[Federal Register Volume 60, Number 15 (Tuesday, January 24, 1995)]
[Notices]
[Pages 4764-4821]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-1718]




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Part VII





Department of Housing and Urban Development





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Office of the Assistant Secretary for Public and Indian Housing



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Annual Factors for Determining Public Housing Agency Administrative 
Fees for the Section 8 Rental Voucher and Rental Certificate Programs; 
Notice

  Federal Register / Vol. 60, No. 15 / Tuesday, January 24, 1995 / 
Notices   
[[Page 4764]] 

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

Office of the Assistant Secretary for Public and Indian Housing
[Docket No. N-95-3859; FR-3830-N-01]


Annual Factors for Determining Public Housing Agency 
Administrative Fees for the Section 8 Rental Voucher and Rental 
Certificate Programs

AGENCY: Office of the Assistant Secretary for Public and Indian 
Housing, HUD.

ACTION: Notice of factors for determining public housing agency and 
Indian housing authority administrative fees for the Section 8 rental 
certificate and rental voucher programs.

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SUMMARY: This Notice announces the annual factors for use in 
determining the on-going administrative fee for housing agencies (HA) 
administering the rental voucher and rental certificate programs during 
Federal Fiscal Year 1995.

EFFECTIVE DATE: HUD will use the procedures in this Notice to approve 
year-end financial statements for housing agency fiscal years ending on 
December 31, 1994; March 31, 1995; June 30, 1995; and September 30, 
1995. Housing agencies also may use these procedures to project earned 
administrative fees in the annual housing agency budget. Housing 
agencies with a fiscal year starting October 1, 1994, and January 1, 
1995, must submit a revised budget to the field office for approval. 
The procedures in this Notice only apply to that portion of the housing 
agency fiscal year that coincides with the Federal FY 1995.

FOR FURTHER INFORMATION CONTACT: Gerald J. Benoit, Director, Operations 
Branch, Rental Assistance Division, Office of Public and Indian 
Housing, Department of Housing and Urban Development, Room 4220, 451 
Seventh Street, SW, Washington, DC 20410-8000, telephone number (202) 
708-0477. Hearing or speech impaired individuals may call HUD's TDD 
number (202) 708-4594. (These numbers are not toll-free.)

SUPPLEMENTARY INFORMATION:

Paperwork Reduction Act Statement

    The information collection requirements contained in this notice 
have been approved by the Office of Management and Budget (OMB), under 
section 3504(h) of the Paperwork Reduction Act of 1980 (44 U.S.C. 3501-
3520), and have been assigned OMB control number 2577-0149.

I. Purpose and Substantive Description

    (a) The system that HUD used to determine administrative fees 
before FY 1995 had three different rates that were applied to the 
Section 8 existing housing fair market rents. The rate used for rental 
vouchers funded before FY 1989 was 6.5 percent and for rental 
certificates funded before FY 1989 was 7.65 percent. These rates were 
also used for non-incremental rental vouchers and certificates funded 
after FY 1988. The rate used for incremental rental vouchers and 
certificates funded after FY 1988 was 8.2 percent. The rate for renewal 
funding increments was the same as the rate initially used for the 
expired funding increment.
    Housing agencies believe that the HUD method of tying fees to fair 
market rents does not reflect the actual costs of administering these 
programs. The problems associated with tying fees to fair market rents 
were most evident in FY 1994 when the fair market rents for most of the 
country were decreased based on the decennial census. As a result, HUD 
sought and Congress approved, for FY 1994 only, a ``hold-harmless'' 
provision so that housing agencies would not suffer a reduction in 
income and thereby jeopardize their ability to properly administer 
these programs.
    (b) Section 8(q) of the U.S. Housing Act of 1937 (42 U.S.C. 
1437f(q)) requires the Secretary to establish a fee for the housing 
agency costs incurred in administering housing assistance under Section 
8(b) (rental certificate program) and Section 8(o) (rental voucher 
program) to the extent provided in appropriations. Section 8(q) is only 
applicable when so provided in appropriations, and applies only to 
incremental units funded in FY 1989 and subsequent years. For rental 
vouchers and certificates subject to Section 8(q), Section 8(q) 
provides that the on-going fee for each month a dwelling unit is 
covered by a housing assistance contract is 8.2 percent of the current 
fair market rent for a two-bedroom dwelling unit subject to 
appropriations.
    (c) All Appropriations Acts, beginning with FY 1989, required that 
HUD reimburse housing agencies using the formula in Section 8(q) for 
incremental rental vouchers and certificates provided from those 
appropriations. The law does not specify the amount of fees for units 
made available through Appropriations Acts for FY 1988 and earlier or 
for non-incremental rental vouchers or certificates provided in FY 1989 
and subsequent appropriations.
    HUD has determined that it is in the best interest of the rental 
voucher and certificate programs to continue to reimburse housing 
agencies at a level sufficient to maintain the integrity of these 
programs. In FY 1995, HUD will reimburse housing agencies for 
administrative expenses attributable to all incremental and non-
incremental rental vouchers and certificates made available from FY 
1989 and subsequent appropriations using the formula in Section 8(q). 
HUD will reimburse housing agencies for pre-FY 1989 units using a new 
method described below using a fee base developed by HUD, and the 
resulting per unit fee amounts subsequently will be updated annually 
using wage and salary data.

II. Supersedure

    On September 26, 1994, HUD issued an administrative Notice (PIH-94-
68) establishing the procedures for calculating fees under the rental 
voucher and certificate programs. On September 28, 1994, the VA-HUD and 
Independent Agencies Appropriations Act (Pub.L. 103-327) was signed; as 
enacted, the Appropriations Act required HUD to pay administrative fees 
for FY 1995 incremental rental vouchers and certificates using the 8.2 
percent specified in Section 8(q) of the U.S. Housing Act of 1937. The 
provisions of the HUD Notice PIH-94-68 are superseded for unit months 
commencing October 1, 1994. Instead, the provisions of this Notice 
apply.

III. Method to Determine Per Unit On-Going Administrative Fee

(a) Method for Pre-FY 1989 Fees

    A housing agency is paid an on-going administrative fee for each 
month for which a dwelling unit is covered by a housing assistance 
contract. Under the revised system, the on-going administrative fee for 
pre-FY 1989 units is calculated using 8.2 percent of a ``base amount'' 
for the first 600 rental vouchers and certificates in the housing 
agency's program and 7.79 percent of the base amount for each 
additional rental voucher and certificate above 600. The base amount is 
subject to a floor and ceiling. The 600 units are the combined total of 
the housing agency's rental voucher and certificate programs and not 
600 for each program.
    The ``base amount'' used by HUD is the higher of (a) the FY 1993 
fair market rent for a two-bedroom unit in the housing agency's market 
area, or (b) the FY 1994 fair market rent for a two-bedroom unit, but 
not more than 103.5 percent of the FY 1993 fair market rent. HUD 
established a maximum of $811 [[Page 4765]] and a minimum of $428 for 
the base amount used to calculate housing agency administrative fees.
    To determine these maximum and minimum base amounts, HUD examined 
available information on administrative expenses and reimbursements for 
a nationally representative sample of all housing agencies, and 
established a level of reimbursement to assure that all housing 
agencies could cover reasonable expenses and generate a modest surplus. 
In a recent report to Congress on housing agency administrative fees, 
HUD indicated that data collected by HUD and others over the last 
decade show distinct differences among various types of housing 
agencies in their ability to cover administrative costs. The use of a 
minimum and a maximum base amount, in combination with the other 
features of the FY 1995 method of reimbursement, are designed to 
address this inequity.
    This ``base amount'' concept builds on the practices used in FY 
1994 based on Section 11 of the HUD Demonstration Act of 1993 (Pub.L. 
103-120, approved October 27, 1993). The base amount is used only to 
determine the monthly per unit fee amount for Federal FY 1995. The 
monthly per unit fee base amounts for pre-FY 1989 rental vouchers and 
certificates will be updated annually using wage and salary data.

(b) Published Fee Amounts

    HUD has attached a schedule of monthly per unit fee amounts for use 
by HUD and housing agencies when preparing and approving housing 
agencies' budgets and fiscal year-end financial statements. The tables 
are organized by the HUD established fair market rent areas and show 
the monthly fee amounts a housing agency will earn for each unit under 
a housing assistance contract on the first day of the applicable month. 
In determining unit months, the same lease-up rate will be applied to 
pre-FY 1989 rental vouchers and certificates and FY 1989 and subsequent 
rental vouchers and certificates.
(1) Column A
    The amount in this column is the monthly per unit fee amount for up 
to 7,200 unit months in Federal FY 1995 for rental vouchers and 
certificates in the housing agency's program from FY 1988 and prior 
year appropriations. (This amount was developed by multiplying the fee 
base established by .082.) The monthly per unit fee amount shown on the 
schedule will be used to reimburse a housing agency for up to 7,200 
unit months in Federal FY 1995 for rental vouchers and certificates in 
its combined program. The reimbursement is computed by multiplying the 
number of unit months the rental vouchers or certificates in the 
housing agency programs were under a housing assistance contract during 
Federal FY 1995 by the per unit amount in column A. The maximum number 
of unit months in Federal FY 1995 for the housing agency's fiscal year 
that this revised procedure is implemented depends on the housing 
agency fiscal year end:


Dec. 31 HA...................  1,800 unit months................  (7,200  x  .25 [3 mos.] of FFY 1995).         
Mar. 31 HA...................  3,600 unit months................  ..............................................
June 30 HA...................  5,400 unit months................  ..............................................
Sept. 30 HA..................  7,200 unit months................  ..............................................
                                                                                                                

(2) Column B
    The amount in this column is the monthly per unit fee for any unit 
months in Federal FY 1995 in excess of the amount used in (b)(1) for 
rental vouchers and certificates made available from FY 1988 and prior 
year appropriations. This amount was developed by multiplying a fee 
base established by HUD by .0779 (95 percent of .082). The monthly per 
unit fee amount shown on the schedule will be used to reimburse housing 
agencies for any pre-FY 1989 rental vouchers and certificates under 
housing assistance contract in Federal FY 1995 in excess of the number 
of unit months for which the fee is calculated from column A. The 
monthly per unit fee in column B will be multiplied by the number of 
unit months that rental vouchers and certificates under housing 
assistance contract exceeds unit months for which a fee is calculated 
from column A.
(3) Column C
    The amount in this column is the monthly per unit fee for rental 
vouchers and certificates made available from FY 1989 and subsequent 
appropriations. This amount was developed by multiplying the most 
recent two-bedroom fair market rent by .082 (8.2 percent) as required 
by law. The amount shown on the schedule will be used to reimburse 
housing agencies for all unit months for which FY 1989 and subsequent 
incremental and non-incremental rental vouchers and certificates were 
under housing assistance contract by multiplying the number of unit 
months under housing assistance contract by the per unit amount shown 
in column C.

(c) Future Year Publication Date

    HUD intends to publish an annual Notice in the Federal Register 
establishing the monthly per unit fee amounts for use in determining 
the on-going administrative fees for housing agencies operating the 
rental voucher and certificate programs in each metropolitan and each 
non-metropolitan fair market rent area for that Federal fiscal year. 
The annual change in the per-unit-month fee amounts for the pre-FY 1989 
rental vouchers and certificates will be based on changes in wage data 
or other objectively measurable data, as determined by HUD, that 
reflect the costs of administering the program. As long as Section 8(q) 
is in effect, the annual change in the monthly per unit fee amounts for 
the FY 1989 and subsequent incremental and non-incremental rental 
vouchers and certificates will be calculated by multiplying the two-
bedroom fair market rent by 8.2 percent (.082).
    The amounts shown on the attached schedule do not reflect the 
authority given to HUD to increase the fee if necessary to reflect the 
higher costs of administering small programs and programs operating 
over large geographic areas and for extraordinary expenses because of 
difficulties some categories of families are having in finding 
appropriate housing. Furthermore, the amounts shown do not include 
preliminary fees. HUD may also approve higher fees if necessary to 
reflect the higher costs of administering the family self-sufficiency 
program under section 23 of the U.S. Housing Act of 1937. Housing 
agency requests for administrative fees and special fees as well as 
higher on-going administrative fees will continue to be considered by 
HUD using the procedures currently in place for providing increased 
fees.
    Accordingly, the Department publishes these annual factors for 
determining housing agency administrative fees under the rental voucher 
and rental certificate programs as set forth on the following schedule:

    [[Page 4766]] Dated: January 13, 1995.
Joseph Shuldiner,
Assistant Secretary for Public and Indian Housing.

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[FR Doc. 95-1718 Filed 1-23-95; 8:45 am]
BILLING CODE 4210-33-C