Notice2026-17777
Revision of Operations Notice for the Expansion of the Moving to Work Demonstration Program
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
September 1, 2026
Issuing agencies
Housing and Urban Development Department
Abstract
This Notice provides revisions to the Notice entitled Operations Notice for the Expansion of the Moving to Work Demonstration Program published in the Federal Register on August 28, 2020, with technical revisions published in the Federal Register on March 20, 2025.
Full Text
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<title>Federal Register, Volume 91 Issue 168 (Tuesday, September 1, 2026)</title>
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[Federal Register Volume 91, Number 168 (Tuesday, September 1, 2026)]
[Notices]
[Pages 56163-56203]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-17777]
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
[Docket No. FR-5994-N-07]
Revision of Operations Notice for the Expansion of the Moving to
Work Demonstration Program
AGENCY: Office of Public and Indian Housing (PIH), HUD.
ACTION: Notice.
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SUMMARY: This Notice provides revisions to the Notice entitled
Operations Notice for the Expansion of the Moving to Work Demonstration
Program published in the Federal Register on August 28, 2020, with
technical revisions published in the Federal Register on March 20,
2025.
DATES: Comment due date: November 2, 2026.
ADDRESSES: Interested persons are invited to submit comments regarding
this Notice. All submissions must refer to the above docket number and
title. There are two methods for submitting public comments. To receive
consideration as public comments, comments must be submitted through
one of the two methods specified below:
1. Electronic Submission of Comments. Interested persons may submit
comments electronically through the Federal eRulemaking Portal at
<a href="https://www.regulations.gov">https://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 them immediately
available to the public. Comments submitted electronically through the
<a href="https://www.regulations.gov">https://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.
2. Submission of Comments by Mail. Comments may be submitted by
mail to the Regulations Division, Office of General Counsel, U.S.
Department of Housing and Urban Development, 451 7th Street SW, Room
10276, Washington, DC 20410-0500.
No Facsimile Comments. Facsimile (Fax) comments will not be
accepted or considered.
Public Inspection of Public Comments. HUD will make all properly
submitted comments and communications available for public inspection
and copying during regular business hours at the above address. Due to
security measures at the HUD Headquarters building, you must schedule
an appointment in advance to review the public comments by calling the
Regulations Division at 202-708-3055 (this is not a toll-free number).
HUD welcomes and is prepared to receive calls from individuals who are
deaf or hard of hearing, as well as individuals with speech or
communication disabilities. To learn more about how to make an
accessible telephone call, please visit <a href="https://www.fcc.gov/consumers/guides/telecommunications-relay-service-trs">https://www.fcc.gov/consumers/guides/telecommunications-relay-service-trs</a>.
FOR FURTHER INFORMATION CONTACT: Pravin Krishnan, Director, Moving to
Work Demonstration Program, Department of Housing and Urban
Development, 451 7th Street SW, Washington, DC 20410; email address:
<a href="/cdn-cgi/l/email-protection#076a73702a6e696168476f726329606871"><span class="__cf_email__" data-cfemail="e18c9596cc888f878ea1899485cf868e97">[email protected]</span></a>, telephone number 202-402-3965 (this is not a toll-
free number). HUD welcomes and is prepared to receive calls from
individuals who are deaf or hard of hearing, as well as from
individuals with speech or communication disabilities. To learn more
about how to make an accessible telephone call, please visit: <a href="https://www.fcc.gov/consumers/guides/telecommunications-relay-service-trs">https://www.fcc.gov/consumers/guides/telecommunications-relay-service-trs</a>.
SUPPLEMENTARY INFORMATION:
I. Background
The Moving to Work (MTW) demonstration program was established
under Section 204 of Title II of section 101(e) of the Omnibus
Consolidated Rescissions and Appropriations Act of 1996, Public Law
104-134 (approved April 26, 1996). The MTW demonstration was
significantly expanded under Section 239 of Division L, Title II of the
Consolidated Appropriations Act, 2016, Public Law 114-113 (approved
December 18, 2015) (2016 MTW Expansion Statute). The 2016 MTW Expansion
Statute authorized HUD to expand the MTW demonstration program from 39
PHAs by an additional 100 PHAs over a period of seven years.
On January 23, 2017, HUD published a notice seeking public comment
in the Federal Register (82 FR 8056), entitled ``Operations Notice for
the Expansion of the Moving to Work Demonstration
[[Page 56164]]
Program Solicitation of Comment.'' On May 4, 2017, the notice was
republished with three technical revisions and an extension of the
comment period (82 FR 20912). HUD considered all relevant comments
received. On October 5 and 11, 2018, HUD republished the notice (83 FR
50387 and 83 FR 51474) with revisions based on public comments and
policy determinations and provided an additional comment period. On
August 28, 2020, HUD published the last version of the notice (85 FR
53444) after the addition of information in the ``Additional activities
and waivers'' section and was effective immediately. On March 20, 2025,
HUD published technical revisions to the notice that made no material
changes that were effective immediately (90 FR 13189).
This notice makes additional revisions as described in more detail
below. A future update of the ``Operations Notice for the Expansion of
the Moving to Work Demonstration Program'' will provide updates with
regard to HOTMA. Before that publication, public housing agencies
should follow other applicable Departmental guidance on the interaction
of HOTMA and the Moving to Work Program.
II. Revisions to Operations Notice for the Expansion of the Moving to
Work Program
A. Updates were made throughout the notice to change references
from the ``MTW Supplement'' to the ``MTW Plan-Expansion.''
B. Technical updates were made throughout the notice to enhance
clarity and to update information.
C. Changes to Section 2--Background: In Section (b) 2016 Expansion
of the MTW Demonstration and Section (c) Eligibility and Selection for
the Expansion of the MTW Demonstration, the deadline to designate MTW
agencies was corrected from 2022 to 2028 to coincide with seven years
from when the first MTW agencies were designated under the 2016 MTW
Expansion Statute.
D. Changes to Section 5--MTW Funding Flexibility:
(1) In Section (b) Calculation of Funding, (iii) Housing Choice
Voucher Funding, (c) Housing Assistance Payment Renewal Sources of
Funds, edits were made to clarify sources of funds that may be used
towards renewal.
(2) In Section (b) Calculation of Funding, (iii) Housing Choice
Voucher Funding, (j) Local, Non-Traditional Activities, edits were made
to eliminate the requirement that Local Non-Traditional activities not
exceed 10% of Housing Assistance Payment budget.
E. Changes to Section 7--Program Administration and Oversight:
Throughout Section (a) Planning and Reporting, edits were made to
reflect decoupling the ``MTW Plan-Expansion'' (formerly the ``MTW
Supplement'') from the PHA Plan.
F. Changes to Section 9--Applying MTW Flexibilities to Special
Purpose Vouchers (SPVs) was revised to reflect renewal process.
G. Changes to Section 13--Administrative and Contact Information:
The contact information in Section 13.b was revised to reflect Pravin
Krishnan, the current MTW Director.
H. Changes to Appendix I--MTW Waivers:
(1) For waiver and associated activities 1.c and 1.d on Stepped
Rent, Safe Harbor (viii) was edited to no longer require the stepped
rent to be tied to unit size.
(2) For waiver and associated activities 1.p and 1.q on Imputed
Income, Safe Harbor (i) was edited to increase the maximum hours per
individual to 40 hours per week. The Safe Harbor (ii) for maximum hours
per household was deleted.
(3) For waiver and associated activities 1.v and 1.w on Alternative
Income Inclusions/Exclusions, Safe Harbor (i) was edited to allow the
policy to apply to elderly and/or disabled individuals when there is no
detrimental effect.
(4) For waiver and associated activities 7.a and 7.b on Term-
Limited Assistance, Safe Harbor (i) was edited to decrease the minimum
term of assistance to two years.
(5) For waiver and associated activity 11 on MTW Self-Sufficiency
Programs, language regarding the consideration of disparate impact was
deleted.
(6) For waiver and associated activities 12.a and 12.b on Work
Requirements, Safe Harbor (i) was edited to increase the maximum hours
per individual to 40 hours per week. The Safe Harbor (ii) for maximum
hours per household was deleted. The Safe Harbor (iii) was edited to
decrease the required notice to three months.
(7) For waiver and associated activities 17.a, 17.b and 17.c on
Local Non-Traditional Programs, the Safe Harbors restricting Local Non-
Traditional activities to 10% of Housing Assistance Payment budget were
deleted.
I. Changes to Appendix II--Requirements for Safe Harbors--Impact
Analysis:
(1) The element to consider disparate impact in impact analyses was
deleted.
III. Solicitation of Public Comments
HUD has engaged in extensive public engagement in formulating this
notice, including six prior Federal Register publications with
opportunity for public comment. HUD is providing additional opportunity
to comment on the revisions detailed above. HUD will consider any
additional comments submitted on these revisions going forward and will
notify the public if there are any changes to the notice as a result.
HUD will allow 60 days for public comment on the revisions, followed by
an additional 30-day public comment period.
IV. Environmental Impact
A Finding of No Significant Impact (FONSI) with respect to the
environment has been made in accordance with HUD regulations in 24 CFR
part 50 that implement section 102(2)(C) of the National Environmental
Policy Act of 1969 (42 U.S.C. 4332(2)(C)). The FONSI is available for
public inspection on <a href="https://www.regulations.gov">https://www.regulations.gov</a>.
V. MTW Operations Notice
Table of Contents
1. Purpose and Applicability
2. Background
a. MTW Demonstration Program
b. 2016 Expansion of the MTW Demonstration Program
c. Eligibility and Selection for Expansion of MTW Demonstration
d. MTW Research Advisory Committee
3. Term of Participation
4. Waivers
a. MTW Waivers
b. Safe Harbor Waivers
c. Agency-Specific Waivers
d. Cohort-Specific Waivers
e. Requirements Outside of the Scope of MTW Waiver Authority
f. Discontinuation of MTW Activity
5. MTW Funding Flexibility and Financial Reporting
a. MTW Funding Flexibility
b. Calculation of Funding
c. Financial Reporting and Auditing
6. Evaluation
a. Program-Wide Evaluation
b. Cohort-Specific Evaluation
c. Ad Hoc Evaluation
7. Program Administration and Oversight
a. Planning and Reporting
b. Performance Assessment
c. Monitoring and Oversight
8. Rental Assistance Demonstration Program
9. Applying MTW Flexibilities to Special Purpose Vouchers (SPVs)
a. HUD-Veterans Affairs Supportive Housing Vouchers
b. Family Unification Program Vouchers
c. Melania Trump Foster Youth to Independence Vouchers
[[Page 56165]]
d. Non-Elderly Persons With Disabilities
e. Mainstream Vouchers
f. Enhanced and Tenant Protection Vouchers
10. Applicability of Other Federal, State, and Local Requirements
11. MTW Agencies Admitted Prior to 2016 MTW Expansion Statute
12. Sanctions, Terminations, and Default
13. Administrative and Contact Information
a. Paperwork Reduction Act
b. Contact Information
Appendix I--MTW Waivers
Appendix II--Requirements for Safe Harbors
a. Impact Analysis
b. Hardship Policy
Appendix III--Substantially the Same Requirement
1. Purpose and Applicability
This Moving to Work (MTW) Operations Notice (MTW Operations Notice)
establishes requirements for the implementation and continued operation
of the expansion of the MTW demonstration program pursuant to Section
239 of the Fiscal Year 2016 Appropriations Act, Public Law 114-113
(2016 MTW Expansion Statute). The MTW Operations Notice applies to all
public housing agencies (PHAs) designated as MTW pursuant to the 2016
MTW Expansion Statute and to any previously-designated MTW agency that
elects to operate under the terms of this notice, collectively referred
to in this MTW Operations Notice as an ``MTW agency.''
The MTW demonstration program allows PHAs to design and test
innovative, locally-designed housing and self-sufficiency strategies
for low-income families by permitting PHAs to use assistance received
under sections 8 and 9 of the United States Housing Act of 1937 (42
U.S.C. 1437f and 1437g) (1937 Act) more flexibly and, as approved by
HUD, with certain exemptions from existing public housing and HCV
program requirements.
Through the MTW Amendment to the Annual Contributions Contract(s)
(ACC),\1\ an MTW agency agrees to comply with the program requirements
and terms and conditions detailed in the MTW Operations Notice for the
term of the MTW agency's participation in the MTW demonstration. Unless
otherwise explicitly provided in the MTW Operations Notice, an MTW
agency's MTW program applies to all of the MTW agency's public housing
units (including MTW agency-owned properties and units comprising a
part of mixed-income, mixed finance communities), tenant-based HCV
assistance, project-based HCV assistance under Section 8(o) of the 1937
Act, and homeownership units developed using Section 8(y) HCV
assistance of the 1937 Act.
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\1\ OMB Approval Number 2577-0294.
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This MTW Operations Notice does not apply to HCV assistance that is
required: (1) to make payments to other PHAs under HCV portability
billing procedures; (2) to meet particular purposes for which HUD has
expressly committed the assistance to the MTW agency; \2\ or (3) to
meet existing contractual obligations of the MTW agency to a third
party (such as Housing Assistance Payment (HAP) contracts with owners
under the MTW agency's HCV program), unless a third party agrees to
Project-Based Voucher (PBV) activities implemented under the MTW
program with the MTW agency.
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\2\ Mainstream Vouchers, HUD-Veterans Affairs Supportive Housing
(HUD-VASH) Vouchers, Non-Elderly Disabled (NED) Vouchers, Mobility
Demonstration Vouchers, Family Unification Program (FUP) Vouchers,
and Melania Trump Foster Youth to Independence Vouchers are not part
of the MTW demonstration program, however certain MTW flexibilities
may be applied to these voucher types, as further described in
section VI.9 of this MTW Operations Notice.
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Any significant updates,\3\ as determined by HUD, to the MTW
Operations Notice will be preceded by a public comment period. However,
HUD may supplement the MTW Operations Notice with Office of Public and
Indian Housing (PIH) Notices without public comment if it determines a
need to provide more detailed guidance, including with respect to
implementing future appropriations act provisions and revisions to
financial policies and procedures. Further, HUD will develop
informational materials to address various program elements, which HUD
will post on the MTW website.
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\3\ Significant amendments could include adding or removing MTW
Waivers found in Appendix I.
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2. Background
a. MTW Demonstration Program
The MTW demonstration program was first established under Section
204 of Title II of section 101(e) of the Omnibus Consolidated
Rescissions and Appropriations Act of 1996, Public Law 104-134, 110
Stat. 1321-281; 42 U.S.C. 1437f note (1996 MTW Statute) \4\ to provide
certain statutory and regulatory flexibility \5\ to participating PHAs
to further the following three statutory objectives:
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\4\ ``PHAs currently operating an MTW demonstration program''
are PHAs with an active MTW Agreement as of December 15, 2015.
``PHAs currently operating an MTW program'' does not include PHAs
that previously participated in the MTW demonstration and later left
the demonstration.
\5\ For more information on the history of the MTW demonstration
program, please go to <a href="https://www.hud.gov/mtw">https://www.hud.gov/mtw</a>.
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<bullet> Reduce cost and achieve greater cost effectiveness in
federal expenditures;
<bullet> Give incentives to families with children where the head
of household is working, seeking work, or is preparing for work by
participating in job training, educational programs, or programs that
assist people to obtain employment and become economically self-
sufficient; and
<bullet> Increase housing choices for eligible low-income families.
To achieve these objectives, PHAs selected for participation in the
MTW demonstration are given exemptions from some existing public
housing and HCV rules and are offered more flexibility with how they
use their federal funds. MTW agencies use this opportunity presented by
the MTW demonstration to better address local housing needs and
encourage self-sufficiency among those families receiving HUD-assisted
housing. HUD considers the experience of MTW agencies when developing
new housing policy recommendations that can positively impact assisted
housing delivery for PHAs and incentivize low-income families to gain
self-sufficiency across the nation.
In addition to statutory and regulatory relief,\6\ MTW agencies
have the flexibility to apply fungibility among three core funding
programs' funding streams--public housing Operating Funds, public
housing Capital Funds, and HCV assistance (to include both HAP and
Administrative Fees)--hereinafter referred to as ``MTW Funding.'' \7\
Throughout participation in the MTW demonstration program, MTW agencies
must continue to meet five statutory requirements established by the
1996 MTW Statute, which are described further in section VI.7.c.i of
this MTW Operations Notice.
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\6\ For more information about the MTW demonstration program and
the specific activities of existing MTW agencies, please refer to
the MTW website at <a href="https://www.hud.gov/mtw">https://www.hud.gov/mtw</a>.
\7\ Funds awarded under Sections 8(o), 9(d), and 9(e) of the
1937 Act are eligible for expanded uses pursuant to MTW fungibility,
with the exception of funds provided for specific non-MTW HCV sub-
programs. Other funds a PHA may receive (i.e., grant funds under
another obligating document) are likewise not covered by MTW
flexibilities and must be tracked and reported under the applicable
rules and requirements.
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As of December 15, 2015, the date the 2016 MTW Expansion Statute
was signed into law, there were 39 agencies \8\
[[Page 56166]]
participating in the MTW demonstration program. The administrative
structure for these 39 agencies is outlined in the Standard MTW
Agreement, an agreement between each existing MTW agency and HUD. The
2016 MTW Expansion Statute extended the term of the Standard MTW
Agreement through each of the existing MTW agencies' 2028 fiscal year.
In Section 241 of Title II of the Consolidated Appropriations Act,
2024, Public Law 118-42 (approved March 9, 2024) the term of the
Standard MTW Agreement was extended further through each of the
existing MTW agencies' 2038 fiscal year.
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\8\ The 39 agencies are: Alaska Housing Finance Corporation;
Atlanta Housing; Housing Authority of the City of Baltimore; Boulder
Housing Partners; Cambridge Housing Authority; Housing Authority of
Champaign County; Charlotte Housing Authority (INLIVIAN); Chicago
Housing Authority; Housing Authority of Columbus, Georgia; District
of Columbia Housing Authority; Delaware State Housing Authority;
Fairfax County Redevelopment and Housing Authority; Holyoke Housing
Authority; Keene Housing; King County Housing Authority; Lawrence-
Douglas County Housing Authority; Lexington-Fayette Urban County
Housing Authority; Lincoln Housing Authority; Louisville
Metropolitan Housing Authority; Massachusetts Department of Housing
and Community Development; Minneapolis Public Housing Authority; Elm
City Communities/Housing Authority of the City of New Haven; Oakland
Housing Authority; Orlando Housing Authority; Philadelphia Housing
Authority; Housing Authority of the City of Pittsburgh; Portage
Metropolitan Housing Authority; Home Forward (Portland, OR); Reno
Housing Authority; San Antonio Housing Authority; Housing Authority
of the County of San Bernardino; San Diego Housing Commission;
Housing Authority of the County of San Mateo; Housing Authority of
the County of Santa Clara/City of San Jose; Seattle Housing
Authority; Tacoma Housing Authority; Housing Authority of Tulare
County; and Vancouver Housing Authority.
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b. 2016 Expansion of the MTW Demonstration Program
Through the demonstration expansion authorized by the 2016 MTW
Expansion Statute, HUD will extend MTW flexibility to a broader range
of PHAs regarding diversity of size and geographic location, balancing
the flexibility inherent in MTW with the need for measurement,
evaluation, and prudent oversight. Overall, in expanding the MTW
demonstration, HUD intends to build on the successes and lessons
learned from the demonstration thus far to improve the delivery of
Federally assisted housing and promote self-sufficiency among assisted
low-income families across the nation.
As the 2016 MTW Expansion Statute directs, HUD is authorized to
expand the MTW demonstration program from the current level of 39
agencies by adding an additional 100 agencies over a period of seven
years, ending in 2028. The 2016 MTW Expansion Statute requires that the
100 new MTW agencies be high-performing at the time of application to
the demonstration in either HUD's Public Housing Assessment System
(PHAS) or its Section Eight Management Assessment Program (SEMAP), and
MTW agencies must represent geographic diversity across the country.\9\
Further, the 2016 MTW Expansion Statute imposes strict size limitations
\10\ on these 100 PHAs and requires that five of the 100 PHAs be
agencies with portfolio-wide awards under the Rental Assistance
Demonstration (RAD).\11\
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\9\ Geographic diversity will be considered based on both MTW
agencies designated pursuant to the 2016 MTW Expansion Statute and
the existing 39 MTW agencies.
\10\ No less than 50 with 1,000 or fewer aggregate housing
voucher and public housing units; no less than 47 with 1,001-6,000
aggregate units; no more than 3 with 6,001-27,000 aggregate units;
no PHA shall be granted MTW designation if it administers more than
27,000 aggregate units.
\11\ A portfolio award is defined for these purposes as a
conversion of a PHA's entire public housing inventory to RAD. All
RAD conversions must be closed and the former public housing units
removed from IMS/PIC in order to satisfy the portfolio-wide
requirement.
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c. Eligibility and Selection for the Expansion of the MTW Demonstration
As required by the 2016 MTW Expansion Statute, HUD designated 100
new agencies for the expansion of the MTW designation in cohorts over a
period of seven years, ending in 2028. If applicable, HUD may backfill
any vacant MTW designation pursuant to the 2016 MTW Expansion Statute
through 2028. For each cohort of MTW agencies selected, the 2016 MTW
Expansion Statute requires HUD to direct one specific policy change to
be implemented by the MTW agencies, which HUD will evaluate rigorously.
MTW agencies may implement additional policy changes, as long as those
policy changes do not conflict or interfere with the cohort study. As
required by the 2016 MTW Expansion Statute, the HUD-appointed MTW
Research Advisory Committee (the Committee), described further below,
advised HUD on the policy changes to be tested through the new cohorts
of MTW agencies and the methods of research and evaluation.
HUD is planning to issue separate PIH Notices for each cohort to
solicit applications from eligible PHAs for participation in the MTW
demonstration. These notices will outline the specific application
submission requirements, evaluation criteria, and process HUD will use
when selecting PHAs for MTW designation.
d. MTW Research Advisory Committee
The 2016 MTW Expansion Statute required HUD to form and consult
with the Committee, which was established in May 2016.\12\ The purpose
of the Committee is to provide independent advice to HUD with respect
to the policies and methods of research in the evaluation of the MTW
expansion. The Committee is specifically charged with advising HUD on
the following:
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\12\ The Committee is governed by the Federal Advisory Committee
Act (5 U.S.C. Appendix 2), which sets forth standards for the
formation and use of advisory committees.
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<bullet> Policy proposals and evaluation methods for the MTW
demonstration to inform the one specific policy change required for
each cohort of agencies;
<bullet> Rigorous research methodologies to measure the impact of
policy changes studied;
<bullet> Policy changes adopted by MTW agencies that have proven
successful and can be applied more broadly to all PHAs; and
<bullet> Statutory or regulatory changes (specific waivers and
associated activities, and program and policy flexibility) necessary to
implement policy changes for all PHAs.
The Committee has no role in reviewing or selecting the 100 PHAs to
participate in the expansion of the MTW demonstration.
Based on the advice of the Committee, HUD will study, by cohort of
MTW agencies, the following four policies (which are in no particular
order except for the first two cohorts): Impact of MTW Flexibility on
small sized PHAs; \13\ Rent Reform; Work Requirements; and Landlord
Incentives. HUD may determine that additional policies be studied
through the MTW expansion and will consider the advice of the
Committee.
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\13\ For the purpose of the MTW expansion, small is defined as
managing or administering 1,000 or fewer units.
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3. Term of Participation
The term of each MTW agency's MTW designation will be twenty years
(PHA fiscal years) starting from the time of its designation as an MTW
agency. All waivers and associated activities provided through the MTW
Operations Notice expire at the end of the MTW agency's term of
participation, unless otherwise discontinued in accordance with section
VI.4.f of this notice. However, if HUD determines that additional time
beyond the end of the MTW agency's MTW term is needed to evaluate a
cohort-specific policy change, or if the MTW agency requests to extend
a particular waiver, HUD may, if allowed by applicable law, approve an
extension of any specific waiver(s).
Once an MTW agency has implemented an activity pursuant to the
authority of the MTW Operations
[[Page 56167]]
Notice, the MTW agency may continue to implement that activity
throughout the term of its participation in the demonstration, subject
to the terms of this notice regarding discontinuation of MTW
activities, or, any amendments to this notice, or any successor notice.
The MTW agency must end all activities requiring MTW-authorized waivers
upon expiration of its MTW participation since HUD cannot guarantee
that it will be able to extend any waivers and associated activities
beyond that point. For this reason, when entering into contracts with
third parties that draw upon MTW flexibility, the MTW agency must
disclose that such flexibility is only available during the term of the
MTW agency's participation in the MTW demonstration as permitted in
this notice. An exception is third-party contracts that relate to the
cohort-specific policy change and associated waiver(s).
4. Waivers
Pursuant to the 1996 MTW Statute and 2016 MTW Expansion Statute,
Appendix I of this notice provides waivers of certain provisions of the
1937 Act as well as the implementing regulations. These waivers and
associated activities afford MTW agencies the opportunity to use their
MTW authority to pursue locally driven policies, procedures, and
programs in order to further the goals of the demonstration. In
addition, the MTW agency may request, and be granted, Safe Harbor
Waivers and Agency-Specific Waivers, described further below, to
implement innovative MTW activities unique to its community. MTW
agencies may update their leases to reflect the MTW flexibilities used
through these waivers. When implementing MTW waivers through MTW
activities, MTW agencies must ensure assisted families are made aware
of the impacts the activity(s) may have on their tenancy.
The following are the categories of waivers that MTW agencies may
pursue:
[ballot] MTW Waivers--MTW agencies may conduct any permissible
activity in the MTW Waivers category within the defined range of
flexibility, characterized in this notice as a ``safe harbor.'' Safe
harbors contain the additional requirements (beyond those specified in
the activity description) the agency must follow in order to implement
the activity once it is included in an approved MTW Plan-Expansion.\14\
Prior to implementation, the MTW Waivers must be included in an
approved MTW Plan-Expansion (see section VI.7.a). MTW Waivers are
detailed in Appendix I.
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\14\ MTW PHAs designated prior to December 15, 2015 (see
footnote 8) submit an MTW Plan and MTW Report annually. MTW PHAs
designated pursuant to the MTW Expansion statute submit an MTW Plan-
Expansion only.
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[ballot] Safe Harbor Waivers--MTW agencies may request to implement
activities in a manner inconsistent with the safe harbors of an MTW
Waiver's activity through the submission of a Safe Harbor Waiver
request.
[ballot] Agency-Specific Waivers--MTW agencies may seek an Agency-
Specific Waiver in order to implement additional activities not
contained in the MTW Waivers and to request to waive a statutory or
regulatory requirement not included in Appendix I.
[ballot] Cohort-Specific Waivers--MTW agencies may be provided with
Cohort-Specific Waivers if additional waivers not included in Appendix
I are necessary to allow for the implementation of the required cohort
study. Cohort-Specific Waivers will be detailed in the applicable
Selection Notice for that cohort study.
a. MTW Waivers
Appendix I, MTW Waivers, is a simplified guide for MTW agencies
seeking to adopt MTW initiatives that have been implemented by existing
MTW agencies; it is not intended to be the complete listing of what an
MTW agency can and cannot do (see Safe Harbor Waivers and Agency-
Specific Waivers). MTW agencies may implement any activity contained in
Appendix I without further activity-specific HUD review and approval as
long as it is included in the MTW Plan-Expansion (described in section
VI.7.a of this notice) and implemented within the associated safe
harbor(s). MTW agencies may combine activities together at the PHA
level in order to create more comprehensive initiatives.
Appendix I includes the waiver name, waiver description, statutes
and regulations waived, permissible activities, and safe harbors
associated with each of the MTW Waivers. The waiver description defines
the authorization provided to the MTW agency, subject to the terms of
this notice. The list of statutes and regulations waived details the
citations of the 1937 Act requirements that may be waived by an MTW
agency in order to implement an activity. The list of waivers and list
of activities are organized by program type (i.e., public housing and/
or HCV program). The safe harbors section contains the additional
requirements (beyond those specified in the activity description) that
the MTW agency must follow in implementing activities without further
HUD approval.
b. Safe Harbor Waivers
Since the safe harbors, as written in Appendix I, may not align
with local priorities or market conditions at some MTW agencies, MTW
agencies may request to expand an activity that is in Appendix I
outside of the listed safe harbor(s).\15\ Elements that are required to
be provided in the request to waive Appendix I safe harbors will be
identified in the MTW Plan-Expansion form.
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\15\ Certain safe harbors, such as impact analyses and hardship
policies, are not waivable, as noted in Appendix I.
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MTW agencies must work closely with their residents and
stakeholders when developing the Safe Harbor Waivers; therefore, when
submitting a Safe Harbor Waiver, the MTW agency must, in addition to
following the PHA Plan public process requirements, also hold a meeting
to specifically discuss the Safe Harbor Waivers. The MTW agency must
consider, in consultation with the Resident Advisory Board (RAB) and
tenant association, as applicable, all of the comments received at the
public hearing. The comments received by the public, RABs, and tenant
associations must be submitted by the MTW agency, along with the MTW
agency's description of how the comments were considered, as a required
attachment to the MTW Plan-Expansion. This public comment and review
period affords the residents and community stakeholders the opportunity
to provide input on the proposed Safe Harbor Waivers prior to its
submission to HUD.
Following approval of the MTW Plan-Expansion, an MTW agency must
update its Administrative Plan and Admissions and Continued Occupancy
Policy (ACOP), as applicable, prior to implementing the Safe Harbor
Waiver. Disapproval of Safe Harbor Waivers will be communicated via the
approval letter of the MTW Plan-Expansion. The MTW agency must follow
the instructions provided by HUD in the letter regarding updating the
MTW Plan-Expansion. Any such disapproval would only apply to a specific
Safe Harbor Waiver, as noted in the approval letter, and would not
apply to the entire MTW Plan-Expansion. Where additional review time
may be needed by HUD, the approval letter of the MTW Plan-Expansion
will state that the waiver decision is pending and the MTW agency must
await further instructions from HUD prior to implementing the Safe
Harbor Waiver.
[[Page 56168]]
Reasons that HUD may object to a Safe Harbor Waiver include, but
are not limited to, the following:
[ballot] The information required in the MTW Plan-Expansion, or
equivalent form as approved by OMB, is not provided or is deemed
insufficient;
[ballot] The MTW agency's proposed Safe Harbor Waiver is
inconsistent with requirements outside of the 1937 Housing Act or is
otherwise not permissible under MTW authority;
[ballot] There are other good cause factors for objection, such as
material misrepresentation, in the submission;
[ballot] The Safe Harbor Waiver conflicts with any of the five
statutory MTW requirements, as determined by HUD; or
[ballot] The Safe Harbor Waiver is determined to have potential
significant negative impacts on families or the MTW agency's operation
of its assisted housing programs using Section 8 and 9 funds, as
determined by HUD.
c. Agency-Specific Waivers
The MTW demonstration program is intended to foster innovation and
HUD encourages MTW agencies, in consultation with their residents and
stakeholders, to be creative in their approach to solving affordable
housing issues facing their local communities. For this reason,
flexibilities beyond those provided for in Appendix I may be needed.
Agency-Specific Waivers may be requested if an MTW agency wishes to
implement additional activities, waive a statutory or regulatory
requirement not included in Appendix I.\16\
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\16\ The MTW demonstration program may only waive certain
provisions of the 1937 Act and its implementing regulations.
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In order to pursue an Agency-Specific Waiver, an MTW agency must
include the Agency-Specific Waiver request in the MTW Plan-Expansion,
for HUD review and approval. In order to pursue an Agency-Specific
Waiver, an MTW agency must include an Agency-Specific Waiver request,
an impact analysis, and a hardship policy (if the activity poses a
potential risk to the continued tenancy of households), in the MTW
Plan-Expansion. Other required elements to be provided in the request
will be identified in the MTW Plan-Expansion form.
Specific requirements for conducting impact analyses and creating
hardship policies are provided in Appendix II. When developing Agency-
Specific Waiver requests, an agency must determine whether to implement
additional hardship criteria beyond the criteria contained in Appendix
II. Any additional hardship criteria must be included in the waiver
request.
MTW agencies must work closely with their residents and
stakeholders when developing the Agency-Specific Waivers; therefore,
similar to submitting Safe Harbor Waivers, when submitting an Agency-
Specific Waiver, the MTW agency must not only follow the PHA Plan
public process requirements, but it must also have an additional public
meeting to specifically discuss the Agency-Specific Waivers.\17\ The
MTW agency must consider, in consultation with the RAB and tenant
association, as applicable, all of the comments received at the public
hearing. The comments received by the public, RABs, and tenant
associations must be submitted by the MTW agency, along with the MTW
agency's description of how the comments were considered, as a required
attachment to the MTW Plan-Expansion. This public comment and review
period provides the residents and community stakeholders the
opportunity to provide input on the proposed Agency-Specific Waiver
prior to its submission to HUD.
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\17\ This can be the same meeting to discuss Safe Harbor Waivers
(i.e., a combined meeting).
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Following approval of the MTW Plan-Expansion, an MTW agency must
update its Administrative Plan and ACOP, as applicable, prior to
implementing the Agency-Specific Waiver. Disapproval of Agency-Specific
Waivers will be communicated via the approval letter of the MTW Plan-
Expansion; the MTW agency must follow the instructions provided by HUD
in the letter regarding updating the MTW Plan-Expansion. HUD may object
to an Agency-Specific Waiver for the same reasons it may object to a
Safe Harbor Waiver. Any disapproval would only apply to a discrete
Agency-Specific Waiver, as noted in the approval letter, and would not
apply to the entire MTW Plan-Expansion. In rare instances where
additional review time may be needed, the approval letter of the MTW
Plan-Expansion will state that the waiver decision is pending and the
MTW agency must await further instructions from HUD prior to
implementing the Agency-Specific Waiver.
Statutory or regulatory waiver(s) derived from the 1937 Act or its
implementing regulations that are outside those listed in Appendix I
cannot be granted by the MTW Office alone; therefore, the MTW Office
will coordinate the approval of those waivers with the appropriate
signatory (e.g., Assistant Secretary, General Deputy Assistant
Secretary, etc.). HUD is committed to providing a timely review of
Agency-Specific Waivers.
d. Cohort-Specific Waivers
Cohort-Specific Waivers include statutory or regulatory waivers and
associated activities, outside of those included in Appendix I, that
are unique to a specific cohort to allow them to complete their
required cohort evaluation. Depending upon the evaluation design, HUD
may restrict certain activities within the MTW Waivers or provide
additional Cohort-Specific Waivers that are not included in Appendix I,
and this would be articulated in the Selection Notice for the
applicable cohort. Any restriction would only be in place during the
evaluation period, as specified in the Selection Notice, and once the
evaluation is concluded, the MTW agency would have access to all of the
MTW Waivers. Specific policy changes to be tested through a given
cohort may not require any Cohort-Specific Waivers. Any MTW activities
that would impact or conflict with the cohort-specific policy change
will be identified in the respective Selection Notice so that the MTW
agency is aware of this potential restriction on its use of waivers
before it enters the MTW demonstration program. Cohort-Specific Waivers
and the associated MTW activities may only be used to the extent
allowed under the applicable evaluative framework provided by HUD in
the applicable Selection Notice.
e. Requirements Outside of the Scope of MTW Waiver Authority
The MTW demonstration program may only waive certain provisions of
the 1937 Act and its implementing regulations. The MTW demonstration
program does not permit waivers of statutes outside of the 1937 Act or
regulations and requirements promulgated under authority outside of the
1937 Act. Accordingly, HUD and the MTW agencies may not waive or
otherwise deviate from compliance with Fair Housing and Civil Rights
laws and regulations, discrimination laws, labor standards, or
environmental statutes and executive orders, or any other applicable
statutes and regulations. Other subject matter prohibited from waivers
or restricted with respect to waivers is discussed in section VI.10 of
this notice. All applicable federal, state, and local requirements
shall continue to apply even in the event of a conflict between such a
requirement and a waiver or activity granted by this notice.
Additionally, the five statutory requirements established under the
1996 MTW Statute, hereinafter referred to as the ``five statutory MTW
requirements,'' cannot be waived. The
[[Page 56169]]
following are the five statutory MTW requirements (discussed in more
detail later in this Notice): very low-income requirement, reasonable
rent policy, substantially the same requirement, comparable mix
requirement, and housing quality standards. In implementing MTW
activities, MTW agencies remain subject to all other terms, conditions,
and obligations under this notice, and all other federal requirements
applicable to the public housing program, the HCV program, federal
funds, and PHAs.
f. Discontinuation of MTW Activity
To the extent any MTW activity conflicts with any of the five
statutory MTW requirements or other applicable requirements, as
determined by HUD, HUD reserves the right to require the MTW agency to
discontinue the activity or to revise the activity to comply with such
applicable contemporary requirements.
HUD also reserves the right to require an MTW agency to discontinue
any activity derived from a waiver should it have significant negative
impacts on families or the MTW agency's operation of its assisted
housing programs using Section 8 and 9 funds, as determined by HUD. The
factors that may be considered when determining whether an activity
should be discontinued include, but are not limited to, the following:
rate of port-outs, attrition rates, occupancy and/or utilization
levels, voucher leasing success rates, rent burdens, local market
conditions, impact analyses, and number of hardship requests. Prior to
requiring a discontinuation of an activity, HUD may take intermediary
steps to work with the MTW agency and its residents to provide
technical assistance, discuss the activity, and determine whether a
discontinuation is in fact necessary.
In the event the MTW Operations Notice is updated to remove a
specific Appendix I waiver, the MTW agency may continue to implement
any activity that has been implemented related to that waiver through
the term of the PHA's MTW designation, so long as it does not conflict
with any of the five statutory MTW requirements (see section VI.7.c.i)
or other applicable current requirements or have significant negative
impacts on families or the MTW PHA's operation of its assisted housing
programs using funds provided under Section 8 and 9 of the 1937 Act, as
determined by HUD, as described in the preceding paragraph.
5. MTW Funding Flexibility and Financial Reporting
During the term of the demonstration, subject to changes in future
years' appropriations, HUD will provide an MTW agency with public
housing Operating Fund Program (OFP) grants, public housing Capital
Fund Program (CFP) grants, and/or HCV HAP and Administrative Fee
assistance as detailed in this notice. CFP grants may include Formula
grants; Demolition or Disposition Transitional Funding (DDTF), which
are included in regular Formula grants; and/or funds from older
Replacement Housing Factor (RHF) grants (a program later superseded by
DDTF). The HCV funding amount for MTW agencies may be increased by
additional allocations of vouchers that the MTW agency is awarded over
the term of its participation in the MTW demonstration. MTW Funding
provided to an MTW agency, including public housing OFP grants, public
housing CFP grants, and HCV HAP and Administrative Fee assistance, is
subject to any laws promulgated in future years, which include without
limitation: statutes, appropriations acts, notices implementing
appropriations acts, regulations, and executive orders.
a. MTW Funding Flexibility
MTW agencies will have the flexibility to apply fungibility among
public housing Operating Fund, public housing Capital Fund, and HCV HAP
and Administrative Fee assistance. These flexibilities expand the
eligible uses of each covered funding stream, but do not negate the
need for both the PHA and HUD to be able to account for the funding
from its original source to the date of its ultimate eligible use \18\
by the PHA, comply with federal grant and financial management
requirements, and use funds effectively and efficiently for their
eligible purposes. As HUD continues to implement program-specific
financial management policies in its core housing programs, MTW
agencies will be subject to the same requirements and procedures as
non-MTW agencies. Therefore, the requirements and procedures described
in this notice may change as new financial management policies are
implemented over time. HUD will update existing guidance and issue new
reporting requirements, as appropriate, to allow HUD to meet its
monitoring and oversight responsibilities while ensuring MTW agencies
fully utilize and benefit from the flexibilities established by
Congress for these funds pursuant to the MTW demonstration and the 2016
MTW expansion. HUD will also update existing guidance and issue new
reporting requirements, as appropriate, to ensure compliance with 2 CFR
part 200, Uniform Administrative Requirements, Cost Principles, and
Audit Requirements for Federal Awards, including with respect to
Federal financial management.
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\18\ The date of the ``ultimate eligible use'' means the date of
disbursement by the PHA for an eligible purpose, which would remove
the funding from the PHA's account and the PHA's control.
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An MTW agency participating in the MTW demonstration program may
flexibly use public housing Operating and Capital Funds provided under
Sections 9(d) and 9(e) of the 1937 Act and HCV HAP and Administrative
Fee program funds provided under Section 8 of the 1937 Act, referred to
collectively as MTW Funding. Certain provisions of Sections 8 and 9 of
the 1937 Act and implementing requirements are waived as necessary to
implement this flexibility. Once the MTW agency receives its MTW
designation through the execution of the MTW ACC Amendment, this
flexibility in the use of MTW Funding does not require prior HUD
approval.
The MTW agency may use MTW Funding covered by MTW flexibility for
any eligible activity under Sections 9(d)(1), 9(e)(1) and Section 8(o)
of the 1937 Act and for the local, non-traditional activities specified
in Appendix I of this notice. All MTW agency expenditures must be
consistent with the MTW agency's charter, approved 5-Year and Annual
PHA Plans, and the approved MTW Plan-Expansion.
Under appropriations law, any reserves the MTW agency has
accumulated prior to signing an MTW ACC Amendment (including public
housing Operating and Capital Reserves and HCV HAP and Administrative
Fee Reserves) must be used for their originally appropriated purposes
and shall not be used flexibly except for when Congress provides an
exception to this requirement. Subject to HUD's annual appropriations
act, Congress provides temporary relief from this requirement, by
allowing an MTW agency to use any reserves accumulated prior to the MTW
designation flexibly. This additional flexibility will expire at the
end of each Federal fiscal year (for example in Federal Fiscal Year
2026, September 30, 2026) unless Congress includes it again in
subsequent appropriations acts. MTW agencies should be aware that this
relief is not permanent and may not continue into the future. MTW
agencies are responsible for being aware of each year's appropriations
act and shall
[[Page 56170]]
maintain careful recordkeeping to ensure they remain in compliance with
the requirement. HUD will monitor the status of this flexibility
closely.
b. Calculation of Funding
i. Public Housing Operating Grants
(a) Funding Calculation. The calculation of an MTW agency's
Operating Fund subsidy grant eligibility will continue in accordance
with operating subsidy formula law, regulations, and appropriations act
requirements, as they may be amended.
(b) Eligible Uses. The MTW agency may use these funds for any
eligible activity permissible under Section 9(e)(1) of the 1937 Act or,
if the agency proposes to use the funding under its MTW flexibility, it
may also use these funds for any eligible activity permissible under
Section 8(o), Section 9(d)(1), and for the local, non-traditional
activities specified in Appendix I of this notice.
(c) Central Office Cost Center (COCC). For an MTW agency's COCC,
which collects fees for administrative services, an MTW agency may
freely use the earned fees for any eligible activity but cannot move
non fee-based funds into the COCC.
ii. Public Housing Capital Fund Formula and Grants
(a) Funding Calculation. The MTW agency's public housing Capital
Fund formula characteristics and grant amounts, including DDTF and RHF,
will continue to be calculated in accordance with public housing law,
regulations, and appropriations act requirements, as they may be
amended.
(b) Financial Management Requirements Apply. MTW agencies must
continue to follow the immediate need requirements applicable to all
Capital funds and may not accelerate their drawdown of Capital funds
for the purpose of funding reserves or for any other purpose.\19\ All
Capital funds, including funds in Budget Line Item (BLI) 1410
(Administrative Costs) and BLI 1492 (MTW), must be drawn down only when
funds are due and payable.
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\19\ HUD will publish a rule that will govern the establishment
and maintenance of a Capital Reserve pursuant to Section 109 of
HOTMA that may give PHAs authorization to draw down funds in advance
of need in certain limited circumstances.
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(c) Eligible Uses. The MTW agency may use these funds for any
eligible activity permissible under Section 9(d)(1) of the 1937 Act or,
if the MTW agency proposes to use the funding under its MTW
flexibility, it may also use these funds for any eligible activity
permissible under Section 8(o), Section 9(e)(1), and for the local,
non-traditional activities specified in Appendix I of this notice. CFP
funds used for activities under Section 9(d)(1) are subject to all
requirements relevant to non-MTW agency CFP funding, including eligible
activities and cost limits.
(d) Requisitioning Funds. In requisitioning Capital Fund grant
funds, the MTW agency will request funds using traditional Capital Fund
BLIs for funds to be used for activities under section 9(d) and using
the available MTW Budget Line (BLI 1492) items for activities under
section 9(e), section 8(o), or local, non-traditional activities. MTW
agencies shall not use the Transfer to Operations Budget Line (BLI
1406) since funds for all non-Section 9(d) activities shall be included
in the MTW Budget Line (BLI 1492). The MTW agency will provide to HUD
information on all capital activities funded by the MTW Funding as
necessary to ensure compliance with requirements outside the scope of
MTW, including environmental review requirements and Energy and
Performance Information Center (EPIC) reporting requirements.
(e) Obligation and Expenditure Requirements. The MTW agency remains
subject to the requirements of Section 9(j) of the 1937 Act with
respect to Capital Fund grants. Section 9(d) funds remain subject to
the obligation and expenditure deadlines and requirements provided in
Section 9(j) despite the fact that they may be used flexibly. Capital
Funds awarded to MTW agencies must be obligated within two years and
expended within four years of award. Funds not obligated or expended
within those timeframes will be subject to recapture. As with all
agencies, an MTW agency may requisition CFP funds from HUD only when
such funds are due and payable, unless HUD approves another payment
schedule.
iii. Housing Choice Voucher Funding
(a) Funding Calculation. As is the case for non-MTW PHAs under
current appropriations law, HAP renewal funding eligibility for MTW
agencies will be calculated based on each MTW agency's actual expenses
for the previous calendar year (known as the re-benchmark year). Unique
to MTW agencies, however, the MTW agency's actual expenses are: (1) the
previous Calendar Year's HAP expenses reported in the Voucher
Management System (VMS), and (2) the previous CY's eligible non-HAP MTW
expenses reported in VMS.\20\ For both HAP and non-HAP MTW expenses,
the reported expenses must have been paid from an eligible source of
funds as described in paragraph (c) below to be included in the HAP
renewal funding formula. In addition, MTW HAP renewal funding is
subject to an MTW Renewal Eligibility Cap derived from the number of
units authorized under the MTW agency's ACC, as described in paragraph
(d) below. The lower of the total combined HAP and non-HAP expenses or
the MTW Renewal Eligibility Cap will then be adjusted by the Renewal
Funding Inflation Factor (RFIF) and any national proration that applies
to the HCV renewal appropriation to determine the MTW agency's actual
CY HAP renewal funding.
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\20\ MTW funds awarded to an MTW agency under Sections 8, 9(d),
and 9(e) of the 1937 Act can be utilized per statute and regulation
on the eligible activities listed at Sections 9(d)(1), 9(e)(1), and
8(o) of the 1937 Act and for local, non-traditional activities.
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Example: An MTW agency executes its MTW ACC Amendment in September
2020. In CY 2020, the MTW agency expended $3,600,000 on HAP and
$400,000 on eligible non-HAP MTW expenses. The MTW agency's HCV HAP
renewal funding for CY 2021 will be $4 million (assuming the HAP
Renewal Eligibility Cap is greater than $4 million), adjusted by the
RFIF and any applicable national proration.
(b) Eligible Uses. The MTW agency may use HCV renewal funds for any
eligible activity permissible under Section 8(o) of the 1937 Act or, if
the MTW agency proposes to use the funding under its MTW flexibility,
it may also use these funds for any eligible activity permissible under
Section 9(e)(1), Section 9(d)(1), and for the local, non-traditional
activities specified in Appendix I of this notice.
(c) HAP Renewal Sources of Funds. Only HAP and non-HAP MTW expenses
that are paid for with funds from one of the following sources will be
included in the MTW HAP renewal formula:
(i) HCV budget authority (first made available to the PHA for the
re-benchmark year),
(ii) HUD-held HAP reserves (undisbursed budget authority from prior
years),
(iii) PHA-held HAP reserves (i.e., Restricted Net Position (RNP)),
(iv) Any funds received via the HAP Set-aside (after PHA
application and HUD approval),
(v) Other sources of funds that HUD explicitly authorizes, in a
separate HCV funding or other notice, to be included in the MTW HAP
renewal formula, and
[[Page 56171]]
(vi) For HAP expenses only: Administrative fee reserves (i.e.,
Unrestricted Net Position). Expenditures of administrative fee reserves
are eligible to be included in the MTW agency's MTW HAP renewal
calculation, but only if the administrative fee reserve funds are used
for HAP expenses. MTW PHAs must report the use of HCV Unrestricted Net
Position (UNP) for HAP and for non-HAP expenses in Expense 1-5 fields
in VMS. Non-HAP MTW expenses paid from the administrative fee reserve
are not eligible for renewal funding. Furthermore, when determining HAP
renewal eligibility, the use of the administrative fee reserves is
always first attributed to the MTW agency's non-HAP MTW expenses
incurred during the calendar year before it is considered to be the
source of funds for HAP expenses. If total HAP and non-HAP MTW expenses
paid out of administrative fee reserves is greater than the total
amount of non-HAP MTW expenses, then the difference is assumed to have
been spent on HAP and is considered in the HAP renewal calculation.
Note that there is no restriction against using administrative fee
reserves for non-HAP MTW expenses, just that those non-HAP MTW expenses
are not eligible to be renewed under the MTW HAP renewal formula.
Expansion MTW PHAs may not bring in outside sources of funds to cover
administrative costs in order to increase their expenditure of HCV
Administrative Fee Reserves to cover HAP costs.
HAP expenses or non-HAP MTW expenses that were paid for with any
other funding source (for example, public housing Operating Funds and
Capital Funds, and current year HCV Administrative Fee funds) will not
be included in the MTW agency's HCV renewal funding calculation, unless
HUD explicitly authorizes such inclusion in a separate funding or other
notice.
(d) HAP Renewal Eligibility Cap. The MTW agency's renewal
eligibility for all MTW Years will be limited by the HAP Renewal
Eligibility Cap. The calculation multiplies (1) the MTW agency's total
number of ACC authorized units in the re-benchmark year (the CY
immediately preceding the CY for which the MTW agency's renewal
eligibility is being calculated) \21\ by (2) the MTW agency's pre-MTW
monthly per-unit cost (PUC) inflated to the re-benchmark year.
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\21\ As noted above, the re-benchmark year is also the source
year for the actual expense data used in the MTW agency's HAP
renewal formula.
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(i) The number of ACC authorized units is measured in unit months
available (UMAs).\22\
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\22\ Authorized units in the HCV program context are measured in
terms of unit months available. For example, if an authorized unit
is under ACC as of January 1, the authorized unit equals twelve unit
months available for that CY. On the other hand, if the authorized
unit was added to the ACC under a new funding increment effective
March 1, the authorized unit is equal to ten unit months available
for that CY.
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(ii) The inflated pre-MTW PUC is projected using, as a base, the
monthly PUC for the CY in which the MTW agency signed its MTW ACC
Amendment. HUD applies the RFIF to this base PUC to estimate what the
MTW agency's HCV PUC would be, had the MTW agency not joined the MTW
program, as of the re-benchmark year.
After the calculation of the HAP Renewal Eligibility Cap, it is
compared with the MTW agency's actual total combined HAP and non-HAP
MTW expenses. The lower of these two amounts--(1) the HAP Renewal
Eligibility Cap or (2) the MTW agency's actual total combined HAP and
non-HAP MTW expenses adjusted by the RFIF and any national proration
factor--is then used to determine the MTW agency's CY renewal funding.
If HAP expenses alone exceed the HAP Renewal Eligibility Cap, any HAP
expenses over the cap will also be included in the MTW agency's renewal
eligibility.
(iii) Example: If an MTW agency signs its MTW ACC Amendment in
September 2020, CY 2021 will be the MTW agency's first full Calendar
Year in the MTW demonstration. In calculating the MTW agency's HCV
renewal funding for CY 2021, the following information applies:
[ballot] The MTW PHA's average monthly PUC for CY 2019 was $700.
[ballot] The CY 2020 inflation rate is two percent.
[ballot] The number of ACC authorized units during CY 2020 is 800
units. (In this example all units were under ACC as of 1/1/2020, so the
number of UMAs is simply 800 units multiplied by twelve months, or
9,600 UMAs).
[ballot] The HAP Renewal Eligibility Cap for CY 2021 is calculated
by first determining the estimated PUC for CY 2020, which is $714 (the
monthly PUC for CY 2019 inflated for CY 2020, or $700 x 1.02). The
estimated PUC for CY 2020 is then multiplied by the MTW agency's CY
2020 ACC authorized UMAs \23\ ($714 x 9,600 UMAs) to determine the HAP
Renewal Eligibility Cap, which is $6,854,400.
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\23\ As noted earlier, these are the MTW agency's CY 2019 UMAs
that are subject to the MTW renewal formula. UMAs attributable to
SPVs such as HUD-VASH and FUP are included in this count.
---------------------------------------------------------------------------
[ballot] The HAP Renewal Eligibility Cap ($6,854,400) is then
compared to the MTW agency's total combined HAP and non-HAP MTW
expenses for the re-benchmark year that originated from the eligible
funding sources described earlier in this notice. If the total combined
HAP and non-HAP MTW expenses do not exceed $6,854,400, the MTW agency's
CY 2021 renewal funding will be the total combined HAP and non-HAP MTW
expenses adjusted by the RFIF and any national proration. If the total
combined HAP and non-HAP MTW expenses exceed $6,854,400, the MTW
agency's CY 2021 renewal funding will be $6,854,400 plus an adjustment
for HAP expenses if HAP expenses alone exceeded $6,854,400, adjusted by
the RFIF and any national proration.
(e) Financial Management Requirements Apply. The same financial
management requirements that apply to non-MTW agencies also apply to
MTW agencies (e.g., Cash Management Requirements for the HCV Program
with Notice PIH 2017-06 and successor notices).
(f) Administrative Fees. The Administrative Fee rates used to
calculate fee eligibility for MTW agencies shall be established
according to the same methodology used to establish Administrative Fee
rates for all agencies, including non-MTW agencies. Under current
appropriations law, as is the case for all agencies, administrative
fees will be calculated on the basis of units leased as of the first
day of each month; this data will be extracted from VMS at the close of
each reporting cycle. Administrative fees for MTW agencies are also
subject to the national proration factor and any other appropriations
act requirements.
(g) Adjustments for the First-Time Renewal of Certain Vouchers. If
the MTW agency receives incremental HCV vouchers and funding (including
tenant protection vouchers), other than SPVs, renewal funding for those
vouchers will be included in the MTW HCV renewal funding eligibility
calculation for the following year. (See section VI.9 of this notice
for further discussion of tenant protection and other SPVs). The
renewal amount for the following year is based on HAP costs reported
for these increments in VMS in the prior year, which will be adjusted
by the RFIF. Should the initial increment(s) be funded for less than
twelve months due to lack of appropriations, HUD will adjust for the
missing months upon renewal, by selecting the funded PUC for the
initial increment times the
[[Page 56172]]
number of units,\24\ then adjusted by the RFIF. The aggregate renewal
eligibility is always subject to the national proration factor.
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\24\ The MTW PUC is equal to MTW HAP expenses divided by the
number of MTW units leased. (Non-HAP MTW expenses are not included
in the MTW PUC calculation).
---------------------------------------------------------------------------
(h) Applicable Inflation Factor and Proration. The same applicable
RFIFs that apply to non-MTW agencies will be applied each CY to
determine the MTW agency's HAP funding renewal eligibility. Likewise,
the MTW agency's HAP funding renewal eligibility is subject to the same
national proration as non-MTW agencies' renewal eligibility.
(i) Reserves. Reserves are subject to offsets as part of future
Congressional appropriations acts.
(j) Local, Non-Traditional Activities. The MTW agency may spend its
HCV HAP funding on local, non-traditional activities, as described in
Appendix I, without prior HUD approval. HUD has the authority to
request information and complete risk-based monitoring of the MTW
agency's implementation of local, non-traditional activities for
compliance with applicable statutory requirements, this Notice, and
other program requirements. If HUD determines a use of local, non-
traditional flexibility is inconsistent with these requirements, HUD
may require the MTW agency to modify or discontinue the activity and
take other corrective action.
(k) Rental Assistance Demonstration (RAD). Any vouchers received as
part of a RAD Component I conversion shall be added to the ACC for the
remainder of the CY in which they are awarded. HUD will issue a new
increment of voucher funding in support of those vouchers for the first
full CY following a RAD Component I conversion. In subsequent years,
voucher funding for RAD-converted units will be renewed under the MTW
HCV renewal funding calculation, adjusted by the renewal funding
inflation factor and the applicable proration factor. Tenant protection
vouchers provided for RAD Component II conversions are renewed in
accordance with section VI.5.b.iii.g of this notice, Adjustment for the
first-time renewal of certain vouchers, above. Administrative fees for
RAD vouchers will be calculated based on the same methodology used to
establish administrative fees for non-MTW agencies. Fees for RAD
vouchers will be prorated at the same level that applies to all non-MTW
agencies.
(l) Voucher Programs Not Included in MTW Renewal Funding
Calculation. The only SPV programs that are not included in the MTW
renewal funding calculation are Emergency Housing Vouchers (EHVs) and
the Section 8 Moderate Rehabilitation Program. Mainstream Vouchers were
excluded prior to 2026, but starting in CY 2026 Mainstream Vouchers
will be renewed as part of the calculation of renewal funding for the
HCV program overall. Congress instituted this change in the renewal
funding provisions for Tenant-Based Rental Assistance in the
Consolidated Appropriations Act, 2026. SPVs are discussed in more
detail in section VI.9 of this MTW Operations Notice. MTW funding
flexibility is not permitted in the Section 8 Moderate Rehabilitation
Program, and these funds may not be used for MTW activities.
c. Financial Reporting and Auditing
MTW agencies must submit year-end unaudited financial information
to the Department no later than two months after their fiscal year end
using the Financial Data Schedule (FDS) contained in the Real Estate
Assessment Center's (REAC) Financial Assessment Subsystem (FASS-PH), or
its successor system. Current financial reporting requirements for MTW
agencies are posted on the REAC website. These requirements may be
updated in the future.
MTW agencies are also required to electronically submit their
audited financial information, if applicable, to HUD no later than nine
months after their fiscal year end. MTW agencies must include public
housing project level financial information in the FDS and must follow
the Asset Management guidelines established in PIH Notice 2007-9
Supplement to Financial Management Handbook PIH Revised April 2007, and
any subsequent updates to this Handbook or PIH Notice. MTW agencies
will conform to the cost requirements of 2 CFR part 200 and any HUD
implementation thereof.
MTW agencies must procure an Independent Public Accountant (IPA) to
perform an annual audit pursuant to federal requirements at 2 CFR part
200 and 24 CFR 990.190, or successor, as well as any audit compliance
supplements developed specifically for use with the MTW demonstration.
Completed IPA audits must be submitted to HUD in accordance with
current HUD regulations. HUD will review the IPA audits of MTW agencies
to determine appropriate action relative to any findings, prepare
recommendations for audit finding resolution, and follow up with MTW
agencies to ensure finding closure. If there are audit findings related
to the MTW program itself, HUD will monitor the resolution of all audit
findings.
6. Evaluation
As a condition of participating in the MTW demonstration, MTW
agencies agree to cooperate fully with HUD and its contractors in the
monitoring and evaluation of the MTW demonstration. MTW agencies shall
keep records and submit reports and other information as required by
HUD. This includes any data collection required for the use of waivers
and associated activities, for the uses of MTW funds within and across
funding streams, and any evaluation efforts that HUD undertakes. Any
additional information requests will follow the Paperwork Reduction Act
requirements. HUD envisions three types of evaluation: program-wide
evaluation, cohort-specific evaluation, and ad hoc evaluation.
a. Program-Wide Evaluation
An MTW demonstration-wide evaluation would seek to assess whether
or not, and to what extent, MTW agencies achieve the statutory
objectives of the MTW demonstration by using federal dollars more
efficiently, helping residents find employment and become self-
sufficient, and/or increasing housing choices for low-income families.
Program-wide evaluation would also seek to determine any effects,
positive or negative, of MTW waivers and funding flexibilities on
residents. HUD intends to develop a method for program-wide evaluation
that is based, to the extent possible, on information already being
collected through existing HUD administrative data systems, although
additional reporting may be necessary to effectively evaluate MTW.
b. Cohort-Specific Evaluation
The specific evaluation methods and requirements for participating
MTW agencies will vary in each cohort based on the policy changes to be
tested in that cohort.\25\ The cohort-specific policy change and
evaluation methods will be described in the applicable Selection Notice
such that the MTW agency is aware, in advance of application to the MTW
demonstration program, of the policy it will be required to implement
and the evaluation requirements. The MTW agency is required to
participate in the evaluation for the full timeframe designated by HUD.
HUD's Office of Policy Development and Research will take the lead on
evaluating cohort-specific policy changes, and separate
[[Page 56173]]
funds are appropriated by Congress for these evaluations. In all cases,
the purpose of the evaluation will be to measure the outcomes
associated with the specific policy change(s) in order to offer policy
recommendations for implementing the policy change(s) across all PHAs.
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\25\ For example, some cohorts of MTW agencies may be required
to participate in randomized control trials, while others may be
required to participate in detailed process studies or ethnographic
research.
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c. Ad Hoc Evaluation
HUD reserves the right to request, and the MTW agency shall provide
upon request, any additional information required by law or required
for the sound administration or evaluation of the MTW agency.
7. Program Administration and Oversight
In general, MTW agencies will be subject to the same planning and
reporting protocols as non-MTW agencies, including the PHA Plan (5-Year
Plan and Annual PHA Plan) and Capital Fund planning. MTW agencies must
also report data into HUD data systems, as required.
New protocols and instruments will be developed for assessing an
MTW agency's performance and will be incorporated into PHAS and SEMAP,
or successor assessment systems, or an alternative assessment system
developed by HUD, explained further in section VI.7.b of this MTW
Operations Notice. In addition, HUD will employ standard program
compliance and monitoring approaches including assessment of relative
risk and on-site monitoring conducted by HUD or by entities contracted
by HUD.
a. Planning and Reporting
i. The Annual PHA Plan
MTW agencies must adhere to Annual PHA Plan regulations at 24 CFR
part 903, any implementing HUD Notices and guidance, as well as any
succeeding regulations. The Annual PHA Plan consists of the 5-Year Plan
that a PHA must submit to HUD once every five PHA fiscal years and the
Annual PHA Plan that the PHA must submit to HUD for each PHA fiscal
year. Annual and 5-Year Plans must be submitted in a format prescribed
by HUD. Currently, submission format requirements are outlined in
Notice PIH 2015-18, issued October 23, 2015, which is effective until
amended, superseded or rescinded.
Any HUD assistance that the MTW agency is authorized to use under
the MTW demonstration must be used in accordance with the Annual PHA
Plan, as applicable.
ii. MTW Plan-Expansion (Under Development)
All MTW agencies will submit an MTW Plan-Expansion on an annual
basis.\26\ The MTW Plan-Expansion form has not been finalized at the
time of the publication of this MTW Operations Notice; it will be made
available for public review and comment, per Paperwork Reduction Act
requirements.\27\
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\26\ MTW agencies designated pursuant to the 2016 Expansion
Statute are not required to submit the Annual MTW Plan or Annual MTW
Report They instead submit only the MTW Plan-Expansion (OMB Control
No.: 2577-0216).
\27\ 83 FR 50676 (October 9, 2018).
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MTW agencies must submit to HUD the MTW Plan-Expansion no later
than 75 days prior to the start of the agency's fiscal year. HUD will
notify the MTW agency in writing if any edits to provisions or
additional information is required in the MTW Plan-Expansion. Absent
unforeseen circumstances, when the MTW agency submits its MTW Plan-
Expansion 75 days in advance of its fiscal year, HUD will respond to
the MTW agency within 75 days or the MTW Plan-Expansion, with the
exception of any Agency-Specific Waivers or Safe Harbor Waivers, is
automatically approved.
Prior to submitting to HUD, the MTW Plan-Expansion must go through
a public process. The MTW agency may elect to put the MTW Plan-
Expansion through public process along with the Annual PHA Plan. This
will allow the MTW agency to inform the community of any programmatic
changes and give the public an opportunity to comment. The MTW agency
must have at least a 45-day public review period of its MTW Plan-
Expansion, after publishing a notice informing the public of its
availability and conducting reasonable outreach to encourage
participation in the process, followed by a public hearing. MTW
agencies must consider, in consultation with the RABs and tenant
associations, as applicable, all of the comments received at the public
hearing. The comments received by the public and RABs and tenant
associations must be submitted by the agency as a required attachment
to the MTW Plan-Expansion. MTW agencies must also include a narrative
describing their analysis of the recommendations and any decisions made
based on these recommendations.
iii. Admissions and Continued Occupancy Policy and Administrative Plan
The MTW agency must update its ACOP and/or Administrative Plan, as
applicable, to be consistent with the MTW activities and related
waivers that it implements. The MTW agency may not implement an MTW
activity or waiver until the relevant sections of the ACOP and/or
Administrative Plan are updated. MTW agencies must provide HUD with
electronic versions of the ACOP and/or Administrative Plan upon
request. If the MTW agency implements an activity using the local, non-
traditional uses of funds waiver, the MTW agency must create and update
an implementing document specifically for such activity. Additionally,
the MTW agency must update its ACOP and/or Administrative Plan upon
terminating an MTW activity.
iv. Capital Planning and Reporting
MTW agencies must adhere to CFP regulations at 24 CFR part 905, any
implementing HUD Notices and guidance, as well as any successor
regulations. As noted previously, MTW agencies are funded in accordance
with CFP regulations and formula funds are calculated and distributed
in the same manner as non-MTW agencies.
MTW agencies have the authority and flexibility to utilize their
CFP funds for expanded uses as part of their MTW funding flexibility.
HUD will award Capital Fund grants to MTW agencies in keeping with the
standard process for all PHAs. The Department will spread budget line
items in eLOCCS in accordance with Annual Statements/Budgets submitted
in EPIC for Capital Fund grants awarded. As with all PHAs, an MTW
agency may draw down Capital Funds from HUD only when such funds are
due and payable, unless HUD approves another payment schedule.\28\ To
the extent that the MTW agency plans to use CFP funding for other MTW-
eligible (non-CFP) activities, the agency must create a separate work
activity (or activities) in the EPIC system that select the ``MTW
(1492)'' work category. CFP funds entered on BLI 1492 would not need to
be broken out and itemized in the part II supporting pages of the HUD-
50075.1. However, regardless of the BLI utilized, funds may not be
drawn down until the PHA has an immediate need for the funds. An MTW
agency may not accelerate drawdowns of funds in order to fund reserves
or to otherwise increase locally held amounts, as discussed in section
5.a. of this notice.
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\28\ HUD will publish a rule that will govern the establishment
and maintenance of a Capital Reserve pursuant to Section 109 of
HOTMA that may give PHAs authorization to draw down funds in advance
of need in certain limited circumstances.
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An MTW agency is not required to use all or any portion of its CFP
grant
[[Page 56174]]
for non-CFP activities. To the extent that the MTW agency wishes to
dedicate all or a portion of its CFP grant to specific capital
improvements, the agency shall record CFP funding in work activities in
EPIC as in the standard program.
v. Inventory Management System/PIH Information Center Reporting
Data from HUD's Inventory Management System/PIH Information Center
(IMS/PIC), or successor systems, is critical to all aspects of program
administration, including HUD monitoring and tracking of MTW agency
progress in meeting the MTW statutory objectives. IMS/PIC data is used
to establish funding eligibility levels for both Operating Subsidy Fund
and Capital Fund grants. Further, HUD relies on IMS/PIC data to provide
a thorough and comprehensive view of PHA program performance and
compliance.
MTW agencies are required to submit the following information to
HUD via IMS/PIC (or its successor system):
[ballot] Family data to IMS/PIC using Form HUD-50058 MTW Expansion
(or successor forms) or Form HUD-50058 for SPV purposes, and in
compliance with HUD's standard 50058 submission requirements for MTW
agencies. MTW agencies must report information on all families
receiving some form of tenant-based or project-based housing
assistance, either directly or indirectly, as well as all public
housing families, to be current to at least a 95 percent level.
[ballot] Current building and unit information in the development
module of IMS/PIC (or successor system).
[ballot] Basic data about the PHA (address, phone number, email
address, etc.).
HUD will monitor MTW agency reporting to IMS/PIC (or successor
system) to ensure compliance and provide technical assistance to MTW
agencies as needed. In order to participate in the MTW expansion, PHAs
must have the information technology capability to upgrade their IMS/
PIC software to accommodate MTW flexibilities. PHAs that currently use
HUD Family Reporting Software (FRS) must upgrade their software to an
approved system that supports the submission of MTW IMS/PIC data. HUD
does not anticipate modifying the FRS to accommodate the submission of
MTW data.
vi. Voucher Management System Reporting
MTW agencies are required to report voucher utilization in VMS, or
its successor system. There are several areas in which VMS reporting is
different for MTW agencies. These areas are highlighted in the VMS
User's Manual, which details the VMS reporting requirements.\29\
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\29\ <a href="https://portal.hud.gov/hudportal/documents/huddoc?id=instructions.pdf">https://portal.hud.gov/hudportal/documents/huddoc?id=instructions.pdf</a>.
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HUD will monitor each MTW agency's VMS reporting to ensure
compliance and provide technical assistance to MTW agencies as needed.
vii. General Reporting Requirement
In addition to the reporting requirements outlined in this MTW
Operations Notice, MTW agencies are required to comply with any and all
HUD reporting requirements not specifically waived by HUD for
participation in the MTW demonstration program.
b. Performance Assessment
Assessing the performance of PHAs (both MTW and non-MTW) helps with
the delivery of services in the public housing and voucher programs and
enhances trust among PHAs, assisted households, HUD, and the general
public. To facilitate this effort, HUD will provide management tools
for effectively and fairly assessing the performance of a PHA in
essential housing operations and program administration.
Currently, HUD uses PHAS and SEMAP to assess risk and identify
underperforming PHAs in the traditional public housing and voucher
programs. However, since some of the MTW flexibilities make it
difficult to accurately assess the performance of MTW agencies under
the existing systems, HUD will develop an alternative, MTW-specific
assessment system, which may be incorporated into PHAS and SEMAP (or
successor assessment system(s)). MTW agencies may not opt out of the
MTW-specific successor system(s). Until the successor system is
implemented, HUD will monitor MTW agency performance through PHAS sub-
scores. Additionally, HUD may consider data provided through other HUD
systems in its assessment of an MTW agency's activities.
i. Public Housing Assessment System
MTW agencies will not be scored in PHAS unless and until such time
as HUD develops an MTW-specific system that is incorporated into PHAS,
or successor system, but they can elect to be scored if they choose to
opt in. MTW agencies continue to receive PHAS sub-scores even if they
do not receive the overall score. An MTW agency will maintain its PHAS
performance designation (i.e., high performer, standard performer,
substandard performer, troubled, Capital Fund-troubled) at the time of
MTW designation, up until a successor system is established. If an MTW
agency elects to receive its overall PHAS score, the agency must
continue to be scored for the duration of the demonstration, or until
the agency is assessed under the alternative, MTW-specific assessment
system(s), whichever comes first. Once developed, all MTW agencies,
including MTW agencies that elect not to receive an overall PHAS score,
must be assessed under the MTW-specific assessment system(s).
Pursuant to the 1996 MTW Statute, when providing public housing,
the MTW agency must ensure that the housing is safe, decent, sanitary,
and in good repair, according to the physical inspection protocols
established and approved by HUD. Thus, MTW agencies continue to be
subject to HUD physical inspections. To the extent that HUD physical
inspections reveal deficiencies, the MTW agency must continue to
address these deficiencies in accordance with existing physical
inspection requirements. If an MTW agency does not maintain public
housing adequately, as evidenced by the physical inspection performed
by HUD, and is determined to be troubled in this area, HUD will
determine appropriate remedial actions.
ii. Section 8 Management Assessment Program
MTW agencies will not be scored in SEMAP unless and until such time
as HUD develops an MTW-specific system that is consistent with SEMAP,
or successor system, but they can elect to be scored if they choose to
opt in. An MTW agency will maintain its SEMAP performance designation
(i.e., high performer, standard performer, troubled) at the time of MTW
designation, up until a successor system is established. If an MTW
agency elects to receive its overall SEMAP score, the agency must
continue to be scored for the duration of the demonstration, or until
the agency is assessed under the MTW-specific assessment system,
whichever comes first. Once developed, all MTW agencies, including MTW
agencies that opt out of SEMAP, must be assessed under the MTW-specific
assessment system(s).
c. Monitoring and Oversight
MTW agencies remain subject to the full range of HUD monitoring and
oversight efforts including, but not limited to, annual risk
assessments, on-site monitoring reviews, monitoring reviews relating to
VMS reporting and rent reasonableness, review of the accuracy of data
reported into HUD data
[[Page 56175]]
systems, and use of HUD data systems to assess agency program
performance, among other activities.
i. Five Statutory MTW Requirements
Throughout participation in the MTW demonstration program, all MTW
agencies must continue to meet five statutory MTW requirements
established under the 1996 MTW Statute. Specific enforcement processes
of the five statutory MTW requirements will be included in the MTW ACC
Amendment (see also, section VI.12 of this notice). HUD will monitor
and determine MTW agencies' compliance with these five statutory MTW
requirements as follows:
(a) Very Low-Income Requirement. MTW agencies must ensure that at
least 75 percent of the families assisted are very low-income families,
in each fiscal year, as defined in Section 3(b)(2) of the 1937 Act. HUD
Verification Approach: Initial household certification data recorded in
IMS/PIC will be used for both the public housing and HCV programs for
compliance monitoring purposes. The initial certification is comprised
only of new admissions in the MTW agency's given fiscal year. Initial
household certification data for families housed through local, non-
traditional activities will be provided in a manner specified by the
Department. An MTW agency's portfolio will then be weighted with
respect to the number of households being served by each housing
program type (i.e., public housing, HCV, and local, non-traditional).
While the verification approach for this statutory requirement will be
conducted based on initial certification in the MTW agency's given
fiscal year, MTW agencies must continue to assist low-income families,
which MTW agencies must monitor through the reexamination process, as
may be amended per Appendix I.
(b) Reasonable Rent Policy. MTW agencies must establish a
reasonable rent policy which shall be designed to encourage employment
and self-sufficiency by participating families, consistent with the
purpose of this demonstration, such as by excluding some or all of a
family's earned income for purposes of determining rent.
HUD Verification Approach: HUD defines rent reform as any change in
the regulations on how rent is calculated for a household. Upon
designation into the MTW demonstration, MTW agencies are to submit
their planned policy to implement a reasonable rent policy in the MTW
Plan-Expansion. All activities falling under any of the activities in
the Tenant Rent Policies waiver or the Alternate Reexamination Schedule
waiver, as detailed in Appendix I, meet the definition of a reasonable
rent policy because these activities constitute a change from
regulations on how rent is calculated for a household. In addition,
implementation of any voluntary alternative rent calculation that is
available for all PHAs would count towards meeting this statutory
requirement. Finally, an MTW agency may propose, for HUD's approval, an
Agency-Specific Waiver to establish a rent policy that is different
from those listed in Appendix I. If approved, this alternative rent
policy approved through an Agency-Specific Waiver would also meet this
statutory requirement. An MTW agency must implement one or multiple
reasonable rent policies during the term of its MTW designation.\30\
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\30\ MTW agencies in the rent reform cohort may have prescribed
deadlines to implement their reasonable rent policies.
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(c) Substantially the Same Requirement. MTW agencies must continue
to assist substantially the same total number of eligible low-income
families as would have been served absent the MTW demonstration. HUD
Verification Approach: Appendix III details the requirements for the
Substantially the Same (STS) methodology which: ensures substantially
the same number of families are housed; allows for local flexibility;
is responsive to changing budgetary climates; is feasible for HUD to
administer; is easy for MTW agencies to predict compliance; is
straightforward to understand; is calculated each year; and has
publicly available results. Please refer to Appendix III for the
specific requirements.
(d) Comparable Mix Requirement. MTW agencies must maintain a
comparable mix of families (by family size) as would have been provided
had the amounts not been used under the demonstration. HUD Verification
Approach: In order to establish a comparable mix baseline, HUD will
pull data, by family size, for occupied public housing units and leased
vouchers at the time of entry into the demonstration. HUD will rely
upon MTW agency-reported data into HUD systems (i.e., IMS/PIC, VMS).
This information will be used to establish baseline percentages, by
family size, to which the agency is measured by for the remainder of
participation. Following entry into the demonstration, agencies will
provide comparable mix data and, if applicable, associated
justifications in the MTW Plan-Expansion. HUD deems an acceptable level
of variation to be no more than 10 percent from the baseline.
Justifications or explanations for fluctuations greater than 10 percent
are required and subject to HUD's review.
(e) Housing Quality Standards (HQS). MTW agencies must ensure that
housing assisted under the demonstration meets HQS established or
approved by the Secretary.
HUD Verification Approach: In order to demonstrate that the MTW
agency meets housing quality standards, HUD will verify compliance for
each housing program type as follows: (1) HCV--Program regulations at
24 CFR part 982 set forth basic HQS for housing assisted under the HCV
program. These housing quality standards, or successor regulations, are
the standards used to determine if the MTW agency is fulfilling its
responsibilities to ensure owners are maintaining the units in
accordance with HQS in the evaluation of an agency. MTW agencies with
an HCV program must certify in the MTW Plan-Expansion that they have
fulfilled their responsibilities to comply with and ensure enforcement
of HQS under this requirement in accordance with the HQS regulations in
24 CFR part 982, as modified where applicable through the
implementation of the discrete MTW Waivers approved by HUD provided in
Appendix 1 or through an Agency-Specific Waiver. (2) Public Housing--
HUD will verify this requirement through its review of public housing
physical inspection scores. Overall scores falling below 60 percent
will be identified as non-compliant with the statutory requirement.
(3) Local, Non-Traditional--In the MTW Plan-Expansion, MTW agencies
must certify that local, non-traditional units meet HQS performance
requirements (as provided in 24 CFR 982.401) as required in PIH Notice
2011-45, or successor notice.
ii. Income Integrity and Enterprise Income Verification System (EIV)
Reviews
MTW agencies are required to comply with the final rule regarding
EIV issued December 29, 2009, or successor, and utilize EIV for all
income and employment verifications. EIV has been modified for MTW
agencies so that family information submitted in IMS/PIC will not
expire for 40 months in order to accommodate agencies choosing to
extend recertification periods for up to three years.
MTW agencies are subject to HUD review to ensure compliance with
EIV requirements as well as monitor the accuracy and integrity of the
MTW agencies' income and rent determination policies, procedures, and
outcomes.
[[Page 56176]]
iii. MTW Site Visit
HUD will periodically conduct site visits to monitor the
implementation of MTW flexibilities provided under the MTW Operations
Notice, provide guidance, discuss the MTW agency's activities, and
offer any needed technical assistance regarding its program. The
purpose of a site visit will be to monitor agency-reported MTW
activities, to review the status and effectiveness of the MTW agency's
strategies, to provide technical assistance, to problem-solve regarding
any local barriers the agency is facing, and to identify and resolve
outstanding MTW related issues.
The MTW agency shall give HUD access, at reasonable times and
places, to all requested sources of information including access to
files, access to units, and an opportunity to interview agency staff
and assisted participants.
Where travel funding or staff resources are not available to
facilitate in-person site visits, HUD may exercise the option to
conduct remote site visits via telephone, videoconference, or webinar.
To the extent possible, HUD will coordinate the MTW site visit with
other site visits to be conducted by HUD.
iv. Housing Choice Voucher Utilization
HUD will monitor HCV utilization at MTW agencies and will ensure
that HCV funds are utilized in accordance with section VI.5.b.iii and
Appendix III of this notice. At its discretion, HUD may take any
appropriate actions to direct an MTW agency to increase HCV leasing and
utilization.
v. Public Housing Occupancy
HUD will monitor public housing occupancy rates for MTW agencies.
In instances where the MTW agency's public housing occupancy rate falls
below 96 percent, HUD may require, at its discretion, that the MTW
agency enter into an Occupancy Action Plan to address the occupancy
issues. The Occupancy Action Plan will include the cause of the
occupancy issue, the intended solution, and reasonable timeframes to
address the cause of the occupancy issue.
vi. Additional Monitoring and Oversight
HUD may, based on the MTW agency's risks and at HUD's discretion,
conduct management, programmatic, financial, or other reviews of the
MTW agency. The MTW agency shall respond to any findings with
appropriate corrective action(s).
In addition, HUD will make use of all HUD data systems and
available information to conduct ongoing remote monitoring and
oversight actions for MTW agencies, consistent with the results of the
PIH risk assessment.
8. Rental Assistance Demonstration Program
MTW agencies converting public housing program units to Section 8
assistance under the RAD program are able to retain MTW regulatory and
statutory flexibilities in the management of those units, subject to
RAD requirements, if the conversion is to Section 8 PBV assistance. MTW
agencies converting projects under RAD to PBV may continue to undertake
flexibilities except to the extent limited by RAD, as described in the
RAD Notice, Notice PIH 2012-32, REV-4 or its successor notice.\31\
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\31\ Notices and laws related to RAD can be found at <a href="https://www.hud.gov/RAD/library/notices">https://www.hud.gov/RAD/library/notices</a>.
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9. Applying MTW Flexibilities to SPVs
SPVs are specifically provided for by Congress in line item
appropriations. Except for enhanced vouchers and tenant-protection
vouchers (described below), SPVs are not part of the MTW demonstration
and are not part of the MTW agency's total available flexible MTW
Funding. Funding (both the initial increment and renewal funding) for
SPVs may only be used for eligible SPV purposes.\32\
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\32\ Expansion MTW PHAs' Renewal Enclosures do not separate out
renewal SPV funding. Expansion MTW PHAs should maintain internal
accounting records regarding SPV fund balances.
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MTW agencies may use non-HAP sources to cover shortfalls, following
the procedures outlined in Notice PIH 2013-28, or successor.\33\ MTW
agencies are also permitted to use HAP reserve funds, including HAP
originated reserves subject to fungibility provisions, to address SPV
funding shortfalls. This flexibility extends to addressing shortfalls
in PHAs' Mainstream Vouchers, which starting in 2026 are being renewed
under HCV program contract renewal appropriations.\34\ Approved MTW
flexibilities may be applied towards SPVs according to HUD's current
guidance.\35\ However, MTW agencies may use SPV funding (including HUD
VASH, FUP, and Mainstream Vouchers) only for the intended SPV purposes
and SPV is not subject to MTW agencies funding flexibilities.
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\33\ A shortfall is defined as a situation where PHAs would
terminate participating families from the HCV program due to
insufficient funds despite taking reasonable cost reduction
measures.
\34\ This information will be available on the MTW website.
\35\ This process is explained further in the SPV FAQ on the MTW
website.
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a. HUD-Veterans Affairs Supportive Housing (VASH) Vouchers
HUD-VASH vouchers have separate operating requirements and must be
administered in accordance with the requirements found in the HUD-VASH
Operating Requirements. The operating requirements waive and alter many
of the standard HCV statutes and regulations at 24 CFR part 982. Unless
stated in the HUD-VASH operating requirements, however, the regulatory
requirements at 24 CFR part 982 and all other HUD directives for the
HCV program are applicable to HUD-VASH vouchers. MTW agencies may
submit a request to HUD to operate HUD-VASH vouchers in accordance with
MTW administrative flexibilities.
b. Family Unification Program (FUP) Vouchers
The FUP NOFO language allows vouchers to be administered in
accordance with MTW flexibilities unless MTW provisions are
inconsistent with the appropriations act or requirements of the FUP
NOFA. In the event of a conflict between the MTW Operations Notice and
the appropriations act or FUP NOFA language, the act and NOFA govern.
c. Melania Trump Foster Youth to Independence Initiative (Melania Trump
FYI) Vouchers
The Melania Trump FYI NOFA language allows vouchers to be
administered in accordance with MTW flexibilities unless MTW provisions
are inconsistent with the appropriations act or requirements of the
Melania Trump FYI NOFA. In the event of a conflict between the MTW
Operations Notice and the appropriations act or Melania Trump FYI NOFA
language, the act and NOFA govern.
d. Non-Elderly Persons With Disabilities (NED) Vouchers
The NED NOFA language allows vouchers to be administered in
accordance with MTW operations unless MTW provisions are inconsistent
with the appropriations act or requirements of the NED NOFA. In the
event of a conflict between the MTW Operations Notice and the
appropriations act or NED NOFA language, the act and NOFA govern.
e. Mainstream Vouchers
The Mainstream NOFA language allows vouchers to be administered in
accordance with MTW flexibilities unless MTW provisions are
inconsistent with the appropriations act or requirements of the
Mainstream NOFA. In the event of a conflict between the
[[Page 56177]]
MTW Operations Notice and the appropriations act or Mainstream NOFA
language, the act and NOFA govern.
f. Enhanced Vouchers and Tenant Protection Vouchers
MTW agencies may apply any MTW flexibilities as authorized by this
notice to replacement TPVs to the extent that the MTW flexibilities
used do not infringe upon the protections applied to those
families.\36\ However, funding fungibility may only be applied to
replacement TPV funds once the initial funding increment is renewed. No
MTW flexibilities may be applied to relocation TPVs. MTW agencies
should review PIH Notice 2020-04 and any future successor notices for
more information on re-issuance of TPVs.
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\36\ For examples of restrictions in applying MTW flexibilities
to tenant protection vouchers, please visit the MTW website.
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The statutory enhanced voucher requirements under Section 8(t) of
the 1937 Act (e.g., the HAP calculation) apply to an enhanced voucher
family until the family either moves from the project or leaves the HCV
tenant-based program for any reason. MTW agencies must follow the
procedures described in Notice PIH 2013-27, or its successor notice,
for a recipient of an enhanced voucher to voluntarily agree to
relinquish their tenant-based assistance in exchange for PBV
assistance. When an enhanced voucher family moves from the project,
either after initially receiving the voucher or anytime thereafter, the
Section 8(t) enhanced voucher requirements no longer apply. The voucher
is then administered in accordance with the regular HCV program
requirements, as modified by the agency's individual MTW waivers and
MTW policies for its tenant-based HCV program.
10. Applicability of Other Federal, State, and Local Requirements
Notwithstanding the waivers and associated activities provided in
this MTW Operations Notice, the following provisions of the 1937 Act
continue to apply to MTW agencies and the assistance received pursuant
to the 1937 Act:
[ballot] The terms ``low-income families'' and ``very low-income
families'' shall continue to be defined by reference to Section 3(b)(2)
of the 1937 Act (42 U.S.C. 1437a(b)(2));
[ballot] Section 12 of the 1937 Act (42 U.S.C. 1437j), as amended,
shall apply to housing assisted under the demonstration, governing
labor standards and community service requirements, other than housing
assisted solely due to occupancy by families receiving tenant-based
assistance;
[ballot] Section 18 of the 1937 Act (42 U.S.C. l437p, as amended by
Section 1002(d) of Public Law 104-19, Section 201(b)(1) of Public Law
104-134, and Section 201(b) of Public Law 104-202), governing
demolition and disposition, shall continue to apply to public housing
notwithstanding any use of the housing under MTW; and
[ballot] Section 8(r)(1) of the 1937 Act on HCV portability shall
continue to apply unless provided as a cohort-specific waiver and
associated activity(s) in an evaluative cohort as necessary to
implement comprehensive rent reform and occupancy policies. Such a
cohort-specific waiver and associated activity(s) would contain, at a
minimum, exceptions for requests to port due to employment, education,
health and safety and reasonable accommodation.
Notwithstanding anything contained in this notice, federal, state
and local requirements applicable to public housing or HCV assistance
other than those provisions of the 1937 Act or its implementing
requirements that are specifically waived pursuant to the MTW
Operations Notice will apply. MTW authority may also be limited by any
laws promulgated in future years, which include without limitation:
statutes, appropriations acts, notices implementing appropriations
acts, regulations, and executive orders.
The MTW ACC Amendment will place in HUD the authority and
discretion to determine whether any future law conflicts with any MTW-
related agreement or notice. If a future law conflicts, the future law
shall be implemented. Additionally, no money damages are contemplated
for action by HUD with respect to the MTW demonstration program.
If any requirement applicable to PHAs, public housing, or HCV
assistance other than those provisions of the 1937 Act or its
implementing requirements that may be waived pursuant to MTW authority
and that are specifically waived pursuant to the MTW Operations Notice,
contains a provision that conflicts or is inconsistent with any MTW
Waiver, Safe Harbor Waiver, and/or Agency-Specific Waiver granted by
HUD, the MTW agency remains subject to the terms of that requirement.
Such requirements include, but are not limited to:
[ballot] Requirements for Federal Funds: Notwithstanding the
flexibilities described in this notice, the public housing and voucher
funding provided to MTW agencies remain federal funds and are subject
to any and all other federal requirements outside of the 1937 Act
(e.g., including but not limited to competitive HUD NOFAs under which
the MTW agency has received an award, state and local laws, federal
statutes other than the 1937 Act (including appropriations acts), and
OMB Circulars and requirements), as modified from time to time. The MTW
agency's expenditures must comply with 2 CFR part 200 and other
applicable federal requirements, which provide basic guidelines for the
use of federal funds, including the requirements of this notice.
[ballot] National Environmental Policy Act (NEPA): MTW agencies
must comply with NEPA, 24 CFR part 50 or part 58, as applicable, and
other related federal laws and authorities identified in 24 CFR part 50
or part 58, as applicable. Information and guidance on the
environmental review process and requirements is provided in PIH Notice
2016-22, or successor notice.
[ballot] Fair Housing and Equal Opportunity: As with the
administration of all HUD programs and all HUD-assisted activities,
fair housing, and civil rights issues apply to the administration of
MTW demonstration programs. This includes actions that discriminate on
the basis of race, color, sex, national origin, religion, disability,
or familial status (see 24 CFR part 1 and part 100, subpart G) or that
may impede, obstruct, prevent, or undermine efforts to affirmatively
further fair housing. Annual PHA Plans must include a civil rights
certification required by Section 5A of the 1937 Act and implemented by
regulation at 24 CFR 903.7(o) and 903.15.
All PHAs, including MTW agencies, are obligated to comply with non-
discrimination and equal opportunity laws and implementing regulation,
including those in 24 CFR 5.105. Specific laws and regulations must be
viewed in their entirety for full compliance, as this MTW Operations
Notice does not incorporate a complete discussion of all legal
authorities. For example, PHAs, including MTW agencies, are required to
comply with the Fair Housing Act, Title VI of the Civil Rights Act of
1964, Section 504 of the Rehabilitation Act of 1973, Title II of the
Americans with Disabilities Act of 1990, Architectural Barriers Act of
1968, Executive Order 11063: Equal Opportunity in Housing, Executive
Order 13166: Improving Access to Services for Persons with Limited
English Proficiency, HUD's Equal Access Rule (24 CFR 5.105(a)(2)), Age
Discrimination Act of 1975, and Title IX
[[Page 56178]]
of the Education Amendments Act of 1972, as well as HUD and government-
wide regulations implementing these authorities. MTW agencies should
review PIH Notice 2011-31, or its successor, for more details.
[ballot] Court Orders and Voluntary Compliance Agreements: MTW
agencies must comply with the terms of any applicable court orders or
Voluntary Compliance Agreements that are in existence or may come into
existence during the term of the MTW ACC Amendment. The MTW agency must
cooperate fully with any investigation by the HUD Office of Inspector
General or any other investigative and law enforcement agencies of the
U.S. Government.
11. MTW Agencies Admitted Prior to 2016 MTW Expansion Statute
The 39 MTW agencies that entered the MTW demonstration prior to the
2016 MTW Expansion Statute adhere to an administrative structure
outlined in the Standard MTW Agreement, an agreement between each
current agency and HUD. The 2016 MTW Expansion Statute extended the
term of the Standard MTW Agreement for these existing MTW agencies
through each agency's 2028 fiscal year.
Some agencies that entered the MTW demonstration prior to the 2016
MTW Expansion Statute may wish to opt out of their Standard MTW
Agreement and administer their MTW program pursuant to the MTW
Expansion and the requirements in this MTW Operations Notice. HUD will
support an existing MTW agency's request to join the MTW Expansion
provided that the agency:
[ballot] makes the change at the end of its fiscal year, so that it
does not have part of a fiscal year under the Standard Agreement and
part under the MTW Operations Notice;
[ballot] follows the same public comment and Board resolution
process as would be required for amending the Standard MTW Agreement;
[ballot] executes its MTW ACC Amendment to authorize participation
in the MTW demonstration consistent with the MTW Operations Notice; and
[ballot] executes the MTW ACC Amendment and terminates its Standard
MTW Agreement, thereby becoming subject to all the terms and conditions
that apply to MTW agencies admitted pursuant to the 2016 MTW Expansion
Statute, including all of the provisions of this Operations Notice and
the accompanying MTW ACC Amendment.
Should an existing MTW agency elect to administer its MTW program
pursuant to the framework described in this MTW Operations Notice, it
will not be required to implement the cohort-specific policy change
associated with any of the MTW cohorts and it will not be required to
participate in the evaluation of that specific policy change. All other
requirements in this MTW Operations Notice will apply.
12. Sanctions, Terminations, and Default
If the MTW agency violates any of the requirements outlined in this
notice, HUD is authorized to take any corrective or remedial action
permitted by law. Sanctions, terminations, and default are covered in
the agency's MTW ACC Amendment.
13. Administrative and Contact Information
a. Paperwork Reduction Act
The information collection requirements contained in this document
are approved by the Office of Management and Budget (OMB) under the
Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). The OMB control
number is 2577-0216. In accordance with the Paperwork Reduction Act,
HUD may not conduct or sponsor, and a person is not required to respond
to, a collection of information unless the collection displays a
currently valid OMB control number.
b. Contact Information
For further information, contact: Pravin Krishnan, Director, Moving
to Work Demonstration Program; email: <a href="/cdn-cgi/l/email-protection#432e37346e2a2d252c032b36276d242c35"><span class="__cf_email__" data-cfemail="e4899093c98d8a828ba48c9180ca838b92">[email protected]</span></a>; telephone
number 202-402-3965, (this is not a toll-free number), or visit the MTW
demonstration program website at <a href="https://www.hud.gov/mtw">https://www.hud.gov/mtw</a>. HUD welcomes
and is prepared to receive calls from individuals who are deaf or hard
of hearing, as well as individuals with speech or communication
disabilities. To learn more about how to make an accessible telephone
call, please visit: <a href="https://www.fcc.gov/consumers/guides/telecommunications-relay-service-trs">https://www.fcc.gov/consumers/guides/telecommunications-relay-service-trs</a>.
Benjamin Hobbs,
Assistant Secretary for Public and Indian Housing.
Appendix I
Appendix I, MTW Waivers, is a simplified guide for MTW agencies
seeking to develop MTW initiatives that have already been executed
by existing MTW agencies. MTW agencies may implement any activity
contained in Appendix I without further HUD approval as long as it
is included in the MTW Plan-Expansion (described in section VI.7 of
this Notice) and implemented within the associated safe harbor(s).
MTW activities are listed by specific waiver name in Appendix I;
however, MTW agencies may use the MTW Plan-Expansion to combine
activities together in order to create more comprehensive
initiatives.
This appendix contains the MTW Waivers and their associated
activities. The appendix includes the waiver name, waiver
description, statutes and regulations waived, permissible
activities, and safe harbors. The waiver description defines the
authorization provided to the MTW agency, subject to the terms of
this notice. The statutory and regulatory citations that may be
waived by an MTW agency in order to implement an activity are
included below the activity. The list of waivers and list of
activities are organized by program type. The safe harbors contain
the additional requirements (beyond those specified in the activity
description) the agency must follow in order to implement the
activity without additional HUD approval once it is included in an
approved MTW Plan-Expansion. Consistent with applicable federal,
state, and local lease requirements, MTW agencies should update
their leases as necessary to adopt MTW flexibilities authorized by
these MTW Waivers.
Appendix I is an exclusive list of activities an MTW agency can
implement without further HUD approval once it is included in an
approved MTW Plan-Expansion; however, is not intended to be the
complete listing of what an MTW agency can and cannot do. If an MTW
agency wishes to request the ability to implement an activity in a
manner inconsistent with the safe harbor(s) of an MTW activity in
this appendix, the MTW agency must go through the Safe Harbor Waiver
request process explained in section VI.4 of the MTW Operations
Notice. If an MTW agency wishes to implement activities or request
waivers not included in this appendix, it must go through the
Agency-Specific Waiver process explained in section VI.4 of the MTW
Operations Notice. As described in Appendix II, the MTW agency shall
submit an impact analysis for all Safe Harbor Waiver requests, and
the MTW agency shall describe any hardship policy, as applicable.
Safe harbors marked with an asterisk (*) cannot be waived
through either the Safe Harbor Waiver process or the Agency-Specific
Waiver process.
Table of Contents
1. Tenant Rent Policies
a. Tiered Rent (Public Housing [PH])
b. Tiered Rent (Housing Choice Vouchers [HCV])
c. Stepped Rent (PH)
d. Stepped Rent (HCV)
e. Minimum Rent (PH)
f. Minimum Rent (HCV)
g. Tenant Payment as a Modified Percentage of Income (PH)
h. Tenant Payment as a Modified Percentage of Income (HCV)
i. Alternative Utility Allowance (PH)
j. Alternative Utility Allowance (HCV)
k. Fixed Rents (PH)
l. Fixed Subsidy (HCV)
m. Utility Reimbursements (PH)
n. Utility Reimbursements (HCV)
[[Page 56179]]
o. Initial Rent Burden (HCV)
p. Imputed Income (PH)
q. Imputed Income (HCV)
r. Elimination of Deduction(s) (PH)
s. Elimination of Deduction(s) (HCV)
t. Standard Deductions (PH)
u. Standard Deductions (HCV)
v. Alternative Income Inclusions/Exclusions (PH)
w. Alternative Income Inclusions/Exclusions (HCV)
2. Payment Standards and Rent Reasonableness
a. Payment Standards--Small Area Fair Market Rents (HCV)
b. Payment Standards--Fair Market Rents (HCV)
c. Rent Reasonableness--Process (HCV)
d. Rent Reasonableness--Third-Party Requirement (HCV)
3. Reexaminations
a. Alternative Reexamination Schedule for Households (PH)
b. Alternative Reexamination Schedule for Households (HCV)
c. Self-Certification of Assets (PH)
d. Self-Certification of Assets (HCV)
4. Landlord Leasing Incentives
a. Vacancy Loss (HCV--Tenant-Based Assistance)
b. Damage Claims (HCV--Tenant-Based Assistance)
c. Other Landlord Incentives (HCV--Tenant-Based Assistance)
5. Housing Quality Standards (HQS)
a. Pre-Qualifying Unit Inspections (HCV)
b. Reasonable Penalty Payments for Landlords (HCV)
c. Third-Party Requirement (HCV)
d. Alternative Inspection Schedules (HCV)
6. Short-Term Assistance
a. Short-Term Assistance (PH)
b. Short-Term Assistance (HCV)
7. Term-Limited Assistance
a. Term-Limited Assistance (PH)
b. Term-Limited Assistance (HCV)
8. Increase Elderly Age (PH & HCV)
9. Project-Based Voucher Program Flexibilities
a. Increase PBV Program Cap (HCV)
b. Increase PBV Project Cap (HCV)
c. Elimination of PBV Selection Process for PHA-owned Projects
Without Improvement, Development, or Replacement (HCV)
d. Alternative PBV Selection Process (HCV)
e. Alternative PBV Unit Types (Shared Housing and Manufactured
Housing) (HCV)
f. Increase PBV Housing Assistance Payment (HAP) Contract Length
(HCV)
g. Increase PBV Rent to Owner (HCV)
h. Limit Choice Mobility for PBV Units (HCV)
10. Family Self-Sufficiency Program with MTW Flexibility
a. Waive Operating a Required FSS Program (PH & HCV)
b. Alternative Structure for Establishing Program Coordinating
Committee (PH & HCV)
c. Alternative Family Selection Procedures (PH & HCV)
d. Modify or Eliminate the Contract of Participation (PH & HCV)
e. Policies for Addressing Increases in Family Income (PH & HCV)
11. MTW Self-Sufficiency Program
a. Alternative Family Selection Procedures (PH & HCV)
b. Policies for Addressing Increases in Family Income (PH & HCV)
12. Work Requirement
a. Work Requirement (PH)
b. Work Requirement (HCV)
13. Public Housing as an Incentive for Economic Progress (PH)
14. Moving On Policy
a. Waive Initial HQS Inspection Requirement (HCV)
b. Allow Income Calculations from Partner Agencies (PH & HCV)
c. Aligning Tenant Rents and Utility Payments between Partner
Agencies (PH & HCV)
15. Acquisition without Prior HUD Approval (PH)
16. Deconcentration of Poverty in Public Housing Policy (PH)
17. Local, Non-Traditional Activities
a. Rental Subsidy Programs
b. Service Provision
c. Housing Development Programs
[[Page 56180]]
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Appendix II
Specific requirements on safe harbors related to impact analyses
and hardship policies are provided in this Appendix.
Impact Analysis
The MTW agency must complete a written analysis of the various
impacts of the MTW activity. The MTW agency must prepare this
analysis: (1) prior to implementation of the MTW activity, if
required as a safe harbor; (2) for certain activities (Work
Requirements, Term-Limited Assistance, and Stepped Rent) on an
annual basis during the implementation of the MTW activity; (3)
prior to any Safe Harbor Waiver or Agency-Specific Waiver requests;
and (4) at the time the MTW activity is closed out, if an impact
analysis was previously required.
This analysis must consider the following factors, as
applicable:
1. Impact on the agency's finances (e.g., how much will the
activity cost, any change in the agency's per family contribution);
2. Impact on affordability of housing costs for affected
families (e.g., any change in how much affected families will pay
towards their housing costs);
3. Impact on the agency's waitlist(s) (e.g., any change in the
amount of time families are on the waitlist);
4. Impact on the agency's termination rate of families (e.g.,
any change in the rate at which families non-voluntarily lose
assistance from the agency);
5. Impact on the agency's current occupancy level in public
housing and utilization rate in the HCV program;
6. Impact on meeting the MTW statutory objectives of cost
effectiveness, self-sufficiency, and/or housing choice;
7. Impact on the agency's ability to meet the MTW statutory
requirements; and
8. Impact on the rate of hardship requests and the number
granted and denied as a result of this activity.
The MTW agency must have the initial impact analysis, which
analyzes potential impacts of the MTW activity, attached to the MTW
Plan-Expansion during the applicable public review period prior to
implementation of the MTW activity. For certain activities (Work
Requirements, Term-Limited Assistance, and Stepped Rent), an updated
impact analysis must be provided in each subsequent year. While MTW
activities are listed by waiver and specific activity name in
Appendix I, MTW agencies may combine activities together at the PHA
level in order to create more comprehensive initiatives. For such
comprehensive initiatives an MTW agency may submit a single impact
analysis. Should a larger initiative undergo a substantial change,
such as adding an activity, the MTW agency must reevaluate its
impact with a new impact analysis. This information must be retained
by the agency for the duration of the agency's participation in the
MTW demonstration program and available for public review and
inspection at the agency's principal office during normal business
hours.
Hardship Policy
The MTW agency must adopt a written policy for determining when
a requirement or provision of an MTW activity constitutes a
financial or other hardship for the family. The agency must include
this policy as an attachment to its MTW Plan-Expansion. The agency
may use a single hardship policy, as applicable, for multiple MTW
waivers or develop different hardship policies for different MTW
waivers as it finds appropriate. The agency must review its hardship
policy(s) with residents during its intake and recertification
processes. The agency must consider if a resident qualifies for a
hardship exemption at the time of a potential termination of
assistance that is due to an MTW activity.
When a resident requests a hardship exemption from a required
MTW activity, the agency must suspend the activity for the
household, beginning the next month after the request, until the MTW
agency has determined if the request is warranted. The agency shall
make the determination of whether a financial or other hardship
exists within a reasonable time after the family's request. If the
agency determines that a financial or other hardship exists, the MTW
agency must continue to provide an exemption from the MTW activity
at a reasonable level and duration, according to the agency's
written policy. If an agency determines that the request did not
meet its hardship standards, they must resume the MTW activity and
collect any retroactive rent, if applicable, through a reasonable
repayment agreement.
The agency's written policy(s) for determining what constitutes
financial hardship must include the following situations:
[ballot] The family has experienced a decrease in income because
of changed circumstances, including loss or reduction of employment,
death in the family, or reduction in or loss of earnings or other
assistance;
[ballot] The family has experienced an increase in expenses,
because of changed circumstances, for medical costs, childcare,
transportation, education, or similar items; and
[ballot] Such other situations and factors determined by the
agency to be appropriate.
The agency's written policies shall include a grievance
procedure that a family may request for second level review of
denied hardship requests.
The agency shall keep records of all hardship requests received
and the results of these requests and supply them at HUD's request.
This information must be retained by the agency for the duration of
the agency's participation in the MTW demonstration program and
available for public review and inspection at the agency's principal
office during normal business hours.
Appendix III
The statutory requirement that MTW agencies continue to ``serve
substantially the same number of families'' throughout participation
in the MTW demonstration program (STS Requirement) will be monitored
for MTW agencies in the MTW Expansion through the following
methodology, which adheres to the main themes and principles
described in the MTW Operations Notice. Since the funding
calculation for public housing (including Operating and Capital
Funds) is significantly different than the funding calculation in
the Housing Choice Voucher (HCV) program, the methodology for
calculating the STS Requirement for the public housing and HCV
programs will differ.
Public Housing
As described in Section 7.c.i of the MTW Operations Notice, HUD
will monitor public housing occupancy rates for MTW agencies. The
public housing occupancy rate will be determined by dividing the
total number of ``occupied'' units by the total number of
``standing'' units:
TOTAL OCCUPIED UNITS / TOTAL STANDING = MTW AGENCY OCCUPANCY RATE
The table below shows what public housing unit categories \39\
are currently included in the numerator and what public housing unit
categories are currently included in the denominator: \40\
---------------------------------------------------------------------------
\39\ Public housing unit categories and unit reporting in IMS/
PIC is provided in PIH Notice 2011-07, or successor notice.
\40\ Current monitoring of public housing occupancy rates for
all agencies is conducted according to the current HUD Agency
Priority Goal (APG) reporting categories. Should this change, MTW
agencies would be subject to the same monitoring of public housing
occupancy rates as all non-MTW agencies.
[[Page 56202]]
----------------------------------------------------------------------------------------------------------------
Total occupied units Total standing units
Public housing unit category/sub-category (numerator) (denominator)
----------------------------------------------------------------------------------------------------------------
Occupied--Assisted Tenant................................... X X
Occupied--Employee.......................................... X X
Occupied--Non-Assisted Tenant Over Income................... X X
Occupied--Police Officer.................................... X X
Occupied--Unauthorized...................................... ........................ X
Vacant--Undergoing Modernization............................ ........................ X
Vacant--Court Litigation.................................... ........................ X
Vacant--Natural Disaster.................................... ........................ X
Vacant--Casualty Loss....................................... ........................ X
Vacant--Market Conditions................................... ........................ X
Non-Dwelling--Anti-Drug Crime............................... X X
Non-Dwelling--Self-Sufficiency Activities................... X X
Non-Dwelling--Other Resident Activities..................... X X
Non-Dwelling--Moving to Work................................ X X
Non-Dwelling--Administrative................................ ........................ X
Non-Dwelling--Resident Amenities............................ ........................ X
Non-Dwelling--Authorized.................................... ........................ X
Demo-Dispo (Approved and Vacant)............................ ........................ X
Vacant--Vacant.............................................. ........................ X
----------------------------------------------------------------------------------------------------------------
Annual Public Housing STS Compliance
To be compliant with the public housing portion of the STS
Requirement, the MTW agency's public housing occupancy rate must be
at or above 96%, unless otherwise approved by HUD. HUD may consider
the MTW agency's efforts to reposition its public housing as an
allowable reason to temporarily dip below 96% occupancy. Any
allowable dips must be time-limited and described and approved by
HUD.
Each year, HUD will advise the MTW agency of its compliance
under the STS Requirement in the public housing program for the
prior calendar year. This information will also be made available on
HUD's website. In instances where the MTW agency's public housing
occupancy rate falls below 96%, HUD may require, at its discretion,
that the MTW agency enter into an Occupancy Action Plan to address
the occupancy issues. The Occupancy Action Plan will include at a
minimum: the cause of the occupancy issue, the intended solution,
and reasonable timeframes to address the cause of the occupancy
issue.
The exception to the above is for MTW agencies that are below
96% public housing occupancy when they receive MTW designation. MTW
agencies that are below 96% occupied when they are designated have
two years, or more as determined by HUD, to come into compliance
before they are required to enter into and adhere to an Occupancy
Action Plan as described above.
Failure to adhere to the Occupancy Action Plan may result in
enforcement processes detailed in the MTW amendment to the MTW
agency's Annual Contributions Contract (ACC Amendment).
Housing Choice Voucher Program
To be compliant with the STS Requirement in the HCV program, the
MTW agency will be required to house at least 90% of the families it
would be able to house based on the HCV Housing Assistance Payment
(HAP) dollars it receives each year.
Establishing the Annual HCV STS Target
In the first full calendar year that the agency is an MTW
agency, the Annual HCV Capacity of the MTW agency will be calculated
based on the total Budget Authority of HCV HAP funds (including
Special Purpose Vouchers) in that year and the per unit cost (PUC)
from the calendar year prior to the agency's entry into the MTW
Demonstration Program, adjusted for inflation.
First Full Calendar Year in MTW--Step 1
HCV PUC FROM CALENDAR YEAR PRIOR TO MTW x ANNUAL INFLATION FACTOR(S)
= ``ADJUSTED BASELINE YEAR PUC''
First Full Calendar Year in MTW--Step 2
TOTAL BUDGET AUTHORITY OF HCV HAP FUNDS / ADJUSTED BASELINE YEAR PUC
= ``ANNUAL HCV CAPACITY''
For all subsequent MTW years, the PUC established from the
calendar year prior to MTW designation will continue to be inflated
annually to determine each MTW year's Annual Adjusted PUC. The
Annual HCV Capacity of the MTW agency will be calculated based on
the total Budget Authority of HCV HAP funds in that year and the
Annual Adjusted PUC from the prior calendar year, adjusted for
inflation.
Subsequent Calendar Year in MTW--Step 1
``ADJUSTED BASELINE YEAR PUC'' (from prior year) x ANNUAL INFLATION
FACTOR = ``ANNUAL ADJUSTED BASELINE YEAR PUC'' (new for current
year)
Subsequent Calendar Year in MTW--Step 2
TOTAL BUDGET AUTHORITY OF HCV HAP FUNDS IN CALENDAR YEAR / ANNUAL
ADJUSTED BASELINE YEAR PUC'' (new for current year) = ``ANNUAL HCV
CAPACITY'' (new for current year)
Because MTW agencies must serve at least 90% of the current year
Annual HCV Capacity to be compliant with the HCV portion of the STS
Requirement, the Annual HCV STS Target will then be established.
``ANNUAL HCV CAPACITY'' x 90% = ``ANNUAL HCV STS TARGET''
Establishing the Number of Families Housed in the HCV Program
To determine the number of families that count towards the STS
Requirement in the HCV program each year, HUD will consider families
housed through both the HCV program and any local, non-traditional
program.
The calculation for determining total families housed in the HCV
program is the total unit months leased divided by twelve.
The calculation for determining total families housed in the
local, non-traditional housing program includes two types of housing
as provided in the waivers appendix of the MTW Operations Notice.
These are also discussed in detail in PIH Notice 2011-45 (or its
successor) titled ``Parameters for Local, Non-Traditional Activities
under the Moving to Work Demonstration Program.''
[ballot] The first type of housing is a local, non-traditional
rental subsidy program. Here, the total unit months of housing
provided over the calendar year will be utilized and divided by
twelve. Families that receive services only will not be included.
[ballot] The second type of housing is a local, non-traditional
housing development program. Here, HUD will first take the total
investment of MTW funds in developing these types of units. This
total dollar amount will be divided by the applicable HUD-published
Total Development Cost (TDC). The resulting number of units will
then count as families housed each year from when a certificate of
occupancy is issued through the term of the affordability
restrictions. Families that receive services only will not be
included.
[[Page 56203]]
Annual HCV STS Compliance
Consistent with the statutory language of serving
``substantially'' the same number of families, the MTW agency will
be considered compliant with the STS Requirement in the HCV program
if it houses families through the HCV and local, non-traditional
program at or above the Annual HCV STS Target. Again, the Annual HCV
STS Target is 90% of the Annual HCV Capacity.
The MTW agency may dip below the Annual HCV STS Target for
certain circumstances, as approved by HUD. Any allowable dips must
be time-limited and described and approved by HUD.
Each year, HUD will advise the MTW agency of its compliance
under the STS Requirement in the HCV program for the prior calendar
year. This information will also be made available on HUD's website.
In the event an MTW agency does not meet the Annual HCV STS
Target, the MTW agency will have two years from the date it is
notified to come into compliance. If, two years after notification
of the deficiency the MTW agency still does not meet the Annual HCV
STS Target, then the MTW agency will be required to expend all HAP
dollars only on HAP. Once the MTW agency achieves 93% expenditures
of Budget Authority on HAP, the MTW agency will be able to again use
its HCV HAP funds flexibly. Failure to adhere to this may result in
enforcement processes detailed in the MTW amendment to the MTW
agency's Annual Contributions Contract (ACC Amendment).
Adjustments to the HCV Annual Capacity
If the MTW agency believes that its Annual Adjusted Baseline
Year PUC is no longer accurate, it may request an adjustment to this
figure. Such a request may not be made more than once every three
calendar years. The MTW agency must submit such a request to HUD
along with a justification for the adjustment (for example, rising
costs, special market conditions, public housing repositioning). HUD
will then review the request and either approve or deny it. If
approved, HUD will change the PUC appropriate to the circumstances
of the MTW agency (as determined by HUD). This new PUC will then be
adjusted by the inflation factor every year and used to determine
compliance with the HCV portion of the STS Requirement going
forward.
[FR Doc. 2026-17777 Filed 8-31-26; 8:45 am]
BILLING CODE 4210-67-P
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This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.