[Federal Register Volume 88, Number 219 (Wednesday, November 15, 2023)]
[Notices]
[Pages 78374-78376]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-25231]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

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


Family Self-Sufficiency Achievement Metrics (``FAM'') Score

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.

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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 <a href="/cdn-cgi/l/email-protection#4f091c1c0f273a2b61282039"><span class="__cf_email__" data-cfemail="57110404173f223379303821">[email protected]</span></a>.
    Electronic Data Availability. This Federal Register notice, 
overview of the

[[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

[[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):
    <bullet> 10 points: three-year average Earnings Performance Measure 
of $6,315 or higher.
    <bullet> 7.5 points: three-year average Earnings Performance 
Measure between $4,795 and $6,314.99.
    <bullet> 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).
    <bullet> 5 points: All PHAs that do not qualify for a 10, 7.5, or a 
0.
    <bullet> 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):
    <bullet> 10 points: three-year average FSS Graduation Rate of 42% 
or higher.
    <bullet> 7.5 points: three-year average FSS Graduation Rate between 
32% and 41.99%.
    <bullet> 0 points: FSS Graduation Rate below 15%.
    <bullet> 5 points: All PHAs that do not qualify for a 10, 7.5, or a 
0.
    c. Participation Rate (20% of final score):
    <bullet> 10 points: participation rate of 2.20 or higher.
    <bullet> 9 points: participation rate between 1.95 and 2.19.
    <bullet> 8 points: participation rate between 1.70 and 1.94.
    <bullet> 7 points: participation rate between 1.45 and 1.69.
    <bullet> 6 points: participation rate between 1.2 and 1.44.
    <bullet> 5 points: participation rate between .95 and 1.19.
    <bullet> 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:
    <bullet> Category 1: FAM Score of 7.9 or higher.
    <bullet> Category 2: FAM Score between 4.0 and 7.89.
    <bullet> Category 3: FAM Score between 3.5 and 3.99.
    <bullet> 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


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