U.S. Department of Housing and Urban Development

Office of Public and Indian Housing and Housing

NOTICE: PIH 2001-27 (HA)

Special Attention of:

All Secretary's Representatives;

Public Housing Office Directors; Multifamily Issued: August 3, 2001

Hub and Program Center Directors;

Community Builders; Public Housing Agencies; Expires: August 31, 2002

Resident Management Corporations (RMCs);

Project Managers; Contract Administrators and Owners

SUBJECT: Implementation of Public Law 106-504 regarding the eligibility
of the citizens of the Freely Associated States for federally assisted
housing

Purpose

The purpose of this Notice is to provide implementation guidance on
Public Law 106-504, enacted November 13, 2000, regarding the eligibility
of the citizens of the Republic of the Marshall Islands, Republic of
Palau, and the Federated States of Micronesia (collectively referred to
as the "Freely Associated States" or "FAS") for federally assisted
housing.

Background

[Public Law 106-504]{.underline}

Section 3(b) of Public Law 106-504, enacted November 13, 2000, amends
Section 214 (a) of the Housing and Community Development Act of 1980
(USC 1436a(a)) to provide that an alien who is a lawful resident in the
United States and its territories and its possessions under section 141
of the Compacts of Free Association between the government of the United
States and the Governments of the Marshall Islands, the Federated States
of Micronesia and Palau (collectively referred to as "the Freely
Associated States"(FAS)) is eligible for financial assistance while the
applicable section is in effect. For purposes of this provision, the
term financial assistance means financial assistance made available
pursuant to the United States Housing Act of 1937, Section 235, or 236
of the National Housing Act, the Direct Loan Program under Section 502
of the Housing Act of 1949 or Section 502(c) (5) (D), 504, 521(a)(2)(A)
or 542 of such Act, Subtitle A of Title III of the Cranston-Gonzales
National Affordable Housing Act or Section 101 of the Housing and Urban
Development Act of 1965.

Housing programs affected by this law include: public housing and
Section 8 Housing Assistance Programs, including the Housing Choice
Voucher Program, the Section 8 Moderate Rehabilitation Program, the
Project Based Voucher Program, the Section 235 Program, the Section 236
Program and the Rent Supplement Program. It is not applicable to
programs under the Native American Housing Assistance and Self
Determination Act.

[March 9, 2001, Information Bulletin]{.underline}

On March 9, 2001, the Department distributed an information bulletin to
all public housing agencies under the jurisdiction of HUD's San
Francisco office which provided initial guidance on implementation of
this law. This information bulletin clarified that FAS citizens whose
residence in the United States is permitted under section 141 of the
Compact are now eligible to receive housing assistance. The bulletin
also explained that rent should not be prorated (in accordance with 24
CFR 5.520) if all members of a household are eligible for assistance.
Finally, the bulletin urged PHAs to honor an affected family's request
for an interim re-examination of income, so that such families would not
have to continue to pay a prorated rent until their annual
re-examination.

Implementation Guidance

This Notice provides some additional guidance on the implementation of
the law.

-   PHAs and Owners must consider certain FAS citizens (e.g., those who
    reside in the U.S. and its territories pursuant to section 141 of
    the Compact) as eligible applicants for federal housing assistance.

    Because certain FAS citizens are now eligible for federal housing
    assistance, PHAs and Owners must accept a FAS citizen's application
    for housing (provided that the waiting list is not closed or
    otherwise restricted).

    It is important to note that this provision applies to PHAs and
    Owners in Guam. Notwithstanding the provision of the law regarding
    preferences in Guam, if a PHA or project owner in Guam has an open
    waiting list, it must accept applications from eligible FAS
    citizens.

-   PHAs and Owners must notify all affected families of the eligibility
    changes made by the November 13^th^ law.

    PHAs and Owners must notify in writing all affected families and
    advise that as a result of Public Law 106-504, FAS citizens whose
    residence in the United States is permitted under section 141 of the
    Compact are now eligible to receive housing assistance.

    Families in occupancy affected by the eligibility change include
    mixed families (as defined at 24 CFR 5.504) who are receiving
    prorated assistance because one or more members is a FAS citizen.
    Such families should no longer be considered a mixed family for
    assistance purposes, but now must be treated as an eligible family,
    if the family's eligibility, pursuant to section 141 of the Compact,
    is verified.

    Other affected families include housing choice voucher holders
    presently searching for a unit, families currently on the waiting
    list for assisted housing, families who, since November 13, 2000,
    were determined to be ineligible for housing assistance because of
    citizenship status, and families who have moved out after November
    13, 2000, because of citizenship status.

    Since the law was passed in November 2000 and PHAs in the
    jurisdiction where this change will have the greatest impact were
    notified (via a HUD information bulletin) in March 2001, it is
    important that PHAs and Owners notify families in occupancy within
    forty five days of the issue date of this Notice, if they have not
    already done so.

-   PHAs and Owners must conduct an interim re-examination of income for
    any family that requests a re-examination as a result of the new
    provisions.

> PHAs are further advised to conduct interim re-examinations and make
> any adjustments to rent as soon as possible, in accordance with 24 CFR
> 960.257 (for families in public housing), 24 CFR 982.516 (for
> participants in the tenant-based and project-based housing choice
> voucher program) and 24 CFR 882.515 (for participants in the section 8
> moderate rehabilitation program). Owners are advised to conduct
> interim re-examinations and make any adjustments to rent as soon as
> possible, in accordance with 24 CFR 5.657 (for Section 8 project-based
> assistance programs), 24 CFR 236.760 (for the Section 236 program) or
> 24 CFR 200.1302 (for the Rent Supplement Program; cross-references all
> of part 215.55(b)).
>
> Although Owners and PHAs outside of the jurisdiction of HUD's San
> Francisco Office did not receive a copy of the Information Bulletin,
> any adjustments to rent should be made retroactive to at least March
> 9, 2001, since this is the date the Department first advised most
> affected PHAs of the new provisions. PHAs and Owners should respond
> quickly to families' requests for interim re-examinations, so that
> affected families are not unnecessarily further burdened by proration
> of rent.

Rulemaking

Because Section 3(b)(3) of Public Law 106-504 includes a preference
provision applicable only to Guam that raises a number of issues
regarding the admission of FAS citizens to federally assisted housing
within Guam, the Department plans to begin rulemaking. An interim
regulation will address this outstanding issue, by clarifying the
conditions on the admission of eligible FAS citizens to federally
assisted housing within Guam.

Contact Person

For additional information, please contact Patricia Arnaudo, Acting
Director, Customer Service and Amenities Division (for Public Housing)
at (202) 708-0744 (email: patricia_s.\_arnaudo \@hud.gov), or Cynthia
Thomas (for Owners) at (202) 708-2866 (email:
cynthia_l.\_thomas@hud.gov).

/s/ Sean Cassidy /s/ Karen A. Newton

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John C. Weicher Paula O. Blunt

Assistant Secretary for Housing- Acting General Deputy Assistant

> Federal Housing Commissioner Secretary for Public and Indian
>
> Housing