Summary of the Proposed Discretionary Policy Changes to the Public Housing Authority (PHA) Plan for Fiscal Year 2026-2027
The Annual Plan provides updates for the five-year goals, major program policies, and financial resources for both the Santa Monica Housing Authority (SMHA) rental assistance programs and City initiatives. Additionally, the Annual Plan updates information on housing needs, housing strategies, and other City program information.
This attachment includes the following sections:
• Proposed discretionary policy changes to the Administrative Plan, which governs the administration of SMHA’s voucher programs. • Summary updates from HUD related to the implementation of the Housing Opportunity through Modernization Act of 2016 (HOTMA) PHA Plan Timeline
• The SMHA must provide a proposed PHA Plan for public review and comment for 45 days: January 20, 2026, through March 6, 2026.
• Public comments are received, memorialized, and considered in developing the PHA Plan • Public hearing during the Housing Commission meeting on February 5, 2026 • Housing Authority Board consideration, Public Hearing and approval on March 24, 2026 • Annual Plan submission due to HUD by April 17, 2026
• HUD approval 75 days after submission
• Annual/Administrative Plan becomes effective July 1, 2026 The Administrative Plan includes language changes that are statutory, regulatory, and/or that clarify existing policy. Additionally, the SMHA is providing the first Annual update to the Agency Plan for FY 2025-2030 and discretionary changes to the proposed Administrative Plan for Fiscal Year (FY) 2026-2027.
Section
Page # Proposed Policy Explanation
4-III.C. SELECTION
METHOD
P 4-12
PHA Policy
The PHA will use the following local preferences in order listed:
Tier 1 Preferences (Displaced, Vulnerable Households, and CoC Graduates) • Displaced: Involuntarily displaced applicants are applicants who have or will (within 12 months from the date of verification) be required to vacate housing in the City of Santa Monica as a result of:
A disaster (fire, flood, earthquake, civil disturbance, etc.) that occurred through no fault of the applicant;
Displacement from another federal housing program for reasons beyond their control or because they did not
participate in a home ownership program;
Domestic Violence. Victims of domestic violence/familial abuse, sexual assault, stalking, or human trafficking, who have been displaced in the City of Santa Monica as a result of the victimization. Supporting documentation shall be in accordance with the guidelines in Chapter 16 Section XI. D of this Plan;
DV will now be part of
the Tier 1 - Vulnerable
Households category.
4-III.C. SELECTION
METHOD
P 4-13
PHA Policy
The PHA will use the following local preferences in order listed:
Tier 1 Preferences (Displaced, Vulnerable Households, and CoC Graduates) • Vulnerable Households: The Santa Monica Housing Authority (SMHA) will allocate Tier 1 priority up to 50% of voucher attrition to assist Santa Monica-Based households who are experiencing homelessness, or are at risk of homelessness and/or . This category will also now include Santa Monica-Based victims of domestic violence, familiar abuse, sexual assault, stalking, or human trafficking who became homeless or at risk of homelessness due to the victimization. Eligibility for the Housing Choice Voucher (HCV) program requires individuals or families to be referred by an approved SMHA Partner. These referrals must be screened and It has been
determined that
referrals for domestic
violence survivors
should be made by
agencies already
working with the
household, as they
are best positioned to
assess vulnerability
and determine
eligibility for Tier 1
Vulnerable Family
referral. Connecting
Section
Page # Proposed Policy Explanation
approved by the Santa Monica Housing Authority before being accepted, at which point applicants will receive priority placement on the waitlist.
Additionally, the City of Santa Monica Human Services Division, or a designated representative approved by the Housing Division, may submit referrals on behalf of other partners that have been approved by the City of Santa Monica.
survivors with a
supportive agency
first also ensures
access to a broader
range of services
beyond placement on
the housing waitlist
7A-I.B. OVERVIEW OF
VERIFICATION
REQUIREMENTS
P 7A-7
PHA Policy
Any documents used for verification must be the original (not photocopies) and generally must be dated within 60 120 days of receipt by the PHA. The documents must not be damaged, altered or in any way illegible.
This change is
intended to reduce
the burden on
applicants and
participants by
minimizing repeated
document updates
during the New
Admission and
Recertification
processes.
7A-I.D. THIRDPARTY WRITTEN
AND ORAL
VERIFICATION
P 7A-10
PHA Policy
Third-party documents provided by the family must be dated within 60120 days of receipt by the PHA. the PHA request date.
This change starts the
document validity
period on the date the
documentation is
received rather than
when it is requested,
allowing each
document to remain
valid for a longer
timeframe.
7A-III.J. STUDENT
FINANCIAL
ASSISTANCE
P 7A-33
7A-III.J. STUDENT FINANCIAL ASSISTANCE [24 CFR 5.609(b)(9) as updated for HOTMA Notice PIH 2015-21]
The regulations under HOTMA distinguish between two categories of student financial assistance paid to both full-time and part-time students. Any other grant-in-aid, scholarship, or other assistance amounts an individual receives for the actual covered HOTMA’s updates to
student income rules
streamline
calculations and
ensure that
Section
Page # Proposed Policy Explanation
costs charged by the institute of higher education not otherwise excluded by the federally mandated income exclusions are included [24 CFR 5.609(b)(9)(ii)].
PHA Policy
The PHA will request written third-party verification of both the source and the amount of student financial assistance. Family-provided documents from the educational institution attended by the student will be requested, as well as documents generated by any other person or entity providing such assistance, as reported by the student.
In addition, unless the student’s only source of assistance is assistance under Title IV of the HEA, the PHA will request written verification of the cost of the student’s tuition, books, supplies, room and board, and other required fees and charges to the student from the educational institution.
If the PHA is unable to obtain third-party written verification of the requested information, the PHA will pursue other forms of verification following the verification hierarchy in section 7-I.B.
Any financial assistance, in excess of amounts received for tuition, fees, and other required charges that a person attending an institution of higher education receives under the Higher Education Act of 1965, from private sources, or from an institution of higher education must be considered income unless the student is over the age of 23 with dependent children or is residing with parents who are seeking or receiving HCV assistance [24 CFR 5.609(b)(9) and FR 4/10/06].
For students over the age of 23 with dependent children or students residing with parents who are seeking or receiving HCV assistance, the full amount of student financial assistance is excluded from annual income [24 CFR 5.609(c)(6)]. The full amount of student financial assistance is also excluded for students attending schools that do not qualify as institutions of higher education (as defined in Exhibit 3-2). Excluded amounts are verified only if, without verification, the PHA would not be able to determine whether or to what extent the income is to be excluded (see section 7-III.H).
PHA Policy
For a student subject to having a portion of their student financial assistance included in annual income in accordance with 24 CFR 5.609(b)(9), the PHA will educational
assistance under the
Higher Education Act
is no longer treated as
countable income.
This creates a fairer
process for families,
reduces unnecessary
administrative
burden, and prevents
students from being
penalized for
receiving financial aid.
Section
Page # Proposed Policy Explanation
request written third-party verification of both the source and the amount. Familyprovided documents from the educational institution attended by the student will be requested, as well as documents generated by any other person or entity providing such assistance, as reported by the student.
In addition, the PHA will request written verification of the student’s tuition, fees, and other required charges.
If the PHA is unable to obtain third-party written verification of the requested information, the PHA will pursue other forms of verification following the verification hierarchy in section 7-I.B.
8-II.C. PERIODIC HQS
INSPECTIONS [24 CRF
982.405(b); Notice
PIH 2016-05]
P 8-22
PHA Policy
If an adult cannot be present on the scheduled date, the family must reschedule the appointment prior to the scheduled date. Appointments will only be rescheduled for good cause, or if it is needed as a reasonable accommodation for a person with disabilities.
Good cause is defined as an unavoidable conflict which seriously affects the health, or welfare of the family including but not limited to . hospitalization, urgent medical treatment, a sudden serious illness, or an unexpected personal crisis requiring immediate attention. These situations must be communicated promptly and, when possible, supported by documentation. At its discretion, the PHA may request documentation of the “good cause” prior to rescheduling the appointment. The PHA and family will agree on a new inspection date that generally should take place within five10 business days of the originally scheduled date. The PHA may schedule an inspection more than five10 business days after the original date for good cause.
The policy now
clarifies what
constitutes a valid
reason to cancel or
reschedule an
inspection. The
rescheduling window
was also shortened to
help keep the process
timely and ensure
inspections move
forward as intended.
12-I.D. MANDATORY
TERMINATION OF
ASSISTANCE
P 12-3
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 policy was
clarified to address
situations in which
violations may result
from a known
disability or
circumstances
beyond the family’s
control, and to
establish clear,
Section
Page # Proposed Policy Explanation
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. An affidavit can be provided either by the household’s case manager when the 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.
consistent
documentation
requirements that
support a streamlined
and equitable review
process for all
households.
12-I.D. MANDATORY
TERMINATION OF
ASSISTANCE
P 12-4
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 The policy was revised
to address situations
in which eviction may
result from a behavior
due to known
disability or
circumstances
Section
Page # Proposed Policy Explanation
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.
beyond the family’s
control, and to
establish clear,
consistent
documentation
requirements that
support a streamlined
and equitable review
process for all
households.
12-I.E. MANDATORY
POLICIES AND OTHER
AUTHORIZED
TERMINATIONS
P 12-8
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 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 The policy was
clarified to account
for situations in which
violations may result
from a known
disability or
circumstances
beyond the family’s
control, and to
establish clear,
consistent
documentation
requirements that
support a streamlined
and equitable review
process for all
households.
Section
Page # Proposed Policy Explanation
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 proceed further 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.
16-III.C. INFORMAL
HEARINGS FOR
PARTICIPANTS
P 16-15
PHA Policy
The PHA will also give participant families an opportunity for an informal hearing for:
Any denial of a request for a reasonable accommodation for a person with disabilities (see Chapter 2).
Families participating in the Family Self-Sufficiency (FSS) program, when the PHA withholds the coordination of supportive services or terminates a family’s participation in the FSS program because the PHA determines the FSS family has failed to comply without good cause with the requirements of the FSS Contract of Participation in accordance with the FSS Action Plan [24 CFR 984.303(i)].
This HUD policy
establishes a process
through which
applicants and
participants may
appeal the denial of a
reasonable
accommodation
request.
Santa Monica
Housing Authority
phased out the FSS
program, therefore
this portion of the
policy is not
applicable.
Section
Page # Proposed Policy Explanation
16-IV.B.
REPAYMENT
POLICY
P 16-31
Criminal Prosecution for Program Fraud/Abuse
Local, state or federal criminal prosecution should be considered by the PHA in flagrant cases, if the abuse was committed over several years, the fraud and/or underpayments are substantial and the PHA documents that a family and/or owner willfully intended to misrepresent the truth [HUD OIG Integrity Bulletin, Summer 2015].
PHA Policy
The PHA will consult with the HUD Field Office and regional OIG Special Agent in Charge (SAC) to determine whether it will refer the matter to the state or local district attorney to pursue criminal fraud charges.
The PHA will give strong consideration to referring cases for criminal fraud prosecution when a tenant is suspected of illegally subleasing a subsidized unit for personal financial gain. In making this determination, the PHA will consult with the HUD Field Office and the regional OIG Special Agent in Charge (SAC) to assess whether referral to the state or local district attorney is warranted.
This HUD policy
establishes expanded
authority for public
housing agencies to
pursue enforcement
actions in cases
involving significant
program fraud.
16-IV.B.
REPAYMENT
POLICY
P 16-71
PHA Policy
The PHA will not enter into a repayment agreement with a family if there is already a repayment agreement in place with the family or if the PHA, in consultation with HUD and local law enforcement, determine to pursue criminal charges in connection with the conduct and the amounts owed the amount owed by the family exceeds the federal or state threshold for criminal prosecution, or if the family has entered into a repayment agreement with the PHA in the past 36 months. In the absence of a repayment agreement due to one of these conditions, the family will be required to pay the debt in full within 30 days.
This adds another
reason based on the
new HUD policy under
which PHA will not
enter into a
repayment
agreement.
Income and Subsidy Determinations Updates for Chapter 6A Chapter 6A Income and Subsidy Determinations has undergone significant revisions as mandated by HUD. These changes are reflected in Chapter 6A, pages 6A-1 to 6A-90.
Continuum of Care (COC) Updates for Chapter 18
Chapter 18 Continuum of Care (COC) has undergone significant revisions as mandated by HUD. These changes are reflected in Chapter 18, pages 18-1 to 18-22.
Summary of Administrative Plan Updates
The following chapters have been updated as part of the FY 2026-27 Administrative Plan revision:
• 2 Versions of Chapter 6: Income and Rent Determination (Chapter 6A: Pre-HOTMA and Chapter 6B: HOTMA versions provided) • 2 Versions of Chapter 7: Verification (Chapter 7A: Pre-HOTMA and Chapter 7B: HOTMA versions provided) • 2 Versions of Chapter 8: HQS Inspections (Chapter 8A: Pre-NSPIRE and Chapter 8B: NSPIRE versions provided) • 2 Versions Chapter 11: Reexaminations (Chapter 11A: Pre-HOTMA and Chapter 11B: HOTMA versions provided) The SMHA is committed to a smooth transition and will work to ensure participants are informed of any changes that may impact their housing assistance. If you have questions or need assistance, please contact our office.