizen. A person who is neither a citizen nor national of the United States. Notice of Funding Availability (NOFA). For budget authority that HUD distributes by competitive process,the Federal Register document that invites applications for funding. This document explains how to apply for assistance and the criteria for awarding the funding. Office of General Counsel(OGC).The General Counsel of HUD. Owner. Any person or entity with the legal right to lease or sublease a unit to a participant. PHA Plan. The annual plan and the 5-year plan as adopted by the PHA and approved by HUD. PHA's quality control sample. An annual sample of files or records drawn in an unbiased manner and reviewed by a PHA supervisor(or by another qualified person other than the person who performed the original work)to determine if the work documented in the files or records conforms to program requirements. For minimum sample size see CFR 985.3. Participant(participant family). A family that has been admitted to the PHA program and is currently assisted in the program. The family becomes a participant on the effective date of the first HAP contract executed by the PHA for the family (first day of initial lease term). Payment standard. The maximum monthly assistance payment for a family assisted in the voucher program (before deducting the total tenant payment by the family). © Copyright 2005 Nan McKay&Associates GL-10 Adminplan 9/1/05 Unlimited copies may be made for internal use. Persons With Disabilities. A person who has a disability as defined in 42 U.S.C. 423 or a developmental disability as defined in 42 U.S.C. 6001. Also includes a person who is determined, under HUD regulations, to have a physical or mental impairment that is expected to be of long-continued and indefinite duration, substantially impedes the ability to live independently, and is of such a nature that the ability to live independently could be improved by more suitable housing conditions. For purposes of reasonable accommodation and program accessibility for persons with disabilities, means and"individual with handicaps" as defined in 24 CFR 8.3. Definition does not exclude persons who have AIDS or conditions arising from AIDS, but does not include a person whose disability is based solely on drug or alcohol dependence (for low-income housing eligibility purposes). See "Individual with handicaps" Portability. Renting a dwelling unit with Section 8 housing choice voucher outside the jurisdiction of the initial PHA. Premises. The building or complex in which the dwelling unit is located, including common areas and grounds. Private space. In shared housing: The portion of a contract unit that is for the exclusive use of an assisted family. Processing entity. The person or entity that, under any of the programs covered, is responsible for making eligibility and related determinations and any income reexamination. In the Section 8 program, the"processing entity" is the "responsible entity." Project owner. The person or entity that owns the housing project containing the assisted dwelling unit. Public Assistance. Welfare or other payments to families or individuals, based on need, which are made under programs funded, separately or jointly, by Federal, state, or local governments. Public Housing Agency (PHA). Any State, county, municipality, or other governmental entity or public body, or agency or instrumentality of these entities,that is authorized to engage or assist in the development or operation of low-income housing under the 1937 Act. Reasonable rent. A rent to owner that is not more than rent charged: (1) For comparable units in the private unassisted market; and (2) For comparable unassisted units in the premises. Receiving PHA. In portability: A PHA that receives a family selected for participation in the tenant-based program of another PHA. The receiving PHA issues a voucher and provides program assistance to the family. Recertification. Sometimes called reexamination. The process of securing documentation of total family income used to determine the rent the tenant will pay for the next 12 months if there are no additional changes to be reported. Remaining Member of Tenant Family. Person left in assisted housing who may or may not normally qualify for assistance on own circumstances (i.e., an elderly spouse dies, leaving widow age 47 who is not disabled). ©Copyright 2005 Nan McKay&Associates GL-I1 Adminplan 9/1/05 Unlimited copies may be made for internal use. Rent to owner. The total monthly rent payable to the owner under the lease for the unit(also known as contract rent). Rent to owner covers payment for any housing services, maintenance and utilities that the owner is required to provide and pay for. Residency Preference. A PHA preference for admission of families that reside anywhere in a specified area, including families with a member who works or has been hired to work in the area("residency preference area"). Residency Preference Area. The specified area where families must reside to qualify for a residency preference. Responsible entity. For the public housing and the Section 8 tenant-based assistance, project- based certificate assistance, and moderate rehabilitation programs, the responsible entity means the PHA administering the program under an ACC with HUD. For all other Section 8 programs, the responsible entity means the Section 8 owner. Secretary. The Secretary of Housing and Urban Development. Section 8. Section 8 of the United States Housing Act of 1937. Section 8 covered programs. All HUD programs which assist housing under Section 8 of the 1937 Act, including Section 8 assisted housing for which loans are made under section 202 of the Housing Act of 1959. Section 214 Section 214 of the Housing and Community Development Act of 1980, as amended Section 214 covered programs is the collective term for the HUD programs to which the restrictions imposed by Section 214 apply. These programs are set forth in §5.500. Security Deposit. A dollar amount(maximum set according to the regulations) which can be used for unpaid rent or damages to the owner upon termination of the lease. Set-up charges. In a manufactured home space rental: Charges payable by the family for assembling, skirting and anchoring the manufactured home. Shared housing. A unit occupied by two or more families. The unit consists of both common space for shared use by the occupants of the unit and separate private space for each assisted family. A special housing type: see §982.615 to §982.618. Single Person. A person living alone or intending to live alone. Single room occupancy housing (SRO). A unit that contains no sanitary facilities or food preparation facilities, or contains either, but not both, types of facilities. A special housing type: see §982.602 to §982.605. Social Security Number (SSN). The nine-digit number that is assigned to a person by the Social Security Administration and that identifies the record of the person's earnings reported to the Social Security Administration. The term does not include a number with a letter as a suffix that is used to identify an auxiliary beneficiary, Special admission. Admission of an applicant that is not on the PHA waiting list or without considering the applicant's waiting list position. ©Copyright 2005 Nan McKay&Associates GL-12 Adminplan 9/1/05 Unlimited copies may be made for internal use. Special housing types. See subpart M of part 982. Subpart M states the special regulatory requirements for: SRO housing, congregate housing, group homes, shared housing, cooperatives (including mutual housing), and manufactured homes (including manufactured home space rental). Specified Welfare Benefit Reduction. Those reductions of welfare benefits (for a covered family) that may not result in a reduction of the family rental contribution. A reduction of welfare benefits because of fraud in connection with the welfare program, or because of welfare sanction due to noncompliance with a welfare agency requirement to participate in an economic self-sufficiency program. Spouse. The marriage partner of the head of household. State Wage Information Collection Agency (SWICA). The state agency, including any Indian tribal agency, receiving quarterly wage reports from employers in the state, or an alternative system that has been determined by the Secretary of Labor to be as effective and timely in providing employment-related income and eligibility information. Subsidy standards. Standards established by a PHA to determine the appropriate number of bedrooms and amount of subsidy for families of different sizes and compositions. Suspension. Stopping the clock on the term of a family's voucher after the family submits a request for approval of the tenancy. If the PHA decides to allow extensions or suspensions of the voucher term, the PHA administrative plan must describe how the PHA determines whether to grant extensions or suspensions, and how the PHA determines the length of any extension or suspension. This practice is also called"tolling". Tenancy Addendunt For the Housing Choice Voucher Program, the lease language required by HUD in the lease between the tenant and the owner. Tenant. The person or persons (other than a live-in aide) who executes the lease as lessee of the dwelling unit. Tenant rent to owner. See "Family rent to owner". Term of Lease. The amount of time a tenant agrees in writing to live in a dwelling unit. Total Tenant Payment(TTP). The total amount the HUD rent formula requires the tenant to pay toward rent and utilities. Unit. Residential space for the private use of a family. The size of a unit is based on the number of bedrooms contained within the unit and generally ranges from zero (0) bedrooms to six(6) bedrooms. Utility allowance. If the cost of utilities (except telephone) and other housing services for an assisted unit is not included in the tenant rent but is the responsibility of the family occupying the unit, an amount equal to the estimate made or approved by a PHA or HUD of the monthly cost of a reasonable consumption of such utilities and other services for the unit by an energy-conservative household of modest circumstances consistent with the requirements of a safe, sanitary, and healthful living environment. Utility reimbursement. In the voucher program, the portion of the housing assistance payment which exceeds the amount of rent to owner. © Copyright 2005 Nan McKay&Associates GL-13 Adminplan 9/1/05 Unlimited copies may be made for internal use. Utility hook-up charge. In a manufactured home space rental: Costs payable by a family for connecting the manufactured home to utilities such as water, gas, electrical and sewer lines. Vacancy Loss Payments. (Applies only to pre-10/2/95 HAP Contracts in the Rental Certificate Program). When a family vacates its unit in violation of its lease, the owner is eligible for 80%of the contract rent for a vacancy period of up to one additional month, (beyond the month in which the vacancy occurred) if s/he notifies the PHA as soon as s/he learns of the vacancy, makes an effort to advertise the unit, and does not reject any eligible applicant except for good cause. Very Low Income Family. A low-income family whose annual income does not exceed 50%of the median income for the area, as determined by HUD, with adjustments for smaller and larger families. HUD may establish income limits higher or lower than 50% of the median income for the area on the basis of its finding that such variations are necessary because of unusually high or low family incomes. This is the income limit for the housing choice voucher program. Violent criminal activity. Any illegal criminal activity that has as one of its elements the use, attempted use, or threatened use of physical force against the person or property of another. Voucher (Housing Choice Voucher). A document issued by a PHA to a family selected for admission to the housing choice voucher program. This document describes the program and the procedures for PHA approval of a unit selected by the family. The voucher also states obligations of the family under the program. Voucher holder. A family holding a voucher with an unexpired term(search time). Voucher program. The housing choice voucher program. Waiting list admission. An admission from the PHA waiting list. Welfare assistance. Income assistance from Federal or State welfare programs, including assistance provided under TANF and general assistance. Does not include assistance directed solely to meeting housing expenses, nor programs that provide health care, child care or other services for working families. FOR THE FSS PROGRAM (984.103(b)), "welfare assistance" includes only cash maintenance payments from Federal or State programs designed to meet a family's ongoing basic needs, but does not include food stamps, emergency rental and utilities assistance, SSI, SSDI, or Social Security. Welfare-to-work (WTN)family. A family assisted by a PHA with Voucher funding awarded to the PHA under the HUD welfare-to-work voucher program (including any renewal of such WTW funding for the same purpose). a --� © Copyright 2005 Nan McKay&Associates GL-14 Adminplan 9/1/05 — Unlimited copies may be made for internal use. Hello