HUD Issues Technical Corrections to HOTMA Implementation Notice

HUD’s Office of Public and Indian Housing (PIH) recently published several technical corrections and to the Housing Choice Voucher (HCV) provisions of the Housing Opportunity Through Modernization Act (HOTMA) it had issued on Jan. 18. The corrections and clarifications are as follows:

• The original notice used the phrase ‘‘50 percent or more’’ to define a controlling interest indicative of PHA ownership. The threshold for control should be ‘‘more than 50 percent.”
• The original notice inadvertently excluded from the list of excepted units those units that have received assistance under Section 201 of the Housing and Community Development Amendments of 1978.
• The original document inadvertently referred to the ‘‘site of the original public housing development’’ instead of ‘‘site of the original development.’’ To avoid any indication that this requirement is applicable only to former public housing units as opposed to all the covered forms of HUD assistance, “original development” is used.
• The original guidance states that ‘‘if the FSS family fails to successfully complete the FSS contract of participation or supportive services objective and consequently is no longer eligible for the supportive services, the family must vacate the unit…and the PHA shall cease paying housing assistance payments on behalf of the ineligible family.’’ HUD was concerned that the sentence may be misinterpreted to imply that a PHA could, under HOTMA, establish a supportive services exception based exclusively on participation in FSS (where participation in the supportive services is required as opposed to voluntary), rather than in combination with another supportive services option where participation in the supportive services is voluntary. Additionally, HUD determined that this provision could be wrongly construed in a way that conflicts with current FSS requirements, which do not allow termination from the housing assistance program for failure to complete the FSS contract of participation. Therefore, HUD corrected the language to remove the ambiguities and better express the requirements of the HOTMA changes.
• The definition of “new construction units” was updated to be both correct and consistent in sections referring to project-based voucher (PBV) assistance.
• HUD stated in the original document that in order to avail itself of the exemption of the competitive award of PBVs, the PHA must “be planning rehabilitation or construction on the project with a minimum of $25,000 per unit in hard costs.” However, because this would not be applicable in a situation where the PHA is replacing a public housing site or property, or a site with PHA-owned or controlled existing housing, several corrections to Section H of the notice have been made.