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HUD Issues Notice on Remedies for Poor Performing HCV and PBV Owners

On March 31, HUD published Notice PIH 2023-06, Notice on Remedies PHAs have for Poor Performing Owners in the Housing Choice Voucher and Project-Based Voucher Programs. The notice reminds HAs of remedies when owners of Housing Choice Voucher (HCV) and project-based voucher (PBV) units fail to comply with the policies and procedures of the voucher program. While the notice does not contain any new guidance, it serves to remind HAs of (i) what remedies they have available when owners fail to meet the obligations of a Housing Assistance Payment (HAP) contract and (ii) which situations require HAs to exclude owners from the HCV and PBV programs and when HAs have discretion to exclude owners.


Remedies for Owner Non-Compliance

While there are several ways that owners may violate a HAP contract, the most common is failure to maintain the unit according to Housing Quality Standards (HQS). Other potential violations include committing fraud, bribery, or drug-related or violent criminal activity.  The notice reminds HAs that, when they determine an owner has breached the HAP contract, they must comply with program regulations. These include (i) providing written notice to the owner regarding the violation, (ii) requiring the owner to correct the breach within a certain timeframe, if applicable, and (iii) taking steps to recover any overpayment; suspend, abate, or reduce HAP, or terminate the HAP contract.


When HAs Are Required to, or Have Discretion, to Exclude Owners from the HCV and PBV Programs

Before executing a HAP contract, HAs must ensure that the owner is eligible to receive assistance through the voucher program. Circumstances, when an owner would not be eligible, include when the Department has debarred the owner, or the owner is subject to an action for violating the Fair Housing Act or similar statutes. HUD will inform the HA that the owner is ineligible in these situations.

Compared to situations when HAs must exclude owners from the voucher program, there are more situations when HAs can exercise discretion to exclude owners.  Many of these reasons include owners who have a “history or practice” of violating HAP contract obligations described in the previous section. The notice reminds HAs that they must adopt policies regarding when they will exclude owners in their Administrative Plans. 

HAs may also choose to exclude owners who have a “history or practice” of refusing to evict voucher tenants for drug-related activity or activities that threaten the health and safety or peaceful enjoyment of the premises by other residents. However, the notice reminds HAs that owners may adopt eviction alternative programs, and that HAs should not penalize such owners if their programs rely on “sound practices.”


HUD Remedies When HAs Fail to Comply With HAP Contract Obligations

The final sections of the notice reiterate the Department’s options when HAs fail to comply with obligations of the voucher program.  These include reducing or offsetting the admin fee, prohibiting use of admin fee reserves, or reducing HAP funding amounts.

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