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Regulatory Update

June 30, 2014

On Wednesday, June 25, 2014, HUD published Notice in the Federal Register (Vol. 79, No. 122) the Final Rule for "The Housing and Economic Recovery Act of 2008 (HERA): Changes to the Section 8 Tenant-Based Voucher and Section 8 Project-Based Voucher Programs."  The final rule implements the reforms made in HERA and will be effective 30 days following its publication in the Federal Register.

The final rule's changes reflect statutory provisions of HERA, as well as clarifications of some regulations already in place.  The final rule adopts many changes proposed in the May 15, 2012, Proposed Rule that was also published in the Federal Register, however, there are some significant changes:

*  The final rule does not amend the definition of "existing housing," but instead retains the original regulatory language.  Still, the final rule re-interprets certain requirements on "existing housing."

*  The proposed rule included language that AHAP must be executed prior to construction or rehabilitation. The final rule explicitly prohibits any construction or rehab, including site clearance and preparation, between the submission of a proposal of PBVS and the execution of the AHAP. The final rule also prohibits executing an AHAP after the commencement of construction.

*  The final rule states Davis Bacon requirements applies to existing housing for rehabilitation work after the execution of the HAP contract.

*  Increased notification responsibilities were added to the final rule for PHAs to HUD and increased certification obligations for owners to PHAs.

These requirements are already creating concern in the industry as many believe these changes severely impact the cost of the RAD-Rental Assistance Demonstration-which relies heavily on conversion to project based vouchers, as well as project basing vouchers in general.

Subscribers to CARH's Electronic AN Express were notified of the final rule on June 25, the day it was published.  Subscribers to CARH's Electronic AN Express receive notification of all key Federal Register excerpts from RD, HUD, FEMA, Department of Treasury, IRS and other agencies that impact the industry. It also includes RD Administrative Notices, procedural manual changes, and data sets (such as Income Limits and Difficult Development Areas). The Electronic AN Express sends all of these documents directly to your e-mail inbox the day they are released. To subscribe to the Electronic AN Express, click here for a copy of the subscription form.

Please contact the CARH national office at carh@carh.org or 703-837-9001 should you have questions or concerns.