Title
Resolution to Approve Amendment to the Housing Choice Voucher Administrative Plan Regarding Interim Disbursements for the Family Self Sufficiency Program
Memorandum
HUD provides the primary source of PHA policy through federal regulations, HUD Notices and Handbooks. Compliance with federal regulations, current HUD Notices and HUD Handbooks is mandatory. In addition, HUD requires all PHAs to adopt an Administrative Plan for the Voucher Program. The purpose of this memorandum is to request board approval for changes to the Administrative Plan for Chapter 18 Part III.E regarding disbursements before the expiration of the contract term.
The purpose of the Family Self-Sufficiency (FSS) program is to promote the development of local strategies to coordinate the use of public housing assistance and housing assistance under the Section 8 rental certificate and rental voucher programs with public and private resources, to enable families eligible to receive assistance under these programs to achieve economic independence and self-sufficiency.
The objective of the FSS program is to reduce the dependency of low-income families on welfare assistance and on Section 8, public, or any Federal, State, or local rent or homeownership subsidies. Under the FSS program, low-income families are provided opportunities for education, job training, counseling, and other forms of social service assistance, while living in assisted housing, so that they may obtain the education, employment, and business and social skills necessary to achieve self-sufficiency.
The Department will measure the success of a local FSS program not only by the number of families who achieve self-sufficiency, but also by the number of FSS families who, as a result of participation in the program, have family members who obtain their first job, or who obtain higher paying jobs; no longer need benefits received under one or more welfare programs; obtain a high school diploma or higher education degree; or accomplish similar goals that will assist the family in obtaining economic independence.
HUD regulations state that if the PHA determines that the FSS family has fulfilled certain interim goals established in the contract of participation and needs a portion of the FSS account funds for purposes consistent with the contract of participation, such as completion of higher education (i.e., college, graduate school), or job training, or to meet start-up expenses involved in creation of a small business, the PHA may, at the PHA's sole option, disburse a portion of the funds from the family's FSS account to assist the family meet those expenses. Below is the current AAHC policy with the recommended amendment in track changes
PHA Policy
In the event the FSS family would like to withdraw funds from its FSS Account, the PHA may at its sole option, disburse a portion of the funds from the family’s escrow account during the Contract period for Contract-related expenses (see full details below).
The determination to disburse these funds will be at the sole discretion of the FSS Coordinator and the HPM.
Interim disbursements may be approved for not more than 25% of the family’s escrow balance at the time of the request. The AAHC will not grant more than two (2)one (1) interim disbursements per FSS family.
Interim disbursements may be considered under the following conditions:
• Requests are made in writing and include verification that the funds are required for the completion of a goal under the family’s Contract of Participation (COP);
• The funds are needed to complete homeownership, business start-up and education goals in the family’s COP (examples: to pay for school tuition, job training expenses, business start-up expenses, homeownership education, or costs related to purchasing a home);
• The family can demonstrate completion of specific interim goals from its COP;
• Interim escrow disbursements must be paid by check directly to the agency or business providing the required items or services;
• A copy of the payment receipt will be retained in the participant’s file; and
• The amount disbursed will be a debit to the FSS escrow account at the time the payment claim is processed.
Interim disbursements will not be approved to pay off existing debt
The goal of the Family Self Sufficiency program is to assist families to become economically self-sufficient. Families must enroll in the FSS program and sign a contract to set interim and final goals. When a family’s income increases, the amount of their rent increases because it is calculated as 30% of their income. When the tenant pays a higher portion of the rent, HUD pays a lower portion of the rent. Under the FSS program, if a FSS participant’s rent increases, the amount of rent that goes to the landlord stays the same and the amount of rent paid by HUD stays the same, and the increased rent goes into an escrow account for the tenant.
If the tenant completes the FSS goals and graduates from the program within 5 years, then the tenant gets to receive all of the funds in the escrow account. If the tenant does not complete the FSS program, the escrow account goes back to HUD to offset the additional rent that HUD paid to the landlord. These changes are recommended to ensure that interim disbursements will lead to successful completions of the Family Self Sufficiency program and are not used to subsidize living expenses.
If a family receives an interim disbursement and does not graduate from the program, neither the AAHC nor HUD have a mechanism to recapture those funds from the family. Consequently, interim disbursements should be an infrequent occurrence and there should be a clearly demonstrated nexus between the activity the family is requesting an interim disbursement for and the FSS goal the family needs to achieve to graduate from the program.
Staff
Prepared and approved by Jennifer Hall, Executive Director
Body
WHEREAS, HUD allows Housing Authorities to adopt policies for the Family Self-Sufficiency (FSS) program;
WHEREAS, the FSS participants must achieve contractual goals to graduate from the FSS program and receive escrow funds;
WHEREAS, the AAHC has adopted optional policies for the interim disbursement of escrow funds to families enrolled in the FSS program;
WHEREAS, the AAHC staff are recommending the following revision to the interim disbursement of escrow funds
Interim disbursements may be approved for not more than 25% of the family’s escrow balance at the time of the request. The AAHC will not grant more than two (2)one (1) interim disbursements per FSS family.
Interim disbursements may be considered under the following conditions:
• Requests are made in writing and include verification that the funds are required for the completion of a goal under the family’s Contract of Participation (COP);
• The funds are needed to complete homeownership, business start-up and education goals in the family’s COP (examples: to pay for school tuition, job training expenses, business start-up expenses, homeownership education, or costs related to purchasing a home);
• The family can demonstrate completion of specific interim goals from its COP;
• Interim escrow disbursements must be paid by check directly to the agency or business providing the required items or services;
• A copy of the payment receipt will be retained in the participant’s file; and
• The amount disbursed will be a debit to the FSS escrow account at the time the payment claim is processed.
Interim disbursements will not be approved to pay off existing debt
RESOLVED, that the Ann Arbor Housing Commission Board approve the Housing Choice Voucher Administrative Plan amendment to Chapter 18 Part III.E regarding circumstances to consider when providing interim assistance, to take effect on October 1, 2016.