New Student Rule Prompts Review of Property Documents & Processes

 

Going to school on the new student rule!

 

While there is a need for additional clarification from HUD in many areas of the new student rule, owner/agents should implement as many changes as possible to be as compliant as possible. 

 

We have done our best to research the new requirements.  Additional review by your management staff and legal counsel is appropriate.  Please keep in mind that RBD investigates information pertaining only to those programs governed by the 4350.3.   This interpretation of the Student Rule applies only to Section 8 contracts.  We are not attempting to interpret the rule as it applies to Section 8 voucher, PHA, Tax Credit, HOME or 515 programs. 

 

Most of the information pertains to applicants.  Please refer to the 4350.3 Revision 1, Change 1 Paragraph 3-4.  HUD indicates that eligibility is determined at move in or at initial certification.  We have requested clarification from HUD regarding implementation of the student rule for existing residents.  We will let you know as we receive responses from HUD.

 

For Section 8 property managers, RBD believes that the following actions are indicated:

 

  1. Amendments to the Application
  2. Creation and/or amendments of the student verification form
  3. Amendments to the resident selection plan
  4. Training for Site staff regarding new eligibility criteria

 

1.      Amendments to the Application:

 

Most property applications include questions asking about student and full time student status.  Now, ALL students enrolled in an institute of higher education must be deemed eligible before the household can receive assistance.  If your application does not inquire about student status, then you might consider adding a question similar to the following:

 

Are you enrolled as a student in an institute of higher education?

(Institutes of higher education include post-secondary vocational institutions, proprietary institutions of higher education which prepare students for gainful employment in a recognized occupation, and accredited post-secondary colleges and universities.)

 

If the applicant answers yes, then the applicant should complete a student verification form.

 

If the student doesn’t know if their school qualifies, they should have a way to indicate that they do not know and you can verify with the school.

 

2.      Amendments to the Student Verification

 

A student verification form should be completed by anyone who indicated that he/she is enrolled as a student in an institute of higher education. 

Questions might include:

 

Are you enrolled as a student in an institute of higher education?

If yes

 

Answers to these questions require verification.  We recommend that you gather contact information and plan to issue verification forms to the parents as well.  This will enable you to gather information about the parent’s income and assets. 

 

Also consider developing a verification form for the institute of higher learning.  You want to verify that the student is enrolled in a program that meets the definition of an institute of higher learning as defined by the Higher Education Act of 1965.  You can find a copy of the Act at the following web site.  http://www.ed.gov/policy/highered/leg/hea98/index.html

 

(a)  INSTITUTION OF HIGHER EDUCATION.—for purposes of this Act, other than title IV, the term ‘institution of higher education’ means an educational institution in any State that

 

(1)   admits as regular students only persons having a certificate of graduation from a school providing secondary education, or the recognized equivalent of such a certificate;

(2)   is legally authorized within such State to provide a program of education beyond  secondary education;

(3)   provides an educational program for which the institution awards a bachelor’s degree or provides not less than a 2-year program that is acceptable for full credit toward such a degree;

(4)   is a public or other nonprofit institution; and

(5)   is accredited by a nationally recognized accrediting agency or association, or if not so accredited, is an institution that has been granted pre-accreditation status by such an agency or association that has been recognized by the Secretary for the granting of  pre-accreditation status, and the Secretary has determined that there is satisfactory assurance that the institution will meet the accreditation standards of such an agency or association within a reasonable time.

 

(b) ADDITIONAL INSTITUTIONS INCLUDED.—for purposes of this Act, other than title IV, the term ‘institution of higher education’ also includes

(1)   any school that provides not less than a 1-year program of training to prepare students for gainful employment in a recognized occupation and that meets the provision of paragraphs (1), (2), (4), and (5) of subsection (a); and

(2)   a public or nonprofit private educational institution in any State that, in lieu of the requirement in subsection (a)(1), admits as regular students persons who are beyond the age of compulsory school attendance in the State in which the institution is located.

 

‘‘(c) LIST OF ACCREDITING AGENCIES.—For purposes of this section and section 102, the Secretary shall publish a list of nationally recognized accrediting agencies or associations that the Secretary determines, pursuant to subpart 2 of part H of title IV, to be reliable authority as to the quality of the education or training offered.

 

3.      Amendments to the Resident Selection Plan

 

The change in the eligibility requirements should also prompt a review and possible update of Section 8 resident selection plans. 

 

If your Section 8 resident selection plan discusses eligibility of Full Time Students Who Will be Head or Co-Head, the verbiage should be changed to reflect the new requirements.  We have included the wording that we are using below:

 

Eligibility of Applicants Applying for Section 8 Assistance Who are Enrolled in an Institute of Higher Education

 

1)       As of January 30, 2006, 24 CFR Parts 5, 880, 883, et al. Eligibility of Students for Assisted Housing Under Section 8 of the U.S. Housing Act of 1937; Final Rule becomes effective.  No assistance shall be provided under Section 8 of the United States Housing Act of 1937 (42 U.S.C. 1437f) to any individual who—

 

a)      Is enrolled as a student at an institution of higher education (as defined under section 102 of the Higher Education Act of 1965 (20 U.S.C. 1002));

b)      Is under 24 years of age;

c)      Is not a veteran;

d)      Is unmarried;

e)      Does not have a dependent child; and

f)       Is not otherwise individually eligible, or has parents who, individually or jointly, are not eligible, to receive assistance under section 8 of the United States Housing Act of 1937 (42 U.S.C. 1437f).

 

2)      For purposes of determining the eligibility of a person to receive assistance under section 8 of the United States Housing Act of 1937 (42 U.S.C. 1437f), any financial assistance (in excess of amounts received for tuition) that an individual receives under the Higher Education Act of 1965 (20 U.S.C. 1001 et seq.), from private sources, or an institution of higher education (as defined under the Higher Education Act of 1965 (20 U.S.C. 1002)), shall be considered income to that  individual, except for a person over the age of 23 with dependent children.’’

Also, if you have listed the “Reasons for Rejection” in your resident selection plan, be sure to indicate that applicant households whose members include a student enrolled in an institute of higher education are not eligible for assistance (Section 8).  Since there is currently no instruction regarding pro-ration of assistance to mixed households (students and non-students living together), we are interpreting the new rule to mean that the applicant household is not qualified for assistance.  (For applicants, not existing households-we are waiting for clarification before addressing how the change impacts existing residents)

 

4.      Training for Site staff regarding new eligibility criteria

 

Be sure that the site staff is informed of the new requirements and make sure they have a chance to identify students on the waiting list so they can determine eligibility based on the new requirements.  As with any modifications to internal processes or to any formal documentation, please be sure that appropriate management staff review and approve any changes before they are implemented.  RBD offers this opinion in response to inquiries from our customers.  Information may change as HUD releases clarification.  We encourage you to discuss these changes with your Contract Administrator or/and HUD contacts. 

 

This Is the Last Week to Respond To HUD's Notice of Proposed Metropolitan Area Definitions for Fiscal Year (FY) 2006 Income Limits and Median Family Income Estimates

 

Comments Due: February 14, 2006

 

A copy of the notice and a comparison chart are available on the HUDUser web site at http://www.huduser.org/datasets/il.html

 

This notice proposes changes in the metropolitan area definitions used to calculate HUD median family income estimates and income limits.  HUD is proposing to issue FY2006 income limits that are based on current Office of Management and Budget (OMB) metropolitan statistical area (MSA) definitions based on 2000 Census data rather than to continue to use old OMB metropolitan area definitions based on 1990 Census data.

 

OMB revises metropolitan area definitions after each Decennial Census. It issued its 2000-Census based definitions in 2003, which contained substantial changes to several metropolitan area definitions. These changes were made to better reflect metropolitan area commuting and economic patterns. 

HUD proposed implementing these definitions in its 2004 publication of proposed FY2005 Section 8 Fair Market Rents. It planned to issue FY2005 income limits using the same area definitions. In response to public comments, it reverted to use of old OMB definitions in its final FY2005 Fair Market Rent (FMR) publication.

 

HUD noted in this publication that it intended to continue exploring how to best implement the new definitions, and subsequently received a number of comments supporting use of the new definitions.

 

Send your comments to:

 

The Office of General Counsel, Rules Docket Clerk
Department of Housing and Urban Development
451 Seventh Street, SW., Room 10276
Washington, DC 20410-0001

 

Send a duplicate of your comments to:

The Headquarters Economic and Market Analysis Division
Department of Housing and Urban Development
451 Seventh Street, SW., Room 8224
Washington, DC 20410-0003

RBD Offers New Class – Preparing for the Management and Occupancy Review

 

Many of you know that industry stakeholders are waiting for the release of several new handbooks and forms.  In December, HUD finalized and OMB approved the new 9834 form used by HUD and the contract administrators during the management and occupancy review (MOR).

 

In response, RBD has developed a new class to let property managers know what to expect before, during and after the management review.  We will provide some best practice tips, some sample forms and checklists and give your staff a basic review of the Fair Housing and Section 504 requirements addressed during the MOR.  Classes are currently scheduled for March and April.  Visit our web site for additional information.  www.rbdnow.com.