PIH Notice PIH-2023-03(HA), which was released in March of 2023, provides guidance and clarification on the statutes in Section 103 of HOTMA. The notice introduced a pathway to removing Over Income Households from the Public Housing program but not from their homes. This notice created a new designation and process for over-income households. These families are defined as non-public housing over-income (NPHOI) families.
What is Over-Income in Public Housing?
The over-income limit is set at 120% of the area median income or 2.4 times the very low-income limits. The over-income provisions are included in a new section of the public housing regulations at 24 CFR 960.507. The over-income limit needs to be included in the PHA’s Admissions and Continuing Occupancy Policy (ACOP), and the PHA must update their ACOP annually within 60 days of the publication of updated income limits.
What is the Process for NPHOI Families?
Once a family has met or exceeded the maximum income level, they will be provided the first of three notices from the PHA, which informs them of their Over Income status and the beginning of a 24-month grace period during which they can remain in the unit at the public housing rent rate. The second notice, provided the family is not again back under the income limit, informs the family of the end of the first 12 months of the grace period. The third notice commemorates the end of the 24-month grace period and provides notice to the family that their rent is going to increase to the “Alternative Rent”. The alternative rent must equal the greater of the Fair Market Rent (FMR) or the amount of monthly subsidy provided for the unit as determined by the amount of Operating and Capital Funds apportioned to a unit.
What Happens Next?
At this point the public housing authority has the option of offering the family an NPHOI lease and charge the alternative non-public housing rental rate or terminate the family’s tenancy. If the family stays under a NPHOI lease, it is no longer a public housing program participant and can no longer receive a utility allowance, be subject to income reexaminations, or be required to comply with Community Service and Self-Sufficiency Requirements. However, if their income were to decrease, they can request a recertification and rejoin the Public Housing Program. HOTMA also requires PHAs to report each year the total number of over-income families in the PHA’s portfolio and waiting list. This will include both families by the alternative rent and families in the 24-month grace period.
What Changes Need to Happen to the PHA’s ACOP Due to HOTMA?
How a PHA handles over-Income families and posting the new maximum income limits and alternative rents needs to be added to their ACOP. This vital change to Public Housing policy affects many parts of PHA operations, including how to handle Rent Choice, Recertifications, Interim Recertifications and much more. US Housing Consultants recently joined forces with Management Resource Group, Inc. in Atlanta. MRG has specialized in updating ACOPs and Administrative Plans for decades. If you should have any questions about what needs to be included in the ACOP update, please contact us.
