NLIHC Gets Copy of HUD Project Based Rent Budget Needs Explanation and a Written Legal Opinion from HUD.

The HUD Chief Financial Officer was heavily criticized during a prior House Financial Services Committee hearing for a less than clear explanation and defense of the adequacy of the FY 2008 HUD projections for project based assistance needs. See prior video HERE.

The National Low Income Housing Coalition (NLIHC) has obtained from Congress the correspondence from HUD (HERE) required by the Committee as a follow up to the prior hearing. It includes, FINALLY, a written legal opinion on why adjustments to the previously used contract form were require in order to comply with Anti Deficiency Act requirements and HUD answers to a number of questions posed by the Committee. My reading of SOME of the answers provided:

1. HUD did not request enough funds to fund a 12 month renewal of contracts in FY 2008. Funding requested was sufficient only for project needs from Oct -Sept 2008 with the addition of a couple of months of forward funding for payments due in Oct and November. HUD ONLY started this practice for expirations that occurred in the last quarter of FY 2007 based on a new verbal legal opinion that it could not fund 12 months worth of project needs.
2. HUD says it does NOT know how many owners used reserve funds to meet project needs while they waited for HUD to approve funding in FY 2007.
3. HUD says it does not know its FY 2009 project based rental assistance needs.
4. HUD says that if appropriations are insufficient to pay for project based rental assistance, it would NOT have the current authority to provide tenant based rental assistance to tenants. HUD does say that where it is required to provide enhanced tenant based rental assistance (HAP contract termination for example) it has NO discretion to provide that assistance, it MUST provide the enhanced tenant rental assistance.
5. HUD refused to provide information on the timeliness of payments saying that it would take to much staff time to provide those estimates.
6. Page 14 of the report includes a table showing contract renewals by month, for more than 14,470 project based rental assistance contracts and more than 1 million units.
7. A HUD contractor is nearing completion of recommendations for a process to estimate future rental housing assistance needs. This estimate will be based on prior rates of disbursements at the project level.