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March 25, 2018

FY 2018 Omnibus Appropriations Bill In-Depth: Section 8 Programs

NAHRO News
Direct News – Washington Update
FY 2018 Omnibus Appropriations Bill In-Depth: Section 8 Programs
Mar 22, 2018

Congress has passed and the President has signed the FY 2018 omnibus spending package, which contains $63 billion in additional funding for domestic programs and a 10 percent increase in spending for the Department of Housing and Urban Development.

Overall, the Transportation-HUD (T-HUD) appropriations bill did very well, with a 24 percent increase. The increase in T-HUD spending was reflected in the HUD budget, which received a 10 percent increase compared to FY 2017. The additional funding resulted in funding increases for nearly every single program in the HUD portfolio.

Today’sDirect Newsitem is intended to provide NAHRO members with a comprehensive summary of the fiscal year (FY) 2018 omnibus as it relates to the fiscal year (FY) 2018 budgets treatment of HUD Section 8 provisions. It also highlights important language included in the omnibus report. Report language included in the Senate and House FY 2018 spending bills also continue to apply, unless superseded by language in the omnibus report.

Major Section 8-related items in the budget include:

  • $19.6 billion for Housing Assistance Payments renewals, a $1,245 million increase from the FY 2017 enacted budget. At this time, NAHRO believes that this represents full funding (i.e., a 100 percent proration) of this account.
  • $1.73 billion for administrative fees for the Housing Choice Voucher program, an increase of $90 million from the FY 2017 enacted budget. While NAHRO understands that this number represents an increase, NAHRO is still disappointed with this funding level and will continue to inform policymakers of the importance of this account to running the Housing Choice Voucher Program. At this time, NAHRO believes that this amount represents a 77 percent proration.
  • $11.515 billion for the project-based rental assistance account–an amount that is a $699 million increase from the FY 2017 enacted budget.

If you have questions about any of the items in thisDirect News, please contact Tushar Gurjal, NAHRO’s Policy Analyst for Section 8 programs attgurjal@nahro.org.

Tenant-Based Rental Assistance (TBRA)

Housing Choice Voucher (HCV) Housing Assistance Payments (HAP): The omnibus includes $19.6 billion for HAP renewals. This is an increase of $1,245 million from the FY 2017 enacted budget. At this time, NAHRO believes that this represents full funding (i.e., a 100 percent proration) of this account.

HAP Renewal Formula: The omnibus calls for HAP renewal funding based on validated calendar year (CY) 2017 voucher management system (VMS) leasing and cost data adjusted by an inflation factor set by the Secretary. Enacted budgets have used a formula which bases renewals on actual HAP costs and utilization since 2007.

HAP Set-Aside Funds: The omnibus allocates $85 million for HAP set-aside funding to four categories: (1) PHAs that experience a significant increase in renewal costs of vouchers resulting from unforeseen circumstances or from portability; (2) vouchers that were not in use during the 12-month period in order to be available to meet PBV commitments; (3) costs experienced with HUD-VASH vouchers; and (4) PHAs that would be required to terminate rental assistance despite taking cost-saving measures.

NRA/HUD-Held HAP Reserves Offset: The omnibus authorizes HUD to offset PHAs CY 2018 allocations based on the excess amounts of PHAs net restricted assets accounts, including HUD-held programmatic reserves (in accordance with VMS data in calendar year 2017 that is verifiable and complete). PHAs participating in the Moving to Work (MTW) demonstration would also be subject to the offset.

HUD-VASH: The omnibus allocates $40 million for new HUD-VASH vouchers. HUD will make the funding available to PHAs that partner with eligible United States Department of Veterans Affairs (VA) Medical Centers or other entities based on geographical need, PHA administrative performance, and other factors. The FY 2017 enacted budget allocated $40 million for HUD-VASH vouchers also. Additionally, the omnibus allocates $5 million for HUD-VASH renewals to serve Native American veterans that are homeless or at-risk of homelessness living on or near a reservation or other [Native American] areas.

Family Unification Program: The omnibus allocates $20 million for new Family Unification Program (FUP) vouchers. This bill directs any PHA that determines that it no longer has an identified need for FUP assistance from prior acts to notify HUD, which will recapture that assistance. The Department is then instructed to reallocate the award of these vouchers to PHAs based on need for voucher assistance in connection with the Family Unification Program.

ACC Caps: The omnibus maintains the ACC Caps, restricting non-MTW PHAs from expending HAP to fund any unit months exceeding the PHAs authorized number of units under contract. MTW agencies are governed by the terms and conditions of their contract. The FY 2017 enacted budget also included this provision.

Tenant Protection Vouchers: The omnibus would provide $85 million for the first-time funding of Tenant Protection Vouchers (TPVs)–a $25 million decrease from the FY 2017 enacted budget levels. These TPVs are to be used for the following: (1) relocation and replacement of public housing units that are demolished or disposed; (2) conversions of section 23 projects; (3) the Family Unification Program; (4) witness relocation; (5) enhanced vouchers; (6) HOPE VI; (7) Choice Neighborhoods; (8) mandatory and voluntary conversion of public housing; and (9) tenant protection assistance for elderly residents of properties formerly assisted under Section 202.

Ongoing Administrative Fees: The omnibus allocates $1.730 billion for ongoing administrative fees, a $90 million increase from the FY 2017 enacted levels. At this time, NAHRO believes that this represents a 77 percent proration.

The omnibus also instructs HUD to continue to use the current administrative fee formula, so the new formula which HUD is developing will likely not be implemented in 2018. HUD is in the process of developing a new administrative fee formula based on findings and recommendations from theHCV Administrative Fee Studyas well as comments received from interested stakeholders (NAHRO’s comments can be foundhere). Although it is unlikely that the new formula will be implemented in 2018, NAHRO believes that career staff at HUD are still working on ways to improve the formula.

As before, NAHRO will continue to take a two-pronged approach in addressing this issue. First, NAHRO will make sure that legislators are aware of how this formula impacts their regions so that they do not rush to give HUD the authority to unilaterally change the formula, until there is a well-developed formula that takes into account all the costs of administering a HCV program. Second, NAHRO will continue to work with HUD to improve the formula to address its flaws, so that it accurately captures all costs associated with running a HCV program.

Additional Administrative Fees: The omnibus allocates up to $30 million in additional administrative fees, which would be available to PHAs that need additional funding to administer their HCV program, including fees associated with tenant protection rental assistance, disaster-related vouchers, HUD-VASH, and other special purpose incremental vouchers.

Project-Based Rental Assistance (PBRA)

Project-Based Rental Assistance: The PBRA program assists approximately 1.2 million extremely low- to low-income households in obtaining decent, safe, and sanitary homes. The FY 2018 omnibus allocates $11.515 billion for the project-based rental assistance account–an amount that is a $699 million increase from the FY 2017 enacted budget. The omnibus provides $11.515 billion for contract renewals of which $285 million may be used for contract administrators. Additionally, HUD may use project funds held in residual accounts, unobligated balances, including recaptures, and carryover for program activities.

The Department is also directed by Congress to provide quarterly reports to the House and Senate Committees on Appropriations on projects with deficient or unsatisfactory scores within the last 3 years and HUDs plans to remedy those defects.

Congress also finds that HUDs cancellation of the two solicitations to procure Performance-Based Contract Administrator services on a competitive basis appropriate. Congress directs HUD to submit a report to the House and Senate committees a report within 90 days of enactment on the staffing and funding requirements in the Office of Multifamily Housing Programs and the Office of the Chief Procurement that would be necessary for a state-by-state contracting methodology.

Other Policy Provisions

Student Rule: The omnibus counts as income, for the purposes of determining Section 8 eligibility, any assistance from private sources, or an institution of higher education, in excess of amounts received for tuition and any other required fees, except for a person over the age of 23 with dependent children. This provision also states restrictions on students receiving section 8 funding.

Repealing Duplicative Provisions: The omnibus contains a section repealing language in a past continuing resolution which allowed HUD to make temporary adjustments to Housing Choice Voucher Program HAP and administrative fee allocations for PHAs in Presidentially-declared disaster areas in 2017 or 2018. According to report language, Congress felt that this was duplicative Section 8 flexibility (i.e., that HUD already had this authority absent this language).

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