HUD Notice H-2012-14 was published on August 2, 2012 requiring the use of “New Regulation” Section 8 Housing Assistance Payments (HAP) Contracts residual receipts to offset project-based Section 8 HAP payments. This Notice applies to Section 8 New Construction/Substantial Rehabilitation projects and projects that are subject to both a Section 202 Direct Loan and a new regulation Section 8 HAP contract. The Notice does not apply to Section 202 and 811 PRAV and PAC projects. The requirements in the Notice apply for all HAP vouchers submitted after October 2, 2012.
The purpose of this requirement is to lower the amount of Section 8 subsidy required by projects that have significant amounts of available residual receipts. Owners will be allowed an initial reserve (“Retained Balance”) of $250 per unit for project purposes. Residual receipt balances in excess of $250 per unit must be applied on a monthly basis to offset Section 8 HAP payments. Offsets will continue until the Residual Receipts account reaches the Retained Balance level of $250 per unit.
Owners with balances at or below the $250 per unit level will voucher for the full monthly HAP payment as they have in the past. At the end of the project’s fiscal year, all surplus cash remaining after payment of any permitted distributions must be deposited into the Residual Receipts account.
Owners who believe they may be subject to the requirements of this Notice should obtain the Notice and review it carefully. Questions regarding applicability should be directed to the Project Manager in the HUB/Program Center with jurisdiction over the project or the Desk Officer in the Office of Asset Management, HUD Headquarters.