THE WEEK IN HOUSING
RECENT NEWS & UPDATES FROM MINNESOTA NAHRO
We head into the final week of 2020 with good news. After months of negotiations and last minute drama by the President, the COVID Relief Package and FY21 Funding Bill is finally law. This member update provides highlights of key components of the bill and its impact on the households we serve. Happy Holidays!
Omnibus & COVID Relief Package Becomes Law
Yesterday, President Trump signed the omnibus and COVID relief package passed by Congress last week into law. The sweeping legislative package provides at least level funding for all HUD programs throughout FY 2021, permanently authorizes the 4 percent Low Income Housing Tax Credit, and provides $25 billion in rent relief to struggling landlords and renters.
This package is the culmination of years of work by NAHRO and its members; the permanent authorization of the 4 percent Low Income Housing Tax Credit has been a priority for NAHRO. Additionally, NAHRO members have pushed for rent relief and full-year appropriations for HUD throughout the year. NAHRO thanks its members for their hard work to make this monumental package possible.
Read the full NAHRO Analysis here.
Public Housing Fund Created & Funded at $7.8B
Excerpted from NAHRO Monitor
The Omnibus Bill creates the Public Housing Fund which is a new fund of $7.806 billion comprised of the Public Housing Operating Fund, Capital Fund, and existing Capital Fund set-asides funding discussed below. To read the in depth NAHRO article, click here.
Public Housing Operating Fund
The Act provides $4.839 billion for public housing formula grants. This is $290 million more than 2020 Appropriations, $190 million more than the House bill, and $347 million more than the Senate bill.
Public Housing Capital Fund
The FY 2021 Appropriations Act includes $2.765 billion for the Capital Fund. As the Act places the Capital Fund as a set-aside within the larger Public Housing Fund, programs previously treated as set-asides from the Capital Fund (discussed below) would no longer be considered direct Capital Fund set-asides. The Act provides $19 million more in Capital Fund formula grants than FY 2020.
Capital Fund Set Asides
The Appropriations Act creates a new fund, the Public Housing Fund. As such, the Capital Fund set asides are no longer treated as set-asides from the Capital Fund, but rather additional set asides from the Public Housing Fund.
Public Housing Subsidy Flexibility & Small Agencies
The Act allows small agencies to retain their flexibility to make fungible 100 percent of their annual grants. The Act also carries forward the appropriations provision increasing the limit on fungibility for PHAs with 250 or more units of public housing to transfer up to 25 percent of their annual Capital Fund grant to operations. Through HOTMA, PHAs are also allowed to transfer 20 percent of their operating subsidy to their Capital Fund grant.
Annual Contributions Contract
The Act includes language that prohibits HUD from requiring or enforcing any changes to the terms and conditions of the ACC as a requisite for PHAs to receive funding unless the changes are mutually agreed upon by HUD and the PHA. This provision was included in the 2020 Appropriations Act.
Small Agency Exemption From Asset Management
The Act includes the provision that exempts PHAs that own and operate 400 or fewer public housing units from asset management requirements.
Read NAHRO’s in depth analysis of the Public Housing Provisions here.
Section 8 & Rental Assistance Provisions Summary
Excerpted from NAHRO Monitor – Read the In Depth NAHRO Analysis of the Section 8 Program here.
Housing Choice Voucher (HCV) & Housing Assistance Payments (HAP)
The final enacted budget includes $23.080 billion for HAP renewals. This is $1.578 billion more than the FY 2020 enacted level, $6.122 billion more than the President’s FY 2021 budget proposal, $228 million more than the House bill, and $189 more than the Senate bill.
HAP Set-Aside Funds
The final enacted budget allocates $110 million for HAP set-aside funding to four categories: (1) PHAs that experience a significant increase in renewal costs of vouchers resulting from unforeseen circumstances or from portability; (2) vouchers that were not in use during the previous 12-month period in order to be available to meet project-based voucher commitments; (3) costs experienced with HUD-VASH vouchers; (4) for PHAs that would be required to terminate rental assistance despite taking cost-saving measures; and (5) for adjustments in the allocations for public housing agencies that are (i) leasing a lower-than-average percentage of their authorized vouchers; (ii) have low amounts of budget authority in their net restricted asset accounts and HUD-held programmatic reserves; and (iii) are not participating in the Moving to Work Demonstration; and (6) for PHAs that have experienced increased costs or loss of units in Presidentially declared emergency areas.
The final enacted budget allocates $314 million for the renewal of mainstream vouchers, including their associated administrative fees. Administrative fees for these vouchers are subject to the same requirements are other HCV administrative fees. Upon turnover, these vouchers shall be used to home non-elderly persons with disabilities.
The final enacted budget allocates $2.159 billion for administrative fees ($2.129 billion for ongoing administrative fees and $30 million for additional administrative fees). This is $182 million more than the FY 2020 enacted budget. The final enacted budget continues to instruct HUD to use the current administrative fee formula. It also gives HUD the ability to prorate the administrative fee and utilize unobligated balances to increase the proration, except for those special purpose vouchers for which administrative fees have already been allocated.
4% Low Income Housing Tax Credit Now Permanent
The Appropriations Act sets the minimum credit rate for the 4 percent credit at 4 percent for all applicable credits allocated or obligated after December 31, 2020. The bill further increases the number of tax credits available to qualified disaster zone projects. NAHRO has long been pushing to make permanent the 4 percent tax credit.