Sneak Preview: Guidance to PHAs Addresses ‘Over-Income’ Families
(The following was excerpted from a recent Thompson Grants Compliance Expert article.) The Department of Housing and Urban Development’s (HUD) Office of Public and Indian Housing (PIH) recently issued updated guidance for public housing authorities (PHAs) that addresses occupancy limitations for “over-income” (OI) families. The guidance redefines how PHAs should calculate the OI limit for a family in public housing, provides new guidance on setting rents for OI families that PHAs allow to remain in their units, and sets forth a requirement for PHAs to submit annual reports to PIH on their number of OI families.
The guidance (PIH-2023-03(HA)), which supersedes previous guidance under PIH-2019-11(HA), responds to requirements set forth under HUD’s Feb. 14 final rule that implemented provisions in section 103 of the Housing Opportunity Though Modernization Act (HOTMA) (Pub. L. 114-201), which was signed into law in January 2016. Section 103 established new limits regarding whether a household in public housing can continue living within the unit if its income exceeds a maximum set by the PHA. The final rule, which established new OI regulations at 24 C.F.R. §960.507, became effective March 16, and all PHAs must fully implement the OI requirements by June 14.
Section 103 states that after a household’s income exceeds the OI limit for 24 consecutive months (i.e., the “grace period”), a PHA must either terminate the household’s public housing tenancy within six months or charge the household an alternative nonpublic housing rent (i.e., “alternative rent”). The alternative rent must equal the greater of the fair market rent or the amount of monthly subsidy provided for the unit as determined by the amount of operating and capital funds apportioned to a unit. This requirement applies to all PHAs with 250 or more public housing units, including so-called Moving to Work (MTW) PHAs. However, for MTW PHAs, the grace period is 36 months, which can be further extended if HUD approves.
The OI limit is determined by multiplying the income limit for a very low-income (VLI) family by a factor of 2.4. For example, the 2022 VLI limit for a family of four in Washington, D.C., is $71,150, so the OI limit for that family size should be calculated as follows: $71,150 x 2.4 = $170,760. VLI varies by jurisdiction and by household size, so each PHA must calculate the OI limit for households of each size occupying their units.
(The full version of this story has now been made available to all for a limited time here.)
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