Housing choice voucher program financial update
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Housing Choice Voucher Program Financial Update. Housing Choice Voucher Program Forum November 1-2, 2007. 2007 Funding Process. Lengthy process, due to late receipt of supplemental requirements

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Housing choice voucher program financial update

Housing Choice Voucher Program Financial Update

Housing Choice Voucher Program

Forum

November 1-2, 2007


2007 funding process
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


2007 funding process1
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


Funding process concerns
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


Hap funding highlights
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


Hap funding highlights1
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


Hap funding highlights2
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


Hap funding highlights3
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


Supplemental appropriation
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:


Admin fee funding highlights
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


Admin fee funding highlights1
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


Admin fee funding highlights2
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


Disbursements
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


100 million renewal set aside
$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


100 million renewal set aside1
$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


100 million renewal set aside2
$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


100 million renewal set aside3
$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


100 million renewal set aside4
$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


100 million renewal set aside5
$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


Implementation notice 2007 14
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


Implementation notice 2007 141
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


2008 proposed funding
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


2008 proposed funding1
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


2008 proposed funding2
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


2008 proposed funding3
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


2008 proposed funding4
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


2008 proposed funding5
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


Administrative fee changes
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


Utilization
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


Utilization1
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


Utilization2
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


Voucher management system
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


Voucher management system1
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


2003 admin fees adjustments
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


2003 admin fees adjustments1
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


Semap issue
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


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