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Latest HUD News
March 11, 2013

FY 2013 Section 8 Project Based Rental Assistance Under the Sequestration

February 25, 2013

The following update on the litigation related to HUD’s Performance-Based Contract
Administration NOFA was just received from HUD:


“Although the court had originally indicated that it would provide a verbal ruling at
yesterday’s hearing (February 19, 2013), due to the complexity of the program and
issues involved, the court requested more time to consider the arguments. Because the
current PBCA contracts have been extended through June 2013, the court stated that it
would make a decision before the end of June. The court has also reserved the right to
call parties back for a supplemental briefings, though it did not set a definite schedule.”


Please know that NAHC will continue to provide you with the latest information on the
PBCA program as we receive it.

New HUD Housing Notice 2012-14 
Click here for Residual Receipts
May 30, 2012
HUD Changes to Section 8 Renewal Policy Guide Book
Click here to see changes
May 2, 2012
Guidelines on Addressing Infestations in HUD-insured and Assisted 
Multifamily Housing


April 3, 2012

As part of NAHC’s online resource collection, click here for the various Housing Handbooks for cooperatives from the US Department of Housing and Urban Development.

Scroll down to:
  • 4550.1 “Basic Cooperative Housing Insurance”
  • 4550.2 “Pre-Sale Management Type Cooperatives”
  • 4550.3 “Existing Construction – Cooperative Housing”
  • 4550.4 “Supplementary Loan – Cooperative Housing”
  • 4550.5 “Investor-Sponsor and Nonprofit Sponsorship of Cooperative Housing”
  • 4550.6 “Sales Type Cooperatives”
March 13, 2012 
HUD Funding:
The Congressional “Super Committee” was tasked with coming up with $1.5 trillion in debt
savings over a ten year period. Their failure to do so, has forced agencies, such as the
Department of Housing and Urban Development (HUD) to implement mandatory budget
cuts to its fiscal year (FY) 2012 budget. Overall funding for the department will be down
$1.1 billion from the net levels in FY 2011. Expect to see additional across the board cuts
of 7% in 2013 and 8% in 2014.
Performance Based Contract Administration (PBCA):
On Friday, March 1, HUD issued a Notification of Funding Availability (NOFA) for the PBCA
Program for the administration of Project-Based Section 8 Housing Assistance Payment
Contracts. The closing date for applications is June 11, 2012. HUD anticipates that Annual
Contributions Contracts (ACCs) awarded under this NOFA will become effective on October
1, 2012. This contract will be a two year term. See link for more information:
Real Estate Assessment Center (REAC)
The REAC will be issuing trends found during previous REAC inspections. New and clearer
definitions will be issued and new software (4.0 vs. the current 2.3) will be implemented by
the summer of 2012. There will be a point cap for deficiencies (e.g., a 7.5 cap on site
deficiencies, a 10 point cap on project wide deficiencies, a 10 point cap on common areas
and a 5 point cap on unit deficiencies). A REAC pilot program on reducing the number of
multiple inspections will be conducted in six states.
On the REAC Financial side, all audits are to be reviewed for project financial health. If the 
project does not pass the REAC benchmarks, the project must submit a financial plan. HUD
is discussing issuance of internal financial benchmarks.
Surplus Cash:
REAC Financial audits are up to date. New guidance will be issued on the old and new
programs. If you receive a finding indicating that you spent money from surplus cash when
it should have been from the replacement reserve account, you may appeal for a waiver at
the local HUD hub.
Section 8 Renewal:
New Section 8 Renewal Guidance will be issued soon. Highlights include:
  • No more extension of Section 8 contracts (only Termination and Renewals);
  • New rent Comps for Tax Credit deals;
  • Option 4 (Exception Project Renewals) will use current debt service and not original debt
    service and they must use Rent Comparability Studies (RCS);
  • Appraisers may need to produce more justifications for higher rents.

Expect HUD to issue additional updates on an ongoing basis.

Operating Cost Adjustment Factor (OCAF)
The automatic OCAF was released nationwide on March 1, 2012.
Rent Comparability Study (RCS)
The appraiser must submit further documentation to justify any proposed rents over 110% of
Fair Market Rent (FMR) in your area. The appraiser must justify the higher rent.
HUD Other:
HUD’s Green initiatives can result in a 27% reduction of energy costs.
New guidance on Replacement and Reserve will be issued soon.
New Guidance on 2530 will be issued soon.
A pilot for the 223(f) loan program to reduce processing time and protocol is expected to be
released in May of 2012. The rehab limits will be increased to $40,000.00 per unit.
HUD will be conducting training sessions on preservation programs in some cities and by
satellite. Go to
www.Tdpsvs.com/hud for training material and information.
The update to the 4350.3 Handbook is expected to be issued soon...