HUD Notice on Implementation of FY 2014 Appropriations Provisions

On June 25, 2014, HUD published a Notice establishing the terms and conditions by which HUD will implement changes to the statutory definition of a “public housing agency” (PHA), the frequency of housing inspections, the statutory definition of “extremely low-income,” and utility allowances for tenant-paid utilities. The effective date of the Notice is July 1, 2014.


The 2014 Appropriations Act includes five statutory changes to the Housing Act of 1937 that are designed to reduce administrative burdens on PHAs, enable PHAs to better target assistance to families in need of such assistance, and reduce Federal costs. The only statutory change that is applicable to the multifamily project-based Section 8 program is the added definition of “extremely low-income” in Section 238 of the Act. For all other statutory changes, the changes provided in the HUD Notice apply only to the public housing and Section 8 voucher programs.

 PHA Consortia

Section 212 of the 2014 Appropriations Act amends the definition of a PHA to include a consortium of such entities.

 Biennial Inspections

Section 220 allows PHAs to comply with the requirement to inspect assisted dwelling units during the term of a housing assistance payment (HAP) contract by conducting biennial housing quality standard inspections (HQS) instead of annual inspections. PHAs are also able to utilize alternative inspection methods to demonstrate that housing meets the housing quality requirements under the voucher program.

PHAs are still required to conduct an initial inspection, prior to entering into a HAP contract, and interim inspections, if a family or government official notifies the PHA of a unit’s failure to comply with HQS.

This section is immediately effective for any unit under HAP contract where the PHA has conducted an HQS inspection within the 12 months preceding 7/1/14. If the most recent inspection occurred more than 12-months prior to 7/1/14, the PHA is required to conduct an annual HQS inspection for that unit.

If PHAs desire to conduct inspections more frequently than on a biennial basis, they may do so.

A PHA may comply with the biennial inspection requirement by relying upon an inspection conducted by another housing assistance program. If there is reliance on another program, the PHA must identify the alternate program in its administrative plan.

Other acceptable programs for inspection standards include the HOME Program, the LIHTC Program, and other inspections by HUD. If a property is inspected under an alternative inspection method that does not employ a pass/fail determination for the inspections – e.g., the LIHTC program – then the PHA must review the deficiencies noted in the alternative inspection to determine whether any deficiency would have resulted in a “fail” score under HQS.


Extremely Low-Income

Section 238 creates a statutory definition of “extremely low-income families,” which is defined as very low-income families whose incomes do not exceed the higher of the Federal poverty level or 30% of area median income.

This provision affects the ELI targeting requirements for the public housing, housing choice voucher (HCV), project-based voucher (PBV), and multifamily project-based Section 8 programs. As of July 1, 2014, compliance with the targeting requirements under each of these programs is required and the new definition of ELI is effective. As of this date, no family on a waiting list may be skipped over if that family meets the new definition of ELI as enacted by Section 238.

For the multifamily project-based Section 8 programs, the contract administrator must ensure that families qualifying at ELI income occupy not less than 40 percent of the Section 8-assisted dwelling units that become available.

HUD’s office of Policy Development and Research has calculated the new income limits for extremely low-income families, using the new ELI definition. These new limits are available online at

Operators of these properties should immediately download and put into place the revised income limits for their properties.




Utility Allowances


Section 242 establishes a cap on the utility allowance for families leasing oversized units. The cap is based on family size rather than the size of the unit leased, with the ability to set a higher amount to provide a reasonable accommodation to the family of a person with disabilities.