Dealing with HUD

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On Jan. 20, President Biden issued Executive Order 13988, titled “Preventing and Combating Discrimination on the Basis of Gender Identity or Sexual Orientation.” The order directed executive branch agencies to examine further steps that could be taken to combat such discrimination. HUD became the first agency to announce that it will implement the order by administering and enforcing the Fair Housing Act to prohibit discrimination on the basis of sexual orientation and gender identity.

If you manage a blended-occupancy or mixed-finance site that includes LIHTC and Section 8 Project-Based Rental Assistance program compliance, you should know that HUD’s Real Estate Assessment Center (REAC) recently released a memorandum that details the return-to-operations plan for inspections.

HUD recently released a proposed rule that would revise the 2013 disparate impact rule, which set the standard for determining when a practice with a discriminatory effect violates the Fair Housing Act. Disparate impact is a legal doctrine under the Fair Housing Act which states that a policy may be considered discriminatory if it has a disproportionate “adverse impact” against any group based on race, national origin, color, religion, sex, familial status, or disability when there is no legitimate, nondiscriminatory business need for the policy.

IRS Revenue Procedure 2016-15 provides that the REAC protocol is among the inspection protocols that satisfy both Section 1.42-5(d) and the physical inspection requirements of Section 1.42-5T(c)(2)(ii) and (iii). According to Revenue Procedure 2016-15, one of the qualifications for an inspection to be considered as being performed under the REAC protocol is if the inspection is performed by HUD REAC inspectors (or inspectors certified by HUD).

HUD is providing owners and managers with guidance on converting studio units into one-bedrooms.

By issuing an official memo on conversions this February, HUD is seeking to impose consistency on a regulatory area in which there had previously been no clear policy, says Denise Muha, executive director of the National Leased Housing Association (NLHA). Muha explains what the recent memo outlining new requirements on conversions could mean to you as an owner or a manager.

HUD is seeking comments from owners and managers about its Enterprise Income Verification (EIV) System. Specifically, HUD would like to hear about the experiences of owners and managers in seeking and gaining access to the EIV System and in using various multifamily applications and reports contained within the EIV System.

Sending comments to HUD. Owners and managers wishing to submit comments about EIV should email their comments to: MF_EIV_Comments@hud.gov.

As of Dec. 18, 2007, HUD ceased prohibiting project-based voucher rents from exceeding tax credit rents. According to housing groups such as the National Leased Housing Association (NLHA), the old voucher rule, which went into effect in October 2005, was flawed; it required a change in the project-based voucher program that was inconsistent with guidance previously provided by HUD.