HUD has released Notice PIH 2022-18 with guidance on the use of Housing Choice Voucher (HCV) and Mainstream Voucher administrative fees for expenses related to assisting families in these programs with leasing units. PHADA has vigorously advocated to HUD to allow for more flexible uses of the increased funding for administrative fees. The current proration for fees is 92 percent, which represents the greatest amount of funding for this account in 20 years. The Administration has proposed full funding of administrative fees for FY 23, which also reflects PHADA’s advocacy priorities. This increased funding and expanded uses for administrative fees reflect an understanding by the Office of Management and Budget and Congress that these are critical to house lower-income families across the country.
HCV Program Administrative Fees
Administrative fees uses include landlord incentive and retention payments, security deposit assistance, utility deposit assistance and arrears, application fees, realtor fees, holding fees, renter insurance if required by lease, as well as a variety of administrative activities. These include front-line, day-to-day operational activities include, but are not limited to, applicant intake, lease-up activities, income determinations and reexaminations, unit inspections, disbursing HAP to landlords, policy and operational planning and implementation, financial management, and HCV record-keeping and reporting.
Administrative activities also extend to housing search assistance activities (counseling, identifying units, providing transportation and directions, post-move counseling, landlord/tenant mediation), owner recruitment and outreach activities, and designating landlord liaison staff.
HAs may not use regular HCV administrative fees to cover Mainstream voucher administrative expenses or other expenses of the HA in administering Mainstream vouchers.
Mainstream Voucher Administrative Fees
HAs are also authorized to use Mainstream administrative fees for certain other eligible activities listed in the Notice for the HCV Program. The Notice describes these activities as those that are “designed to help assist HCV families in leasing units under the program, which while not required by HUD HCV regulations, clearly will assist the HA in achieving the mission and purpose of the HCV program. An HA may use its administrative fees to support these other activities, including to recruit and retain owners to participate in the HCV program, should it have the resources available to do so.”
HAs may not use Mainstream administrative fees to cover administrative expenses or other expenses of the HA in administering regular vouchers or other special purpose vouchers.
The new authorized expenses listed in this Notice that are incurred by the HA each month and paid with ongoing administrative fees are reported as part of the total expenses in the VMS “Administrative Expense” field. There is no separate field currently for reporting these other expenses.
In general, the new authorized expenses listed in this Notice are reported on FDS Line 92400 Tenant services – other. However, with respect to the fees used for security deposits, an HA may account for these deposits in different ways: as an expense to a balance sheet only transaction, or with the cash outlay for the deposits treated as an accounts receivable and allowance for doubtful accounts being established. The accounting treatment is typically based on the HA’s and its auditor’s interpretation of Generally Accepted Accounting Principles (GAAP) for these deposit transactions and individual state law, with only limited deposits ever coming back to the HA. Therefore, HUD will not require any specific FDS reporting for ongoing administrative fees used for security deposits as long as the accounting and reporting conform to GAAP.