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Updates on COVID-19 HUD Policies May 1, 2020

HUD released updates to their COVID-19 Question and Answer document on May 1, 2020. This updated Q&A addresses both changes to policies and procedures as well as clarifications to existing policies. Some of the updates relate to operational issues that affect such as TRACS vacancy claims, emergency evictions, food insecurity concerns, and handling income from COVID-19 related programs such as CARES act unemployment benefits. With so many things changing daily, these Q&A updates from HUD are beneficial. Below is a summary of the changes related to front-line property management.

Food insecurity concerns for residents of HUD-assisted Multifamily properties

In this section, HUD provides food security resources and guidance for property owners and agents. Many vulnerable populations live in HUD-assisted housing, as such, property management professionals are on the front line. HUD encourages management professionals to provide information to residents who may be in need. Here are some of the resources nationally; please check your local resources as well.

Are household payments under the CARES Act reportable as tenant income?

The Economic Impact Payment is technically an advance payment of a tax credit that may be claimed on a 2020 tax return. Accordingly, the temporary weekly federal enhancement to unemployment insurance provided by the CARES Act are not to be included in calculations of income. However, HUD notes that regular payments of unemployment insurance (issued by the state) are treated as income, as is customary under program rules.

Does HUD have a standard form Forbearance Agreement?

The Mortgagee Letter (ML) 2020-09, dated April 10, 2020, provides guidelines to assist all FHA Approved Multifamily Mortgagees in developing forbearance agreements.

Can an owner or agent evict a perpetrator of domestic violence or criminal activity?

Yes. The eviction moratorium found in Section 4024(b) of the CARES Act only applies to non-payment evictions. The moratorium also prohibits the charging of other fees, penalties, or other charges due to the non-payment of rent. Protections under the Violence Against Women Reauthorization Act of 2013 (P.L. 113-4) remain in effect, and owners/agents should consult Housing Notice 2017-05 for more information about the housing rights of victims of domestic violence, dating violence, sexual assault, and stalking under VAWA.

In some areas, the civil court system may not be operating as part of Stay at Home restrictions. As such, evictions may not be possible due to restrictions on the court systems.

Are unemployed or furloughed residents eligible to receive childcare expense deductions?

Yes, the resident can continue to receive a deduction for reasonable childcare expenses if the parent/guardian/caretaker continues to have childcare expenses. HUD regulations under 24 CFR 5.611(a) permit deductions for unreimbursed childcare expenses, enabling a family member to seek employment, be employed or further his/her education.

If an owner/agent cannot fill vacancies as a result of the COVID-19 can they request vacancy claims?

If the owner/agent is not able to interview and fill vacancies due to restrictions based on guidance from their local or state jurisdiction regarding COVID-19, then the owner should submit information to their Contract Administrator or HUD office, as appropriate, documenting why the filling of any vacancies was considered infeasible. The HUD Office will review this information on a case-by-case basis and process requests for vacancy claims accordingly.

For sole tenant households who pass away from COVID-19, Can subsidy payments be extended after the tenant’s death?

At this time, HUD is not extending subsidy payments past the earlier of 14 days after the date of the tenant’s death or the date the unit was vacated. Owners and family of the deceased should follow the Center for Disease Control (CDC) guidelines and the direction of local health officials when determining whether the possessions are safe to remove from the unit.

Can project funds be used for direct services to residents, such as meals to those who are home-bound?

No, in accordance with 24 CFR 880.601(e) [responsibilities of the owner], direct services are not an eligible use of project funds.

Is the purchase of masks an allowable use of project funds?

Multifamily property owners and agents can access property operating accounts (which does not include any “new regulation” residual receipts or reserve for replacement accounts) for all reasonable and necessary COVID-19 related preparedness and response actions, including supplies, staff hours, and overtime. Due to the extreme public health risk presented by COVID-19 during this national emergency, providing staff and residents access to protective gloves and masks, at the owners’ discretion, is an allowable use of project funds.

Can a property close or limit access to common areas and rental offices?

Owners and agents should base limiting access to their rental offices and indoor common spaces on local guidance and the property’s individual circumstances. HUD defers these decisions to the owner/agent, there are no defined restrictions.

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