National News -- Project-based Assistance (PBA) renewals will be funded at $6.139 billion, up $163 million from last year. In addition, any amounts recaptured from the prior-year unobligated tenant or project-based rental assistance may be used to renew or amend PBA contracts in FY08. Owners of rental properties with PBA estimate that this year's renewal funding is short by $2 - $2.5 billion.  Section 211 of the bill directs HUD to submit a report to Congress by August 30, 2008 detailing the number of federally-assisted housing units under lease and the per-unit cost of those units.

The conferees beefed up some of their bill and report language requiring HUD to account for all outstanding tenant and project-based contracts on a project-by-project basis and their costs and report regularly to the Appropriators. This is in response to the late HAP debacle this year where HUD was behind as much as two months in paying owner / managers of buildings with project-based vouchers in them.

An even more specific and hefty requirement requires HUD to report quarterly to the Appropriations Committees on the number of PBA units by HUD region, including the number of opt-outs and an analysis of the number of federally-assisted units being refinanced under the Mark-to-Market program. The bill goes on to state, "The Secretary shall identify in detail and by project all the efforts made by the Department to preserve all Section 8 project-based housing units and all the reasons for any units which opted out or otherwise were lost as Section 8 project-based units. Such analysis shall include a review of the impact of the loss of any subsidized units in that housing marketplace, such as the impact of cost and the loss of available subsidized, low-income housing in areas with scarce housing resources for low-income families."

The Appropriators weren't done. Responding to the continuing problem of late HAP payments to landlords and management agents, Section 235 of the bill directs HUD to provide a "complete and accurate accounting for FY07 and FY08 of "actual" PBA renewal costs; revised budget estimates of the cost to renew all PBA contracts expiring in FY07 and FY08 and to identify all sources of funding that HUD will use "to fully fund all 12 months" of PBA contracts expiring in FY07 and 08.  HUD must report this information to Congress within 60 days of enactment of the Omnibus bill. Anytime after that, HUD "may" revise and update its cost estimates if an audit of the project-based program "reveals additional information that may provide Congress a more complete understanding of the Secretary's implementation" of the PBA program.
 
The same section of the bill directs HUD, as part of next year's budget submission, to provide a project-by-project analysis "that verifies that such budget request will fully fund all project-based contracts" in FY09, including expiring contracts.

In addition, the Conference Report accompanying the bill further states, "The Appropriations Committees note the Department's inability to identify actual funding needs for Project-based Rental Assistance renewals. The Appropriations Committees also finds that the Department has not been aggressive in reducing the impact that its decisions are having on the affordable housing community. In light of what appears to be a severe funding shortage, the Department has taken the drastic step of abandoning its practice of 12-month contracts and has been sending short-term renewal that impact owners, landlords, financial institutions, and most importantly tenants of Project-based housing."

A large part of the problem is that the Administration has not determined if 12-month contracts can be conditioned on the availability of funds, and can be funded incrementally. The Appropriations Committees directs HUD and OMB to make a final determination about whether an Anti-Deficiency Act (ADA) violation would exist under those circumstances by January 15, 2008. If not, a violation would exist, and HUD is then instructed to immediately begin issuing two-month contracts subject to the availability of funds. If a violation would exist or has occurred, the administration must report that violation to the Committees immediately.

HUD Translated Materials for Persons With Limited English Proficiency -- The bill increases the Fair Housing account by $380,000 and requires HUD to create and promote translated materials on its programs for people who have limited English proficiency.  HUD has recently required private property owners to bear this cost. This provision had been successfully offered as a floor amendment to the Senate version of HUD appropriations by Senator Bob Menendez (D-NJ).  A word of caution, however, this does not mean that contract funding/payment issues are fully resolved.   Congress did not provide a full 12 months of funds for all contracts, and funds will continue to be placed incrementally onto contracts.  But the mere fact that there is a full appropriation (as part of the omnibus) instead of just another long-term Continuing Resolution (like last year), HUD's financial management team should have a better time of trying to access and release funds.    

Once this legislation is signed into law (the President has indicated he will not veto it), and HUD gets its money from the Treasury, we expect to see much larger increments - perhaps enough to carry all existing and renewal contracts through the end of the fiscal year (Sept 30, 2008).    We know that the HUD funding staff wants to get as much attached to individual property contracts as soon as they can. 

Your continued advocacy and communication to the FAHSA office on these issues are critical, and we depend on you to let us know when you are having any problems.  Keep those e-mails coming!