HUD updates COVID-19 guidance for vacancy claims, evictions moratorium

Regulation | April 14, 2020 | by Juliana Bilowich

HUD’s Office of Multifamily Housing updated their COVID-19 Question and Answer document early on April 14, 2020. The updates cover how the agency views extended vacancies resulting from COVID-19 and expands on new HUD provisions from the CARES Act.

In their April 14 updates, the HUD Office of Multifamily Housing added eight pages of guidance for affordable housing providers coming to terms with the spread of the virus at their properties. LeadingAge remains in regular communication with the agency regarding the needs of providers and residents across the country, and will host a key agency leader on our national update call on April 16.

Regarding disinfection of both common spaces and units and protections for staff, HUD added best practices for the safe disposal of medical waste. The agency also directs providers to CDC information about disinfecting electronics, laundry, and other surfaces.

Regarding returning residents who were hospitalized for COVID-19, the agency says there is no HUD prohibition against a resident returning to their unit, whether they have received a COVID-19 negative test or not. For more information on ensuring safe transitions between locations, HUD says providers should coordinate with their local health care professionals.

Regarding new resources under the CARES Act, HUD’s Q&A provides a summary of the funds made available by the recently-enacted CARES Act, including $1 billion for Project-based Rental Assistance (PBRA) and $50 million for Section 202 Supportive Housing for the Elderly, $10 million of which can be used for service coordinator support. Most of the new funding is designated to help properties stay solvent through increased subsidy as tenant rent contributions drop, as well as for unusual operating expenses such as increased cleaning costs. However, HUD’s Office of Multifamily Housing has yet to commit to a timeline for allocating the new service coordinator funds.

In response to questions about accessing additional sources of government assistance to cover losses, HUD encourages both borrowers and lenders to access available federal assistance to assist in meeting project operations and debt service. This includes Community Development Block Grants and other sources; however, HUD reminds recipients that the Stafford Act prohibits certain forms of federal assistance to be used for duplicative purposes.

Regarding additional waiver authority granted by the CARES Act, HUD has said it will consider utilizing waiver authority in Section 8 PBRA, Section 202, and Section 811 programs for expediting or facilitating the use of funds to prepare and respond to COVID-19. The waiver authority cannot be used for fair housing or other related standards.

In response to requests for forbearance guidance, HUD issued two mortgagee letters for Multifamily Housing borrowers and for Section 232 Healthcare Facilities, which are in effect starting March 27, 2020. The guidance implements forbearance requirements and options provided in the CARES Act and is summarized in the Q&A document.

Related to the 120 day evictions moratorium, the HUD Q&A document outlines the prohibition on evictions or late fees for nonpayment of rent granted by the CARES Act, but explains that the CARES Act does not prohibit owners from sending late payment notices during the 120 days. The CARES Act also does not restrict the evictions moratorium to tenant whose income is directly affected by COVID-19. In addition, owners can still initiate evictions proceedings for criminal activity, domestic violence, or other lease violations. HUD also explains how owners should handle instances of “abandoned units” throughout the moratorium.

Regarding move-ins, HUD states that it understands that the in-person interview is essential during the application process and is made difficult because of social distancing. HUD says that owners can choose to conduct the interviews remotely using technology or barriers. Owners may also accept electronic signatures on forms or to perform HUD-required screening criteria, but owners will still need to obtain original signatures on verification forms at a later date. For conducting physical move-ins/move-outs, HUD is allowing owners to use flexibilities for electronic processing provided for the recertification process. However, HUD states that property owners and managers must make decisions about performing move-in inspections based on guidance from their local or state jurisdictions, as well as from the CDC, and based on the property circumstances, while ensuring the safety of residents. If the unit is not able to be made ready for occupancy (for example, if the utility provider is not able to turn provide new service turn-ons), the resident cannot move in and the owner can delay the move-in.

For vacancy claims, the document states that if the owner/agent is not able to interview and fill vacancies due to restrictions based on guidance from their local or state jurisdiction regarding COVID-19, then the owner should submit information to their HUD office documenting why the filling of any vacancies were considered infeasible. The HUD Office will review this information on a case-by-case basis and process requests for vacancy claims accordingly; however, at this time, HUD is not considering expanding the current vacancy payment procedures. LeadingAge is requesting that HUD issue a nationally-consistent policy on vacancy claims during this emergency, in particular a policy that incentivizes owners to prioritize the health of existing residents.

Regarding Rent Comparability Studies, Major Rehab, Utility Baselines, and Closings, HUD’s guidance document also covers adjustments to the agency’s current policy on Rent Comparability Studies, major rehab schedules, Utility Analysis (UA) baselines, and closings. To read the guidance document, click here, and to read LeadingAge’s current HUD requests related to COVID-19, please click here.