Rural Development Voucher Program Guide

Rural

Development

Voucher

Program

Guide

SEPTEMBER 2010

UNITED STATES DEPARTMENT OF AGRICULTURE

RURAL DEVELOPMENT

MULTIFAMILY HOUSING PROGRAMS

i

TABLE OF CONTENTS

CHAPTER 1

INTRODUCTION TO THE GUIDE

1.1

1.2

1.3

1.4

1.5

1.6

1.7

1.8

1.9

1.10

1.11

CHAPTER 2

RD VOUCHER PROGRAM PURPOSE AND AUTHORIZATION

KEY FEATURES OF THE RD VOUCHER PROGRAM

PURPOSE AND ORGANIZATION OF THE GUIDE

PARTICIPATION IN THE RD VOUCHER PROGRAM

KEY PLAYERS IN THE RD VOUCHER PROGRAM

ROLE OF RD

ROLE OF THE CONTRACTOR

ROLE OF OWNER

ROLE OF TENANT

TASKS AND RESPONSIBILITIES OF THE CONTRACTOR

ACRONYMS AND DEFINITIONS

PAGE #

1

2

7

7

8

9

9

9

10

10

11

RESPONSIBILITIES

2.1

2.2

2.3

2.4

2.5

2.6

2.7

2.8

2.9

CHAPTER OVERVIEW

STEPS PRIOR TO VOUCHER ISSUANCE

DOCUMENTS TIMELINE

FORECLOSURE ACTIONS AND OTHER PAYOFF ACTIONS

TENANTS UNDER LEASE

TENANTS WHO WANT TO MOVE

HAP RENEWAL

VOUCHER TRANSFER

DCFO REPORT REVIEW

14

14

19

21

21

22

22

23

23

ATTACHMENTS

2A

2B

RCS LETTER TO OWNERS

2C

SAMPLE TENANT NOTIFICATION LETTER #1A FOR LOAN

ACCELERATION

32

2D

2E

MULTIFAMILY HOUSING VOUCHER REQUEST FOR OBLIGATION (VOF)

AMAS INSTRUCTIONS FOR VOUCHER OBLIGATION AND DEOBLIGATION

33

35

PROOF OF CITIZENSHIP

49

2F

CHAPTER 3

SAMPLE TENANT NOTIFICATION LETTER #3 A VOUCHER

DETERMINATION LETTER

25

27

HOW TO OBTAIN AN RD VOUCHER

3.1

3.2

3.3

3.4

CHAPTER OVERVIEW

STEPS IN THE VOUCHER PROCESS

50

50

51

56

3A

TENANT INFORMATION SUMMARY

60

TENANT ELIGIBILITY

INFORMING TENANTS

ATTACHMENTS

CHAPTER 4

DETERMINATION OF THE RD VOUCHER AMOUNT

4.1

4.2

4.3

CHAPTER 5

CHAPTER OVERVIEW

DETERMINATION OF THE VOUCHER AMOUNT

NO TENANT CERTIFICATION DATA

64

64

66

HOUSING SEARCH AND LEASING

5.1

5.2

5.3

5.4

5.5

5.6

5.7

5.8

CHAPTER OVERVIEW

VOUCHER ISSUANCE

TENANT OBLIGATIONS

SEARCH TIME, EXTENSIONS AND VOUCHER EXPIRATION

REQUESTS FOR TENANCY APPROVAL

APPROVAL OF THE TENANCY

TENANT SCREENING

LEASE AND TENANCY

67

67

67

68

69

70

71

71

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ATTACHMENTS

5A

5B

5C

CHAPTER 6

SAMPLE TENANT LETTER #4

VOUCHER PACKAGE LETTER

RD VOUCHER

REQUEST FOR TENANCY APPROVAL FORM

73

75

78

RURAL DEVELOPMENT INSPECTION STANDARDS

6.1

6.2

6.3

6.4

6.5

CHAPTER OVERVIEW

RD INSPECTION STANDARDS: GENERAL REQUIREMENTS

CONDUCTING RTA INSPECTIONS

INSPECTION OF FORMER RD UNITS

VOUCHER TRANSFERS AND RENEWALS

80

80

80

81

82

ATTACHMENTS

6A

6B

6C

CHAPTER 7

REQUEST FOR TENANCY INSPECTION FORM AND INSTRUCTIONS

RTA INSPECTION RESULTS LETTER

SAMPLE LETTER FROM RD STATE DIRECTOR REGARDING RD UNIT

INSPECTIONS

83

90

92

HOUSING ASSISTANCE PAYMENTS (HAP) CONTRACT

7.1

7.2

7.3

7.4

7.5

7.6

7.7

7.8

OWNER BREACH OF HAP CONTRACT

93

93

94

95

99

100

100

101

RD HAP CONTRACT RD HAP CONTRACT INCLUDING PARTS A-C

103

CHAPTER OVERVIEW

TERM OF THE HAP CONTRACT

PAYMENT TO THE OWNER

CONTENTS OF THE HAP CONTRACT

HAP CONTRACT EXECUTION AND TIME LIMITS

CHANGES REQUIRING NEW HAP CONTRACT

OWNER RESPONSIBILITIES

ATTACHMENTS

7A

CHAPTER 8

MOBILITY AND PORTABILITY OF VOUCHERS

8.1

8.2

8.3

CHAPTER 9

OVERVIEW

HOLDERS OF RD VOUCHERS

INFORMATION ABOUT PORTABILITY

113

113

113

TERMINATION OF ASSISTANCE AND HAP CONTRACTS

9.1

9.2

9.3

9.4

9.5

9.6

9.7

9.8

CHAPTER OVERVIEW

TERMINATION OF TENANCY

HAP CONTRACT TERMINATION

RD TERMINATION OF ASSISTANCE TO THE TENANT

UNAUTHORIZED ASSISTANCE

DOCUMENTATION OF UNAUTHORIZED ASSISTANCE

NOTICE TO THE OWNER OT TENANTS

DEBT COLLECTION IMPROVEMENT ACT OF 1996 (DCIA)

114

114

116

117

119

119

119

120

ATTACHMENTS

9A

9B

CHAPTER 10

RD VOUCHER CONTACTS

121

122

123

RD APPEAL RIGHTS

125

SAMPLE NOTICE OF CONTRACT TERMINATION

SAMPLE NOTICE OF TERMINATION OF ASSISTANCE

APPENDIX

iii

RD Voucher Program Guide

Chapter 1 Introduction

CHAPTER 1

INTRODUCTION TO THE GUIDE

1.1

RD VOUCHER PROGRAM PURPOSE AND AUTHORIZATION

Purpose

The RDVP was created to offer some protection to eligible multifamily housing tenants

in properties financed through Rural Development¡¯s Section 515 Rural Rental Housing

Program who may be subject to economic hardship through prepayment of the RD

mortgage. When the owner of such a development pays off the loan, the RD affordable

housing requirements may be modified. (Rents may increase thereby making the housing

unaffordable to tenants.) The RD Voucher Program applies to any property financed

through Section 515 where the mortgage is paid off prior to the maturity date in the

promissory note. This includes foreclosed properties. Tenants in these properties are

eligible for an RD Voucher under the same conditions as properties that go through the

standard prepayment process. The RD Voucher will help tenants by providing a shortterm rental subsidy that will supplement the tenant¡¯s rent payment. Low-income tenants

in the prepaying property are eligible to receive a voucher that they may use at that

property or take to any other rental unit in the United States that passes RD inspection

and where the owner will accept an RD Voucher, with the exception of rental units in

subsidized housing like USDA Section 521 Rental Assistance, HUD Section 8 and public

housing where two housing subsidies would result. The RD Voucher may not be used at

this time for the purchase of a home.

Authorization

This program was initially authorized by Congress as a demonstration program in FY

2006. The Agriculture, Rural Development, Food and Drug Administration, and Related

Agencies Appropriations Act, 2010 (Pub. L. 111-80) (Appropriations Act, 2010) was

enacted on October 16, 2009, and appropriated $16, 400,000 to USDA for the Rural

Development Voucher Program as authorized under Section 542 of the Housing Act of

1949, as amended, 42 U.S.C. 1471 et. seq. (without regard to Section 542(b)).

The Appropriations Act, 2010 provided that the Secretary of the U.S. Department of

Agriculture shall carry out the Rural Development Voucher Program as follows:

That of the funds made available under this heading, $16,400,000 shall be

available for rural housing vouchers to any low-income household (including

those not receiving Rental Assistance) residing in a property financed with a

Section 515 loan which has been prepaid after September 30, 2005: Provided

further, That the amount of such voucher shall be the difference between

comparable market rent for the Section 515 unit and the tenant paid rent for such

unit: Provided further, That funds made available for such vouchers shall be

subject to the availability of annual appropriations: Provided further, That the

Secretary shall, to the maximum extent practicable, administer such vouchers

with current regulations and administrative guidance applicable to Section 8

1

RD Voucher Program Guide

Chapter 1 Introduction

housing vouchers administered by the Secretary of the Department of Housing

and Urban Development (HUD).

HUD Regulations and Requirements

RD does not currently have regulations for this demonstration program. All references to

HUD regulations and requirements mentioned in the description of the RDVP are

available on HUD¡¯s website (.). Interested parties

may order copies of HUD handbooks and other directives through the HUD website. The

regulations and directives listed may be updated from time to time. HUD¡¯s codified

regulations are issued as Title 24 of the Code of Federal Regulations (CFR). Revisions or

additions to HUD regulations are initially published in the Federal Register. HUD may

also publish Federal Register notices. In addition to publication in the Federal Register

and the CFR, HUD and the USDA RD issue additional program requirements as HUD or

RD ¡°directives,¡± including HUD or RD notices, handbooks and forms. References to

citizenship are required as stated in the Personal Responsibility and Work Opportunity

Reconciliation Act of 1996.

1.2

KEY FEATURES OF THE RD VOUCHER PROGRAM

Key

Features

of the

Program

Demonstration Program ¨C In FY 2009, the RDVP continues to be a

demonstration program. RD anticipates establishing a permanent

program based on experience in the demonstration program. Program

features are highlighted below.

One Household-One Voucher ¨C The RD Voucher is issued to

households that reside at the property on the day of prepayment or

foreclosure. The Primary tenant signs for the Voucher. The primary tenant is considered

the voucher holder for the household. The RD voucher may only be transferred to the cotenant in the event of death of the voucher holder.

Eligibility to Receive a Voucher ¨C The tenant must be a citizen, United States non-citizen

national or qualified alien in residence and qualify as a low-income tenant on the date of

prepayment of or termination of the RD mortgage of a Section 515 property.

Waiting List ¨C There is no waiting list for RD Vouchers.

Voucher Amount ¨C This is determined as the difference between the comparable market

rent for the Section 515 unit being rented by the tenant and the amount being paid as rent

by the tenant ¨C the net tenant contribution. The Voucher payment cannot exceed the

lease rent for the approved unit. Once established, the maximum voucher amount does

not change. The voucher payment in the RDVP does not relate to the resident¡¯s income.

RD is responsible for calculating the maximum voucher amount. However, RD may

reduce the voucher amount if the tenant moves and the maximum voucher amount

exceeds the rent at the new location (See Chapter 4)

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