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Notice2022-01285

Implementation of the Fostering Stable Housing Opportunities Amendments

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Published

January 24, 2022

Effective

April 25, 2022

Issuing agencies

Housing and Urban Development Department

Abstract

This notice implements and provides guidance on the provisions of the Fostering Stable Housing Opportunities (FSHO) amendments that are effective through the publication of this notice. This notice also identifies the provisions of FSHO that were effective upon enactment (i.e., December 27, 2020) or otherwise already in effect and advises of actions that may or must be taken now to comply with the changes. Additionally, this notice identifies the provisions of FSHO that require further action from HUD to be implemented. Through this notice, HUD also seeks public comment on certain provisions of FSHO. However, HUD welcomes public comment on any of this notice's provisions.

Full Text

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<title>Federal Register, Volume 87 Issue 15 (Monday, January 24, 2022)</title>
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[Federal Register Volume 87, Number 15 (Monday, January 24, 2022)]
[Notices]
[Pages 3570-3580]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-01285]

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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-6284-N-01]

Implementation of the Fostering Stable Housing Opportunities
Amendments

AGENCY: Office of the Assistant Secretary for Public and Indian Housing
(PIH), Department of Housing and Urban Development (HUD).

ACTION: Notice.

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SUMMARY: This notice implements and provides guidance on the provisions
of the Fostering Stable Housing Opportunities (FSHO) amendments that
are effective through the publication of this notice. This notice also
identifies the provisions of FSHO that were effective upon enactment
(i.e., December 27, 2020) or otherwise already in effect and advises of
actions that may or must be taken now to comply with the changes.
Additionally, this notice identifies the provisions of FSHO that
require further action from HUD to be implemented. Through this notice,
HUD also seeks public comment on certain provisions of FSHO. However,
HUD welcomes public comment on any of this notice's provisions.

DATES:
Effective date of amendments in Section III of this notice: April
25, 2022.
Comment due date: March 25, 2022.

ADDRESSES: Interested persons are invited to submit comments regarding
this document. All communications must refer to the above docket number
and title. There are two methods for submitting public comments.
1. Submission of Comments by Mail. Comments may be submitted by
mail to the Regulations Division, Office of General Counsel, Department
of Housing and Urban Development, 451 7th Street SW, Room 10276,
Washington, DC 20410-0500.
2. Electronic Submission of Comments. Interested persons may submit
comments electronically through the Federal eRulemaking Portal at
<a href="http://www.regulations.gov">www.regulations.gov</a>. HUD strongly encourages commenters to submit
comments electronically. Electronic submission of comments allows the
commenter maximum time to prepare and submit a comment, ensures timely
receipt by HUD, and enables HUD to make comments immediately available
to the public. Comments submitted electronically through the
<a href="http://www.regulations.gov">www.regulations.gov</a> website can be viewed by other commenters and
interested members of the public. Commenters should follow the
instructions provided on that site to submit comments electronically.
No Facsimile Comments. Facsimile (fax) comments are not acceptable.
Public Inspection of Public Comments. All properly submitted
comments and communications submitted to HUD will be available for
public inspection and copying between 8 a.m. and 5 p.m., weekdays, at
the above address. Due to security measures at the HUD Headquarters
building, an advance appointment to review the public comments must be
scheduled by calling the Regulations Division at 202-708-3055 (this is
not a toll-free number). Copies of all comments submitted are available
for inspection and downloading at <a href="http://www.regulations.gov">www.regulations.gov</a>.

FOR FURTHER INFORMATION CONTACT: Ryan E. Jones, Director, Housing
Voucher Management and Operations Division, Department of Housing and
Urban Development, 451 Seventh Street SW, Room 4216, Washington, DC
20410, telephone number (202) 402-2677. (This is not a toll-free
number.) HUD encourages submission of questions about this document be
sent to: <a href="/cdn-cgi/l/email-protection#aaecf3e3eac2dfce84cdc5dc"><span class="__cf_email__" data-cfemail="70362939301805145e171f06">[email&#160;protected]</span></a>.

SUPPLEMENTARY INFORMATION:

I. Background

The Fostering Stable Housing Opportunities (FSHO) amendments,
enacted as section 103 of division Q of the Consolidated Appropriations
Act, 2021 on December 27, 2020 (Pub. L. 116-260), made changes to the
assistance provided to eligible youth pursuant to the Family
Unification Program (FUP) authorized under Section 8(x) of the U.S.
Housing Act of 1937 (42 U.S.C. 1437f(x)). FSHO provides an extension of
the assistance provided to eligible youth for up to 24 months beyond
the 36-month time limit of assistance if the youth is participating in
a Family Self-Sufficiency (FSS) program under section 23 of the U.S.
Housing Act of 1937 and for youth who are unable to enroll in an FSS
program who engaged in education, workforce development, or employment
activities for at least 9 months of the 12-month period preceding the
extension. FSHO also provides an extension of assistance for up to 24
months beyond the 36-month time limit of assistance for eligible youth
who meet one of three statutory exceptions.
FUP provides Housing Choice Vouchers (HCVs) to two different
populations: (1) Families for whom the lack of adequate housing is a
primary factor in the imminent placement of the family's child or
children in out-of-home care or in the delay of the discharge of the
child or children to the family from out-of-home care (``FUP
families''), and (2) eligible youth who are at least 18 years of age
and not more than 24 years of age who have left foster care, or will
leave foster care within 90 days, in accordance with a transition plan
described in section 475(5)(H) of the Social Security Act, and are
homeless or at risk of becoming homeless at age 16 or older (``FUP
youth'').
In 2019, HUD established the Foster Youth to Independence (FYI)
initiative. Through Notice PIH 2019-20, HUD made available Tenant
Protection Vouchers (TPVs) targeted to youth eligible under FUP,
subject to availability. These vouchers are referred

[[Page 3571]]

to as FYI TPVs. The assistance was made available under the
Consolidated Appropriations Act, 2019, (Pub. L. 116-6), enacted on
February 15, 2019, that allowed TPV appropriated funds to be used for
FUP. The notice explained the eligibility and application requirements
for FYI TPV funding and described how applications will be processed.
HUD made FYI TPVs available under the notice through the end of Fiscal
Year (FY) 2020.
Following the rollout of FYI, Congress provided funding targeted
for eligible youth under section 8(x) of the U.S. Housing Act of 1937
in the two most recent appropriations Acts--the Consolidated
Appropriations Act, 2021, (Pub. L. 116-260), enacted on December 27,
2020, and the Further Consolidated Appropriations Act, 2020, (Pub. L.
116-94), enacted on December 20, 2019 (``the Acts''). While the Acts
allowed that a portion of the appropriated amounts be made available
without competition, the Acts also required that a minimum amount be
made available competitively. On October 6, 2020, HUD issued Notice PIH
2020-28,\1\ making available up to $10 million dollars for youth under
FUP to be available on a rolling basis without competition.
Subsequently, HUD issued the Foster Youth to Independence Competitive
Notice of Funding Availability (FR-6400-N-41) making available $20
million dollars to assist youth under FUP.\2\ On September 3, 2021, HUD
issued Notice PIH 2021-26, making available an additional $10 million
for youth under FUP on a rolling basis without competition. HUD refers
to vouchers that are funded from these appropriated amounts as FYI
vouchers, regardless of whether they were awarded competitively or
noncompetitively.
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\1\ <a href="https://www.hud.gov/sites/dfiles/PIH/documents/pih2020-28.pdf">https://www.hud.gov/sites/dfiles/PIH/documents/pih2020-28.pdf</a>.
\2\ <a href="https://www.hud.gov/sites/dfiles/SPM/documents/Foa_Content_of_FR-6400-N-41.pdf">https://www.hud.gov/sites/dfiles/SPM/documents/Foa_Content_of_FR-6400-N-41.pdf</a>.
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The assistance made available under FYI, including FYI vouchers and
FYI TPVs, are collectively referred to in this notice as ``FYI.'' In
this notice, HUD calls out FYI TPVs only where the operating
requirements are different from those for the newer FYI vouchers and
such program requirement distinctions impact the implementation of
FSHO.
By statute, there is no time limitation on FUP assistance when used
to assist FUP-eligible families. However, FUP assistance used to assist
FUP-eligible youth (FUPY), including FYI vouchers, collectively
referred to hereafter as ``FUPY/FYI'' assistance, is subject to a 36-
month time limit.
Public housing agencies (PHAs) administer FUP (including FUPY/FYI)
in partnership with Public Child Welfare Agencies (PCWAs), who are
responsible for referring families and youth to the PHA for a
determination of eligibility for FUP rental assistance. Once the PCWA
makes the referral, the PHA places the FUP applicant on its waiting
list,\3\ determines whether the family or youth meets HCV program
eligibility requirements, and conducts all other processes relating to
voucher issuance and administration. The PCWA is responsible for
providing or leveraging follow-up supportive services, such as
educational counseling and job preparation, for the period defined in
the notice or Notice of Funding Availability/Opportunity (NOFA/O) for
which the funding was made available.
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\3\ FYI TPVs do not require the use of a waiting list since the
FYI TPV is awarded to the PHA for use by a specific person and is a
special (non-waiting list) admission.
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The FSHO amendments made changes to the FUP authorized under
section 8(x) of the U.S. Housing Act of 1937 to provide eligible youth
with an extension of FUPY/FYI voucher assistance for up to 24 months
beyond the 36-month time limit of assistance if they are participating
in an FSS program under section 23 of the U.S. Housing Act of 1937 (42
U.S.C. 1437u). In cases where a PHA is not carrying out an FSS program
or is carrying out an FSS program in which the youth has been unable to
enroll, FSHO provides the youth with an extension of FUPY/FYI voucher
assistance for up to 24 months beyond the 36-month time limit of
assistance if they engaged in education, workforce development, or
employment activities for at least 9 months of the 12-month period
preceding the extension. FSHO also provides an extension of FUPY/FYI
voucher assistance for up to 24 months beyond the 36-month time limit
of assistance for youth who are responsible for the care of a dependent
child under the age of 6 or for the care of an incapacitated person;
regularly and actively participating in a drug addiction or alcohol
treatment and rehabilitation program; or incapable of complying with
the requirement to participate in an FSS program or engage in
education, workforce development, or employment activities, as
applicable, due to a documented medical condition.
This notice implements and provides guidance on the provisions of
FSHO that are effective as of this notice's effective date (see Section
III). This notice also identifies the provisions of FSHO that were
effective upon enactment (i.e., December 27, 2020) or otherwise already
in effect and advises of actions that may or must be taken now to
comply with the changes (see Section IV). Additionally, this notice
identifies the provisions of FSHO that require further action from HUD
to be implemented (see Section V).
Through this notice, HUD also seeks public comment on certain
provisions of FSHO. Specifically, HUD seeks public comment on the
provisions of FSHO related to participation in an FSS program and
engagement in education, workforce development, and employment
activities and has included specific questions for public comment in
each of these sections. While this notice implements these provisions,
HUD is seeking public comment in order to determine whether future
changes are necessary. HUD also welcomes public comment on any of the
other provisions of this notice. All comments must be submitted using
the two methods detailed above.

II. Applicability (Section 103(d) of FSHO)

Section 103(d) of FSHO made the provisions of FSHO applicable only
to FUPY/FYI vouchers that were not in use on behalf of an assisted
family as of the date of the enactment of FSHO (i.e., December 27,
2020). For FUPY/FYI tenant-based vouchers, the provisions of FSHO apply
to eligible youth who first leased or leases a unit where the effective
date of the HAP contract execution is after December 27, 2020. For
FUPY/FYI project-based vouchers (PBVs), the provisions of FSHO apply to
eligible youth who first entered or enters into a lease agreement for
their PBV unit after December 27, 2020.\4\ \5\ \6\

[[Page 3572]]

The provisions of FSHO apply to FUPY/FYI vouchers regardless of whether
the PHA was awarded the voucher allocation before or after the
enactment of FSHO as long as the youth first leased or leases a unit
after the date of enactment of FSHO (i.e., December 27, 2020).
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\4\ Except for the provisions related to the PBV percentage
limitation and income-mixing requirement, which are tied to the
effective date of the HAP contract. These provisions are discussed
in section IV(D) of this document.
\5\ While PHAs may project-base FUPY/FYI vouchers (except FYI
TPVs), PHAs are reminded that sponsor-based housing is not permitted
under the PBV program (unless the PHA is a Moving to Work (MTW)
agency, and it has received HUD approval to create a sponsor-based
housing program through its Annual MTW Plan or MTW Supplement to the
PHA Plan). Under the sponsor-based housing model, PHAs provide
housing funds directly to sponsors (i.e., nonprofits and social
service providers) through a competitive process and the providers
use the funds to secure private market rentals, typically through
master lease contracts, that are then subleased to program
participants. Certain administrative responsibilities (e.g.,
eligibility determinations, wait list management) are delegated to
the qualified sponsor and the PHA performs a quality control audit.
\6\ Note that PHAs are prohibited from project-basing FYI TPVs
since FYI TPVs ``sunset'' (i.e., may not be reissued) when a youth
leaves the program.
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III. Provisions of FSHO Implemented Through This Notice

A. Requirements To Extend Assistance for Youth Aging Out of Foster Care
(Section 103(b)(1) of FSHO)

i. Extension of Assistance
Section 103(b)(1) of FSHO amended section 8(x) of the U.S. Housing
Act of 1937 (42 U.S.C. 1437f(x)) to add a new paragraph (5),
subparagraph (A), to provide an extension of FUPY/FYI assistance for
youth who are participating in a Family Self-Sufficiency (FSS) program
under section 23 of the U.S. Housing Act of 1937 (42 U.S.C. 1437u) and
for youth who are unable to enroll in an FSS program but who engaged in
education, workforce development, or employment activities for at least
9 months of the 12-month period preceding the extension. Section
103(b)(1) of FSHO also provides youth with an extension of FUPY/FYI
assistance if they meet one of three statutory exceptions. These
requirements for the extension of FUPY/FYI assistance are described
below.
PHAs must inform FUPY/FYI youth of the provisions of FSHO that
allow for an extension of FUPY/FYI assistance and the requirements that
they must meet to receive such an extension during the family briefing
(24 CFR 982.301(a)). PHAs must also notify FUPY/FYI youth who were
issued a voucher prior to the publication of this notice and first
leased or leases a unit after 12/27/2020, to inform them of the
availability of this extension of assistance and the requirements that
they must meet to receive such an extension. PHAs should note that FSHO
does not restart or otherwise impact the initial 36-month time limit of
assistance for FUPY/FYI vouchers but does make FUPY/FYI youth who first
leased or leases a unit after 12/27/2020 eligible for an extension of
assistance of up to 24 months.
Through the publication of this notice, HUD is not establishing
terms or conditions for meeting these requirements beyond those
contained in the statute. HUD is providing PHAs with flexibility in
applying these requirements and encourages PHAs to consider how they
can provide extensions of FUPY/FYI assistance to the broadest
population possible consistent with the statutory requirements. In
accordance with 24 CFR 982.54(a), PHAs must update their Administrative
Plans to include written policies regarding how they will implement the
following provisions of FSHO. HUD encourages PHAs to consult with their
partnering PCWAs and other groups that work with foster youth when
formulating their policies for implementing the requirements below.
As one of the goals of FSHO is to help FUPY/FYI youth advance their
education, improve their career and employment prospects, and build
towards financial security, HUD encourages PHAs that do not currently
administer an FSS program to start one by creating an FSS Action Plan
pursuant to 24 CFR 984.201 and having it approved by their local HUD
Field Office. The creation of an FSS program would allow FUPY/FYI youth
who enroll in the FSS program to accrue funds in an escrow account, in
accordance with 24 CFR 984.305. Youth may use these funds to invest
further in their education, to build financial security, or to help
achieve other life goals.
(a) Extension of Assistance for Youth Participating in a Family Self-
Sufficiency Program
An eligible youth who is participating in the Family Self-
Sufficiency (FSS) program authorized under section 23 of the U.S.
Housing Act of 1937 (42 U.S.C. 1437u) is entitled to receive FUPY/FYI
assistance for up to an additional 24 months beyond the 36-month time
limit of assistance as long as the youth is in compliance with the
applicable terms and conditions of the FSS program set forth in section
23 of the U.S. Housing Act and the FSS program regulations at 24 CFR
part 984.
Families cannot be required to participate in the FSS program as a
condition of receipt of assistance under the HCV program, including
FUPY/FYI assistance. However, only FUPY/FYI youth that sign an FSS
Contract of Participation and comply with the requirements of the FSS
program are entitled to receive an extension of the time limit for
voucher assistance under this statutory provision. A FUPY/FYI youth
must participate in the FSS program if it is available to them in order
to receive the extension of the time limit for voucher assistance
unless the youth meets one of the statutory exceptions described in
paragraph (c) below.
A PHA that carries out an FSS program must inform the FUPY/FYI
youth of the availability of the FSS program at the time the voucher is
issued and offer them an FSS slot, if available, or offer to place them
on the FSS waiting list. The PHA must also notify FUPY/FYI youth who
were issued a voucher prior to the publication of this notice and first
leased or leases a unit after 12/27/2020, and offer them an FSS slot,
if available, or offer to place them on the FSS waiting list.
HUD has determined that if a PHA that carries out an FSS program is
unable to offer a FUPY/FYI youth an FSS slot during their first 36
months of receiving FUPY/FYI assistance, the youth is considered to
have been ``unable to enroll'' in the program and may have their
voucher extended by meeting the education, workforce development, or
employment requirements in paragraph (b) below. In other words, a FUPY/
FYI youth must accept an FSS slot if it is offered to them prior to the
36-month mark in order to receive an extension of assistance (unless
the youth meets one of the statutory exceptions described in paragraph
(c) below). If an FSS slot becomes available between the 36-month mark
and the 48-month mark, the PHA must offer the slot to a FUPY/FYI youth
who had their voucher extended based on meeting the education,
workforce development, or employment requirement or one of the
statutory exceptions (even if the youth previously declined an FSS slot
because they met one of the statutory exceptions). The PHA must work
with the youth to determine whether enrollment in FSS is feasible and
in their best interest given any education, workforce development, or
employment activities that the youth is engaged in and any statutory
exceptions that apply to the youth, as well as the remaining time on
their FUPY/FYI voucher. If the FUPY/FYI youth accepts the FSS slot, the
PHA must work with the youth to establish Contract of Participation
goals and an Individual Training and Services Plan (ITSP) that can be
accomplished within the time period left on the FUPY/FYI voucher. The
PHA may, but is not required to, offer a FUPY/FYI youth an FSS slot
that becomes available between the 48-month mark and the 60-month mark,
since the youth will have already received their second and final
extension under FSHO.
HUD is establishing this 36-month cut-off because it recognizes
that it may not always be feasible or in the best

[[Page 3573]]

interest of the youth to enroll in an FSS program after the 36-month
mark because of the limited time period of FUPY/FYI assistance. At that
point, the FUPY/FYI youth will already be engaging in education,
workforce development, or employment activities described in paragraph
(b) below (unless they meet one of the statutory exceptions described
in paragraph (c) below), and it may not be feasible to incorporate
these activities into an FSS Contract of Participation for the
remaining time period of the FUPY/FYI voucher. Therefore, a FUPY/FYI
youth who met the alternative requirement described in paragraph (b)
below or one of the statutory exceptions described in paragraph (c)
below at the 36-month mark and received an extension of assistance on
that basis may decline an FSS slot that is offered between the 36-month
mark and the 48-month mark and meet the alternative requirements
described in paragraph (b) below or one of the statutory exceptions
descrbed in paragraph (c) below in order to receive an extension of
assistance at the 48-month mark.
A PHA may give a selection preference for up to 50 percent of their
FSS program slots to families with a member already enrolled in, or on
the waiting list for, an FSS-related service program (24 CFR 984.203).
If a PHA chooses to establish a selection preference in its FSS
program, the PHA may, but is not required to, create a selection
preference for FUPY/FYI youth to help ensure that they are able to
enroll in the program. This is allowed under 24 CFR 984.203 because the
services provided through the PCWA or other parties as required by the
FUPY/FYI programs are considered an ``FSS related service program.''
FUPY/FYI youth participating in the services or who are on the waiting
list for the services may be considered eligible for the preference.
For FUPY/FYI youth who enroll in the FSS program, the PHA must
comply with the regulations concerning the term of the FSS Contract of
Participation at 24 CFR 984.303(c) and any extensions of that term at
24 CFR 984.303(d). However, since it will be known that the FUPY/FYI
participant's voucher will only be available for a specific period of
time (not to exceed 60 months, total), the PHA's FSS Program
Coordinator must work with the FUPY/FYI youth to establish Contract of
Participation goals and an ITSP that can be accomplished within the
time period left on the FUPY/FYI voucher. For example, a FUPY/FYI youth
who enrolls in FSS at the beginning of their first year of receiving
FUPY/FYI assistance would have five years in the FSS program before the
expiration of their FUPY/FYI assistance while a youth that enrolls in
FSS at the beginning of their third year of receiving FUPY/FYI
assistance would have 3 years in the FSS program before the expiration
of their FUPY/FYI assistance. The PHA should also ensure that their FSS
Action Plan reflects policies that allow for goals to be changed or
added to the Contract of Participation in order to allow the youth to
continue in the FSS program through the full Contract of Participation
period in the case that the FUPY/FYI youth is later issued a regular
voucher or if there is another type of change in rental assistance
which allows for the youth to continue in FSS after the FUPY/FYI
assistance has expired.
If the PHA does not have an FSS program or if the FUPY/FYI youth
has not been provided an opportunity to enroll in the FSS program
during the first 24 months of FUPY/FYI assistance, HUD encourages the
PHA to remind the youth at the 24-month reexamination of the education,
workforce development, and employment requirements described in
paragraph (b) below so that the youth has enough time to meet these
requirements prior to the expiration of the 36-month time period for
FUPY/FYI assistance. However, if the FUPY/FYI youth is later offered an
FSS slot prior to the 36-month mark, the youth will be required to
enroll in the FSS program in order to receive an extension of
assistance at the end of the 36-month and 48-month time periods (unless
they meet one of the statutory exceptions described in paragraph (c)
below). If the FUPY/FYI youth is offered an FSS slot prior to the 36-
month mark, the youth will not be considered to have been ``unable to
enroll'' in the FSS program, and, as a result, will not be eligible to
receive an extension of assistance based on meeting the education,
workforce development, or employment requirements described in
paragraph (b) below.
At the 36-month and 48-month reexaminations, the PHA must extend
the FUPY/FYI voucher assistance if the youth is participating in and in
compliance with the FSS program as long as the youth is still eligible
for the HCV program. In any case, the FUPY/FYI youth cannot receive
more than a total of 60 months of FUPY/FYI voucher assistance even if
the FSS Contract of Participation time period extends beyond the FUPY/
FYI voucher 60-month mark.
Question for Comment
1. In order to receive an extension of FUPY/FYI assistance, should
the cut-off for requiring a youth to enroll in the FSS program be the
36-month mark or is a different cut-off more appropriate based on the
requirements of the FSS program?
(b) Extension of Assistance for Youth Engaging in Education, Workforce
Development, or Employment Activities
If a PHA does not carry out an FSS program under section 23 the
U.S. Housing Act of 1937 (42 U.S.C. 1437u) or the FUPY/FYI youth has
been unable to enroll in the program during the first 36 months of
receiving FUPY/FYI assistance, the FUPY/FYI youth is entitled to
receive an extension of FUPY/FYI assistance for up to two successive
12-month periods beyond the 36-month time limit of assistance provided
that the youth engaged in at least one of the education, workforce
development, or employment activities below for not less than 9 months
of the 12-month period preceding each extension.
In order to meet the 9-months out of the preceding 12-months
requirement, the youth may have engaged in one of the education,
workforce development, or employment activities described below or a
combination of these activities. For example, a youth may have engaged
in obtaining a recognized postsecondary credential at the beginning of
the 12-month period, but then the youth obtained the credential and
became employed later in the 12-month period. The youth may combine the
time that they were engaged in obtaining a recognized postsecondary
credential and the time that they were employed in order to meet the 9-
months out of 12-months requirement.
HUD notes that FSHO does not establish a minimum number of classes
or credits that a youth must be enrolled in or a minimum number of
hours that a youth must work in order to receive an extension of FUPY/
FYI assistance under this provision. Conversely, FSHO does not prohibit
a PHA from establishing such minimum requirements. Therefore, a PHA
may, but is not required, to establish a minimum number of classes or
credits that a youth must be enrolled in or a minimum number of hours
that a youth must work in order to receive an extension of FUPY/FYI
assistance under this provision. However, HUD strongly encourages PHAs
to establish policies that provide extensions of FUPY/FYI assistance
for youth that were engaged in such activities on a part-time basis as
long as they meet the requirement to engage in such activities for not
less than 9 months of the 12-month period preceding each extension. If
a PHA

[[Page 3574]]

chooses to establish minimum requirements, HUD encourages the PHA to
establish policies that would allow them to make exceptions to such
requirements for circumstances beyond the youth's control.
For example, a PHA may establish a requirement that a youth must be
enrolled in education activities on at least a halftime basis but may
make exceptions to this requirement if the youth is unable to enroll in
a sufficient number of classes due to a lack of course offerings by the
educational institution where the youth is enrolled. Similarly, a PHA
may establish a requirement that a youth must work a minimum number of
hours per week but may make exceptions to this requirement if the
youth's hours are reduced due to circumstances beyond their control or
the youth must temporarily reduce their work hours due to a family
emergency. A PHA's policies implementing its education, workforce
development, and employment requirements must be included in its
Administrative Plan, in accordance with the procedures set forth in 24
CFR 903.21.
Education Requirements
<bullet> The youth was engaged in obtaining a recognized
postsecondary credential or a secondary school diploma or its
recognized equivalent.
A PHA may use the definitions of ``recognized postsecondary
credential'' and ``secondary school diploma or its recognized
equivalent'' under the Workforce Innovation and Opportunity Act (WIOA).
WIOA defines a ``recognized postsecondary credential'' as a
credential consisting of an industry-recognized certificate or
certification, a certificate of completion of an apprenticeship, a
license recognized by the State involved or Federal Government, or an
associate or baccalaureate degree (29 U.S.C. 3102). Examples of a
``recognized postsecondary credential'' include, but are not limited
to, an associate's degree, bachelor's degree, occupational licensure,
or occupational certification (see U.S. Department of Labor, Training
and Employment Guidance Letter No. 10-16, Change 1).
For the purpose of WIOA, the U.S. Department of Labor defines a
``secondary school diploma or its recognized equivalent'' as a
secondary school diploma (or alternate diploma) that is recognized by a
State and that is included for accountability purposes under the
Elementary and Secondary Education Act of 1965 (ESEA), as amended by
the Every Student Succeeds Act (ESSA). A secondary school equivalency
certification signifies that a student has completed the requirement
for a high school education. Examples of a ``secondary school diploma
or its recognized equivalent'' include, but are not limited to,
obtaining certification of attaining passing scores on a State-
recognized high school equivalency test, earning a secondary school
diploma or State-recognized equivalent, or obtaining certification of
passing a State-recognized competency-based assessment.
<bullet> The youth was enrolled in an ``institution of higher
education,'' as such term is defined in section 101(a) of the Higher
Education Act of 1965 (20 U.S.C. 1001(a)) or an institution that meets
the definition of a ``proprietary institution of higher education'' or
a ``postsecondary vocational institution'' under sections 102(b)(1) and
(c)(1) of the Higher Education Act of 1965 (20 U.S.C. 1002(b)(1) and
(c)(1)), respectively.
Workforce Development Requirements
<bullet> The youth was participating in a career pathway, as such
term is defined in section 3 of the Workforce Innovation and
Opportunity Act (29 U.S.C. 3102).
Employment Requirements
<bullet> The youth was employed.
Questions for Comment
2. Should HUD establish a minimum number of classes or credits that
a youth must be enrolled in or a minimum number of hours that a youth
must work in order to receive an extension of FUPY/FYI assistance under
this provision?
3. Should HUD establish a maximum number of classes or credits or a
maximum number of work hours that a PHA may require in order for a
youth to receive an extension of FUPY/FYI assistance under this
provision?
(c) Extension of Assistance Exceptions
A FUPY/FYI youth will be entitled to receive an extension of their
FUPY/FYI assistance for up to 24 months beyond the 36-month time limit
of assistance if they certify that they meet one of the exceptions
below.
<bullet> The FUPY/FYI youth is a parent or other household member
responsible for the care of a dependent child under the age of 6 or for
the care of an incapacitated person.
HUD is not defining the term ``incapacitated person'' but is
providing PHAs with flexibility in applying this requirement. PHAs may
choose to apply the definition of ``incapacitated person'' that has
been established under state or local law. HUD encourages PHAs to apply
this exception in a manner that provides extensions of FUPY/FYI
assistance to the broadest population possible consistent with the
statutory requirements.
FSHO does not require that the child or incapacitated person reside
in the household in order for the FUPY/FYI youth to certify that they
meet this exception. For example, a FUPY/FYI youth may submit this
certification on the basis that they are responsible for the care of a
dependent child under the age of 6 even if the child resides in the
household only part of the time due to a shared custody arrangement.
Similarly, a FUPY/FYI youth may submit this certification on the basis
that they are responsible for the care of an incapacitated person, such
as an elderly relative, even if the incapacitated person does not
reside in the household.
<bullet> The FUPY/FYI youth is a person who is regularly and
actively participating in a drug addiction or alcohol treatment and
rehabilitation program.
<bullet> The FUPY/FYI youth is a person who is incapable of
complying with the requirement to participate in a Family Self-
Sufficiency (FSS) program as described in paragraph (a) above or engage
in education, workforce development, or employment activities as
described in paragraph (b) above, as applicable, due to a documented
medical condition.
HUD is not defining the types of medical conditions that may meet
this requirement but is providing PHAs with flexibility in applying
this requirement. HUD encourages PHAs to apply this exception in a
manner that provides extensions of FUPY/FYI assistance to the broadest
population possible consistent with the statutory requirements.
A FUPY/FYI youth that meets one of these exceptions must still be
offered an opportunity to enroll in FSS (if it is available to them)
and receive any supportive services available to FUPY/FYI youth,
including those described in section III.B. of this document. A FUPY/
FYI youth may choose to participate in an FSS program or engage in
education, workforce development, or employment activities even if they
meet one of these statutory exceptions.
ii. Verification of Compliance
In order to extend the FUPY/FYI assistance for an eligible youth
beyond the 36-month time period, the PHA must determine that the youth
meets one of the statutory conditions described in paragraphs
III(A)(i)(a), (b), or (c) above. Section 103(b)(1) of FSHO

[[Page 3575]]

requires that the PHA verify that the FUPY/FYI youth meets one of these
statutory conditions on an annual basis in conjunction with reviews for
determining income eligibility for the HCV program (24 CFR 982.516). In
order to provide an extension of assistance, the PHA would need to
verify compliance with these requirements at the end of the 36-month
time period and the 48-month time period of FUPY/FYI assistance. The
PHA does not need to verify compliance with these requirements at the
end of the 60-month time period since the maximum length of assistance
is 60 months.
HUD notes that since FUPY/FYI vouchers are limited to 36 months, a
PHA will only need to conduct an annual reexamination of the FUPY/FYI
youth at the end of the 36-month time period and the 48-month time
period if the youth meets one of the statutory conditions that allow
for the extension of FUPY/FYI assistance. Therefore, the PHA may wish
to time its verification of compliance process in advance of the annual
reexamination process. The PHA should ensure that it provides
sufficient time for the FUPY/FYI youth to demonstrate that they meet
one of these statutory conditions and for the PHA to conduct an annual
reexamination prior to the expiration of the FUPY/FYI assistance.
Since the PHA only needs to verify compliance with the statutory
conditions described in paragraphs III(A)(i)(a), (b), or (c) above on
an annual basis (i.e., at the end of the 36-month time period and the
48-month time period), the failure of a FUPY/FYI youth to meet one of
these statutory conditions would only impact their ability to receive a
subsequent extension of FUPY/FYI assistance; it would not serve as a
basis for terminating the FUPY/FYI assistance prior to the annual
reexamination. This does not affect the ability of the PHA to terminate
FUPY/FYI assistance in accordance with 24 CFR 982.552.
Furthermore, a FUPY/FYI youth who received an extension of voucher
assistance at the end of the 36-month time period based on meeting one
of these statutory conditions does not have to meet this same statutory
condition when they reach the end of the 48-month time period. The
FUPY/FYI youth may demonstrate that they meet a different condition in
order to receive an extension of their assistance.
For example, a FUPY/FYI youth received an extension of voucher
assistance at the end of the 36-month time period based on their
certification that they were caring for a child under the age of 6.
However, at the 48-month reexamination, the child is no longer under
the age of 6. The FUPY/FYI youth must be given an opportunity to show
that they meet a different condition in order to receive an extension
of their assistance.
To verify compliance with the statutory conditions described in
paragraphs III(A)(i)(a), (b), or (c) above, the PHA must conduct the
following activities, as applicable, prior to the end of the 36-month
time period and 48-month time period:
(a) Verification of Compliance for Youth Participating in a Family
Self-Sufficiency Program
To verify compliance with the FSS requirement described in
paragraph III(A)(i)(a) above, the PHA must examine its records to
confirm, or obtain confirmation from the PHA's FSS program staff, that
the FUPY/FYI participant is in compliance with FSS program requirements
and has not been terminated from the FSS program.
(b) Verification of Compliance for Youth Who Engage in Education,
Workforce Development, or Employment Activities or Who Meet One of the
Statutory Exceptions
To verify compliance with the education, workforce development, or
employment requirement described in paragraph III(A)(i)(b) above or one
of the statutory exceptions described in paragraph III(A)(i)(c) above,
the PHA must provide the FUPY/FYI youth written notification informing
them that they may receive an extension of their FUPY/FYI assistance if
they meet one of the statutory conditions described in paragraphs
III(A)(i)(b) and (c) above and providing instructions on how the youth
may demonstrate that they meet one of these conditions.\7\ This
notification must be provided sufficiently in advance of the end of the
36-month time period or 48-month time period, as applicable, to allow
the FUPY/FYI youth to demonstrate that they meet one of these statutory
conditions and for the PHA to conduct an annual reexamination prior to
the expiration of the FUPY/FYI assistance. When necessary, the PHA must
provide this notification in a format accessible to FUPY/FYI youth with
disabilities (see 24 CFR 8.6) and in a translated format for FUPY/FYI
youth with limited English proficiency (see 24 CFR 1.4(b)(2)(i); 72 FR
2731).
---------------------------------------------------------------------------

\7\ HUD encourages PHAs to ensure that any written notification
that is sent to the FUPY/FYI youth only includes the statutory
conditions that are available to them. Specifically, the PHA should
be mindful that the education, workforce development, and employment
requirement described in paragraph III(A)(i)(b) above is only
available to FUPY/FYI youth who are unable to enroll in the FSS
program.
---------------------------------------------------------------------------

In order for the FUPY/FYI youth to meet the education, workforce
development, or employment requirement described in paragraph
III(A)(i)(b) above, the youth must demonstrate to the PHA that they
were engaged in at least one education, workforce development, or
employment activity for at least 9 months of the 12-month period
immediately preceding the end of 36-month or 48-month time period, as
applicable. Due to the timing of when the PHA verifies compliance and
conducts the annual reexamination, the FUPY/FYI youth may have not yet
met the 9-month requirement but may be able to demonstrate that they
will meet the 9-month requirement as of the end of the 36-month or 48-
month time period. In such cases, the FUPY/FYI youth will still be
considered to have met the requirements of paragraph III(A)(i)(b). In
order for the FUPY/FYI youth to meet one of the statutory exceptions
described in paragraph III(A)(i)(c) above, the youth must submit a
certification to the PHA that they meet one of these exceptions. This
certification is the only documentation that the FUPY/FYI youth must
submit in order to demonstrate that they meet one of these exceptions.
If the PHA determines that the youth meets one of the statutory
conditions described in paragraphs III(A)(i)(a), (b), or (c) above, the
PHA would then conduct an annual reexamination. If the annual
reexamination determines that the youth is still eligible for the HCV
program, the PHA must provide the FUPY/FYI youth the extension of
voucher assistance in accordance with the applicable statutory
provision.
If the FUPY/FYI youth does not meet any of the statutory conditions
described in paragraphs III(A)(i)(a), (b), and (c) above, the youth is
subject to the statutory time limit of 36 months or the time limit of
any extension that the youth has already received, and the FUPY/FYI
voucher must be terminated once the youth reaches this time limit. The
calculation of the time limit begins from the date the first HAP
contract is signed (for tenant-based vouchers) or from the date the
youth entered into the initial lease agreement (for project-based
vouchers). Note that the number of months is calculated based on the
number of months that HAP subsidy is being paid on behalf of the youth,
not the number of months that the youth is in the FUPY/FYI program.
Prior to termination, the PHA must offer the FUPY/FYI youth the
opportunity to request an informal hearing, in accordance with 24 CFR
982.555 and

[[Page 3576]]

the procedures set forth in its Administrative Plan.

B. Supportive Services (Section 103(b)(1) of FSHO)

Section 103(b)(1) of FSHO amended section 8(x) of the U.S. Housing
Act of 1937 (42 U.S.C. 1437f(x)) to add a new paragraph (5),
subparagraph (B), that makes FUPY/FYI youth eligible for any supportive
services (as such term is defined in section 3 of the Workforce
Innovation and Opportunity Act (WIOA) (29 U.S.C. 3102)) made available
in connection with any housing assistance program of the PHA, by or
through the PHA. Section 3 of WIOA defines supportive services as
services, such as transportation, child care, dependent care, and
needs-related payments, that are necessary to enable an individual to
participate in activities authorized under WIOA.\8\ This subparagraph
also requires the PHA to inform the youth of the existence of such
programs or services and of their eligibility for such programs and
services upon initial provision of FUPY/FYI assistance.
---------------------------------------------------------------------------

\8\ Section 3 of WIOA (29 U.S.C. 3102) also includes ``housing''
in its definition of ``supportive services.'' However, housing would
not be considered a supportive service under the FUPY/FYI program.
---------------------------------------------------------------------------

The FUP program already requires that the PHA's partnering PCWA(s)
offer a range of supportive services to eligible youth for the period
defined in the notice or NOFA/O for which the funding was made
available. FSHO does not change these existing requirements but
requires that the PHA make available to FUPY/FYI youth any supportive
services that are made available in connection with any other housing
assistance program of the PHA, by or through the PHA. However, this
provision of FSHO does not supersede any eligibility requirements for
the supportive services that are made available in connection with any
other housing assistance program of the PHA, by or through the PHA.
At the time the FUPY/FYI voucher is issued to an eligible youth,
the PHA must inform the youth of the FUPY/FYI supportive services
available to them, the existence of any other programs or services, and
their eligibility for such programs and services. The PHA must provide
this information as part of the family briefing pursuant to 24 CFR
982.301(a). However, participation in supportive services cannot be
required as a condition of receiving FUPY/FYI assistance.

C. Applicability to Moving to Work Agencies (Section 103(b)(1) of FSHO)

Section 103(b)(1) of FSHO amended section 8(x) of the U.S. Housing
Act of 1937 (42 U.S.C. 1437f(x)) to add a new paragraph (5),
subparagraph (C), to allow Moving to Work (MTW) agencies to establish
alternative terms, conditions, or requirements for the extension of
FUPY/FYI assistance. For example, an MTW agency may provide an
extension of FUPY/FYI assistance for youth participating in a local MTW
self-sufficiency program in lieu of participating in an FSS program
under section 23 of the U.S. Housing Act. Note that an MTW agency may
only waive or modify the terms, conditions, or requirements to receive
an extension of FUPY/FYI assistance, not the length of the extension of
assistance. An MTW agency also may not waive or modify the exceptions
under which a youth who does not meet the requirement to participate in
an FSS program as described in paragraph III(A)(i)(a) of this document
or engage in education, workforce development, or employment activities
as described in paragraph III(A)(i)(b) of this document, as applicable,
may receive an extension of FUPY/FYI assistance.
Any alternative terms, conditions, and requirements for the
extension of FUPY/FYI assistance must be included in the Annual MTW
Plan (for initial agencies) or the MTW Supplement to the PHA Plan (for
expansion agencies). If an MTW PHA's Annual MTW Plan or MTW Supplement
to the Annual PHA Plan does not include alternative terms, then the
policies set forth in this Notice will apply to the MTW PHA. Further,
FUPY/FYI vouchers are not eligible for funding fungibility under the
Standard MTW Agreement or MTW Amendment to the Annual Contributions
Contract.

D. Termination of Vouchers Upon Turnover (Section 103(b)(1) of FSHO)

Section 103(b)(1) of FSHO amended section 8(x) of the U.S. Housing
Act of 1937 (42 U.S.C. 1437f(x)) to add a new paragraph (5),
subparagraph (D), to prohibit a PHA from reissuing a FUPY/FYI voucher
when assistance for the youth initially assisted is terminated, unless
specifically authorized by the Secretary.
This provision of FSHO prohibiting the reissuance of vouchers upon
turnover does not affect FUPY/FYI vouchers funded by an appropriations
Act that specified such vouchers be reissued to eligible youth upon
turnover. Currently, the appropriations Acts for FUPY/FYI require that
vouchers be made available to eligible recipients upon turnover (except
for FYI TPVs awarded under Notice PIH 2019-20, which cannot be reissued
when the youth exits the HCV program). For FUPY/FYI vouchers (except
FYI TPVs), PHAs are currently required to notify HUD if it determines
that it no longer has an identified need for a FUPY/FYI voucher upon
turnover, so HUD can recapture the assistance and reallocate it to a
PHA with an identified need. If there are changes to this requirement
in future FUPY/FYI appropriations Acts, HUD will provide guidance at
that time.

IV. Provisions of FSHO Effective Upon Enactment or Otherwise Already in
Effect

A. Definition of Family (Section 103(a) of FSHO)

Section 103(a) of FSHO amended the definition of ``family'' at
section 3(b)(3)(A) of the U.S. Housing Act of 1937 (42 U.S.C.
1437a(b)(3)(A)) to clarify that a family may include families
consisting of a single person who is a youth described in section
8(x)(2)(B) of the U.S. Housing Act of 1937 (42 U.S.C. 1437f(x)(2)(B)).
Implementation Action. This statutory change was effective as of
the date of enactment of FSHO (i.e., December 27, 2020). This document
serves as notice to PHAs that the definition of family in the PHA's
Administrative Plan must reflect this statutory change (24 CFR
982.54(d)(4)(i)). At a later date, HUD will undertake conforming
rulemaking to revise its regulations to reflect this statutory change.

B. Allocation of Assistance for Youth Aging Out of Foster Care (Section
103(b)(1) of FSHO)

Section 103(b)(1) of FSHO amended section 8(x)(3) of the U.S.
Housing Act of 1937 to require that the Secretary, subject only to the
availability of funds, allocate FUPY/FYI assistance to any PHA that (1)
administers FUPY/FYI assistance or seeks to administer such assistance,
consistent with procedures established by the Secretary, (2) has
requested FUPY/FYI assistance so that they may provide timely
assistance to eligible youth, and (3) has submitted to the Secretary a
statement describing how it will connect assisted youths with local
community resources and self-sufficiency services, to the extent they
are available, and obtain referrals from PCWAs regarding youths in
foster care who become eligible for FUPY/FYI assistance.
Implementation Action. The Consolidated Appropriations Act, 2021,
(Pub. L. 116-260) and the Further Consolidated Appropriations Act,
2020,

[[Page 3577]]

(Pub. L. 116-94) made funding available to provide HCV assistance on a
non-competitive basis for eligible youth under section 8(x) of the U.S.
Housing Act of 1937. HUD made this funding available through Notices
PIH 2020-28 and PIH 2021-26. These notices set forth application
requirements that are consistent with this provision of FSHO.

C. Reports (Section 103(b)(1) of FSHO)

Section 103(b)(1) of FSHO amended section 8(x) of the U.S. Housing
Act of 1937 (42 U.S.C. 1437f(x)) to add a new paragraph (5),
subparagraph (E)(i)(I), to require that PHAs report the number of
persons on whose behalf FUPY/FYI assistance was provided during the
fiscal year.
Implementation Action. PHAs are already required to report this
information in the Public Information Center (PIC). PHAs must use a
special program code for FUPY/FYI voucher participants in line 2n of
the Family Report (form HUD-50058) or line 2p of the MTW Family Report
(form HUD-50058-MTW), as applicable. If the voucher is issued as part
of FUP, the special program code is ``FUPY.'' If the voucher is issued
as part of FYI, the special program code is ``FYI,'' except for FYI
TPVs, whose special program code is ``FYITPV.''

D. Exceptions to Limitations for Project-Based Voucher (PBV) Assistance
(Section 103(c) of FSHO)

Section 103(c) of FSHO amended the percentage limitation at section
8(o)(13)(B)(ii) of the U.S. Housing Act of 1937 (42 U.S.C.
1437f(o)(13)(B)(ii)) and the income-mixing requirement at section
8(o)(13)(D)(ii)(I) of the U.S. Housing Act (42 U.S.C.
1437f(o)(13)(D)(ii)(I)) for units that house eligible youth receiving
FUPY/FYI assistance. Note that this section is not applicable to FYI
TPVs that were awarded under Notice PIH 2019-20, since PHAs are
prohibited from project-basing FYI TPVs.
While FUP vouchers (not including FYI vouchers) can be used for
either families or youth, a PBV unit may only be covered by these
amendments to the percentage limitation and income-mixing requirement
if the FUP PBV assistance is provided on behalf of an eligible youth.
Therefore, the HAP contract must specify that the PBV unit is
specifically made available to FUP youth in order for the unit to be
covered. In order to make PBV units specifically available to FUP
youth, the PHA must determine that such a limitation is consistent with
the local housing needs of both eligible FUP populations (i.e.,
families and youth) and maintain documentation to support this
determination. The PHA must also amend its Administrative Plan to
include the limitation of these FUP PBV units to eligible youth. Since
FYI vouchers are already limited to youth, the PHA does not need to
take these steps in order to project-base FYI vouchers under this new
percentage limitation and income-mixing requirement authority.
(i) Section 103(c)(1), Percentage Limitation
Section 103(c)(1) of FSHO amended the percentage limitation at
section 8(o)(13)(B)(ii) of the U.S. Housing Act of 1937 to make units
that house eligible youth receiving FUPY/FYI assistance an eligible
category of units where a PHA is permitted to project-base additional
vouchers above the 20 percent PBV program limitation. Section
8(o)(13)(B)(ii) of the U.S. Housing Act of 1937, as amended by section
106(a)(2) of the Housing Opportunity Through Modernization Act of 2016,
Public Law 114-201, 130 Stat. 782 (HOTMA), allows a PHA to project-base
an additional 10 percent of its units above the 20 percent program
limit, provided those additional units fall into one of the following
categories: (1) The units are specifically made available to house
individuals and families that meet the definition of homeless under
section 103 of the McKinney-Vento Homeless Assistance Act (42 U.S.C.
11302); (2) The units are specifically made available to house families
that are comprised of or include a veteran; (3) The units provide
supportive housing to persons with disabilities or to elderly persons;
(4) The units are located in a census tract with a poverty rate of 20
percent or less, as determined in the most recent American Community
Survey 5-Year Estimates. Pursuant to section 103(c)(1) of FSHO, this
list of categories now includes units that house eligible youth
receiving FUPY/FYI assistance.
Implementation Action. The provision of HOTMA that amended section
8(o)(13)(B)(ii) of the U.S. Housing Act of 1937 to allow for a 10
percent increase in project-based vouchers for certain categories of
units was implemented via a Federal Register notice, 82 FR 5458
(January 18, 2017) (``HOTMA January 18, 2017, Notice''), and the
subsequent amendment, 82 FR 32461 (July 14, 2017) (``HOTMA July 14,
2017, Notice''). HUD subsequently issued guidance on HOTMA
implementation in Notice PIH 2017-21. Under section II.C.2.B. of the
HOTMA January 18, 2017, Notice, a PHA that wishes to add PBV units
under the 10 percent exception authority must submit certain
information to HUD.
This statutory change making units that house eligible youth
receiving FUPY/FYI assistance eligible for the 10 percent increase in
the program cap was effective as of the date of enactment of FSHO
(i.e., December 27, 2020) and applies to vouchers that were not in use
on behalf of an assisted family as of December 27, 2020. A PHA that
wishes to add PBV units that house eligible youth receiving FUPY/FYI
assistance under the 10 percent exception authority must submit the
information required under section II.C.2.B. of the HOTMA January 18,
2017, Notice to HUD. A PHA may amend a previous submission under
section II.C.2.B. that is currently in process if it wants to include
units that house eligible youth receiving FUPY/FYI assistance under the
10 percent exception authority.
A PHA need not meet the 20 percent program cap before it can
designate eligible units for the 10 percent exception category. For
example, if a PHA has project-based 10 percent of its units under the
percentage limitation and wants to project-base 5 percent of its units
under the 10 percent exception category, it may do so. This PHA would
have 10 percent remaining under the percentage limitation and 5 percent
remaining under the 10 percent exception authority. A PHA proposal that
would result in the PHA exceeding either the 20 percent program cap or
the 10 percent exception from the program cap will be rejected by the
HUD field office. As long as a PHA has not exceeded the 30 percent
limit, it may amend its proposal by moving units from one category to
the other, provided that only eligible units are counted toward the 10
percent exception from the program cap.
PBV units that house eligible youth receiving FUPY/FYI assistance
may only be covered by this 10 percent exception authority if the units
are under a HAP contract that became effective after December 27, 2020,
and if the unit is occupied by an eligible youth receiving FUPY/FYI
assistance. Units added after December 27, 2020, through an amendment
of a HAP contract that became effective after December 27, 2020, are
eligible for this 10 percent exception authority. In contrast, units
added after December 27, 2020, through an amendment of a HAP contract
that became effective on or prior to December 27, 2020, are not
eligible for this 10 percent exception authority.
The PBV unit specifically made available to FUPY/FYI youth, as
applicable, will apply under the 10 percent exception authority as long
as

[[Page 3578]]

an eligible youth receiving FUPY/FYI assistance resides in the unit.
Therefore, prior to project-basing a FUPY/FYI voucher under this 10
percent exception authority, the PHA must plan for how it will maintain
compliance with this 10 percent exception authority once the FUPY/FYI
assistance has expired for a particular youth who has leased the unit.
In order for the unit to remain under the FUPY/FYI exception authority,
the youth must vacate the unit once their FUPY/FYI assistance has
expired and the owner must lease the unit to another FUPY/FYI youth. If
the youth does not move from the unit upon the expiration of their
FUPY/FYI assistance, at that time the PHA must take one of the
following actions since the unit no longer qualifies for the FUPY/FYI
exception authority:
<bullet> Remove the unit from the HAP contract. The PHA would
remove the unit from the HAP contract if the youth remains in the unit
without assistance or with non-FUPY/FYI tenant-based assistance. The
unit may be added back to the contract per 24 CFR 983.207(b) \9\ if the
youth later moves from the unit;
---------------------------------------------------------------------------

\9\ As amended by HOTMA (see HOTMA January 18, 2017 Notice;
Notice PIH 2017-21 Att. J).
---------------------------------------------------------------------------

<bullet> Amend the HAP contract to substitute the youth's current
unit for another unit in the building if it is possible to do so in
accordance with 24 CFR 983.207(a). Such a substitution will result in
the other unit in the building being covered by the FUPY/FYI 10 percent
exception authority. A PHA may, but is not required to, in conjunction
with such substitution add the youth's current unit to the HAP contract
if it is possible to do so in accordance with 24 CFR 983.207(b), as
amended by HOTMA, including that such addition does not cause the PHA
to exceed the program limitation or become non-compliant with the
income-mixing requirement (as described in the following section). If
the youth's current unit is not added to the HAP contract, the youth
may remain in the unit without assistance or with non-FUPY/FYI tenant-
based assistance; or
<bullet> Change the 10 percent exception authority category from
FUPY/FYI to one of the other 10 percent exception categories if the
FUPY/FYI youth, or the unit, happens to qualify for it, so long as the
change is allowable under the income-mixing requirement (as described
in the following section).
A PHA may only allow the youth to remain in the unit with non-FUPY/
FYI HCV assistance (either tenant-based or project-based, as
applicable) if the youth was selected from the applicable waiting list
in accordance with the policies set forth in the PHA's Administrative
Plan. A PHA may, but is not required to, create a preference applicable
to the PHA's regular HCV and/or PBV waiting lists for persons whose
FUPY/FYI assistance is expiring and will have a lack of adequate
housing as a result of their termination from the program, or other
similar category. However, as noted above, the unit will no longer
qualify for the FUPY/FYI exception category if the youth remains in the
unit with another form of HCV assistance after their FUPY/FYI
assistance has expired.
At a later date, HUD will undertake conforming rulemaking to revise
its regulations to reflect this statutory change.
(ii) Section 103(c)(2), Income-Mixing Requirement
Section 103(c)(2) of FSHO amended the income-mixing requirement
(i.e., the project cap) at section 8(o)(13)(D)(ii)(I) of the U.S.
Housing Act of 1937 to except units that are exclusively made available
to youth receiving FUPY/FYI assistance from the cap on the number of
PBV units in a project. Section 8(o)(13)(D)(ii)(I) of the U.S. Housing
Act, as amended by section 106(a)(3) of HOTMA, generally limits the
number of PBV units in a project to the greater of 25 units or 25
percent of the units in the project. Under HOTMA, units that are in one
of the following categories are excluded from the 25 percent or 25-unit
project cap on PBV assistance: (1) Units exclusively serving elderly
families (as such term is defined in 24 CFR 5.403); or (2) Units
housing households eligible for supportive services available to all
families receiving PBV assistance in the project. Pursuant to section
103(c)(2) of FSHO, this list of categories now includes units that are
exclusively made available to eligible youth receiving FUPY/FYI
assistance.
Implementation Action. The provision of HOTMA that amended section
8(o)(13)(D)(ii)(I) of the U.S. Housing Act of 1937 to except certain
categories of units from the project cap was implemented via the HOTMA
January 18, 2017, Notice and amended in the HOTMA July 14, 2017,
Notice. HUD subsequently issued guidance on HOTMA implementation in
Notice PIH 2017-21. Under section II.C.3.A. of the HOTMA January 18,
2017, Notice, owners under HAP contracts already in effect prior to the
effective date of the HOTMA January 18, 2017, Notice (i.e., April 18,
2017) are still obligated by the terms of those HAP contracts with
respect to the requirements that apply to the number of excepted units
in a multifamily project. The owner must continue to designate the same
number of contract units and assist the same number of excepted
families as provided under the HAP contract during the remaining term
of the HAP contract unless the owner and the PHA mutually agree to
change those requirements.
This statutory change excepting units that are exclusively made
available to youth receiving FUPY/FYI assistance from the project cap
was effective as of the date of enactment of FSHO (i.e., December 27,
2020) and applies to vouchers that were not in use on behalf of an
assisted family as of December 27, 2020. Therefore, units exclusively
made available to youth receiving FUPY/FYI assistance may be excepted
from the project cap for HAP contracts first effective after December
27, 2020. Consistent with the effect on existing contracts in the
implementation of the HOTMA provision on units exclusively made
available to certain families, owners under HAP contracts already in
effect on or prior to December 27, 2020, are still obligated by the
terms of those HAP contracts with respect to the requirements that
apply to the number of excepted units in a multifamily project. The
owner must continue to designate the same number of contract units and
assist the same number of excepted families as provided under the HAP
contract during the remaining term of the HAP contract unless the owner
and the PHA mutually agree to change those requirements. The PHA and
owner may agree by mutual consent to change the terms of a HAP contract
already in effect as it pertains to the exception category of units
exclusively made available to youth receiving FUPY/FYI assistance
(i.e., a PHA and owner may agree to add excepted units exclusively made
available to FUPY/FYI youth to an existing HAP contract or change the
exception category of a current excepted unit to be a unit exclusively
made available to FUPY/FYI youth). The PBV HAP contract may not be
changed to include units exclusively made available to youth receiving
FUPY/FYI assistance if the change would jeopardize an assisted family's
eligibility for continued assistance at the project.
Excepted PBV units exclusively made available to FUPY/FYI youth, as
applicable, qualify as excepted as long as an eligible youth receiving
FUPY/FYI assistance resides in the unit. Therefore, prior to entering
into a HAP contract that includes FUPY/FYI excepted units, the PHA must
plan for how it will maintain compliance with the requirements for
excepted units once the FUPY/FYI assistance has expired for a
particular youth who has leased the

[[Page 3579]]

unit. In order for the unit to remain under the FUPY/FYI excepted unit
category, the youth must vacate the unit once their FUPY/FYI assistance
has expired and the owner must lease the unit to another FUPY/FYI
youth. If the youth does not move from the unit upon the expiration of
their FUPY/FYI assistance, at that time the PHA must take one of the
following actions in order to maintain compliance with the income-
mixing requirement:
<bullet> Remove the unit from the HAP contract. The PHA would
remove the unit from the HAP contract if the youth remains in the unit
without assistance or with non-FUPY/FYI tenant-based assistance. The
unit may be added back to the contract per 24 CFR 983.207(b) \10\ if
the youth later moves from the unit;
---------------------------------------------------------------------------

\10\ As amended by HOTMA (see HOTMA January 18, 2017 Notice;
Notice PIH 2017-21 Att. J).
---------------------------------------------------------------------------

V. Provisions of FSHO That Require Future Action From HUD To Be
Implemented

A. Reports (Section 103(b)(1) of FSHO)

Section 103(b)(1) of FSHO amended section 8(x) of the U.S. Housing
Act of 1937 (42 U.S.C. 1437f(x)) to add a new paragraph (5),
subparagraphs I(i)(II) and (III), to require that PHAs report the
following information to HUD regarding FUPY/FYI assistance.
(i) The Number of Persons Who Applied for FUPY/FYI Assistance During
the Fiscal Year Who Were Not Provided FUPY/FYI Assistance and the
Reason Why the PHA Was Unable To Provide Such Assistance
PHAs are required to report the number of persons who applied for
FUPY/FYI assistance during the fiscal year who were not provided FUPY/
FYI assistance and the reason why the PHA was unable to provide such
assistance. For the purpose of this reporting requirement, HUD
interprets the number of persons who applied for assistance during the
fiscal year to be the number of youth that a partnering PCWA determined
to be eligible for FUPY/FYI assistance and referred to the PHA during
the fiscal year. Therefore, the PHA must report the number of persons
who were referred for FUPY/FYI assistance by a partnering PCWA during
the fiscal year who were not provided FUPY/FYI assistance and the
reason why the PHA was unable to provide such assistance. For example,
a PHA may have been unable to provide FUPY/FYI assistance because it
did not have any FUPY/FYI vouchers available or it determined that the
person was not eligible for the HCV program.
Implementation Action. The requirement to report this information
to HUD is not in effect until HUD completes the Paperwork Reduction Act
requirements. Until such time, PHAs are not required to report this
information to HUD. HUD notes that it would be beneficial for PHAs to
maintain this information to facilitate future reporting to HUD.
(ii) How the PHA Communicated or Collaborated With PCWAs To Collect
Such Data During the Fiscal Year
PHAs are required to report how they communicated or collaborated
with PCWAs to collect the data described in paragraphs IV(C) and
V(A)(i) of this document.
Implementation Action. The requirement to report this information
to HUD is not in effect until HUD completes the Paperwork Reduction Act
requirements. Until such time, PHAs are not required to report this
information to HUD. HUD notes that it would be beneficial for PHAs to
maintain this information to facilitate future reporting to HUD.

B. Coordination Between Public Housing Agencies and Public Child
Welfare Agencies (Section 103(b)(2) of FSHO)

Section 103(b)(2) of FSHO amended section 8(x)(4) of the U.S.
Housing Act of 1937 (42 U.S.C. 1437f(x)(4)), which requires HUD to
issue guidance to improve coordination between PHAs and PCWAs in
carrying out the FUP program. Specifically, section 103(b)(2) of FSHO
requires the provision of guidance on establishing a point of contact
at the PHA to receive appropriate referrals of eligible recipients from
its partnering PCWA(s).
Implementation Action. HUD will provide guidance in this area as
part of the guidance required by section 8(x)(4) of the U.S. Housing
Act. HUD expects to issue this guidance in the near future.

C. Supplemental Fees for Administering Assistance for Youth Aging Out
of Foster Care (Section 103(b)(3) of FSHO)

Section 103(b)(3) of FSHO amended section 8(q) of the U.S. Housing
Act of 1937 (42 U.S.C 1437f(q)) by adding a new paragraph (5) to allow
HUD to provide supplemental fees to PHAs for the cost of administering
FUPY or FYI vouchers but only if the PHA waives any residency
requirement that it has established pursuant to section 8(r)(1)(B)(i)
of the U.S. Housing Act of 1937 (42 U.S.C. 1437f(r)(1)(B)(i)). Section
8(r)(1)(B)(i) allows PHAs to require that any family that does not live
in its jurisdiction at the time the family applies for HCV assistance
must lease and occupy a dwelling in the PHA's jurisdiction during the
first 12-months of assistance.
A PHA's residency requirement applies to all HCVs. As a result,
PHAs are prohibited from making changes to the residency requirement
for FUPY and

[[Page 3580]]

FYI only absent statutory authority as FSHO did not grant such
authority.
Implementation Action: Should HUD receive funding to provide
supplemental fees for FUPY or FYI vouchers under this section, HUD will
issue a notice communicating the availability of funds, eligible
activities and expenses, and instructions on how to apply for such
funds.

VI. Environmental Impact

This notice does not direct, provide for assistance or loan and
mortgage insurance for, or otherwise govern or regulate, real property
acquisition, disposition, leasing, rehabilitation, alteration,
demolition, or new construction, or establish, revise, or provide for
standards for construction or construction materials, manufactured
housing, or occupancy. Accordingly, under 24 CFR 50.19(c)(1), this
notice is categorically excluded from environmental review under the
National Environmental Policy Act of 1969 (42 U.S.C. 4321).

Dominique Blom,
General Deputy Assistant Secretary for Public and Indian Housing.
[FR Doc. 2022-01285 Filed 1-21-22; 8:45 am]
BILLING CODE 4210-67-P

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