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Housing Choice Voucher Program Financial Update

Housing Choice Voucher Program Financial Update

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Housing Choice Voucher Program Financial Update

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  1. Housing Choice Voucher Program Financial Update Housing Choice Voucher Program Forum November 1-2, 2007

  2. 2007 Funding Process • Lengthy process, due to late receipt of supplemental requirements • Funding letters issued to all PHAs June 22 for renewal HAP and Fees • PHAs involved in ensuring HUD used accurate and complete data by reviewing or providing— • VMS data CY 2006 Transfer costs • Project-Based New Units

  3. 2007 Funding Process • 700+ PHAs responded to HUD’s invitation to review or provide data • All approved changes are reflected in final funding calculations; most were approved • Approved changes entered into VMS by HUD

  4. Funding Process Concerns • Too many changes – need stability • Changes should not be retroactive to prior months • Need appropriate reserve levels • Ensure sufficient admin fees • Allow spending without unit cap • Timely notification

  5. HAP Funding Highlights • HAP costs from CY 2006 (latest verifiable) • Mid-month costs added from PIC if PHA reported as of the first of each month • Additional eligibility ($$) added for the renewal of new increments, to ensure 12 months’ funding in 2007

  6. HAP Funding Highlights • Total actual leasing plus lease-up periods could not exceed total unit months available for 2006 • Beginning in an increment’s 4th month, leasing was assumed to be reported in VMS • Additional months added to eligibility if lease-up period plus VMS period plus original funding term equaled less than 12 months in CY 2007

  7. HAP Funding Highlights • Additional eligibility added to actual costs based on total units in new increment at higher of average 2006 PUC or originally funded amount • Eligibility added for vouchers withheld from leasing to meet a project-based commitment • Each PHA’s eligibility increased via applying the 2007 Annual Adjustment Factor

  8. HAP Funding Highlights • Eligibility adjusted for transfers into or from the PHA’s inventory • Total eligibility calculated for each PHA and national total compared to available appropriation of $14,336,200,000, creating pro-ration factor of 105.017%, applied to all • Remember these calculations are renewal only – many PHAs also have tenant protection funds covering some or all months of CY 2007

  9. Supplemental Appropriation • Provided alternate funding eligibility calculations for three groups of PHAs: • Certain disaster-impacted agencies (plan) (34 total) • PHAs in receivership or breech (plan) (5 total) • PHAs with negative reserves (11 total) • Eligibility calculation began with 2006 funded amount rather than 2006 VMS data; all other adjustments, AAF and pro-ration factor applied:

  10. Admin Fee Funding Highlights • Admin fee policy unchanged from 2006 • Base was CY 2006 eligibility • Adjusted for new units, to ensure 12 months of funding • Adjusted for transfers in or out • Total compared to appropriation of $1,251,000,000 to yield pro-ration factor of 101.528%, applied to all HAs

  11. Admin Fee Funding Highlights • Admin fees have now been recouped from HAs for failing to meet PIC reporting threshold – fees were offset beginning December 2006 • These fees are being re-distributed to all HAs on the basis of each one’s share of the 2007 renewal fees

  12. Admin Fee Funding Highlights • Notice to be issued concerning special admin fees from 2007 appropriation, to be used for: • HAs that require program-specific audits for FY 2007 – up to $1,000,000 • One-time $5000 fee for first homeownership closing – up to $500,000 • HAs who increased leasing since the fee base was established – up to $6,500,000

  13. Disbursements • HAP and Fees disbursed through June on basis of 2006 rules and funding level • HUD calculated amount each PHA was due through June under 2007 funding rules • Shortages were paid in July 1 payment • Reduction for excess disbursements are spread across remaining months – July to December

  14. $100 Million Renewal Set-Aside • Eligibility and processing of $100 million set-aside from renewal account • 2 categories of eligibility: (1) HAs who had experienced a significant increase in renewal costs, more than 3%, due to unforeseen circumstances or portability HAs must document the circumstance and calculate the funding needed, or provide data for HUD to do so

  15. $100 Million Renewal Set-Aside (2) PHAs who would experience a decrease in funding and loss of vouchers due to re-benchmarking – • 3% threshold • Higher of Dec 2006 or average Oct to Dec 2006 leasing and per-unit-cost compared to leasing the 2007 funding award will support • If funds support 3% fewer vouchers or less, PHA was eligible

  16. $100 Million Renewal Set-Aside • For second category, HUD calculated apparent eligibility and posted list of PHAs on HCV website; advisory only • For both categories, PHAs had to apply, using the Notice attachment • Ultimately there were two request periods • HAs were advised that, based on eligible requests, available funds might be pro-rated; this was not needed

  17. $100 Million Renewal Set-Aside • Eligible requests only required approximately $23.4 million to fund • Remaining $76.6 million is being distributed to all HAs on the basis of each one’s percentage of the total renewal eligibility - .5% of eligibility • Each HA’s share of the total will be added to eligibility for 2008 funding purposes, unless we re-benchmark again • These funds may be used for HAP purposes only; unused at FYE will accrue to Net Restricted Assets

  18. $100 Million Renewal Set-Aside • Portability and Re-benchmarking approvals were based solely on formulae • if an HA was eligible and applied, the HA was funded • HAs were eligible for portability funds on the basis of portable vouchers administered by other HAs – if receiving HA did not enter data into PIC, the initial HA was not funded under this category

  19. $100 Million Renewal Set-Aside • Unforeseen circumstances requests depended on HA submittal • Most common problem was that HA did not identify an unforeseen circumstance, but just a normal occurrence or HA decision -- • Re-benchmarking • Desire to lease to baseline • HA decided to raise payment standards or utility allowances

  20. Implementation Notice 2007-14 • No over-leasing may be supported using appropriated funds, including current year and excess HAP from prior years • Quality Assurance reviews continue – funding subject to reduction if PHA knowingly provided false data; HAs were reduced in the initial funding calculations and additional ones are being reduced now, affecting Nov and Dec payments

  21. Implementation Notice 2007-14 • FY 2007 HAP renewal funds recouped through this process will be redistributed to all HAs • HAP funds and HAP equity may be used for HAP purposes only, even though held at PHA • May not be used for administrative costs • May not be used for Public Housing program costs

  22. 2008 Proposed Funding • Renewals: House: $14,744,506,000 Senate: $14,936,200,000 2007 Enacted: $14,436,200,000 • Tenant Protection: House: $ 150,000,000 Senate: $ 150,000,000 2007 Enacted: $ 150,000,000

  23. 2008 Proposed Funding • Family Self-Sufficiency: House: $ 48,000,000 Senate: $ 50,000,000 2007 Enacted: $ 47,500,000 • Administrative Fees: House: $ 1,351,000,000 Senate: $ 1,351,000,000 2007 Enacted: $ 1,281,100,000

  24. 2008 Proposed Funding • Other: House: Incremental Vouchers $30,000,000 (non-elderly disabled and homeless vets) Senate: VASH $75,000,000 Family Unification $30,000,000

  25. 2008 Proposed Funding • House: Budget-based approach – PHAs’ 2008 renewal eligibility would be based on 2007 funding $75,000,000 set-aside Administrative fees paid on the basis of units leased Leasing limited to baseline unit months

  26. 2008 Proposed Funding • Senate: Re-benchmarking approach – PHAs’ 2008 renewal eligibility would be based on actual HAP expenditures for most recent 12 months of verifiable data 3 categories of PHAs to be funded based on 2007 funding: PHAs in receivership, disaster PHAs, PHAs spending more than funds available $100,000,000 set-aside Administrative fees paid on the basis of units leased Leasing limited to baseline unit months

  27. 2008 Proposed Funding HUD has estimated all HAs’ funding under 4 scenarios: budget-based and re-benchmarking, for both House and Senate funding amounts Result was pro-ration factors of 101% to 104% Point: If HA leasing is generally stable, 2008 funding will not vary significantly from 2007 funding – HAs can lease with confidence before receiving final funding amounts

  28. Administrative Fee Changes • Due to proposed payment of fees on the basis of leasing, HUD will develop and issue new fee tables (last updated for FY 2003) • HUD is also contracting for a major study to determine the appropriate level of fees for a well-run agency, for use in establishing future fee rates

  29. Utilization • High pro-ration factor in 2007 was due to under-utilization in 2006 • Some under-utilization due to statutory leasing cap; some not • Due to program size, small percentage of unused funds equates to major dollar amount • Cumulative effect from 1/1/05 forward is critical

  30. Utilization • As of June 30, 2007, calculated excess HAP (NRA) totaled $2.121 Billion – 6.07% of all BA for the period 1/1/2005 thru 6/30/2007 • As of 12/31/2006: Useable: $802,000,000 Additional unit months that could have been assisted: 1,516,000 Unuseable: $407,000,000

  31. Utilization • Voucher Unit Months Assisted: 2005: 23,804,827 2006: 23,351,498 2007 (6 months): 11,669,704 • New Tenant Protection Units Awarded: 2006: 22,638 2007: 25,350

  32. Voucher Management System • PHA reporting rates improved significantly, but • too many HAs are still not reporting unless reminded • HAs must remember to enter corrections that they provide during validation process • Data integrity is critical • Funding (Congressionally-mandated) • Congressional reporting • Determination of NRA • Decision-making

  33. Voucher Management System • Modifications underway, for release for January reporting – • Many unneeded data items and sections deleted • Few new items added • Form re-organized for clarity • Update procedure for locked quarters • Revised user instructions

  34. 2003 Admin Fees Adjustments • Appropriations required – • reduction of fees if 1/31/03 admin fee reserve > 105% of 2002 fees earned • recapture of fees if 2003 excess fees would generate a reserve > 5% of 2003 fees • Some offsets initially done when YESTs were closed • HUD developed calculations, notified HAs of outcomes, paid HAs who had excess funds offset and began collecting amounts due via offset in 12/06

  35. 2003 Admin Fees Adjustments • Decision by federal court modified slightly the time periods used for the reduction calculations • Offsets were suspended pending ruling and final calculations • In immediate future, HAs will be notified of new calculations; repayments and offsets will resume

  36. SEMAP Issue • Leasing indicator based on higher percentage of UMLs/UMAs or HAP expenses/HAP BA • Formula uses BA attributable to each month • Jan to June 2007 BA attributable did not generally equal BA disbursed, affecting 23% of June 30 PHA leasing scores • Re-scoring that indicator