Enhanced Vouchers
1
1-7
Housing Conversion Actions

HUD provides tenant-based rental
assistance to assist residents affected by
Owner Actions
 Actions taken by HUD’s Office of Multi-family
Housing Programs

2
Housing Conversion Actions

The type of event dictates the type of
rental assistance provided


HUD makes the determination
Could result in families being given
HCV (traditional vouchers), or
 Enhanced vouchers

3
1-7 thru 1-9
Housing Conversion Actions
Preservation Prepayment
 Section 8 Opt-Outs
 HUD Enforcement Action
 Property Disposition

4
1-7
Housing Conversion Actions

Preservation Prepayment:
Owner prepays HUD insured mortgage, or
 Terminates mortgage insurance

 No

rent or income limitations on the project
Eligible residents receive Enhanced Vouchers
5
1-10
Part 3: Key Players:
An Overview of Roles
6
1-10
HUD’s Role

HUD’s Office of Multifamily Housing


Primary contact for owners during the
conversion process
Responsibilities include:
Determining if owner has the right to prepay
 Ensuring owner fulfills the responsibilities
throughout the process

7
HUD’s Role

Office of Public Housing
Selects PHA to administer the tenant-based
assistance
 Provide technical assistance and guidance
 Serves as the PHA point-of-contact

8
1-11
Owner’s Role
Comply with proper notice requirements
 Meet with tenants to explain process
 Provide tenant information to PHA
 Execute new lease with the families
 Comply with the HAP contract

9
PHA Role
Screen families
 Certify families eligibility
 Conduct rent reasonableness
 Conduct HQS Inspections
 Approve units for leasing
 Execute HAP contracts

10
Family’s Role

Family chooses whether to:
Accept preservation voucher (stay in unit) or
 Move with a regular voucher


Provide necessary information to PHA
11
1-14 & 1-15
Preservation Prepayment

Eligibility event date

Effective date of the prepayment
 Date
the owner prepaid mortgage or terminated
mortgage insurance

Target date

Date owner can increase rent after
prepayment
 60
days after the effective date to the prepayment
12
1-16
Special Fees

Fees for extraordinary costs:
$200 per unit occupied on the eligibility event
date (multifamily conversion only)
 Compensates PHAs for increased costs:

 Overtime
paid to staff
 Temporary
 Owner
services
outreach
 Informational
meetings, interviews, briefings
13
1-18
Tenant-based Program Issues
14
1-18
Initial and Subsequent Use

All enhanced or non-enhanced vouchers
provided for a housing conversion action
are ‘special admission vouchers’
Must be used first to assist HUD listed,
specific families
 ‘Left over’ vouchers may be used by the PHA
to assist families on the PHA waiting list

 These
vouchers are regular HCV, not enhanced
vouchers
15
Tenant-based Nature of Assistance
Owner has no guarantee that any tenantbased assistance will be used at the
property
 Families may elect to move from the
property with voucher
 Families may move under portability

16
PHA Screening of Families
By agreeing to administer the special
admission voucher, PHAs are not
relinquishing their authority to screen
potentially eligible families
 May deny admission in accordance with
the regulations and PHA policies

17
PHA Screening of families

Policies for screening and denial of
admission must be the same as those
used for waiting list admissions

However, repayment agreements are
encouraged by HUD if the sole reason for
denial is that the family owes the PHA money
18
PHA Screening of Families

If family is ineligible as result of the
interview or verification

PHA must notify the applicant of:
 Reasons
 Right
why ineligible
and how to request informal review
19
1-19
Determining Tenant Income

PHA may use owner’s most recent family
income examination if:
Owner’s current certification is no more than
six months old, as of voucher issuance date,
and
 PHA determines owner certifications are
acceptable after reviewing small sample for
accuracy

20
Determining Tenant Income

If PHA uses owner’s certification, annual
reexamination requirements must be met

Annual reexamination must be completed
within one year from date owner certification
completed
 Not
date owner certification accepted
21
Owner Certifications

Reexamination date if Owner Certifications
used
Owner Certification Date
 Eligibility Event Date
 PHA Voucher Issued
 Lease up Date
 Reexamination Date

2/1/07
5/15/07
6/1/07
8/1/07
2/1/08
22
Owner Certifications

If owner certifications not used, regular
rules apply
Eligibility Event Date
 PHA Voucher Issued
 Lease up Date
 Reexamination Date

5/15/07
6/1/07
8/1/07
8/1/08
23
Voucher Issuance

Voucher issued in accordance with PHA
policy
Regular PHA subsidy standards apply
 HUD encourages PHA to provide families with
maximum search time reasonably required to
locate housing

24
PHA Tenancy Approval

To begin lease-up process, PHA receives:
Request for Tenancy Approval (RFTA)
 Copy of the owner’s unexecuted lease with
tenancy addendum attached

25
PHA Tenancy Approval
Unit must be eligible
 Unit must have passed HQS
 Lease must include the tenancy addendum
 Rent must be reasonable
 Rent must be affordable (regular voucher)


Does not apply to enhanced voucher
26
PHA Tenancy Approval

Standard Rent Reasonableness policies
apply
PHA uses methodology from admin plan
 The rent to owner is not more than the rent
charged for:

 Comparable
units in the private unassisted
market
 Comparable
unassisted units in the premises
27
1-20
PHA Tenancy Approval

Rent Reasonableness
Based on “as is” condition of the unit and
premises
 If the rent is not reasonable, the family will
have to move to benefit from the voucher
assistance
 Family may not choose to pay unreasonable
amount out of pocket

28
PHA Tenancy Approval

Housing Quality Standards (HQS)

The PHA must inspect the unit and ensure it
meets HQS
 May
not make HAP payments to cover any period
prior to the date the unit passes HQS
 No
HQS exceptions
29
Contract Execution

Preservation prepayment:

For families staying at the project, the HAP
contract may not be executed for a lease term
effective prior to the target date
 60

days after effective date of prepayment
For families moving from the property, the
PHA may execute HAP contracts effective
prior to the target date
30
Contract Execution
HAPC must be executed no later than 60
days from beginning of the lease term
 PHA may not pay HAP until HAPC
executed

If within 60 days of lease term, pay
retroactively
 If not executed within 60 days, contract is
void and cannot pay owner

31
1-22
Part 6: Enhanced Vouchers
32
Enhanced Vouchers
Eligibility

On the eligibility event date, the family
must be
Residing in the property, and
 Income eligible

33
Income Limits
Moderate Income
95% of median
Low Income
80% of median
Very Low Income
50% of median
Median income for the area is determined by HUD
34
Enhanced Vouchers
Preservation Eligibility

Income eligible
Low-income family (80% or less)
 Moderate-income families (95% or less) will
qualify if they are:

 Elderly
or disabled families, or
 Residing
 3%
in a low vacancy area
or less vacancy rate
 HUD
local office will determine
35
1-23
Opt-Out after Prepayment

Properties where prepayment preceded
the owner opt-out

Special eligibility rules, family must:
 Reside
in a unit covered by the expiring contract
 Reside
in the property on the effective date of the
prepayment
 Meet
income requirements for prepayment
36
Enhanced Vouchers and
Income Targeting
Income targeting requirements do not
apply to enhanced voucher admissions
 Admission of these families is not counted
in determining compliance with income
targeting

37
Family Eligibility
No Initial HAP
1-24

PHA must keep records on file if family is
income-eligible for enhanced voucher, and
There is no initial HAP (TTP exceeds gross
rent), and
 The family wishes to remain in the project

38
Family Eligibility
No Initial HAP

If family income decreases or rent
increases within 3 years of eligibility event

PHA will execute a HAP contract
PHA must inform family of 3-year period
 Family is responsible to contact PHA if
situation changes


When a voucher is available, eligible family
will receive the voucher
39
Preservation Prepayments

Assisted and unassisted families may be
eligible for enhanced voucher assistance
Unassisted families are residents of a
preservation property
 Assisted families are residents, but are
receiving tenant based assistance

40
1-25

Definitions
Stayers:


Eligible families use their tenant-based
assistance to remain in the project
Movers:

Eligible families take their tenant-based
assistance and move out of the project
41
1-25
Enhanced Voucher Assistance
Enhanced voucher assistance is subject to
most normal voucher program rules
 Special requirements

Payment standard
 Family unit size limitation
 Enhanced minimum rent requirement

42
Payment Standards

Special Payment Standards are used for
Enhanced Voucher family staying in the
unit


Payment standard (12j) = the greater of
Payment standard or the (new) gross rent
If gross rent is less than PHA’s Payment
Standard, the regular payment standard
rules apply
43
Enhanced Voucher
Payment Standard
Payment standard for enhanced voucher stayers
Two bedroom unit
Rent = $650, UA = $50
Gross Rent =
PHA’s payment standard =
Payment Standard is?
$700
$625
$700
44
1-26
Enhanced Payment Standard
If gross rent increases, enhanced payment
standard may increase
 PHA must identify family as an enhanced
voucher family even if initial gross rent
does not exceed regular payment standard


Enhanced payment standard may apply due
to subsequent rent increases
45
Learning Activity: 1

Enhanced Voucher Payment Standard

Page 1-30
46
Enhanced Voucher Requirements
for Over-Housed Families
1-26
47
Over-housed families

Enhanced voucher size is issued based on
PHA’s subsidy standards


Not the actual size of the family’s unit
If the bedroom size of the family’s unit
exceeds the enhanced voucher size the
family is overhoused
48
Over-housed families

If an overhoused family wishes to stay in
the project with enhanced voucher
assistance, PHA must:
Notify the owner that the family is in an
oversize unit
 Inform the owner of the appropriate size
under the PHA’s subsidy standards

49
Over-housed families
The owner will identify all appropriate size
units available
 Family must move to an available unit that
is the appropriate size
 Unit must meet program requirements
including rent reasonableness and HQS

50
1-27
Over-housed families

If family moves:



Lease and HAP contract are executed
Enhanced voucher HAP calculation based on gross
rent of appropriate sized unit
If family refuses to move:


HAP calculation based on regular voucher subsidy
formula
Family responsible for amount of gross rent above
HAP
51
1-28
Over-housed families

If no appropriate size units available
PHA will execute a HAP for the oversized unit
 Family’s enhanced voucher subsidy
calculation will be based on the gross rent of
the oversized unit

 Until
an appropriate size unit is available
52
Over-housed families

When an appropriate unit becomes
available
Owner must immediately notify family and
PHA
 Family must move in order to continue to
receive enhanced voucher assistance

53
Over-housed families

If the family moves



Lease and HAP contract are executed
Enhanced voucher HAP calculation based on the
gross rent of the appropriate sized unit
If the family refuses to move


HAP calculation based on regular voucher subsidy
formula
Family responsible for amount of gross rent above
HAP
54
Over-housed families

If an enhanced voucher family
subsequently becomes overhoused


Decrease in family size or change in family
composition
Policies regarding overhoused voucher
families apply
55
1-29
Over-housed families

If there are more overhoused families than
appropriate size units, PHA determines
who moves
Use of lottery system; or
 Consider family circumstances

 Age
 Frailty
of family members
56
Over-housed families

If family moves out of project, the voucher
becomes a Housing Choice Voucher
57
1- 31
Enhanced Voucher Minimum
Rent for Stayers
58
Minimum Rent for Stayers
This minimum rent is different than the
PHA’s minimum rent set between $0 - $50
 Enhanced voucher families must pay no
less in rent than what was being paid on
eligibility event date

59
Section 9: TTP
60
Minimum Rent for Stayers

Unassisted residents of preservation
project

Enhanced Voucher Minimum Rent = Gross
Rent (rent + utility allowance) at time owner
pre-paid
Rent
$325
Utility Allowance
25
Enhanced Voucher Minimum Rent = $350
61
Minimum Rent for Stayers

Assisted families under a project-based
contract

Enhanced voucher minimum rent = Total
Tenant Payment (TTP) as of event date
62
Minimum Rent for Stayers

Assisted families under voucher program

Enhanced voucher minimum rent = Family
share as of event date
 TFC
(Total Family Contribution) is old term for
family share
63
Total Family Share
750
680
20
700
700
400
300
400
300
380
64
Minimum Rent for Stayers
Recap


So, Minimum Rent is

Unassisted family: Gross Rent, on event date

PB assisted family: TTP, on event date

HCV assisted family: Family Share, on event date
Enhanced voucher minimum rent continues as
long as the enhanced voucher family continues
to reside at the property
65
1-32
HCV Assisted Families

Residents receiving HCV assistance on
date of preservation prepayment may
choose Enhanced Voucher if:
Family meets income requirements on date of
eligibility event
 Rent increases comply with lease and regs
 New gross rent is reasonable
 Family stays in the unit

66
HCV Assisted Families

If HCV family chooses NOT to accept
enhanced voucher assistance

All regular HCV rules continue to apply
67
HCV Assisted Families

Why would a HCV family choose an
Enhanced Voucher?
Payment Standard = new gross rent
 Example:

 PHA
Payment Standard = $500
 New
Gross Rent = $575
 Enhanced
 Family
Voucher Payment Standard = $575
will pay $75 less; PHA will pay $75 more
68
Enhanced Voucher Funding

HUD will use funds appropriated for
enhanced voucher assistance to amend
the existing ACC to cover additional
subsidy cost

No new enhanced vouchers are provided
69
Not in text
Tenant Protection Funds




$200,000,000 funded
Significant change is that HUD will fund every
unit that was occupied during any part of the 24
months prior to the eligibility event
Previously only funded units occupied at that
time
Applies to any tenant protection actions funded
from 2008 appropriations
70
Significant Decline in
Family Income
1-35

Effect on Enhanced Voucher Minimum
Rent

If Enhanced Voucher family experiences a
15% + decrease in family’s gross income from
eligibility event date
A
new enhanced voucher minimum rent must be
calculated
71
Significant Decline in
Family Income
Oh, my….. How to
figure out a decrease of
15%
72
Significant Decline in
Family Income

SUGGESTION:


Calculate ‘threshold’ at time of enhanced
voucher eligibility determination
What is family’s gross monthly income at
time of eligibility event date?

$1,000 (gross monthly income at event date)
73
Significant Decline in
Family Income

Either:
Multiply Old Gross monthly income by .15
(15%)
 $ 1,000 x .15 = $150 (threshold)


Then check: did gross monthly income
decrease by at least $150?
74
Significant Decline in
Family Income

Or…
Multiply Old Gross monthly income by .85
(85%)
 $ 1,000 x .85 = $850 (threshold)
 Check: Is the family’s gross monthly income
$850 or less?

75
Significant Decline in
Family Income
If gross monthly income
meets threshold
 Then new minimum rent
percentage (%) must be
calculated

76
Significant Decline in
Family Income
Enhanced Voucher Minimum rent changes
from a dollar amount to a specific
percentage
 Will not revert back to a dollar amount

77
Learning Activity: 2

Significant Decline in Family Gross Income

Page 1-36
78
Minimum Rent
after Significant Decline
1-37

Unassisted Families: Enhanced Voucher
Minimum rent is greater of:
(A)
(B)
The percentage of adjusted monthly income
paid for gross rent on eligibility event, or
30% of the family’s current adjusted
monthly income
79
Minimum Rent
after Significant Decline

Assisted Families: Enhanced Voucher
Minimum rent is greater of :
(A)
(B)
The percentage of adjusted monthly income
paid for TTP or total family share on
eligibility event, or
30% of the family’s current adjusted
monthly income
80
Minimum Rent after
Significant Decline – Recap

Enhanced Voucher Minimum rent becomes
the greater of:
30% of family’s adjusted monthly income, or
 % of monthly adjusted income paid for

 Gross
rent (unassisted)
 TTP (Project base assisted)
 Family Share/TFC (HCV assisted)

on eligibility event date
81
Converting Enhanced Voucher
Minimum Rent to a Percentage

Step 1:

Determine percentage of adjusted monthly
income family was paying for:
 Gross
 TTP,
rent
or
 Family

share
On the eligibility event date
82
Converting Enhanced Voucher
Minimum Rent to a Percentage

Step 1: Example

$400 (gross rent, TTP or family share)

$1,000 adjusted monthly income

$400 / $1000 = .40 = 40%


40% of adjusted monthly income was paid for gross
rent, TTP or family share so. . .
40% of adjusted monthly income is now the
enhanced voucher minimum rent percentage
83
Converting Enhanced Voucher
Minimum Rent to a Percentage

Step 2: Determine which percentage is
greater:
Percentage of adjusted monthly income at
eligibility event date, or
 30% of the family’s current adjusted monthly
income

84
Converting Enhanced Voucher
Minimum Rent to a Percentage
85
EV Minimum Rent - Family
Assisted on eligibility event

Step 3: Apply % to find Enhanced Voucher
Minimum Rent
Family had a 25% decrease in GROSS income
 $750 (adjusted monthly income)
 x .40 (minimum rent percentage)
 $300
 $300 is new enhanced voucher minimum rent

86
Section 9: TTP
750
9d x .40
50
300
87
Learning Activity: 3
Page 1- 38
$$$$ to %%%%
Does anyone have a calculator
88
Learning Activity: 4
Page 1- 40
OK… I think I’m ready for another one.
Decrease in family monthly income,
new minimum rent?
89
Calculating Total HAP
for Stayers
1-41

Gross rent for the unit minus TTP (greater
of):
30% of adjusted monthly income
 10% of gross monthly income
 Welfare rent in “as paid” states
 PHA minimum rent
 Enhanced voucher minimum rent

90
Learning Activity: 5
Calculating HAP for Stayers
 Page 1-42

91
Learning Activity: 6
Enhanced Voucher Subsidy Calculations
on the HUD-50058
 Page 1-43

92
Changes in Family Size

If unit becomes overcrowded due to
increase in family size:


Family must move to continue voucher
assistance
PHA
Must assist family in housing search
 Must terminate HAP contract if family refuses
acceptable unit

93
Changes in Family Size

If unit becomes overcrowded due to
increase in family size:
Enhanced Voucher rules apply if family
moves to larger unit in project
 HCV rules apply if family moves out of project

94
Changes in Family Size

Family size decreases:
If family moves to appropriate unit size in the
project enhanced voucher assistance
continues
 If family refuses to move to appropriate unit
size in the project regular HCV rules apply

 Family
responsible for amount of the gross rent
not covered by HAP
95
Regular Rules For Movers

Family moves from project at any time

Housing Choice Voucher rules apply
 No
enhanced payment standard
 No
enhanced voucher minimum rent
96
Part 7: Enhancements
Part 8: Conversion of HCV to Enhanced
Vouchers
Information is in book
97
Additional Tools in Book
Developing an Action Plan for Housing
Conversion Actions
 Chart:



Differences Between Preservation and Optout
Flow of Your Housing Conversion Action
98