[Federal Register Volume 80, Number 9 (Wednesday, January 14, 2015)]
[Notices]
[Pages 1930-1933]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-00353]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-5654-N-02]


Section 8 Housing Assistance Programs Proposed Management and 
Occupancy Review Schedule

AGENCY: Office of the Assistant Secretary for Housing--Federal Housing 
Commissioner.

ACTION: Notice.

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SUMMARY: Through this notice, FHA solicits comment from interested 
members of the public on HUD's proposed Management and Occupancy Review 
(MOR) schedule for the seven project-based Section 8 programs 
administered by the Office of Multifamily Housing. This proposed 
schedule will reduce the frequency of unnecessary MORs, thereby 
minimizing interruptions in property operations created by onsite 
reviews, preserving staff time, and reducing costs. The proposed 
schedule ties the project's annual MOR rating with HUD's new

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risk-based asset management model rating to determine the frequency of 
a project's MOR. This proposed schedule is being published for comment 
concurrently with a proposed rule, found elsewhere in today's Federal 
Register, proposing to amend the program regulations to follow this MOR 
schedule or any subsequent MOR schedule published by HUD in the Federal 
Register.

DATES: Comment Due Date. March 16, 2015.

ADDRESSES: Interested persons are invited to submit comments regarding 
this rule to the Regulations Division, Office of General Counsel, 451 
7th Street SW., Room 10276, Department of Housing and Urban 
Development, Washington, DC 20410-0500. Communications must refer to 
the above docket number and title. There are two methods for submitting 
public comments. All submissions must refer to the above docket number 
and title.
    1. Submission of Comments by Mail. Comments may be submitted by 
mail to the Regulations Division, Office of General Counsel, Department 
of Housing and Urban Development, 451 7th Street SW., Room 10276, 
Washington, DC 20410-0500.
    2. Electronic Submission of Comments. Interested persons may submit 
comments electronically through the Federal eRulemaking Portal at 
www.regulations.gov. HUD strongly encourages commenters to submit 
comments electronically. Electronic submission of comments allows the 
commenter maximum time to prepare and submit comments, ensures timely 
receipt by HUD, and enables HUD to make them immediately available to 
the public. Comments submitted electronically through the 
www.regulations.gov Web site can be viewed by other commenters and 
interested members of the public. Commenters should follow the 
instructions provided on that site to submit comments electronically.

    Note: To receive consideration as public comments, comments must 
be submitted through one of the two methods specified above. Again, 
all submissions must refer to the docket number and title of the 
rule.

    No Facsimile Comments. Facsimile (FAX) comments are not acceptable.
    Public Inspection of Public Comments. All properly submitted 
comments and communications submitted to HUD will be available for 
public inspection and copying between 8 a.m. and 5 p.m. Eastern Time 
weekdays at the above address. Due to security measures at the HUD 
Headquarters building, an advance appointment to review the public 
comments must be scheduled by calling the Regulations Division at 202-
708-3055 (this is not a toll-free number). Individuals with speech or 
hearing impairments may access this number through TTY by calling the 
Federal Relay Service at 800-877-8339. Copies of all comments submitted 
are available for inspection and downloading at www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: For information about management and 
occupancy reviews contact Lauryn Alleva, Program Administration Office, 
Office of Housing, Department of Housing and Urban Development, 451 7th 
Street SW., Washington, DC 20410-7000; telephone number 202-708-3730 
(this is not a toll-free number). Hearing- and speech-impaired persons 
may access these numbers through TTY by calling the Federal Relay 
Service at 800-877-8339 (this is a toll-free number).

SUPPLEMENTARY INFORMATION:

I. Background

    Section 8 of the United States Housing Act of 1937 (42 U.S.C. 
1437f) authorizes one of HUD's primary programs for providing rental 
housing assistance (Section 8). The purpose of Section 8 is to provide 
low-income families with decent, safe, and sanitary rental housing. 
There are seven project-based Section 8 Housing Assistance Payments 
(HAP) programs administered by the Office of Multifamily Housing: the 
HAP program for New Construction (24 CFR part 880) and the HAP program 
for Substantial Rehabilitation (24 CFR part 881), which provide rental 
assistance in connection with the development of newly constructed or 
substantially rehabilitated privately owned rental housing; the HAP 
Program for State Housing Agencies (24 CFR part 883); the HAP program 
for New Construction financed under Section 515 of the Housing Act of 
1949 (24 CFR part 884), which applies to U.S. Department of Agriculture 
rural rental housing projects; the Loan Management Set Aside Program 
(24 CFR part 886, subpart A), which provides rental subsidies to HUD-
insured or HUD-held multifamily properties experiencing immediate or 
potential financial difficulties; the Housing Assistance Program for 
the Disposition of HUD-Owned Projects (24 CFR part 886, subpart C), 
which provides Section 8 assistance in connection with the sale of HUD-
owned multifamily rental housing projects and the foreclosure of HUD-
held mortgages on rental housing projects; and the Section 202/8 
Program (24 CFR part 891, subpart E), which provides assistance for 
housing projects serving elderly or families and individuals with 
disabilities.
    Under the Section 8 project-based program, HUD may enter into an 
annual contributions contract (ACC) with a public housing agency (PHA) 
through which HUD commits to provide the agency with funds to make 
housing assistance payments to a project owner. The PHA, acting as a 
contract administrator, then enters into a HAP contract with the owner. 
In certain circumstances HUD may act as the contract administrator, 
whereby HUD will directly enter into a HAP contract with an owner.
    Contract administrators in the above-listed Section 8 programs are 
responsible for assessing the management and oversight of housing 
projects and for ensuring that owners comply with the requirements of 
the HAP contract. To assess an owner's compliance with the terms and 
conditions of its HAP contract, contract administrators are required 
under the terms of their ACCs to conduct MORs. Completion of MORs can 
require Contract administrators to visit the site and can cause 
interruption in project operations. The Contract administrator spends 
approximately 8 hours of staff time and additional resources to review 
every project. HUD has found that over the last three years projects 
have been rated ``Above Average'' or ``Superior'' 35 percent of the 
time, ``Satisfactory'' 57 percent of the time, and ``Below Average'' or 
``Unsatisfactory'' eight percent of the time. A full or limited review 
of all projects, including those that consistently receive high 
ratings, puts a strain on HUD and project resources.
    A proposed rule found elsewhere in today's Federal Register 
proposes to revise the regulations that govern MORs for Section 8 HAP 
projects to provide consistency across programs and allow HUD the 
flexibility to set a schedule that is more in-line with the needs of 
the programs. Reducing the frequency of MORs for these properties would 
result in fewer interruptions in project operations and would allow HUD 
to focus its staff and resources on areas that require greater 
attention.

II. This Notice

    This notice proposes to require MORs of projects on a schedule that 
is based on both the project's annual MOR rating and HUD's risk-based 
asset management model. The purpose of the MOR is to establish the 
quality of management at HUD subsidized projects, and to verify the 
project's compliance with the terms of the HAP Contract, any HUD

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Regulatory Agreement, and the Management Agreement and Management Plan, 
as applicable. The project's annual MOR rating, provided by the 
Contract administrator, assists HUD in its assessment of the project's 
risk of failure. Over the past two years, HUD has implemented a risk-
based asset management model that incorporates the evaluation of both 
qualitative and quantitative elements into a comprehensive property 
level rating. The risk rating model helps HUD prioritize resources by 
identifying the risk of a project and the allocation of human capital 
to riskier assets. This rating translates to a classification of 
Troubled, Potentially Troubled, or Not Troubled (hereafter referred to 
as the risk classification).
    The proposed Section 8 Housing Assistance Payments Program MOR 
schedule will use this new risk-based classification in combination 
with the previous MOR score to determine the future schedule of MORs 
for all Section 8 projects in the Office of Multifamily Housing's 
portfolio. HUD has found that when a project is performing well, risk 
of failure is lower. Additionally, the Office of Multifamily Housing 
has found that many of the properties receiving assistance under its 
Section 8 Housing Assistance Payments program receive high marks on the 
MOR annually indicating that conducting MORs annually is not necessary 
to mitigate risk at these properties. Using this new MORs schedule, HUD 
may focus staff and resources on projects that warrant greater 
attention.
    The schedule will be as follows: (1) Projects with a Below Average 
or Unsatisfactory score on the last MOR and a risk classification of 
Troubled, Potentially Troubled, or Not Troubled, must have a MOR within 
12 months of the last MOR conducted at the project. (2) Projects with a 
Satisfactory score on the last MOR and a risk classification of 
Troubled or Potentially Troubled, must have a MOR within 24 months of 
the last MOR conducted at the project. Additionally, projects with an 
Above Average or Superior score on the last MOR and a risk 
classification of Troubled, must have a MOR within 24 months of the 
last MOR conducted at the project. (3) Projects with a Satisfactory 
score on the last MOR and a risk classification of Not Troubled, must 
have a MOR within 36 months of the last MOR conducted at the project. 
Additionally, projects with an Above Average or Superior score on the 
last MOR and a risk classification of Potentially Troubled or Not 
Troubled, must have a MOR within 36 months of the last MOR conducted at 
the project.

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                                       Last MOR:            Last MOR:  Below            Last MOR:           Last MOR:  Above
                                     Unsatisfactory              average              Satisfactory               average           Last MOR:  Superior
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Risk Classification: Troubled.  Within 12 months.......  Within 12 months......  Within 24 months......  Within 24 months......  Within 24 months.
Risk Classification:            Within 12 months.......  Within 12 months......  Within 24 months......  Within 36 months......  Within 36 months.
 Potentially Troubled.
Risk Classification: Not        Within 12 months.......  Within 12 months......  Within 36 months......  Within 36 months......  Within 36 months.
 Troubled.
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    This notice does not restrict HUD or the Contract Administrator 
from conducting additional MORs outside of this schedule pursuant to 
existing and future administrative guidelines.

III. Findings and Certifications

Paperwork Reduction Act

    The information collection requirements for this notice has 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 2502-0178. The collection requirement will be amended to 
reflect this notice's reduced burden. In accordance with the Paperwork 
Reduction Act, an agency 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.
    This notice would amend the frequency of the Management and 
Occupancy Review (MOR) schedule for the seven project-based Section 8 
programs listed-above. The collection title is, ``Management Reviews of 
Multifamily Housing Programs'' and the current burden is 8 hours for 
each of the 24,366 annual reviews, 194,928 total burden hours. This 
notice is estimated to reduce the burden in the existing information 
collection requirement as follows:

                                       Reporting and Recordkeeping Burden
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                                                                                  Estimated
                                              Number of         Number of       average  time   Estimated  total
         Information collection              respondents         annual       for  requirement   burden (hours)
                                                                responses          (hours)
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Current: 2102-0178......................            24,366            24,366              8.00           194,928
Proposed: 2102-0178.....................            21,680             6,598              8.00            52,781
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Percentage of Burden Change................Estimated net reduction of burden               73%
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    In accordance with 5 CFR 1320.8(d)(1), HUD is soliciting comments 
from members of the public and affected agencies concerning this 
collection of information to:
    (1) Evaluate whether the proposed collection of information is 
necessary for the proper performance of the functions of the agency, 
including whether the information will have practical utility.
    (2) Evaluate the accuracy of the agency's estimate of the burden of 
the proposed collection of information.
    (3) Enhance the quality, utility, and clarity of the information to 
be collected.
    (4) Minimize the burden of the collection of information on those 
who are to respond; including through the use of appropriate automated 
collection techniques or other forms of information technology (e.g., 
by permitting electronic submission of responses).
    Interested persons are invited to submit comments regarding the 
information collection requirements in this rule. Comments must refer 
to the proposed rule by name and docket

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number (FR-5654-P-01) and must be sent to:

HUD Desk Officer, Office of Management and Budget, New Executive Office 
Building, Washington, DC 20503, Fax number: 202-395-6947

and

Reports Liaison Officer, Office of Housing, Department of Housing and 
Urban Development, 451 7th Street SW., Room 9128, Washington, DC 20410.

    Interested persons may submit comments regarding the information 
collection requirements electronically through the Federal eRulemaking 
Portal at http://www.regulations.gov. HUD strongly encourages 
commenters to submit comments electronically. Electronic submission of 
comments allows the commenter maximum time to prepare and submit a 
comment, ensures timely receipt by HUD, and enables HUD to make them 
immediately available to the public. Comments submitted electronically 
through the http://www.regulations.gov Web site can be viewed by other 
commenters and interested members of the public. Commenters should 
follow the instructions provided on that site to submit comments 
electronically.

Environmental Review

    This notice provides operating instructions and procedures in 
connection with activities under provisions of Section 8 project-based 
assistance program regulations that have been the subject of a required 
environmental review. Accordingly, under 24 CFR 50.19(c)(4), this 
notice is categorically excluded from environmental review under the 
National Environmental Policy Act of 1969 (42 U.S.C. 4321).

    Dated: December 11, 2014.
Biniam Gebre,
Acting Assistant Secretary for Housing-Federal Housing Commissioner.
[FR Doc. 2015-00353 Filed 1-13-15; 8:45 am]
BILLING CODE 4210-67-P