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###### Department of Housing and Urban Development

          - [Docket No. FR-6406-N-01]

# AGENCY:

Office of Public and Indian Housing, Department of Housing and Urban Development (HUD).

# ACTION:

Notice of updated Family Self-Sufficiency Achievement Metrics (FAM) Score for the Family Self-Sufficiency (FSS) program.

# SUMMARY:

This notice describes updates to the FAM Score that HUD has implemented to track the program performance of Public Housing Agencies (PHAs) that receive HUD Family Self-Sufficiency (FSS) program coordinator grants and that were brought onto the Moving to Work (MTW) Demonstration after December 15, 2015. This notice does not apply to the initial MTW PHAs, which are PHAs that received MTW Demonstration designation prior to December 15, 2015.

# FOR FURTHER INFORMATION CONTACT:

                        Questions on this notice may be addressed to Jason Amirhadji, 202-402-5467, at                         *FSS@hud.gov.*

*Electronic Data Availability.*                         This                         **Federal Register**                         notice, overview of the                               ( print page 78375)                            revised FAM Score methodology, and a spreadsheet containing scores applying this revised methodology to FSS programs funded in any of the last three years will be available electronically from the HUD FSS web page:                         *https://www.hud.gov/​program_​offices/​public_​indian_​housing/​programs/​hcv/​fss.*

**Federal Register**                         notices also are available electronically at                         *https://www.federalregister.gov/​,*                         the U.S. Government Printing Office website.                    

# SUPPLEMENTARY INFORMATION:

## I. Background

                    On December 12, 2017, HUD published a notice in the                     **Federal Register**                     (82 FR 58434) describing and requesting comment on a performance measurement system that HUD planned to implement for Public Housing Agencies (PHAs) that receive HUD Family Self Sufficiency (FSS) program coordinator grants, with the exception of those in the initial MTW cohort. Through a subsequent                     **Federal Register**                     (83 FR 57493) dated November 15, 2018, HUD announced its intent to implement the revised system. Through this                     **Federal Register**                     notice, HUD is announcing adjustments to this system to strengthen its ability to effectively track the performance of PHA FSS programs. HUD has also re-calibrated the baseline for determining FAM Scores using the PIH Information Center (PIC) data through 2019.                

                    Under section 23(i)(5) of the Housing Act of 1937 (42 U.S.C. 1437u(i)), “Program performance shall be reviewed periodically as determined by the Secretary.” Additionally, 24 CFR 984.102 states, “The Department will evaluate the performance of a PHA's or owner's FSS program using a scoring system that measures criteria, such as graduation from the program, increased earned income, and program participation, as provided by HUD through a                     **Federal Register**                     notice.” Accordingly, HUD has developed the FAM Score to provide HUD, Congress, PHAs, and other entities with information on the performance of individual FSS programs. The information will help grantees determine how their programs compare to others across the country in their ability to help participants to successfully graduate from the program and make progress toward economic security. The information will also help HUD understand the extent to which FSS program performance—individually and collectively—improves or declines over time.                

                    As described more fully in the                     **Federal Register**                     notices cited above, the FAM Score consists of three components: Earnings Performance, Graduation Rate, and Participation Rate. HUD uses data that PHAs submit through PIC, or any successor data system such as the Housing Information Portal (HIP), to calculate FAM Scores for all FSS programs that receive FSS coordinator funding from HUD other than for the initial 39 MTW PHAs. Since the methodology relies on an analysis of historical performance data, new FSS programs will not initially have a FAM Score. As new FSS programs begin operation, their FAM Scores will be based solely on their Participation Rate for their first three years, until there is enough data to produce an Earnings Performance Score or a Graduation Rate score, which require a minimum of four years of data to compute. For a complete description of the methodology for computing FAM Scores, see the description posted on HUD's website at:                     *https://www.hud.gov/​program_​offices/​public_​indian_​housing/​programs/​hcv/​fss.*

At this time, FAM Scores do not apply to the initial 39 MTW PHAs, PHA-based FSS programs that do not receive coordinator funding, or to FSS programs administered by Multifamily Owners of Project-Based Rental Assistance (PBRA) housing. HUD is investigating options for evaluating the performance of FSS programs administered by the initial 39 MTW agencies, PHAs that do not receive FSS coordinator funding, and FSS programs administered by Multifamily PBRA Owners.

## II. Summary of Adjustments to the FAM Score

Through this notice, HUD is implementing a series of adjustments to improve the FAM Score. These adjustments will help provide a more comprehensive and accurate assessment of a PHA's performance and reduce the possibility for volatility in scores from one year to the next for reasons unrelated to a PHA's performance. The changes are as follows:

                    A. For both the Earnings Performance Measure and the Graduation Rate, HUD will use a new rolling three-year average rather than a one-year measure as the basis for computing a PHA's component score. The three-year average provides a more comprehensive measure of performance and helps correct for any significant impact in one year (                    *e.g.,*                     the closing of a nearby factory or the impact of a natural disaster). For example, if the PIC data being used in the calculation is through December 31, 2020, HUD would determine the Earnings Performance Measure for each PHA through the end of three annual periods: 2018, 2019, and 2020. HUD would then compute the average of these three measures to determine the three-year average Earnings Performance Measure. HUD will use the three-year average Earnings Performance Measure to determine the PHA's Earnings Performance Score by applying the applicable thresholds, which are noted below. HUD will apply the same approach in determining the Graduation Rate score.                

B. HUD has modified the number of comparison households used to determine the Earnings Performance Measure in the event that more than three households are equally similar to the FSS program participant in terms of considered metrics. In selecting comparison households for purposes of determining the Earnings Performance Measure, HUD selects the three households (and more if there is a tie; see discussion below) that are most similar to each FSS participant along these metrics: earnings as of the time of the FSS household's entry into FSS, age of head of household, length of time in the voucher or public housing program, number of adults in the household, number of children in the household, presence of a child with a disability, and presence of a non-head of household adult with a disability. HUD has added a metric (number of children in the household) to the criteria for determining the similarity of comparison households to the FSS household. In addition, HUD has found that in some cases, more than three comparison households are equally similar to the FSS household on these metrics. Previously, HUD used three households randomly selected from among these similar households as the comparison households for calculating the Earnings Performance Measure in a given year. Going forward, HUD will use all households that are equally similar to the FSS household in the calculation. This will help reduce the possibility of volatility in scores from one year to the next.

                    C. HUD has made changes to the adjustment it makes for local economic conditions to improve year-to-year stability of Earnings Performance Scores. To adjust for local economic conditions, HUD first uses a linear regression model to examine the relationship between the Earnings Performance Measures across PHAs and the median incomes of the counties in which each PHA serves residents. On average, unadjusted Earnings Performance Measures tend to be higher in counties with high median incomes, and lower in counties with low median incomes. HUD then adjusts for this                           ( print page 78376)                        variation by using the relationship estimated in the linear regression and applies this adjustment factor to the earnings performance measure for each PHA, resulting in an adjusted Earnings Performance Measure that is used to determine the PHA's score for the earnings component of the FAM Score. Going forward, to improve year-to-year stability of scores, HUD will implement this adjustment to ensure the average of the adjusted earnings measure is the same as the average of the unadjusted measure.                

D. HUD adjusted and clarified how joint FSS grantees are counted across years. For each of the three years included in the measures, calculations are made at the joint applicant level so that each PHA in a joint funding group has the same measure for the year. Because the component calculations are made during each of the three years, joint funding recipients are only included in a group for the time period associated with the measure in the year(s) when they are part of the joint funding group. As a result, PHAs in joint FSS programs without stable agency membership will have members with different measures and scores when averaging across all three years of calculation to produce composite measures, scores, and components.

E. Using the revised year-year average score methodology for the baseline year ending December 31, 2019 (reflecting the average of scores for 2019, 2018, and 2017), HUD has recalibrated the thresholds for converting the Earnings and Graduation measures into scores and specified the updated thresholds below. Going forward, these thresholds will be fixed to allow HUD and PHAs to gauge the extent to which individual PHAs and the entire FSS program as a whole are making progress toward higher performance levels. The only exceptions are the thresholds for determining Earnings Performance Scores, which shall be adjusted annually. This annual adjustment will account for changes in the average earnings using a custom inflation index based on the weighted hourly series for the first (lowest) quartile of wage earners within the wage growth data from the Federal Reserve Bank of Atlanta. This will help ensure that the thresholds for determining Earnings Performance Scores keep pace with wage inflation over time.

## III. Revised Thresholds

The following are the updated thresholds HUD will use to compute a FAM Score for each PHA.

### 1. Step One: Assigning Scores to Each of the Three Measures

In Step One, HUD will assign a score of 0 to 10 to each PHA's FSS program for each of the three measures. Scores will be assigned using the thresholds and procedures described below. The ranges for awarding points between two values include those values as well as all intermediary values.

a. Earnings Performance Measure (50% of final score):
    -  10 points:                      three-year average Earnings Performance Measure of $6,315 or higher.                
    -  7.5 points:                      three-year average Earnings Performance Measure between $4,795 and $6,314.99.                
    -  0 points:                      three-year average Earnings Performance Measure below $2,283 and a p-value of <.10 on a statistical test measuring the likelihood that a PHA's three-year average Earnings Performance Measure is significantly lower than the median measure of $4,247 (see December 12, 2017                      Federal Register                      Notice at page  82 FR 58437  for an explanation of this statistical test).                
    -  5 points:                      All PHAs that do not qualify for a 10, 7.5, or a 0.                
    - These thresholds will apply to Earnings Performance Measures for the 2019 audit year, which reflect an average of Earnings Performance Measures for the 2017, 2018 and 2019 calendar years. As described above, to keep pace with inflation, HUD will adjust the thresholds used to compute Earnings Performance Scores annually to reflect changes in the weighted hourly series for the first (lowest) quartile of wage earners in the wage growth data from the Federal Reserve Bank of Atlanta.

b. FSS Graduation Rate (30% of final score):
    -  10 points:                      three-year average FSS Graduation Rate of 42% or higher.                
    -  7.5 points:                      three-year average FSS Graduation Rate between 32% and 41.99%.                
    -  0 points:                      FSS Graduation Rate below 15%.                
    -  5 points:                      All PHAs that do not qualify for a 10, 7.5, or a 0.                

c. Participation Rate (20% of final score):
    -  10 points:                      participation rate of 2.20 or higher.                
    -  9 points:                      participation rate between 1.95 and 2.19.                
    -  8 points:                      participation rate between 1.70 and 1.94.                
    -  7 points:                      participation rate between 1.45 and 1.69.                
    -  6 points:                      participation rate between 1.2 and 1.44.                
    -  5 points:                      participation rate between .95 and 1.19.                
    -  0 points:                      participation rate of lower than .95.                

### 2. Step Two: Developing the Final FAM Score and Ranking

In Step Two, after computing individual scores for each of the three measures, HUD will aggregate each PHA's scores using the weights noted above to develop a final FAM Score from 0 to 10. Based on this score, HUD will assign the following ranking to the PHA's FAM Score:
    -  Category 1:                      FAM Score of 7.9 or higher.                
    -  Category 2:                      FAM Score between 4.0 and 7.89.                
    -  Category 3:                      FAM Score between 3.5 and 3.99.                
    -  Category 4:                      FAM Score of less than 3.5.                

## IV. Environmental Impact

This notice does not direct, provide for assistance or loan and mortgage insurance for, or otherwise govern or regulate, real property acquisition, disposition, leasing, rehabilitation, alteration, demolition, or new construction, or establish, revise or provide for standards for construction or construction materials, manufactured housing, or occupancy. Accordingly, under 24 CFR 50.19(c)(1), this notice is categorically excluded from environmental review under the National Environmental Policy Act of 1969 (42 U.S.C. 4321).

                    Principal Deputy Assistant Secretary for Public and Indian Housing, Richard J. Monocchio, having reviewed and approved this document, is delegating the authority to electronically sign this document to submitter, Aaron Santa Anna, who is the Federal Register Liaison for HUD, for purposes of publication in the                     **Federal Register**                    .                

Aaron Santa Anna,

Federal Register Liaison for the Department of Housing and Urban Development.

[FR Doc. 2023-25231 Filed 11-14-23; 8:45 am]

BILLING CODE 4210-67-P