New HUD Q&A provides little clarity during COVID-19 surge

Regulation | January 04, 2021 | by Juliana Bilowich

HUD’s new set of Q&As for Multifamily Housing providers addresses vaccines, PPP loans, and residual receipts, but falls short of providing support or clarity for senior housing communities

On January 4th, HUD issued a new set of Q&As for Multifamily Housing providers, including senior housing, but falls short of addressing pressing LeadingAge member questions. With affordable housing communities bracing for continued COVID-19 surges across the country, the Q&A provides little direction for housing owners and staff navigating COVID-19 vaccines and testing, as well as ongoing unbudgeted expenses and operational challenges. The Q&A was last updated October 14th.

Vaccines

The Q&A addresses the issue of vaccines at housing sites but offers little clarity. Specifically, the HUD Q&A states that the “temporary use of property common areas, parking lots, and vacant offices by providers of healthcare services to provide flu shots and/or COVID-19 testing and vaccines to residents is allowable. The services must not affect property operating costs beyond budgeted and approved supportive services funds.”

Many LeadingAge housing provider members are participants in the CDC’s Pharmacy Partnership program for vaccine distribution at Section 202 senior housing communities. LeadingAge has urged HUD to issue more clarity for providers regarding fair housing issues, as well as more support to help providers with added costs and operational challenges of hosting vaccine clinics for residents. However, the January 4th Q&A update only adds the word "vaccines" to previous HUD Q&A language related to flu shots and COVID-19 testing sites. 

Small Business Administration PPP Loans

Many housing providers have questions about Paycheck Protection Program (PPP) loans at communities receiving HUD subsidy. In particular, LeadingAge urged HUD to provide clarity for housing properties receiving PPP loan funds in addition to existing federal payments such as HAP contracts.

In response to questions about PPP loans, HUD’s Q&A states that “the Department’s standard subordinate financing requirements must be followed for PPP and EIDL loans. For subsidized properties repayment can only come from surplus cash.”

CDC Eviction Moratorium

The new HUD Q&As are updated to reflect the recently extended eviction moratorium, which now expires at the end of January.

Management and Occupancy Reviews (MORs)

The new HUD Q&A extends flexibility previously granted by HUD for Management and Occupancy Reviews (MORs) occurring on site. Previously, HUD had allowed for PBCAs, TCAs, and HUD staff to conduct on-site MORs without entering resident units until December 31st; the new Q&A extends this flexibility until May 31, 2021. HUD’s earlier total suspension on MORs is only lifted “in locations where there are no restrictions by state or local law or ordinance to prevent them from performing these reviews.”

Project Capital Needs Assessments (PCNAs)

To allow for additional time for scheduling, conducting, and submitting Capital Needs Assessments, HUD has further postponed PCNAs until May 31, 2021 for properties with PCNA reports that are due between March 15, 2020 and May 31, 2021.

Residual Receipts

LeadingAge had urged HUD to extend expiring flexibility allowing owners and agents to temporarily stop reducing their vouchers to offset Residual Receipts as a precaution against COVID-19 expenses. HUD’s new Q&A extends the flexibility until May 31, 2020.

Specifically, the Q&A states that “HUD will temporarily permit suspension of Residual Receipts Housing Assistance Payment (HAP) offsets in certain circumstances. All Project Rental Assistance Contracts (PRACs) may suspend offsets for Residual Receipts through May 31, 2021. Owners of properties receiving Section 8 HAP assistance payments must receive approval in advance to suspend offset payments…after May 31, 2021, all properties must offset HAP vouchers for all Residual Receipts in excess of the minimum allowed retainable balance.”