[Federal Register: March 20, 2006 (Volume 71, Number 53)]
[Notices]
[Page 14083-14087]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr20mr06-86]
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Part III
Department of Agriculture
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Department of Housing and Urban Development
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USDA Voucher Program; Notice
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DEPARTMENT OF AGRICULTURE
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
[Docket No. FR-5021-N-01]
USDA Voucher Program
AGENCY: Office of Housing and Community Facilities Programs, USDA;
Office of the Assistant Secretary for Public and Indian Housing, HUD.
ACTION: Notice.
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SUMMARY: This notice informs the public that the United States
Department of Agriculture (USDA) is establishing a demonstration USDA
Voucher Program, as authorized under section 542 of the Housing Act of
1949 (without regard to section 542(b)), to be administered by the
United States Department of Housing and Urban Development (HUD),
pursuant to an Inter Agency Agreement (IAA) between the two
Departments, executed on March 1, 2006. This notice informs the public
that USDA, acting under the IAA with HUD, shall make up to $16 million
available for this purpose, as appropriated under the Agriculture,
Rural Development, Food and Drug Administration, and Related Agencies
Appropriations Act, 2006. The notice also sets forth the policies and
procedures for use of these vouchers.
DATES: Effective Date: March 20, 2006.
FOR FURTHER INFORMATION CONTACT: Laurence Anderson, Acting Deputy
Administrator, Multi-family Housing, Rural Development, United States
Department of Agriculture, 1400 Independence Avenue, SW., Washington,
DC, 20250 or David A. Vargas, Director, Office of Housing Voucher
Programs, Department of Housing and Urban Development, 451 Seventh
Street, SW., Room 4228, Washington, DC 20410-5000. Telephone number
(202) 708-2815 (this is not a toll-free telephone number). Persons with
hearing or speech impairments may access this number via TTY by calling
the toll-free Federal Information Relay Service at 800-877-8339.
SUPPLEMENTARY INFORMATION:
I. Background
The Agriculture, Rural Development, Food and Drug Administration,
and Related Agencies Appropriations Act, 2006 (Pub. L. 109-97, approved
November 10, 2005) (FY2006 Appropriations Act), appropriates
approximately $16 million to the USDA for the USDA Voucher Program as
authorized under section 542 of the Housing Act of 1949 (42 U.S.C. 1471
et seq.) (without regard to section 542(b)).
The FY 2006 Appropriations Act provides that the Secretary of the
Department of Agriculture shall carry out a USDA voucher program as
follows:
That such vouchers shall be available to any low-income family
(including those not receiving rental assistance) residing in a
property financed with a section 515 loan which has been prepaid
after September 30, 2005: Provided further, [t]hat the amount of the
voucher shall be the difference between comparable market rent for a
section 515 unit and the tenant paid rent for such unit: Provided
further, [t]hat funds made available for such vouchers shall be
subject to the availability of annual appropriations: Provided
further, [t]hat the Secretary shall, to the maximum extent
practicable, administer such vouchers with current regulations and
administrative guidance applicable for section 8 housing vouchers
administered by the Secretary of the Department of Housing and Urban
Development (including the ability to pay administrative costs
related to delivery of the voucher funds).
In order to expedite the provision of voucher assistance to
eligible families impacted by an owner's decision to prepay the section
515 loan and convert the property to market-rate housing, USDA and HUD
entered into an IAA whereby HUD will: (1) Administer, on behalf of the
USDA, all or a portion of the USDA voucher assistance appropriated for
this purpose, (2) provide USDA voucher assistance to public housing
agencies (PHAs), and (3) ensure that USDA voucher assistance is
administered to the maximum extent practicable in accordance with HUD's
Housing Choice Voucher Program regulations at 24 CFR part 982 and
guidance, and consistent with the formula established by the FY2006
Appropriations Act.
This notice outlines the process for providing voucher assistance
to the eligible impacted families when an owner prepays a section 515
loan after September 30, 2005. Unless expressly stated in this notice
or in subsequent directives, the requirements of the regulations at 24
CFR part 982 for the Housing Choice Voucher Program are applicable to
the USDA vouchers provided under this notice. USDA vouchers authorized
by the FY 2006 Appropriations Act and section 542 are exclusively
tenant-based rental assistance. Consequently, the regulations at 24 CFR
part 983 and all other directives pertaining to the project-based
voucher program do not apply, nor do the homeownership voucher
regulations at 24 CFR 982.625 through 982.643.
II. USDA Voucher Program Procedures
This section sets forth the design features of the USDA Voucher
Program, including the eligibility of families, the inspection of the
units, and the calculation of the subsidy amount.
USDA vouchers under this notice are administered in accordance with
the Housing Choice Voucher Program regulations set forth at 24 CFR part
982 unless otherwise noted by this notice or subsequent program
requirements and guidance. In the Housing Choice Voucher Program, HUD
pays monthly rental subsidies so eligible families can afford decent,
safe, and sanitary housing. The program is generally administered by
state or local governmental entities called Public Housing Agencies
(PHAs). HUD provides housing assistance funds to the PHA. HUD also
provides funds for PHA administration of the program.
The basic structure of the USDA voucher program is the same as the
Housing Choice Voucher Program. Families select and lease units that
meet program housing quality standards. If the PHA approves a family's
unit and tenancy, the PHA contracts with the owner to make rental
subsidy payments (housing assistance payments) directly to the owner on
behalf of the family on a monthly basis. The family enters into a lease
with the owner and pays the family rent to the owner in accordance with
the lease. The housing assistance payments (HAP) contract between the
PHA and the owner only covers a single unit and a specific assisted
family. If the family moves out of the leased unit, the HAP contract
with the owner terminates. Unless expressly noted below or in
subsequent directives, all regulatory requirements, including
compliance with the Fair Housing Act and other civil rights related
requirements, and directives regarding the housing choice voucher
tenant-based program are applicable to the USDA vouchers. The PHA's
local discretionary policies adopted in the PHA administrative plan
apply to USDA vouchers administered by the PHA, unless such local
policy conflicts with the requirements of the USDA voucher program
outlined below. The USDA voucher funding remains separate and distinct
from the PHA's regular voucher program in terms of the source and use
of the funding. The PHA may only provide USDA voucher assistance to
eligible low-income families that were residing in section 515
properties on the date of the owner's prepayment of the loan to the
extent that the PHA has funds available. The PHA may not use funds from
the USDA voucher program
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to assist families applying under its regular voucher program.
Furthermore, PHAs may not use HUD's regular voucher funding to assist
families applying to USDA's voucher program. The PHA is required to
maintain records that allow for the easy identification of families
receiving USDA vouchers. The PHA must report monthly leasing and
expenditures for such families separately, as will be required under
the Voucher Management System (VMS).
1. Family Eligibility
In order to be eligible for a USDA voucher under this notice, a
family must be residing in the section 515 project on the date of the
prepayment of the section 515 loan. Furthermore, the date of the
prepayment must be after September 30, 2005, and the voucher funds
obligated to the family before October 1, 2006. USDA will determine if
the family is a low-income family on the date of the prepayment and, if
the family wants to participate in the USDA voucher program, USDA will
provide such determination to HUD. In turn, HUD will provide this
information to the PHA that will administer the USDA vouchers. A low-
income family is a family whose annual income does not exceed 80
percent of the median income for the area. If USDA makes a
determination that the tenant is ineligible based on income, USDA will
provide the administrative appeal rights.
A family currently assisted under a Section 8 project-based
contract on the date of the section 515 loan prepayment also qualifies
for an enhanced voucher under section 8(t) of the United States Housing
Act of 1937 (42 U.S.C. 1437 et seq.) on the date that the owner opts-
out of or does not renew the section 8 project-based contract. If the
Section 8 project-based contract ends on the same day as the date of
the prepayment, a family receiving Section 8 project-based assistance
will inform USDA if the family chooses to either receive an enhanced
voucher under section 8(t) or a USDA voucher.
A family that is already receiving enhanced voucher or regular
voucher assistance on the date of the section 515 loan prepayment (for
example, a family previously assisted under a Section 8 project-based
contract where the contract expired and the owner chose not to renew
prior to the loan prepayment) may continue to receive enhanced or
regular voucher assistance or may choose to be converted to USDA
voucher assistance under this notice.
Once the family has chosen to participate in the USDA voucher
program instead of in the HUD voucher program, the family may not opt
to switch forms of assistance.
Tenants receiving USDA rental assistance payments on the date of
prepayment who decline a USDA voucher and move to another USDA financed
multi-family housing complex may request that USDA transfer their
rental assistance payments to the new project.
By agreeing to administer the USDA vouchers, the PHA is not
relinquishing its authority to screen potentially eligible families or
deny assistance on any grounds allowed under 24 CFR 982.552 and
982.553. The PHA must provide a family with an opportunity for an
informal review if it denies the family admission to the USDA voucher
program in accordance with 24 CFR 982.552 and 982.553. While the
decision to deny assistance rests with the PHA, PHAs are encouraged to
provide an otherwise eligible family with the opportunity to enter into
a repayment agreement if the sole reason for the denial is that the
family owes the PHA or another PHA rent or other amounts in connection
with public housing or Section 8.
A family provided with a USDA voucher is not admitted to the PHA's
regular voucher program and is not subject to local preferences or
waiting list requirements. Families provided with USDA voucher
assistance are not subject to the income targeting requirements of the
tenant-based voucher program at 24 CFR 982.201(e)(2), and their
admission is not counted in determining whether the PHA is complying
with the income targeting requirements.
2. Initial Lease Term
The initial lease term must be for one year.
3. Inspection of Units and Unit Approval
Housing Choice Voucher Program housing quality standard (HQS)
requirements apply to the USDA voucher program.
The PHA must inspect the unit and ensure that the unit meets the
housing quality standards of the program at 24 CFR 982.401. Under no
circumstances may the PHA make USDA voucher rental payments for any
period of time prior to the date that the PHA physically inspects the
unit and determines the unit meets the housing quality standards. The
PHA may not make any exceptions to the normal housing quality standards
used by the PHA and must conduct a complete HQS inspection of the unit.
Upon notification of a prepayment by USDA, HUD will determine if
there is a PHA that has jurisdiction and that is willing and able to
administer the USDA vouchers. HUD will provide the necessary funding to
the selected PHA. Before approving a family's assisted tenancy or
executing a Housing Assistance Payments Contract, the PHA must
determine that the following conditions are met: (1) The unit is
eligible; (2) the unit has been inspected by the PHA and passes the
housing quality standards inspection; and (3) the lease includes the
HUD tenancy addendum.
Once these conditions are met, the PHA may approve the unit for
leasing. While the PHA must use its best efforts to execute the HAP
contract on behalf of the family before the beginning of the lease
term, the HAP contract may be executed up to 60 calendar days after the
beginning of the lease term (see 24 CFR 982.305(c)). If the HAP
contract is executed during this period, the PHA will pay retroactive
housing assistance payments to cover the portion of the approved lease
term before execution of the HAP contract. However, under no
circumstances may the PHA make payments to the owner before the HAP
contract is executed. Furthermore, any HAP contract executed after the
60-day period is void and the PHA may not pay any housing assistance
payment to the owner for that period. If 60 days have passed from the
beginning of the approved lease term, the PHA must re-approve the unit
and the family and owner must enter into a new lease agreement in order
for USDA voucher rental payments to commence on behalf of the family.
In establishing the effective date of the voucher HAP contracts,
the PHA may not execute a housing voucher contract that is effective
prior to the section 515 loan prepayment.
4. Subsidy Calculations for USDA Vouchers
The monthly housing assistance payment for the USDA voucher family
for the initial year of assistance is the difference between comparable
market rent for the family's former section 515 unit and the tenant
contribution on the date of the prepayment. USDA will determine the
voucher amount and provide the amount to HUD. The tenant can appeal
USDA's determination of the voucher amount through USDA's
administrative appeal process. Since the USDA voucher amount will be
based on the comparable market rent, the voucher amount will never
exceed the comparable market rent at the time of prepayment for the
tenant's unit if the
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tenant chooses to stay in-place. Also, in no event may the USDA voucher
subsidy payment exceed the actual tenant lease rent. The tenant is
required to notify USDA directly if the tenant's income increases above
the income amount stated in the tenant's letter. USDA will then
determine whether the tenant still qualifies as a low income tenant. If
not, the tenant will no longer be eligible to participate in the
program; however, the tenant will be given the opportunity to appeal
this determination through USDA's appeal process. The PHA must
terminate the family's participation in the USDA voucher program when
notified to do so by USDA.
5. Mobility and Portability of USDA Vouchers
An eligible family who is issued a USDA voucher may elect to use
the assistance in the same project or may choose to move from the
property. Upon issuance of the voucher, the family also may move
outside of the jurisdiction of the administering PHA. The provisions of
24 CFR 925.355 do not apply.
If the PHA with jurisdiction over the area to which the family
wishes to move is unwilling to administer the USDA voucher, USDA will
administer the assistance directly in the jurisdiction to which the
family wishes to move.
The initial search period (i.e., term) of the voucher must be at
least 60 calendar days. At its discretion, the PHA may grant a family
one or more extensions of the initial search period of up to an
additional 60 days. If the family needs and requests an extension of
the initial USDA voucher search period as a reasonable accommodation to
make the program accessible to a family member who is a person with
disabilities, the PHA must extend the voucher search period. The
maximum voucher search period for any family participating in the USDA
voucher program is 120 days. The PHA may not provide for the suspension
of the initial or any extended search period of the voucher.
6. Term of Funding for USDA Vouchers
It is anticipated that this USDA voucher program will provide
voucher assistance for one year, subject to the availability of
appropriations to the USDA and transfer of such funding to HUD. At such
time that the last USDA voucher Annual Contributions Contract (ACC)
funding increment expires, HUD will recall any unspent USDA voucher
funding from the PHA.
7. Applicability of Other Requirements
(a) In general, the following provisions of 24 CFR part 982 do not
apply to assistance under the USDA voucher program:
(i) Any provisions concerning the reasonableness of the rent and
PHA determination of the reasonableness of the rent.
(ii) Any provisions concerning the absorption of the family by the
receiving PHA under the portability procedures.
(iii) Any provisions related to the term of the lease or a
participant family's subsequent move with continued assistance.
(vi) Any provisions related to the verification and calculation of
family income, the use of the payment standard, and the calculation of
the housing assistance payment.
(b) The following provisions of 24 CFR part 982 do not apply to the
USDA voucher program:
(i) Sec. 982.1 Programs: purpose and structure.
(ii) Sec. 982.101 Allocation of funding.
(iii) Sec. 982.102 Allocation of budget authority for renewal of
expiring consolidated ACC funding increments.
(iv) Sec. 982.160 HUD determination to administer a local program.
(v) Sec. 982.201 Eligibility and targeting.
(vi) Sec. 982.202 How applicants are selected: General
Requirements.
(vii) Sec. 982.204 Waiting list: Administration of waiting list.
(viii) Sec. 982.205 Waiting list: Different programs.
(ix) Sec. 982.206 Waiting list: Opening and closing; public
notice.
(x) Sec. 982.207 Waiting list: Local preferences in admission to
program.
(xi) Sec. 982.303 Term of Voucher.
(xii) Sec. 982.314 Move with continued tenant-based assistance.
(xiii) Sec. 982.317 Lease-purchase agreements.
(xiv) 982.353 Where family can lease a unit with tenant-based
assistance.
(xv) Sec. 982.455 Automatic termination of HAP contract.
(xvi) Subpart K Rent and Housing Assistance Payment (with the
exception of Sec. 982.521).
(xvii) Subpart M and the regulations of Sec. Sec. 982.601 through
982.643.
III. The Funding Process
This section sets forth the process for providing allocations of
vouchers to PHAs to prevent the displacement of eligible low-income
families who are impacted by an owner's decision to prepay the Section
515 loan and convert the property to market-rate housing. This section
describes the funding process, the calculation of the initial budget
authority, and the special fee and on-going administrative fee that
will be provided to the PHA to cover the costs of administering the
USDA voucher on behalf of the eligible families.
USDA is responsible for informing the tenants of the affected
property of the prepayment and that the tenants may be eligible for
USDA voucher assistance as a result.
The Director of the Office of Public Housing in the HUD field
office will determine the appropriate PHA to administer the USDA
voucher assistance and will invite the PHA to administer the USDA
vouchers. If there is no PHA able or willing to administer the rural
housing vouchers, USDA will administer the USDA voucher assistance
directly. Upon PHA acceptance of the invitation, the HUD field office
shall provide the PHA with the information on the project. The HUD
field office will identify the PHA to the HUD Housing Voucher Finance
Division. USDA shall work with both the HUD field office and the PHA to
ensure that the PHA has timely access to the project, the families, and
any relevant records that will assist the PHA in expediting the
determination of family eligibility and the issuance of vouchers.
HUD Headquarters will calculate the budget authority as described
below and assign the budget authority for the USDA voucher assistance
to the Financial Management Center (FMC). The HUD field office shall
transmit the approval letter to the PHA with a copy to the FMC. Upon
receiving the approval letter from the HUD field office and the budget
authority from HUD Headquarters, the FMC shall reserve and contract the
USDA voucher funds based on the amount of the voucher provided the
families by USDA, the ongoing and administrative fee determined by HUD,
and the one-time special fee of $250 per unit. The FMC will then
prepare and send ACC documents and the ACC transmittal letter to the
PHA with a copy of the letter to the HUD field office.
The PHA will determine family eligibility (except for income
eligibility) and issue vouchers. The family will decide whether to stay
in place or move. Upon selecting a unit, the family must submit the
request for tenancy approval to the PHA, at which time the PHA will
inspect the unit. Once the unit is approved, the PHA shall execute the
HAP contract with the owner.
After completing the initial lease-up of units, the PHA shall
determine if the actual HAP costs will exceed the initial funding
amount provided under the funding increment. On the rare occasion such
an adjustment is necessary, the PHA must immediately contact the
applicable HUD financial analyst at the FMC and provide a spreadsheet
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demonstrating the actual costs of the vouchers.
IV. On-going Administrative Fee and Special Fee
HUD will provide the PHA with a fee for the on-going administration
of the USDA voucher out of the USDA appropriation. The fee will be
calculated in the same manner as the administrative fee for units the
PHA receives under the regular housing voucher program. The
administrative fee is calculated by multiplying the established per
unit cost administrative fee for the PHA's housing voucher program by
the number of families residing in the section 515 project on the
effective date of the prepayment multiplied by 12 months.
In order to avoid or at least minimize any adverse impact of the
section 515 loan prepayment on the affected families, the administering
PHA must complete a number of tasks within a relatively short amount of
time. These tasks include completing and submitting the funding
application; determining each individual family's eligibility; and
conducting housing quality standards inspections on potential units.
Depending on the number of residents affected by the action, PHAs
may have to utilize additional staff, staff time, and PHA resources to
promptly process and assist all eligible families. Given the time
sensitive nature of the issuance of USDA vouchers and the leasing of
units by eligible families, subject to the availability of funds, PHAs
will receive a one-time special fee in recognition of the additional
costs associated with the administration of these vouchers. The amount
of the fee is $250 per unit for the total number of occupied units on
the effective date of the prepayment.
V. Findings and Certifications
Environmental Impact
A Finding of No Significant Impact with respect to the environment
was made in accordance with HUD regulations at 24 CFR part 50, which
implement section 102(2)(C) of the National Environmental Policy Act of
1969 (42 U.S.C. 4332). This Finding of No Significant Impact is
available for public inspection between the hours of 8 a.m. and 5 p.m.
weekdays in the Office of Regulations, Office of General Counsel, Room
10276, Department of Housing and Urban Development, 451 Seventh Street,
SW., Washington, DC 20410. Due to security measures at the HUD
Headquarters building, please schedule an appointment to review the
public comments by calling the Regulations Division at (202) 708-3055
(this is not a toll-free number). Under 24 CFR 50.19(b)(3), (5) and
(11), activities assisted under this notice are categorically excluded
from environmental review under the National Environmental Policy Act
of 1969 and are not subject to compliance with related environmental
laws and authorities.
Paperwork Reduction Act
The information collection requirements contained in this document
are those of the Housing Choice Voucher Program, which have been
approved by the Office of Management and Budget (OMB) under the
Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520) and assigned OMB
control number 2577-0169. In accordance with the Paperwork Reduction
Act, HUD may not conduct or sponsor, and a person is not required to
respond to, a collection of information unless the collection displays
a currently valid OMB control number.
Dated: March 14, 2006.
Orlando J. Cabrera,
Assistant Secretary for Public and Indian Housing.
Russell T. Davis,
Administrator, Housing and Community Facilities Programs, U.S.
Department of Agriculture.
[FR Doc. 06-2660 Filed 3-15-06; 3:17 pm]
BILLING CODE 4210-67-P