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HOUSING VOUCHER PROGRAMS - POLICY AND PROCEDURES MANUAL

CHAPTER XXI.  SPECIAL PROGRAMS – PROJECT BASED VOUCHER PROGRAM

Section

Section Name
 

Introduction   

Section A

Selection of Properties

Section B

Ineligible Properties

Section C

Public Notification Methods

Section D

Types of Project Based Vouchers
 

1. Homeless or Disabled PBV Units
 

2. SHP (Supportive Housing Program) PBV Units
 

3. Preserving Low Income Housing Units

Section E

Housing Assistance Payments (HAP) Contract Term

Section F

Selection of Agents to Administer PBV

Section G

Administering Project Based Vouchers

Section H

Waiting List Procedures

Section I

Family Eligibility Requirements

Section J

Conversion of PBV to Tenant-Based Vouchers

Section K

Tenant Moves

Section L

Termination of Assistance

Section M

One Year Notice of HAP Contract Expiration

Section N

Elite Data System

Section O

Applicable Forms List

Introduction

The U.S. Department of Housing and Urban Development (HUD) allows a Public Housing Authority (PHA) to allocate up to 20% of the Housing Choice Vouchers (HCV) to a Project Based Voucher (PBV) program provided it does not contribute to additional concentrations of extremely low income families in certain properties or neighborhoods.  The Michigan State Housing Development Authority (MSHDA) may allocate up to 20% of its HCVs to this initiative.  Project-based units are defined as units where the rental subsidy assistance is assigned to a specified unit, not a tenant. 

After the publishing of HUD’s final rule for the PBV program (24 CFR Part 983) in October 2005, MSHDA implemented changes to the administration of its PBV Program.  New awards for PBV will follow this policy. 

Section A: Selection of Properties

Beginning in FY 2006, MSHDA will select proposals for PBV that have successfully competed for housing assistance under a federal, state, or local government housing assistance, community development, and supportive services program, provided the proposal has been selected in accordance with such program’s competitive selection requirements within three years of the PBV proposal selection date, and the earlier competitive selection proposal did not involve any consideration that the project would receive PBV assistance.

MSHDA additionally sets the requirement that all proposals must have been awarded on or after January 1, 2006 and have successfully met all Supportive Housing underwriting criteria as established by MSHDA’s Office of Supportive Housing & Homeless Initiatives, been part of a commitment for supportive housing within the MSHDA’s Low Income Housing Tax Credit (LIHTC) Program and/or MSHDA HOME Program.  All MSHDA PBV awards must be for new units (acquisition/rehabilitation, substantial rehabilitation, or new construction) and at minimum meet HUD HQS standards at time of occupancy and have satisfied  HUD Environmental Review Requirements. 

25% Cap: 

The PHA will not allow more than 25% of the units in a building to receive PBV unless they are units in a single-family building (1-4 units); units that house elderly or disabled households for the term of the Housing Assistance Payment (HAP) Contract; or units that receive supportive services for the term of the HAP.

Site Selection: 

For existing and rehabilitated PBV housing, applications will be selected that demonstrate that the proposed site is in compliance with PBV goals, fair housing requirements and HQS requirements and will be in a census tract showing expanded housing opportunities.  Consideration of all the following factors will be given at the time of project selection, but the project must meet a minimum of two before an award will be made.  The census tract area must:

Serving Homeless: 

Applications will be selected that have a focus for serving the homeless population in Michigan and meet one or all of the following:

Neighborhood criteria for existing and rehabilitated sites: 

The following additional neighborhood standards must be met:

Neighborhood criteria for new construction PBV sites: 

The following additional neighborhood standards must be met:

Environmental Review Requirements:

Every PBV project is subject to HUD environmental review requirements.  Prior to execution of a HAP Contract, the owner must present evidence that the environmental review has been performed by a HUD designated “responsible entity” and approved by HUD; or where applicable, categorically excluded from review. 

Supportive Services:

Units that require supportive services may include any or all the following types of training and services; however, this list is not all inclusive:

  1. Job training, development, and/or placement;
  2. Money management skills and services;
  3. Providing resources to assist families achieve economic self-sufficiency;
  4. Parenting skill training;
  5. Individual and/or family counseling services;
  6. Educational services;
  7. Substance abuse training, counseling, and/or treatment;
  8. Mental health treatment and/or counseling;

Section B:  Ineligible Properties

Units that are ineligible for project-based assistance include those that are:

Section C:  Public Notification Methods

MSHDA will utilize its web page at www.michigan.gov/mshda to make public all major announcements, key documents, and application materials for the PBV Program.  MSHDA will announce that it will accept PBV proposals at least three weeks in advance of the designated due date.  The announcement will include the proposal application, review criteria, required documents and the date it will stop accepting proposals. 

MSHDA may implement more than one PBV initiative at any one time.  The specific requirements of each initiative will be publicly announced.

Any proposal for PBV housing in which MSHDA has a direct or indirect interest will be considered PHA–owned housing.  Any PHA-owned proposals must be approved by HUD or an independent entity selected by HUD, after MSHDA has granted preliminary approval.  Applicants will be informed that a final proposal selection determination cannot be made until this review is completed and approved by HUD.

Section D:  Types of Project-Based Vouchers

MSHDA PBV that were awarded using HUD’s Initial Guidance for PBV issued January 16, 2001 and prior to HUD’s final rule of October 13, 2005 are classified in the following three categories: 

Homeless or Disabled, Supportive Housing Program (SHP), or Preserving Low Income Housing Units.  Only one category of PBV will be awarded after May 1, 2006; that of utilizing supportive services .  The three types are described below. 

1. Homeless or Disabled PBV Units

The PBV for Homeless or Disabled are designated for units that would be occupied by people with disabilities or a history of homelessness.  The developments selected must have service provider partners who commit to provide ongoing supportive services to tenants.  The developments must also have a system of blended management in place (a program of housing management and individualized supportive services) that incorporates services designed to help tenants remain stably housed. 

MSHDA defines a history of homelessness for the PBV program as:

A) Meeting the HUD McKinney Act definition of homeless which states a person is considered homeless only when he/she resides in one of the places described below:

B)    Meets FIA eligibility criteria for housing related emergency assistance more than once in the past 12 months; or,

C)    Current participant in a transitional housing program; or

D)    Current participant in a residential treatment program or foster care.

For the PBV Program, MSHDA defines people with disabilities as:

(A)  A disability, as defined in section 223 of the Social Security Act (42 USCS Part 423); or

(B)  To have a physical, mental, or emotional impairment that is expected to:

  1. Be of long-continued and indefinite duration,
  2. Substantially impede his or her ability to live independently, and,
  3. Is of such a nature that the ability to live independently could be improved by more suitable housing conditions, or,

(C)  Has a developmental disability as defined in Section 102 of the Developmental Disabilities Assistance and Bill of Rights Act (42 USCS part.6001), or,

(D)  The disease of acquired immunodeficiency syndrome (AIDS) or any conditions arising from the etiologic agent for acquired immunodeficiency syndrome; or,  

(E)  A person receiving Supplemental Security Income (SSI) under age 65, or who meets the definition of disabled as described on the Verification of Disability (MSHDA 16), or who identifies themselves as disabled on the application.

Disabled can mean “individual with handicaps”, for the purpose of qualifying for low-income housing, or for the purpose of qualifying for a reasonable accommodation or program accessibility.     

Disabled would not include a person whose disability is based solely on any drug or alcohol dependence.

2. SHP (Supportive Housing Program) PBV Units

Owners  submitted a joint application with local service providers who committed to provide ongoing supportive services to homeless and disabled tenants.  Applications included plans and agreements for blended management (a program of housing management and individualized supportive services) that incorporated services designed to help tenants remain stably housed.

Units must be designated exclusively for occupancy by persons who are homeless in accordance with the definition of the HUD McKinney Act.  The HUD McKinney Act definition of homeless states a person is considered homeless only when he/she resides in one of the places described below:  

  1. places not meant for human habitation, such as cars, parks, sidewalks, and abandoned buildings;
  2. an emergency shelter;
  3. transitional or supportive housing for homeless persons who originally came from the streets or emergency shelter;
  4. any of the above places but is spending a short time (up to 30 days) in a hospital or other institution;
  5. is being evicted within a week from a private dwelling unit and no subsequent residence has been identified and the person lacks the resources and support networks needed to obtain housing; or
  6. is being discharged within a week from an institution, licensed residential facility, foster care facility, nursing home or medical care facility in which the person has been a resident for more than 30 consecutive days and no subsequent residence has been identified and he/she lacks the resources and support networks needed to obtain housing;

3.  Preserving Low Income Housing Units

These PBV were awarded to preserve the existing stock of federally subsidized housing, which may be lost due to prepayments of Authority-financed mortgage loans, and keep units available to low-income residents. These existing rental units must be of very good quality and be currently certified and ready for occupancy. Eligible units met Housing Quality Standards (HQS) and represented a superior choice, as determined by MSHDA, within the range of local rental options available to extremely low-income tenants.  Up to 50% of the units of a development not receiving other forms of federal subsidies (e.g. Rent Supplement, RAP or Section 8 project-based assistance) were eligible.  At least 60% of the units in the development must be set-aside for tenants at not more than 60% of median income for at least 15 years. 

It is our intent to create partnerships between local homeless service organizations and existing landlords.  We will utilize HOME funds to create temporary rental subsidies by providing Tenant Based Rental Assistance (TBRA) that is directly linked to organizations that provide shelter and supportive services to those who are homeless.  The supportive service agencies and emergency shelters will work with housing resource specialists to:

Section E:  Housing Assistance Payment (HAP) Contract Term

MSHDA enters into a HAP Contract with the owner of the property selected to have a PBV program in the form required by HUD headquarters.  The initial term of the HAP contract may be executed for a period of up to ten years for each contract unit.  The length of the term of the HAP contract for any contract unit may not be less than one year, nor more than ten years.  Within one year before expiration, MSHDA may agree to extend the term of the HAP contract for an additional term of up to five years if it is determined an extension is appropriate to continue providing affordable housing to extremely low income families.  Any extensions must be on the appropriate form and subject to conditions set by HUD at the time of the extension.

At the time the HAP Contract is executed, the owner will identify the specific units that will be assisted under the Contract.  Because there is a HAP Contract  between the owner and MSHDA for all the project-based units awarded to that owner, no individual HAP contract will be needed in a tenant file.  Each tenant will have a lease with the owner for the specified unit. 

Additional HAP Contract Requirements: 

The HAP Contract must specify the following:

E)    Total number of contract units by number of bedrooms;

F)    Specific contract units in each building;

G)   Owner supplied services, maintenance, and/or equipment without charges in addition to the rent;

H)    Utilities available to the contract unit;

I)       Initial rent to owner (first twelve months on the HAP contract term);

J)     Accessibility features provided to comply with Section 504 of the Rehabilitation Act of 1973;

K)    HAP contract term; and

L)     Number of units that exceed the 25% per building set-aside cap if applicable.

The HAP contract will not be executed until each unit has been inspected and complies with HQS requirements. 

Section F: Selection of Housing Agent (HA) to Administer PBV

Once a PBV project has been identified, the MSHDA Office of Existing Housing Programs Resource Specialist/Regional Manager (RS/RM) will determine if a Request for Proposal (RFP) must be executed for the assignment of the vouchers to a MSHDA Contracted Housing Agent (HA) to administer.  If an RFP is necessary, the RS/RM will announce the RFP and select a HA to administer the vouchers from the responses. If an RFP does not need to be executed, then the RM will select the HA to administer the vouchers. 

Section G:  Administering Project Based Vouchers

Step 1:  The MSHDA Review Team selects the projects meeting the required criteria and sends Preliminary Award letters to the owner.

Step 2:  Phone calls are made by the RS, RM, and assigned HA to the property owner/on-site manager to work out initial details such as:

  1. establishing dates for meetings with in-place tenants,
  2. explaining HQS standards and establishing HQS inspection dates,
  3. conducting a rent reasonable test and agreeing to initial rental rates, rent increases and decreases,
  4. discussing tenant options if tenant is in an oversized unit,
  5. the MSHDA subsidy payment process, and
  6. agreeing to an effective date. 
  7. The RS/RM explains to the owner that HCV rules apply to the PBV units which are different from Multi-Family Housing rules. 

Step 3:  Owner accepts or refuses the PBV Award.

Step 4:  If owner accepts Award, the RS prepares the HAP contract between MSHDA and the owner of the property and the HAP Contract is executed.

Step 5:  The processing of required PBV paperwork begins.  The assigned HA will follow HCV program guidelines, and MSHDA policies and procedures for a housing choice voucher including the third party verification of income eligibility, criminal screenings, briefings, unit inspections, hearings, annual re-examinations, interim re-examinations, cancellations, etc.  A listing of forms being used for PBV is located in the Applicable Forms Listing section at the end of this policy. 

Step 6:  During the briefing meeting with the family, in addition to other required items, the HA must explain:

  1. the subsidy is tied to the unit;
  2. the family must inquire as to the availability of another voucher before giving the owner a 30-day notice of their intention to move if they have lived in the unit for one year and they desire continued assistance after the move;

Step 7:  When vacancies occur, the owner or representative must notify the HA immediately and the HA will select names from the appropriate county MSHDA waiting list, determine eligibility, and proceed with the required paperwork verification process.

Note:  Participants in the PBV program are eligible for the Family Self-Sufficiency program and may apply to the FSS Waiting List. 

Section H:  Waiting List Procedures

In counties where a PBV program exists, the HA will maintain a PBV waiting list that is site specific and separate from the county waiting list for Housing Choice Vouchers (HCV).   Therefore, for counties with a closed HCV waiting list, two waiting lists will be kept, the HCV waiting list and the PBV waiting list.  The PBV waiting list will be divided by bedroom size.  

County PBV waiting lists will remain open at all times.  Applications will be accepted for the PBV program on a continual basis from persons who certify that they qualify for the program and are interested in receiving a project-based voucher via a first-come, first-serve method.  No applications will be accepted for the closed HCV list in that county until the HCV waiting list is opened.

For a county with an open HCV waiting list, applicant names will be placed on either waiting list (HCV or PBV) following procedures set forth in the Elite User Guide using a first-come, first-serve method.

If a large PBV waiting list exists, (unlikely that all applicants on the list will be served within a reasonable period of time; i.e., 2 years) closure of the PBV waiting list may be discussed with the RS.

Waiting Lists at Initial Start Up of PBV Program

1.  In-Place Families

When a PBV project begins, in-place tenants who are eligible for the program may receive a PBV.    Once the in-place family’s continued eligibility is verified, the eligible in-place families located at the PBV site must be placed on the PHA PBV waiting list, if the family is not already on the waiting list, by using a special admission selection preference.  The in-place family will be placed on the waiting list and then immediately pulled from the waiting list and offered a subsidy for an appropriately sized unit in the project.

2. Existing Vacancies at Start Up 

At the time that a PBV program begins, if a vacancy exists in an identified PBV unit at a property that is participating in a PBV program, the current waiting list maintained by the property’s owner or management company may be used to fill the vacancy.  The property waiting list may be used only at the time the PBV program begins.  Once the proposed family’s eligibility is determined by the HA, the family will be placed on the MSHDA PBV waiting list using a special admission selection preference.  The HA will then immediately pull the family’s name from the waiting list and be issued assistance for an appropriately sized unit in the project.  If vacancies remain in the project after using the property’s waiting list, the MSHDA  PBV waiting list for that specific site will be used to find appropriate families to fill the remaining vacancies. 

If ineligible tenants are housed in the identified PBV units, no subsidy will be offered to the ineligible tenant in that unit and no subsidy will be paid to the owner until an eligible tenant is in place.

Waiting Lists after Initial Lease-Up

After the initial lease-up of families in the specified PBV units, the appropriate county PBV site-based waiting list maintained by the HA must be utilized.  Applicants who will occupy PBV units must be selected by the HA from the appropriate MSHDA PBV site-based waiting list. In the event there are not enough names on the site-based waiting list, the county waiting lists will be used in the following order: 

Property owners with PBV designated units and/or service agencies may refer applicants to the HA maintaining the appropriate county’s PBV waiting list for inclusion on the open PBV waiting list at any time.

Placement on the Waiting List

Applicants must follow the appropriate steps to be placed on a PBV waiting list. If an applicant wants to be on both the waiting list for HCVs and a specific project-based site, they must complete two applications, and their name will be placed on both lists.  If the county’s HCV waiting list is closed, the applicant may only apply to be on the PBV program waiting list. 

MSHDA will offer to place applicants who are listed on the county HCV waiting list on the county waiting list for PBV assistance.  The HA must then send an application for the PBV program to the applicant for completion if the applicant indicates interest.  A listing of the available PBV sites should accompany the application. 

If the applicant is on both the HCV and PBV waiting lists, PBV assistance becomes available and the family refuses the offer of PBV assistance, their name would be removed from the PBV waiting list. The refusal does not affect the family’s position on the waiting list for tenant-based (HCV) voucher assistance. 

If a HCV applicant on a HCV waiting list for a county that has a PBV project refuses to accept an offer of project based assistance, their name remains on the HCV waiting list in the same position on the tenant-based HCV waiting list. 

If an HCV applicant on the HCV waiting list accepts a PBV, their name may remain on the waiting list in the same position for the tenant-based HCV assistance. 

Waiting List Outreach

When it is determined that the number of names on an open  PBV waiting list is nearly exhausted, the HA will follow the procedures for purging, updating, outreach and/ or marketing the waiting list as identified in the Policy Procedure Manual, Chapter II, Waiting List Management.  The HA will follow the process for removing names from the waiting list and ranking applications as appropriate. 

Removing Applicant Names from a PBV Waiting List

A name may only be removed from a PBV waiting list when:

Elite Entry

Follow the Elite User Guides for entering applicants on the waiting list in the appropriate county.  When placing an applicant on the waiting list, select the appropriate waiting list in Full Application Entry (i.e. Kalamazoo – PBV – Summit Park); then select the appropriate Application Status (i.e. Summit Park) and enter family information and bedroom size.    The HA must enter all family members for Elite to determine bedroom size. 

When pulling an applicant for PBV, use Wait List Draw and the appropriate bedroom size for selecting the next appropriate applicant on the waiting list.    

An applicant may be on more than one waiting list.  When you pull an applicant, Elite will list all the waiting lists that the applicant is on. 

NOTE:  When entering application information in Elite, all income should be listed under the Head of Household so it populates the correct field on the Waiting List Report.

Section I:  Family Eligibility Requirements

After August 1, 2006, 90% percent of the families admitted to the PBV program from the waiting list must be at or below 100% of federal poverty standards.  The remaining 10% may be at or below 120% of the federal poverty standard.

The HA may only select families who are applicants to the HCV program, or, who have applied for PBV assistance.   All families must be eligible for admission to the program at the commencement of PBV assistance.  

Section J.  Conversion of PBV to Tenant-Based HCV:

Transfer of the project-based voucher to a tenant-based voucher is permissible after:  

  1. The tenant has occupied the PBV unit for a minimum period of one year under the HAP contract, and         
  2.  A voucher is available.   

The HA would assign a voucher to the tenant before the tenant gives 30-day notice. 

Section K. Tenant Moves

After a tenant with a PBV has occupied the project-based unit for a period of one year or more, and funding for a HCV voucher is available; the tenant has the same rights as a tenant with a tenant-based HCV and may port (out of state) or transfer (within state) with a HCV to another unit that is not assisted with a PBV.  The PPM, Chapter XVII Transfer or Chapter XVIII Portability policy must be followed.  

When the tenant notifies the HA of their intention to move and provides 30-day notice of their intent, if a HCV is available, the family may move with continued assistance.  The HA will assign a new HCV increment to the tenant on PBV assistance if the HA has an increment available that can be assigned to the tenant.  A short waiting period may occur if a new increment is not available at the time of the request (next available increment would be assigned).  The tenant may choose to move without continued assistance.  

The vacated project-based unit will be leased to another eligible family from the waiting list. 

The original increment will remain assigned to the PBV unit. 

Section L.  Termination of Assistance

The family will continue to receive the rental subsidy until the family’s Total Tenant payment equals or exceeds the gross rent for the unit.  See PPM Chapter IV, Income Policy, Income Verification, Zero HAP. 

Section M.  One Year Notice of HAP Contract Expiration

At least fifteen months prior to the expiration of the HAP Contract between MSHDA and the owner for the project-based vouchers, MSHDA and appropriate parties will evaluate the success of PBV and determine if the HAP Contract will be extended for another five years.  If yes, a new HAP Contract will be executed for another five-year period with the owner.  If not, one year notice must be given to all families residing in the designated project-based units that the project-based rental subsidy assistance will expire and notify them of the expiration date.  At the time the HAP contract terminates, if the family has occupied the PBV unit for more than a year, they will receive a HCV.

Section N.  Elite Data System

When the HA enters the eligible applicants on the waiting list using the Elite data system, the HA must use a Special Program status in the Application Status Field.  In counties that have a project-based program, site specific application status fields will be created for each site.  The Special Program “Application Status” fields are: 

          PBV – site name specific (i.e., Summit Park, Pinehurst)

          PBV – no preference

See Elite User Guides for detailed instructions on how to enter Project Based Vouchers in the Elite data system.

Section O:  Applicable Forms List 

MSHDA Form #

Name of Form

No Number

MSHDA PBV Housing Assistance Payment Contract

HUD-52646

Housing Choice Voucher

MSHDA/PBV-18

Current Unit Documents Checklist

MSHDA/PBV-19

Permanent Documents Checklist

MSHDA/PBV-43

Informal Review Flow Chart

MSHDA/PBV-44

Informal Hearing Flow Chart

MSHDA/PBV-103

Tenant Repayment Agreement

MSHDA/PBV-145

PBV Briefing Packet

MSHDA/PBV-145a

Briefing Packet - Program Information

MSHDA/PBV-145b

Tenant/Owner Responsibilities Notice

MSHDA/PBV-284

Forms Reference - Submission Chart

MSHDA/PBV-322

PBV Program Application

MSHDA/PBV-326

PBV Program Homeless Preference

MSHDA/PBV-1634

Application Status

 

(Effective August 2006)