News

HOTMA Final Rule - New Rules on Hardship Exemptions

The Department of Housing & Urban Development (HUD) has released a Final Rule implementing the Housing Opportunity Through Modernization Act of 2016 (HOTMA). This final rule was published in the Federal Register on February 14, 2023. With the exception of changes relating to Non-Public Housing Over Income families (which take effect on March 16, 2023), this final rule takes effect on January 1, 2024.  The Housing Opportunity Through Modernization Act (HOTMA) was signed into law on July 29, 2016, amending many aspects of Multifamily Housing programs (as well as programs administered through the Offices of Public and Indian Housing and Community Planning and Development). HOTMA was intended to streamline processes and reduce burdens on housing providers. On September 17, 2019, HUD issued a proposed rule to update its regulations according to HOTMA s statutory mandate. The final rule, published on January 9, 2023, considers public comment received on the proposed rule and provides additional guidance for implementing Sections 102, 103, and 104 of HOTMA. Which Programs will be Affected by the Final Rule?  The Section 8 PBRA (including RAD), Section 202/811 PRAC, 202/8, 202/162 PAC, Senior Preservation Rental Assistance Contract (SPRAC), and Section 811 Project Rental Assistance (811 PRA) programs will see changes due to HOTMA. This is the third in a series of articles I will write on the sweeping changes that will be made to HUD affordable housing programs. This article will focus on the revised hardship exemptions made by the final rule. HUD received many comments on the proposed rule relating to hardship exemptions for unreimbursed health and medical care, attendant care, auxiliary apparatus expenses, and childcare expenses. The final rule has been revised to provide clarity to these exemptions and ease burdens on families experiencing financial hardship. Medical/Disability Expenses Current regulations permit the deduction of medical expenses from annual income for elderly households if the expenses (1) will not be reimbursed by insurance or another source, and (2) when combined with any disability assistance expenses are in excess of three percent of annual income. The new regulation does not permit the deduction until the medical expenses exceed 10 percent of gross income. This will clearly have a negative impact on many elderly/disabled households. To help ease this burden, the final rule provides two types of hardship exemptions to the ten percent threshold for health and medical care expenses (for elderly and disabled families) and reasonable attendant care and auxiliary apparatus expenses (for families that include a person with disabilities). The first category is for families eligible for and taking the unreimbursed health and medical care expenses and reasonable attendant care and auxiliary apparatus expenses deduction in effect prior to this rule (i.e., the 3% rule). The second category is for families that can demonstrate that the family s health and medical care expenses or reasonable attendant care and auxiliary apparatus expenses increased, or the family s financial hardship is a result of a change in circumstances that would not otherwise trigger an interim reexamination. HUD is adding this second category in the final rule in recognition that the change from the three percent threshold to the new ten percent threshold for unreimbursed health and medical care expenses or reasonable attendant care and auxiliary apparatus expenses may result in financial hardship for families, including those families who were not receiving the deduction or may not even have been receiving housing assistance at the time the final rule goes into effect. These families may receive temporary hardship relief if their health and medical care expenses or reasonable attendant care and auxiliary apparatus expenses exceed five percent of the family s income. Under the first category (families taking the deduction based on the three percent rule), owners must deduct eligible expenses exceeding five percent of the family s income for the first year, 7.5% for the second year, and 10% for the third year. Under the second category, a family may qualify for hardship exemptions for health and medical care expenses or reasonable attendant care and auxiliary apparatus expenses if the family can demonstrate that the expenses increased, or the family s financial hardship is a result of a change in circumstances (as determined by the project owner). For these families, the deduction will be for expenses in excess of five percent of family income for up to 90 days. This may be extended for additional 90-day periods at the discretion of the owner, based on family circumstances. Owners may also terminate the hardship exemption if it is determined that the family no longer needs the exemption. In some circumstances, families receiving the deduction under the first category may request relief under the second category of hardship relief. During the second year of transition, the owner deducts expenses exceeding 7.5 percent of family income if relief is being obtained under the first category. If the family can demonstrate that the health and medical care expenses or reasonable attendant care and auxiliary apparatus expenses increased or the family s financial hardship is a result of a change in circumstances, and not just due to the transition to the 7.5% threshold, the family may be granted relief under the second category. In this case, expenses exceeding five percent of the family income will be deducted (instead of 7.5%). However, this relief will last only for 90 days (unless extended by the owner), and the family is no longer eligible for relief under the first category. In other words, at the end of the relief period for the second category, the family will be subject to the regular health and medical care expenses or reasonable attendant care and auxiliary apparatus expenses deduction threshold of ten percent, regardless of whether they fully transitioned to the ten percent threshold under the first category. Childcare Deduction Hardship Relief Under the final rule, property owners may extend a deduction for unreimbursed childcare expenses for 90-days, with extensions for additional 90-day periods if the family can demonstrate that they are unable to pay their rent due to loss of the childcare expense deduction, and the childcare expense is still necessary even though the family member is no longer employed or furthering his or her education. The following example illustrates how this relief could work: A family that was claiming the childcare deduction no longer qualifies because the care is no longer necessary to enable a family member to work or go to school. The family member who was employed had to leave their job in order to provide uncompensated care to an elderly friend who is very ill and lives across town. The family may continue to claim the childcare deduction for 90 days, with 90-day extensions as approved by the owner. Bottom Line The hardship exemptions outlined here apply only to HUD projects that allow for deductions from gross income and will not go into effect until January 1, 2024. Owners of such projects should familiarize themselves with the details of these exemptions so that they will be ready to implement them in 2024.

Federal Court Rules that Applicant May Request Reasonable Accommodation on Behalf of Roommate

In McClendon v. Bresler, the Ninth Circuit affirmed a district court decision that statements made in an email by a rental co-applicant to an apartment owner supporting the need for a reasonable accommodation (a support animal) suffice as a request for a reasonable accommodation and that the co-applicant had standing to sue for the landlord s refusal to grant the accommodation. The landlord had a "no dogs" policy and would not waive it for an assistance animal. The applicant presented evidence that her dog was verified as a support animal and requested the accommodation. To succeed in a reasonable accommodation fair housing claim, a plaintiff must prove: (1) plaintiff has a disability; (2) the defendant knew or reasonably should have known of the disability; (3) an accommodation may be necessary to afford the disabled person an equal opportunity to use and enjoy the dwelling (4) the requested accommodation is reasonable, and (5) the defendant refused to make the requested accommodation. In this case, only number 2 was in dispute. When the roommate informed the landlord via email that the applicant had a "verified support animal," used the terms "reasonable accommodation, "and "discrimination," the landlord was notified of the potential disability. As to whether the claim could be brought by the roommate and not the disabled applicant, the court stated that the FHA permits any "aggrieved person" who "claims to have been injured by a discriminatory housing practice" to bring a housing discrimination suit." The co-applicant was equally harmed by the denial of the reasonable accommodation. Bottom Line: This case serves as a reminder that requests for reasonable accommodations do not have to be made by a disabled person. The request may be made by someone acting on behalf of that person. In addition, action against housing providers who refuse to grant needed reasonable accommodations may be brought by anyone who is harmed by the landlord s action - even if it is not the disabled person.

HOTMA Final Rule - Revised Exclusions to Income

The Department of Housing & Urban Development (HUD) has released a Final Rule implementing the Housing Opportunity Through Modernization Act of 2016 (HOTMA). This final rule was published in the Federal Register on February 14, 2023. With the exception of changes relating to Non-Public Housing Over Income families (which take effect on March 16, 2023), this final rule takes effect on January 1, 2024.  The Housing Opportunity Through Modernization Act (HOTMA) was signed into law on July 29, 2016, amending many aspects of Multifamily Housing programs (as well as programs administered through the Offices of Public and Indian Housing and Community Planning and Development). HOTMA was intended to streamline processes and reduce burdens on housing providers. On September 17, 2019, HUD issued a proposed rule to update its regulations according to HOTMA s statutory mandate. The final rule, published on January 9, 2023, considers public comment received on the proposed rule and provides additional guidance for implementing Sections 102, 103, and 104 of HOTMA. Which Programs will be Affected by the Final Rule?  The Section 8 PBRA (including RAD), Section 202/811 PRAC, 202/8, 202/162 PAC, Senior Preservation Rental Assistance Contract (SPRAC), and Section 811 Project Rental Assistance (811 PRA) programs will see changes due to HOTMA. This is the second in a series of articles I will write on the sweeping changes that will be made to HUD affordable housing programs. This article will focus on the revised income "exclusions" made by the final rule. PHAs, owners, and grantees are not required to calculate and may not include imputed income on assets when a household s net family assets are valued at or below $50,000. This amount will be adjusted annually for inflation. The actual income from assets continues to be included in income, regardless of the amount of assets. For an irrevocable trust or a revocable trust outside the control of any member of the household, the final rule excludes from income distributions of the principal or the property that was transferred into the trust. Distributions of income (e.g., interest earned) from the trust when the distributions are used to pay the cost of health and medical care expenses for a minor are also excluded. For a revocable trust or trust that is under the control of the household, distributions from the trust are excluded from income, but any actual income earned by the trust (i.e., interest, dividends, rent), regardless of whether it is distributed, shall be considered income to the family. Income received for the care of foster children or adults has long been excluded. This final rule expands the exclusion to State or Tribal kinship or guardian care payments. Payments and settlements from insurance for personal or property loss are excluded, as are payments through health insurance, motor vehicle insurance, and worker s compensation. Payments from training programs funded by HUD or qualifying Federal, State, Tribal, or local employment training programs (including training programs not affiliated with a local government) and payments from training of a family member as a resident management staff are excluded from income. Since the $480 dependent deduction will be adjusted annually based on inflation, the final rule clarifies that for full-time students age 18 and over who are dependents of the household, any income in excess of the dependent deduction is excluded from income. I.e., only the amount of the dependent deduction will be counted as income. All payments from State Medicaid agencies for in-home support are excluded from income. Payments made or authorized by a Federal agency for this purpose are also excluded from income. Amounts paid directly to a member of an assisted family by a State Medicaid agency (including through a managed care entity) or other State or Federal agency (or entities authorized by the agencies to make such payments) to enable a family member who has a disability and wishes to remain in the unit are excluded from income. This applies only when the payments to the family member are for the care of another member of the family living in the unit. HUD is clarifying the general exclusion for "nonrecurring income," by defining nonrecurring income as income that will not be repeated in the coming year, based on information that the family provides. The exclusion specifically states that income earned as an independent contractor, day laborer, or seasonal worker does not count as "nonrecurring" income and is therefore included as income. The wording of this exclusion indicates that in order to be recurring, income must be received on an "annual" basis - it need not be received monthly, quarterly, etc. Examples of nonrecurring income provided by HUD include: (1) payments from the U.S. Census Bureau for work on the decennial Census or the American Community Survey that is less than 180 days and does not result in a permanent position; (2) direct Federal or State payments intended for economic stimulus or recovery; (3) amounts received directly by a family as a result of State or Federal refundable tax credits or refunds at the time they are received; (4) gifts for holidays, birthdays, or significant life events or milestones; (5) non-monetary, in-kind donations from food banks or similar organizations; and (6) lump-sum additions to assets such as lottery or other contest winnings. HUD is adding a new income exclusion that broadly excludes any income a family receives from civil rights settlements or judgments regardless of how the settlement or judgment is structured (i.e. whether by a lump-sum or payment schedule). However, the settlement or judgment amounts will be counted toward a family s net assets if deposited into an account that would otherwise be considered an asset. The interest from such accounts will be considered asset income. Any income received from any account under a retirement plan recognized by the IRS, including IRAs, employer retirement plans, and retirement plans for self-employed individuals shall be excluded. However, any distribution of periodic payments from these retirement accounts shall be considered income. The final rule also makes changes to the exclusion of income relating to student financial assistance. However, this section of the rule is complex and will be discussed in the next article in this series.

A. J. Johnson Partners with Mid-Atlantic AHMA for March Training on Affordable Housing

During the month of March 2023, A. J. Johnson will be partnering with the MidAtlantic Affordable Housing Management Association for four training sessions intended for real estate professionals, particularly those in the affordable multifamily housing field. All four sessions will be presented via live webinars. The following sessions will be presented: March 7: Developing Smoke-Free Policies for Multifamily Housing - A smoke-free policy in your apartment community will help protect your property and residents from smoke damage and reduce the risk of fires. You will save money on turnover expenses because apartments will cost less to clean, repair, and repaint. Living in a smoke-free environment promotes healthier hearts and lungs. What are the other benefits of smoke-free housing? Your family, guests, pets, and building staff will all find the air more pleasant to breathe. This three-hour training will assist owners in understanding the steps necessary to go "smoke-free." It will include (1) a discussion of the legal issues relating to prohibiting smoking; (2) the advantages of smoke-free housing; and (3) the steps to implementing such a policy, including details on what to include in the policy. This session is a must for any property looking to go smoke-free and will provide much-needed reinforcement and guidance for those that already have. March 9: Implementing Criminal Screening Policies for Multifamily Housing - Property owners may (and should) screen applicants for criminal behavior but must be careful when doing so - and must have transparent and defensible policies relative to screening for past criminal conduct. This 1.5-hour webinar will assist owners and property managers in understanding what is required when implementing a criminal screening policy. The training will outline the HUD guidance relative to criminal screening and will review the type of policies that are - and are not - acceptable. The discussion will center on (1) the types of crimes that are appropriate for screening; (2) the HUD policy regarding the use of arrest records in criminal screening; (3) dealing with convictions for non-dangerous crimes; and (4) the use of individual assessments for rejected applicants. Following the session, participants will be better prepared to develop a criminal screening policy that will not run afoul of fair housing law. March 28: Intermediate LIHTC Compliance - Designed for more experienced managers, supervisory personnel, investment asset managers, and compliance specialists, this program expands on the information covered in the Basics of Tax Credit Site Management. A more in-depth discussion of income verification issues is included as well as a discussion of minimum set-aside issues (including the Average Income Minimum Set-Aside), optional fees, and use of common areas. The Available Unit Rule is covered in great detail, as are the requirements for units occupied by students. Attendees will also learn the requirements relating to setting rents at a tax-credit property. This course contains some practice problems but is more discussion oriented than the Basic course. A calculator is required for this course. March 29: Advanced LIHTC Compliance - This full-day training is intended for senior management staff, developers, corporate finance officers, and others involved in decision-making with regard to how LIHTC deals are structured. This training covers complex issues such as eligible and qualified basis, applicable fraction, credit calculation (including first-year calculation), placed-in-service issues, rehab projects, tax-exempt bonds, projects with HOME funds, Next Available Unit Rule, employee units, mixed-income properties, the Average Income Minimum Set-Aside, vacant unit rule, and dealing effectively with State Agencies. These sessions are part of the year-long collaboration between A. J. Johnson and MidAtlantic AHMA that is designed to provide affordable housing professionals with the knowledge needed to effectively manage the complex requirements of the various agencies overseeing these programs. Persons interested in any (or all) of these training sessions may register by visiting either www.ajjcs.net or https://www.mid-atlanticahma.org.

HOTMA Final Rule - Overview of Program Changes

The Department of Housing & Urban Development (HUD) has released a Final Rule implementing the Housing Opportunity Through Modernization Act of 2016 (HOTMA). This final rule has not yet been published in the Federal Register. Publication in the Federal Register will establish the effective dates of the rule.  The Housing Opportunity Through Modernization Act (HOTMA) was signed into law on July 29, 2016, amending many aspects of Multifamily Housing programs (as well as programs administered through the Offices of Public and Indian Housing and Community Planning and Development). HOTMA was intended to streamline processes and reduce burdens on housing providers. On September 17, 2019, HUD issued a proposed rule to update its regulations according to HOTMA s statutory mandate. The final rule, published on January 9, 2023, considers public comment received on the proposed rule and provides additional guidance for implementing Sections 102, 103, and 104 of HOTMA. Which Programs will be Affected by the Final Rule?  The Section 8 PBRA (including RAD), Section 202/811 PRAC, 202/8, 202/162 PAC, Senior Preservation Rental Assistance Contract (SPRAC), and Section 811 Project Rental Assistance (811 PRA) programs will see changes due to HOTMA. This is the first in a series of articles I will write on the sweeping changes that will be made to HUD affordable housing programs. This article will focus on some of the "definitional" changes made to the programs, with follow-up articles on specific areas, including income, assets, HOME program changes, Housing Trust Fund changes, and changes that affect HOPWA, Section 202 and 811, public housing, and general requirements. This final rule implements a number of definitional changes. One particularly important change is the definition of "earned income." In this final rule, HUD is expanding the definition of "earned income" to explain that "transfer payments" (which are not included in earned income) mean payments made or income received in which no goods or services are being paid for. This will include welfare, social security, and certain governmental subsidies. HUD has also provided a precise definition of "unearned income," which is essentially any income other than income from employment. The final rule specifies that the term "unearned income" is broad, encompassing any annual income that is not earned income. HUD is revising the definition of "medical expenses" to be "health and medical care expenses" consistent with the language used in HOTMA, and to reflect the IRS definition of the term. The final rule adds "long-term care premiums" as an example of what is included in the definition of health and medical care expenses. This conforms the final regulation to guidance that was already in the HUD Handbook 4350.3, which states that "long-term care premiums" are examples of deductible health and medical care expenses. With regard to assets, HUD clarifies that net family assets do not include the value of "non-necessary" items of personal property with a total combined value of $50,000 or less, to be adjusted annually by an inflation factor. HUD will issue formal guidance - possibly in Change 5 of 4350.3 - to assist owners/agents (O/As) in determining whether an item is a "necessary item of personal property" or whether the value of the item should be included in calculating the value of all non-necessary items of personal property for the $50,000 threshold. The definition of net family assets also excludes Federal tax refunds or refundable tax credits for a period of 12 months after receipt by the family. The final rule also indicates that non-revocable trusts will not be included as an asset as long as the Trust is not within the control of a member of the household. This indicates that voluntarily setting up a non-revocable trust may no longer be considered an asset disposed of for less than fair market value. Finally, HUD is excluding as an asset the value of any "baby bond" account created, authorized, or funded by Federal, State, or local government. HUD is also narrowing the definition of "nonrecurring income." Since this type of income is excluded, HUD is including definitions for "day laborer," "independent contractor," and "seasonal worker," to assist owners in better determining what income must be included. HUD provides more detail relating to the status of foster children and adults. While foster adults and foster children are members of the household (and therefore will be considered when determining appropriate unit size and utility allowance), they are not considered members of the family for purposes of determining either annual and adjusted income or net family assets, nor are the assets of foster adults or children considered for purposes of the asset limitations in HUD programs. Since the HUD Office of Multifamily Housing has treated foster children and adults as family members, this revised definition will change the treatment of foster children and adults. In other words, these individuals will not count as household members for income purposes, similar in nature to the treatment of a live-in aide. This change eliminates the program quirk that allowed a family with a child in foster care and the foster care family to both claim the child as a household member. Handbook 4350.3 will be updated to reflect this new rule. The new rule provides additional guidance relative to over-income families in public housing. Such families will be permitted to remain in public housing as long as they pay an "alternative non-public housing rent." Such families will no longer be considered public housing program participants. Obviously, these changes are complex and far-reaching. Future articles will go into detail on the major elements of the final rule in order to simplify what is likely to be a year-long transition to the new rules.

HUD Announces Move to NSPIRE Protocol

The Department of Housing & Urban Development (HUD) has published a notice that effective April 1, 2023, HUD-assisted sites enrolled in HUD s NSPIRE demonstration program will change from receiving "advisory" housing safety inspections to receiving "inspections or record." NSPIRE stands for "National Standards for the Physical Inspection of Real Estate." This will replace HUD s current REAC protocol for inspecting HUD affiliated housing projects. The NSPIRE process is designed to create a new simplified inspection system that more accurately reflects the physical conditions of housing units and places greater emphasis on issues like lead-based paint hazards and mold. The NSPIRE demonstration program will end for Public Housing participants on June 30, 2023, the day before HUD intends to begin inspections under NSPIRE for Public Housing. The demonstration will end for Multifamily Housing participants on September 30, 2023, and the NSPIRE final rule is anticipated to take effect for those projects on October 1, 2023. Impact on LIHTC Projects The jury is still out on the impact changing from the UPCS protocol to NSPIRE will have on LIHTC properties. Treasury Regulation 1.42-5 requires a physical inspection of LIHTC properties. Some Housing Finance Agencies may rely on REAC inspections for purposes of the HFA required inspection of tax credit properties. Since NSPIRE will replace the current UPCS standard, this will change the manner in which these properties are inspected. The impact on Agency inspections that are not done as part of the REAC protocol is unclear. HFAs will be examining their procedures relative to the upcoming change in CFR 5.703, which governs the HUD inspection process. Since this requirement will not go into effect until October 1, 2023, Agencies and owners have time to determine how this change will impact specific inspections.

HUD Releases Final Rule Implementing HOTMA

The Department of Housing & Urban Development (HUD) has released a Final Rule implementing the Housing Opportunity Through Modernization Act of 2016 (HOTMA). This final rule has not yet been published in the Federal Register. Publication in the Federal Register will establish the effective dates of the rule.  The Housing Opportunity Through Modernization Act (HOTMA) was signed into law on July 29, 2016, amending many aspects of Multifamily Housing programs (as well as programs administered through the Offices of Public and Indian Housing and Community Planning and Development). HOTMA was intended to streamline processes and reduce burdens on housing providers. On September 17, 2019, HUD issued a proposed rule to update its regulations according to HOTMA s statutory mandate. The final rule, published on January 9, 2023, considers public comment received on the proposed rule and provides additional guidance for implementing Sections 102, 103, and 104 of HOTMA.  Section 102:  Changes requirements related to income reviews for the Public Housing, Housing Choice Voucher (HCV), and Section 8 Project-Based Rental Assistance (PBRA) programs. Section 103:  Modifies the continued occupancy standards of Public Housing residents (does not apply to Multifamily Housing programs). Section 104:  Sets maximum asset limits for eligibility and continued assistance in the Public Housing, HCV, Section 8 PBRA programs. Which Programs will be Affected by the Final Rule?  The Section 8 PBRA (including RAD), Section 202/811 PRAC, 202/8, 202/162 PAC, Senior Preservation Rental Assistance Contract (SPRAC), and Section 811 Project Rental Assistance (811 PRA) programs will see changes due to HOTMA. Key Changes to the Multifamily Housing Programs Definitions: HOTMA amends the definitions of family and earned income. Enterprise Income Verification (EIV): HOTMA states that owners are no longer required to use EIV to verify tenant employment and income information during an interim reexamination. Hardship Relief: HOTMA creates hardship relief provisions for childcare, health & medical care, and attendant care, and auxiliary apparatus expense deductions. Imputed Asset Income: HOTMA raises the imputed asset threshold from $5,000 to $50,000 (adjusted annually for inflation). Income and Asset Exclusions: HOTMA codifies additional income and asset exclusions. Income Reviews: HOTMA creates a 10% adjusted income increase/decrease threshold for conducting interim reexaminations. Mandatory Deductions: HOTMA increases the elderly/disabled family deduction to $525. The dependent deduction and the elderly/disabled deduction will be adjusted for inflation on an annual basis. Self-Certification of Assets: HOTMA permits owners to accept self-certification of net assets if estimated to be equal to $50,000 (adjusted for inflation on an annual basis) or less. Final Rule Effective Date & HOTMA Implementation All provisions for Multifamily Housing programs will become effective on January 1, 2024. Owners must implement the revised regulations for all tenant certifications of income effective January 1, 2024, and after. Additional guidance will be forthcoming about the timing of submitting January 1, 2024 certifications to TRACS. This 303-page final rule is complex and makes sweeping changes to HUD programs, particularly with regard to income calculation and reviews.  In addition to amending rules for HUD s public housing and Section 8 programs, the final rule revises program regulations for several other HUD programs. HUD did this to align requirements across programs. Affected programs include Community Development Block Grants (CDBG), HOME, Housing Trust Fund, Housing Opportunities for Persons with Aids, Section 202, and Section 811. Due to the complex nature of this final rule, rather than try to describe the changes in one massive article, I will be publishing a series of articles in the coming weeks - each dealing with a separate section of the final rule. _

HUD Announces New Proposed "Affirmatively Furthering Fair Housing Rule"

The Department of Housing & Urban Development (HUD) is preparing to publish a Notice of Proposed Rulemaking in the Federal Register. The rule will be titled "Affirmatively Furthering Fair Housing (AFFH)," and is designed to meet President Biden s call to fully enforce the 1968 Fair Housing Act. The proposed rule implements the Fair Housing Act s furthering fair housing mandate and streamlines the required fair housing analysis for local communities, states, and public housing agencies, and requires them to set ambitious goals to address fair housing issues facing their communities. It is designed to spur HUD program participants to take action in order to ensure members of protected classes have equal access to affordable housing opportunities. The proposed rule incorporates much of the framework of the 2015 AFFH rule, which was effective for only a short time before the previous administration ended it, and includes several refinements based on feedback HUD received from a variety of stakeholders. In particular, the proposed rule is designed to simplify the required fair housing analysis, emphasize goal setting, increase transparency for public review and comment, foster local commitment in addressing fair housing issues, enhance HUD technical assistance to local communities, and provide mechanisms for regular program evaluation and greater accountability. Under the proposed rule, every five years program participants will submit to HUD for review and acceptance an Equity Plan. That plan would contain the local analysis of fair housing issues confronting the communities, goals, and strategies to remedy those issues. The proposed rule would then require program participants to incorporate goals and strategies from their accepted Equity Plans into subsequent planning documents (e.g., Consolidated Plans, Annual Action Plans, and Public Housing Agency Plans). In addition, program participants would be required to conduct and submit to HUD annual progress evaluations that describe progress toward and/or any needed modifications of each goal in the Equity Plan. The proposed rule includes provisions that permit members of the public to file complaints with HUD if program participants are not living up to their AFFH commitments and various other provisions that enable HUD to ensure that program participants are held accountable for complying with the rule. It is important to note that the rule does not apply to individual developers or management companies - either for-profit or non-profit. Timing of Equity Plan Submissions The proposed rule would require larger, higher-capacity program participants to submit Equity Plans first. Submission deadlines would then be staggered across the different categories of program participants, again based on size as well as their respective program year or fiscal year start dates. Who Will the Rule Apply to? The rule will apply to local governments, states, and insular areas participating in and required to submit consolidated plans for the Community Development Block Grant (CDBG) program, the Emergency Solutions Grants (ESG) program, the HOME program, the Housing Trust Fund (HTF), and the Housing Opportunities for Persons with AIDS (HOPWA) program.  The rule will also apply to public housing agencies (PHAs) receiving assistance under Section 8 or 9 of the United States Housing Act of 1937. Public Comment The comment period for the AFFH proposed rule will end 60 days after the date of publication in the Federal Register - not the publication on HUD s website. The public may make comments through regulations.gov. States, localities, and PHAs that will be subject to this rule should review the proposed rule as soon as it is published and comment to HUD on the workability of the proposal.