Project-Basing Mainstream Vouchers
Tens of thousands of vouchers are now available under HUD’s Mainstream Housing Choice Voucher Program, with more vouchers in our future. As highlighted in past newsletters, these vouchers can be targeted to households that include a non-elderly person with disabilities who are experiencing or at risk of homelessness, and/or such households who are tenants in rapid re-housing or permanent supportive housing programs. (See New Vouchers Propel Us Forward and Does Anyone Need 18,000 Vouchers?)
Even with a housing voucher in hand, however, it can be difficult to locate safe, appropriate rental units where that voucher can be used. And this is especially true in rental housing markets that are high cost and low vacancy.
Project-based and Tenant-based Vouchers
One option to consider is project-basing these vouchers. While Housing Choice vouchers are generally tenant-based, it is also allowable, with certain restrictions and caveats, to use a portion of a PHA’s allocated tenant-based vouchers as project-based voucher assistance – and this holds true for mainstream vouchers.
Tenant-based vouchers are typically used in the private housing market in a unit selected by the household; a project-based voucher is attached to a particular housing development. For more information on project-basing, see HUD’s Project-Based Vouchers landing page.
Limitations, Requirements, and Special Considerations
A Public Housing Agency (PHA) is allowed to project-base up to 20% of its authorized units generally, and under some conditions – including providing housing for households exiting homelessness – the PHA may project-base an additional 10%, for a total of 30% of authorized units. (See PIH Notice 2017-21 for more guidance and details.) This cap applies to the total number of authorized units for the PHA, and not just the mainstream voucher authority. Therefore, more than 30% of a PHA’s mainstream vouchers may be project-based if the PHA has not already reached its cap.
The flexibility to project-base vouchers comes with certain requirements, so the PHA must ensure that any decision regarding project-basing consider these additional requirements. Referring to official HUD resources, including those cited above, is essential as you decide whether to project-base mainstream vouchers and, if so, how many will be project-based.
Further, given the population served by the mainstream voucher program – non-elderly persons with disabilities – it is critical to be particularly mindful of fair housing requirements. The PHA and the owner of the property must ensure that the property complies with all applicable federal, state, and local nondiscrimination and civil rights statutes and requirements.
In addition to strictly following project-basing and fair housing requirements, the PHA should recognize that a subsequent renewal of funding for mainstream vouchers depends on utilization rates. If the awarded vouchers are not being used by early in the second year, the PHA risks losing renewal funding to support the vouchers. Therefore, the PHA should choose the latest “effective date” possible for awarded vouchers and may wish to project-base vouchers only for developments likely to open within the first year or very early in the second year. Attaching new awards of mainstream vouchers to developments that have not yet broken ground elevates the risk of low utilization, resulting in low renewal funding.
Because project-basing vouchers involves special requirements and caps on numbers of units allowable – as well as close consideration of fair housing issues around disabilities – it can seem complicated. But doable! Close collaboration with your local PHA and HUD fair housing office will ensure your community is on the right track.