HUD to recalculate
HCV administrative fees

Reductions now at 6.2 percent

PHADA participated in a telephone conference concerning HCV administrative fees called by Assistant Secretary Michael Liu on Thursday, June 3. Based on concerns the industry raised in a previous discussion, the Department has chosen to amend its method for distributing fees from the approach it announced in letters HAs received late in May, and use a method that follows the '04 appropriations statute more closely. HUD anticipates announcing the revised method in a notice it hopes to publish as soon as possible.

HAs will receive administrative fees based on a pro rata share of the '04 appropriations. That share will be based upon each HA's proportion of national administrative fees for which they were eligible in 2003, excluding any recapture of "excessive" administrative fee reserves that occurred that year. HUD estimates that this approach will result in an overall reduction in administrative fees for agencies of about 6.2 percent, instead of reductions of approximately 13 percent or more in HUD's first approach. The Department also expects that administrative fee eligibility in 2004 will rise from the initial announcements of per unit fees for approximately two thirds of HAs, and will decline for approximately one third of HAs.

The Department will distribute administrative fees as block amounts in each quarterly contract renewal. HUD was very clear that it intended to distribute all of the 2004 administrative fee appropriations to agencies by year end, and fully disburse each agency's prorated share of this year's appropriation.

PHADA FRONT