Assisted Housing Services Corporation Fall 2011 The purpose of the newsletter is to provide useful information to stakeholders in lowincome housing in regard to compliance and policy changes as well as recent HUD news. If you are not receiving this publication via e-mail, or if you have ideas for articles or questions we d like to hear from you. Email us at: mark.pascoe@cgifederal.com In This Issue EIV Notice 11-21 1-2 Energy Innovation Fund 3-4 EIV and SS Cents 4 Bed Bug Control and Prevention 5-6 Vouchers Suspended or Rejected in TRACS 6-8 What's New? 8 Utility Allowance Regs 9 Proposed FMR s 9-10 Funds Authorization Form- 9250 10 HUD Issues Revised EIV Notice 11-21 Housing Notice 2011-21, Enterprise Income Verification (EIV) System, was issued August 19, 2011. This Notice supersedes Notices H 2008-03, H 2009-20, and H 2010-10. The notice provides updates to O/A requirements for using EIV. The key points of the notice are listed below: Clarifies that IPAs may use printed EIV documents when auditing an owner s compliance (An IPA is an Independent Public Auditor hired to audit a property s financial statements), however these documents may only be reviewed at the property or O/A office. Clarifies the requirement on resolving discrepancies between TRACS and the current form HUD-50059. O/A s must make every effort to correct the discrepant information. Tenants are required to resolve discrepant information with SSA. O/A s must maintain documentation in the file to show efforts to resolve the errors. Clarifies that the 90 day rule for running the EIV Income report for new tenants (MI s) also pertains to tenants living at the property but not previously receiving assistance (Initial Certifications - IC s) Indicates the following reports must be run by selecting the All recertification month: No Income Report New Hires Report Identity Verification Report Deceased Tenant Report Note: This should also be updated in the O/A s written policies and procedures for using EIV. THE NEWS AND INFORMATION QUARTERLY FOR OWNERS AND AGENTS OF THE PERFORMANCE BASED CONTRACT ADMINISTRATION FOR OHIO AND WASHINGTON DC
States the O/A must make sure that the income appearing on the EIV Income Discrepancy Report does not meet a regulatory income exclusion. MOR Reviewers will ensure that O/A s evaluated the income type to determine if it meets one of the income exclusions as noted in HUD Handbook 4350.3 REV 1 Chg.3. Clarifies that a tenant s monthly repayment agreement payment may exceed 40% of the family s monthly adjusted income if the family agrees to the amount stated in the repayment agreement. The agreement on the amount of the repayment is signified by both tenant and OA signature on the agreement. Recommends that an O/A has the head of household and, if applicable, the family member who had the unreported income sign a repayment agreement. Indicates the comment field on the voucher must be completed when explaining payment and costs retained even if no costs were retained. The notice provides a detailed example of how O/A s are to provide notes for the OARQ (Owner/Agent Request) Miscellaneous Accounting Request that are included on the voucher. Identifies an updated penalty for not using the EIV system. The O/A will now incur a penalty of a five percent decrease in the voucher payment for the month following the date the violation was found and each subsequent voucher payment until the MOR finding is cured. OA s are still required to mitigate the issue of non-compliance within 30 days or risk being flagged in APPS by HUD. This represents the most significant change from HUD Notice 10-10 as that notice only required a onetime 5% voucher reduction. Indicates a new security training requirement. EIV users are now required to complete the online Federal ISS Awareness training program. The most recent HUD EIV webcast will no longer satisfy the security training requirement. The training can be accessed by clicking or typing the following link:http:// iase.disa.mil/eta/index.html#onlinetraining. Other items of note: Upon completion of the training O/A staff should print the Certification of Completion and maintain in a file for auditing purposes by HUD or CA reviewers Clarifies that when mailing EIV data, data must be sent to an office of the O/A and must not be mailed to Independent Auditor offices. New Attachment 9: Assessing the Five Percent Penalty in Voucher Payment has been added New Attachment 10: Sample Tenant Consent to Disclose EIV Income Information has been added Note: OA s should note that this is only a sample and OA s have the option of developing their own. The complete text of HUD Notice 11-21 is available on HUDClips: http://portal.hud.gov/hudportal/ documents/huddoc?id=11 21hsgn.pdf. The CA Quarterly Review Fall 2011 Edition Page 2
Multifamily Energy Innovation Fund Included here please find an overview of the program and links to other sites for obtaining important information and instructions. The information that appears here is not a substitute for careful reading of the EI Notice of Funding Availability (EI NOFA) published on the Grants.Gov website on August 22, 2011. OVERVIEW HUD s Office of Multifamily Housing Programs has issued a NOFA for the Multifamily Energy Innovation Fund. This fund provides a total of $25 million in grants to be used for the purpose of energy efficiency upgrades at multifamily properties. The goals of this NOFA are to: Demonstrate solutions to the primary and longstanding challenges to implementing energy efficiency and renewable energy improvements, in existing affordable multifamily properties. Leverage private capital and additional public funding to demonstrate proof of concept of specific models. Conduct applied research to document and disseminate mainstream, scalable approaches to retrofitting affordable multifamily properties. The overall objective of the Energy Innovation Fund is to help catalyze a home energy retrofit market in the United States by accelerating private investment in cost-saving energy efficiency retrofits in the residential sector. Innovative and replicable strategies to improve the usefulness of existing HUD programs--as well as developing new financing tools--will lead to significant reductions in energy consumption, operating costs, and the carbon footprint of both affordable and market-rate housing. THE HUD GRANTS WEB PAGE Detailed application instructions and EI program requirements are included in the General Section of HUD s FY 2010 NOFAs for Discretionary Programs, and in the Energy Innovation Fund NOFA. Both documents can be accessed from the HUD Grants web page or Grants.Gov. HOW TO APPLY Applications are required to be submitted through Grants.Gov. When applying for funding through Grants.Gov, registration is the first step. For information and instructions go to the Grants.Gov website and click on Get Registered." To get instructions and access the application for the Energy Innovation Fund activity, go back to the Grants.Gov website and choose "Apply for a Grant." Download and follow all instructions. The NOFA is published here also and all required forms can be found here. GRANT TERMS The terms of any grant ultimately awarded under this NOFA will be controlled by a Cooperative Agreement to be executed when a grant is awarded. The document is provided here for examination, but is not a part of the application process. FLOOD PLAIN REPORTING HUD will maintain a Notice of Floodplain Action Spreadsheet. As properties are identified HUD will post them and any required notice information. The CA Quarterly Review Fall 2011 Edition Page 3
QUESTIONS AND ANSWERS Please send your questions to the Energy Innovation Fund Help Desk: EIFApplication@hud.gov. APPLICATION DEADLINE DATE As stated in the NOFA, the application deadline date is 11:59:59 p.m. on Thursday, October 20, 2011. WEBCAST HUD has scheduled a webcast on September 19, 2011 from 11:00 am to 12:30 pm EDT which will present the highlights of the EI NOFA and answer questions. Pre-registration is not necessary. After the webcast, the archived broadcast will be posted for your continued use. Are Social Security Cents Included as Income? HUD has received requests for further clarification to RHIIP Listserv messages #229 and #231 on how to calculate Social Security income and/or Medicare when the amounts in the EIV system differ from the amounts represented on the SSA Award Letter. Specifically, which document do you use when the Social Security Award Letter indicates a cents amount being received and the EIV Income Report does not. Housing Notice 2010-10 states the Income Report identifying the Social Security benefit information in EIV must be used as third party verification of the tenant s income and will be used to calculate the tenant s income. Additionally, the O/A must confirm with the tenant that the current benefit amount in EIV is correct. If the tenant agrees that the Social Security benefit information reported in EIV is correct, the O/A must use the gross benefit amount reported in EIV for calculating the tenant s income by annualizing the gross benefit amount projected forward for the next 12 months. This requirement allows the O/A to use the amount represented in EIV (even if no cents are included) to calculate income. Social Security Award Letters are not required to be viewed or included in the tenant s file if the EIV Income Report is being used to verify and calculate benefits. The SSA award letter should be used to calculate income and included in the tenant s file only if the tenant disputes the amount(s) on the EIV Income Report. Having the SSA Award Letter in the file is not in itself an indication that the tenant disputes the amount(s) on the EIV Income Report. The O/A should make a note on the EIV Income Report that the tenant disputes the amount and then use the Social Security Award Letter to calculate income. The award letter must not be older than 120 days. Please refer to Notice H 2010-10 for instructions when the tenant does not have his/her Social Security Award Letter or when the letter is older than 120 days. The CA Quarterly Review Fall 2011 Edition Page 4
HUD Issues Notice 11-20 - Guidelines on Bed Bug Control and Prevention Housing Notice 2011-20, Guidelines on Bed Bug Control and Prevention in HUD Insured and Assisted Multifamily Housing, was issued August 19, 2011. This Notice provides information and references to best practices regarding the prevention and control of bed bug infestations. It also provides guidance on the rights and responsibilities of HUD, Owners and Management Agents (O/As) and tenants with regard to bed bug infestations. The notice also clarifies that the costs of eradicating bed bugs is a project expense and consequently HUD can approve withdrawals from Residual Receipts and Reserve For Replacement or reimbursement of owner loans to the project. O/A s, however, are not permitted to charge tenants for the cost of eradication. HUD recommends that O/A s develop an Integrated Pest Management (IPM) Plan---details of requirements are provided. As part of the IPM plan: Provide training for staff Engage residents in efforts to prevent bedbugs Provide orientation for new tenants O/A s should respond with urgency to any report of bedbugs, if an owner cannot attain the services of a licensed pest control company within 3 calendar days of the reported infestation, the O/A is required to retain documentation of efforts to obtain services. Prohibited Actions by an O/A: Denying tenancy to a potential resident on the basis of a previous infestation Give a preference to any tenant based on responses to questions regarding prior exposure to bedbugs Charging a tenant to cover the cost of bedbug treatment The Hub/PC Director may honor requests for releases from the Reserve for Replacement or Residual Receipts accounts to reimburse an Owner for bed bug treatment. HUD may also consider an increased pest control line item in the project s operating budget, if the Section 8 Housing Assistance Payments (HAP) contract allows for budget-based rent setting in accordance with the Section 8 Renewal Policy Guide. However, any request for a rent increase should be part of an ongoing pest prevention program. The CA may allow this expense on the budget IF the property has demonstrated that they have an ongoing pest prevention program. Evidence of the program would need to be submitted in addition to other supporting financial documents, such as an invoice, in order to be eligible for approval. The Notice is available on HUDCLIPS at http://portal.hud.gov/hudportal/documents/huddoc?id=11-20hsgn.pdf The CA Quarterly Review Fall 2011 Edition Page 5
A Guide to Getting Paid When Vouchers Are Suspended or Rejected in TRACS Owners, management agents, and contract administrators (hereafter known as the submitter ) should routinely check the TRACS mail-box and Voucher Query to determine the status of vouchers submitted in TRACS. Vouchers that have been Suspended or Rejected in TRACS require actions to be taken by the submitter. Voucher eligible for manual review by Multifamily Housing s Financial Operations Division (FOD) must be transmitted by the submitter for manual review (see specific guidance below). They cannot be paid until manually reviewed. Voucher Approved by the reviewer are automatically paid. If the vouchers are Rejected, the submitter is provided two notices: (1) A notice from the FOD identifying the corrective actions that need to be taken prior to resubmitting the vouchers and (2) a message in the submitter s TRACS mail-box indicating that the Voucher has been cancelled by reviewer. Once the corrective actions are completed, the vouchers must be re-submitted in TRACS as a MAT 30 Correction (see specific guidance below). Many of the vouchers that are eligible for manual review have not been transmitted to the FOD. As a result, many owners have not been paid. This may be due in part to the fact that once a voucher is Suspended, the submitter ( generally the contract administrator) does not receive reminders in TRACS. After 24 months, the vouchers do not appear on the TRACS Voucher Query summary. In order to alert submitters that they have eligible vouchers that need to be transmitted to the FOD for manual review, the FOD will begin to automatically Reject vouchers more than 24 months old. This action will create a new Voucher has been cancelled by reviewer message in the submitter s TRACS mail-box. Rejected vouchers must then be resubmitted in TRACS as a MAT 30 Correction (see specific guidance below). Guide to Submitting Eligible Vouchers: If a voucher is Suspended in TRACS with a Status Code of T03, T31, or T52, it is eligible for manual review and must be transmitted to the FOD. Unless it is submitted for manual review, it cannot be paid. If the Status Code is T91 or T92, the voucher is eligible for manual review but only Traditional Contract Administrator (TCA) must submit the vouchers to the FOD. Paperless Manual Voucher Reviews Effective July 15, 2011, submitters (CA) must transmit the eligible voucher by email. Attach only one voucher to each email message. The CA Quarterly Review Fall 2011 Edition Page 6
ONE EMAIL ONE VOUCHER Please follow these File Name and Email Subject Name requirements: The file name must be the Contract number plus month (three letters) and year (two digits). For example: XX19Q051000 JUL 11 The email Subject line must be the Contract number plus month (three letters) year (two digits). Same as above example: XX19Q051000 JUL 11 Email a digital copy (Adobe Acrobat PDF file) of the voucher to VoucherProcessing@hud.gov Guide to Re-submitting Rejected Vouchers: If an eligible voucher has been manually reviewed by the FOD and Rejected in TRACS, the submitter must take the corrective actions directed by the FOD in the Record of Manual Review TRACS Suspended Voucher Notice. Once the corrective actions have been completed the voucher must be resubmitted in TRACS as a MAT 30 Correction (see Step 1 and Step 2 below). If an eligible voucher has not been submitted to the FOD and it is over two years old, it will be automatically Rejected in TRACS in order to alert the submitter via a Voucher cancelled by reviewer message in the submitter s TRACS mail-box. The submitter must resubmit the voucher in TRACS as a MAT 30 Correction (see Step 1 and Step 2 below). Handling MAT 30 Corrections: Step 1: Resubmit the voucher(s) for payment in TRACS. Resubmitted vouchers must be entered in TRACS as a MAT 30 Correction. To submit a MAT30 Correction, the MAT30 Section 2: Assistance Payment Summary Record must include the Voucher ID generated by TRACS. If you need assistance with a MAT 30 Correction resubmission, please contact the TRACS Help Desk by e -mail at TRACS@HUD.gov or telephone at 1-800-767-7588. Step 2: After resubmitting the voucher, wait one business day, then enter HUD Secure Systems, imax, to check TRACS Status Message and Voucher Query for TRACS Status Code for the resubmitted voucher(s) at https://hudapps.hud.gov/hud_systems/ Guide to Handling Other TRACS Status Codes: No Manual Voucher Review Required. Some submitters routinely transmit vouchers to the FOD that do not need to be reviewed. This time consuming and unnecessary step can be avoided by checking the Voucher Query in TRACS. If the Status Code is P00, the voucher is paid. If the Status Code is P10, the voucher will be automatically paid. The CA Quarterly Review Fall 2011 Edition Page 7
Ineligible Vouchers. Certain Suspended vouchers are ineligible for manual review by the FOD. Submitters need to take the following actions: If the Status Code is T53, the submitter should contact the TRACS Help Desk. Email address (best method because messages and responses are tracked): TRACS@hud.gov. Telephone: 1-800 -767-7588 All other TRACS Messages and Status Codes: The submitter must contact the local Multifamily Housing Project Manager in the HUD Hub or Program Center office that serves the project. For local HUD Hub and Program Center Information by State go to http://portal.hud.gov/portal/page/portal/hud/states If Owners and/or Agents identify that you have vouchers that have been suspended or rejected they should work with their CA to resolve the issue to ensure that payments are made accurately and timely. What s New? HUD Notice 11-21- Bed Bug Control and Prevention Posted 8/19/2011 HUD Notice 11-20- EIV Posted 8/19/2011 HUD Form 9250- Funds Authorization Form (see article later in newsletter for more Posted 8/5/2011 detail) HUD Form 935-2 - AFHMP (Replacement) Posted 8/3/2011 FY 2012 Income Limits (Proposed) Posted 8/19/2011 HUD Form9887/9887A - Document Package for Applicant's/Tenant's Consent to the Posted 8/31/2011 Release Of Information (Corrected spacing) HUD Notice 11-22- Extension of Housing Notice 2010-17, Revised Procedures for Requesting Posted 8/24/2011 Inspections from the Real Estate Assessment Center HUD Notice 11-18- Updated Processing Guidance for the Section 202 Supportive Housing for the Elderly and Section 811 Supportive Housing for Persons with Disabilities Posted 8/17/2011 Programs HUD Forms 928.1- Fair Housing Poster (Title VIII /63Act) English Posted 8/5/2011 HUD Form 90106 Move-In/Move-Out Inspection form (Formatting corrections) Posted 8/12/2011 Resident s Rights & Responsibilities Brochure is also now available in Braille via Multifamily Housing Clearinghouse at 1-800-685-8470. There is a limit of 20 documents per order. The CA Quarterly Review Fall 2011 Edition Page 8
Reminder on Utility Allowance Regulations Per HUD memorandum dated June 20, 2011, Owners of multifamily housing properties that receive subsidy assistance, and for which HUD provides a utility allowance, are required to adjust their properties utility allowances every year at the time of the annual adjustment of contract rents be it OCAF, AAF, Special Adjustment or Budget Based. The adjustment, which may result in an increase, decrease or no change from the current utility allowance, must be supported by an analysis with the rent adjustment submission. AHSC will withhold the rent adjustment until receipt of the utility analysis along with all other required submission documents. AHSC currently requires a 10% sample of all unit types for 12 consecutive months of occupancy along with an analysis and Owner recommendation (increase, decrease, keep at current levels) to be considered a complete UA submission. In the event of a late submission, once the required documents are received, AHSC will make the rent effective date retroactive. AHSC and HUD requires a Utility Analysis for a submission to be considered complete for all properties where the tenants receive a Utility Allowance. If you have any questions concerning this policy, please contact your Central Contract Specialist. FY 2012 Proposed FMR s Decreases Could Have Major Impact on HUD Programs On August 19, 2011, HUD issued a notice in the Federal Register with the Proposed Fair Market Rents for the Housing Choice Voucher Program and Moderate Rehabilitation Single Room Occupancy Program for Fiscal Year 2012. The primary uses of FMRs are to determine payment standards for the Housing Choice Voucher (HCV) program, to determine initial renewal rents for some expiring project-based Section 8 contracts, to determine initial rents for housing assistance payment contracts in the Moderate Rehabilitation Single Room Occupancy program, and to serve as rent ceilings in the HOME program. HUD s notice proposed FY 2012 FMRs for all areas that reflect the estimated 40 th and 50 th percentile rent levels trended to April 1, 2012. The FY 2012 FMRs are re-benchmarked using five-year, 2005 2009 data collected by the American Community Survey (ACS). These data are updated using one-year ACS data in areas where statistically valid one-year ACS data is available. The Consumer Price Index (CPI) rent and utility indexes are used to further update the data from 2009 to the end of 2010. Due to the decrease in the Fair Market Rents, Owners of Section 8 projects may see a drop in their rents, particularly those owners who utilize the Alternative RCS method whereas 75% of the Fair Market Rents are used as the rent ceiling. The CA Quarterly Review Fall 2011 Edition Page 9
The Funds Authorization Form- HUD-9250 The Funds Authorization Form, HUD-9250, has been revised on HUDClips to update the OMB Approval Expiration date from 5/31/2010 to 7/31/2013 in the top right corner of the form. Owners should note that the form date on the bottom right corner has not changed as it still reflects 1/2008. Owners should update their procedures to use the newly OMB approved form in the future that can be obtained from HUDClips at: http://portal.hud.gov/hudportal/hud?src=/program_offices/administration/hudclips/forms/ HUD encourages the use of energy saving devices and equipment, including Energy Star appliances, energy-efficient lighting, reduced water saving shower heads and low-flush toilets. These items, along with a firm preventive maintenance program and resident education pertaining to energy conservation can be significant in reducing energy/water usage and related costs. For more information regarding saving energy and money and HUD s Energy Action Plan, please visit www.hud.gov/energy Please note that the Funds Authorization Form, HUD-9250, page 2 requires the submitter to provide the following: Owners/Agents must also submit the following with this form: 1. A narrative providing a detailed description of the work performed or to be performed; 2. Copies of paid invoices if the withdrawal request is for reimbursement for work that has been performed; 3. If a bid exceeds $25,000 than copies of bids may required. Please refer to HUD Handbook 4350.1 Chapter detailed guidance; 4. Mortgagor Certification (refer to HUD Handbook 4350.1, REV-1); and, 5. A list of appliances and/or major components that will be replaced along with a notation of whether or not the replacement items will be energy efficient products. If replacement items are not energy efficient products, the owner/agent must provide a justification. Instructions: Indicate the Fund for the request and provide the information for each section as requested. Owners and Agents are encouraged to contract their HUD project manager with any questions. The CA Quarterly Review Fall 2011 Edition Page 10