HUD Notice 10-08: Highlights Inside This Issue: HUD Notice 10-08 1-5 Economic Opportunities for Low and Very Low Income Persons Section 3 5-6 HUD UPDATES! 7-8 Experiencing Problems with EIV? 8-9 EIV Resources 10 HUD released Notice 10-08 on April 13, 2010. This notice details the Implementation of Refinement of Income and Rent Determination Requirements in Public and Assisted Housing Programs: Implementation of the Enterprise Income Verification System - Amendments; Final Rule. Highlights of this notice include new Social Security verification requirements, the mandatory use of EIV, Notification to Applicants/Tenants of Regulation Changes, Updating O/A s Tenant Selection Plans and Policies and Procedures, and provides a list of tools and resources. Applicability Project-based Section 8 New Construction State Agency Financed Substantial Rehabilitation Section 202/8 Rural Housing Services Section 515/8, Loan Management Set-Aside (LMSA) Property Disposition Set-Aside (PDSA) Section 101 Rent Supplement Section 202/162 Project Assistance Contract (PAC) Section 202 Project Rental Assistance Contract (PRAC) Section 811 PRAC Section 236 Section 236 Rental Assistance Payment (RAP) Section 221(d)(3) Below Market Interest Rate (BMIR) Social Security Verification requirements The regulation at 24 CFR 5.216 now requires that assistance applicants and tenants, excluding tenants age 62 and older as of January 31, 2010, whose initial determination of eligibility was begun prior to January 31, 2010, and those individuals who do not contend eligible immigration status, to disclose and provide verification of the complete and accurate SSN assigned to them.
Notice 10-08 Highlights continued Existing tenants as of January 31, 2010, who have previously disclosed their SSN and HUD has determined their SSN to be valid are also excluded. For a child Under the Age of Six Without a SSN; if the child does not have a SSN, the O/A must give the household 90 days in which to provide documentation of a SSN for the child. An additional 90-day period must be granted by the O/A if the failure to provide documentation of a SSN is due to circumstances that are outside the control of the tenant. Examples include but are not limited to: delayed processing of the SSN application by the SSA, natural disaster, fire, death in family, etc. During this time period, the child is to be included as part of the household and will receive all of the benefits of the program in which the tenant is involved, including the dependent deduction. Timeframe for Providing Social Security Numbers Applicants Applicants do not need to disclose or provide verification of a SSN for all non-exempt household members at the time of application and for placement on the waiting list. However, applicants must disclose and provide verification of a SSN for all non-exempt household members before they can be housed. If all non-exempt household members have not disclosed and/or provided verification of their SSNs at the time a unit becomes available, the next eligible applicant must be offered the available unit. The applicant who has not disclosed and/or provided verification of SSNs for all nonexempt household members has 90 days from the date they are first offered an available unit to disclose and/or verify the SSNs. During this 90-day period, the applicant may, at its discretion, retain its place on the waiting list. After 90 days, if the applicant is unable to disclose and/or verify the SSNs of all non-exempt household members, the applicant should be determined ineligible and removed from the waiting list. Tenants All tenants, except those individuals age 62 or older as of January 31, 2010, whose initial determination of eligibility was begun before January 31, 2010 and those individuals who do not contend eligible immigration status, must disclose and provide verification of their SSN at the time of their next interim or annual recertification. If a tenant fails to provide a valid and verified SSN, the household is subject to termination of tenancy in accordance with 24 CFR 5.218. Verification The O/A shall verify and document each disclosed SSN by obtaining the acceptable documentation listed below from each member of the applicant s or tenant s household. The O/A should make a copy of the original documentation submitted, returning the original to the individual and retaining 2
the copy in the file folder. The O/A should record the SSN on line 45 of the form HUD-50059 and transmit the data to TRACS in a timely manner. O/As are encouraged to transmit the form HUD- 50059 data within 30 calendar days, to enable HUD to initiate its computer matching efforts. To ensure that the SSN transmitted to TRACS is valid, O/As must use the Failed EIV Pre-Screening Report and the Failed Verification Report in EIV in accordance with the instructions in the current HUD Housing Notice, Enterprise Income Verification System. Acceptable Verification Documents Most individuals should be able to verify all SSNs with a Social Security card. However, if the applicant or tenant cannot produce the Social Security card for any or all non-exempt household members, other documents showing the household member s SSN may be used for verification. He or she may be required to provide one or more of the following alternative documents to verify his or her SSN. (a) Original document issued by a federal or state government agency which contains the name, SSN, and other identifying information of the individual. (b) Drivers license with Social Security Number (c) Earnings statements on payroll stubs (d) Bank statement (e) Form 1099 (f) SSA benefit award letter (g) Retirement benefit letter (h) Life insurance policy (i) Court records Rejection of Documentation The O/A must reject a document that: (a) Is not an original document; or (b) Is the original document but it has been altered, mutilated, or is not legible; or (c) Appears to be a forged document (e.g., does not appear to be authentic). The O/A must explain to the applicant or tenant the reason(s) why the document(s) is not acceptable and request the individual obtain acceptable documentation of the SSN and submit it to the O/A within a reasonable time frame. Actions Once SSN is Verified Once the individual s SSN has been verified, the O/A should remove and destroy the copy of the documentation above by no later than the next recertification of family income or composition. 3
Notice 10-08 Highlights continued Penalties for a Tenant s Non-disclosure of SSN Termination of Tenancy O/As must terminate the tenancy of a tenant and the tenant s household if the tenant does not meet the SSN disclosure, documentation and verification requirements in the specified timeframe as the household is in non-compliance with its lease. Deferring Termination of Tenancy The O/A may defer termination of tenancy and provide the tenant with an additional 90 days past their next regularly scheduled recertification of income and family composition to become compliant with the SSN disclosure and verification requirements. The deferral is at the O/A s discretion and must only be provided if failure to meet the SSN requirements was due to circumstances outside the control of the tenant and there is likelihood that the tenant will be able to disclose and provide verification of the needed SSN(s) by the deadline date. After this 90-day deferral, if the tenant has not disclosed and provided verification of the needed SSN(s), the O/A must pursue termination of tenancy in accordance to chapter 8 of the 4350.3. Mandatory Use of the Enterprise Income Verification (EIV) System The new regulation at 24 CFR 5.233 requires O/As to incorporate use of EIV in its entirety: 1) as a third-party source to verify tenant employment and income information during mandatory recertifications of family composition and income, and 2) To reduce administrative and subsidy payment errors. Effective January 31, 2010, it is mandatory that O/As use EIV at the time of recertification of family composition and income. O/A must use EIV at other times as specified by HUD in the current Housing Notice Enterprise Income Verification (EIV) System and in the O/A s Tenant Selection Plan and Policies and Procedures. EIV Use The current Housing Notice, Enterprise Income Verification System, provides instructions on use of EIV data for verifying, at the time of recertification, the employment and income of individuals participating in one of Multifamily Housing s rental assistance programs listed in Section III of this Notice. The Notice also provides instructions for using the various reports in the EIV system. The Notice is posted at: http://portal.hud.gov/portal/page/portal/hud/program_offices/administration/hudclips/ notices/hsg 4
Notice 10-08 Highlights continued Five Percent Voucher Penalty for Not Having Access To and/or Using EIV Effective January 31, 2010, O/As are required to have access to and begin using the EIV system as a third party verification source and as a supplement to reducing administrative and subsidy payment errors to disclose additional information. Economic Opportunities for Low- and Very Low-Income Persons Do you know that question during the MOR when the reviewer asks you, Has management made an effort to employ tenants in accordance with Section 3 of the Housing and Community Development Act of 1968?... and you secretly ask yourself, What does that mean? A summary of the regulations can be found in the updated Chapter 9 of the 4350.1. Section 3 of the Housing and Urban Development Act of 1968 (Section 3) requires that owners receiving funds for certain HUD-assisted housing projects, to the greatest extent feasible, and consistent with existing Federal, state and local laws, and regulations direct new employment, contracts and other economic opportunities generated by HUD financial assistance to low- and very lowincome persons, particularly to those who receive government assistance for housing, and to business concerns which provide economic opportunities to low- and very low-income persons living in the Metropolitan Statistical Area (MSA). Section 3 only applies to owners of multifamily housing projects covered by the following programs: Section 202 Supportive Housing for the Elderly Section 811 Supportive Housing for Persons with Disabilities Assisted Living Conversion Program Section 3 requirements apply to owners receiving multifamily housing assistance in excess of $200,000 which will be used for housing construction, rehabilitation (including lead abatement), or other public construction. Section 3 also applies to any contractor or subcontractor that is awarded $100,000 or more to perform work on a project covered under Section 3. Section 3 does not cover housing constructed or rehabilitated utilizing HUD mortgage insurance programs. Responsibilities for Owners and Affiliates So if you are one of the above properties what do you need to do? If new employment or contracting opportunities will be created during the construction or rehabilitation phase, owners of projects covered by Section 3 are required to employ Section 3 residents as 30 percent of new hires and to award 10 percent of covered contracts to Section 3 businesses annually. Owners also have the responsibility for ensuring that their contractors and subcontractors meet these annual numerical goals if they are awarded covered contracts. 5
Low Income Opportunities continued.. Where a managing general partner or management agent is affiliated with recipients of Section 3 covered assistance for an aggregate of 500 or more units in any fiscal year, the managing partner or management agent must employ Section 3 residents as 30 percent of its new hires. The owner is responsible for ensuring the compliance of its managing partners and/or management agents. Owners, contractors, subcontractors, managing agents and managing partners are also required to: Notify eligible low- and very low-income residents in the MSA of available training and employment opportunities available resulting from Section 3 covered projects and activities; Facilitate employment and training opportunities for qualified residents; Notify qualified Section 3 businesses of contracting opportunities available at Section 3 covered project sites; Facilitate the award of contracts to qualified business concerns; and Document efforts to comply with the requirements of Section 3. The next time the reviewer asks this question, you can answer with a little more confidence. This article is just a summary of the Section 3 requirements. For a complete understanding of these requirements refer to Chapter 9 paragraph 9-12 of the 4350.1. For additional information, please refer to the following: www.hud.gov/section3 Section 3 Statute 12 U.S.C. 1701u Section 3 regulations 24 CFR Part 135 U.S. Department of Housing and Urban Development Section 3 FAQ http://www.hud.gov/offices/fheo/section3/section3.pdf Section 3 ARRA http://www.hud.gov/offices/fheo/section3/econ-stimulus-sec3-final.pdf Section 3 Economic Opportunities http://www.hud.gov/offices/fheo/section3/section3.cfm Or write to: Economic Opportunity Division 451 Seventh Street, SW Room 5235 Washington, DC 20410 202-708-3633 (this is not a toll free number) section3@hud.gov 6
HUD UPDATES! HUD Issues Updated Chapter 9 of Handbook 4350.1. This change to HUD Handbook 4350.1, REV-1, Chapter 9, Monitoring Civil Rights Statutes, Regulations and Program Requirements, provides current guidance for conducting civil rights front-end and limited on-site monitoring reviews. Civil rights front-end monitoring reviews are used to evaluate and monitor owner/agent compliance with fair housing and civil rights nondiscrimination requirements in multifamily housing projects. Compliance with the revised Chapter 9 should assist HUD s Office of Fair Housing and Equal Opportunity with identifying current or potential civil rights violations and correcting deficiencies. Owners and Agents are encouraged to review this Chapter carefully to understand their roles in complying with Civil Rights Statutes, Regulations and program requirements. The Chapter is available at: http://www.hud.gov/offices/adm/hudclips/handbooks/hsgh/4350.1/ FY2010 Income Limits Released - Effective date: May 14, 2010 HUD has released its FY2010 Median Family Income estimates and FY2010 Income Limits. New for FY2010, HUD has removed its Hold-Harmless provisions used in the calculation of Section 8 Income Limits. HUD solicited comments on its intentions to remove this policy and the official publication of the Federal Register notice containing HUD s responses to these comments will be published on Monday May 17, 2010. A public preview copy of the notice is available at http:// www.federalregister.gov/ofrupload/ofrdata/2010-11638_pi.pdf. This notice, along with all of HUD s FY2010 Income Limits materials, is available at http://www.huduser.org/portal/datasets/il.html 2010 Census: What information can be provided to census takers? Article I, Section 2 of the Constitution of the United States calls for an actual enumeration of the people every ten years to be used for appointment of seats in the House of Representatives among the states. In March 2010, census takers began going to addresses across the country to count the population and to collect information for the 2010 Census. Census takers are required to contact occupied apartments themselves; however, if an apartment is vacant or if the census taker is unable to contact the tenant, the census taker is instructed to ask an apartment owner/manager to answer a few short questions about the apartment (e.g. who was occupying the unit on April 1, 2010), as well as provide the name and phone number of the apartment 7
HUD UPDATES continued.. owner/manager. Any follow-up questions have to be requested from HUD as outlined in the Federal Privacy Act, as HUD is authorized to provide the detailed information maintained in a system of records (as defined by the Privacy Act). Because there are no Privacy Act implications, owners and/or managers could also provide information on what units were vacant. Property owners/managers are not authorized to disclose additional information. In addition, Contract Administrators (CAs) of HUD Multifamily programs must not provide any tenant information to census takers. If contacted, CAs should refer the census taker to the owner or manager of the property. Release of HUD Handbook 4350.1, Chapter 6 Delayed.. Although the Department had decided to indefinitely extend the implementation of the updated and revised Chapter 6; unfortunately, the wrong version remained posted on HUD Clips. As a result, some Field Offices and Project-Based Contract Administrators have begun implementing policy from the updated chapter. Please be advised the updated chapter was posted to HUD Clips in error and is not the official policy. Everyone should refer to the REV-1 version that was published in September of 1992 (attached). Although this chapter is outdated, it still serves as the Department s official guidance for performing project reviews until the revised handbook chapter is finalized. We apologize for any miscommunication and/or confusion this may have caused. The correct version of this chapter will be posted to HUD Clips by the end of today. Experiencing Problems with EIV? Currently, the updated version is in the final stages of the Departmental clearance process. After the chapter completes the clearance process, there will be a waiting period before the updated guidance is officially implemented. We will continue to keep the field updated on status of this chapter. Please forward this email to the appropriate staff. If you have any questions, please contact this office. To verify that you are currently using and referencing the correct version click on the link noted below: http://www.hud.gov/offices/adm/hudclips/handbooks/hsgh/4350.1/index.cfm 8
Experiencing Problems with EIV? Continued While EIV has already proven to be very beneficial to many Owner s and Agents as well as for HUD in correcting and recapturing incorrect subsidy payments, it has not been without some struggles. As most OA s who currently have access to EIV know the EIV system has been periodically down and also has demonstrated that there is a chance of inconsistent information contained within the system. AHSC and HUD understand these struggles and are in agreement that during the periods of downtime OA s will not be held accountable for non-compliance in the use of EIV during the period of April 20, 2010 to June 7, 2010. However, as of June 8, 2010 the system is back up and all OA s should be using in its entirety as a source of 3 rd party verification for all recertification s. Also, HUD is determined to correct any and all deficiencies in the EIV system and in this effort is requesting assistance from OA s. Per the RHIIP Listserv posting noted below, HUD is asking the OA s notify HUD with any information anomalies and/or issues with the functionality of the system. With this information HUD hopes to correct and eliminate future downtime and inconsistencies with EIV. Below is HUD s latest guidance for owners and agents experiencing issues with the system. RHIIP Listserv Posting # 229 June 11, 2010 Welcome to the MULTIFAMILY HOUSING RENTAL HOUSING INTEGRITY IMPROVEMENT PROJECT (RHIIP) LISTSERV that brings you up-to-date RHIIP related publications, news, information and occupancy tips in an effort to help reduce errors in rent determinations and subsidy calculations. Experiencing Problems with EIV? We are asking Multifamily Program users of the EIV system to assist us in our effort to detect and correct all problems with the functionality of the EIV system since it came back online. If you experience any data anomalies or other functionality issues during your use of the system, please send a description of the problem, what report was run and for what property as well as a screenshot, if possible, to Michael Sharkey at michael.a.sharkey@hud.gov. This will help the EIV team troubleshoot, as well as provide a permanent fix, for any anomalies that may be occurring. Please be advised that the cents being left off of SSA income is not an anomaly; this is the amount transmitted by SSA and is to be used for SSA income calculation. Thank you for your assistance and continued patience in this process. 9
Tools and Resources for EIV Use HUD HQ has made the following tools and resources available to assist in the implementation of EIV: Refinement of Income and Rent Determination Requirements in Public and Assisted Housing Programs: Implementation of the Enterprise Income Verification System Amendments; Final Rule http://edocket.access.gpo.gov/2009/pdf/e9-30720.pdf Current Housing Notice, Enterprise Income Verification (EIV) System; found on HUD s HUDCLIPS Housing Notices Website at: http://portal.hud.gov/portal/page/portal/hud/program_offices/ administration/hudclips/notices/hsg Multifamily Housing EIV Website: http://www.hud.gov/offices/hsg/mfh//rhiip/eiv/eivhome.cfm Enterprise Income Verification (EIV 9.0) System User Manual for Multifamily Housing Program Users http://www.hud.gov/offices/hsg/mfh/rhiip/eiv/usermanual.pdf Rental Housing Integrity Improvement Project (RHIIP) website http://www.hud.gov/offices/hsg/mfh/rhiip/mfhrhiip.cfm Resolving Income Discrepancies Between Enterprise Income Verification (EIV) System Data and Tenant-Provided Income Information http://www.hud.gov/offices/hsg/mfh//rhiip/eiv/eivhome.cfm Handbook 4350.3 REV-1, Occupancy Requirements of Subsidized Multifamily Housing Programs http://www.hud.gov/offices/adm/hudclips/handbooks/hsgh/4350.3/index.cfm If you are not already receiving this publication via e- mail or if you have ideas, suggestions or questions for future publications, we d like to hear from you. Please visit: www.cahi-oakland.org OR send an email to Sheldon.scott@cgifederal.com 10