[Federal Register Volume 83, Number 194 (Friday, October 5, 2018)]
[Notices]
[Pages 50387-50402]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-21723]
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
[Docket No. FR-5994-N-03]
Operations Notice for the Expansion of the Moving to Work
Demonstration Program
AGENCY: Office of Public and Indian Housing, HUD.
ACTION: Notice.
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SUMMARY: The Public Housing/Section 8 Moving to Work (MTW)
demonstration program was first established under Section 204 of the
Omnibus Consolidated Rescissions and Appropriations Act of 1996 to
provide statutory and regulatory flexibility to participating public
housing agencies (PHAs) under three statutory objectives. Those three
statutory objectives are: To reduce cost and achieve greater cost
effectiveness in Federal expenditures; to give incentives to families
with children whose heads of household are either working, seeking
work, or are participating in job training, educational or other
programs that assist in obtaining employment and becoming economically
self-sufficient; and to increase housing choices for low-income
families. This Operations Notice for the Expansion of the MTW
Demonstration Program (Operations Notice) establishes requirements for
the implementation and continued operation of the MTW demonstration
program pursuant to the 2016 MTW Expansion Statute.
DATES: Comment Due Date: November 19, 2018.
Submission of Comments
Electronic Submission of Comments. HUD strongly encourages
interested persons 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. Interested persons may
submit comments electronically through the Federal eRulemaking Portal
at www.regulations.gov. Comments submitted electronically through the
www.regulations.gov website 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.
Submission of Comments by Mail. Alternatively, interested persons
may submit comments regarding this Notice to the Regulations Division,
Office of General Counsel, Department of
[[Page 50388]]
Housing and Urban Development, 451 7th Street SW, Room 10276,
Washington, DC 20410-0500. Communications must refer to the above
docket number and title.
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 Notice.
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. weekdays at the
above address. Due to security measures at the HUD Headquarters
building, an appointment to review the public comments must be
scheduled in advance 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 via TTY by calling the
Federal Relay Service at 1-800-877-8339 (this is a toll-free number).
Copies of all comments submitted are available for inspection and
downloading at www.regulations.gov.
FOR FURTHER INFORMATION CONTACT: Marianne Nazzaro, Director, Moving to
Work Demonstration Program, Office of Public and Indian Housing,
Department of Housing and Urban Development, 451 7th Street SW, Room
4130, Washington, DC 20410; email address [email protected].
SUPPLEMENTARY INFORMATION:
I. Background
Section 239 of the Fiscal Year 2016 Appropriations Act, Public Law
114-113 (2016 MTW Expansion Statute), signed by the President in
December 2015, authorizes HUD to expand the MTW demonstration program
from the current size of 39 agencies to an additional 100 agencies over
a period of 7 years. This Notice was originally published on January
23, 2017, in the Federal Register, entitled ``Operations Notice for the
Expansion of the Moving to Work Demonstration Program Solicitation of
Comment.'' On May 4, 2017, the Notice was republished with three
technical revisions and an extension of the comment period. HUD took
all comments received into consideration.
Changes to this Notice have been made to incorporate feedback from
the two previous publications and to reflect policy decisions. The
primary changes are as follows:
The term of participation has been set at 12 years from
the year of designation in response to public comments for the term to
be at least 10 years from the year of designation.
In response to public comments, the Department removed the
General Waivers and Conditional Waivers categories and replaced them
with a singular MTW Waivers category, which MTW agencies may implement
without further approval from HUD.
[cir] In restructuring the MTW Waivers, the Notice now includes
safe harbors, which are defined as the additional requirements, beyond
those specified in the activity description, that the agency must
follow in implementing activities without further HUD approval.
[cir] MTW Waivers now include specific guidance on impact analyses,
hardship policies, and applicability of waivers to elderly/disabled
families.
[cir] An additional MTW Waiver was added: ``Increase Elderly Age,''
which allows agencies to amend the definition of an elderly person to
be an individual who is at least sixty-five.
[cir] The Homeownership Waiver was removed. Upon reviewing this
waiver, the Department determined that the activities provided to
agencies under the waiver were already available under the Section 32
Homeownership Program.
The 90 percent voucher utilization requirement was
removed. The MTW Housing Assistance Payment (HAP) Renewal Formula has
been revised to use as a base, all prior-year MTW-eligible Housing
Choice Voucher (HCV) funding expenses paid from HAP, including HAP
expenses plus non-HAP expenses.
For a prospective agency to be eligible for selection to
the MTW demonstration, it must be a high performer in either the Public
Housing Assessment System (PHAS) or the Section Eight Management
Assessment Program (SEMAP).
Regionalization was removed from the MTW Operations Notice
and will be implemented through a separate forthcoming notice.
Agencies will formalize their MTW status with an amendment
to their Annual Contributions Contract.
The monitoring of the requirement that an MTW agency
designated pursuant to the 2016 MTW Expansion Statute continues to
assist substantially the same number of families has been simplified.
Compliance will be determined using a baseline ratio of total public
housing and HCV HAP funding to families served.
MTW Demonstration Program
The MTW demonstration program was first established under Section
204 of Title II of section 101(e) of the Omnibus Consolidated
Rescissions and Appropriations Act of 1996, Public Law 104-134, 110
Stat. 1321-281; 42 U.S.C. 1437f note (1996 MTW Statute) \1\ to provide
statutory and regulatory flexibility \2\ to participating PHAs under
three statutory objectives. Those three statutory objectives are to:
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\1\ PHAs currently operating an MTW demonstration program
include PHAs with an active MTW agreement as of December 15, 2015.
PHAs currently operating an MTW program do not include PHAs that
previously participated in the MTW demonstration and later left the
demonstration.
\2\ The MTW demonstration program may only provide certain
flexibilities under the 1937 Act. For more information on the
history of the MTW demonstration program, please go to: www.hud.gov/mtw.
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Reduce cost and achieve greater cost effectiveness in
Federal expenditures;
give incentives to families with children where the head
of household is working, seeking work, or is preparing for work by
participating in job training, educational programs, or programs that
assist people to obtain employment and become economically self-
sufficient; and
increase housing choices for eligible low-income families.
To achieve these objectives, PHAs selected for participation in the
MTW demonstration are given exemptions from many existing public
housing and HCV rules and offered more flexibility with how they use
their Federal funds. MTW agencies use this opportunity presented by the
MTW demonstration to better address local housing needs. HUD learns
from the experience of MTW agencies to develop new housing policy
recommendations that can positively impact assisted housing delivery
for PHAs nationwide.
In addition to statutory and regulatory relief,\3\ MTW agencies
have the flexibility to apply fungibility among three core funding
programs' funding streams--public housing Operating Funds, public
housing Capital Funds, and HCV assistance (to include both HAP and
Administrative Fees)--hereinafter referred to as ``MTW Funding.'' \4\
These flexibilities do not
[[Page 50389]]
negate the need for both the PHA and HUD to be able to account for the
funding from its original source to the date of its ultimate eligible
use \5\ by the PHA, to comply with Federal grant and financial
management requirements, and to use funds effectively and efficiently
for their eligible purposes. As the Department continues to implement
program-specific financial management policies in its core housing
programs, MTW agencies will be subject to the same requirements and
procedures as non-MTW agencies. Therefore, the requirements and
procedures described in this Notice may change as new financial
management policies are implemented over time.
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\3\ For more information about the MTW demonstration program and
the specific activities of existing MTW agencies, please refer to
the MTW website at www.hud.gov/mtw.
\4\ Funds awarded under Sections 8(o), 9(d), and 9(e) of the
1937 Act are eligible for expanded uses pursuant to MTW fungibility,
with the exception of funds provided for specific non-MTW HCV sub-
programs. Other funds a PHA may receive (i.e., grant funds under
another obligating document) are likewise not covered by MTW
flexibilities and must be tracked and reported under the applicable
rules and requirements.
\5\ The date of the ``ultimate eligible use'' means the date of
disbursement by the PHA for an eligible purpose, which would remove
the funding from the PHA's account and the PHA's control.
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Throughout participation in the MTW demonstration program, MTW
agencies must continue to meet five statutory requirements established
under the 1996 MTW Statute. The five statutory requirements are:
At least 75 percent of the families assisted by
participating demonstration public housing authorities shall be very
low-income families, as defined in section 3(b)(2) of the United States
Housing Act of 1937;
establishing a reasonable rent policy, which shall be
designed to encourage employment and self-sufficiency by participating
families, consistent with the purpose of this demonstration, such as by
excluding some or all of a family's earned income for purposes of
determining rent;
continuing to assist substantially the same total number
of eligible low-income families as would have been served had the
amounts not been combined;
maintaining a comparable mix of families (by family size)
as would have been provided had the amounts not been used under the
demonstration; and
assuring that housing assisted under the demonstration
program meets housing quality standards established or approved by the
Secretary.
Currently, there are 39 agencies \6\ participating in the MTW
demonstration program. The administrative structure for these 39
agencies is outlined in the Standard MTW Agreement, a contract between
each existing MTW agency and HUD. The 2016 MTW Expansion Statute
extended the term of the Standard MTW Agreement through each of the
existing MTW agencies' 2028 fiscal year.
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\6\ The 39 agencies are: Alaska Housing Finance Corporation;
Atlanta Housing Authority; Housing Authority of the City of
Baltimore; Boulder Housing Partners; Cambridge Housing Authority;
Housing Authority of Champaign County; Charlotte Housing Authority;
Chicago Housing Authority; Housing Authority of Columbus, Georgia;
District of Columbia Housing Authority; Delaware State Housing
Authority; Fairfax County Redevelopment and Housing Authority;
Holyoke Housing Authority; Keene Housing; King County Housing
Authority; Lawrence-Douglas County Housing Authority; Lexington-
Fayette Urban County Housing Authority; Lincoln Housing Authority;
Louisville Metropolitan Housing Authority; Massachusetts Department
of Housing and Community Development; Minneapolis Public Housing
Authority; Housing Authority of the City of New Haven; Oakland
Housing Authority; Orlando Housing Authority; Philadelphia Housing
Authority; Housing Authority of the City of Pittsburgh; Portage
Metropolitan Housing Authority; Home Forward (Portland, OR); Housing
Authority of the City of Reno; San Antonio Housing Authority;
Housing Authority of the County of San Bernardino; San Diego Housing
Commission; Housing Authority of the County of San Mateo; Housing
Authority of the County of Santa Clara/City of San Jose; Seattle
Housing Authority; Tacoma Housing Authority; Housing Authority of
Tulare County; and Vancouver Housing Authority.
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2016 Expansion of the MTW Demonstration Program
As the 2016 MTW Expansion Statute directs, HUD is authorized to
expand the MTW demonstration program from the current level of 39
agencies to an additional 100 agencies over a period of 7 years, ending
in 2023. In expanding the MTW demonstration, HUD intends to build on
the successes and lessons learned from the demonstration thus far. The
vision for the MTW expansion is to learn from MTW interventions to
improve the delivery of Federally assisted housing and promote self-
sufficiency for low-income families across the Nation. Through the
expansion, HUD will extend flexibility to a broader range of PHAs both
in terms of size and geographic diversity and will balance the
flexibility inherent in MTW with the need for measurement, evaluation,
and prudent oversight.
HUD will select the additional 100 PHAs in cohorts, with
applications for each cohort to be sought via PIH Notice. For each
cohort of agencies selected, the 2016 MTW Expansion Statute requires
HUD to direct all the agencies within the cohort to implement one
specific policy change, which HUD will evaluate rigorously. MTW
agencies may implement policy changes in addition to the policy change
directed by HUD as long as those policy changes do not conflict or
interfere with the cohort study. As required by the 2016 MTW Expansion
Statute, the HUD-appointed MTW Research Advisory Committee, described
further below, advised HUD on the policy changes to be tested through
the new cohorts of MTW agencies and the methods of research and
evaluation.
The 2016 MTW Expansion Statute also includes a provision allowing
the Secretary to designate an MTW agency as a regional MTW agency--at
the request of said agency--should the Secretary determine that unified
administration of assistance ``under sections 8 and 9 of the United
States Housing Act of 1937 (42 U.S.C. 1437f and g)'' by that agency
across multiple jurisdictions will lead to (a) efficiencies and to (b)
greater housing choice for low-income persons in the region. HUD will
issue separate guidance regarding how an MTW agency may be designated
as a regional MTW agency.
Eligibility and Selection for the Expansion of the MTW Demonstration
The 2016 MTW Expansion Statute provides that the 100 MTW agencies
selected must be high performers in either HUD's Public Housing
Assessment System (PHAS) or its Section Eight Management Assessment
Program (SEMAP) at the time of application to the demonstration, and
represent geographic diversity across the country. Further, the 2016
MTW Expansion Statute states that of these 100 PHAs:
No less than 50 PHAs shall administer 1,000 or fewer
aggregate housing voucher and public housing units;
no less than 47 PHAs shall administer 1,001-6,000
aggregate housing voucher and public housing units;
no more than 3 PHAs shall administer 6,001-27,000
aggregate housing voucher and public housing units;
no PHA shall be granted MTW designation if it administers
more than 27,000 aggregate housing voucher and public housing units;
and
five of the PHAs selected shall be agencies with a Rental
Assistance Demonstration (RAD) portfolio award.
HUD will issue separate PIH Notices, by cohort, soliciting
applications from eligible PHAs for participation in the MTW
demonstration. These Notices, when issued, will outline the specific
application submission requirements, evaluation criteria, and process
HUD will use when selecting PHAs for MTW designation.
The PHA sizes eligible for participation in the MTW demonstration
are statutory and were defined by Congress; therefore, HUD is unable to
waive or modify those size restrictions.
[[Page 50390]]
MTW Research Advisory Committee
The 2016 MTW Expansion Statute required HUD to form and consult
with a Federal MTW Research Advisory Committee (the Committee),
established in May 2016. The Committee is governed by the Federal
Advisory Committee Act (5 U.S.C. Appendix 2), which sets forth
standards for the formation and use of advisory committees. The purpose
of the Committee is to provide independent advice with respect to the
policies to be studied through the MTW expansion and the related
methods of research and evaluation. The Committee is charged with
advising HUD on the following:
Policy proposals and evaluation methods for the MTW
demonstration to inform the one specific policy change required for
each cohort of agencies;
rigorous research methodologies to measure the impact of
policy changes studied;
policy changes adopted by MTW agencies that have proven
successful and can be applied more broadly to all PHAs; and
statutory and/or regulatory changes (specific waivers and
associated activities, and program and policy flexibility) necessary to
implement policy changes for all PHAs.
The Committee has no role in reviewing or selecting the 100 PHAs to
participate in the expansion of the MTW demonstration.
The Committee members were appointed to a two-year term in June
2016 by the HUD Secretary and chosen to ensure balance, diversity, and
a broad representation of ideas.\7\ In May 2018, HUD extended the
Committee and the members' appointments for another two-year term. As
required by the 2016 MTW Expansion Statute, the Committee includes
program and research experts from HUD; a representation of MTW
agencies, including current and former residents; and independent
subject matter experts in housing policy research.
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\7\ For more information on the establishment, purpose, members,
and meeting content of the MTW Research Advisory Committee, please
go to: https://portal.hud.gov/hudportal/HUD?src=/program_offices/public_indian_housing/programs/ph/mtw/expansion/rac.
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Based on the advice of the Committee, HUD will study, by cohort of
MTW agencies, the following four policies (which are in no particular
order except for the first two cohorts):
Impact of MTW Flexibility on Small and Medium PHAs: In
this first cohort, HUD will evaluate the overall effects of MTW
flexibility on a PHA and the residents it serves. The Committee
recommended that PHAs with under 1,000 aggregate public housing and
voucher units be included in this cohort. To date, only one of the
existing MTW agencies has less than 1,000 aggregate units, while the
majority of PHAs nationwide fit into this size category.
Rent Reform: In this second cohort, HUD will evaluate
different rent reform models. Rent reform models may be income based
and may include tiered rents and/or stepped-up rents.
Work Requirements: In this cohort, HUD will evaluate work
requirements for residents/participants who are non-elderly, non-
disabled, and at least 18 years old.
Landlord Incentives: In this cohort, HUD will evaluate how
to improve landlord participation in the HCV program through incentives
such as participation payments, vacancy payments, alternate inspection
schedules and other methods.
Operations Notice for the Expansion of the MTW Demonstration
Through the MTW expansion, HUD seeks to design and test new
approaches to providing and administering housing assistance and then
to apply the lessons-learned nationwide, all within a framework of
simplifying program administration. This is laid out in HUD's guiding
principles for the expansion, which are: (1) Simplify; (2) learn; and
(3) apply. The Operations Notice is an embodiment of this vision. The
Operations Notice describes a framework for the MTW demonstration that
streamlines and simplifies HUD's implementation of MTW status and the
associated flexibilities of participating MTW agencies while providing
for the rigorous evaluation of specific policy changes. This framework
would apply to all PHAs designated as an MTW agency pursuant to the
2016 MTW Expansion Statute and to any previously-designated MTW
agencies that agree to operate under the framework of the Operations
Notice. These PHAs are referred to in the Operations Notice as ``MTW
agencies.'' Participation in the MTW Expansion will be formalized by an
amendment to the PHA's Consolidated Annual Contributions Contract,
which is called the MTW CACC Amendment.\8\
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\8\ The MTW Consolidated ACC Amendment amends the ACCs and the
CACCs for the Public Housing and Section 8 Voucher programs.
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The Operations Notice is organized into 11 sections as follows:
1. Purpose and Applicability
2. Waivers
a. MTW Waivers
b. Agency-Specific Waiver Requests
c. Cohort-Specific Waivers
3. Term of Participation
4. MTW Funding Flexibilities and Financial Reporting
a. MTW Funding Flexibility
b. Calculation of Funding
c. Financial Reporting and Auditing
5. Evaluation
a. Program-Wide Evaluation
b. Cohort-Specific Evaluation
c. Ad-Hoc Evaluation
6. Program Administration and Oversight
a. Planning and Reporting
b. Performance Assessment
c. Monitoring and Oversight
7. Rental Assistance Demonstration Program
8. Applying MTW Flexibilities to Special Purpose Vouchers
a. HUD-Veterans Affairs Supportive Housing
b. Family Unification Program
c. Non-Elderly Persons With Disabilities Vouchers
d. Enhanced Vouchers and Tenant Protection Vouchers
9. Applicability of Other Federal, State, and Local Requirements
10. MTW Agencies Admitted Prior to 2016 MTW Expansion Statute
11. Sanctions, Terminations, and Default
II. Operations Notice
1. Purpose and Applicability
The Operations Notice establishes requirements for the
implementation and continued operation of the expansion of the MTW
demonstration program pursuant to the 2016 MTW Expansion Statute. The
Operations Notice also applies to all PHAs designated as MTW pursuant
to the 2016 MTW Expansion Statute and to any previously-designated MTW
agency that elects to operate under the terms of this Notice.
Through the MTW CACC Amendment, an MTW agency agrees to abide by
the program structure, flexibilities, and terms and conditions detailed
in the Operations Notice for the term of the agency's participation in
MTW demonstration. Any significant updates to the Operations Notice by
HUD will be preceded by a public comment period. HUD may supplement the
Operations Notice with PIH Notices providing more detailed guidance,
including with respect to implementing future appropriations act
provisions and revisions to financial policies and procedures.
Additionally, HUD will develop informational materials to address
various program elements, which HUD will post on the MTW website.
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Unless otherwise provided in the Operations Notice, an agency's MTW
program applies to all of the agency's public housing units (including
agency-owned properties and units comprising a part of mixed-income,
mixed finance communities, tenant-based HCV assistance, project-based
HCV assistance under Section 8(o), and Homeownership units developed
using Section 8(y) HCV assistance. This Operations Notice does not
apply to HCV assistance that is required: (i) To make payments to other
PHAs under HCV portability billing procedures; (ii) To meet particular
purposes for which HUD has expressly committed the assistance to the
agency; \9\ or (iii) to meet existing contractual obligations of the
agency to a third party (such as Housing Assistance Payment (HAP)
contracts with owners under the agency's HCV program), unless a third
party agrees to Project-Based Voucher (PBV) activities implemented
under the MTW program with the agency.
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\9\ Mainstream Vouchers, Moderate Rehabilitation Renewals, HUD-
Veterans Affairs Supportive Housing (HUD-VASH) Vouchers, Non-Elderly
Disabled (NED) Vouchers, and Family Unification Program (FUP)
Vouchers are not part of the MTW demonstration program.
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PHAs are reminded that the MTW demonstration program does not
permit waivers related to statutes outside of the 1937 Act or
regulations promulgated under authority outside of the 1937 Act,
including any waivers to fair housing, nondiscrimination, labor
standards, or environmental requirements. Other subject matter
prohibited from waivers or restricted with respect to waivers is
discussed elsewhere in this Notice.
2. Waivers
Pursuant to the 1996 MTW Statute and 2016 MTW Expansion Statute,
the Appendix of this Notice provides waivers of certain provisions of
the 1937 Act as well as the implementing requirements and regulations.
These waivers and associated activities afford MTW agencies the
opportunity to use their MTW authority to pursue locally-driven
policies, procedures, and programs in order to further the goals of the
demonstration. In implementing MTW activities, agencies will ensure
assisted families are made aware of the impacts the activity(s) may
have to their tenancy. The following are the three categories of
waivers that MTW agencies may pursue: (a) MTW Waivers; (b) Agency-
Specific Waiver Requests; and (c) Cohort-Specific Waivers. MTW agencies
may conduct any permissible activity in the MTW Waivers category within
the provided safe harbors, as detailed in the Appendix, without
additional approval from HUD. Agencies may make an Agency-Specific
Waiver Request to implement additional activities not contained in the
MTW Waivers, request to waive a statutory or regulatory requirement not
waived in the MTW Waivers, and/or request to expand the safe harbors of
an MTW Waivers activity. Agencies may also be provided with Cohort-
Specific Waivers if they are necessary to allow for the implementation
of the required cohort study.
a. MTW Waivers
The Appendix contains the available waivers and associated
activities that MTW agencies may implement after they have been
included in the MTW Supplement (described in Section 6 of this Notice)
of an approved PHA Plan. The Appendix includes the waiver name, waiver
description, statutes and regulations waived, permissible activities,
and safe harbors. The waiver description defines the authorization
provided to the MTW agency, subject to the terms of this Notice. The
list of statutes and regulations waived details the citations of the
1937 Act requirements that may be waived by an MTW agency in order to
implement an activity. The list of waivers and list of activities are
organized by program type. The safe harbors section contains the
additional requirements (beyond those specified in the activity
description) that the agency must satisfy in implementing activities
without further HUD approval. If an MTW agency wishes to implement
additional activities not contained in the MTW Waivers, request to
waive a statutory or regulatory requirement, and/or request the ability
to go beyond an MTW activity's safe harbor(s), the MTW agency must
submit an Agency-Specific Waiver Request for approval from HUD as
explained further in Section 2.b of this Notice.
MTW agencies may implement any activity contained in the Appendix
as long as it is included in the MTW Supplement of an approved PHA Plan
and implemented within the associated safe harbor(s). The MTW agency
will update the MTW Supplement annually, as described in Section 6 of
this Notice, to reflect the new activities it plans to implement in the
coming fiscal year and ongoing activities it has implemented in the
prior year, which includes estimated costs/savings for planned
activities that have a cost implication. While MTW activities are
listed by specific waiver name, MTW agencies may use the MTW Supplement
to combine activities together to create more comprehensive initiatives
at the local level.
The MTW Waivers only waive certain provisions of the 1937 Act and
its implementing regulations. The five statutory requirements
established under the 1996 MTW Statute cannot be waived. Other
applicable Federal, state, and local requirements shall continue to
apply even in the event of a conflict between such a requirement and a
waiver or activity granted by this Notice. Accordingly, HUD and the MTW
agencies may not waive or otherwise deviate from compliance with Fair
Housing and Civil Rights laws and regulations. Additionally, in
implementing activities, MTW agencies remain subject to all other
terms, conditions, and obligations under this Notice, and all other
Federal requirements applicable to the public housing program, the HCV
program, Federal funds, and PHAs. To the extent any MTW activity
conflicts with any of the five statutory requirements or other
applicable requirements, HUD reserves the right to require the MTW
agency to discontinue the activity or to revise the activity to comply
with this Notice, and the other applicable Federal requirements. HUD
also reserves the right to require an MTW agency to discontinue any
activity derived from a waiver should it have significant negative
impacts on families or the agency's operation of its assisted housing
programs using Section 8 and 9 funds, as determined by HUD.
b. Agency-Specific Waiver Requests
Pursuant to the exceptions in Section 9 of this Notice, HUD
understands that MTW agencies may wish to request Agency-Specific
Waivers to implement activities, waive statutory or regulatory
requirements that are not in the Appendix, and/or expand the safe
harbor(s) of an activity included in the MTW Waivers. There are two
categories of Agency-Specific Waiver Requests: (1) A request to waive a
statutory or regulatory requirement, or to implement an activity, not
provided for in the Appendix; and (2) a request to expand an activity
that is in the Appendix outside of the listed safe harbor (or multiple
safe harbors). The MTW agency must obtain explicit written approval
from HUD for each Agency-Specific Waiver Request prior to
implementation. Agency-Specific Waiver Requests are optional and made
at the discretion of the MTW agency.
To submit an Agency-Specific Waiver Request(s), an MTW agency will
first share the specifics and details of the proposed waiver in the MTW
Supplement to the Annual PHA Plan, indicating which of the two
categories of Agency-Specific Waiver Requests is
[[Page 50392]]
being sought. The MTW Supplement form, when finalized, will provide a
comprehensive explanation of the elements required to submit an Agency-
Specific Waiver Request.
The approval of the Annual PHA Plan and MTW Supplement during this
stage does not constitute an approval of the Agency-Specific Waiver
Request. Rather, the public comment and review period affords the MTW
agency's Resident Advisory Board (RAB), community, and residents the
opportunity to provide input on the proposed waiver prior to its
submission to HUD.
Once the MTW agency obtains approval of its Annual PHA Plan and MTW
Supplement containing the Agency-Specific Waiver Request information,
the agency will then submit a letter to its local HUD field office
requesting final approval of the Agency-Specific Waiver Request(s).
This letter is sent and reviewed outside of the Annual PHA Plan and MTW
Supplement process. It must include: A good cause justification that
relates to one or more of the three MTW statutory objectives; the
statute, regulation, and/or MTW Waiver safe harbor which the MTW agency
seeks to waive and its justification for doing so; a copy of the
approval letter for the Annual PHA Plan and MTW Supplement containing
the proposed waiver; a description of the initiative; the
implementation timeline; and any other information requested by HUD.
Depending on the nature of the request, HUD may ask for an associated
hardship policy, impact analysis, and/or other information necessary to
understand the waiver and its possible effects. Agency-Specific Waiver
Requests may not conflict with the agency's cohort-specific evaluation.
If the Agency-Specific Waiver is approved by HUD and the changes
between the Agency-Specific Waiver Request and the Waiver that HUD
ultimately approves do not constitute a ``significant amendment'' to
the Annual PHA Plan, as defined by the agency, then the Agency-Specific
Waiver may be implemented once the MTW Agency receives HUD's explicit
written approval. The MTW Agency will need to submit a narrative
description of the Agency Specific Waiver in its subsequent MTW
Supplement.
If the Agency-Specific Waiver is approved by HUD with changes
between the Agency-Specific Waiver Request and the Waiver that HUD
ultimately approves that constitute a ``significant amendment'' to the
Annual PHA Plan, as defined by the agency, then the MTW agency must re-
submit the Agency-Specific Waiver Request through the Annual PHA Plan
and MTW Supplement public comment process a second time. Once the
Annual PHA Plan and MTW Supplement are approved this second time, the
MTW agency may implement its Agency-Specific Waiver.
To the extent a policy in an Agency-Specific Waiver Request
conflicts with any of the five statutory requirements, the cohort-
specific evaluation, or other applicable requirements, HUD shall
require the MTW agency to discontinue the policy or to revise the
policy to comply with this Notice and the other applicable federal
requirements. HUD also reserves the right to require an MTW agency to
discontinue any policy derived from a waiver should it have significant
negative impacts on families or the agency's operation of its assisted
housing programs using Section 8 and 9 funds, as determined by HUD.
c. Cohort-Specific Waivers
Pursuant to the 2016 MTW Expansion Statute, at the time of
designation as an MTW agency, each agency will be selected into an
evaluative cohort that seeks to test a specific policy change, as
specified in that cohort's Selection Notice. Cohort-Specific Waivers
include statutory and/or regulatory waivers and associated activities
that are unique to a specific cohort to allow them to complete their
required cohort study. Depending upon the cohort's study, there is a
possibility that HUD restricts certain activities within the MTW
Waivers or provides additional waivers that are not included in the
Appendix. It is also possible that the specific policy changes to be
tested through a given cohort would not need any Cohort-Specific
Waivers. Any MTW activities that would impact or conflict with the
cohort-specific policy change will be identified in the respective
Selection Notice so that the MTW agency is aware of this potential
restriction on its use of waivers before it enters the MTW
demonstration program. Cohort-Specific Waivers and the associated MTW
activities may only be used to the extent allowed under the applicable
evaluative framework provided by HUD in the applicable Selection
Notice.
In determining the Cohort-Specific Waivers that will be included in
the Selection Notices, HUD will remove and/or add waivers and
associated activities based on whether a waiver and its associated
activity would impact or conflict with the specific policy(s) to be
studied in the MTW agency's cohort group. The addition or removal of
any waivers and associated activities would only apply within the
confines of the cohort study. For instance, if the study focuses on
rent models as it relates to the voucher program, then an agency's
public housing program would not be affected by the addition or removal
of any such waivers and associated activities. If the MTW Waiver(s) and
associated activity(s) are not provided to a cohort, or some portion of
the agency's portfolio within the cohort, to allow the cohort to test a
specific policy change, the agencies within that cohort study will not
be able to conduct that activity(s) until the evaluation of the
specific policy change has concluded.
3. Term of Participation
The term of each agency's MTW designation will be 12 years (PHA
Fiscal Years) starting from the time of its designation as an MTW
agency. All waivers and associated activities provided through the
Operations Notice expire at the end of the agency's term of
participation. However, Cohort-Specific Waivers provided to enable a
cohort-specific policy change may be extended beyond the agency's term
of participation with HUD's specific approval if HUD determines that
additional time is needed to evaluate the policy change, subject to
continued statutory authority for the MTW demonstration.
Once an MTW agency has implemented an activity pursuant to the
authority of the Operations Notice, the agency may continue to
implement that activity throughout the term of its participation in the
demonstration, subject to the other terms and conditions of this
Notice. The MTW agency must end all activities requiring MTW-specific
waivers upon expiration of MTW participation, as HUD cannot guarantee
that it will be able to extend any waivers and associated activities
beyond that point. For this reason, when entering into contracts with
third-parties that draw upon MTW flexibility, the agency should
disclose that such flexibility is only available during the term of the
agency's participation in the MTW demonstration as permitted in this
Notice. An exception is third-party contracts that relate to the
cohort-specific policy change and associated waiver(s). If HUD
determines that additional time beyond the end of the agency's MTW term
is needed to evaluate a cohort-specific policy change, HUD may approve
an extension of any cohort-specific waiver(s).
4. MTW Funding Flexibility and Financial Reporting
During the term of the demonstration, subject to appropriations,
HUD will provide an MTW agency with public housing Operating Fund
Program grants,
[[Page 50393]]
public housing Capital Fund Program (CFP) grants, and/or HCV HAP and
Administrative Fee assistance as detailed in this Notice. CFP grants
may include Formula grants; Demolition or Disposition Transitional
Funding (DDTF), which are included in regular Formula grants; and/or
funds from older Replacement Housing Factor (RHF) grants (a program
later superseded by DDTF). The funding amount for MTW agencies may be
increased by additional allocations of vouchers that the agency is
awarded over the term of its participation in the MTW demonstration.
MTW Funding provided to an MTW agency, including public housing
Operating Fund Program grants, public housing CFP grants, and HCV HAP
and Administrative Fee assistance, is subject to any future laws and
appropriations. If a future law or appropriations bill conflicts with
this Operations Notice, the law or appropriations bill shall be
implemented, and no breach of contract claim, or any claim for monetary
damages, may result from the conflict or implementation of the
conflicting law or regulation.
a. MTW Funding Flexibility
MTW agencies will have the flexibility to apply fungibility among
public housing Operating Fund, public housing Capital Fund, and HCV HAP
and Administrative Fee assistance. These flexibilities expand the
eligible uses of each covered funding stream, but do not negate the
need for both the PHA and HUD to be able to account for the funding
from its original source to the date of its ultimate eligible use \10\
by the PHA, comply with Federal grant and financial management
requirements, and use funds effectively and efficiently for their
eligible purposes. As the Department continues to implement program-
specific financial management policies in its core housing programs,
MTW agencies will be subject to the same requirements and procedures as
non-MTW agencies. Therefore, the requirements and procedures described
in this Notice may change as new financial management policies are
implemented over time. HUD will update existing guidance and issue new
reporting requirements, as appropriate, to allow HUD to meet its
monitoring and oversight responsibilities while ensuring MTW agencies
fully utilize and benefit from the flexibilities established by
Congress for these funds pursuant to the MTW demonstration and the 2016
MTW expansion. HUD will also update existing guidance and issue new
reporting requirements, as appropriate, to ensure compliance with 2 CFR
part 200, including with respect to Federal financial management.
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\10\ The date of the ``ultimate eligible use'' means the date of
disbursement by the PHA for an eligible purpose, which would remove
the funding from the PHA's account and the PHA's control.
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An agency participating in the MTW demonstration program may
flexibly use public housing Operating and Capital Funds provided under
Sections 9(d) and 9(e) of the 1937 Act and HCV HAP and Administrative
Fee program funds provided under Section 8 of the 1937 Act, referred to
collectively as MTW Funding. Certain provisions of Sections 8 and 9 of
the 1937 Act and 24 CFR 982 are waived as necessary to implement this
flexibility. Once the agency receives its MTW designation through the
execution of the MTW CACC Amendment, this flexibility in the use of MTW
Funding does not require prior HUD approval.
The agency may use MTW Funding covered by MTW flexibility for any
eligible activity under Sections 9(d)(1), 9(e)(1) and Section 8(o) of
the 1937 Act and for the local, non-traditional activities specified in
this Notice, including in the Appendix. Any reserves the MTW agency has
accumulated prior to signing an MTW CACC Amendment (including public
housing Operating and Capital Reserves and HCV HAP and Administrative
Fee Reserves) must be used for their originally appropriated purposes
and may not be used flexibly for any eligible MTW activity described in
the Appendix. All MTW PHA expenditures, including for local, non-
traditional activities, must be consistent with the PHA's charter,
approved 5-Year and Annual PHA Plans, and the approved MTW Supplement
to the Annual PHA Plan.
i. Calculation of Funding
(a) Public Housing Operating Grants
(1) The calculation of an MTW agency's Operating Fund subsidy grant
eligibility will continue in accordance with operating subsidy formula
law, regulations, and appropriations act requirements. As these
programmatic and financial requirements are updated, MTW agencies will
be affected by and shall comply with these changes.
(2) The agency may use these funds for any eligible activity
permissible under Section 9(e)(1) of the 1937 Act or, if the agency
proposes to use the funding under its MTW flexibility, it may also use
these funds for any eligible activity permissible under Section 8(o),
Section 9(d)(1), and for the local, non-traditional activities
specified in this Notice, including in the Appendix.
(3) For Operating Fund grant funding, the MTW agency has
accumulated prior to signing an MTW CACC Amendment, the agency may not
use such funds for eligible MTW purposes other than the originally
appropriated purpose of the funds (i.e., these funds may not be used as
flexible MTW Funding).
(b) Public Housing Capital Fund Formula and Grants
(1) The agency's public housing Capital Fund formula
characteristics and grant amounts, including DDTF and Replacement
Housing Factor (RHF), will continue to be calculated in accordance with
public housing law, regulations, and appropriations act requirements.
(2) MTW agencies must continue to follow the immediate need
requirements applicable to all Capital funds and may not accelerate
their drawdown of Capital funds for the purpose of funding reserves or
for any other purpose. All Capital funds, including funds in BLI 1410
(Administrative Costs) and Budget Line Item (BLI) 1492 (MTW), must be
drawn down only when funds are due and payable.
(3) The agency may use these funds for any eligible activity
permissible under Section 9(d)(1) of the 1937 Act or, if the agency
proposes to use the funding under its MTW flexibility, it may also use
these funds for any eligible activity permissible under Section 8(o),
Section 9(e)(1), and for the local, non-traditional activities
specified in this Notice, including in the Appendix. Capital Fund
Program (CFP) funds used for activities under section 9(d)(1) are
subject to all requirements relevant to non-MTW agency CFP funding,
including eligible activities and cost limits.
(4) For Capital Funds the MTW agency has accumulated prior to
signing an MTW CACC Amendment, the agency may not use such funds for
eligible MTW purposes other than the originally appropriated purpose of
the funds (i.e., these funds may not be used as flexible MTW Funding).
(5) In requisitioning Capital Fund grant funds, the MTW agency will
request funds using traditional Capital Fund Budget Line Items (BLIs)
for funds to be used for activities under section 9(d) and using the
available MTW Budget Line (BLI 1492) items for activities under section
9(e), section 8(o), or local, non-traditional activities. MTW agencies
shall not use the Transfer to Operations Budget Line (BLI 1406) since
funds for all non-section 9 activities shall be included in the MTW
Budget Line (BLI 1492). The agency will
[[Page 50394]]
provide to HUD information on all capital activities funded by the MTW
Funding as necessary to ensure compliance with requirements outside the
scope of MTW, including environmental review requirements and Energy
and Performance Information Center (EPIC) reporting requirements.
(6) The agency remains subject to the requirements of Section 9(j)
of the 1937 Act with respect to Capital Fund grants. Section 9(d) funds
remain subject to the obligation and expenditure deadlines and
requirements provided in Section 9(j) despite the fact that they may be
in the MTW Single Fund. Capital Funds awarded to MTW agencies must be
obligated within 2 years and expended within 4 years of award. Funds
not obligated or expended within those timeframes will be subject to
recapture. As with all agencies, an MTW agency may requisition CFP
funds from HUD only when such funds are due and payable, unless HUD
approves another payment schedule.
(c) Housing Choice Voucher Funding
(1) Funding for the Initial MTW Year. For the calendar year (CY)
after the MTW agency joins the MTW demonstration (the ``Initial MTW
Year''), the MTW agency's HCV HAP renewal funding will be calculated in
accordance with the same HAP renewal funding formula used for non-MTW
HCV agencies in the applicable FY appropriations act. The HAP renewal
formula is customarily based on the previous CY's HAP expenses reported
in the Voucher Management System (VMS), adjusted by any applicable
inflation factor and national proration.
Example:
If an MTW Agency signs its MTW CACC Amendment in July
2018, CY 2019 will be the Initial Year in the MTW demonstration. The
MTW Agency's CY 2019 HAP renewal funding will be calculated based on
the Agency's CY 2018 HAP expenses, adjusted by inflation and proration
(assuming this is the formula in the 2019 Appropriations Act).
(2) Funding for Subsequent MTW Years. As is the case for non-MTW
PHAs under current appropriations law, the HAP renewal funding
eligibility for subsequent MTW years will be calculated based on the
MTW agency's actual expenses for the previous calendar year (known as
the re-benchmark year). Unique to MTW agencies, however, the MTW
agency's actual expenses are: (i) The previous CY's HAP expenses
reported in Voucher Management System (VMS,) and (ii) the previous CY's
eligible non-HAP MTW expenses reported in VMS. For both HAP and non-HAP
MTW expenses, the reported expenses must have been paid from an
eligible source of funds as described in section 4(c) below in order to
be included in the HAP renewal funding formula. In addition, MTW HAP
renewal funding is subject to an MTW Renewal Eligibility Cap derived
from the number of units authorized under the agency's ACC, as
described in paragraph (d) on the following page. The lower of the
total combined HAP/non-HAP expenses or the MTW Renewal Eligibility Cap
will then be adjusted by an applicable inflation factor and any
national proration that applies to the HCV renewal appropriation to
determine the MTW agency's actual CY HAP renewal funding.
Example:
In CY 2019, an MTW Agency expended $3,600,000 on HAP and
$400,000 on eligible non-HAP MTW expenses. The agency's HCV HAP renewal
funding for CY 2020 will be $4 million (assuming the HAP Renewal
Eligibility Cap is greater than $4 million), adjusted by an inflation
factor and any applicable national proration.
(3) HAP Renewal Sources of Funds. The only HAP and non-HAP MTW
expenses that will be included in the MTW HAP renewal formula are those
paid for with the same sources of funds that would be included in the
non-MTW HAP renewal formula for a non-MTW agency (see PIH Notice 2013-
28 and any future successor notices). Accordingly, HAP expenses and
non-HAP MTW expenses must be paid from the following sources of funds
to be included in the HAP renewal formula calculation:
Housing Choice Voucher (HCV) budget authority,
HUD-held HAP reserves (undisbursed budget authority),
PHA-held HAP reserves (i.e., Restricted Net Position
(RNP)),
Any funds from the HAP Set-aside (if available after PHA
application and approval), and
Administrative Fee reserves (i.e., Unrestricted Net
Position (UNP)). HAP expenses or non-HAP MTW expenses that were covered
by any other funding source (for example, public housing Operating
Funds and Capital Funds, and current year HCV Administrative Fee funds)
will not be included in the MTW PHA's HCV renewal funding calculation.
(4) HAP Renewal Eligibility Cap. The MTW PHA's renewal eligibility
for all MTW Years will be limited by the HAP Renewal Eligibility Cap.
The calculation multiplies (1) the MTW PHA's total number of MTW-
eligible ACC authorized units \11\ in the re-benchmark year (the CY
immediately preceding the CY for which the PHA's renewal eligibility is
being calculated) \12\ by (2) the PHA's pre-MTW monthly per-unit cost
(PUC) inflated to the re-benchmark year.
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\11\ ``MTW-eligible ACC authorized units'' means the PHA's
number of ACC authorized units, regardless of whether the units are
leased, after excluding the number of authorized units that would
not be subject to the MTW renewal formula. In other words, special
purpose vouchers that are renewed separately and are not part of the
MTW HAP renewal formula are not included in the formula used to
calculate the HAP Renewal Eligibility Cap. See Section 8 of this
Notice for further information on these special purpose vouchers
that are renewed separately outside the MTW renewal formula.
\12\ As noted above, the re-benchmark year is also the source
year for the actual expense data used in the MTW PHA's HAP renewal
formula.
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For (1), the number of MTW-eligible ACC authorized units
is measured in unit months available (UMAs).\13\
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\13\ Authorized units in the HCV program context are measured in
terms of unit months available. For example, if an authorized unit
is under CACC as of January 1, the authorized unit equals 12 unit
months available for that CY. On the other hand, if the authorized
unit was added to the CACC under a new funding increment effective
July 1, the authorized unit is equal to 6 unit months available for
that CY.
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For (2), the inflated pre-MTW PUC is projected using, as a
base, the monthly PUC for the CY in which the agency signed its MTW
CACC Amendment. HUD applies an inflation factor to this base PUC to
estimate what the PHA's HCV PUC would be, had the PHA not joined the
MTW program, as of the re-benchmark year.
After the calculation of the HAP Renewal Eligibility Cap, it is
compared with the MTW PHA's actual total combined HAP/non-HAP expenses.
The lower of these two amounts--(1) the HAP Renewal Eligibility Cap or
(2) the MTW PHA's actual total combined HAP/non-HAP expenses--is then
adjusted by the inflation factor and any national proration factor to
determine the MTW PHA's CY renewal funding.
Example:
If an MTW Agency signs its MTW CACC Amendment in July
2018, CY 2019 will be the Initial Year in the MTW demonstration. In the
Initial CY (CY 2019) the MTW Agency's renewal formula is the same
formula that is used for non-MTW PHAs. In calculating the MTW Agency's
HCV renewal funding for CY 2020, the following information applies:
[cir] The MTW PHA's average monthly PUC for CY 2018 was $700.
[cir] The CY 2019 inflation rate is 2 percent.
[cir] The number of MTW-eligible ACC authorized units during CY
2019 is 800
[[Page 50395]]
units. (In this example all units were under ACC as of January 1, 2019,
so the number of unit months available (UMAs) is simply 800 units
multiplied by 12 months, or 9,600 UMAs.)
The HAP Renewal Eligibility Cap for CY 2020 is calculated
by first determining the estimated PUC for CY 2019, which is $714 (the
monthly PUC for CY 2018 inflated for CY 2019, or $700 x 1.02). The
estimated PUC for CY 2019 is then multiplied by the MTW PHA's CY 2019
MTW-eligible ACC authorized UMAs \14\ ($714 x 9,600 UMAs) to determine
the HAP Renewal Eligibility Cap, which is $6,854,400.
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\14\ As noted earlier, these are the MTW PHA's CY 2019 UMAs that
are subject to the MTW renewal formula. UMAs attributable to special
purpose vouchers such as HUD-VASH and FUP that are renewed
separately are not included in this count.
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The HAP Renewal Eligibility Cap ($6,854,400) is then
compared to the MTW Agency's total combined HAP/non-HAP expenses for
the re-benchmark year that originated from the eligible funding sources
described earlier in this Notice. If the total combined HAP/non-HAP
expenses do not exceed $6,854,400, the MTW Agency's CY 2020 renewal
funding will be the total combined HAP/non-HAP expenses adjusted by an
inflation factor and any national proration. If the total combined HAP/
non-HAP expenses exceed $6,854,400, the MTW Agency's CY 2020 renewal
funding will be $6,854,400, adjusted by an inflation factor and any
national proration.
(5) Financial Management Requirements Apply. The same financial
management requirements that apply to non-MTW agencies also apply to
MTW agencies. Accordingly, all undisbursed HAP funds, including HAP-
originated reserve funds, will be retained as HUD-held reserves per
Office of Management and Budget cash management requirements and can be
requested by the MTW agency when immediate need exceeds the scheduled
HAP monthly disbursements, but only after consideration of available
MTW agency-held Restricted Net Position (RNP).
(6) Administrative Fees. The Administrative Fee rates used to
calculate fee eligibility for MTW agencies shall be established
according to the same methodology used to establish Administrative Fee
rates for all agencies, including non-MTW agencies. As is the case for
all agencies under current appropriations law, administrative fees will
be calculated on the basis of units leased as of the first day of each
month; this data will be extracted from Voucher Management System (VMS)
at the close of each reporting cycle. Administrative fees for MTW
agencies are also subject to the national proration factor and any
other appropriations act requirements.
(7) Adjustments for the First-Time Renewal of Certain Vouchers. If
the MTW agency receives incremental HCV vouchers and funding (including
tenant protection vouchers) other than special purpose vouchers,
renewal funding for those vouchers will be included in the MTW HCV
renewal funding eligibility calculation for the following year. (See
Section 8 of this Notice for further discussion of tenant protection
and other special purpose vouchers.) The renewal amount for the
following year is based on HAP costs reported for these increments in
VMS in the prior year, which will be adjusted by the inflation factor.
Should the initial increment(s) be funded for less than 12 months due
to lack of appropriations, HUD will adjust for the missing months upon
renewal, by selecting the higher of the funded PUC for the initial
increment, or the MTW per unit cost (PUC) times the number of
units,\15\ then adjusted by the inflation factor. The aggregate renewal
eligibility is always subject to the national proration factor.
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\15\ The MTW PUC is equal to MTW HAP expenses divided by the
number of MTW units leased. (Non-HAP MTW expenses are not included
in the MTW PUC calculation.) HUD may further adjust the MTW PUC
calculation for PHAs administering RAD project-based vouchers to
exclude RAD Rehab payments so the MTW PUC only reflects expenses
attributable to actual housing assistance payments.
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(8) Applicable Inflation Factor and Proration. The same applicable
inflation factor that applies to non-MTW agencies will be applied each
CY to determine the MTW agency's HAP funding renewal eligibility.
Likewise, the MTW agency's HAP funding renewal eligibility is subject
to the same national proration as non-MTW agencies' renewal
eligibility.
(9) Prior Year Reserves. For HCV HAP and Administrative Fee funding
provided in years prior to the designation of the agency as an MTW
agency, the agency may not use any accumulated HCV reserves for
eligible MTW purposes other than the originally appropriated purpose of
the funds (i.e., these funds may not be used as flexible MTW Funding).
(10) Rental Assistance Demonstration (RAD). Any vouchers received
as part of a RAD Component I conversion shall be added to the ACC for
the remainder of the CY in which they are awarded. HUD will issue a new
increment of voucher funding in support of those vouchers for the first
full CY following a RAD Component I conversion. In subsequent years,
voucher funding for RAD-converted units will be renewed under the MTW
HCV renewal funding calculation, plus inflation factor and the
applicable proration factor. Tenant protection vouchers provided for
RAD Component II conversions are renewed in accordance with section
4.v, Adjustment for the first-time renewal of certain vouchers, above.
Administrative fees for RAD vouchers will be calculated based on the
same methodology used to establish administrative fees for non-MTW
agencies. Fees for RAD vouchers will be prorated at the same level that
applies to all non-MTW agencies.
(11) Voucher Programs Not Included in MTW Program. Vouchers and
funding provided for the following special purpose vouchers, or any new
special purpose vouchers provided in future appropriations acts,
whether for new allocations or renewal of existing increments, shall
not be included in the HCV MTW renewal calculation: Mainstream, HUD-
Veterans Affairs Supportive Housing (HUD-VASH), Non-Elderly Disabled
(NED), and Family Unification Program (FUP). These vouchers will be
renewed under the regular voucher renewal requirements as provided
under the appropriations acts. Special purpose vouchers are discussed
in more detail in Section 8 of this Notice. In addition, funding
provided for the Section 8 Moderate Rehabilitation Program is not part
of the MTW program and may not be used for MTW activities.
b. Financial Reporting and Auditing
MTW agencies must submit year-end unaudited financial information
to the Department no later than 2 months after their fiscal year end
using the Financial Data Schedule (FDS) contained in the Real Estate
Assessment Center's (REAC) Financial Assessment Subsystem (FASS-PH), or
its successor system. Current financial reporting requirements for MTW
agencies are posted on the REAC website at https://www.hud.gov/sites/documents/DOC_11833.PDF. These requirements may be updated in the
future.
MTW agencies are also required to electronically submit their
audited financial information, if applicable, to the Department no
later than 9 months after their fiscal year end. MTW agencies must
include public housing project level financial information in the FDS
and must follow the Asset Management guidelines established in Public
and Indian Housing (PIH) Notice 2007-9 Supplement to Financial
Management Handbook Office of Public and Indian Housing (PIH) Revised
April 2007, and any subsequent updates to this Handbook or PIH Notice.
MTW agencies will conform to the cost
[[Page 50396]]
requirements of 2 CFR part 200 and any HUD implementation thereof.
MTW agencies must procure an Independent Public Accountant (IPA) to
perform an annual audit pursuant to Federal requirements at 2 CFR part
200 and 24 CFR 990.190, or successor, as well as any audit compliance
supplements developed specifically for use with the MTW demonstration.
Completed IPA audits must be submitted to HUD in accordance with
current HUD regulations. HUD will review IPA audits of MTW agencies to
determine appropriate action relative to any findings, prepare
recommendations for audit finding resolution, and follow up with MTW
agencies to assure finding closure. If there are audit findings related
to the MTW program itself, HUD will monitor the resolution of all audit
findings.
5. Evaluation
As a condition of participating in the MTW demonstration, MTW
agencies agree to cooperate fully with HUD and its contractors in the
monitoring and evaluation of the MTW demonstration. MTW agencies shall
keep records and submit reports and other information as required by
HUD. This includes any data collection required for the use of waivers
and associated activities, for the uses of MTW funds within and across
funding streams, and any evaluation efforts that HUD undertakes for the
cohort-specific policy changes.
MTW is a demonstration that provides PHAs flexibilities to innovate
and try different approaches to housing assistance in order to achieve
at least one of the three statutory objectives laid out in the 1996 MTW
Statute. At its core, the demonstration is an opportunity for PHAs,
participants, HUD, stakeholders, and the general public to learn from
different approaches to providing Federal housing assistance to low-
income families. This includes learning from approaches that are
effective and produce desired outcomes, and from approaches that are
less effective than anticipated and where results may have unintended
consequences.
Because MTW agencies can use different flexibilities calling on
multiple activities within the MTW Waivers to serve local populations
in various parts of the country, interpreting PHA-reported performance
data on the effects of an individual MTW activity can be challenging.
Consequently, and while adhering to the guiding principles for the
expansion--to simplify, learn, and apply--HUD will create and develop
an evaluation system that will document and consider the MTW
demonstration through the lens of the three statutory objectives
relating to cost effectiveness, self-sufficiency, and housing choice.
HUD envisions three types of evaluation: Program-wide evaluation,
cohort-specific evaluation, and ad hoc evaluation.
a. Program-Wide Evaluation
Program-wide evaluation would seek to assess whether or not, and to
what extent, MTW agencies use Federal dollars more efficiently, help
residents find employment and become self-sufficient, and/or increase
housing choices for low-income families. HUD intends to develop a
method for program-wide evaluation that is based, to the extent
possible, on information already being collected through existing HUD
administrative data systems. HUD may determine and require that
additional reporting is necessary to effectively evaluate MTW.
b. Cohort-Specific Evaluation
The 2016 MTW Expansion Statute requires HUD to direct all the
agencies in a cohort to implement one specific policy change and to
conduct a rigorous evaluation of the one specific policy change. The
MTW Research Advisory Committee has considered input from the public
and advised HUD on the policy changes to be tested through the new
cohorts of MTW agencies and on the methods of research and evaluation.
The cohort-specific policy change and evaluation methods will be
described in the applicable Selection Notice so that the MTW agency is
aware, in advance of application to the MTW demonstration program, of
the policy it will be required to implement and the evaluation
requirements. The specific evaluation methods and requirements for
participating MTW agencies will vary based on the policy changes to be
tested. For example, some cohorts of MTW agencies may be required to
participate in randomized control trials, while others may be required
to participate in detailed process studies or ethnographic research.
HUD's Office of Policy Development and Research (PD&R) will take the
lead on evaluating cohort-specific policy changes, and funds have been
appropriated by Congress for this evaluation. In all cases, the purpose
of the evaluation will be to measure the outcomes associated with the
specific policy change(s) in order to offer policy recommendations for
implementing the policy change(s) across all PHAs.
HUD will determine the length and timeframe for the evaluation,
which will be informed by feedback provided by the MTW Research
Advisory Committee. In some cases, the evaluation timeframe may extend
beyond the agency's term of MTW participation. The MTW agency is
required to participate in the evaluation for the full timeframe
designated by HUD. HUD may extend waivers and associated activities
beyond the agency's term of participation to the extent that those
waivers and associated activities are needed to support the evaluation
of the specific policy change and HUD determines whether additional
time is needed to evaluate the policy change.
c. Ad-Hoc Evaluation
HUD reserves the right to request, and the MTW agency agrees to
provide, any additional information required by law or required for the
sound administration or evaluation of the MTW agency.
6. Program Administration and Oversight
In general, MTW agencies will be subject to the same planning and
reporting protocols as non-MTW agencies, including the PHA Plan (5-Year
Plan and Annual PHA Plan) and Capital Fund planning. MTW agencies must
also report data into HUD data systems, as required.
New protocols and instruments will be developed for assessing an
MTW agency's performance and will be incorporated into PHAS and SEMAP,
or successor assessment systems, or an alternative assessment system
developed by HUD, explained further in Section 6.b. of this Operations
Notice. In addition, HUD will employ standard program compliance and
monitoring approaches including assessment of relative risk and on-site
monitoring conducted by HUD or by entities contracted by HUD.
a. Planning and Reporting
i. The Annual PHA Plan
MTW agencies must adhere to Annual PHA Plan regulations at 24 CFR
part 903, any implementing HUD Notices and guidance, as well as any
succeeding regulations. The Annual PHA Plan consists of the 5-Year Plan
that a PHA must submit to HUD once every five PHA fiscal years and the
Annual PHA Plan that the PHA must submit to HUD for each PHA fiscal
year. Any HUD assistance that the agency is authorized to use under the
MTW demonstration must be used in accordance with the Annual PHA Plan,
as applicable.
Annual and 5-Year Plans must be submitted in a format prescribed by
HUD. Currently, submission format requirements are outlined in Notice
PIH 2015-18 (HA), issued October 23, 2015,
[[Page 50397]]
which is effective until amended, superseded, or rescinded.
ii. MTW Supplement to the Annual PHA Plan (Under Development)
As an MTW agency, all Annual PHA Plan information must be provided
in the context of the agency's participation in the MTW demonstration.
This includes taking into account the MTW Waiver(s) and associated
activity(s) afforded to the MTW agency. To this end, the MTW agency
will submit an MTW Supplement to the Annual PHA Plan, in a format to be
developed by HUD. Prior to submitting to HUD, the MTW Supplement must
go through a public process along with the Annual PHA Plan. This will
allow the agency to inform the community of any programmatic changes
and give the public an opportunity to comment. Details about this
requirement are elaborated later in this section. New MTW agencies will
not be required to submit the Annual MTW Plan or Annual MTW Report
(i.e., Form 50900), which are required for existing MTW agencies.
The MTW Supplement form has not been finalized at the time of
publishing of this Operations Notice. The MTW Supplement will be made
available for public review and comment, per Paperwork Reduction Act
requirements, prior to finalizing the form. At this time, HUD plans to
require MTW agencies to use the MTW Supplement to the Annual PHA Plan
to:
Describe how the MTW agency seeks to address the three MTW
statutory objectives during the coming fiscal year, in a narrative
format;
Indicate the MTW activities that the agency plans to
implement in the Annual PHA Plan year that utilize the activities
contained in the MTW Waivers (Appendix), and ongoing activities the
agency has implemented in the prior year, using a check-box or other
simple format;
Indicate the estimated costs/savings per year for planned
activities that have a cost implication;
Indicate the reason(s) why any previously approved MTW
activities were not implemented in the previous year;
Indicate any changes in the MTW activities and associated
waivers, including safe harbors, that have changed from the previous
Annual PHA Plan year;
Describe any Agency-Specific Waiver Requests that the MTW
agency seeks to implement in PHA fiscal year, if applicable;
Indicate the MTW activities that the agency will undertake
in the Annual PHA Plan year that require Cohort-Specific Waivers (as
applicable and identified in each cohort's Selection Notice), and the
Cohort-Specific Waivers to be used, using a check-box or other simple,
non-narrative format;
Certify to HUD that all MTW activities being implemented
by the agency fall within the safe harbors outlined in the Appendix;
Submit data or information required for the ongoing use of
any activities within the MTW Waivers; and
Submit data required for HUD's verification of the MTW
agency's compliance with the five statutory requirements established
under the 1996 MTW Statute.
Non-MTW PHAs that are qualified under 24 CFR 903.3(c) and that are
not designated as troubled under PHAS and that do not have a failing
score under SEMAP are exempt from the requirement to submit the Annual
PHA Plan. Per this Operations Notice, while MTW agencies that are
qualified under 24 CFR 903.3(c) are not required to submit the Annual
PHA Plan, they are required to submit the MTW Supplement to the Annual
PHA Plan on an annual basis.
During the agency's initial year of participation in the MTW
demonstration, an agency may implement MTW activities once they have
been included in an approved MTW Supplement, either during the next
regularly scheduled submission of the Annual PHA Plan and MTW
Supplement or through an amendment to the Annual PHA Plan, which would
include the MTW Supplement. Agency-Specific Waiver Requests and
activities may only be implemented after explicit written approval from
HUD.
MTW agencies must submit to HUD the Annual PHA Plan, including any
required attachments, and the MTW Supplement no later than seventy-five
(75) days prior to the start of the agency's fiscal year. Before
submission to HUD, the agency must have at least a 45-day public review
period of its plan, after publishing a notice informing the public of
its availability and conducting reasonable outreach to encourage
participation in the plan process, followed by a public hearing. MTW
agencies must consider, in consultation with the RABs, all of the
comments received at the public hearing. The recommendations received
by the public and RABs must be submitted by the agency as a required
attachment to the Plan. MTW agencies must also include a narrative
describing their analysis of the recommendations and the decisions made
on these recommendations. Agencies must also obtain the proper signed
certifications and board certification.
HUD will notify the MTW agency in writing if HUD objects to any
provisions or information in the Annual PHA Plan or the MTW Supplement.
When the MTW agency submits its Plan seventy-five (75) days in advance
of its fiscal year, HUD will respond to the MTW agency within 75 days.
Reviews of the Annual PHA Plan and the MTW Supplement will be
conducted by the local field office, in consultation with the MTW
Office.
iii. Admissions and Continued Occupancy Policy (ACOP) and
Administrative Plan
The MTW agency must update its ACOP and Administrative Plan to be
consistent with the MTW activities and related waivers that it
implements. The agency may not implement an MTW activity or waiver
until the relevant sections of the ACOP and/or Administrative Plan are
updated. MTW agencies must provide HUD with electronic versions of the
ACOP and Administrative Plan upon request. If the MTW agency implements
an activity using the local, non-traditional uses of funds waiver, the
MTW agency must create and update an implementing document specifically
for such activity.
iv. Capital Planning and Reporting
MTW agencies must adhere to CFP regulations at 24 CFR part 905, any
implementing HUD Notices and guidance, as well as any successor
regulations. As noted previously, MTW agencies are funded in accordance
with CFP regulations and formula funds are calculated and distributed
in the same manner as non-MTW agencies.
MTW agencies have the authority and flexibility to utilize their
CFP funds for expanded uses as part of their MTW funding flexibility.
HUD will award Capital Fund grants to MTW agencies in keeping with the
standard process for all PHAs. The Field Office will distribute funds
in Line of Credit Control System (LOCCS) to the MTW agencies in
accordance with the standard process. As with all PHAs, an MTW agency
may draw down Capital Funds from HUD only when such funds are due and
payable, unless HUD approves another payment schedule. To the extent
that the MTW agency plans to use CFP funding for other MTW-eligible
(non-CFP) activities, the CFP funding would be recorded on BLI 1492
(Moving to Work) on Form HUD-50075.1. CFP funds entered on BLI 1492
would not need to be broken out and itemized in the part II supporting
pages of the HUD-50075.1. However,
[[Page 50398]]
regardless of the BLI utilized, funds may not be drawn down until the
PHA has an immediate need for the funds. An MTW agency may not
accelerate drawdowns of funds in order to fund reserves or to otherwise
increase locally held amounts, as discussed in 4(a)(i)(b)(2) of this
Notice.
An MTW agency is not required to use all or any portion of its CFP
grant for non-CFP activities. To the extent that the MTW agency wishes
to dedicate all or a portion of its CFP grant to specific capital
improvements, the agency shall record CFP funding on the appropriate
BLI(s) on Form HUD-50075.1 (other than BLI 1492) as in the standard
program.
v. Inventory Management System/PIH Information Center Reporting
Data from HUD's Inventory Management System (IMS) and Public and
Indian Housing (PIH) Information Center (PIC), or successor systems, is
critical to all aspects of program administration, including HUD
monitoring and tracking of MTW agency progress in meeting the MTW
statutory objectives. IMS/PIC data is used to establish funding
eligibility levels for both Operating Subsidy Fund and Capital Fund
grants. Further, HUD relies on IMS/PIC data to provide a thorough and
comprehensive view of PHA program performance and compliance.
MTW agencies are required to submit the following information to
HUD via IMS/PIC (or its successor system):
Family data to IMS/PIC using Form HUD-50058 MTW (or
successor forms) or Form HUD-50058 and in compliance with HUD's 50058
MTW or standard 50058 submission requirements for MTW agencies. MTW
agencies must report information on all families receiving some form of
tenant-based or project-based housing assistance, either directly or
indirectly, as well as all public housing families, to be current to at
least a 95 percent level.
Current building and unit information in the development
module of IMS/PIC (or successor system).
Basic data about the PHA (address, phone number, email
address, etc.).
HUD will monitor MTW agency reporting to IMS/PIC (or successor
system) to ensure compliance and provide technical assistance to MTW
agencies as needed.
vi. Voucher Management System Reporting
MTW agencies are required to report voucher utilization in the
Voucher Management System (VMS), or its successor system. There are
several areas in which VMS reporting is different for MTW agencies.
These areas are highlighted in the VMS User's Manual (http://portal.hud.gov/hudportal/documents/huddoc?id=instructions.pdf), which
details the VMS reporting requirements.
HUD will monitor each MTW agency's VMS reporting to ensure
compliance and provide technical assistance to MTW agencies as needed.
vii. General Reporting Requirement
In addition to the reporting requirements outlined in this
Operations Notice, MTW agencies are required to comply with any and all
HUD reporting requirements not specifically waived by HUD for
participation in the MTW demonstration program, including the
requirement (discussed in Section 5) to comply with HUD's evaluation of
the specific-policy changes being implemented by cohort.
b. Performance Assessment
Assessing the performance of PHAs (both MTW and non-MTW) helps with
the delivery of services in the public housing and voucher programs and
enhances trust among PHAs, public housing participants, HUD, and the
general public. To facilitate this effort, HUD will provide management
tools for effectively and fairly assessing the performance of a PHA in
essential housing operations and program administration.
Currently, HUD uses PHAS and SEMAP to assess risk and identify
underperforming PHAs in the traditional public housing and voucher
programs. However, since some of the MTW flexibilities make it
difficult to accurately assess the performance of MTW agencies under
the existing systems, HUD will develop an alternative, MTW-specific
assessment system, which may be incorporated into PHAS and SEMAP (or
successor assessment system(s)). MTW agencies may not opt out of the
MTW-specific successor system(s). Until the successor system is
implemented, HUD will monitor MTW agency performance through PHAS sub-
scores.
i. Public Housing Assessment System
MTW agencies are scored in PHAS, however, agencies can elect not to
receive the overall score (MTW agencies continue to receive PHAS sub-
scores even if they elect not to receive the overall score). If an MTW
agency elects to receive its overall PHAS score, the agency must
continue to be scored for the duration of the demonstration, or until
the agency is assessed under the alternative, MTW-specific assessment
system(s), whichever comes first. Once developed, all MTW agencies,
including MTW agencies that elect not to receive an overall PHAS score,
must be assessed under the MTW-specific assessment system(s).
Per the 1996 MTW statute, when providing public housing, the MTW
agency must ensure that the housing is safe, decent, sanitary, and in
good repair, according to the physical inspection protocols established
and approved by HUD. Thus, MTW agencies continue to be subject to HUD
physical inspections. To the extent that HUD physical inspections
reveal deficiencies, the MTW agency must continue to address these
deficiencies in accordance with existing physical inspection
requirements. If an MTW agency does not maintain public housing
adequately, as evidenced by the physical inspection performed by HUD
and is determined to be troubled in this area, HUD will determine
appropriate remedial actions. The actions to be taken by HUD and the
agency will include actions statutorily required and such other actions
as may be determined appropriate by HUD. These actions may include
developing and executing a Memorandum of Agreement (MOA) with the MTW
agency, suspension or termination of the MTW CACC Amendment in
accordance with the provisions therein, or such other actions legally
available to the Department.
MTW agencies must continue to submit year-end financial information
into the Financial Data System (FDS)or successor system, as discussed
earlier.
ii. Section 8 Management Assessment Program
MTW agencies are not scored in SEMAP but they can elect to be
scored if they choose to opt in. If an MTW agency elects to receive its
overall SEMAP score, the agency must continue to be scored for the
duration of the demonstration, or until the agency is assessed under
the MTW-specific assessment system, whichever comes first. Once
developed, all MTW agencies, including MTW agencies that opt out of
SEMAP, must be assessed under the MTW-specific assessment system(s).
c. Monitoring and Oversight
MTW agencies remain subject to the full range of HUD monitoring and
oversight efforts including, but not limited to, annual risk
assessments, on-site monitoring reviews, monitoring reviews relating to
VMS reporting and rent reasonableness, review of the accuracy of data
reported into HUD data systems, and use of HUD data systems
[[Page 50399]]
to assess agency program performance, among other activities.
i. MTW Statutory Requirements
Throughout participation in the MTW demonstration program, all MTW
agencies must continue to meet five statutory requirements established
under the 1996 MTW Statute. Implementation, monitoring and enforcement
of the five statutory requirements will be discussed in greater detail
in the final version of this Operations Notice, and specific
enforcement processes will be included in the MTW CACC Amendment (see
also, section 11 of this Notice). HUD will monitor and determine MTW
agencies' compliance with these five requirements as follows:
(a) MTW agencies must ensure that at least 75 percent of the
families assisted are very low-income families, in each fiscal year, as
defined in section 3(b)(2) of the 1937 Act.
(i) HUD Verification Approach: Initial household certification data
recorded in PIC will be used for both the public housing and HCV
programs for compliance monitoring purposes. The initial certification
is comprised only of new admissions in the agency's given fiscal year.
Initial household certification data for families housed through local,
non-traditional activities (in accordance with the Appendix) will be
provided in a manner specified by the Department. An agency's portfolio
will then be weighted with respect to the number of households being
served by each housing program type (i.e., PH, HCV, Local, Non-
Traditional).
(b) MTW agencies must establish a reasonable rent policy which
shall be designed to encourage employment and self-sufficiency by
participating families, consistent with the purpose of this
demonstration, such as by excluding some or all of a family's earned
income for purposes of determining rent.
(i) HUD Verification Approach: HUD defines rent reform as any
change in the regulations on how rent is calculated for a household.
Upon designation into the MTW demonstration, agencies are to submit
their planned policy to implement a reasonable rent policy in the MTW
Supplement. All activities falling under the Tenant Rent Policies
category, detailed in the Appendix, meet the definition of a reasonable
rent policy. An MTW agency must implement one or multiple reasonable
rent policies during the term of its MTW designation (MTW agencies in
the rent reform cohort may have prescribed deadlines to implement their
reasonable rent policies).
(c) MTW agencies must continue to assist substantially the same
total number of eligible low-income families as would have been served
had the amounts not been combined.
(i) HUD Verification Approach: HUD continues to consider the best
approach to monitor the MTW statutory requirement that MTW agencies
serve substantially the same number of families absent the
demonstration. The main themes and principles for this effort include a
Substantially the Same (STS) methodology that: Ensures substantially
the same number of families are housed; allows for local flexibility;
is responsive to changing budgetary climates; is feasible for HUD to
administer; is easy for MTW agencies to predict compliance; is straight
forward to understand; is calculated each year; and has publicly
available results. First, the STS methodology would establish a
baseline ratio of dollars the agency expends and families housed.
Before an agency enters the MTW demonstration, the public housing
funding and the HCV HAP funding spent by the agency in the prior CY
would be divided by the current number of families housed in each
program. This calculation would yield how many families the agency
houses per $100,000 of funding in both the public housing and HCV
programs. Each year during an agency's participation in the MTW
demonstration, the baseline number of total families housed per
$100,000 of funding in both the public housing and HCV programs would
be applied to the agency's actual funding for that calendar year. So,
for example, the agency would know that if it is appropriated ``x
number of dollars,'' it would be required to house ``y number of
families.'' Depending on the specific circumstances of the agency, a
dip below the baseline year number would be allowed. HUD is exploring
methods to ensure that the ratio of families housed per $100,000 in the
baseline year continues to be an accurate measure of ``substantially
the same'' service levels in future years of the MTW designation. There
would also be opportunities for PHAs to request adjustments of the
baseline ratio to account for changes in costs due to special
circumstances.
The following is an example of the STS baseline ratio calculation:
Baseline Year (Calendar Year Before Agency Enters MTW)
Agency expends $800,000 in HCV HAP funds and houses 100
HCV families. Agency then houses 12.5 HCV families per $100,000 of HCV
funds.
Agency expends $500,000 in public housing funds and houses
75 public housing families. Agency then houses 15 public housing
families per $100,000 public housing funds.
First Year in MTW Demonstration
MTW agency receives $900,000 in HCV HAP funds and $300,000
in public housing funds.
MTW agency must house 112.5 families for the HCV share and
45 families for the public housing share. Therefore, in this example,
the MTW agency is required to house 157 total families flexibly with
its MTW funds (this may be in the public housing program, the HCV
program, a local, non-traditional rental subsidy program, or a local,
non-traditional development program \16\).
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\16\ MTW agencies may use their MTW Funding to develop
affordable housing units that are outside of the traditional public
housing and HCV programs. Such local, non-traditional development
allows for the creation of important affordable housing resources,
which must be balanced with the existing and immediate needs of
families waiting for housing assistance. It is therefore necessary
to relate the amount of the MTW agency's total available MTW Funding
investment to the number of affordable units developed. To that end,
HUD will divide the MTW agency's total available MTW Funding in the
local, non-traditional development by the HUD-published Total
Development Cost (TDC). The resulting number of units would then
count as families housed for the length of time the units remained
affordable.
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(d) MTW agencies must maintain a comparable mix of families (by
family size) as would have been provided had the amounts not been used
under the demonstration.
(i) HUD Verification Approach: In order to establish a comparable
mix baseline, the Department will pull data, by family size, for
occupied public housing units and leased vouchers at the time of entry
into the demonstration. The Department will rely upon agency-reported
data into HUD systems (i.e., PIC, VMS). This information will be used
to establish baseline percentages, by family size, to which the agency
is measured by for the remainder of participation. Following entry into
the demonstration, agencies will provide comparable mix data and, if
applicable, associated justifications in the MTW Supplement. The
Department deems an acceptable level of variation to be no more than 5
percent from the baseline. Justifications or explanations for
fluctuations greater than 5 percent are required and subject to the
Department's review.
(e) MTW agencies must ensure that housing assisted under the
demonstration meets housing quality standards established or approved
by the Secretary.
[[Page 50400]]
(i) HUD Verification Approach: In order to demonstrate that the MTW
agency meets housing quality standards, HUD will verify compliance for
each housing program type as follows:
HCV--Program regulations at 24 CFR part 982 set forth
basic housing quality standards (HQS) for housing assisted under the
HCV program. These housing quality standards, or its successor
regulations, are the standards used to determine if the agency is
fulfilling its responsibilities to ensure owners are maintaining the
units in accordance with HQS in the evaluation of an agency. Agencies
with an HCV program must certify in the MTW Supplement that they have
fulfilled their responsibilities to comply with and ensure enforcement
of HQS under this requirement.
Public Housing--HUD will verify this requirement through
its review of PHAS Physical Assessment Subsystem (PASS) scores, or
successor assessment system. Scores falling below 24 out of 40 will be
identified as non-compliant with the statutory requirement.
Local, Non-Traditional--In the MTW Supplement, MTW
Agencies must certify that local, non-traditional units meet housing
quality standards as required in PIH Notice 2011-45, or successor
notice.
ii. Income Integrity and Enterprise Income Verification System (EIV)
Reviews
MTW agencies are required to comply with the final rule regarding
EIV issued December 29, 2009, and utilize EIV for all income
verifications. EIV has been modified for MTW agencies so that family
information submitted in PIC will not expire for 40 months, in order to
accommodate agencies choosing to extend recertification periods for up
to three years.
MTW agencies are subject to HUD review to ensure compliance with
EIV requirements as well as monitor the accuracy and integrity of the
MTW agencies' income and rent determination policies, procedures, and
outcomes.
iii. MTW Site Visit
HUD will periodically conduct site visits to provide guidance,
discuss the MTW agency's MTW activities, and offer any needed technical
assistance regarding its program. The purpose of a site visit will be
to confirm reported agency MTW activities, to review the status and
effectiveness of the agency's MTW strategies, provide technical
assistance, and to identify and resolve outstanding MTW related issues.
The MTW agency shall give HUD access, at reasonable times and
places, to all requested sources of information, including access to
files, access to units, and an opportunity to interview agency staff
and assisted participants.
Where travel funding or staff resources are not available to
facilitate in-person site visits, HUD may exercise the option to
conduct remote site visits via telephone, videoconference, or webinar.
To the extent possible, HUD will coordinate the MTW site visit with
other site visits to be conducted by HUD.
iv. Housing Choice Voucher Utilization
HUD will monitor HCV utilization at MTW agencies and will ensure
that HCV funds are utilized in accordance with Section 4(a)(i)(c) and
Section 6(c)(i)(c) of this Notice. Where leasing levels are
inconsistent with the requirements of this Notice, HUD may take
appropriate actions to work with the MTW agency to increase leasing and
utilization.
v. Public Housing Occupancy
HUD will monitor public housing occupancy rates for MTW agencies.
In instances where the MTW agency's public housing occupancy rate falls
below 96 percent, HUD may require, at its discretion, that the MTW
agency enter into an Occupancy Action Plan to address the occupancy
issues. The Occupancy Action Plan will include the cause of the
occupancy issue, the intended solution, and reasonable timeframes to
address the cause of the occupancy issue.
vi. Additional Monitoring and Oversight
HUD may, based on the MTW agency's risks and at HUD's discretion,
conduct management, programmatic, financial, or other reviews of the
MTW agency. The MTW agency shall respond to any findings with
appropriate corrective action(s).
In addition, HUD will make use of all HUD data systems and
available information to conduct ongoing remote monitoring and
oversight actions for MTW agencies, consistent with the results of the
PIH risk assessment.
7. Rental Assistance Demonstration Program
MTW agencies converting public housing program units to Section 8
assistance under the Rental Assistance Demonstration (RAD) program are
able to retain MTW regulatory and statutory flexibilities in the
management of those units, subject to RAD requirements, if the
conversion is to Project Based Voucher (PBV) assistance. MTW agencies
converting projects under RAD to PBV may continue to undertake
flexibilities except to the extent limited by RAD, as described in the
RAD Notice, PIH 2012-32, REV-3, or its successor Notice.\17\
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\17\ Notices and laws related to RAD can be found at http://portal.hud.gov/hudportal/HUD?src=/RAD/library/notices.
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8. Applying MTW Flexibilities to Special Purpose Vouchers
Special Purpose Vouchers (SPVs) are specifically provided for by
Congress in line item appropriations, which distinguish them from
regular vouchers. Except for enhanced vouchers and tenant-protection
vouchers (described below), SPVs are not part of the MTW demonstration
and are not part of the MTW agency's total available flexible MTW
Funding. The funding is renewed outside of the MTW HAP renewal formula
and the funding (both the initial increment and renewal funding) for
the SPVs may only be used for eligible SPV purposes. There are no
additional MTW flexibilities around using MTW funds to cover SPV
shortfalls. MTW PHAs may use non-HAP sources to cover shortfalls,
following the procedures outlined in Notice PIH 2013-28. PHAs already
have the ability to use HAP reserve funds to address SPV instances of
shortfalls, where the SPVs are under the same appropriations allocation
for renewal as their Section 8 vouchers.\18\
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\18\ https://portal.hud.gov/hudportal/documents/huddoc?id=DOC_10495.pdf.
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a. HUD-Veterans Affairs Supportive Housing
HUD-Veterans Affairs Supportive Housing (HUD-VASH) vouchers have
separate operating requirements and must be administered in accordance
with the requirements listed at www.hud.gov/program_offices/public_indian_housing/programs/hcv/vash. The operating requirements
waive and alter many of the standard HCV statutes and regulations at 24
CFR part 982. Unless stated in the HUD-VASH operating requirements,
however, the regulatory requirements at 24 CFR part 982 and all other
HUD directives for the HCV program are applicable to HUD-VASH vouchers.
Agencies may submit a request to HUD to operate HUD-VASH vouchers in
accordance with MTW administrative flexibilities.
b. Family Unification Program
The Family Unification Program (FUP) NOFA language allows vouchers
to be administered in accordance with MTW operations, unless MTW
provisions are inconsistent with the
[[Page 50401]]
appropriations act or requirements of the FUP NOFA. In the event of a
conflict between the Operations Notice and the appropriations act or
FUP NOFA language, the act and NOFA govern.
c. Non-Elderly Persons With Disabilities Vouchers
The Non-Elderly Persons with Disabilities (NED) NOFA language
allows vouchers to be administered in accordance with MTW operations
unless MTW provisions are inconsistent with the appropriations act or
requirements of the NED NOFA. In the event of a conflict between the
Operations Notice and the appropriations act or FUP NOFA language, the
act and NOFA govern.
d. Enhanced Vouchers and Tenant Protection Vouchers
Enhanced and tenant protection voucher funds become fungible once
the initial funding increment is renewed. The agency must continue to
provide rental assistance to enhanced voucher families and tenant
protection voucher families after the initial funding increment is
renewed.
The statutory enhanced voucher requirements under Section 8(t) of
the 1937 Act (e.g., the HAP calculation) apply to an enhanced voucher
family until the family either moves from the project or leaves the HCV
tenant-based program for any reason. MTW agencies must follow the
procedures described in Notice PIH 2013-27, or its successor Notice,
for a recipient of an enhanced voucher to voluntarily agree to
relinquish their tenant-based assistance in exchange for PBV
assistance. When an enhanced voucher family moves from the project,
either after initially receiving the voucher or anytime thereafter, the
Section 8(t) enhanced voucher requirements no longer apply. The voucher
is then administered in accordance with the regular HCV program
requirements, as modified by the agency's individual MTW waivers and
MTW policies for its tenant-based HCV program.
Regular tenant protection vouchers (i.e., tenant protection
vouchers that are not enhanced vouchers) are always administered in
accordance with the normally applicable HCV program requirements, as
modified by the agency's individual MTW waivers and MTW policies for
its tenant-based HCV program, regardless of whether the family stays or
moves from the project.
9. Applicability of Other Federal, State, and Local Requirements
Notwithstanding the MTW Waivers and associated activities provided
in this Operations Notice, the following provisions of the 1937 Act
continue to apply to MTW agencies and the assistance received pursuant
to the 1937 Act:
i. The terms ``low-income families'' and ``very low-income
families'' shall continue to be defined by reference to Section 3(b)(2)
of the 1937 Act (42 U.S.C. 1437a(b)(2));
ii. Section 12 of the 1937 Act (42 U.S.C. 1437j), as amended, shall
apply to housing assisted under the demonstration, other than housing
assisted solely due to occupancy by families receiving tenant-based
assistance;
iii. Section 18 of the 1937 Act (42 U.S.C. 1437p, as amended by
Section 1002(d) of Pub. L. 104-19, Section 201(b)(1) of Pub. L. 104-
134, and Section 201(b) of Pub. L. 104-202), governing demolition and
disposition, shall continue to apply to public housing notwithstanding
any use of the housing under MTW; and
iv. Section 8(r)(1) of the 1937 Act on HCV portability shall
continue to apply unless provided as a cohort-specific waiver and
associated activity(s) in an evaluative cohort as necessary to
implement comprehensive rent reform and occupancy policies. Such a
cohort-specific waiver and associated activity(s) would contain, at a
minimum, exceptions for requests to port due to employment, education,
health and safety, and reasonable accommodation.
Notwithstanding any requirement contained in this Notice or any MTW
Waiver and associated activity granted herein, other Federal, state and
local requirements applicable to public housing or HCV assistance will
continue to apply. The MTW CACC Amendment will place in HUD the
authority to determine if any future law or future regulation conflicts
with any MTW-related agreement or Notice. If a future law conflicts,
the law shall be implemented, and no breach of contract claim, or any
claim for monetary damages, may result from the conflict or
implementation of the conflicting law or regulation.
If any non-1937 Act requirement applicable to PHAs, public housing,
or HCV assistance contains a provision that conflicts or is
inconsistent with any MTW Waiver and associated activity granted by
HUD, the agency remains subject to the terms of that non-1937 Act
requirement. Such requirements include, but are not limited to:
Requirements for Federal Funds: Notwithstanding the
flexibilities described in this Notice, the public housing and voucher
funding provided to MTW agencies remain Federal funds and are subject
to any and all other Federal requirements outside of the 1937 Act
(e.g., including, but not limited to, competitive HUD NOFAs under which
the MTW agency has received an award, state and local laws, Federal
statutes other than the 1937 Act (including appropriations acts), and
OMB Circulars and requirements), as modified from time to time. The MTW
agency's expenditures must comply with 2 CFR part 200 and other
applicable Federal requirements, which provide basic guidelines for the
use of Federal funds, including the requirements of this Notice.
National Environmental Policy Act (NEPA): MTW agencies
must comply with NEPA, 24 CFR part 50 or part 58, as applicable, and
other related Federal laws and authorities identified in 24 CFR. Part
50 or part 58, as applicable. Information and guidance on the
environmental review process and requirements is provided in PIH Notice
2016-22, or successor notice.
Fair Housing and Equal Opportunity: As with the
administration of all HUD programs and all HUD-assisted activities,
fair housing, and civil rights issues apply to the administration of
MTW demonstration programs. This includes actions and policies that may
have a discriminatory effect on the basis of race, color, sex, national
origin, religion, disability, or familial status (see 24 CFR part 1 and
part 100 subpart G) or that may impede, obstruct, prevent, or undermine
efforts to affirmatively further fair housing. Annual PHA Plans must
include a civil rights certification required by Section 5A of the 1937
Act and implemented by regulation at 24 CFR 903.7(o) and 903.15, as
well as a statement of the PHA's strategies and actions to achieve fair
housing goals outlined in an approved Assessment of Fair Housing (AFH)
consistent with 24 CFR 5.154. If the PHA does not have a HUD-accepted
AFH, it must still provide a civil rights certification and statement
of the PHA's fair housing strategies, which would be informed by the
corresponding jurisdiction's AFH and the PHA's assessment of its own
operations.
All PHAs, including MTW agencies, are obligated to comply with non-
discrimination and equal opportunity laws and implementing regulation,
including those in 24 CFR 5.105. Specific laws and regulations must be
viewed in their entirety for full compliance, as this Operations Notice
does not incorporate a complete discussion of all legal authorities.
For example, PHAs, including MTW agencies, are required to comply with
[[Page 50402]]
the Fair Housing Act, Title VI of the Civil Rights Act of 1964, Section
504 of the Rehabilitation Act of 1973, Title II of the Americans with
Disabilities Act of 1990, Architectural Barriers Act of 1968, Executive
Order 11063: Equal Opportunity in Housing, Executive Order 13166:
Improving Access to Services for Persons with Limited English
Proficiency, HUD's Equal Access Rule (24 CFR 5.105(a)(2), Age
Discrimination Act of 1975, and Title IX of the Education Amendments
Act of 1972, as well as HUD and government-wide regulations
implementing these authorities. PHAs should review PIH Notice 2011-31
for more details.
Court Orders and Voluntary Compliance Agreements: MTW
agencies must comply with the terms of any applicable court orders or
Voluntary Compliance Agreements that are in existence or may come into
existence during the term of the MTW CACC Amendment. The PHA must
cooperate fully with any investigation by the HUD Office of Inspector
General or any other investigative and law enforcement agencies of the
U.S. Government.
10. MTW Agencies Admitted Prior to 2016 MTW Expansion Statute
The 39 MTW agencies that entered the MTW demonstration prior to the
2016 MTW Expansion Statute adhere to an administrative structure
outlined in the Standard MTW Agreement, a contract between each current
agency and HUD. The 2016 MTW Expansion Statute extended the term of the
Standard MTW Agreement for these existing MTW agencies through each
agency's 2028 fiscal year.
Some agencies that entered the MTW demonstration prior to the 2016
MTW Expansion Statute may wish to opt out of their Standard MTW
Agreement and administer their MTW program pursuant to the MTW
Expansion and the requirements in this MTW Operations Notice. HUD will
support an existing MTW agency's request to join the MTW Expansion
provided that the agency:
Makes the change at the end of its fiscal year, so that it
does not have part of a fiscal year under the Standard Agreement and
part under the Operations Notice;
follows the same public comment and Board resolution
process as would be required for amending the Standard MTW Agreement;
executes its MTW CACC Amendment to authorize participation
in the MTW demonstration consistent with the Operations Notice; and
agrees to all the terms and conditions that apply to MTW
agencies admitted pursuant to the 2016 MTW Expansion Statute, including
all of the provisions of this Operations Notice and the accompanying
MTW CACC Amendment.
Should an existing MTW agency elect to administer its MTW program
pursuant to the framework described in this Operations Notice, it will
not be required to implement the cohort-specific policy change
associated with any of the MTW cohorts and it will not be required to
participate in the evaluation of that specific policy change. All other
requirements in this Operations Notice will apply.
11. Sanctions, Terminations, and Default
If the MTW agency violates any of the requirements outlined in this
Notice, HUD is authorized to take any corrective or remedial action
permitted by law. Sanctions, terminations, and default are covered in
the agency's MTW CACC Amendment.
III. Environmental Impact
1. Purpose and Applicability
A Finding of No Significant Impact (FONSI) with respect to the
environment was made for a previous version of this Notice in
accordance with HUD regulations in 24 CFR part 50 that implement
section 102(2)(C) of the National Environmental Policy Act of 1969 (42
U.S.C. 4332(2)(C)). The FONSI is applicable to the current version of
the Notice because there were no significant changes to the provisions
of the Notice. The FONSI will be available for public inspection on
www.regulations.gov.
Dated: August 24 2018.
Robert E. Mulderig,
Acting Deputy Assistant Secretary for Public Housing Investments.
[FR Doc. 2018-21723 Filed 10-4-18; 8:45 am]
BILLING CODE 4210-67-P