[Federal Register: January 27, 2009 (Volume 74, Number 16)]
[Rules and Regulations]
[Page 4831-4842]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr27ja09-4]
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Part II
Department of Housing and Urban Development
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24 CFR Parts 5, 92, and 908
Refinement of Income and Rent Determination Requirements in Public and
Assisted Housing Programs; Final Rule
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
24 CFR Parts 5, 92, and 908
[Docket No. FR-4998-F-02]
RIN 2501-AD16
Refinement of Income and Rent Determination Requirements in
Public and Assisted Housing Programs; Final Rule
AGENCY: Office of the Secretary, HUD.
ACTION: Final rule.
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SUMMARY: This final rule revises HUD's public and assisted housing
program regulations to implement the upfront income verification (UIV)
process and to require the use of HUD's Enterprise Income Verification
(EIV) system by public housing agencies (PHAs), and multifamily housing
owners and management agents (O/As), when verifying the employment and
income of program participants at the time of all reexaminations or
recertifications. This final rule will ensure that deficiencies in
public and assisted housing rental determinations are identified and
cured. This final rule is consistent with HUD's comprehensive strategy
under the Rental Housing Integrity Improvement Project (RHIIP)
initiative to reduce the number and dollar amount of errors in HUD's
rental assistance programs. This final rule follows publication of a
June 19, 2007, proposed rule, and makes certain changes at this final
rule stage in response to public comment and further consideration of
certain issues by HUD.
DATES: Effective Date: March 30, 2009.
FOR FURTHER INFORMATION CONTACT: For Office of Public and Indian
Housing programs, contact Nicole Faison, Director of the Office of
Public Housing Programs, Department of Housing and Urban Development,
451 Seventh Street, SW., Room 4226, Washington, DC 20410, telephone
number 202-708-0744. For Office of Housing Programs, contact Gail
Williamson, Director of the Housing Assistance Policy Division,
Department of Housing and Urban Development, 451 Seventh Street, SW.,
Room 6138, Washington, DC 20410, telephone number 202-402-2473. (These
are not toll-free numbers.) Persons with hearing or speech impairments
may access these numbers through TTY by calling the toll-free Federal
Information Relay Service at 800-877-8339.
SUPPLEMENTARY INFORMATION:
I. Background
Sections 6 and 8 of the United States Housing Act of 1937 (42
U.S.C. 1437d and 1437f), section 202 of the Housing Act of 1959 (12
U.S.C. 1701q), sections 221(d)(3), 221(d)(5), and 236 of the National
Housing Act (12 U.S.C. 1715l(d) and 1715z-1), section 811 of the
Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 8013), and
section 101 of the Housing and Urban Development Act of 1965 (12 U.S.C.
1701s) authorize HUD to provide financial assistance in the form of
rent subsidies for participants in HUD's public and assisted housing
programs. The regulations implementing this authority are located in
parts 5, 236, and 891 of Title 24 of the Code of Federal Regulations.
As part of the procedures for determining proper rent subsidies,
PHAs and O/As must conduct income verifications for applicants and
participants in covered HUD programs. As a condition for obtaining
financial assistance, HUD requires the disclosure and verification of
Social Security Numbers, Employer Identification Numbers, and
citizenship or eligible immigration status. With few exceptions, HUD
cannot make financial assistance available to applicants and
participants who do not have eligible status with respect to
citizenship or who have noncitizen immigration status. However,
temporary deferrals of financial assistance termination may be
allowable in limited circumstances.
In addition to these eligibility requirements, HUD requires the
determination of annual and adjusted income of applicants and
participants who apply for or receive assistance in the public and
assisted housing programs. In part, ``annual income'' means all income
amounts that a family anticipates to receive in the 12-month period
following admission or a participant's reexamination or recertification
effective date. Furthermore, PHAs and O/As are required to
electronically submit family characteristics data to HUD through
certain forms.
II. The June 19, 2007, Proposed Rule
On June 19, 2007, at 72 FR 33844, HUD published for public comment
a proposed rule to revise HUD's public and assisted housing program
regulations, by requiring PHAs and O/As to conduct UIV of participants
in assistance programs through the use of HUD's EIV system. The purpose
of the proposed regulatory amendments was to address HUD's priority of
reducing errors, including overpayment of subsidy to PHAs and O/As,
caused by incorrect income determinations and rent calculations in
HUD's public housing program, and in tenant-based and project-based
rental assistance programs.
For more detail on the proposed revisions to HUD's public and
assisted housing program regulations, please see the preamble of the
June 19, 2007, proposed rule.
III. This Final Rule; Changes to the June 19, 2007, Proposed Rule
In response to public comments, discussed in section IV of this
preamble, and following further consideration of several aspects of the
proposed rule, HUD has made certain changes at this final rule stage.
This section of the preamble highlights some of the more significant
changes.
1. Social Security Numbers of participants. The final rule provides
that each participant whose initial determination of eligibility was
before the effective date of the final rule must submit their Social
Security Number at the next interim or regularly scheduled
reexamination or recertification.
2. Social Security Numbers of new household members. The final rule
provides that if the participant's household adds a new member,
including a child or children, the participant must submit the new
member's Social Security Number at the time of the request for
assistance or at the time of processing the interim reexamination/
recertification of family composition.
3. Waiting list position retained despite failure to provide Social
Security Number. The final rule has been revised to allow applicants
who cannot provide Social Security Numbers for all family members to
retain their place on the waiting list for the program; however, all
members of the household must provide appropriate documentation of his
or her Social Security Number before the household is admitted into the
program. The final rule removes the proposed rule language permitting
the applicant to participate in the program, provided it submits to the
processing entity appropriate documentation within 60 days from the
date of admission into the program. HUD recognizes, however, that
homeless persons face additional challenges in obtaining appropriate
documentation of their Social Security Number. Thus, in this final
rule, HUD has created an exception for applicants receiving assistance
under the section 8 Moderate Rehabilitation Single Room Occupancy
Program for Homeless Individuals. Such applicants have 90 days after
admission into the program to provide appropriate documentation, with
discretion given to the processing
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entity to extend this period for an additional 90 days.
4. Removal of pro-rata rental assistance provisions. The proposal
to prorate rental assistance for family members who do not have Social
Security Numbers was not adopted by the final rule.
5. Required use of HUD's EIV system. The final rule requires PHAs
and O/As to implement and use HUD's EIV system for verifying income of
current participants only. For multifamily housing O/As, implementation
of the use of EIV will commence 6 months after the effective date of
this final rule to allow them additional time to become as familiar
with using the EIV system as their PHA counterparts and to prepare for
the full implementation of EIV. The public may view the System of
Records notice and Privacy Impact Assessment for the EIV system at
http://www.hud.gov/offices/cio/privacy/documents/fed_reg_sornotice_
eiv.pdf and http://www.hud.gov/offices/cio/privacy/pia/eiv.pdf,
respectively.
6. Required verification of U.S. citizenship or nationality. The
final rule requires that the responsible entity obtain verification of
the signed declaration of U.S. Citizenship or U.S. nationality.
7. Discretion to use either actual past income or projected future
income. The final rule gives PHAs and O/As discretion to use either
actual past income or projected future income for purposes of
calculating annual income.
8. Calculation of annual income under the HOME program. The final
rule requires participating jurisdictions in the HOME Investment
Partnerships Act Program (HOME Program) to determine the time period
for calculating a family's annual income in accordance with Sec.
5.609. However, participating jurisdictions may continue to use one of
the three definitions of ``annual income'' permitted by Sec.
92.203(b).
9. Other technical changes. In addition to the changes described
above, HUD has taken the opportunity afforded by the final rule to make
other nonsubstantive, technical, changes to the regulatory language for
purposes of clarity and organization.
IV. Discussion of Public Comments Received on the June 19, 2007,
Proposed Rule
The public comment period for the June 19, 2007, proposed rule
closed on August 20, 2007. HUD received 34 public comments. HUD
received public comments from a variety of sources, including:
Individuals; PHAs; national PHA and redevelopment organizations;
affordable housing advocacy associations; and immigration policy
groups.
The following provides a summary of the significant issues raised
by the public commenters on the June 19, 2007, proposed rule, and HUD's
response to those issues.
A. General Comments
Comment: Three commenters, although generally in support of HUD's
goal of reducing errors in the calculation of rental subsidy, wrote
that the proposed rule would result in increased administrative burdens
and requirements on PHAs and O/As. Examples of increased administrative
burdens include: Changes in software, model leases, and training;
increases in document collection responsibilities by PHAs, individuals,
and households; and extensive revisions to current operating
procedures.
HUD Response: HUD is sympathetic to concerns regarding the
administrative burdens imposed by its regulations, and strives to
minimize such burdens in the development of new regulatory policy. HUD
does not agree with the commenters that the regulatory changes will
increase administrative burden. Rather, the final rule will, in many
instances, reduce the administrative requirements for PHAs and O/As.
For example, the income verification processes will be reduced with the
use of the EIV system. PHAs and O/As in many instances will not be
required to obtain written verification of employment, wages,
unemployment compensation, and Social Security benefits from third-
party income sources, so long as the PHA or O/A obtains and maintains
documentation of EIV system consultation/usage. PHAs and O/As may
accept tenant-provided documentation, and this documentation will meet
HUD's requirement for obtaining third-party verification when
supplemented by the EIV income report and/or, for PHAs, the EIV
individual control number, in the tenant file.
Comment: Two commenters urged HUD to delay development of the final
rule until the future of the section 8 Voucher Reform Act (SEVRA, H.R.
1851) in Congress is clear. SEVRA would make several major policy and
procedural changes to HUD's housing assistance programs. The commenters
suggested that HUD consider holding off on rulemaking until it is clear
what will happen legislatively, or that HUD limit the changes in the
regulation to the bare minimum of what it believes is necessary, in
order to minimize the disruption and costs that would otherwise result
from having to implement two sets of potentially conflicting changes
within a short time frame.
HUD Response: The purpose of this rulemaking is to strengthen
income and rent integrity, thereby reducing overpayments. To delay
issuance of the final rule would delay significant reductions in the
level of improper payments within HUD's rental assistance programs.
B. Comments Specific to Proposed Amendments to Sec. 5.216
Comment: Two commenters questioned HUD's authority under section
165 of the Housing and Community Development Act of 1987 (42 U.S.C.
3543) to deny housing assistance to an otherwise eligible individual or
household because the individual has not been assigned a Social
Security Number. The commenters also wrote that the changes to Sec.
5.216 in the proposed rule contradict HUD's previous interpretation of
42 U.S.C. 3543, in which HUD required the disclosure only of assigned
Social Security Numbers.
HUD Response: HUD has not revised the rule in response to these
comments. HUD has determined that the legal authority exists to deny
housing assistance to individuals and households who have failed to
disclose his or her Social Security Number. HUD believes this
regulatory change is essential to assuring the financial integrity of
its rental assistance programs.
Typically, individuals who are U.S. citizens or who are in this
country legally possess a Social Security Number. Based on HUD's
analysis of participant data in its public and Indian housing (PIH)
programs, there are 290,043 individuals who have invalid Social
Security Numbers \1\ and 54,612 individuals who have not disclosed a
Social Security Number. Thus, 344,655 individuals out of a total of
7,570,271 individuals (nationwide), or 5 percent of individuals, may
not have disclosed an accurate and complete Social Security Number. To
prevent fraud and abuse within HUD rental assistance programs, HUD is
seeking to terminate assistance to those individuals who have not
disclosed a valid Social Security Number.
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\1\ The Social Security Administration (SSA) has determined that
38,269 of these individuals have an invalid Social Security Number
(SSN). Some of these errors may be attributed to PHA data entry
errors. Through its internal HUD pre-screening process, HUD has
determined that the PHA-reported SSN for the remaining 251,774
individuals is invalid because the reported number does not meet SSA
standards as a valid SSN.
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Based on HUD's analysis of participant data in its Office of
Housing programs, there are 29,074 individuals out of a total 2,186,268
individuals nationwide who have invalid Social Security Numbers (the
Social Security Number for 1,542 of these individuals is invalid
because the reported number does not meet the standards of the Social
Security Administration (SSA) as a valid Social Security Number, and
the remaining 27,532 are individuals who have not disclosed a Social
Security Number). Thus, 1.3 percent of individuals may not have an
accurate and complete Social Security Number. To prevent fraud and
abuse within HUD's multifamily rental assistance programs, HUD is
seeking to terminate assistance to those individuals who have not
disclosed a valid Social Security Number. It should be noted that HUD's
use of Social Security Numbers is for the purpose of ensuring that
limited federal resources serve as many eligible individuals and
families as possible. As previously publicized in its Federal Register
notices, HUD has implemented appropriate privacy safeguards to protect
each Social Security Number collected and utilized for identity and
income-matching purposes. The public should be assured of HUD's
commitment to safeguarding individuals' private information.
Comment: One commenter wrote that HUD's proposal to prorate
assistance for households in which one or more members do not have an
assigned Social Security Number is at cross-purposes with current
statutory (42 U.S.C. 1436a) and regulatory (24 CFR 5.518(b))
authorities that permit a temporary deferral of full assistance to
households who have a refugee or asylum application pending final
adjudication.
HUD Response: As noted above in this preamble, HUD has, upon
reconsideration, decided not to make final the provisions of the
proposed rule regarding the proration of assistance based upon failure
to submit a Social Security Number.
HUD must comply with the provisions of 42 U.S.C. 1436a, which
provide restrictions on use of assisted housing by non-resident aliens.
Eligible for financial assistance under this statute are U.S. residents
who are refugees (or aliens who are lawfully present in this country
pursuant to admission under section 207 of the Immigration and
Nationality Act (8 U.S.C. 1157)), and aliens who are granted asylum
under section 208 of this statute (8 U.S.C. 1158). Aliens in these
groups are covered under 24 CFR 5.500. These individuals would have
Social Security Numbers.
Until the family members have been determined to have eligible
status (i.e., their applications are no longer pending), they are not
authorized under the regulations to receive rental assistance. Such
individuals may be eligible for a temporary deferral of termination of
assistance--i.e., temporary deferral of eviction. Proration of rental
assistance, however, is not an option if the family member(s) do/does
not have eligible status, since there would be no assistance to
prorate.
Comment: Three commenters urged HUD to permit a phase-in period for
the required disclosure and verification of Social Security Numbers,
especially for children under 6 years of age who do not have Social
Security Numbers or cards. One commenter suggested a 2-year
implementation period, in order to provide for adequate notification of
participants.
HUD Response: Based on HUD's analysis of participant data, there
are a small number of children under the age of 6 without a Social
Security Number. The proposed rule provided for a phase-in period of
not more than one year. Upon the effective date of the final rule, PHAs
and O/As must notify the affected households of this policy. As of
August 21, 2008, there are approximately 62,246 individuals under the
age of 6 who would be impacted by the final rule. In the Office of
Housing's programs, as of September 9, 2008, there are 21,083
individuals under the age of 6 who will now be required to have a
Social Security Number as a result of the final rule. Based on the
minimal amount of time it takes to apply for and receive a Social
Security Number and card, it is in the best interest of HUD to limit
the phase-in period to no more than one year.
Comment: One commenter suggested that, if applicants for housing
assistance must disclose their Social Security Number at the time of
application, the same procedure should apply to new household members
seeking to become participants, rather than forcing them to wait until
the next interim or regularly scheduled examination.
HUD Response: HUD agrees with this comment, and has incorporated
this suggestion into the final rule.
C. Comments Specific to Proposed Amendments to Sec. 5.218
Comment: Four commenters raised the issue about the effect of
proposed revisions to Sec. 5.218 on ``mixed families,'' defined as
those households that have a member who is unable to obtain
documentation of a Social Security Number. Because proposed Sec. 5.218
does not allow for proration of housing assistance to applicants, the
commenters expressed concern that the final rule would exclude such
mixed families from housing assistance programs, even using a prorated
assistance structure.
HUD Response: The final rule has been revised to allow applicants
who cannot provide Social Security Numbers for all family members to be
admitted to the waiting list; however, the head of household must
disclose his or her Social Security Number. In addition, all members of
the household must disclose his or her Social Security Number before
the household is admitted to assisted housing.
Comment: Four commenters wrote that the language concerning
proration of assistance in Sec. 5.218 and the interplay between the
assistance provisions in Sec. 5.216 and Sec. 5.218 was confusing. For
example, proposed Sec. 5.216 would require the disclosure of Social
Security Numbers and verification and documentation for all household
members. However, proposed Sec. 5.218 would permit ``mixed participant
households'' to receive prorated housing assistance when the ineligible
person is residing in the unit.
HUD Response: HUD agrees with this comment, and has revised Sec.
5.218 to remove references to proration of assistance, and references
to mixed families.
Comment: One commenter agreed that proration of assistance can be
appropriate where some, but not all, household members provide Social
Security Numbers with appropriate documentation and verification.
However, the commenter also suggested that PHAs and owners should
inquire into whether there may be extenuating circumstances that
warrant other, more appropriate, relief.
HUD Response: The final rule provides ample time for affected
parties to disclose and submit adequate documentation of his or her
SSN, and references to proration have been removed.
Comment: One commenter suggested that the final rule should more
clearly give PHAs the right to deny participation in the assisted
housing programs unless and until all Social Security Numbers have been
submitted and documented for each household member.
HUD Response: HUD has not revised the rule in response to these
comments. The change suggested by the commenter might have the
unintended consequence of creating vacancies or homelessness as a
result of current participants not having a Social Security Number. The
intent of the final rule is to notify
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affected families and require a specified time frame to submit the
Social Security Numbers.
D. Comments Specific to Proposed Amendments to Sec. 5.233
Comment: Many commenters expressed concerns over the proposed
mandated use of upfront income verification techniques, either through
use of HUD systems (such as the EIV system) or by implementing direct
computer matching agreements with a federal, state, or local government
agency or a private agency. The commenters specifically noted current
problems with the EIV system, such as: The significant lag time in the
provision of income data, especially for new applicants; a restriction
on the use of income data older than 12 months; and the inability to
verify certain types of income through EIV, including asset
information, self-employment income, and other government assistance.
The commenters wrote that HUD should perfect the EIV system, including
addressing the aforementioned problems, before mandating its use.
HUD Response: HUD has taken steps to enhance the performance of its
EIV system. Improvement of the EIV system is an ongoing process, and
HUD welcomes comments and suggestions from PHAs and O/As on possible
future changes to the system. As noted above in this preamble, the
final rule requires use of the EIV system for verifying income sources
maintained in the EIV system of current participants only. The use of
the EIV system will be required to ensure that participants have
disclosed all income sources that are verifiable through HUD computer-
matching programs.
Comment: Two commenters wrote that mandating UIV use would be cost-
prohibitive. One commenter wrote that small PHAs will not have the
administrative funds necessary to pay for computer-matching agreements
with other agencies. One commenter requested that Sec. 5.233 not be
applied to programs administered or sponsored by nonprofit housing
agencies. By requiring the use of a particular vendor or software, HUD
would be increasing costs for small nonprofit housing providers, and
rents are not sufficient to support these additional costs.
HUD Response: HUD is sympathetic to the cost concerns raised by the
commenters and has revised the rule to address this issue.
Specifically, the final rule requires PHAs and O/As to use HUD's EIV
system, which HUD provides to program administrators at no cost.
Comment: One commenter suggested that there is no statutory
authority for portions of the data available in the EIV system to be
made readily accessible to multifamily property owners and contract
agents who administer HUD's multifamily housing programs. The commenter
noted that, although HUD and PHA representatives may have direct access
to wage, employment, and Social Security income data, such access by
multifamily owners or agents should be granted only after notice-and-
comment rulemaking.
HUD Response: HUD has not revised the rule in response to this
comment. Sections 453(j)(7)(E)(iv)(I) and (II) of the Social Security
Act (42 U.S.C. chapter 7) authorize HUD to disclose information from
the computer-matching program to a private owner, a management agent,
and a contract administrator after appropriate safeguards have been put
in place.
Comment: One commenter expressed concern about the ability to share
tenant or participant EIV data with affected tenants or participants,
even when an adverse action is being taken against the tenant or
participant based on the EIV data. The commenter suggests that HUD add
the following language to Sec. 5.233, which is currently found in HUD
Handbook 4350.3, REV-1, CHG-2: ``The applicant's or tenant's file
should be available for review by the applicant or tenant upon request
or by a third party who provides signed authorization for access from
the applicant or tenant.''
HUD Response: HUD has not revised the rule in response to this
comment. In accordance with the Federal Privacy Act (5 U.S.C. 552a),
including HUD's regulations implementing the Federal Privacy Act at 24
CFR part 16, and 24 CFR 5.236(b)(3)(ii), the PHA and O/A are authorized
to: (1) Provide the tenant with information obtained from a computer-
matching program; and (2) verify such information with the tenant.
Comment: Three commenters discussed the proposed language in Sec.
5.233(b) involving penalties, including sanctions, for noncompliance
with the mandated use of UIV techniques. The commenters expressed
concern about what the commenters perceived to be open-ended or
undefined penalties for noncompliance. The commenters wrote that safe
harbor provisions, including a reasonable implementation period, should
be included in the final rule.
HUD Response: HUD has not revised the rule in response to these
comments. Ninety-eight percent of all active PHAs already have access
to EIV. The final rule provides for a 6-month transition period before
use of the EIV system becomes mandatory for multifamily housing. This
transition period will allow for O/As to become more familiar with
using the National Directory of New Hires (NDNH) data, which has been
available to O/As only since January 2008.
E. Comments Specific to Proposed Amendments to Sec. 5.508
Comment: One commenter suggested that section 8 housing assistance
be available only to U.S. citizens and legal immigrants. The commenter
also suggested that if applicants for housing assistance cannot provide
the required documentation, they should be denied assistance
immediately whether or not they have legal family residing in this
country.
HUD Response: The regulations at 24 CFR part 5, subpart E,
implement the requirements of section 214 of the Housing and Community
Development Act of 1980 (42 U.S.C. 1436a(a)). Section 214(a) provides
that notwithstanding any other applicable provision of law, the
Secretary may not make financial assistance available for any alien
unless that alien is a resident of the United States and one of seven
categories of eligible aliens. Pursuant to section 214(b)(1),
``financial assistance'' includes ``assistance made available pursuant
to the United States Housing Act of 1937.'' Section 214(b)(2) provides
that:
If the eligibility for financial assistance of at least one
member of a family has been affirmatively established under the
program of financial assistance and under this section, and the
eligibility of one or more family members has not been affirmatively
established under this section, any financial assistance made
available to that family by the applicable Secretary shall be
prorated, based on the number of individuals in the family for whom
eligibility has been affirmatively established under the program of
financial assistance and under this section, as compared with the
total number of individuals who are members of the family.
A ``mixed family'' is defined under the regulations (24 CFR 5.504), to
mean a family whose members include those with citizenship or eligible
immigration status, and those without citizenship or eligible
immigration status.
Comment: Three commenters wrote that the requirements for proof of
citizenship are extremely burdensome to residents already participating
in the program (particularly those who may be elderly or disabled, have
limited English proficiency, or who are victims of domestic violence,
dating violence, stalking, or sexual assault) and to PHAs and owners
who must verify such citizenship status. Two commenters suggested that,
by requiring proof of citizenship, HUD is taking away the PHAs'
discretion in establishing program standards.
[[Page 4836]]
HUD Response: Verification of citizenship status is statutorily
required. Further, the majority of participants and applicants already
have the necessary proof of citizenship or eligible noncitizen status.
HUD also provides program administrators use of the Systemic Alien
Verification for Entitlements (SAVE) system to assist in the
verification of non-U.S. citizens' immigration status.
Comment: Three commenters raised questions regarding the meaning of
``eligible immigration status'' and the type of documentation,
including submission of documentation electronically, that would be
acceptable in meeting the requirements of Sec. 5.508. The commenters
requested that HUD clarify ``eligible immigration status'' to ensure
that immigrant victims of domestic violence and Cuban/Haitian
immigrants are eligible for federal housing assistance. Moreover, the
commenters urged HUD to clarify that the list of documents in Sec.
5.508(b) is an illustrative, rather than exhaustive, list, since many
types of documents serve to establish eligible, non-citizen status.
HUD Response: Any immigrant who is lawfully in this country and
meets other program eligibility requirements is eligible to participate
in HUD's rental assistance programs. HUD's list of acceptable documents
for eligible immigration status will reflect those documents referenced
by the Department of Homeland Security (Bureau of Immigration and
Customs Enforcement), as prescribed in HUD administrative instruction
and guidance.
Comment: Two commenters suggested that HUD establish time frames
for the tenant to obtain and provide the necessary citizenship
documentation, and for PHAs to implement the documentation requirement.
HUD Response: HUD has not revised the rule in response to these
comments. However, HUD may issue administrative guidance as questions
arise regarding implementation of this final rule, or as HUD may
otherwise determine is necessary, to assist affected parties in
complying with the new regulatory requirements.
Comment: One commenter stated that the current regulations
governing assistance to non-citizens are very difficult to interpret,
and that the proposed revisions at Sec. 5.508 do not improve the
clarity. The commenter suggests that HUD rewrite the regulations at 24
CFR part 5, subpart E, Restrictions on Assistance to Noncitizens, to
make them easier to understand and follow.
HUD Response: HUD has not revised the rule in response to these
comments. As noted in the response to the preceding comments, HUD may
issue administrative guidance at a later date to assist affected
parties in complying with the new regulatory requirements.
F. Comments Specific to Proposed Amendments to Sec. 5.518
Comment: One commenter suggested that, instead of eliminating
temporary deferrals of termination of assistance for families with
noncitizen members, such temporary deferrals should be expanded.
Because obtaining the necessary documentation for all family members
can be time-consuming and expensive, the commenter wrote that the
proposed revisions would be a further constraint on noncitizens and
cause temporary homelessness.
HUD Response: HUD must ensure that all individuals in the program
are eligible. Only those individuals who need to be verified would
incur the cost of obtaining documentation. In addition, the PHA or O/A
may at its discretion extend the time period to obtain documentation,
which may enhance the individuals' ability to afford the expense. The
18-month deferral period was a sufficient length of time and has long
since elapsed. With the exception of refugees and persons seeking
asylum, families with temporary deferral of termination of assistance
with noncitizen members should no longer be receiving housing
assistance.
G. Comments Specific to Proposed Amendments to Sec. 5.609
Comment: Several commenters wrote that, because HUD's EIV system
does not capture ``actual time'' data, the proposal in Sec. 5.609 to
amend the current definition of annual income, from anticipated
``future income'' to ``actual income,'' is not compatible with the
method of collecting individuals' actual income. The commenters
suggested that until such time as the EIV system can be used to verify
current income, the definition of annual income should not be changed.
One commenter suggested that HUD permit PHAs to rely on EIV data for
the purpose of determining annual income, unless it possesses credible
information that such data are not accurate.
HUD Response: The final rule gives the PHA or O/A the discretion to
use either actual past income or projected future income to minimize
possible errors in the reexamination/recertification system (for
example, where a tenant quits a job before reexamination/
recertification and assistance is calculated at a higher level). PHAs
and O/As may use actual past annual income from EIV, so long as the
tenant does not dispute the income information and current tenant-
provided documentation or third-party verification does not suggest
higher income in the next 12 months.
Comment: Several commenters wrote that although the rationale for
using past income is that it is a known amount, anticipated future
income more accurately reflects what applicants and participants are
receiving when they are seeking housing assistance. One commenter
suggested that PHAs or owners look at the previous year's tax return to
determine ``annual income.''
HUD Response: As noted in the preceding response, the final rule
gives the PHA or O/A the discretion to use either actual past income or
projected future income to minimize errors in the reexamination/
recertification system. The use of information from the previous year's
tax returns is not an effective method of determining annual income
because tenants may not file tax returns.
Comment: Four commenters wrote that the change in the ``annual
income'' definition would increase the administrative workload and the
complexity of verifying actual income received, and that PHAs would
lose money and would need increased operating subsidy while complying
with the new requirements. One commenter suggested that HUD provide
grants to PHAs that are earmarked for implementing investigative and
paralegal staffing to combat program fraud and abuse.
HUD Response: The final rule gives the PHA or O/A the discretion to
use either actual past income or projected future income. PHAs and O/As
may use actual past annual income from EIV, so long as the tenant does
not dispute the income information and current tenant-provided
documentation, or third-party verification does not suggest higher
income in the next 12 months.
Comment: Two commenters focused on the new requirement in Sec.
5.609(b) for PHAs to ``annualize the income data to determine the
family's income for the 12-month period.'' One commenter asked HUD to
clarify what it meant by ``annualize the income data.'' One commenter
urged HUD to strike this new requirement and consider issuing guidance
that encourages sponsors to use newer information if it reflects
substantial changes in household income.
HUD Response: ``Annualize the income data'' means to convert
periodic income to an annual amount. For example, if the PHA or O/A
determines
[[Page 4837]]
that the tenant's monthly income is $500, this amount should be
multiplied by 12 to compute an annual amount of $6,000. Again, the
final rule provides the PHA or O/A with the discretion to use either
actual past income or projected future income to minimize errors in the
reexamination/recertification system. PHAs and O/As may use actual past
annual income from EIV, so long as the tenant does not dispute the
income information and current tenant-provided documentation, or third-
party verification does not suggest higher income in the next 12
months.
Comment: One commenter asked HUD to clarify whether income
generated from assets should be considered as income from the previous
12 months or as ``anticipated future income.''
HUD Response: The regulation for determination of income from
assets is not being changed, and references the 12-month period in
Sec. 5.609(a)(2), which is the 12-month period following admission or
recertification effective date. Accordingly, income from assets is
``anticipated future income.''
Comment: One commenter requested that HUD provide guidance and
standards for PHAs and owners to follow when dealing with ``atypical
income situations,'' such as: A loss of employment, waiting periods for
Social Security income, welfare payments, zero income, and self-
employment.
HUD Response: The PHA's interim policy and multifamily housing's
interim policy defines how the PHA or O/A will deal with atypical
income situations. HUD encourages PHAs and O/As to implement policies
that will minimize unwarranted zero or minimum rents.
Comment: One commenter wrote that HUD should ensure that proposed
Sec. 5.609(a) properly follows the statutory definition of ``income''
at 42 U.S.C. 1437a(b)(4) and thus exclude ``any amounts not actually
received by the family.'' The commenter also requested that HUD make
all necessary technical changes in the regulation to account for
incorrect cross-references.
HUD Response: The current regulatory definition makes reference to
the term of income ``anticipated to be received.'' The proposed rule
removes the term anticipated, which results in counting only income,
received by the family. This change is consistent with the statutory
definition of the term ``income,'' and HUD has not revised the rule in
response to this comment.
Comment: One commenter wrote that some PHAs and owners may
misinterpret the language in Sec. 5.609(b) to mandate interim
reporting or adjustment of rent for increases in income that occur in
between annual re-certifications. The commenter urged HUD to clarify
that the proposal is not intended as a substantive change to interim
reporting and rent adjustment requirements, and that PHAs and owners
should follow their existing policies or HUD guidance regarding when
interim reporting or rent adjustment is required for increases in
income.
HUD Response: The final rule does not mandate interim
reexaminations, but gives the PHA the discretion to determine annual
income using actual past annual income or projected future income based
on current income. The PHA has discretion in developing interim
increase reexamination policies; however, O/As do not. While these
types of policies are helpful in reducing income reporting errors, HUD
does not require PHAs to adopt interim increase reexamination policies.
O/As must continue to follow existing policies for conducting interim
recertifications.
Comment: One commenter suggested that HUD allow PHAs to accept
recertifications of income performed by other federal, state, or local
government entities for purposes of determining the annual income of
applicant households and recertifications of participant households.
HUD Response: HUD has not revised the rule in response to this
comment. Third-party recertifications for other benefits from other
federal, state or local entities may not be effective due to the
different program requirements in determining eligibility.
Comment: One commenter suggested that HUD give PHAs the discretion
to rely on (or to reject) evidence of recent income changes when
determining annual income. The commenter wrote that some program
participants have been known to manipulate their income temporarily
before annual recertifications, in order to reduce their rent
obligation.
HUD Response: HUD does support PHA and O/A discretion in accepting
or rejecting changes in family income. PIH published guidance in 2004,
PIH Notice 2004-01 (located at http://www.hud.gov/offices/pih/), which
requires the tenant to provide acceptable documentation to the PHA.
Multifamily housing has guidance in Chapter 7 of Handbook 4350.3 REV-1.
Furthermore, this final rule allows the PHA and O/A the flexibility and
discretion to use either actual past annual income or projected future
income based on current income. This flexibility will enable PHAs and
O/As to minimize the occurrence of tenant income manipulation and
ensure that participants pay their fair share of rent. It should be
noted that the EIV system, as well as income information derived from
the Social Security earnings statement (use SSA form-7004 available at
http://www.ssa.gov to obtain this information) can provide the PHA and
O/A with historical annual earned income of a participant. HUD
recognizes that there are atypical situations in which an individual's
income may fluctuate as a result of seasonal and sporadic employment,
or in which a participant intentionally discontinues employment prior
to an interim or annual reexamination or recertification, in order to
minimize his or her contribution to rent, thus avoiding the imposition
of a higher rental subsidy on the individual's family. PHAs and O/As
are encouraged to utilize income information provided by HUD and
available from other federal, state, and local agencies, as well as
from private sector entities (such as The Work Number) to improve the
integrity of income, or lack of income, reported by families.
H. Comments Specific to Proposed Amendments to Sec. 92.203
Comment: One commenter wrote that the income determination under
the HOME program should be based on the prior 12-month period, because
``anything else is too confusing and the HOME Program is confusing
enough as it is.''
HUD Response: HUD has changed the proposed rule to require
participating jurisdictions to calculate a family's annual income based
on the actual income being received at the time the participating
jurisdiction determines the family is income eligible, projected
forward for a 12-month period. However, if the participating
jurisdiction is unable to determine annual income using current
information because the family reports little to no income or because
income fluctuates, the participating jurisdiction may average past
actual income received or earned within the last 12 months before the
determination date to calculate annual income. This provides the
participating jurisdiction with the discretion needed to respond to a
variety of family situations.
Comment: One commenter wrote that the proposed requirements in
Sec. 92.203 are a duplication of effort because, absent an accessible
and constantly updated source of income data for the previous 12
months, participating jurisdictions must contact employers or review
paycheck stubs to verify such
[[Page 4838]]
income, which must then be verified to determine if the income is
different from the previous 12 months. The commenter also recommended
that HUD amend the HOME regulations to permit subrecipients and
developers using HOME funds to perform income determinations on behalf
of the HOME participating jurisdiction.
HUD Response: HUD has changed the rule to require participating
jurisdictions to calculate a family's annual income based on the actual
income being received at the time the participating jurisdiction
determines the family is income eligible, projected forward for a 12-
month period. However, the final rule also gives program administrators
the discretion to use a family's past actual income when the program
administrator is unable to project the family's annual income based on
current verified income information. This is most useful in situations
where it is difficult for the participating jurisdiction to accurately
determine a family's projected annual income due to fluctuations in the
family's income or because the family reports little or no income.
Subrecipients are nonprofit organizations and public agencies that
are under contract with the participating jurisdiction to administer
HOME programs on the participating jurisdiction's behalf. The HOME
regulations already permit subrecipients to perform income
determinations for the participating jurisdiction. However, developers
are not under contract to perform the functions of the participating
jurisdiction and are not permitted to perform those functions
independent of the participating jurisdiction. While these entities
cannot perform income determinations, they can collect income
documentation for the participating jurisdiction to review. As such, no
further changes to 24 CFR part 92 are required at this time.
I. Comments Specific to Proposed Amendments to Sec. 908.101
Comment: One commenter suggested that HUD strike the proposed
language in Sec. 908.101 requiring sponsors to retain form HUD-50058
during the term of each assisted lease and for at least 3 years
thereafter. The commenter argued that PHAs should not be required to
maintain such form in the files, and that compliance with standards in
state law and imposed by audit requirements are sufficient to protect
HUD's interests.
HUD Response: HUD is requiring the PHA to maintain the form HUD-
50058 in its tenant's files (either electronically or paper) to ensure
that information transmitted to HUD is consistent with what is on file
at the PHA. Previous PHA audits have in some instances revealed
significant disparities between the actual PHA transaction and the
transaction transmitted to HUD via the Public and Indian Housing
Information Center (PIC) system.
Comment: Two commenters opposed the change to require paper copies
of each Form HUD-50058 in the tenant's file. The commenters wrote that
such a requirement would impose administrative burden and additional
expense for PHAs and staff. Moreover, the commenters wrote that the
information is readily available electronically. One commenter
suggested that PHAs be required to keep only the most recent 2 years of
form HUD-50058, and to maintain the file for 3 years after move-out.
HUD Response: The rule does not require paper copies of the form
HUD-50058. The PHA has discretion to determine how they will maintain
the form HUD-50058. PHAs are encouraged to retain electronic copies of
the form.
V. Findings and Certifications
Executive Order 12866, Regulatory Planning and Review
The Office of Management and Budget (OMB) reviewed this rule under
Executive Order 12866 (``entitled Regulatory Planning and Review'').
This rule was determined to be economically significant under E.O.
12866, and a regulatory impact analysis has been prepared for this
rule.
At both the proposed rule and this final rule stage, HUD determined
that implementation of the regulations proposed and now promulgated
through this final rule could result in transfers of funding to and
among stakeholders of more than $100 million per year. Findings from an
ongoing HUD study indicate that the gross transfer resulting from
eliminating all the under- and over-payments of rents is approximately
$925 million ($584 million in rent subsidy overpayment and $341 million
in rent subsidy underpayment). Of these amounts, about $138 million in
rent subsidy overpayment and $17 million in rent subsidy underpayment
are attributable to errors in earned income reported to, or recorded
by, program administrators, as determined by the study interviewers. In
addition, income matches with the National Directory of New Hires
(NDNH) reports an additional $359 million in rent underpayment due to
tenants' failure to report income to program administrators and the
study interviewers. If the rule succeeds in reducing gross errors found
in the study by at least 20 percent, the gross transfers among HUD-
assisted tenants would be above the $100 million annual threshold. The
majority of the financial and economic impact of the final rule would
result from the implementation and use of upfront verification of
income to ensure truthful and correct reporting and recording of
tenants' income. The anticipated impacts of this rule are discussed
more fully in the regulatory impact analysis that accompanies this
rule.
It should be noted that the implementation of this final rule would
improve the integrity of HUD's rental assistance programs and would
result in some transfer. However, it may not necessarily lead to a
reduction in subsidy needs and could in fact lead to a needed increase
in the program funding to maintain the number of households served by
the programs. The EIV system is already available and being used by
program administrators. Therefore, this final rule would not impose
significant additional costs.
Assuming the rule is 100 percent effective in eliminating earned
income-based rent errors, if no over-subsidized tenants left the
program in response to rent increases based on correct determination of
earned income, then the net transfer to new tenants would be about $480
million per year, resulting in approximately 92,284 new tenants served
(assuming an average total subsidy per tenant of $5,091 per year). At
the other extreme, if all households who were over-subsidized due to
earned-income error left HUD-assisted housing in response to rent
corrections under the rule, the transfer to new tenants would amount to
approximately $1,715,667,000 per year, resulting in about 337,000 new
tenants served, assuming the same average subsidy costs.
Notwithstanding, it is not realistic to expect the rule to be 100
percent effective, since there is no realistic basis for assessing a
range of effectiveness away from a range of $0 to $480 million. There
is also no basis for assessing the primary estimate. For all of these
reasons, $1.715 million would represent the high estimate (assuming 100
percent effectiveness and 100 percent of existing tenants leave
replaced by 337,000 new tenants) and $0 would represent the low
estimate, assuming 0 percent effectiveness.
The docket file, which includes the regulatory impact analysis, is
available for public inspection in the Regulations Division, Office of
General Counsel, Department of Housing and Urban Development, 451
Seventh Street, SW., Room 10276, Washington, DC 20410-0500. Due to
security measures at the
[[Page 4839]]
HUD Headquarters building, please schedule an appointment to review the
docket file by calling the Regulations Division at 202-708-3055 (this
is not a toll-free number). Persons with hearing or speech impairments
may access this number through TTY by calling the toll-free Federal
Information Relay Service at 800-877-8339. Additionally, the Economic
Analysis prepared for this rule is also available for public inspection
at the same location and on HUD's Web site at http://www.hud.gov.
Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq.)
generally requires an agency to conduct a regulatory flexibility
analysis of any rule subject to notice and comment rulemaking
requirements, unless the agency certifies that the rule will not have a
significant economic impact on a substantial number of small entities.
This final rule is concerned with those entities that are responsible
for making eligibility determinations and conducting income
reexaminations or recertifications under sections 3 and 5 of the United
States Housing Act of 1937 and tenant-based and project-based housing
assistance under section 8 of the United States Housing Act of 1937.
Specifically, the final rule strengthens HUD's internal controls,
refines regulations where unclear, and requires the use of HUD's EIV
system to verify the employment and income of existing participants.
The U.S. Housing Act of 1937 defines a small PHA as a PHA that
administers 250 or fewer public housing units and irrespective of the
number of vouchers that the PHA administers. HUD uses this number of
units to also measure small multifamily housing developments. With
fewer units to administer, there are fewer families for whom income
verification is needed. Nonetheless, regardless of the number of units
or families to administer, income verification processes are reduced
with the use of the EIV system. Public housing and multifamily housing
administrators are relieved of the burden of obtaining written
verification of employment, wages, unemployment compensation, and
Social Security benefits from third-party income sources, which is time
consuming. Additionally, PHAs, large and small, are already familiar
with and have begun using EIV. The final rule provides an additional 6
months for administrators of multifamily housing developments, large or
small, to transition to EIV. Therefore, this final rule will not have a
significant economic impact on a substantial number of small entities.
Accordingly, the undersigned certifies that this rule will not have
a significant economic impact on a substantial number of small
entities.
Environmental Impact
This final rule involves external administrative requirements or
procedures that are related to income limits and exclusions with regard
to eligibility for or calculation of HUD housing assistance or rental
assistance. Such requirements or procedures do not constitute a
development decision that affects the physical condition of specific
project areas or building sites. Accordingly, under 24 CFR 50.19(c)(6),
this final rule is categorically excluded from environmental review
under the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et
seq.).
Paperwork Reduction Act
The information collection requirements in this final rule have
been approved by the Office of Management and Budget (OMB) under the
Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520) and assigned OMB
Control Numbers 2577-0220 and 2502-0204. 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.
Executive Order 13132, Federalism
Executive Order 13132 (entitled ``Federalism'') prohibits, to the
extent practicable and permitted by law, an agency from promulgating a
regulation that has federalism implications and either imposes
substantial direct compliance costs on state and local governments and
is not required by statute, or preempts state law, unless the relevant
requirements of section 6 of the Executive Order are met. This final
rule does not have federalism implications and does not impose
substantial direct compliance costs on state and local governments or
preempt state law within the meaning of the Executive Order.
Unfunded Mandates Reform Act
Title II of the Unfunded Mandates Reform Act of 1995 (2 U.S.C.
1531-1538) (UMRA) establishes requirements for federal agencies to
assess the effects of their regulatory actions on state, local, and
tribal governments, and on the private sector. This final rule would
not impose any federal mandate on any state, local, or tribal
government, or on the private sector, within the meaning of UMRA.
Congressional Review of Final Rules
This rule constitutes a ``major rule'' as defined in the
Congressional Review Act (5 U.S.C. Chapter 8). This rule therefore has
a 60-day delayed effective date and will be submitted to the Congress
in accordance with the requirements of the Congressional Review Act.
Catalog of Federal Domestic Assistance
The Catalog of Federal Domestic Assistance numbers applicable to
the programs affected by this rule are 14.103, 14.135, 14.149, 14.157,
14.181, 14.195, 14.850, and 14.871.
List of Subjects
24 CFR Part 5
Administrative practice and procedure, Aged, Claims, Crime,
Government contracts, Grant programs--housing and community
development, Individuals with disabilities, Intergovernmental
relations, Loan programs--housing and community development, Low and
moderate income housing, Mortgage insurance, Penalties, Pets, Public
housing, Rent subsidies, Reporting and recordkeeping requirements,
Social Security, Unemployment compensation, Wages.
24 CFR Part 92
Administrative practice and procedure, Grant programs--housing and
community development, Low and moderate income housing, Manufactured
homes, Rent subsidies, Reporting and recordkeeping requirements.
24 CFR Part 908
Computer technology, Grant programs--housing and community
development, Rent subsidies, Reporting and recordkeeping requirements.
0
Accordingly, for the reasons described in the preamble, HUD amends 24
CFR parts 5, 92, and 908 to read as follows:
PART 5--GENERAL HUD PROGRAM REQUIREMENTS; WAIVERS
0
1. The authority citation for part 5 continues to read as follows:
Authority: 42 U.S.C. 1437a, 1437c, 1437d, 1437f, 1437n, 3535(d),
and Sec. 327, Pub. L. 109-115, 119 Stat. 2936.
0
2. Revise Sec. 5.216 to read as follows:
Sec. 5.216 Disclosure and verification of Social Security Number
(SSN) and Employer Identification Numbers (EIN).
(a) Disclosure required of assistance applicants. Each assistance
applicant must submit the following information
[[Page 4840]]
to the processing entity when the assistance applicant's eligibility
under the program involved is being determined:
(1) The complete and accurate SSN assigned to the assistance
applicant and to each member of the assistance applicant's household;
and
(2) The documentation referred to in paragraph (f)(1) of this
section to verify each such SSN.
(b) Disclosure required of individual owner applicants. Each
individual owner applicant must submit the following information to the
processing entity when the individual owner applicant's eligibility
under the program involved is being determined:
(1) The complete and accurate SSN assigned to the individual owner
applicant and to each member of the individual owner applicant's
household who will be obligated to pay the debt evidenced by the
mortgage or loan documents; and
(2) The documentation referred to in paragraph (f)(1) of this
section to verify each such SSN.
(c) Disclosure required of certain officials of entity applicants.
Each officer, director, principal stockholder, or other official of an
entity applicant must submit the following information to the
processing entity when the entity applicant's eligibility under the
program involved is being determined:
(1) The complete and accurate SSN assigned to each such individual;
and
(2) The documentation referred to in paragraph (f)(1) of this
section to verify each SSN.
(d) Disclosure required of participants. (1) Initial disclosure.
Each participant whose initial determination of eligibility under the
program involved was begun before March 30, 2009 must submit the
following information to the processing entity at the next interim or
regularly scheduled reexamination of family composition or income, or
other recertification for the program involved:
(i) The complete and accurate SSN assigned to the participant and
to each member of the participant's household; and
(ii) The documentation referred to in paragraph (f)(1) of this
section to verify each such SSN.
(2) Subsequent disclosure. Once a participant has disclosed and the
processing entity has verified every SSN, the following rules apply:
(i) When a participant requests to add a new household member, the
participant must submit that SSN to the processing entity at the time
of the request or at the time of processing the interim reexamination
or recertification of family composition that includes the new
member(s):
(A) The complete and accurate SSN assigned to each new member; and
(B) The documentation referred to in paragraph (f)(1) of this
section to verify the SSN for each new member.
(ii) If the participant or any member of the participant's
household has a previously undisclosed SSN, or has been assigned a new
SSN, the participant must submit the following to the processing entity
at the next interim or regularly scheduled reexamination of family
composition or income, or other recertification:
(A) The complete and accurate SSN assigned to the participant or
household member involved; and
(B) The documentation referred to in paragraph (f)(1) of this
section to verify the SSN of each such individual.
(iii) Additional SSN disclosure and verification requirements,
including the nature of the disclosure, the verification required, and
the time and manner for making the disclosure and verification, may be
specified in administrative instructions by:
(A) HUD; and
(B) In the case of the public housing program or the programs under
24 CFR parts 882 and 982, the PHA.
(e) Disclosure required of entity applicants. Each entity applicant
must submit the following information to the processing entity when the
entity applicant's eligibility under the program involved is being
determined:
(1) Any complete and accurate EIN assigned to the entity applicant;
and
(2) The documentation referred to in paragraph (f)(2) of this
section to verify the EIN.
(f) Required documentation. (1) Social Security Numbers. The
documentation necessary to verify the SSN of an individual who is
required to disclose his or her SSN under paragraphs (a) through (d) of
this section is a valid SSN card issued by the Social Security
Administration (SSA), or such other evidence of the SSN as HUD may
prescribe in administrative instructions.
(2) Employer Identification Numbers. The documentation necessary to
verify any EIN of an entity applicant that is required to disclose its
EIN under paragraph (e) of this section is the official, written
communication from the IRS assigning the EIN to the entity applicant,
or such other evidence of the EIN as HUD may prescribe in
administrative instructions.
(g) Effect on assistance applicants. (1) Except as provided in
paragraph (g)(2) of this section, if the processing entity determines
that the assistance applicant is otherwise eligible to participate in a
program, the assistance applicant may retain its place on the waiting
list for the program, but cannot become a participant until it can
provide:
(i) The complete and accurate SSN assigned to each member of the
household; and
(ii) The documentation referred to in paragraph (f)(1) of this
section to verify the SSN of each such member.
(2) For applicants receiving assistance pursuant to the section 8
Moderate Rehabilitation Single Room Occupancy (SRO) Program for
Homeless Individuals under subpart H of part 882 of this title, the
documentation in paragraph (g)(1) of this section must be provided to
the processing entity within 90 days from the date of admission into
the program, except that the processing entity may, at its discretion,
extend this period for an additional 90 days.
(h) Rejection of documentation. The processing entity may reject
documentation referred to in paragraph (f) of this section only for
such reasons as HUD may prescribe in applicable administrative
instructions.
(i) Information on SSNs and EINs. (1) Information regarding SSNs
and SSN cards may be obtained by visiting the IRS.gov Web site or
calling the IRS toll-free Business and Specialty Tax Line at 800-829-
4933.
(2) Information regarding EINs may be obtained by contacting the
local office of the IRS or consulting the appropriate IRS publications.
0
3. Amend Sec. 5.218 by revising paragraph (a), the introductory text
of paragraph (b), and paragraph (c) to read as follows:
Sec. 5.218 Penalties for failing to disclose and verify Social
Security and Employer Identification Numbers.
(a) Denial of eligibility of assistance applicants and individual
owner applicants. The processing entity must deny the eligibility of an
assistance applicant or individual owner applicant in accordance with
the provisions governing the program involved, if the assistance or
individual owner applicant does not meet the applicable SSN disclosure,
documentation, and verification requirements as specified in Sec.
5.216.
(b) Denial of eligibility of entity applicants. The processing
entity must deny the eligibility of an entity applicant in accordance
with the provisions governing the program involved; if:
* * * * *
(c) Termination of assistance or termination of tenancy of
participants. The processing entity must terminate the assistance or
terminate the tenancy,
[[Page 4841]]
or both, of a participant, in accordance with the provisions governing
the program involved, if the participant does not meet the applicable
SSN disclosure, documentation, and verification requirements specified
in Sec. 5.216.
* * * * *
0
4. Add a new Sec. 5.233 to read as follows:
Sec. 5.233 Mandated use of HUD's Enterprise Income Verification (EIV)
System.
(a) Programs subject to this section and requirements. (1) The
requirements of this section apply to entities administering assistance
under:
(i) Public housing;
(ii) Section 8 Housing Choice Voucher (HCV) program under 24 CFR
part 982;
(iii) Moderate Rehabilitation under 24 CFR part 882;
(iv) Project-based voucher program under 24 CFR part 983;
(v) Project-based Section 8 programs under 24 CFR parts 880, 883,
884, 886, and 891;
(vi) Section 202 of the National Housing Act of 1959 (12 U.S.C.
1701q);
(vii) Section 811 of the Cranston-Gonzalez National Affordable
Housing Act (42 U.S.C. 8013);
(viii) Sections 221(d)(3) and 236 of the National Housing Act (12
U.S.C. 1715l(d)(3) and 1715z-1); and
(ix) Rent Supplement program under section 101 of the Housing and
Urban Development Act of 1965 (12 U.S.C. 1701s).
(2) Processing entities must use HUD's EIV system as a third-party
source to verify tenant employment and income information during
mandatory reexaminations or recertifications of family composition and
income, in accordance with Sec. 5.236.
(b) Penalties for noncompliance. Failure to use the EIV system may
result in the imposition of remedial actions as outlined in 24 CFR
84.62, except as provided in paragraph (b) of this section. For
multifamily owners and management agents, failure to use the EIV system
may result in the imposition of sanctions and/or the assessment of
disallowed costs associated with any resulting incorrect subsidy or
tenant rent calculations, or both.
(c) Implementation Date for Multifamily Owners and Management
Agents. For entities administering assistance under paragraphs
(a)(1)(v) through (a)(1)(ix) of this section, use of the EIV system is
required commencing on September 30, 2009.
0
5. Amend Sec. 5.508 by revising paragraphs (b)(1), and (b)(2) to read
as follows:
Sec. 5.508 Submission of evidence of citizenship or eligible
immigration status.
* * * * *
(b) * * *
(1) For U.S. citizens or U.S. nationals, the evidence consists of a
signed declaration of U.S. citizenship or U.S. nationality. The
responsible entity must obtain verification of the declaration by
requiring presentation of a U.S. passport, U.S. birth certificate,
Employment Authorization card, Temporary Resident card, or other
appropriate documentation, as provided by section 214.
(2) For noncitizens, adequate evidence consists of:
(i) A signed declaration of eligible immigration status; and
(ii) One of the Section 214 documents listed in Sec. 5.508(b)(1)
and referred to in Sec. 5.510.
* * * * *
0
6. Amend Sec. 5.516 by revising paragraph (c) to read as follows:
Sec. 5.516 Availability of preservation assistance to mixed families
and other families.
* * * * *
(c) Assistance available to other families in occupancy. In
accordance with Sec. 5.518, temporary deferral of termination of
assistance may be available to families receiving assistance under a
section 214-covered program on June 19, 1995, and who either include a
refugee under section 207 of the Immigration and Nationality Act, or an
individual seeking asylum under section 208 of the Immigration and
Nationality Act.
* * * * *
0
7. Amend Sec. 5.518 by revising paragraph (b), removing paragraph (c),
and redesignating existing paragraph (d) as paragraph (c) to read as
follows:
Sec. 5.518 Types of preservation assistance available to mixed
families and other families.
* * * * *
(b) Temporary deferral of termination of assistance. (1)
Eligibility of temporary deferral of termination of assistance: If a
family was receiving assistance under a section 214-covered program on
June 19, 1995, and the family includes a refugee under section 207 of
the Immigration and Nationality Act or an individual seeking asylum
under section 208 of the Immigration and Nationality Act, the family
may be eligible for temporary deferral of termination of assistance if
necessary to permit the family additional time for the orderly
transition of those family members with ineligible status, and any
other family members involved, to other affordable housing. Other
affordable housing is used in the context of transition of an
ineligible family from a rent level that reflects HUD assistance to a
rent level that is unassisted; the term ``affordable housing'' refers
to housing that is not substandard; that is of appropriate size for the
family; and that can be rented for an amount not exceeding the amount
that the family pays for rent, including utilities, plus 25 percent.
(2) Housing-covered programs: Conditions for granting temporary
deferral of termination of assistance. The responsible entity shall
grant a temporary deferral of termination of assistance to a mixed
family if the family is assisted under a Housing-covered program and
the family was receiving assistance under a Section 214-covered program
on June 19, 1995, and the family includes a refugee under section 207
of the Immigration and Nationality Act or an individual seeking asylum
under section 208 of the Immigration and Nationality Act.
* * * * *
0
8. Amend Sec. 5.609 as follows:
0
a. Revise paragraph (a);
0
b. Remove existing paragraph (d);
0
c. Redesignate existing paragraphs (b) and (c) as paragraphs (d) and
(e), respectively;
0
d. In newly designated paragraph (d)(3), revise the reference to
``paragraph (b)(2) of this section'' to read ``paragraph (d)(2) of this
section'';
0
e. In newly designated paragraph (d)(4), revise the parenthetical
reading ``(except as provided in paragraph (c)(14) of this section)''
to read ``(except as provided in paragraph (e)(14) of this section)'';
0
f. In newly designated paragraph (d)(5) revise the reference to
``paragraph (c)(3) of this section'' to read ``paragraph (e)(3) of this
section'';
0
g. In newly designated paragraph (d)(6)(B), revise the reference to
``paragraph (c) of this section'' to read ``paragraph (e) of this
section'';
0
h. In newly designated paragraph (d)(8), revise the reference to
``paragraph (c)(7) of this section'' to read ``paragraph (e)(7) of this
section'';
0
i. In newly designated paragraph (e)(6), revise the reference to
``paragraph (b)(9) of this section'' to read ``paragraph (d)(9) of this
section'';
0
j. In newly designated paragraph (e)(17), revise the reference to ``24
CFR 5.609(c)'' to read ``24 CFR 5.609(e)''; and
0
k. Add new paragraphs (b) and (c) to read as follows:
Sec. 5.609 Annual income.
(a) Annual income means all amounts, monetary or not, which:
[[Page 4842]]
(1) Go to, or on behalf of, the family head or spouse (even if
temporarily absent) or to any other family member; and
(2) Are based on, at the time of admission, reexamination, or
recertification:
(i) Actual income being received (projected forward for a 12-month
period); or
(ii) Past actual income received or earned within the last 12
months of the determination date, as HUD may prescribe in applicable
administrative instructions when:
(A) The family reports little or no income; and
(B) The processing entity is unable to determine annual income due
to fluctuations in income (e.g., seasonal or cyclical income);
(3) Which are not specifically excluded in paragraph (e) of this
section.
(4) Annual income also means amounts derived (during the 12-month
period) from assets to which any member of the family has access.
(b) Historical amounts. If the processing entity is unable to
determine annual income using current information because the family
reports little to no income or because income fluctuates, the
processing entity may average past actual income received or earned
within the last 12 months before the determination date to calculate
annual income. The processing entity may also request the family to
provide documentation of current income. If the family can provide
acceptable documentation dated either within the 60-day period
preceding the determination date or the 60-day period following the
request date, the processing entity may use this documentation to
determine annual income.
(c) Rejection of documentation. The processing entity may reject
any income documentation for such reason as HUD may prescribe in
applicable administrative instructions.
* * * * *
PART 92--HOME INVESTMENT PARTNERSHIPS PROGRAM
0
9. The authority citation for part 92 continues to read as follows:
Authority: 42 U.S.C. 3535(d) and 12701-12839.
0
10. Revise Sec. 92.203(d)(1) to read as follows:
Sec. 92.203 Income determination.
* * * * *
(d)(1) The participating jurisdiction must calculate the annual
income of the family based on the actual income being received at the
time the participating jurisdiction determines the family is income
eligible, projected forward for the 12-month period. If the
participating jurisdiction is unable to determine annual income using
current information because the family reports little to no income or
because income fluctuates, the participating jurisdiction may average
past actual income received or earned within the last 12 months before
the determination date to calculate annual income. The participating
jurisdiction may also request the family to provide documentation of
the current income, and if the family can provide acceptable
documentation dated either within the 60-day period preceding the
determination date or the 60-day period following the request date, the
processing entity may use this documentation to determine annual
income. Annual income shall include income from all family members.
Income or asset enhancement from the HOME-assisted project shall not be
considered in calculating annual income.
* * * * *
PART 908--ELECTRONIC TRANSMISSION OF REQUIRED FAMILY DATA FOR
PUBLIC HOUSING, INDIAN HOUSING, AND THE SECTION 8 RENTAL
CERTIFICATE, RENTAL VOUCHER, AND MODERATE REHABILITATION PROGRAMS
0
11. The authority citation for part 908 continues to read as follows:
Authority: 42 U.S.C. 1437f, 3535d, 3543, 3544, and 3608a.
0
12. Revise Sec. 908.101 to read as follows:
Sec. 908.101 Purpose.
The purpose of this part is to require Public Housing Agencies
(PHAs) that operate public housing, Indian housing, or section 8 Rental
Certificate, Housing Choice Voucher (HCV), Rental Voucher, and Moderate
Rehabilitation programs to electronically submit certain data to HUD
for those programs. These electronically submitted data are required
for HUD forms HUD-50058, Family Report; and HUD-50058-FSS, Family Self-
Sufficiency Addendum. Applicable program entities must retain form HUD-
50058 during the term of each assisted lease, and for at least 3 years
thereafter, to support billings to HUD and to permit an effective
audit. Electronic retention of form HUD-50058 fulfills the retention
requirement under this section.
Dated: January 13, 2009.
Roy A. Bernardi,
Deputy Secretary.
[FR Doc. E9-1248 Filed 1-26-09; 8:45 am]
BILLING CODE 4210-67-P