November 17, 2021

reminder: deadline is this friday, november 19, 2021 – hud announces fourth round of supplemental operating funds available for section 8, section 202, and section 811 properties

On Thursday, September 16, 2021, HUD's Office of Housing published Housing Notice, H 2021-05 Continued Availability of Funds for COVID-19 Supplemental Payments for Properties Receiving Project-Based Rental Assistance under Section 8, Section 202, or Section 811 Programs.

HUD is making a fourth round of CARES Act funds available to offset property expenditures to combat the effects of COVID-19. This notice establishes a fourth request window and updates the submission requirements. The guidance includes a November 19, 2021, filing deadline for owners of properties assisted under these programs to be considered for COVID-19 Supplemental Payments (CSP).

Per the notice:

“HUD recognizes that many owners continue to incur additional operational costs to maintain their properties in decent, safe, and sanitary condition as it relates to responding to COVID-19 in the community. To the extent that rent receipts and other project funds are inadequate to address these needs and meet other ongoing financial obligations, HUD has created opportunities for supplemental subsidy payments.”

what's covered?

The supplemental payments continue to cover expenses for additional cleaning and disinfecting, additional staff, face coverings, and other expenses to help keep properties safe for residents.

Note: CSPs are only available to offset actual expenditures and may not fully reimburse all COVID-19-related costs. CSPs are not a means to receive funding for lower tenant rent contributions due to income reductions, extended vacancies, or unpaid tenant charges. To the extent allowable under current policies, these financial impacts can be addressed through Special Claim payment requests and through tenant recertifications with corresponding subsidy voucher adjustments as outlined in the HUD Handbook 4350.3 and the Multifamily Special Claims Guide.

Specific eligible activities and purchases for which costs may be reimbursed through COVID-19 Supplemental Payments (CSP) requests include the following:

Category A: Operational Expenses (fourth round changes are italicized below)

Increased frequency of cleaning and disinfecting common areas and property management offices as a preventative measure.
Intensive deep cleaning and sanitization services in response to the presence of COVID-19 cases at the property, which may include treatment in units being prepared for re-occupancy, in addition to common areas.
Office technology and other equipment to facilitate social distancing.
Personal protective equipment (PPE) such as face masks, goggles, gloves, and hand-hygiene products for use by property management staff and for residents entering leasing offices or using common areas.
Facility and equipment expenses related to maintaining adequate social distancing, including, but not limited to, cough/sneeze barriers or modifying or limiting access to communal spaces.
Site control measures in support of shelter-in-place, stay-at-home orders, or visitor restriction policies within properties.
Temporary staffing, contract services, overtime pay, and/or supply expenditures to maintain or enhance ongoing service coordination in properties designated to serve the elderly or persons with disabilities (excludes service coordinator positions funded by a Multifamily Service Coordinator Grant).
Temporary staffing increases to process higher-than-normal volumes of interim tenant recertifications requested by tenants due to loss of income (includes overtime and new positions; excludes “hazard pay” or other bonuses).
Incremental costs of upgrading disposable HVAC air filters to include those with higher Minimum Efficiency Reporting Value ratings. This should not include the full cost of routine replacement but may include the incremental cost of purchasing higher-quality filters over basic ones that were previously used. Also permitted are minor equipment expenditures to improve air quality over a temporary period (i.e., rental or purchase of a window fan or portable air purifier in the leasing office or high-traffic common areas).
Property operating costs associated with facilitating access to COVID-19 vaccination and testing services for residents that are administered by third-party healthcare providers. Overtime for property management staff and existing service coordinators, additional cleaning and PPE associated with conducting vaccination, and testing events and temporary clinics at the property are among the eligible expenses. Also covered are owner reimbursements to residents for public transit fares and owner costs for transportation services, not to exceed the current Internal Revenue Service rate of $0.56 per mile, to provide residents access to nearby vaccination sites. Expenses for tent, table, and chair rentals for outdoor vaccination events at the property will be permitted. Reimbursable expenses do not include the costs for provision of any medical care, such as the cost of individual tests, vaccinations, or clinical consultations.

CSPs are intended to address temporary cost increases associated with property management during the period of national COVID-19 impact and are not available for capital costs, except where specifically identified under Category B.

Category B: Eligible Capital Expenses

This CSP round will consider reimbursement of certain capital investments made in direct response to COVID-19 that will benefit the property over a multi-year period that includes (but may extend beyond) the period for which the property is affected by COVID-19. The following are Eligible Capital Expenses that are newly eligible under Round IV:

Incremental Costs for HVAC System Ventilation and Filtration Upgrades: Owners may include only the marginal cost of system enhancements specifically designed to limit virus transmission in building common areas by improving air flow and filtration. CSP reimbursements are authorized to supplement, not replace, expenditures from the Reserve for Replacement accounts for HVAC systems. All technologies must be consistent with virus mitigation measures identified by the CDC. Please see CDC communications on maintaining healthy environments in common areas of multifamily housing, including “Ensuring Adequate Ventilation."
Emergency Generators to protect vulnerable elderly residents from the exposure risk associated with evacuations/displacement: HUD will allow reimbursement only where generators are necessary to address critical medical needs and a documented risk of recurring power outages pose a significant risk to residents if stay-at-home orders or other public health directives prevent or discourage temporary relocations.
Broadband Wi-Fi Infrastructure: Though an increasing number of buildings include broadband wiring for individual units and community rooms, this infrastructure does not exist in many older HUD-assisted buildings that have not been recently renovated. Building-wide WiFi is recognized as an effective means to make internet service available to residents in facilities that are not currently wired throughout for broadband. HUD will allow CSP reimbursement for the purchase and installation of infrastructure needed to support building-wide Wi-Fi. The equipment may support service within tenant units and/or in common areas such as the lobby or community rooms. HUD will not allow CSP reimbursement for monthly service costs, which may be paid only from external (non-project funds) or through an optional service charge paid by tenants. The provision of internet services for tenants cannot be included in HUD rents or in utility allowances.

standard csp request cap

Note: The term "Standard CSP" replaces the "Tier I" designation used in prior rounds.

HUD is retaining a structure for CSP requests that considers the size of a request relative to certain property characteristics. Whether the amount requested is above or below the Standard CSP cap for the property determines eligibility requirements, the level of supporting documentation required by HUD, and the funding priority.

The Standard CSP request process allows for the reimbursement of expenses up to a capped amount for each of the four CSP operating periods based on a formula that considers property size, whether the property has a service coordinator funded from HUD rent receipts, and whether the property’s rental assistance contract or other controlling documents specify that the property houses elderly residents. The CSP caps for Round IV have been modified in accordance with the longer time period for incurring expenses. In addition, an upper limit of $25,000 has been added for Standard CSP requests. Property-level caps for Round IV are as follows:

$2,500 base amount per property, plus $75 per assisted unit;
$1,000 additional per-property allowance for properties specified to house elderly residents
Up to $1,250 additional allowance for properties with an ongoing service coordinator program funded from operating income (as reported to HUD through Standard for Success) or funded with an IWISH grant. The service coordinator allowance may be claimed only for eligible COVID-19-related service coordinator program cost increases and cannot be utilized for other COVID-19 costs.
The maximum amount for a Standard CSP request is $25,000, regardless of property size or characteristics. All requests for payment exceeding $25,000 will be subject to the additional eligibility and supporting documentation requirements identified in Section VIII.

expense timeline and request deadline

This Notice establishes a fourth CSP operating period, which runs for seven months from April 1, 2021, through October 31, 2021. Owners may prepare and submit a CSP Request, Form HUD52671-E, for each of the four operating periods:

March 27, 2020, through July 31, 2020
August 1, 2020, through November 30, 2020
December 1, 2020, through March 31, 2021
April 1, 2021, through October 31, 2021

Combined Requests

Some smaller requests covering multiple operating periods may be combined on a single HUD-52671-E. If an owner has not previously received a CSP for expenses incurred in a particular prior period, is now seeking reimbursement for multiple operating periods, and the total expenses fall below the single period Standard CSP cap, the owner may choose to combine all expenses on one HUD-52671-E. If an owner is seeking reimbursement for multiple operating periods, and the total expenses for which reimbursement is being sought exceed the Standard CSP cap, the owner must separate expenses from the different operating periods and submit up to four separate HUD-52671-E forms. For example, if the property Standard CSP cap is calculated as $5,630, and the owner incurred expenses of $3,750 from August 1, 2020, through November 30, 2020, and $1,700 between December 1, 2020, and March 31, 2021, the total request of $5,450 can be consolidated on one form. If the expenses from the third operating period were also $3,750, then the cumulative total would exceed $5,630, and the owner would need to submit a separate form for each of the two operating periods.

Amendments to Prior Approvals

In prior CSP rounds HUD has prohibited the approval of a CSP that included expenses incurred in an operating period for which a CSP of any amount was previously approved. For CSP Round IV, HUD will permit owners to amend prior-round approved CSP requests to include additional expenses that they may have inadvertently omitted or are now made eligible by the Round IV Notice. All amendments to prior-round requests will be subject to current Standard CSP caps and must be evaluated cumulatively to determine eligibility.

how to request funds

Owners must submit standard form HUD-52671-E for all CSP requests, including the accompanying certifications and signature page, directly to CHFA at CSP@chfainfo.com no later than 11:59pm MT on November 19, 2021. Given current mandatory telework policies and limited access to standard mail, electronic submissions via email are required and may utilize digital signatures, consistent with Notice-H-20-04. CSP funding is not being provided on a first-come, first-served basis. All requests received by CHFA by 11:59pm MT on November 19, 2021, will be given equal consideration.

Requests received after this deadline may be evaluated only after all other eligible CSPs have been funded, and in no case will be considered if received after November 30, 2021. Owners may submit only one request form per property for each operating period.

Please refer to the HUD Notice H 2021-05 for a full description of this fourth round of CSP funding. For any questions regarding the process, please contact Chris Linton at CHFA using the contact information below.

Chris Linton
Manager of Multifamily Program Compliance
303.297.7411
CSP@chfainfo.com

Connect with CHFA!