HUD Publishes Notice on Voluntary Conversions

In late March, HUD published a notice titled “Streamlined Voluntary Conversions of Last Remaining Projects of Small Public Housing Agencies” (PIH 2019-05 (HA)). This notice allows PHAs with 250 or fewer Public Housing units to convert them to Section 8 vouchers within the Housing Choice Voucher (HCV) program under a streamlined conversion process. This notice differs from the Rental Assistance Demonstration (RAD) program in several ways, but primarily in that instead of receiving RAD rents (i.e., a combination of public housing capital fund, operating fund, and tenant rent amounts), PHAs would receive full HCVs for their residents after conversion.

For a PHA to normally use the voluntary conversion option, it must conduct a conversion assessment and provide a timeline identifying PHA conversion actions. Under this notice, HUD is using its statutory authority to waive the conversion assessment requirement to make it easier for small PHAs to convert their portfolios. Public Housing Agencies are eligible under this notice if they meet the following requirements:

• They have a portfolio of 250 or fewer public housing units;
• They intend to close-out their public housing program; and
• Conversion will result in the conversion of all public housing units.

If a converting PHA does not administer a Section 8 HCV program, then another PHA with a Section 8 HCV program must be identified to administer the vouchers.

To apply for a conversion, eligible PHAs must submit a conversion plan to HUD through the Inventory Management System / Public and Indian Housing Information Center (IMS/PIC). The conversion plan and application must include a PHA plan referencing the proposed conversion; evidence of resident involvement; evidence of board approval; a plan of future use of involved assets; HUD approval of environmental requirements; an impact analysis of the conversion on the neighborhood(s) (in the form of a narrative statement); a summary of information concerning the relocation plan; close-out information; and another Section 8 HCV program identified to receive vouchers, if the applying PHA does not have a Section 8 HCV program. Additionally, certain other requirements must be met (e.g., civil rights reviews, etc.). The Department must respond within 90 days of the PHA submitting the conversion plan.

The full notice can be found here.