HUDBlast September 8, 2008

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Be Prepared for TRACS Changes

The iMAX and TRACS 2.0.2.C changes are scheduled for the last quarter of 2008.  Owner/agents will have until January 31, 2009 to switch from TRACSMail and TRACS 2.0.2.B.  Preparing for these changes will be critical to ensure that you do not experience interruption in voucher payments.

A Bit of Forms Confusion

We have received several inquiries about the re-release of several HUD forms.  In order to try to answer as many of you as possible, I wanted to see if I could provide a bit of insight.

In April 2008, HUD released a 9887 Packet that included an OMB number.  Subsequently, it was determined that the OMB number was not required and in May 2008, a new 9887 Packet was released without the OMB number.  HUD clarified that the OMB number should not be included on 9887 Packets presented to residents and applicants.  Inadvertently, in August 2008, the 9887 Packet that included the OMB number was re-posted to HUDClips.  HUD caught the error and replaced the erroneous version with the correct version.  The net result is this; the 9887 Packet should not have an OMB number or expiration date.  The revision date is still 2/2007.

The four HUD model leases were also re-released as part of this posting.  Many of you have noticed that the PDF versions of these leases are no longer available.  HUD has specified that the PDF versions are being updated to allow for automated data entry.  In addition, the correction to the lease for 202/8 and 202 PAC properties (90105-b), adding the CFR reference, will be included when the PDF versions are re-posted. 

Special Note on Collecting the 9887

Please keep in mind that the requirements in the instructions for the 9887 Packet indicate that owner/agents must ensure that the head, co-head and spouse and all adults living in the community sign a copy of the 9887 and 9887A. 

When a household member turns 18, don’t forget to have that “new” adult come in and sign the 9887 forms.  While there is no requirement to complete an interim certification if this is the only change, there is a requirement to obtain permission to include the resident when performing functions allowed by the data share agreements covered by the 9887.  This includes comparison of income reported on the 50059 with income and employment information provided by the Social Security Administration and the Department of Health and Human Services. 

Reminder for 236 Property Managers

As part of HUD’s implementation of the Government Paperwork Elimination Act, the Department is changing reporting and collection processes related to Section 236 Excess Income from paper to an electronic Internet site operated by the Department of Treasury.

On September 1, 2008, reporting and processing of Form HUD-93104 Monthly Report of Excess Income will become electronic through a secured Internet site operated by the Department of Treasury: https://Pay.gov/paygov

The content of the existing Form HUD-93104 was altered to remove data inputs not required for on-line submissions.  For example, the HUD lockbox address and return address are absent as they are not required when submitting on-line.

If you own and or manage a 236 property, you should read the entire notice which can be found on the HUD web site at:  http://www.hud.gov/local/shared/working/r10/mf/236income.pdf

Updates to the Section 8 Renewal Guide

The Section 8 Renewal Guide has been updated.  The instructions contained in the note at the top of page 2 in Chapter 14, dealing with renewals of 524(b) projects has been corrected.  The words “and subsequent renewal” have been added so that RHS projects like all other 524(b) projects are subject to the “lesser of” test at both initial and subsequent renewal.

If you have not done so already, please revise your Section 8 Renewal Policy Guide.  The Section 8 Renewal Guide can be found on the HUD web site at http://www.hud.gov/offices/hsg/mfh/mfhsec8.cfm#s8rpg

Thanks to HUD for providing us with the following Section 8 Contract Renewal Tips:

  1. Submit Renewal Packages to the Contract Administrator 120 days prior to contract expiration to avoid payment delays.
  2. If it is the first contract renewal, or has been five years since the last one, and you are required to include a new Comparability Study, start this process well before the 120-day deadline, so you can submit the completed study with your Renewal Package.
  3. Make sure the owner of record is available to sign documents.
  4. If renewing under Option Four of the Renewal Guidebook, note the following requirements:

§  Submit a budget, prepared according to HUD Handbook 4350.1, The Multifamily Asset Management and Servicing Handbook, Chapter Seven, Processing Budgeted Rent Increases www.hud.gov/offices/adm/hudclips/handbooks/hsgh/4350.1/43501c7HSGH.pdf.

§  Review monthly deposits (R4R analysis useful life –sample.xls) to ensure you have enough in reserve to cover your Replacement Account

§  Conduct a "lesser of" test (see Chapter Six, Renewal of Projects Exempted from OMHAR, www.hud.gov/offices/hsg/mfh/exp/guide/s8renew.pdf  updated 12/20/2006

For those of you with contract renewals that coincide with HUD’s fiscal year end, we would suggest you get your paperwork in sooner rather than later.

New REAC Information

If it has been a while since your last REAC inspection, you may want to review the following: 

Guidance available to owners to get ready for a REAC inspection: http://www.hud.gov/offices/reac/products/pass/PDFs/guidance4inspect.pdf and http://www.hud.gov/local/shared/working/r10/mf/reacinspectiontips.cfm?state=wa

A few overlooked items, (an unlocked breaker panel box and/or the fire inspector forgetting to mark off the fire extinguisher inspection tag) can be the difference between a passing score and a failing score of under 60. 

Please take the time to be prepared for the next inspection.

RBD does not act as a legal advisor nor as a regulatory governing agency.  The recipient should understand that any materials or comments contained herein are not designed for, nor should be relied upon as a source of legal guidance or as a final authority with respect to any particular circumstance. Ross Business Development, Inc. makes no warranty of merchantability or fitness for a particular purpose or any other warranty of any type. Owners and management should seek competent legal advice in developing and carrying out policies and procedures.  While we have been diligent in our efforts to provide comprehensive and accurate regulatory information, Ross Business Development, Inc. shall not be responsible for errors or inaccuracies.