Draft FY 2026-2027 Administrative Plan — Santa Monica City Council, April 14, 2026 (part 5 of 8)

New Family and Household Members Requiring Approval
With the exception of children who join the family as a result of birth, adoption, or courtawarded 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/adult) [24 CFR 982.551(h)(4)].

Although the PHA must verify aspects of program eligibility when any new family member is added, the Streamlining Final Rule removed the requirement that PHAs conduct a reexamination of income whenever a new family member is added. The PHA may state in policy that an income reexamination will be conducted.

PHA Policy
The PHA will only approve the addition of a new household member under the following circumstances:

The individual is the spouse or partner of a current participant The individual is a child (0 –18) who joined the family through birth, custody, or adoption during the family’s current period of program participation, or for applicants, after they were selected from the waitlist
Adults age 18 or older who join the household due to a court ordered action such as guardianship or conservatorship
A foster child or foster adult may be added to the household for the duration of the placement. During this period, they are considered household members only and are not counted as family members. They may become family members only if the household later obtains permanent guardianship, conservatorship, or completes an adoption
The individual is added at the time the applicant is notified that they have been selected from the waitlist
The individual was previously a member of the participating household and is being reinstated
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 family’s 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 14 consecutive days or 28 cumulative days within a 12-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 into the unit. © Copyright 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use.

Page 11 ends

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) and documentation requirements (see Chapter 7, Part II).

The PHA allows a family to add a foster child or foster adult for the duration of the placement. An extra bedroom is approved only if adding the foster individual would violate HQS occupancy standards and the placement will last more than three consecutive months (for example, a two person household adding a foster child becomes eligible for a two bedroom voucher, while a single person household does not). When the foster individual leaves, the voucher size is reduced at the next reexamination.

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 and documentation requirements, 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 a voucher and will be required to move.

If the PHA determines that an individual does not meet the PHA’s eligibility criteria or documentation requirements, 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 20 business days of receiving all information required to verify the individual’s eligibility.

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.

Changes in Family Unit Size (Voucher Size) [24 CFR 982.505(c)(6)] Changes effective 12/2/24 and earlier: Irrespective of any increase or decrease in the payment standard, if the family unit size increases or decreases during the HAP contract term, the new family unit size must be used to determine the payment standard for the family beginning at the family’s first regular reexamination following the change in family unit size.

Unlimited copies may be made for internal use.

Page 11 ends

family unit size may be used to determine the payment standard immediately or at the family’s first regular reexamination following the change in family unit size.

PHA Policy
If the family unit size (voucher size) changes during the term of a HAP contract, the new family unit size will be used to determine the payment standard 12 months following the change in family unit size.
© Copyright 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use.

Page 11 ends

11A-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 conclusion of the 24-month eligibility period.

All zero income participants are subject to an interim change following the acquisition of any reasonably stable income. Income that is continuous but from different or changing sources (i.e., odd jobs, etc.) can be anticipated for the future by averaging past months’ income as reported on the zero income checklist and worksheet required by the PHA. 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 declarations 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.

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
© Copyright 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use.

Page 11 ends

Families are required to report all increases in earned income (monetary or not including gifts, gambling winnings, and loans), earned income/assets, including new employment, loss of full-time student status, within 10 business days of the date the change takes effect.

The PHA will only conduct an interim reexamination for families that qualify for the earned income disallowance (EID), and only when the EID family’s share of rent will change as a result of the increase.

If the monthly increase in income is less than $200.00 the PHA will note the information in the family’s file, and will not conduct an interim reexamination. In all other cases, the PHA will conduct an interim reexamination. At its sole discretion, the PHA may postpone all interim re-certifications resulting from increases of income until the participant’s next annual recertification to address changes in HUD funding. In addition, the PHA may adjust the rent portion for an increase less than $200.00 for those participants previously reporting zero or very low incomes or when a participants’ income source changes.

Families are required to report any other changes in income or expenses.

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 noncompliance 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 an decrease in the family share of the rent, the PHA will conduct an interim reexamination only if:
• The decrease in income is anticipated to last more than thirty (30) days.

If a family reports a change to expenses 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 only if:
• The change in expenses isn anticipated to last more than (30) days; AND • The change in expenses will result in a decrease in the family share or rent of $15 or more.
© Copyright 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use.

Page 11 ends

11A-II.D. PROCESSING THE INTERIM REEXAMINATION
Method of Reporting
PHA Policy
The family must notify the PHA of changes in writing by completing and signing a “Request for Interim Certification”.

The family may be required to attend an interview for an interim reexamination.

However, if the PHA determines that an interview is not warranted, the family may not 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 email, or in person.

All rent reduction requests will be completed with the effective date as the first of the following month when the necessary verifications are received prior to the 20th of the month. Interim re-certifications will be completed in accordance with our interim ReExam Procedure.

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 the change was reported within the required time frames.

If new income can only be verified through 3rd party generated documents and subsequently the verification is delayed, through no fault of the family, the change in rent will be effective on the first of the month following 30 days’ notice once the information is properly verified.

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 1
st of the month following the date of the
action. In this case, the PHA will not provide 30 days’ notice to the family.

Additionally, the family will be responsible for any overpaid subsidy and may be offered a repayment agreement in accordance with the policies in Chapter 16. © Copyright 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use.

Page 11 ends

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. When income is calculated using an anticipated annual average income, PHA may determine that a change is not necessary. A downward change may not be made if it is determined that the change is temporary (less than 30 consecutive days).
© Copyright 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use.

Page 11 ends

PART III: RECALCULATING FAMILY SHARE AND SUBSIDY AMOUNT 11A-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.
11A-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 and FR Notice 5/7/24] 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 standard or when there is a change in family composition.

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 immediately or 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 [HCV GB, p. 18- 8].

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. © Copyright 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use.

Page 11 ends

11A-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 will state the family has the right to request an explanation of how the assistance was calculated and if the family disagrees, they have the right to informal hearing. The notice will include the procedures for requesting an informal hearing. 11A-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 143.
© Copyright 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use.

Page 11 ends

Chapter 11.B.

REEXAMINATIONS UNDER HOTMA 102/104

INTRODUCTION
This chapter is applicable upon the PHA’s HOTMA 102/104 compliance date. Prior to this date, the PHA will follow policies as outlined in Chapter 11.A. of the model policy.

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 four 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.

Part IV: Non-Interim Reexamination Transaction. This part describes transactions that do not entail changes to the family’s adjusted income.

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.
© Copyright 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use.

Page 11 ends

PART I: ANNUAL REEXAMINATIONS [24 CFR 982.516]
11B-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.

Unlike when performing an interim reexamination or at intake, at annual reexamination, the PHA must determine the income of the family for the previous 12-month period, except where the PHA uses a streamlined income determination. Income from assets, however, is always anticipated, irrespective of the income examination type [Notice PIH 2023-27]. PHAs also have the option of using a Safe Harbor income verification from another federal means-tested program to verify gross annual income. Chapter 7 contains the PHA’s policies related to streamlined income determinations and the use of safe harbor income verifications. 11B-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 between 90 and 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, on the first day of the month from the effective date of the family’s initial examination (admission).

In accordance with new requirements as the Secretary shall establish, the PHA will implement triennial recertifications for households who establish that 90 percent or more of the family income consists of fixed income, as defined by the Secretary, and that the sources of such income have not changed since the previous year. The PHA shall conduct a review of each such family’s income not less than once every 3 years.

If the family moves to a new unit, the PHA will perform a new annual reexamination.

When a family moves to a new unit and thereby establishes a new contract anniversary date, if the family’s latest annual reexamination took effect within 4 months prior to the new contract anniversary, the PHA may simply ascertain whether there has been any change in the family’s adjusted income since the last annual reexamination and, if so, obtain acceptable verification of only the change. The PHA must then use any new verified information together with information from the last annual reexamination to © Copyright 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use.

Page 11 ends

re-determine the family share of rent and the subsidy payment. [SEMAP Final Rule, 63 Fed.Reg. 48553] (See Chapter 7 for Verification Requirements) 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. However, PHAs should give tenants who were not provided the opportunity the option to complete Form HUD-92006 at this time [Notice PIH 2009-36].

PHA Policy
Families are required to complete an annual reexamination.

Notification of annual reexamination will be sent by first-class mail and/or email and will contain the due date and methods of location to returnreturning the completed reexamination forms and required documents. Any required notices sent by the PHA will be addressed to the Head of Household and must be deliverable to the address of the subsidized apartment.

If the family is unable to submit the required forms and documents by the due date, the family should contact the PHA in advance of the due date to request an extension.

If a family fails to complete the annual reexamination after two notices, or if the notice is returned by the post office, 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 reexamination process. No minor children will be permitted to act as an interpreter for these interviews. The family and the PHA must execute a certification attesting to the role and the assistance provided by any such third party. For Limited English Proficient (LEP) applicants, the PHA will provide interpretation services free of charge in accordance with the PHA’s LEP Plan.
© Copyright 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use.

Page 11 ends

11B-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 mail, email, or deliver all required information (as described in the reexamination notice) to the PHA office. The required information will include a PHA-designated reexamination form as well as supporting documents or forms related to the family’s income, expenses, and family composition.

If the family is unable to obtain the information or materials within the required time frame, the family may request an extension not to exceed 10 business days from the date of the deadline.

If the family does not provide the required documents or information within the required time period (plus any extensions), the family will be sent a notice of termination (See Chapter 12).

Additionally, HUD recommends that at annual reexaminations PHAs ask whether the tenant, or any member of the tenant’s household, is subject to a lifetime sex offender registration requirement in any state [Notice PIH 2012-28].

PHA Policy
The PHA may, at its discretion, perform a criminal background check for adult household members as part of the annual reexamination process.

The PHA will comply with the policies for criminal background screening and denial outlined at 3-III.B, 3-III.C and 3-III.D.

If the PHA proposes to terminate assistance based on lifetime sex offender registration information, the PHA must notify the household of the proposed action and must provide the subject of the record and the tenant a copy of the record and an opportunity to dispute the accuracy and relevance of the information prior to termination. [24 CFR 5.903(f) and 5.905(d)]. (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 PHA 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
© Copyright 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use.

Page 11 ends

• 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].
11B-I.D. DETERMINING ONGOING ELIGIBILITY OF CERTAIN STUDENTS [24 CFR 982.552(b)(5)] Section 327 of Public Law 109-115 established restrictions on the ongoing eligibility of certain students (both part- and full-time) who are enrolled in institutions of higher education.

If a student enrolled in an institution of higher education is under the age of 24, is not a veteran, is not married, does not have a dependent child, and is not a person with disabilities receiving HCV assistance as of November 30, 2005, the student’s eligibility must be reexamined along with the income eligibility of the student’s parents on an annual basis. In these cases, both the student and the student’s parents must be income eligible for the student to continue to receive HCV assistance. If, however, a student in these circumstances is determined independent from their parents or is considered a vulnerable youth in accordance with PHA policy, the income of the student’s parents will not be considered in determining the student’s ongoing eligibility.

Students who reside with parents in an HCV assisted unit are not subject to this provision. It is limited to students who are receiving assistance on their own, separately from their parents.

PHA Policy
During the annual reexamination process, the PHA will determine the ongoing eligibility of each student who is subject to the eligibility restrictions in 24 CFR 5.612 by reviewing the student’s individual income as well as the income of the student’s parents. If the student has been determined “independent” from their parents or is considered a vulnerable youth based on the policies in Sections 3-II.E and 7-II.E, the parents’ income will not be reviewed.

If the student is no longer income eligible based on their own income or the income of their parents, the student’s assistance will be terminated in accordance with the policies in Section 12-I.D.

If the student continues to be income eligible based on their own income and the income of their parents (if applicable), the PHA will process a reexamination in accordance with the policies in this chapter.
© Copyright 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use.

Page 11 ends

11B-I.E. CALCULATING ANNUAL INCOME AT ANNUAL REEXAMINATION [24 CFR 5.609(c)(2) and Notice PIH 2023-27]
The PHA must determine the income of the family for the previous 12-month period and use this amount as the family income for annual reexaminations, except where the PHA uses a streamlined income determination as indicated in Chapter 7 of this policy. The PHA may also use Safe Hharbor income determinations dated within the last 12 months from a means-tested federal public assistance program at annual reexamination as outlined in Chapter 7 of this policy.

Except when using streamlined or Safe Harbor income determinations, in determining the income of the family for the previous 12-month period, any change of income since the family’s last annual reexamination, including those that did not meet the threshold to process an interim reexamination in accordance with PHA policies and 24 CFR 5.657(c) or 960.257(b) must be considered.

Income from assets is always anticipated, irrespective of the income examination type.

A change in income may be a loss of income or the addition of a new source of income.

Changing to a different employer in the prior year does not necessarily constitute a change if the income earned from either employer is substantially the same. The PHA should look at the entirety of the family’s unearned income and earned income from the prior year in which earned income may have been one constant job or many different jobs that start and stop.

Cost of Living Adjustments (COLA) to Social Security income and Social Security disability income are always considered changes to income because the COLA is an adjustment that automatically occurs annually by law. See Chapter 6 for PHA policies on when the COLA is applied and Chapter 7 on streamlined determination of income for inflationary adjustments.

Notice PIH 2023-27 lists the following steps to calculate both earned and unearned income at annual reexamination.

Step 1: The PHA determines annual income for the previous 12-month period by reviewing the following information:
• The EIV Income Report pulled within 120 days of the effective date of the annual reexamination;
• The income reported on the most recent HUD–50058; and • The amount of prior-year income reported by the family on the PHA’s annual reexamination paperwork.

Step 2: The PHA takes into consideration any interim reexamination of family income completed since the last annual reexamination.
• If there was an interim reexamination performed within the last reexamination cycle and there are no additional changes, the PHA must use the annual income from the interim to determine the family’s total annual income, The PHA may use verification obtained from the interim for this step.
© Copyright 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use.

Page 11 ends

• If the PHA did not perform an interim or there have been changes since the last reexamination, the PHA moves to Step 3.

Step 3: If there were changes in annual income not processed by the PHA since the last reexamination, the PHA must use current income. The family will be required to report their income for the prior year and whether there have been permanent changes.

If there are no reported changes to an income source, the PHA may use documentation of prior-year income to calculate the annual income. For example, the PHA may use the following documentation:
• EIV + self-certification (wages, Supplemental Security Income (SSI), Social Security, and unemployment)
• Current written third-party verification from the source verifying prior-year income that is dated within 120 days of receipt by the PHA, for example:
- Year-end statements
- Paystub with year-to-date amounts
- Tax forms (Form 1040, W2, 1099, etc.)
If there are reported changes by the family or the PHA notes discrepancies between EIV and what the family reports, the PHA must follow the verification hierarchy (described in Chapter 7) to document and verify income. Exhibit 11-1 provides detailed examples of how the PHA calculates income from different sources at annual reexamination using the above method.

PHA Policy
When income is calculated using a streamlined income determination or Safe Harbor determination from a means-tested federal public assistance program in accordance with PHA policies in Chapter 7, the above is not applicable. However, where the family disagrees with the PHA or other agency’s determination of income or the PHA has other reason to use third-party verification in these circumstances, then the above will apply. © Copyright 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use.

Page 11 ends

11B-I.F. 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, unless the family waives their right to a 30-day notice in writing.

If there has been a misrepresentation or a material omission by the family, or 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.

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.

If the family share of the rent is to decrease:

Unlimited copies may be made for internal use.

Page 11 ends

Unlimited copies may be made for internal use.

Page 11 ends

PART II: INTERIM REEXAMINATIONS [24 CFR 982.516; Notice PIH 2023-27] 11B-II.A. OVERVIEW
Family circumstances may change 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.

A family may request an interim determination of family income or composition because of any changes since the last determination. The PHA must conduct any interim reexamination within a reasonable period of time after the family request or when the PHA becomes aware of a change in the family’s adjusted income that must be processed in accordance with HUD regulations. What qualifies as a “reasonable time” may vary based on the amount of time it takes to verify information, but the PHA generally should conduct the interim reexamination not longer than 30 days after the PHA becomes aware of changes in income.

Notice PIH 2023-27 changes the conditions under which interim reexaminations must be conducted, codifies when interim reexaminations should be processed and made effective, and requires related changes for annual reexaminations and streamlined income determinations.

When the PHA determines that an interim reexamination of income is necessary, they must ask the family to report changes in all aspects of adjusted income. 11B-II.B. CHANGES IN FAMILY AND HOUSEHOLD COMPOSITION
Reporting
PHAs must require families to report household composition changes; however, PHAs determine the timeframe in which reporting happens [Notice PIH 2023-27]. The PHA must adopt policies prescribing when and under what conditions the family must report changes in income and family composition [24 CFR 960.257(b)(5)].

PHA Policy
All families must report all changes in family and household composition that occur between annual reexaminations within 10 business days of the change.

The PHA will conduct interim reexaminations to account for any changes in household composition that occur between annual reexaminations.

New Family Members Not Requiring PHA 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)].

New Family and Household Members Requiring Approval
With the exception of children who join the family as a result of birth, adoption, or court- © Copyright 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use.

Page 11 ends

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/adult) [24 CFR 982.551(h)(4)].

PHA Policy
The PHA will only approve the addition of a new household member under the following circumstances:

A foster child or foster adult may be added to the household for the duration of the placement. During this period, they are considered household members only and are not counted as family members. They may become family members only if the household later obtains permanent guardianship, conservatorship, or completes an adoption.

The individual is added at the time the applicant is notified that they have been selected from the waitlist
The individual was previously a member of the participating household and is being reinstated
The PHA will not approve the addition of a new household member unless they are a spouse or partner, a child through birth, custody, adoption, or foster, or a household member who is added at the time the applicant receives notification that they have been selected from the waitlist.

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 family’s HAP contract in accordance with its terms [24 CFR 982.403].

PHA Policy
Families must request PHA approval to add a new family member(other than due to birth, adoption, or court-awarded custody), live-in aide, foster child, or foster adult. This © Copyright 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use.

Page 11 ends

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 12-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 into the unit.

The PHA will not approve the addition of a foster child or foster adult if it will cause a violation of HQS space standards.

The PHA allows a family to add a foster child or foster adult for the duration of the placement. An extra bedroom is approved only if adding the foster individual would violate HQS occupancy standards and the placement will last more than three consecutive months (for example, a two-person household adding a foster child becomes eligible for a two-bedroom voucher, while a single-person household does not). When the foster individual leaves, the voucher size is reduced at the next reexamination.

The PHA will make its determination within 20 business days of receiving all information required to verify the individual’s eligibility.

Departure of a Family or Household Member
Families must promptly notify the PHA if any household 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. The PHA must process an interim for all decreases in adjusted income when a family member permanently moves out of the unit.

Unlimited copies may be made for internal use.

Page 11 ends

Changes effective 12/2/24 and earlier: Irrespective of any increase or decrease in the payment standard, if the family unit size increases or decreases during the HAP contract term, the new family unit size must be used to determine the payment standard for the family beginning at the family’s first regular reexamination following the change in family unit size.

Changes effective 12/3/24 and later: Irrespective of any increase or decrease in the payment standard, if the family unit size increases or decreases during the HAP contract term, the new family unit size may be used to determine the payment standard immediately or at the family’s first regular reexamination following the change in family unit size.

PHA Policy
If the family unit size (voucher size) changes during the term of a HAP contract, the new family unit size will be used to determine the payment standard at the family’s first regular reexamination following the change in family unit size. 11B-II.C. CHANGES AFFECTING INCOME OR EXPENSES
Overview
Interim reexaminations for changes in income or expenses may 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.

The PHA must estimate the income of the family for the upcoming 12-month period to determine family income for an interim reexamination [24 CFR 5.609(c)(1)]. Policies for projecting income are found in Chapter 6.

Interim Decreases [24 CFR 982.516(c)(2) and Notice PIH 2023-27] A family may request an interim determination of family income for any change since the last determination. However, the PHA may decline to conduct an interim reexamination if the PHA estimates the family’s adjusted income will decrease by an amount that is less than 10 percent of the family’s adjusted income. The PHA may set a lower threshold in PHA policy such as performing an interim for any decreases in adjusted income, although HUD prohibits the PHA from setting a dollar-figure threshold.

However, while the PHA has some discretion, HUD requires that the PHA perform an interim reexamination for a decrease in adjusted income of any amount in two circumstances:
• When there is a decrease in family size attributed to the death of a family member; or • When a family member permanently moves out of the assisted unit during the period since the family’s last reexamination.

In the above circumstances, the PHA must perform an interim reexamination for any decrease in adjusted income.

If the net effect of the changes in adjusted income due to a decrease in family size results in no change or an increase in annual adjusted income, then PHA must process the removal of the © Copyright 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use.

Page 11 ends

household member(s) as a non-interim reexamination transaction without making changes to the family’s annual adjusted income.

PHA Policy
The PHA will conduct an interim reexamination any time the family’s adjusted income has decreased by any amount.

Interim Increases [24 CFR 982.516(c)(3) and Notice PIH 2023-27] Increases Less than 10 Percent
PHAs must not process interim reexaminations for income increases that result in less than a 10 percent increase in annual adjusted income.

Increases 10 Percent or Greater
PHAs must conduct an interim reexamination of family income when the PHA becomes aware that the family’s adjusted income has changed by an amount that the PHA estimates will result in an increase of 10 percent or more in adjusted income, with the following exceptions:
• PHAs may not consider any increases in earned income when estimating or calculating whether the family’s adjusted income has increased, unless the family has previously received an interim reduction during the same reexamination cycle; and • PHAs may choose not to conduct an interim reexamination during the last three months of a certification period if a family reports an increase in income within three months of the next annual reexamination effective date.

When the family previously received an interim reexamination for a decrease to adjusted income during the same annual reexamination cycle, a PHA has the discretion whether to consider a subsequent increase in earned income.

PHA Policy
When a family reports an increase in their earned income between annual reexaminations, the PHA will not conduct an interim reexamination, regardless of the amount of the increase, and regardless of whether there was a previous decrease since the family’s last annual reexamination.

The PHA will process an interim reexamination for any increases in unearned income of 10 percent or more in adjusted income.

The PHA will not perform an interim reexamination when a family reports an increase in income (whether earned or unearned income) within three months of their annual reexamination effective date. However, families who delay reporting income increases until the last three months of their certification period may be subject to retroactive rent increases in accordance with the PHA policies in Chapter 14.

Concurrent Increases in Earned and Unearned Income [Notice PIH 2023-27] When the family reports an increase in both earned and unearned income at the same time, © Copyright 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use.

Page 11 ends

the PHA must look at the earned and unearned income changes independently of each other to determine if an interim reexamination is performed. The PHA will only conduct an interim reexamination when the increase independently meets the 10 percent threshold and all other requirements for performing interim reexaminations. For example, if a family reported increases in both earned and unearned income that overall resulted in a 12 percent increase in their adjusted income, but the change in earned income represented a 7 percent increase and the change in unearned income represented a 5 percent increase, the PHA may not perform an interim for either change since neither change meets the 10 percent threshold amount independently. If the change in unearned income met the 10 percent threshold in this case, the PHA would be required to perform an interim. If the change in earned income met the 10 percent threshold in this case, the PHA would refer to PHA policy to determine whether an interim was required.

Cumulative Increases [Notice PIH 2023-27]
A series of smaller reported increases in adjusted income may cumulatively meet or exceed the 10-percent increase threshold, at which point the PHA must conduct an interim reexamination in accordance with PHA policy.

Family Reporting
The PHA must adopt policies consistent with HUD regulations prescribing when and under what conditions the family must report a change in family income or composition [24 CFR 982.516(d)].

PHA policy may require families to report only changes that the family estimates meet the threshold for an interim reexamination or the PHA may establish policies requiring that families report all changes in income and household composition, and the PHA will subsequently determine if the change requires an interim reexamination [Notice PIH 2023-27].

When the PHA determines that an interim reexamination of income is necessary, they must ask the family to report changes in all aspects of adjusted income. For example, if the family is reporting a decrease in adjusted income that is more than 10 percent, but the family also had a change in assets that would result in a change in income, the change in assets must also be reviewed [Notice PIH 2023-27].

PHA Policy
The family will be required to report all changes in income regardless of the amount of the change, whether the change is to earned or unearned income, or if the change occurred during the last three months of the certification period. Families must report changes in income within 10 business days of the date the change takes effect. The family may notify the PHA of changes either orally or in writing, including email. If the family provides oral notice, the PHA may also require the family to submit the changes in writing, including email.

Unlimited copies may be made for internal use.

Page 11 ends

If the change will not result in an interim reexamination, the PHA will note the information in the tenant file but will not conduct an interim reexamination. The PHA will send the family written notification within 10 business days of making this determination informing the family that the PHA will not conduct an interim reexamination.

If the change will result in an interim reexamination, the PHA will determine the documentation the family will be required to submit based on the type of change reported and PHA policies in Chapter 7. The PHA will ask the family to report changes in all aspects of adjusted income at this time. 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, email, fax, or in person. The PHA will conduct the interim within a reasonable time period based on the amount of time it takes to verify the information.

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.
11B-II.D. EFFECTIVE DATES [24 CFR 982.516(e) and Notice 2023-27] Changes Reported Timely [Notice PIH 2023-27]
If the family reports a change in family income or composition timely in accordance with PHA policies:
• For rent increases, the PHA must provide the family with 30 days advance written notice.

The rent increase is effective the first of the month after the end of that 30-day notice period.
• Rent decreases are effective on the first of the month after the date of the actual change leading to the interim reexamination of family income. This means the decrease will be applied retroactively.

Changes Not Reported Timely [Notice PIH 2023-27]
If the family failed to report a change in family income or composition timely in accordance with PHA policies:
• For rent increases, the PHA must implement any resulting rent increases retroactively to the first of the month following the date of the change leading to the interim reexamination of family income.
• For rent decreases, the PHA must implement the change no later than the first rent period following completion of the interim reexamination.

However, the PHA may choose to adopt a policy that would make the effective date of the rent decrease retroactive to the first of the month following completion of the reexamination. PHAs © Copyright 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use.

Page 11 ends

may choose to establish conditions or requirements for when such a retroactive application would apply. PHAs that choose to adopt such policies must ensure the earliest date that the retroactive decrease is applied is the later of:
• The first of the month following the date of the change that led to the interim reexamination; or
• The first of the month following the most recent previous income examination.

In applying a retroactive change in rent as the result of an interim reexamination, the PHA must clearly communicate the effect of the retroactive adjustment to the family so that there is no confusion over the amount of the rent that is the family’s responsibility.

PHA Policy
In general, when the family fails to report a change in income or family composition timely, and the change would lead to a decrease in the tenant share of rent, the PHA will apply the decrease the first of the month following completion of the interim reexamination.

However, the PHA will apply the results of the interim reexamination retroactively where a family’s ability to report a change in income promptly may have been hampered due to extenuating circumstances such as a natural disaster or disruptions to PHA management operations. The PHA will decide to apply decreases retroactively on a case-by-case basis.

When the PHA applies the results of interim increases retroactively, the PHA will clearly communicate the effect of the retroactive adjustment to the family and may enter into a repayment agreement in accordance with PHA policies.

The PHA will also clearly communicate the effect of the retroactive adjustment to the owner.
© Copyright 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use.

Page 11 ends

PART III: RECALCULATING FAMILY SHARE AND SUBSIDY AMOUNT 11B-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.
11B-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.

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 [HCV GB, p. 18- 8].

PHA Policy
© Copyright 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use.

Page 11 ends

Revised utility allowances will be applied to a family’s rent and subsidy calculations at the first annual reexamination after the allowance is adopted. 11B-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 will state the family has the right to request an explanation of how the assistance was calculated and if the family disagrees, they have the right to an informal hearing. The notice will include the procedures for requesting an informal hearing. © Copyright 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use.

Page 11 ends

11B-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 143.
© Copyright 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use.

Page 11 ends

PART IV: NON-INTERIM REEXAMINATION TRANSACTIONS [Notice PIH 2023-27] Families may experience changes within the household that do not trigger an interim reexamination under PHA policy and HUD regulations but which HUD still requires the PHA to report to HUD via Form HUD-50058. These are known as non-interim reexamination transactions. In these cases, PHAs will submit a separate, new action code on Form HUD-50058.

The following is a list of non-interim reexamination transactions:
• Adding or removing a hardship exemption for the child care expense deduction; • Updating or removing the phased-in hardship relief for the health and medical care expense deduction and/or reasonable attendant care and auxiliary apparatus expense deduction (the phased-in relief will begin at an eligible family’s first annual or interim reexamination, whichever is sooner, after January 1, 2024);
• Adding or removing general hardship relief for the health and medical care expense deduction and/or reasonable attendant care and auxiliary apparatus expense deduction; • Adding or removing a minimum rent hardship;
• Adding or removing a non-family member (i.e., live-in aide, foster child, foster adult); • Ending a family’s EID or excluding 50 percent (decreased from 100 percent) of a family member’s increase in employment income at the start of the second 12- month EID period. • Adding a family member and the increase in adjusted income does not trigger an interim reexamination under the final rule;
• Removing a family member and the increase in adjusted income does not trigger an interim reexamination under the final rule;
• Adding/updating a family or household member’s Social Security number; and • Updating a family member’s citizenship status from eligible to ineligible or vice versa, resulting in a change to the family’s rent and/or utility reimbursement, if applicable (i.e., family begins receiving prorated assistance or previously prorated assistance becomes full assistance), or updating the prorated rent calculation due to the addition or removal of family members in household with an ineligible noncitizen(s). • Rent increases
PHAs must make all other changes to assets, income, and deductions at the next annual or interim reexamination of income, whichever is sooner.
© Copyright 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use.

Page 11 ends

EXHIBIT 11B-1: CALCULATING INCOME AT ANNUAL REEXAMINATION Example 1: Calculating Annual Income at Annual Reexamination Using EIV Staff are processing the 3/1/2024 annual reexamination for Ruby Myers and her minor daughter, Georgia. No interim reexaminations have been processed, and Ruby has not reported any changes to annual income to the PHA since the 3/1/2023 annual reexamination. The SSA published 2024 COLA is 7 percent.

Last reexamination – 3/1/2023 Annual Reexamination
Ruby:

Wages: $30,000
Georgia:

SSI: $10,980 ($915 monthly)s
The EIV report pulled on 12/15/2023
Ruby: Georgia:

Wages Total: $33,651 SSI Total: $10,980
Quarter 3 of 2023: $8,859 (City Public School) 2023 benefit $915 monthly Quarter 2 of 2023: $8,616 (City Public School)
Quarter 1 of 2023: $8,823 (City Public School)
Quarter 4 of 2022: $7,353 (City Public School)
© Copyright 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use.

Page 11 ends

Income Reported on Reexamination Application
Ruby:

Wages at City Public School: $32,000
(switched jobs but no permanent change to
amount)
Georgia:

SSI benefits: $10,980 (no changes)
Calculating Ruby’s wages:

Step 1: Determine prior annual income from
EIV (i.e., Q4 2022 through Q3 of 2023:
$33,651).

Step 2: Take into consideration any interim
reexamination of family income completed
since the last annual reexamination (in this
case, there have been no interim
reexaminations processed since the last
annual reexamination).

Step 3: Ruby certifies that the $33,651 of
wages in EIV is accurate and reflects her
current annual income, so the PHA will use
$33,651 for annual wages for the 3/1/2024
annual reexamination given there have been
no additional changes to annual income.

Calculating Georgia’s SSI benefit:

Step 1: Determine the prior annual income
from EIV (i.e., $915 x 12 months: $10,980).

Step 3: Ruby certifies the SSI income in EIV is
accurate and reflects Georgia’s current annual
income. The PHA must adjust the prior-year
income (2023 SSI benefit) by the 7- percent
COLA and will use this amount to calculate
annual SSI income for the 3/1/2024 annual
reexamination:

COLA: $64.05 ($915 x 0.07)
New gross SSI benefit: $11,748.60 ($979.05 x
12 months)
If Ruby did not agree with the annual wages
reported in EIV, the PHA/MFH Owner would
be required to verify her current income in
accordance with HUD’s verification hierarchy.

Summary of Annual Income (as reported on the HUD-50058) Ruby (Head of Household):

Other Wage: $33,651
Myers Family Total Annual Income: $45,399
Georgia (Other Youth Under 18):

SSI: $11,748
© Copyright 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use.

Page 11 ends

Example 2: Calculating Annual Income at Annual Reexamination Using EIV:

Family Disagrees with EIV
Staff are processing Paul Hewson’s 5/1/2024 annual reexamination. Since the last annual reexamination, Paul reported a decrease in annual income that exceeded 10 percent. Last year, Paul reported a decrease in earned income because he transferred from a full-time job at Sasha’s Sweets to a part-time job at Viking Bakery. Following HUD’s EIV verification hierarchy, staff confirmed Paul was no longer employed at Sasha’s Sweets and decreased his anticipated annual income from $28,000 to $7,500 resulting from his new part-time employment at Viking Bakery; an interim reexamination was processed effective 7/1/2023. After the 7/1/2023 interim, Paul worked briefly at two different jobs, but he says he is no longer working and is not planning to work.
5/1/2023 Annual Reexamination
Wages: $28,000
The EIV report pulled on 1/15/2024
Wages Total: $18,271
Quarter 3 of 2023: $2,500 (Viking Bakery)
Quarter 3 of 2023: $796 (Sweet Tooth Candy Bar)
Quarter 2 of 2023: $1,300 (Sasha’s Sweets)
Quarter 2 of 2023: $584 (Larry’s Concessions)
Quarter 2 of 2023: $2,401 (Viking Bakery)
Quarter 1 of 2023: $6,500 (Sasha’s Sweets)
Quarter 4 of 2022: $600 (Sasha’s Sweets)
SS/SSI: No history of benefits
© Copyright 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use.

Page 11 ends

Income Reported on Reexamination Application
Wages: $0 (permanent change; no longer receiving)
Social Security: $14,400 ($1,200 monthly)
Paul certified on the PHA’s annual reexamination paperwork that he does not agree with the annual wages of $18,271 reported in EIV and it is not reflective of his current anticipated annual income. He reported he is currently unemployed, and provided a copy of an award letter from the Social Security Administration to document that he will begin receiving a monthly disability benefit of $1,200 effective 3/1/2024.

Calculating Wages and SS Benefit
Step 1: Determine prior annual income taking into consideration the 8/1/2023 interim reexamination (i.e., EIV wages reflected Q4 2022 through Q3 2023: $18,271) Step 2: Take into consideration any interim reexamination of family income completed since the last annual reexamination. In this case, there was a 7/1/2023 interim that reduced wages to $7,500.

Step 3: Obtain documentation to verify current income and confirm Paul is no longer employed at Viking Bakery or The Sweet Tooth Candy Bar (the employers reported in the most recent quarter of EIV). This step is necessary, because Paul did not agree with the EIV income report or income reported on the last interim reexamination. Paul reported that he is no longer working at all.

Process the annual reexamination effective 5/1/2024 using annual SS income of $14,400 and $0 wages.

Summary of Annual Income (as reported on the HUD-50058) Paul (Head of Household): $14,400 (SS)
Hewson Family Total Annual Income: $14,400
© Copyright 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use.

Page 11 ends

Example 3: Calculating Annual Income at Annual Reexamination Staff are processing the 11/1/2024 annual reexamination for Samantha and Fergus Pool, head of household and spouse. On 2/14/2024 Samantha reported her monthly child support payment was reduced from $200 to $100 per month, but an interim reexamination was not processed because the reduction in child support income for Samantha’s daughter, Hailey, did not result in a decrease of 10 percent or more in annual adjusted income, and the PHA did not establish a lower threshold. Samantha did not report any additional changes to the PHA.

Last reexamination – 11/1/2023 Annual Reexamination
Samantha:

Business income: $28,000
VA disability pension: $12,000
Child support: $2,400
Fergus:

Wages: $8,250
Other non-wage income: $3,000 (Go Fund Me
online fundraiser)
The EIV report pulled on 9/16/2024
Samantha: Fergus:

Wages Total: $0 (no wage data reported since
Q1 2023)
Wages Total: $8,600
Quarter 1 of 2024: $2,100 (Ian’s Fish ‘n’ Chips)
Quarter 1 of 2024: $500 (Claire’s Healthcare
Supplies)
Quarter 4 of 2023: $1,000 (Claire’s Healthcare
Supplies)
Quarter 3 of 2023: $1,800 (The Onion Garden
Shop)
Quarter 2 of 2023: $3,200 (Ivar’s Fish Haus)
© Copyright 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use.

Page 11 ends

Current Family Circumstances: Income Reported on Reexamination Application Samantha and Fergus reported how much income was earned/received in the previous 12- month period and noted permanent changes, where applicable, for each source of their income on PHA’s annual reexamination form. However, no information was reported by the family concerning other non-wage income. Fergus reported only wages and his current employment at Ian’s Fish ‘n’ Chips for the annual reexamination. The family supplied the supporting documentation noted below to the PHA for the 11/1/2024 annual reexamination.

Samantha:

Business income: $28,750 (last year); has
decreased to $18,000 (permanent change)
VA disability benefit: $12,000 (last year); has
increased to $12,300 (permanent change)
Child support: $2,400 (last year); has
decreased to $1,200 (permanent change)
Fergus:

Wages: $6,000
Calculating Samantha’s Net Business Income
Step 1: Determine prior annual net business income (i.e., $28,000 on last HUD–50058.

Step 3: Adjust to reflect current net business income. Samantha reported on the annual reexamination application that business income permanently decreased to $18,000. The PHA must obtain supporting documentation from Samantha that demonstrates current net business income. Samantha provided documentation that supported the current annual net business income is $18,000. Process the annual reexamination effective 11/1/2024 using annual net business income determined in Step 3.

Calculating Samantha’s VA Pension Income
Step 1: Determine prior annual VA pension income (i.e., $12,000 supported by a VA award letter Samantha supplied that documents the prior year monthly VA pension was $1,000).

Step 3: The PHA needs to adjust to reflect current VA pension income. Samantha supplies a VA award letter showing a monthly pension of $1,025, or $12,300 annually. Process the annual reexamination effective 11/1/2024 using annual VA pension income determined in Step 3 ($12,300 in this example).
© Copyright 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use.

Page 11 ends

Calculating Samantha’s Child Support Income
Step 1: Determine prior annual child support income (i.e., $2,400 on the last HUD–50058).

Step 2: Take into consideration any interim reexamination of family income completed since the last annual reexamination. In this case, there have been no interim reexaminations processed since the last annual reexamination. The family reported a decrease from $200 to $100 monthly, but the change was not processed because it did not meet the threshold.

Step 3: The family reported changes, so the PHA must adjust to reflect current child support income. In this example, the family submitted a child support history report from the local child support office that documents regular $100 monthly child supports payments beginning 3/1/2024 through the current month. Process the annual reexamination effective 11/1/2024 using current annual child support income determined in Step 3 ($1,200 in this example).

Calculating Fergus’ Wages
Step 1: Determine prior annual income from wages in EIV (i.e., Q2 2023 through Q1 of 2024:
$8,600).

Step 3: There is a discrepancy between what the family reported and EIV, so the PHA must verify and adjust to reflect current annual income from wages. Fergus reported $6,000 in annual income from wages on the annual reexamination from a single employer, Ian’s Fish ‘n’ Chips. The PHA projected annual income of $7,800 based on the two paystubs for this employer, and EIV shows $8,600 earned in the most recent four quarters in EIV. To complete Step 3, the PHA must do the following:
• Resolve the discrepancy between EIV wages, the $6,000 annual income Fergus reported, and the $7,800 projected based on the paystubs he provided, and • Verify he is no longer employed at Claire’s Healthcare Supplies in accordance with HUD’s verification hierarchy and local policies.

The PHA determined that Fergus reported his net vs. gross annual income from wages, which he corrected on the annual reexamination form to reflect his current gross annual income of $9,000. The PHA verified Fergus was no longer employed at Claire’s Healthcare Supplies and obtained two additional paystubs. Based on four current and consecutive paystubs, Fergus is now projected to earn $9,360 annually. Process the annual reexamination effective 11/1/2024 using income from wages determined in Step 3 ($9,360 in this example). © Copyright 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use.

Page 11 ends

Calculating Fergus’ Other Non-Wage Income
Step 1: Determine prior annual income from other non-wage income (i.e., $3,000 on the last HUD– 50058).

Step 3: The family did not report any non-wage income on the annual reexamination form, but it was included on the last HUD–50058. The PHA must verify and adjust to reflect current nonwage income. The PHA must verify no income was received through a “Go Fund Me” online fundraiser so that it may be excluded. Fergus provided a self-certification that he hasn’t solicited funds online and doesn’t plan to in the following year; he also provided records from the account that documented no fundraising activity in the prior 12-month period. Process the annual reexamination effective 11/1/2024 using annual non-wage income of $0 determined in Step 3.

Summary of Annual Income (as reported on the HUD-50058) Samantha (Head of Household):

Own business: $18,000
Pension: $12,300
Child support: $1,200
Fergus (Co-head):

Wages: $9,360
Poole Family Total Annual Income: $40,860
© Copyright 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use.

Page 12 ends

Chapter 12

TERMINATION OF ASSISTANCE AND TENANCY

INTRODUCTION
HUD regulations specify mandatory and optional grounds for which a PHA can terminate a family’s assistance. They also specify the circumstances under which an owner may terminate the tenancy of an assisted family. This chapter describes the policies that govern mandatory and optional 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 describes the various circumstances under which assistance under the program can be terminated by the family or by the PHA.

Part II: Approach to Termination of Assistance. This part describes the policies and the process that the PHA will use in evaluating decisions on whether to terminate assistance due to actions or inactions of the family where termination is an option. It specifies the alternatives that the PHA may consider in lieu of termination, the criteria the PHA will use when deciding what action to take and the steps the PHA must take when terminating a family’s assistance.

Unlimited copies may be made for internal use.

Page 12 ends

PART I: GROUNDS FOR TERMINATION OF ASSISTANCE
12-I.A. OVERVIEW
HUD requires the PHA to terminate assistance for certain actions and inactions of the family and when the family no longer requires assistance due to increases in family income. HUD permits the PHA to terminate assistance for certain other actions or inactions of the family. In addition, a family may decide to withdraw from the program and terminate their HCV assistance at any time by notifying the PHA.
12-I.B. FAMILY NO LONGER REQUIRES ASSISTANCE [24 CFR 982.455] As a family’s income increases, the amount of the housing assistance payment decreases. If the amount of assistance provided by the PHA is reduced to zero, the family's assistance automatically terminates 180 days after the last HAP payment.

PHA Policy
If a participating family receiving zero assistance experiences a change in circumstances that would result in a HAP payment to the owner, the family must notify the PHA in writing of the change and request an interim reexamination before the expiration of the 180-day period.
12-I.C. FAMILY CHOOSES TO TERMINATE ASSISTANCE
The family may request that the PHA terminate housing assistance payments on behalf of the family at any time.

PHA Policy
The request to terminate assistance shall be made in writing and signed by the head of household, and spouse or co-head if applicable. Before terminating the family’s assistance, the PHA will follow the notice requirements in Section 12-II.F. © Copyright 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use.

Page 12 ends

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), Pub.L. 109-162]
The PHA must terminate assistance whenever a family is evicted from a unit assisted under the HCV program for a serious violation of the lease. As discussed further in section 12-II.E, incidents of actual or threatened domestic violence, dating violence, sexual assault, stalking, or human trafficking, may not be construed as serious violations of the lease by the victim or threatened victim of such violence or stalking nor considered good cause for terminating assistance or tenancy of the victim or threatened victim.

PHA Policy
Step 1: The PHA will first determine if the family has been evicted. A family will be considered evicted if the property owner has an unconditional judgment to evict the family, and a writ of possession is issued by the court, and the sheriff posts a notice to vacate and/or the sheriff physically locks the tenant out, and (or the tenant moves in response to that notice to vacate).

If the family settles the case prior to trial, the PHA will not consider the family to have been evicted so long as the family meets all of the conditions of the stipulation, including vacating timely if required. The family will not be considered evicted just because a stipulation requires the entry of a judgment, the issuance of a writ of possession and/or the posting of a notice to vacate so long as the family complies with the terms of the stipulation, including vacating timely. In cases where a default judgment has been entered at no fault of the family, the family will not be considered evicted.

Step 2: In every case, even if the family has been evicted, the PHA will make a determination if the eviction was based on a serious lease violation or if the lease violation is also a violation of other family obligations. Serious lease violations include, but are not limited to, nonpayment of rent or other amounts due under the lease, disturbance of neighbors, destruction of property, or living or housekeeping habits that cause damage to the unit or premises, criminal activity, and other good cause. The PHA will also consider the property owner’s motivation for filing the eviction. The PHA will make this determination based on available evidence. In making its decision, the PHA will consider the factors described in sections 12-II.D and 12-II.E. Upon consideration of such factors, the PHA may, on a case-by-case basis, choose not to terminate assistance.

The PHA may authorize a family to move prior to the finalization of an eviction proceedings when the family submits an affidavit demonstrating that the behavior(s) leading to eviction were isolated in nature or that steps have been taken to prevent those behaviors from recurring. If applicable, the affidavit should also indicate that conduct of a household member with a disability was directly related to that disability.

Unlimited copies may be made for internal use.

Page 12 ends

household includes a person with a disability engaged with a service agency—or by the Head of Household. If the behavior was not disability‑related and reflects ongoing noncompliance with program obligations, the family shall be required to execute a Program Violation Notice prior to the issuance of a transfer voucher. If a household faces a second or subsequent eviction after previously being granted approval to move, the PHA will terminate program participation unless the household demonstrates compelling and well‑documented circumstances that justify the repeated occurrence.

If a family moves after the owner has given the family an eviction notice for serious lease violations but before a legal eviction order has been issued, termination of assistance is not mandatory. In such cases the PHA will determine whether the family has committed serious 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. In making its decision, the PHA will consider the factors described in sections 12-II.D and 12-II.E. Upon consideration of such factors, the PHA may, on a caseby-case basis, choose not to terminate assistance.

Notification of Eviction [24 CFR 982.551(g)]
A family must promptly give the PHA a copy of any owner eviction notice the tenant actually receives. If the family requests assistance to move, but has not provided the PHA with a copy of the eviction within 10 days of receiving the notice of lease termination, the move will be denied. If the behavior that lead to the eviction process was not disability‑related and reflects ongoing noncompliance with program obligations, the family shall be required to execute a Program Violation Notice prior to the issuance of a transfer voucher. If a household faces a second or subsequent eviction after previously being granted approval to move, the PHA will terminate program participation unless the household demonstrates compelling and well‑documented circumstances that justify the repeated occurrence.

Upon the PHA’s HOTMA 102/104 compliance date, the below section on failure to provide consent is added:

Failure to Provide Consent [24 CFR 982.552(b)(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 regular or interim reexamination. See Chapter 7 for a complete discussion of consent requirements.

Upon the PHA’s HOTMA 102/104 compliance date, the below policy on failure to provide consent is added:

PHA Policy
The PHA will also terminate assistance if the family revokes consent for the PHA to collect information from financial institutions.
© Copyright 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use.

Page 12 ends

Unlimited copies may be made for internal use.

Page 12 ends

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 Disclose and Document Social Security Numbers [24 CFR 5.218(c), Notice PIH 2012- 10]
The PHA must terminate assistance if a participant family fails to disclose the complete and accurate social security numbers of each household member and the documentation necessary to verify each social security number.

However, if the family is otherwise eligible for continued program assistance, and the PHA determines that the family’s failure to meet the SSN disclosure and documentation requirements was due to circumstances that could not have been foreseen and were outside of the family’s control, the PHA may defer the family’s termination and provide the opportunity to comply with the requirement within a period not to exceed 90 calendar days from the date the PHA determined the family to be noncompliant.

PHA Policy
The PHA will defer the family’s termination and provide the family with the opportunity to comply with the requirement for a period of 90 calendar days for circumstances beyond the participant’s control such as delayed processing of the SSN application by the SSA, natural disaster, fire, death in the family, or other emergency, if there is a reasonable likelihood that the participant will be able to disclose an SSN by the deadline.

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.

Lifetime Registered Sex Offenders [Notice PIH 2012-28]
Should a PHA discover that a member of an assisted household was subject to a lifetime registration requirement at admission and was erroneously admitted after June 25, 2001, the PHA must immediately terminate assistance for the household member. © Copyright 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use.

Page 12 ends

In this situation, the PHA must offer the family the opportunity to remove the ineligible family member from the household. If the family is unwilling to remove that individual from the household, the PHA must terminate assistance for the household.

Failure of Students to Meet Ongoing Eligibility Requirements [24 CFR 982.552(b)(5) and FR 4/10/06]
If a student enrolled at an institution of higher education is under the age of 24, is not a veteran, is not married, does not have dependent children, is not residing with their parents in an assisted household, and is not a person with disabilities receiving assistance as of November 30, 2005, the PHA must the terminate the student’s assistance if, at the time of reexamination, either the student’s income or the income of the student’s parents (if applicable) exceeds the applicable income limit.

If a participant household consists of both eligible and ineligible students, the eligible students shall not be terminated, but must be issued a voucher to move with continued assistance in accordance with program regulations and PHA policies, or must be given the opportunity to lease in place if the terminated ineligible student members elect to move out of the assisted unit.

Death of the Sole Family Member [24 CFR 982.311(d) and Notice PIH 2010-9] The PHA must immediately terminate program assistance for deceased single member households.

Lifetime Sex Offenders [24 CFR 5.856, 960.204(a)(4) and 982.553(a)(2)] HUD prohibits admission after June 25, 2001, if any member of a household is subject to a State lifetime sex offender registration requirement. This regulation reflects a statutory prohibition. A household receiving assistance with such a member is receiving assistance in violation of federal law.

If an owner or the PHA discovers that a household member was erroneously admitted (the household member was subject to a lifetime registration requirement at admission and was admitted after June 25, 2001), the owner or PHA must immediately pursue eviction or termination of assistance for the household member. Regulations for hearings for Housing Choice Voucher (HCV) programs, at 24 CFR § 966 Subpart B and § 982.555, respectively, continue to apply.

If the PHA erroneously admitted a lifetime sex offender, the PHA must offer the family the opportunity to remove the ineligible family member from the household. If the family is unwilling to remove that individual from the household, the PHA must terminate assistance for the household.
© Copyright 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use.

Page 12 ends

12-I.E. MANDATORY POLICIES AND OTHER AUTHORIZED TERMINATIONS Mandatory Policies [24 CFR 982.553(b) and 982.551(l)]
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 violent criminal activity
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 three 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.

A record or records of arrest will not be used as the sole basis for the termination or proof that the participant engaged in disqualifying 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 Sections 12-II.D and 12-II.E.

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).
© Copyright 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use.

Page 12 ends

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 (including gang-related criminal activity) during participation in the 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.

A record or records of arrest will not be used as the sole basis for the termination or proof that the participant engaged in disqualifying 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 Sections 12-II.D and 12-II.E.

Upon consideration of such alternatives and factors, the PHA may, on a case-by-case basis, choose not to terminate assistance.

Other Authorized Reasons for Termination of Assistance
[24 CFR 982.552(c), 24 CFR 5.2005(c), 24 CFR 984.101(d)] 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. As discussed further in section 12-II.E, the Violence Against Women Act explicitly prohibits PHAs from considering incidents of, or criminal activity directly related to, domestic violence, dating violence, sexual assault, stalking, or human trafficking, as reasons for terminating the assistance of a victim of such abuse.

Additionally, per 24 CFR 984.101(d), PHAs are no longer permitted to terminate assistance to a family due to the family’s failure to meet its obligations under the Family Self-Sufficiency (FSS) contract of participation.

PHA Policy
The PHA will terminate a family’s assistance if:

The family has failed to comply with any family obligations under the program and they cannot provide a written affidavit either from a Head of Household or when applicable a case manager that shows sufficient evidence that violation was caused by mitigating circumstances such as a disability or other factors beyond family’s control and, will not likely to be repeated again, nor that they © Copyright 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use.

Page 12 ends

have taken verifiable actions to maintain compliance with the family obligations.

See Exhibit 12-1 for a listing of family obligations and related PHA policies. • Program Violation Warnings: If the PHA receives a copy of a lease violation notice from a property owner, or otherwise becomes aware of a potential program violation, the PHA will carry out a reasonable investigation to determine whether a violation occurred. As part of its investigation, the PHA may send the participant a notice stating that a violation has been alleged and providing the participant an opportunity to respond. The head of household, or a case manager when applicable, may submit a written affidavit either disputing the allegations and providing an explanation demonstrating compliance, or describing the circumstances that led to the violation, including whether it was an isolated incident and what corrective actions have been taken to prevent recurrence. Where appropriate, the PHA may wait for the judgment of a court and consider the court’s judgment before making any determination.
• If, after appropriate investigation, the PHA determines that a violation of a family obligation has occurred, the PHA will determine whether or not the participant will be allowed to remain in the program based on the following factors: whether this is the first occurrence of a violation of family obligations; whether the violation was believed by the PHA to be unintentional; and the severity of the circumstances. If the participant is allowed to remain on the program, the participant will be required to sign a Program Violation Warning and a Repayment Agreement if appropriate. If a violation results from a disability or circumstances beyond the family’s control, the family will may not be required to sign a Program Violation Warning for the first occurrence. However, the family will still be required to enter into a repayment agreement, if applicable. A warning will be required if the same violation occurs again. If, after a reasonable investigation, the participant is determined to have violated the same obligation on at least two different separate occasions, cto termination will proceedfurther enforcement action, including but not limited to termination of assistance, may proceed. In no most cases shall a participant shall not be offered allowed more than a total of two Program Violation Warnings during their participation. The supervisor and/or administrator designated staff member(s) will determine when a Program Violation Warning is merited. Participants must sign Program Violation Warnings when issued to avoid further violations of Family Obligations.

Any family member has been evicted from federally assisted housing in the last five years.

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 Section 8 or public assistance under the 1937 Act.

The family has not reimbursed any PHA for amounts the PHA paid to an owner under a contract for rent, damages to the unit, or other amounts owed by the family under the lease.
© Copyright 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use.

Page 12 ends

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 to termination and any verifiable evidence that the family will maintain compliance with the family obligations. The PHA will also consider alternative as described in Section 12- II.C and other factors described in Sections 12-II.D and 12-II.E. Upon consideration of such alternatives and factors, the PHA will choose whether to terminate assistance on a case-by-case basis.

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 90 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. Notice of termination will be sent in accordance with Section 12-II.F.

Upon the PHA’s HOTMA 102/104 compliance date, the below section on the asset limitation is added:

Asset Limitation [24 CFR 5.618; Notice PIH 2023-27]
The PHA has discretion with respect to the application of the asset limitation at annual and interim reexamination. The PHA may adopt a written policy of total nonenforcement, enforcement, or limited enforcement as well as adopting exception policies.

PHA Policy
The PHA has adopted a policy of total nonenforcement of the asset limitation for all program participants. The asset limitation only applies to initial eligibility determinations for new admissions to the PHA’s HCV program.

Insufficient Funding [24 CFR 982.454]
© Copyright 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use.

Page 12 ends

The PHA may terminate 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. The PHA must identify in the administrative plan, in the event of insufficient funding, taking into account any cost saving measures taken by the PHA, a description of the factors the PHA will consider when determining which HAP contracts to terminate first [24 CFR 982.54(d)(26)].

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 contracts, the PHA will determine if any other actions can be taken to reduce program costs. The PHA will notify the local Legal Aid Office of any substantial cuts in voucher funding.

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 contracts as a last resort.

Prior to terminating any 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 contracts due to insufficient funding, the PHA will do so in accordance with the following criteria and instructions:

Families who have been assisted in the HCV program the longest will be the first to be terminated, excluding families that include elderly or disabled family members.

Families comprising the required number of special purpose vouchers such as , including nonelderly disabled (NED), HUD-Veteran’s Affairs Supportive Housing (HUD-VASH), and family unification program (FUP) will be the last to be terminated.
© Copyright 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use.

Page 12 ends

PART II: APPROACH TO TERMINATION OF ASSISTANCE
12-II.A. OVERVIEW
The PHA is required by regulation to terminate a family’s assistance for certain actions or inactions of the family. For other types of actions or inactions of the family, the regulations give the PHA the authority 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 notification to the family of the PHA’s intent to terminate assistance.
12-II.B. METHOD OF TERMINATION [24 CFR 982.552(a)(3)]
Termination of assistance for a participant may include any or all of the following:
• Terminating housing assistance payments under a current contract, • Refusing to enter into a new contract or approve a lease, or • Refusing to process a request for or to provide assistance under portability procedures. 12-II.C. 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 reside 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 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use.

Page 12 ends

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.

Use of Criminal Conviction Records after Admission [24 CFR 5.903] The regulation at 24 CFR 5.903 governs a PHA’s access to and use of criminal conviction records obtained from a “law enforcement agency” such as the National Crime Information Center (NCIC), police departments, and other law enforcement agencies that hold criminal conviction records. While the regulatory listing of permitted uses for these records includes PHA screening of applicants for admission to the HCV program, it specifically excludes the use of records for lease enforcement and eviction of HCV participants and excludes by omission a PHA’s use of records to terminate assistance for participants. While a PHA has regulatory authority to use criminal conviction records for the purpose of applicant screening for admission, there is no corresponding authority to use these records to check for criminal and illegal drug activity by participants, and therefore, PHAs may not use records for this purpose. The limitations, however, do not apply to criminal conviction information searches from non-federal sources (i.e., sources other than the “law enforcement agencies” defined in 24 CFR 5.902(b)). There is no prohibition that bars a PHA from using non-federal sources to conduct criminal background checks of program participants.

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 facts and circumstances when making its decision to terminate assistance:

The seriousness of the case, especially with respect to how it would affect other residents’ safety or property
© Copyright 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use.

Page 12 ends

The effects that termination of assistance may have on other members of the family who were not involved in the action or failure to act The extent of participation or culpability of individual family members, including whether the culpable family member is a minor or a person with disabilities or (as discussed further in section 12-II.E) a victim of domestic violence, dating violence, sexual assault, stalking, or human trafficking.

The length of time since the violation occurred, including the age of the individual at the time of the conduct, as well as the family’s recent history and the likelihood of favorable conduct in the future
While a record or records of arrest will not be used as the sole basis for termination, an arrest may, however, trigger an investigation to determine whether the participant actually engaged in disqualifying criminal activity. As part of its investigation, the PHA may obtain the police report associated with the arrest and consider the reported circumstances of the arrest. The PHA may also consider:

Any statements made by witnesses or the participant not included in the police report
Whether criminal charges were filed
Whether, if filed, criminal charges were abandoned, dismissed, not prosecuted, or ultimately resulted in an acquittal
Any other evidence relevant to determining whether or not the participant engaged in disqualifying activity
Evidence of criminal conduct will be considered if it indicated a demonstrable risk to safety and/or property
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 (See Chapter 16- IV.B. Repayment Policy, Criminal Prosecution for Program Fraud/Abuse). © Copyright 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use.

Page 12 ends

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 related to the reason for a proposed termination of assistance, the PHA will determine whether there is a nexus between the disability and the behavior. 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.

Limited English Proficiency
The PHA will not terminate an LEP family’s assistance if the family was not provided properly translated notices and therefore not provided an opportunity to correct a violation that could otherwise have been remedied.
12-II.E. TERMINATIONS RELATED TO DOMESTIC VIOLENCE, DATING VIOLENCE, SEXUAL

ASSAULT, STALKING, OR HUMAN TRAFFICKING
This section describes the protections against termination of assistance that the Violence Against Women Act (VAWA) provides for victims of domestic violence, dating violence, sexual assault, stalking, and human trafficking. For general VAWA requirements, key VAWA definitions, and PHA policies pertaining to notification, documentation, and confidentiality, see section 16-IX of this plan.

VAWA Protections Against Termination
VAWA provides four specific protections against termination of HCV assistance for victims of domestic violence, dating violence, sexual assault, or stalking. (Note: The second, third, and fourth protections also apply to terminations of tenancy or occupancy by owners participating in the HCV programs, as do the limitations discussed under the next heading.) • Although the VAWA 2022 statute does not specifically include human trafficking in the list of victims protected under VAWA, in 2022 HUD began including human trafficking as part of the list of victims protected under VAWA (as seen in Notices PIH 2022-06, PIH 2022-22, and PIH 2022-24). In the absence of a final rule implementing VAWA 2022 and to mirror HUD’s recent usage, this policy includes human trafficking in addition to domestic violence, dating violence, sexual assault, and stalking anywhere such a list appears.

First, VAWA provides that a PHA may not terminate assistance to a family that moves out of an assisted unit in violation of the lease, with or without prior notification to the PHA, if the move © Copyright 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use.

Page 12 ends

occurred to protect the health or safety of a family member who is or has been the victim of domestic violence, dating violence, sexual assault, stalking, or human trafficking, and who reasonably believed they were imminently threatened by harm from further violence if they remained in the unit [24 CFR 982.354(b)(4)].

Second, it provides that an incident or incidents of actual or threatened domestic violence, dating violence, sexual assault, stalking, or human trafficking, may not be construed as a serious lease violation by the victim or as good cause to terminate the assistance of the victim [24 CFR

5.2005(c)(1)].

Third, it provides that criminal activity directly related to domestic violence, dating violence, sexual assault, stalking, or human trafficking, may not be construed as cause for terminating the assistance of a tenant if a member of the tenant’s household, a guest, or another person under the tenant’s control is the one engaging in the criminal activity and the tenant or affiliated individual or other individual is the actual or threatened victim of the domestic violence, dating violence, sexual assault, stalking, or human trafficking [24 CFR 5.2005(c)(2)].

Fourth, it gives PHAs the authority to terminate assistance to any tenant or lawful occupant who engages in criminal acts of physical violence against family members or others without terminating assistance to, or otherwise penalizing, the victim of the violence [24 CFR 5.2009(a)].

PHAs and owners may not coerce, intimidate, threaten, interfere with, or retaliate against any person who exercises or assists or encourages a person to exercise any rights or protections under VAWA [FR Notice 1/4/23].

Limitations on VAWA Protections [24 CFR 5.2005(d) and (e)] VAWA does not limit the authority of a PHA to terminate the assistance of a victim of abuse for reasons unrelated to domestic violence, dating violence, sexual assault, stalking, or human trafficking, so long as the PHA does not subject the victim to a more demanding standard than it applies to other program participants [24 CFR 5.2005(d)(1)].

Likewise, VAWA does not limit the authority of a PHA to terminate the assistance of a victim of domestic violence, dating violence, sexual assault, stalking, or human trafficking, if the PHA can demonstrate an actual and imminent threat to other tenants or those employed at or providing service to the assisted property if the victim is not terminated from assistance [24 CFR

5.2005(d)(2)].

HUD regulations define actual and imminent threat to mean words, gestures, actions, or other indicators of a physical threat that (a) is real, (b) would occur within an immediate time frame, and (c) could result in death or serious bodily harm [24 CFR 5.2005(d)(2) and (e)]. In determining whether an individual would pose an actual and imminent threat, the factors to be considered include:
• The duration of the risk
• The nature and severity of the potential harm
• The likelihood that the potential harm will occur
© Copyright 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use.

Page 12 ends

• The length of time before the potential harm would occur [24 CFR 5.2005(e)] In order to demonstrate an actual and imminent threat, the PHA must have objective evidence of words, gestures, actions, or other indicators. Even when a victim poses an actual and imminent threat, however, HUD regulations authorize a PHA to terminate the victim’s assistance “only when there are no other actions that could be taken to reduce or eliminate the threat” [24 CFR 5.2005(d)(3)]. The Violence Against Women Reauthorization Act of 2013 (VAWA) provides that an individual cannot be denied housing assistance, tenancy, or occupancy rights due to “criminal activity directly relating to domestic violence, dating violence, sexual assault, or stalking, that is engaged in by a member of the household of the tenant or any guest or other person under the control of the tenant, if the tenant or an affiliated individual of the tenant is the victim or threatened victim of such domestic violence, dating, violence, sexual assault, or stalking [42 U.S.C. § 14043e-11(b)(3)(A).

VAWA also gives PHAs the authority to “evict, remove or terminate assistance to any individual who is a tenant or lawful occupant of the housing and who engages in criminal activity directly related to domestic violence, dating violence, sexual assault, or stalking against an affiliated individual or other individual, without evicting, removing, terminating assistance to, or otherwise penalizing a victim of such criminal activity who is also a tenant or lawful occupant of the housing [42 U.S.C. § 14043e-11(b)(3)(B)(i).”
VAWA does not limit the authority of the PHA to terminate the assistance of any participant if the PHA “can demonstrate an actual and imminent threat to other tenants or those employed at or providing service to the property if that tenant is not evicted or terminated from assistance.” However, situations where this might be relevant are extremely rare.

PHA Policy
In determining whether a program participant who is a victim of domestic violence, dating violence, sexual assault, stalking, or human trafficking, is an actual and imminent threat to other tenants or those employed at or providing service to a property, the PHA will consider the following, and any other relevant, factors:

Whether the threat is toward an employee or tenants other than the victim of domestic violence, dating violence, sexual assault, stalking, or human trafficking.

Whether the threat is a physical danger beyond a speculative threat Whether the threat is likely to happen within an immediate time frame Whether the threat to other tenants or employees can be eliminated in some other way, such as by helping the victim relocate to a confidential location or seeking a legal remedy to prevent the perpetrator from acting on the threat.

If the participant wishes to contest the PHA’s determination that they are an actual and imminent threat to other tenants or employees, the participant may do so as part of the informal hearing.

Documentation of Abuse [24 CFR 5.2007]
© Copyright 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use.

Page 12 ends

PHA Policy
When an individual facing termination of assistance for reasons related to domestic violence, dating violence, sexual assault, stalking, or human trafficking, claims protection under VAWA, the PHA will request that the individual provide documentation supporting the claim in accordance with the policies in section 16-IX.D of this plan.

The PHA reserves the right to waive the documentation requirement if it determines that a statement or other corroborating evidence from the individual will suffice. In such cases the PHA will document the waiver in the individual’s file.

Terminating the Assistance of a Domestic Violence Perpetrator Although VAWA provides protection against termination of assistance for victims of domestic violence, it does not provide such protection for perpetrators. VAWA gives the PHA the explicit authority to “terminate assistance to any individual who is a tenant or lawful occupant and who engages in criminal acts of physical violence against family members or others without terminating assistance to “or otherwise penalizing the victim of such violence who is also a tenant or lawful occupant” [24 CFR 5.2009(a)]. This authority is not dependent on a bifurcated lease or other eviction action by an owner against an individual family member. Further, this authority supersedes any local, state, or other federal law to the contrary. However, if the PHA chooses to exercise this authority, it must follow any procedures prescribed by HUD or by applicable local, state, or federal law regarding termination of assistance. This means that the PHA must follow the same rules when terminating assistance to an individual as it would when terminating the assistance of an entire family [FR Notice 3/16/07] If the perpetrator remains in the unit, the PHA continues to pay the owner until the PHA terminates the perpetrator from the program. The PHA must not stop paying HAP until 30 days after the owner bifurcates the lease to evict the perpetrator. The PHA may pay HAP for the full month if the 30-day period will end mid-month [Notice PIH 2017-08].

If the perpetrator is the only participant eligible to receive assistance, the PHA will provide any remaining participant a chance to establish eligibility for the program. If the remaining participant cannot do so, the PHA will provide them with 30 days to establish eligibility for another housing program prior to termination of the HAP contract.

PHA Policy
The PHA will terminate assistance to a family member if the PHA determines that the family member has committed criminal acts of physical violence against other family members or others. This action will not affect the assistance of the remaining, nonculpable family members.

In making its decision, the PHA will consider all credible evidence, including, but not limited to, a signed certification (form HUD-5382) or other documentation of abuse submitted to the PHA by the victim in accordance with this section. The PHA will also consider the factors in section 12-II.D. Upon such consideration, the PHA may, on a © Copyright 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use.

Page 12 ends

case-by-case basis, choose not to terminate the assistance of the culpable family member.

If the PHA does terminate the assistance of the culpable family member, it will do so in accordance with applicable law, HUD regulations, and the policies in this plan. 12-II.F. TERMINATION NOTICE
HUD regulations require PHAs to provide written notice of termination of assistance to a family only when the family is entitled to an informal hearing. However, since the family’s contract and lease will also terminate when the family’s assistance terminates [form HUD-52641], it is a good business practice to provide written notification to both owner and family anytime assistance will be terminated, whether voluntarily or involuntarily.

PHA Policy
Whenever a family’s assistance will be terminated, the PHA will send a written notice of termination to the family and to the owner. The PHA will also send a form HUD-5382 and form HUD-5380 to the family with the termination notice. The notice will state the date on which the termination will become effective. This date generally will be at least 30 calendar days following the date of the termination notice, but exceptions will be made whenever HUD rules, other PHA policies, or the circumstances surrounding the termination require.

When the PHA notifies an owner that a family’s assistance will be terminated, the PHA will, if appropriate, advise the owner of their right to offer the family a separate, unassisted lease.

SMHA will provide translated copies of the termination notice to LEP participants, in accordance with SMHA’s LEP Plan.

If a family whose assistance is being terminated is entitled to an informal hearing, the notice of termination that the PHA sends to the family must meet the additional HUD and PHA notice requirements discussed in section 16-III.C of this plan. VAWA requires PHAs to provide notice of VAWA rights and the HUD 5382 form when a PHA terminates a household’s housing benefits.

VAWA also requires that this notice of VAWA rights be translated in accordance with HUD’s LEP Guidance and Executive Order 13166.

PHA Policy
Whenever the PHA decides to terminate a family’s assistance because of the family’s action or failure to act, the PHA will include in its termination notice the VAWA information described in section 16-IX.C of this plan and a form HUD-5382 and form HUD-5380. The PHA will request in writing that a family member wishing to claim protection under VAWA notify the PHA within 14 business days.

Still other notice requirements apply in two situations:
© Copyright 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use.

Page 12 ends

• If a criminal record is the basis of a family’s termination, the PHA must provide a copy of the record to the subject of the record and the tenant so that they have an opportunity to dispute the accuracy and relevance of the record [24 CFR 982.553(d)]. • If immigration status is the basis of a family’s termination, as discussed in section 12-I.D, the special notice requirements in section 16-III.D must be followed. © Copyright 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use.

Page 12 ends

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. Termination of tenancy for certain reasons will also result in termination of assistance as discussed in this section.
12-III.B. GROUNDS FOR OWNER TERMINATION OF TENANCY [24 CFR 982.310, 24 CFR

5.2005(c), and Form HUD-52641-A, Tenancy Addendum]
During the term of the lease, the owner is not permitted to terminate the tenancy except for just cause.

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, except when the violations are related to incidents of actual or threatened domestic violence, dating violence, sexual assault, stalking, or human trafficking, and the victim is protected from eviction by the Violence against Women Act of 2013 (see section 12-II.E). A serious lease violation 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 © Copyright 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use.

Page 12 ends

• Any drug-related criminal activity on or near the premises However, in the case of criminal activity directly related to domestic violence, dating violence, sexual assault, stalking, or human trafficking, if the tenant or an affiliated individual is the victim, the criminal activity may not be construed as cause for terminating the victim’s tenancy (see section 12-II.E).

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 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 the covered person has engaged in the criminal activity, regardless of whether the covered person has been arrested or convicted for such activity and without satisfying the standard of proof used for a criminal conviction. This is the case except in certain incidents where the criminal activity directly relates to domestic violence, dating violence, sexual assault, stalking, or human trafficking, and the tenant or an affiliated individual is the victim or threatened victim of the domestic violence, dating violence, sexual assault, stalking, or human trafficking.

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
• 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) © Copyright 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use.

Page 12 ends

After the initial lease term, the owner may give the family notice at any time, in accordance with the terms of the lease.

If a property is subject to foreclosure, during the term of the lease, the new owner of the property does not have good cause to terminate the tenant’s lease, unless the new owner will occupy the unit as their primary residence and has provided the tenant with at least a 90-day notice. In that case, the lease may be terminated effective on the date of sale, although the tenant is still entitled to a 90-day notice to vacate. See Section 13-II.G for a discussion of PHA policies relating to units in foreclosure.

PHA Policy
Property owners in Santa Monica must act in accordance with the Santa Monica City Charter Articles XVIII and XXIII. These articles detail the grounds for owner termination of tenancy, and mandate that an owner may only terminate tenancy if there are documented serious lease violations, certain violations of state or local law, or other good cause.
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 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use.

Page 12 ends

12-III.D. DECIDING WHETHER TO TERMINATE TENANCY [24 CFR 982.310(h), 24 CFR 982.310(h)(4)]
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 nature of the offending action
• 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.

An owner’s decision to terminate tenancy for incidents related to domestic violence, dating violence, sexual assault, stalking, or human trafficking, is limited by the Violence Against Women Act (VAWA) and the conforming regulations in 24 CFR Part 5, Subpart L. (See section 12-II.E.)
© Copyright 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use.

Page 12 ends

12-III.E. EFFECT OF TENANCY TERMINATION ON THE FAMILY’S ASSISTANCE If a termination is not due to a serious 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).
© Copyright 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use.

Page 12 ends

EXHIBIT 12-1: STATEMENT OF FAMILY OBLIGATIONS
Following is a listing of a participant family’s obligations under the HCV program:

1. The family must supply any information that the PHA or HUD determines to be necessary in the administration of the program, including submission of required evidence of citizenship or eligible immigration status. “Information” includes any requested certification, release or other documentation.

2. 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 in accordance with HUD requirements.

3. The family must disclose and verify social security numbers and sign and submit consent forms for obtaining information.

4. Any information supplied by the family must be true and complete.

5. The family may be held responsible for a breach of Housing Quality Standards (HQS) caused by the family’s failure to pay tenant-provided utilities or appliances, or damages to the dwelling unit or premises beyond ordinary wear and tear caused by any member of the household or guest.

PHA Policy
The tenant is responsible to notify the owner in writing of any/all items needing repair in the apartment or other issues related to damage or inoperability in the apartment, whether they are tenant caused or the result of normal wear and tear.

Damages beyond ordinary wear and tear will be considered to be damages which could be assessed against the security deposit under state law or in court practice.

5.6. 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.

6.7. The family must not commit any serious violation of the lease.

PHA Policy
The PHA will determine if a family has committed serious 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 lease violations will include, but not be limited to, nonpayment of rent, disturbance of neighbors, destruction of property, living or housekeeping habits that cause damage to the unit or premises, pose a safety hazard, or are and criminal activity.

Generally, the criterion to be used will be whether or not the reason for the eviction was the fault of the tenant or guests. Any incidents of, or criminal activity related to, © Copyright 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use.

Page 12 ends

domestic violence, dating violence, sexual assault, stalking, or human trafficking, will not be construed as serious lease violations by the victim [24 CFR 5.2005(c)(1)].

7.8. 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, but no less than 30 days prior to moving or terminating the lease. The family must request PHA approval to move and comply with PHA’s transfer and portability procedures. The family must submit the request to move in writing at least sixty (60) days before the requested lease termination/move out date.

9. The family must promptly give the PHA a copy of any owner eviction notice within 10 business days. .

PHA Policy

8. The family must promptly provide to the PHA a copy of any notice of lease violation, or other official notice served on the family by the landlord.

9.10. The family must use the assisted unit for residence by the family. The unit must be the family’s only residence.

10.11. The composition of the assisted family residing in the unit must be approved by the PHA. The family must immediately notify the PHA in writing of the birth, adoption, or courtawarded custody of a child. The family must request PHA approval to add any other family member as an occupant of the unit in advance. A criminal background will be conducted prior to adding any member to the household if the member is age 18 or older. No other person (i.e., nobody but members of the assisted family) may reside in the unit (except for a foster child or live-in aide as provided below).

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.

12. The family must immediately notify the PHA in writing if any family member no longer lives in the unit.

PHA Policy

11. The notification of a change in household size must be submitted in writing and may require PHA approval prior to the person being removed from the household.

12.13. 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 © Copyright 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use.

Page 12 ends

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).

13.14. Members of the household may engage in legal profitmaking activities in the unit, but only if such activities are incidental to primary use of the unit for residence by members of the family.

14.15. The family must not sublease or let 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.

15.16. The family must not assign the lease or transfer the unit.

16.17. The family must supply any information or certification requested by the PHA to verify that the family is living in the unit, or related to family absence from the unit, including any PHA requested information or certification for the purposes of family absences. The family must cooperate with the PHA for this purpose. 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 prior to the start of the extended absence.

17.18. 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).

18.19. 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).

19.20. 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).

20.21. 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).

21.22. 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. © Copyright 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use.

Page 12 ends

22.23. 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]

23.24. The family must immediately notify the PHA in writing of any increases in family income or assets.

24.25. The family must immediately notify the PHA in writing when a full-time adult student is no longer enrolled and/or attending school full-time.

25.26. 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].

26.27. The family (including each family member) must not damage the unit or premises (other than damage from ordinary wear and tear) or permit any guest to damage the unit or premises.

27.28. The family agrees not to pay the owner/landlord any additional compensation (either monetary or other) other than that which is approved by the lease or approved by the PHA.

28.29. The family must not engage in or threaten abusive or violent behavior towards any PHA employee or representative.
© Copyright 2024 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use. Page 13-1 Chapter 13
OWNERS

INTRODUCTION
Owners play a major role in the programs 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 programs [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.

The chapter is organized in two parts:

Part I: Owners in the Program. This part discusses the role of an owner in the PHA’s program and highlights key owner rights and responsibilities.

Part II: HAP Contracts. This part explains provisions of the contract and the relationship between the PHA and the owner as expressed in the contract.

For detailed information about 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 2024 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use. Page 13-2 PART I: OWNERS IN THE PROGRAM
13-I.A. OWNER RECRUITMENT AND RETENTION [HCV GB, pp. 2-4 to 2-6; HCV Landlord Strategy Guidebook for PHAs]
Education and Outreach PHAs are responsible for ensuring that very low-income families have access to all types and ranges of affordable housing in the PHA’s jurisdiction, particularly housing outside areas of poverty or minority concentration. A critical element in fulfilling this responsibility is for the PHA to ensure that a sufficient number of owners, representing all types and ranges of affordable housing in the PHA’s jurisdiction, are willing to participate in the programs.

To accomplish this objective, PHAs must identify and recruit new owners to participate in the program. PHAs can provide education and outreach in a variety of ways. Some strategies include hosting or attending events targeted to landlords or affordable housing providers.

Education and outreach can include activities like newsletters, presentations, briefings to community groups, one-on-one appointments, or other ways of sharing information or creating relationships between PHAs and owners. The PHA may also provide monetary incentives and reimbursements to encourage participation in the program.

If the PHA will be conducting outreach events, the PHA must ensure that notices and communications during outreach events are provided in a manner that is effective for persons with hearing, visual, and other communications-related disabilities. PHAs must also take reasonable steps to ensure meaningful access to programs to persons with limited English proficiency.

PHA Policy
The PHA will conduct owner outreach to ensure that owners are familiar with the program and its advantages. The PHA will actively recruit property owners with property located outside areas of poverty and minority concentration. These outreach strategies will include:

Distributing an owner packet of printed material about the program to property owners and managers
Contacting property owners and managers by phone or in-person Holding owner recruitment/information meetings.

Participating in community-based organizations comprised of private property and apartment owners and managers
Developing working relationships with owners, apartment associations, industry investor groups, and real estate brokers associations
To the extent practical, partnering with and attending events hosted by other area agencies to deliver information about the HCV program Outreach strategies will be monitored for effectiveness and adapted accordingly. © Copyright 2024 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use. Page 13-3 Retention
In addition to recruiting owners to participate in the programs, the PHA must also provide the kind of customer service that will encourage participating owners to remain active in the program. See the “Landlord-Focused Customer Service” chapter of the HCV Landlord Strategies Guidebook for more information.

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 factsheet that explains the programs, 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 through a landlord handbook, including answers to frequently asked questions.

Contacting owners via emails or texts to disseminate information.

Additional services may be undertaken on an as-needed basis, and as resources permit. 13-I.B. BASIC HCV PROGRAM REQUIREMENTS
HUD requires the PHA to assist 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. As part of the briefing packet, the PHA is also required to provide a current listing of accessible units known to the PHA. 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 family, or to help the 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 family or to help the family find a unit must notify the PHA. The PHA will maintain a listing of such units and provide this listing to the family as part of the informational briefing packet if available.

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 © Copyright 2024 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use. Page 13-4 any potential unassisted 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 requirements for the approval of an assisted tenancy.

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 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 program. Other types may be assisted under certain conditions. See chapter 9 for more detail on unit eligibility policies and process.

The selected unit must pass HUD’s Housing Quality Standards (HQS) [24 CFR 982.305(a)]. The PHA will inspect the owner’s dwelling unit at least annually to ensure that the unit continues to meet HQS requirements. See chapter 8 for a discussion of the inspection standards, and policies for HQS inspections at initial lease-up and throughout the family’s tenancy.

The PHA must determine that the proposed rent for 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, if the gross rent exceeds the applicable payment standard, the PHA must ensure that the family share 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. The HUD Tenancy Addendum (Form HUD-52641-A) includes the HUD requirements governing the tenancy and must be added word-for-word to the owner’s lease. See chapter 9 for a discussion of the dwelling lease and tenancy addendum, including lease terms and provisions.

The PHA and the owner must execute a Contract (Form HUD-52641). The contract format is prescribed by HUD. See Chapter 9 for a discussion of the HUD requirements for execution of the contract.
© Copyright 2024 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use. Page 13-5 13-I.C. OWNER RESPONSIBILITIES [24 CFR 982.452]
The basic owner responsibilities in the program are outlined in the regulations as follows:
• Complying with all of the owner's obligations under the 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.
o A unit is not in compliance with housing quality standards if the PHA or other inspector authorized by the state or local government determines that the unit has deficiencies based upon an inspection, the agency or inspector notifies the owner in writing of the deficiencies, and the deficiencies are not remedied within the appropriate timeframe.
• Complying with equal opportunity requirements.
• Preparing and furnishing to the PHA information required under the HAP contract. • Collecting and the security deposit, the tenant rent, and any charges for unit damage by the family.
• Enforcing tenant obligations under the dwelling lease. • Paying for utilities and services that are not the responsibility of the family as specified in the lease.
• Allowing reasonable modifications to a dwelling unit occupied or to be occupied by a disabled person [24 CFR 100.203].
• Complying with the Violence Against Women Act (VAWA) when screening prospective HCV tenants or terminating the tenancy of an HCV family [see 24 CFR Part 5, Subpart L; 24 CFR 982.310(h)(4); 24 CFR 982.452(b)(1); and FR Notice 1/4/23]. © Copyright 2024 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use. Page 13-6 13-I.D. OWNER QUALIFICATIONS
The PHA does not formally approve an owner to participate in the program. However, there are several 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 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 a tenancy 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 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.

PHA Policy
In cases where the owner and tenant bear the same last name, the PHA may, at its discretion, require the family and or owner to certify whether they are related to each other in any way.

Conflict of Interest [24 CFR 982.161; HCV GB p. 8-19; Form HUD-52641, Section 13] 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
Such “covered individual” may not have any direct or indirect interest in the HAP contract or in any benefits or payments under the contract (including the interest of an immediate family © Copyright 2024 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use. Page 13-7 member of such covered individual) while such person is a covered individual or for one year thereafter.

Immediate family member means the spouse, parent (including a stepparent), child (including a stepchild), grandparent, grandchild, sister, or brother (including a stepsister or stepbrother) of any covered individual.

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 the following [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 their duties under state or local law, including reference to any responsibilities involving the program;
• If the case involves employment of a family member by the PHA or assistance under the program for an eligible PHA employee, explanation of the responsibilities and duties of the position, including any related to the 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 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 certain factors such as consistency of the waiver 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 © Copyright 2024 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use. Page 13-8 conflict of interest; the nature of any financial investment in the property and plans for disclosure/divestiture; and the possible appearance of impropriety.

Owner Actions That May Result in Disapproval of a Tenancy Request [24 CFR 982.306(c)] HUD regulations permit the PHA to disapprove a request for tenancy for various actions and inactions of the owner.

If the PHA disapproves a request for tenancy because an owner is not qualified, it may not terminate the 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 contract under Section 8 of the 1937 Act (42 U.S.C. 1437f);
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;
© Copyright 2024 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use. Page 13-9 The owner has not paid state or local real estate taxes, fines, or assessment; The owner has engaged in or threatened violent or abusive behavior toward PHA personnel; or
The proposed unit is in foreclosure.

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.

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
The PHA will only enter into a contractual relationship with the legal owner of a qualified unit. No tenancy will be approved without acceptable documentation of legal ownership (e.g., deed of trust, proof of taxes for most recent year).

If a professional management firm represents the owner, the PHA will require a letter from the owner verifying this arrangement. The PHA will also require a Tax ID number for tax purposes and bank deposit information for direct deposit. No housing assistance payment will be made prior to the PHA receiving these documents. 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, disability, or status as a victim of domestic violence, dating violence, sexual assault, or stalking, in connection with any actions or responsibilities under the program and the 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 program and the contract with the PHA.

See Chapter 2 for a more thorough discussion of Fair Housing and Equal Opportunity requirements in the program.
© Copyright 2024 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use. Page 13-10 PART II: HAP CONTRACTS
13-II.A. OVERVIEW
The contract (Form HUD-52641) represents a written agreement between the PHA and the owner of the dwelling unit occupied by an assisted family. The contract spells out the owner’s responsibilities under the program, as well as the PHA’s obligations. Under the contract, the PHA agrees to make housing assistance payments to the owner on behalf of the family approved by the PHA to occupy the unit.

The contract is used for all tenant-based program tenancies except for assistance under the Section 8 homeownership program, and assistance to families that own a manufactured home and use their assistance to lease the space for the manufactured home. See chapter 15 for a discussion of any special housing types included in the PHA’s HCV program.

When the PHA has determined that the unit meets program requirements and the tenancy is approvable, the PHA and owner must execute the contract. See chapter 9 for a discussion of the leasing process, including provisions for execution of the contract. 13-II.B. HAP CONTRACT CONTENTS
The 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: the names of the tenant and all household members, the address of the contract unit, start and end dates of initial lease term, the amount of initial monthly rent to owner, the amount of initial housing assistance payment, the utilities and appliances to be supplied by owner and tenant, and the signatures of the PHA representative and owner [HCV Guidebook, pp 11-10 and 11-11].

In general, the contract cannot be modified. However, PHAs do have the discretion to add language to Part A of the 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. PHAs also have the discretion to add language to Part A of the 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 contract will be necessary.

Part B is the body of the contract. It describes in detail program requirements affecting the owner and owner roles and responsibilities under the program. Most of the requirements © Copyright 2024 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use. Page 13-11 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 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 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.

PHA Policy
To cover the special requirements of the HOME Program, the PHA requires a Lease Addendum to be executed between the tenant and the landlord, which covers the prohibited lease provisions that may not be enforced by the landlord. © Copyright 2024 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use. Page 13-12 13-II.C. HAP CONTRACT PAYMENTS
General
During the term of the contract, and subject to the provisions of the 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 payment is determined according to the policies described in Chapter 6 and is subject to change during the term of the 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 and the HAP payment is equal to the rent to owner as specified in the lease.

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 rent to 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.

PHA Policy
The PHA requires property owners to participate in direct deposit of HAP payments. To begin direct deposit service, property owners must provide a completed Direct Deposit Authorization form.

Owner Certification of Compliance
Unless the owner complies with all provisions of the contract, the owner is not entitled to receive housing assistance payments under the contract [HAP Contract – Form HUD-52641].

By accepting the monthly check from the PHA, the owner certifies to compliance with the terms of the contract. This includes certification that the owner is maintaining the unit and premises © Copyright 2024 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use. Page 13-13 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.

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 contract. After the first two calendar months of the contract term, the contract provides for late 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 contract as long as the tenant continues to occupy the unit and the contract is not violated.

HAP payments terminate when the 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. Notification includes providing a copy of the eviction notice to the PHA at the same time the owner serves the tenant.

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 © Copyright 2024 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use. Page 13-14 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 moves from the unit or the family is physically evicted from the unit. 13-II.D. BREACH OF CONTRACT [24 CFR 982.453]
Any of the following actions by the owner constitutes a breach of the contract:
• If the owner violates any obligations under the contract including failure to maintain the unit in accordance with HQS
• If the owner has violated any obligation under any other contract • 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 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 contract has occurred, the PHA must take enforcement action in accordance with 24 CFR 982.404.

The PHA rights and remedies against the owner under the contract include recovery of any HAP overpayment, withholding or abatement of the housing assistance payment, termination of the payment or termination of the 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 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 contract violations.
© Copyright 2024 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use. Page 13-15 13-II.E. HAP CONTRACT TERM AND TERMINATIONS
The term of the 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 contract and the housing assistance payments made under the 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 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 contract.

PHA Policy
The PHA may elect to terminate the 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 contract [24 CFR 982.453(b)] – see Section 13-II.D.

If the PHA terminates the 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 contract is terminated, no further HAP payments may be made under that contract [HCV Guidebook pg.15-4].

PHA Policy
In all cases, the 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 © Copyright 2024 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use. Page 13-16 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 contract for the assisted unit terminates. A new 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 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].
13-II.F. CHANGE IN OWNERSHIP / ASSIGNMENT OF THE HAP CONTRACT [HUD-52641]
The contract cannot be assigned to a new owner without the prior written consent of the PHA.

An owner under a 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 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 contract will be approved only if the new owner is qualified to become an owner under the 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 contract.

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 contract assignment;
A written agreement to comply with the terms of the contract; and A certification that the new owner is not a prohibited relative.

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 2024 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use. Page 13-17 13-II.G. FORECLOSURE [Notice PIH 2010-49]
Families receiving HCV assistance are entitled to certain protections set forth under the Protecting Tenants at Foreclosure Act (PTFA). During the term of the lease, the new owner of the property does not have good cause to terminate the tenant’s lease, unless the new owner will occupy the unit as their primary residence and has provided the tenant with at least a 90- day notice. In that case, the lease may be terminated effective on the date of sale, although the tenant is still entitled to a 90-day notice to vacate. Further, the new owner assumes interest in the lease between the prior owner and the tenant and to the HAP contract.

Any state or local law that provides longer time periods or other additional protections for tenants also applies.

PHA Policy
If a property is in foreclosure, the PHA will make all reasonable efforts to determine the status of the foreclosure and ownership of the property and will continue to make payments to the original owner until ownership legally transfers in accordance with the HAP contract.

The PHA will attempt to obtain a written acknowledgement of the assignment of the HAP contract from the successor in interest. This will include a request for owner information, including a tax identification number and payment instructions from the new owner. Even if the new owner does not acknowledge the assignment of the HAP contract in writing, the assignment is still effective by operation of law.

The PHA will inform the tenant that they must continue to pay rent in accordance with the lease, and if the new owner refuses to accept payment or cannot be identified, the tenant should pay rent into escrow. Failure to pay rent may constitute an independent ground for eviction.

In the event that the PHA is unable to make HAP payments to the new owner due to an action or inaction by the new owner that prevents such payments (e.g., rejection of payments or failure to maintain the property according to HQS), or due to an inability to identify the new owner, the PHA will either use the funds to pay:

The utilities that are the owner’s responsibility after taking reasonable steps to notify the owner; except that if the unit has been or will be rendered uninhabitable due to termination or threat of termination of service, prior notice is not required. In the latter case, the PHA shall notify the owner within a reasonable time after making the utility payment; or
For the family’s reasonable moving costs, including security deposit costs.

The PHA will also refer the tenant, as needed, to the local legal aid office in order to ensure adequate protection of the tenant’s rights and enforcement of the successor in interest’s performance under the HAP contract.

See Section 12-III.B for a discussion of foreclosure as it pertains to owner termination of tenancy.
© Copyright 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use. Page 14-1 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 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use. Page 14-2 PART I: PREVENTING, DETECTING, AND

INVESTIGATING ERRORS AND PROGRAM ABUSE
14-I.A. PREVENTING ERRORS AND PROGRAM ABUSE
HUD created the Enterprise Income Verification (EIV) system to provide PHAs with a powerful tool for preventing errors and detecting program abuse. PHAs are required to use the EIV system at annual reexamination in accordance with HUD administrative guidance [24 CFR

5.233]. PHAs are further required to:
• Provide applicants and participants with form HUD-52675, “Debts Owed to PHAs and Terminations”
• Require all adult members of an applicant or participant family to acknowledge receipt of form HUD-52675 by signing a copy of the form for retention in the family file PHA Policy
To ensure that the PHA’s programs are 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 a copy of “Is Fraud Worth It?” (form HUD-1141-OIG), which explains the types of actions a family must avoid and the penalties for program abuse.

The PHA will provide each applicant and participant with a copy of “What You Should Know about EIV,” a guide to the Enterprise Income Verification (EIV) system published by HUD as an attachment to Notice PIH 2017-12. In addition, the PHA will require the head of each household to acknowledge receipt of the guide by signing a copy for retention in the family file.

The PHA will place a warning statement about the penalties for fraud (as described in 18 U.S.C. 1001 and 1010) on key PHA forms and form letters that request information from a family or owner.

At every regular reexamination, PHA staff will explain any changes in HUD regulations or PHA policy that affect program participants.

The PHA will require first-time owners (or their agents) to participate in a briefing session on contract requirements.

The PHA will provide owners with ongoing information about the program, with an emphasis on actions and situations to avoid.

PHA staff will provide the family the opportunity for review and will explain when the family requests clarification, the contents of HUD and PHA required forms when requesting family member signatures.
© Copyright 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use. Page 14-3 The PHA will inform participants of the investigative process and their rights by providing each participant with the PHA’s Investigation Protocol in the following manner:

1. As part of the annual recertification process; and

2. Immediately prior to commencement of the investigatory interview.

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 that result in payment of funds in violation of program requirements. 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 HUD and other non-HUD sources of up-front income verification. This includes The Work Number and any other private or public databases available to the PHA.

At each annual or interim reexamination, current information provided by the family will be compared to information provided at the last annualmost recent reexamination to identify inconsistencies and incomplete information.

The PHA will compare family-reported income and expenditures to detect possible unreported income.

Every two years (subject to funding availability) the PHA may obtain a credit report on all adult family members, at no expense to the family.

Independent Audits and HUD Monitoring
OMB Circular A-133 requires all PHAs that expend $500$750,000 or more in federal awards © Copyright 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use. Page 14-4 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.
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 when inconsistent or contradictory information is detected through file reviews, the verification process and, when needed, an independent fraud investigator.

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 families to sign consent forms for 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. © Copyright 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use. Page 14-5 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.

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 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use. Page 14-6 PART II: CORRECTIVE MEASURES AND PENALTIES
14-II.A. 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 on the first of the month following a written 30-day 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. 14-II.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 or creates more than two overpayments in 36 months by failing to report income, the PHA will terminate the family’s assistance in accordance with the policies in Chapter 12.
© Copyright 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use. Page 14-7 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.

Prohibited Actions
An applicant or participant in the 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).
© Copyright 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use. Page 14-8 • 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.
14-II.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, or by withholding housing assistance payments due for subsequent months.

Prohibited Owner Actions
An owner participating in the 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
© Copyright 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use. Page 14-9 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 a family as an inducement for the family to make false or misleading statements to the PHA Residing in the unit with an assisted family
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 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.
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 program.

Additional standards of conduct may be provided in the PHA personnel policy.

PHA-caused incorrect subsidy determinations include (1) failing to correctly apply rules regarding family composition, income, assets, and expenses, (2) assigning the incorrect voucher size to a family, and (3) errors in calculation.

The following policy is effective upon the PHA’s HOTMA compliance date:

De Minimis Errors [24 CFR 5.609(c)(4)]
The PHA will not be considered out of compliance when making annual income determinations solely due to de minimis errors in calculating family income. A de minimis error is an error where the PHA determination of family income deviates from the correct income determination by no more than $30 per month in monthly adjusted income ($360 in annual adjusted income) per family.

PHAs must take corrective action to credit or repay a family if the family was overcharged rent, including when PHAs make de minimis errors in the income determination. Families will not be required to repay the PHA in instances where the PHA miscalculated income resulting in a family being undercharged for rent. PHAs state in their policies how they will repay or credit a family the amount they were overcharged as a result of the PHA’s de minimis error in income determination.
© Copyright 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use. Page 14-10 PHA Policy
The PHA will reimburse a family for any family overpayment of rent, regardless of whether the overpayment was the result of staff-caused error or a de minimis error.

Prohibited Activities
PHA Policy
Any of the following will be considered evidence of program abuse by PHA staff:

Failing to comply with any program requirements for personal gain Failing to comply with any program requirements as a result of a conflict-ofinterest 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 funds
Destroying, concealing, removing, or inappropriately using any records related to the program
Committing any other corrupt or criminal act in connection with any federal housing program
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 program will be referred to the appropriate local, state, or federal entity.
© Copyright 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use. Page 14-11 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 collected 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 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use.

Page 15 ends

Chapter 15

SPECIAL HOUSING TYPES
[24 CFR 982 Subpart M; New HCV GB, Special Housing Types]

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, and the PHA must permit a family to lease a manufactured home and space with assistance under the program. The PHA also may limit the number of families who receive 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, with the exception of Shared Housing, and manufactured homes where the family owns the home and leases the space with the following exceptions:

If needed as a reasonable accommodation so that the program is readily accessible to a person with disabilities; and
The PHA must permit a family to lease a manufactured home and space with assistance under the program.

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]. A single unit cannot be designated as more than one type of special housing. The PHA cannot give preference to households that wish to live in any of these types of housing and cannot require households to select any of these types of housing [New HCV GB, Special Housing Types, p. 3].

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 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use.

Page 15 ends

PART I: SINGLE ROOM OCCUPANCY
[24 CFR 982.602 through 982.605; Form HUD-52641; New HCV GB, Special Housing Types, p. 4] 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 assistance to an SRO unit, a separate lease and contract are executed for each assisted person. The standard form of the contract is used (form HUD-52641) with the special housing type specified in Part A of the contract, as follows: “This contract is used for the following special housing type under HUD regulations for the Section 8 voucher program: Single room occupancy (SRO) housing.”
15-I.B. PAYMENT STANDARD, UTILITY ALLOWANCE, AND HAP CALCULATION The payment standard for SRO housing is 75 percent of the zero-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 zerobedroom 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. SRO: HOUSING QUALITY STANDARDS (HQS) [24 CFR 982.605(a)] HQS requirements described in the applicable portions of Chapter 8 apply to SRO housing except that sanitary facilities, and space and security characteristics must meet local code standards for SRO housing. In the absence of applicable local code standards for SRO housing, the following standards apply:
• 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, large 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. © Copyright 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use.

Page 15 ends

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].
• 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 males, 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 to all persons sharing them 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.

If no children live in SRO housing, the housing quality standards applicable to lead-based paint do not apply.
© Copyright 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use.

Page 15 ends

PART II: CONGREGATE HOUSING
[24 CFR 982.606 through 982.609; Form HUD-52641; New HCV GB, Special Housing Types, p. 6] 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 assistance in congregate housing, a separate lease and contract are executed for each assisted family. The standard form of the contract is used (form HUD-52641) with the special housing type specified in Part A of the contract, as follows: “This contract is used for the following special housing type under HUD regulations for the Section 8 voucher program:

Congregate housing.”
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 for the assisted family. 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 zero-bedroom unit. If the unit has two or more rooms (other than the bathroom and the kitchen), the PHA must use the one-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 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. CONGREGATE: HOUSING QUALITY STANDARDS
HQS requirements as described in Chapter 8 apply to congregate housing except for the requirements stated below.

Congregate housing must have a refrigerator of appropriate size in the private living area of each resident, a central kitchen and dining facilities located within the premises and accessible to the residents, and food service for the residents, that is not provided by the residents themselves.

The congregate housing must contain adequate facilities and services for the sanitary disposal of food waste and refuse, including facilities for temporary storage where necessary.

Unlimited copies may be made for internal use.

Page 15 ends

PART III: GROUP HOME
[24 CFR 982.610 through 982.614; Form HUD-52641; New HCV GB, Special Housing Types, p. 8] 15-III.A. OVERVIEW
A group home is a state-approved (licensed, certified, or otherwise approved in writing by the state) 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 assistance in a group home, a separate lease and contract is executed for each assisted family. The standard form of the contract is used (form HUD-52641) with the special housing type specified in Part A of the contract, as follows: “This contract is used for the following special housing type under HUD regulations for the Section 8 voucher program:

Group home.”
15-III.B. PAYMENT STANDARD, UTILITY ALLOWANCE, AND HAP CALCULATION Unless there is a live-in aide, the family unit size (voucher size) for an assisted occupant of a group home must be zero- or one-bedroom. 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 pro rata share of the payment standard for the group home size. The pro rata 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 number of persons in the assisted household equals one assisted person plus any PHA-approved live-in aide.

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 pro rata share of the family unit size to 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 pro rata portion of the reasonable rent for the group home. In determining reasonable rent, the © Copyright 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use.

Page 15 ends

PHA must consider whether sanitary facilities and facilities for food preparation and service are common facilities or private facilities.
15-III.C. GROUP HOME: HOUSING QUALITY STANDARDS
The entire unit must comply with HQS requirements described in Chapter 8, 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. Doors and windows accessible from outside the unit must be lockable. • 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 disturbing noises and reverberations, and other 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 unless a child under the age of six is expected to reside in the unit.
© Copyright 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use.

Page 15 ends

PART IV: SHARED HOUSING
[24 CFR 982.615 through 982.618; Form HUD-52641; Notice PIH 2021-05; New HCV GB, Special Housing Types, p. 11]
15-IV.A. OVERVIEW
Families in markets with tight rental conditions or with a prevalence of single-family housing may determine a shared housing living arrangement to be a useful way to secure affordable housing. PHAs offering shared housing as a housing solution may also experience some reduction in the average per-unit-cost (PUC) paid on behalf of assisted families.

Shared housing is a single housing unit occupied by an assisted family and another resident or residents. The unit may be a house or an apartment. 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 program or with other unassisted persons.

Shared housing may be offered in a number of ways, including for-profit co-living (such as a boarding house, single bedroom with common living room/kitchen/dining room) run by a private company [Notice PIH 2021-05].

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 shared housing is offered as a housing option, HUD encourages PHAs to consider ways in which the families may be assisted in finding shared housing, including for-profit shared housing matching (such as roommates or single-family homes) and online sites that charge a fee for their matching services, or nonprofit shared housing matching services. HUD further encourages PHAs to include information about this housing possibility in the family’s voucher briefing.

PHA Policy
If the PHA has information available to families regarding the shared housing option, including a listing to families of any known for-profit or nonprofit shared housing matching services in the community, the PHA will provide it at briefing, and and again after initial briefing, upon written or oral request. Families will be advised they can conduct their own internet search. Families will be cautioned to not enter into any rental agreement or pay any deposit or rental payment until the tenancy is approved by the PHA.

PHAs should be aware of potential local legal barriers to HCV participants using shared housing, which can create additional obstacles for shared housing:
© Copyright 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use.

Page 15 ends

• Municipalities may have occupancy limits for the number of unrelated persons who may share a housing unit.
• Local zoning codes for single family housing may restrict occupancy in certain areas to households whose family members are related by blood.

PHAs should work with local jurisdictions to find solutions that encourage affordable housing and are consistent with the Fair Housing Act, Title VI, and other federal, state, and local fair housing laws. PHAs should inform HUD if they encounter barriers to shared housing that may conflict with fair housing laws.

PHA Policy
The PHA will work with local jurisdictions as necessary to identify solutions consistent with fair housing laws and will inform HUD if the PHA encounters barriers to shared housing that conflict with fair housing laws.

When providing assistance in shared housing, a separate lease and contract are executed for each assisted family. The standard form of the contract is used (form HUD-52641) with the special housing type specified in Part A of the contract, as follows: “This contract is used for the following special housing type under HUD regulations for the Section 8 voucher program:

Shared housing.”
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 (voucher size) or the pro rata share of the payment standard for the shared housing unit size.

The pro rata share is calculated by dividing the number of bedrooms available for occupancy by the assisted family in the private, non-shared 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 TTP or the gross rent minus the TTP. The utility allowance for an assisted family living in shared housing is the pro rata share of the utility allowance for the shared housing unit.

Example: A family holds a 2-bedroom voucher. The family decides to occupy 3 out of 4 bedrooms available in the unit.

The utility allowance for a 4-bedroom unit equals $200
The utility allowance for a 2-bedroom unit equals $100
The pro rata share of the utility allowance is $150 (3/4 of $200) The PHA will use the 2-bedroom utility allowance of $100.

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 © Copyright 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use.

Page 15 ends

pro rata portion of the reasonable rent for the shared unit. In determining reasonable rent, the PHA may consider whether sanitary and food preparation areas are private or shared. 15-IV.C. SHARED HOUSING: 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 zerobedroom or one-bedroom unit may not be used for shared housing. © Copyright 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use.

Page 15 ends

PART V: COOPERATIVE HOUSING
[24 CFR 982.619; New HCV GB, Special Housing Types, p. 14] 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.” The monthly carrying charge includes the member’s share of the cooperative debt service, operating expenses, and necessary payments to cooperative reserve funds. It 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.

The occupancy agreement, or lease and other appropriate documents, must provide that the monthly carrying charge is subject to Section 8 limitations on rent to owner, and the rent must be reasonable as compared to comparable unassisted units.

When providing assistance in cooperative housing, the standard form of the contract is used with the special housing type specified in Part A of the contract, as follows: “This contract is used for the following special housing type under HUD regulations for the Section 8 voucher program: Cooperative housing.”
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 gross rent (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. COOPERATIVE: HOUSING QUALITY STANDARDS
All standard HQS requirements apply to cooperative housing units. There are no additional HQS requirements. The PHA remedies described in 24 CFR 982.404 do not apply. Rather, if the unit and premises are not maintained in accordance with HQS, the PHA may exercise all available remedies regardless of whether the family or cooperative is responsible for the breach of HQS.

No housing assistance payment can be made unless unit meets HQS and the defect is corrected within the period as specified by the PHA and the PHA verifies correction (see Chapter 8).

In addition to regular breaches of HQS, breaches of HQS by the family include failure to perform any maintenance for which the family is responsible in accordance with the terms of the cooperative occupancy agreement [HCV GB].
© Copyright 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use.

Page 15 ends

PART VI: MANUFACTURED HOMES
[24 CFR 982.620 through 982.624; FR Notice 1/18/17; New HCV GB, Special Housing Types, p. 15]
15-VI.A. OVERVIEW
A manufactured home is a manufactured structure, transportable in one or more parts, which is built on a permanent chassis, and designed for use as a principal place of residence. Assisted families may occupy manufactured homes in three different ways. (1) A family may 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) A family can purchase a manufactured home under the Housing Choice Voucher Homeownership program.
(3) 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 as well as certain other housing expenses. PHAs may, but are not required to, provide assistance for such families.
15-VI.B. SPECIAL REQUIREMENTS FOR MANUFACTURED HOMEOWNERS 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 designated HAP Contract (form HUD-52642) and designated Tenancy Addendum (form HUD 52642-A) for this special housing type.
© Copyright 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use.

Page 15 ends

15-VI.C. PAYMENT STANDARD, UTILITY ALLOWANCE AND HAP CALCULATION Payment Standards
The PHA payment standard for manufactured homes is determined in accordance with 24 CFR 982.505 and is the payment standard used for the PHA’s HCV program. It is based on the applicable FMR for the area in which the manufactured home space is located.

The payment standard for the family is the lower of the family unit size (voucher size) or the payment standard for the number of bedrooms in the manufactured home.

Utility Allowance [24 CFR 982.624]
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 hookup 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 [24 CFR 982.622]
Rent to owner for rental of a manufactured home space includes payment for maintenance and services that the owner must provide to the tenant under the lease for the space. Rent to owner does not include the costs of utilities and trash collection for the manufactured home.

However, the owner may charge the family a separate fee for the cost of utilities or trash collection provided by the owner.

Amortization Costs
The monthly payment made by the family to amortize the cost of purchasing the manufactured home is the debt service established at the time of application to a lender for financing the purchase of the manufactured home if monthly payments are still being made. Any increase in debt service due to refinancing after purchase of the home may not be included in the amortization cost. Debt service for set-up charges incurred by a family may be included in the monthly amortization payments made by the family. In addition, set-up charges incurred before the family became an assisted family may be included in the amortization cost if monthly payments are still being made to amortize the charges.

Housing Assistance Payment [24 CFR 982.623(a)]
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 manufactured home space rent (including other eligible housing expenses) minus the TTP.

Eligible Housing Expenses [24 CFR 982.623(b)]
The family’s eligible housing expenses are the total of:
• The rent charged by the owner for the manufactured home space. © Copyright 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use.

Page 15 ends

• Charges for the maintenance and management the space owner must provide under the lease.
• The monthly payments made by the family to amortize the cost of purchasing the manufactured home established at the time of application to a lender for financing the purchase of the manufactured home if monthly payments are still being made, including any required insurance and property taxes included in the loan payment to the lender. - Any increase in debt service or term due to refinancing after purchase of the home may not be included in the amortization cost.
- Debt service for installation charges incurred by a family may be included in the monthly amortization payments. Installation charges incurred before the family became an assisted family may be included in the amortization cost if monthly payments are still being made to amortize the charges.
• The applicable allowances for tenant-paid utilities, as determined under 24 CFR 982.517 and 982.624.

Rent Reasonableness [24 CFR 982.622(b)]
During the assisted tenancy, the rent to owner for the manufactured home space may not exceed a reasonable rent. Initially, and at least 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 housing assistance payment, the owner of the manufactured home space certifies that the rent does not exceed rents charged by the owner for comparable unassisted spaces in the same manufactured home park or elsewhere.

If requested by the PHA, the owner must give the PHA information on rents charged by the owner for other manufactured home spaces.

Distribution of HAP [24 CFR 982.623(c)]
The PHA pays the owner of the space the lesser of the housing assistance payment or the portion of the monthly rent due to the owner. The portion of the monthly rent due to the owner is the total of:
• The actual rent charged by the owner for the manufactured home space; and • Charges for the maintenance and management the space owner must provide under the lease.

If the housing assistance payment exceeds the portion of the monthly rent due to the owner, the PHA may pay the balance of the housing assistance payment to the family. Alternatively, the PHA may pay the balance to the lender or utility company, in an amount no greater than the amount due for the month to each, respectively, subject to the lender’s or utility company’s willingness to accept the PHA’s payment on behalf of the family. © Copyright 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use.

Page 15 ends

PHA Policy
If the housing assistance payment exceeds the portion of the monthly rent due to the owner, the PHA will may pay the balance to the family if unable to pay directly to the lender.

Single HAP to Family [24 CFR 982.623.(d)]
If the owner of the manufactured home space agrees, the PHA may make the entire housing assistance payment to the family, and the family is responsible for paying the owner directly for the full amount of rent of the manufactured home space due to the owner, including owner maintenance and management charges.

PHA Policy
The PHA will not exercise the option to pay a single HAP and will pay HAP directly to the owner
15-VI.D. 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. © Copyright 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use.

Page 15 ends

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 described in the regulations: monthly homeownership assistance payments, and single down payment assistance grants. However, PHAs may not offer down payment assistance until and unless funding is allocated by Congress.

Since this has not yet happened, only monthly homeownership assistance may be offered.

The PHA may choose not to offer homeownership assistance. However, the PHA must offer 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. 15-VII.B. FAMILY ELIGIBILITY [24 CFR 982.627]
If the PHA offers the homeownership option, participation by the family is optional. However, 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. © Copyright 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use.

Page 15 ends

• 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 25 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).
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. © Copyright 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use.

Page 15 ends

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 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.

Families may enter into contracts of sale for units not yet under construction. However, the PHA will not commence homeownership assistance for the family for that unit until:

1. Either the responsible entity completes the environmental review as required by 24 CFR part 58 and HUD approved the environmental certification and request for release of funds prior to commencement of construction or HUD performed an environmental review under CFR part 50 and notified the PHA in writing of environmental approval of the site prior to construction commencement; and

2. Construction of the unit has been completed and the unit has passed the required HQS inspection and independent inspection as addressed elsewhere in this chapter. • For PHA-owned units (as defined in 24 CFR 982.4),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;
© Copyright 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use.

Page 15 ends

- The unit is not ineligible housing;
- The PHA obtains the services of an independent entity (as defined in 24 CFR 982.4) 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-VII.E. 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. 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.
© Copyright 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use.

Page 15 ends

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.

Any homeownership counseling provided to families in connection with this section must be conducted by a HUD certified housing counselor working for an agency approved to participate in HUD’s Housing Counseling program.
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 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, 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;
© Copyright 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use.

Page 15 ends

• 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. • A contract for the sale of a unit not yet under construction must meet all above requirements, and requirements below. Commencement of construction in violation of the below requirements voids the purchase contract.
- The purchaser is not obligated to purchase the unit unless an environmental review has been performed and the site received environmental approval prior to commencement of construction in accordance with 24 CFR 982.628; and
- The construction will not commence until the environmental review has been completed and the seller has received written notice from the PHA that environmental approval has been obtained. Environmental approval may be conditioned on the contracting parties’ agreement to modification to the unit design or to mitigation actions.

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)]. 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 of family obligations in the form prescribed by HUD [form HUD-52649]. In the statement, the family agrees to comply with all family obligations under the homeownership option.

Unlimited copies may be made for internal use.

Page 15 ends

• 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.
• The family must provide the PHA with information on any satisfaction or payment of the mortgage debt.
• 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), (f), (g) and (j). 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 © Copyright 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use.

Page 15 ends

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. The payment standard amount may not be lower than what the payment standard amount was at commencement of homeownership assistance.

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. The payment standard for a family is the greater of (i) The payment standard as determined at the commencement of homeownership assistance for occupancy of the home, or (ii) The payment standard at the most recent regular reexamination of family income and composition since the commencement of homeownership assistance for occupancy of the home.

The PHA must adopt policies for determining the amount of homeownership expenses to be allowed by the PHA in accordance with HUD requirements.

Homeownership expenses (not including cooperatives) may only must 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; © Copyright 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use.

Page 15 ends

• 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.

The PHA does not have the discretion to exclude any of the listed homeownership expenses or to add any additional items.

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.

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. 15-VII.L. 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, is acceptable. The receiving PHA must promptly notify the initial PHA if the family has © Copyright 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use.

Page 15 ends

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.
© Copyright 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use.

Page 15 ends

15-VII.M. MOVING WITH CONTINUED ASSISTANCE [24 CFR 982.637] A family receiving homeownership assistance may move with continued tenant-based assistance or with voucher homeownership assistance.

The PHA must determine that all initial requirements have been satisfied if a family that has received homeownership assistance wants to move with continued homeownership assistance.

However, the following do not apply:
• The requirement that a family must be a first-time homeowner is not applicable. • The requirement for pre-assistance counseling is not applicable. However, the PHA may require that the family complete additional counseling (before or after moving to a new unit with continued homeownership assistance).

Continued tenant-based assistance for a new unit cannot begin so long as any family member holds title to the prior home. However, when the family or a member of the family is or has been the victim of domestic violence, dating violence, sexual assault, stalking, or human trafficking, and the move is needed to protect the health or safety of the family or family member (or any family member has been the victim of a sexual assault that occurred on the premises during the 90-calendar-day period preceding the family’s request to move), such family or family member may be assisted with continued tenant-based assistance even if they own any title or other interest in the prior home.

The PHA may deny permission to move to a new unit with continued voucher assistance:
• If the PHA has insufficient funding to provide continued 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.
© Copyright 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use.

Page 15 ends

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 and in accordance with its own policy, with the exception of failure to meet obligations under the Family Self-Sufficiency program as prohibited under the alternative requirements set forth in FR Notice 12/29/14.

Homeownership assistance for a family automatically terminates 180 calendar days after the last homeownership assistance payment on behalf of the family. However, a PHA may grant relief from this requirement in those cases where automatic termination would result in extreme hardship for the family.

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 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use.

Page 16 ends

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: Recordkeeping. All aspects of the program involve certain types of recordkeeping. 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 Elevated Blood Lead Level. This part describes the PHA’s responsibilities for reporting, data collection, and record keeping relative to children with elevated 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.

Part IX: Violence Against Women Act (VAWA): Notification, Documentation, Confidentiality. This part contains key terms used in VAWA and describes requirements related to notifying families and owners about their rights and responsibilities under VAWA; requesting documentation from victims of domestic violence, dating violence, sexual assault, stalking, and human trafficking; and maintaining the confidentiality of information obtained from victims.
© Copyright 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use.

Page 16 ends

PART I: ADMINISTRATIVE FEE RESERVE [24 CFR 982.155]
The PHA will maintain administrative fee reserves, or unrestricted net position (UNP) for the program to pay program administrative expenses in excess of administrative fees paid by HUD for a PHA fiscal year. HUD appropriations acts beginning with FFY 2004 have specified that administrative fee funding may be used only for activities related to the provision of HCV assistance, including related development activities. Notice PIH 2012-9 cites two examples of related development activities: unit modification for accessibility purposes and development of project-based voucher units. The notice makes clear that other activities may also qualify as related development activities. Administrative fees that remain in the UNP account from funding provided prior to 2004 may be used for “other housing purposes permitted by state and local law,” in accordance with 24 CFR 982.155(b)(1).

In addition, as specified in Notice PIH 2022-18, PHAs may use administrative fee funding for both administrative and “other expenses” needed to employ strategies and undertake activities beyond regular administrative responsibilities to facilitate the successful leasing and use of housing choice vouchers by families, such as through the use of security deposit assistance and landlord recruitment and incentive payments, among other allowable expenses specified in the notice. PHAs are also permitted to use UNP for these expenses [Notice PIH 2022-18] If a PHA has not adequately administered its HCV program, HUD may prohibit use of funds in the UNP Account and may direct the PHA to use funds in that account to improve administration of the program, for HCV HAP expenses, or to reimburse ineligible expenses in accordance with the regulation at 24 CFR 982.155(b)(3).

HUD requires the PHA Board of Commissioners or other authorized officials to establish the maximum amount that may be charged against the UNP account without specific approval.

PHA Policy
Expenditures from the UNP account will be made in accordance with all applicable federal requirements. Expenditures are approved by HUD and the Board annual budget. © Copyright 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use.

Page 16 ends

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 on the PHA’s website.

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 electronically.
© Copyright 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use.

Page 16 ends

16-II.B. PAYMENT STANDARDS [24 CFR 888.113
The payment standard sets the maximum subsidy payment a family can receive from the PHA each month [24 CFR 888.111]. Payment standards are based on the Small Area fair market rents (SAFMRs) published annually by HUD. SAFMRs are set at a percentile within the rent distribution of standard quality rental housing units in each SAFMR 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 SAFMR area within the PHA’s jurisdiction, and for each unit size within each of the SAFMR areas. For each unit size, the PHA may establish a single payment standard amount for the whole SAFMR 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.

PHA Policy
Payment Standards are based on the SAFMRs.

Updating Payment Standards
When HUD updates its SAFMRs, 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 SAFMR is published, and at other times as determined necessary. The PHA will consider the following factors when determining whether an adjustment should be made to the payment standard schedule, including in determining whether to request an exception payment standard from HUD:

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. © Copyright 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use.

Page 16 ends

Quality of Units Selected: The PHA may 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 may 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 may 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.

Effective dates of changes to payment standard amounts will be determined at time of update. The PHA will always ensure the payment standards will be within the basic range.

Exception Payment Standards [982.503(c)(5), Notice PIH 2018-01, FR Notice 9/27/21] A non-SAFMR PHA may establish an exception payment standard for a zip code area of up to and including 110 percent of the SAFMR determined by HUD for that zip code area. Regardless of the level of the exception payment standard compared to the metropolitan area FMRs (MAFMRs), the PHA must send an email to [email protected] to notify HUD that it has adopted an exception payment standard based on the SAFMR. A PHA that adopts an exception payment standard pursuant to this authority must apply it to the entire ZIP code area, for both its HCV, and if applicable, its PBV program. For the PBV program, this means that the rent to owner may not exceed the new exception payment standard amount, provided the rent is still reasonable.

A PHA that adopts an exception payment standard area must revise its briefing materials to make families aware of the exception payment standard and the area that it covers.

In addition, HUD allows PHAs to establish a HUD-Veterans Affairs Supportive Housing (HUDVASH) exception payment standard. PHAs may go up to but no higher than 120 percent of the FMR or SAFMR specifically for VASH families. PHAs who want to establish a VASH exception payment standard over 120 percent must still request a waiver from HUD (See Section 19-III.E.).

Unit-by-Unit Exceptions [24 CFR 982.503(b), 24 CFR 982.505(d), Notice PIH 2010-26] 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 120 percent of the applicable FMR for the unit size [24 CRF 982.503(b)]. The PHA may request HUD approval © Copyright 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use.

Page 16 ends

for an exception to the payment standard for a particular family if the required amount exceeds 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 (RTA) is submitted. If the adjusted gross rent is above 120 percent of the SAFMR, the request must be submitted to Headquarters for approval. The regulatory waiver process in Public and Indian Housing requires PHAs to first send their request to the local field office; the field office then forwards the waiver request to the appropriate program office at HUD headquarters along with a field office recommendation (See PIH Notice 2009-41).

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 share would otherwise exceed 40 percent of adjusted monthly income; and
The rent for the unit is reasonable.

The unit has the feature/s required to meet the needs of the person with disabilities as noted in the statement from the health care provider where such a statement is necessary.
"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 © Copyright 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use.

Page 16 ends

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.
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 PHA has not included an allowance for air-conditioning in its schedule.

Reasonable Accommodation and Individual Relief
Upon request from a family that includes a person with disabilities, the PHA must approve a utility allowance which is higher than the applicable amount on the utility allowance schedule if a higher utility allowance is needed as a reasonable accommodation to make the program accessible and usable by the family member with a disability [24 CFR 982.517(e)]. See Chapter 2 for policies regarding the request and approval of reasonable accommodations.

Further, the PHA may grant requests for relief from charges in excess of the utility allowance on reasonable grounds, such as special needs of the elderly, ill, or residents with disabilities, or © Copyright 20254 Nan McKay & Associates, Inc.

Unlimited copies may be made for internal use.

Page 16 ends

Santa Monica City CouncilApril 14, 2026

Santa Monica City Council
April 14, 2026