Revisions to Notices H95-55 and 95-68 Proc for implementing Section 214

Revisions to Notices H 95-55 and 95-68 - Procedures for implementing Section 214 of the Housing and Community Development Act of 1980, as amended -

Directive Number: 96-88

U.S. Department of Housing and Urban Development

Office of Housing

Special Attention of: Notice H 96-88 (HUD)

Directors of Housing Issued: October 10, 1996

Directors of Multifamily Expires: October 31, 1997

Housing Division;

Asset Management Branch Chiefs;

Owners and Management Agents Cross References: Handbook 4350.3

Contract Administrators Notices H 95-55

and 95-68

Subject: Revisions to Notices H 95-55 and 95-68 - Procedures for

implementing Section 214 of the Housing and Community

Development Act of 1980, as amended - Restrictions on

assistance to Noncitizens.

Purpose: This Notice provides guidance on prorating rents for mixed

families in preservation projects with an approved plan of

action under LIHPRHA (Title VI) and ELIHPA (Title II) that

are subject to Section 214.

Applicability:

Section 214 of the Housing and Community Development Act of 1980

applies only to certain programs. A complete listing of these

programs is included in Section 4 of Notice H 95-55. The only

preservation projects that are covered under Section 214 are those

with an existing Section 236 mortgage or those projects with Section 8

assistance. All other preservation projects are exempt from the

requirements of Section 214.

Prorating Rents:

In certain cases (see Section 6 of Notice H 95-55), rents will be

prorated for mixed families. Proration always involves the use of a

fraction, developed by using a denominator, which is the number of

people in the household and a numerator, which is either the number of

eligible or ineligible people in the household, depending on the type

of assistance.

For preservation projects, the numerator should be the number of

ineligible people in the household. Therefore, if a household

consists of five people, and only three have eligible immigration

status, the fraction used to prorate their rent would be 2/5.

2

Preservation Project Rent (PPR) is equal to market rent. Even

though PPR is capped at 90% in an effort to maintain the

income mix in a project, for the sake of calculating prorated rent,

project owners/managers will use the PPR (100%) in the proration as

follows:

1. Subtract the Total Tenant Payment (TTP) shown on line 51 of

Form HUD 50059 from the PPR (100%). The resulting amount is

considered the amount of subsidy the family currently

receives (or in the case of an applicant family, the amount

they would have received prior to implementation of the

Noncitizen rule).

Example: PPR - $600 minus

TTP - $400 equals $200 subsidy amount

2. Multiply the subsidy amount by the fraction, in this case

"2/5" and the resulting amount is the amount by which the

TTP must be increased.

Example: $200 subsidy x 2/5 equals $80

3. The amount of increase should be added to the current TTP to

get the prorated rent or new TTP.

Example: $400 (current TTP) plus $80 (increase) equals

$480 - prorated rent or new TTP

Questions:

1. Project Owners/Managers

Project Owners/Managers who have questions regarding the the

noncitizen rule should contact the Asset Manager in the local HUD

Office with jurisdiction over their project. Questions regarding

Preservation should be directed to the Preservation staff at 202-

708-2300.

2. HUD Field Staff

HUD Field Staff who have questions regarding the noncitizen rule

should contact their Headquarters Desk Officer at 202-708-0547.

Questions regarding Preservation should be directed to the

Preservation staff at 202-708-2300.

3

HUD Field Staff who have questions regarding this notice should,

until December 30, 1996, contact the Program

Management Division in the Office of Asset Management and

Disposition at (202) 708-3944. Starting on December 31, 1996,

these questions should be addressed to the Headquarters

Operations Desk Officer.

___________________________

Nicolas P. Retsinas

Assistant Secretary for Housing -

Federal Housing Commissioner

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