Tenn. Comp. R. & Regs. 0770-01-05-.33

Current through January 8, 2025

Section 0770-01-05-.33 - SPECIAL HOUSING AND HOUSING CONVERSION ACTIONS

(1) Special Housing Requirements.

(a) Group Homes, Independent Group Residences, and Assisted Living Facilities may be approved for elderly and individuals with disabling conditions.

(b) Rent to Owner - Reasonable Rent Limit. The rent to owner for an assisted person may not exceed the pro-rata portion of the reasonable rent for the group home. 24 C.F.R. 982.613.

(c) Cost of Meals. The cost of meals and supportive services may not be included in the cost of the rent to owner. These items must be paid through other sources. Nonpayment of the fees for meals and services is not grounds for termination of Housing Choice Voucher assistance or for eviction from the housing.

(d) Separate Lease for Each Person. A separate lease and HAP Contract must be executed for each assisted person living in a group home, IGR, or assisted living facility.

(2) Types of Group Housing.

(a) Group Home. A group home is a state-licensed facility intended for occupancy by elderly persons and/or persons with disabilities. The group home consists of residents' bedrooms, which can be shared by no more than two people, a living or common room, kitchen, dining area, typically a shared bathroom, and other appropriate social, recreational, or community space that may be shared with other residents.

1. Requirements.

(i) Maximum Number of Residents Allowed. No more than 12 persons may reside in a group home. This includes assisted and unassisted residents and any live-in aides.

(ii) Live-In Aide. A live-in aide must reside in the unit solely to provide care for the assisted individual and must live in the home full-time to be approved. The live-in aide must be counted when determining unit size for the assisted individual. Rotating caregivers do not qualify to be counted when determining unit size.

(iii) Must be Elderly or Disabled. Except for the live-in aide, all residents of the unit must be elderly or disabled.

(iv) A group home may be approved if the bedrooms (sleeping quarters) are shared, if the rent is appropriately prorated.

(v) Persons living in a group home must not require continual medical or nursing care (e.g. the home may not be a nursing home or convalescent facility).

2. Payment Standard and HAP Calculation.

(i) Determining the Payment Standard for a Group Home Unit. Unless there is a live-in aide, the family voucher size for an assisted occupant of a group home is 0-bedroom. If there is a live-in aide, the aide must be counted in determining the household's voucher size, and the family voucher size is a 2-bedroom. The payment standard used to calculate the HAP is the lower of the payment standard for the family unit size or the pro-rata share of the payment standard for the group home size. The pro-rata share is calculated by dividing the number of persons in the assisted household (1 person if no live-in aide or 2 persons if a live in aide is approved) by the number of people in the group home. With payment standard calculations you always round down.

(I) Examples.

Example 1:

Household: Person with Disabilities.

Family Composition: 1

Family Voucher Size: 0 BR

Group Home Size: 8 Bedrooms

People in Group Home: 8 People

0 BR payment standard: $275

8 BR payment standard: $1,500

1 in assisted household ÷ 8 people in group home =.125 pro-rata share

$1,500 x .125 = $188 pro-rata share of payment standard for group home

*Compare the pro-rata share of the payment standard ($188) to the zero bedroom standard of $275. Since $188 is lowest, the $188 is the payment standard used to calculate the HAP payment.*

Example 2:

Household: Person with Disabilities, plus a Live-In Aide.

Family Composition: 2

Family Voucher Size: 2 BR

Group Home Size: 8 Bedrooms

People in Group Home: 8 People

2 BR payment standard: $400

8 BR payment standard: $1,500

2 in assisted household ÷ 8 persons in group home =.25 pro-rata share

$1,500 x .25 = $375 pro-rata share of payment standard for group home

*Compare the pro-rata share of the payment standard ($375) to the two-bedroom payment standard of $400. Since $375 is the lowest, the $375 is the payment standard used to calculate the HAP payment.*

Example 3:

Household: Person with Disabilities, Group Home with Shared Bedrooms

Family Composition: 1

Family Voucher Size: 0 BR

Group Home Size: 8 Bedrooms, which are shared

Persons in the group home: 12, not 16, no more than 12 may reside in GH

0 BR payment standard: $275

8 BR payment standard: $1,500

1 in assisted household ÷ 12 persons in group home =.08 pro-rata share

$1500 x .08 = $120 pro-rata share of payment standard for group home

*Compare the pro-rata share of the payment standard ($120) to the zero-bedroom payment standard of $275. Since $120 is the lowest, the $90 is the payment standard used to calculate the HAP payment.*

(ii) Calculating the HAP. The HAP for an assisted occupant in a group home is the lower of the payment standard minus the Total Tenant Payment (TTP) or the gross rent minus the TTP. The utility allowance for an assisted occupant in a group home is the pro-rata share of the utility allowance for the group home.

(iii) Utility Allowance. Due to complications with creating utility allowances for bedroom sizes larger than 5 bedrooms, the group home should include the cost of utilities in the gross rent (shelter cost), which will result in a $0 utility allowance.

(iv) Rent. Housing Choice Voucher Program assistance should be calculated on the shelter portion of the resident's monthly housing expense only. The residents' costs for food service or other services must not be included in the rent for a group housing unit.

(b) Congregate Housing/Single Person Placement in Independent Group Residence (IGR) Facilities. Congregate Housing/Single Person Placement contains a private, not shared, bedroom, living area, private bathroom, with a shared kitchen, dining area, and some shared living space.

1. Number of Residents. Typically, congregate facilities will have four (4) or fewer residents. However, in some cases the facility may house more than four (4) residents, such as in the case of an Assisted Living Facility, which falls under the congregate housing definition.

2. Must be Elderly or Disabled. All residents of the unit must be elderly or disabled.

3. No Live-In Aides Allowed. A live-in aide may not be approved in congregate housing situations because of the HUD requirements for the rent calculation. Rotating caregivers may be present and do not affect the unit size (payment standard) assignment.

4. Payment Standard and HAP Calculation.

(i) Determining the Payment Standard in a Congregate Housing Facility. The payment standard for an individual unit in a congregate housing facility is based on the number of rooms in the private living area. If there is only one room in the private living area, not including the bathroom, such as a sleeping area, the 0-bedroom payment standard is used. If the unit has two or more room, other than the bathroom and any shared spaces, such as a sleeping room and a separate living room, the 1-bedroom payment standard will be used. For a family residing in congregate housing in an exception area, the payment standard is the HUD-approved zero-bedroom exception payment standard amount. 24 C.F.R. 982.608(a)(1)

(I) Examples.

Example 1:

Disabled household member lives in private room with private sanitary facility (bathroom) and at least one additional private living area (such as a private living room).

1 bedroom payment standard is used.

1 bedroom utility allowance is used unless utilities are included in the rent (shelter portion of the resident's costs).

Example 2:

Disabled household member lives in a private room (only 1 non-shared room) with private sanitary facilities (bathroom) and other shared rooms.

0 bedroom payment standard is used.

0 bedroom utility allowance is used unless utilities are included in the rent (shelter portion of the resident's costs).

(ii) Calculating the HAP. The HAP for an assisted occupant in a congregate housing facility is the lower of the applicable payment standard minus the TTP or the gross rent for the unit minus the TTP.

(iii) Utility Allowance. The Congregate/IGR facility should include the cost of utilities in the gross rent (shelter cost), which will result in a $0 utility allowance. If the utilities are not included in the rental amount provided to the THDA, the $0 bedroom utility allowance will be applied.

(c) Single Room Occupancy/Single Person Placement in Independent Group Residence Facilities. A single room occupancy (SRO) placement provides private, not shared, sleeping quarters for the exclusive use of the occupant, but requires the occupant to share sanitary (bathroom), food preparation (kitchen), and most other living spaces.

1. Maximum Number of Units. There is no federal or program limitation on the number of SRO units in an SRO facility, although the size of a facility may be limited by local laws.

2. Live-In Aide. A live-in aide may live in the SRO/IGR if the live-in aide resides in the unit solely to provide care for the assisted individual. To qualify as a live-in aide, the person must reside in the unit full-time. The live-in aide must be counted when determining unit size for the assisted individual. Rotating caregivers do not qualify to be counted when determining unit size.

3. Must Be Elderly or Disabled. Except for the live-in aide, all residents of the unit must be elderly or disabled.

4. Payment Standard and HAP Calculation.

(i) Determining the Payment Standard. The payment standard for SRO housing is 75 percent of the HUD-approved zero-bedroom exception payment standard amount. 24 C.F.R. 982.604(a). If a live-in aide resides in the unit for the care of the assisted individual, the payment standard is 75% of the 2-bedroom payment standard.

(ii) Calculating the HAP. The HAP for an assisted occupant in an SRO facility is the lower of the SRO payment standard amount minus the TTP or the gross rent for the unit minus the TTP.

(iii) Utility Allowance. The utility allowance is 75 percent of the 0-bedroom utility allowance. Preferably, the SRO/IGR facility should include the cost of utilities in the gross rent (shelter cost), which will result in a $0 utility allowance.

(iv) Rent. Housing Choice Voucher program assistance should be calculated on the shelter portion of the resident's monthly housing expense only. The residents' costs for food service or other services must not be included in the rent for a SRO housing unit.

(3) Data Entry Requirements. The special housing type (group home, congregate/IGR, SRO/IGR, assisted living) will be entered into the notes to ensure that an auditor can review the rent calculation method. If the housing type is a group home, the total number of residents and the total number of bedrooms at the time of inspection should also be entered into the notes system or as an entity alert. For 50058 data recording, under housing type, group home should be selected when the person lives in a group home (2-12 persons in a single unit) facility. When a person lives in an IGR/SRO, SRO should be selected. For IGR/Congregate units, no special group housing designation is required.

(4) Guardian & Conservators. See § 0770-01-05-.30(4).

(5) Housing Conversion Actions (PIH Notice 2000-09). Several different types of owner or HUD actions, collectively described as "housing conversion actions", may affect residents of Section 8 Multi-family developments. As a result of these housing conversion actions, HUD may allocate funding to the THDA for the provision of vouchers to be issued to eligible families residing in properties affected by a housing conversion action. The following type of housing conversion actions typically involve voucher issuance:

(a) Preservation Prepayment or Voluntary Termination Actions. The owner prepays the mortgage or voluntarily terminates the mortgage insurance.

(b) Project-Based Opt-Outs. The owner chooses to opt out of certain programs by not renewing an expiring Section 8 or Section 23 project-based contract.

(c) HUD Enforcement Actions. HUD either terminates the Section 8 project-based HAP contract or does not offer the owner the option to renew an expiring HAP contract due to an owner's failure to comply with the terms of the HAP Contract, including suspensions and debarments. HUD enforcement actions may also result from material adverse financial or managerial actions or omissions that lead to either owner default or a documented material violation of one or more of the obligations under the project's Regulatory Agreement.

(d) Conversion Actions and Type of Voucher Assistance (Regular or Enhanced). When the THDA issues a special admissions voucher to families affected by HUD conversion actions, the type of housing conversion action determines whether a regular Housing Choice Voucher or an enhanced Housing Choice Voucher is issued to affected families.

1. Regular Housing Choice Vouchers.

(i) These vouchers are typically issued when the housing conversion action is a result of HUD enforcement actions. Families who are issued regular vouchers as the result of an HUD enforcement action are subject to all of the same program rules and regulations as other regular Housing Choice Voucher families.

(ii) If the housing conversion action is due to a HUD enforcement action and the families are able to remain at the property after the contract termination and receive tenant-based assistance, it may be possible for the eligible families to receive enhanced vouchers. Typically, the property will need to be in good physical condition for the families to qualify for enhanced vouchers. The HUD field office makes the final determination as to whether the vouchers issued to families due to an HUD enforcement action are regular or enhanced.

2. Enhanced Housing Choice Vouchers. These vouchers typically are issued when the housing conversion action is due to a project-based opt-out or a preservation prepayment. Enhanced vouchers have several special requirements but in all other aspects the vouchers are subject to normal program rules. The special conditions related to enhanced voucher assistance are:

(i) Income Limits. The low-income limit, rather than the very low income limit, is the threshold for families admitted into the Section 8 program with an enhanced voucher. If the property is a preservation-eligible property, as determined by HUD, on the effective date of prepayment, the family may be one of the following:

(I) A low-income family, including a very low income family;

(II) A moderate-income, above 80 percent of area median but below 95 percent, elderly or disabled family; or

(III) A moderate-income family residing in a low vacancy area, as determined by HUD.

(ii) Special Payment Standard When the Family Chooses to Stay in the Same Unit.

(I) For a family that stays in the same unit and receives enhanced voucher assistance, the payment standard used to calculate the voucher housing assistance payment is the gross rent, if the gross rent exceeds the payment standard, provided the proposed gross rent is rent reasonable. This condition applies until the family relocates from the property.

(II) If the gross rent is less than or equal to the normally applicable payment standard, the regular payment standard rules apply.

(III) If the family moves from the project for any reason, including when the proposed new rent for the project is not reasonable or the unit fails HQS, the normal payment standard regulations apply.

(iii) Rent Reasonableness Documentation and Lease Requirements. All regular program requirements concerning the reasonableness of the rent and the term and conditions of the approved lease apply to enhanced vouchers. The current condition of the unit must be considered for rent comparable purposes. Under no circumstances may the future condition (i.e. post repairs or renovation) be considered. Copies of three rent comparables must be kept in the tenant file when the family receives enhanced voucher assistance.

(iv) Effect of Family Unit Size Limitation.

(I) The family is issued a voucher for the unit size for which they qualify under regular Housing Choice Voucher unit size guidelines. The voucher size is based on subsidy standards, not on the actual size of the unit the family is presently occupying. If a family wishes to stay in the project, but

I. Qualifies for a smaller unit than the actual size of their current unit and

II. The gross rent exceeds the applicable payment standard for the bedroom size on the family voucher, the family must move to an available unit within the project that is the appropriate size according to regular Housing Choice Voucher unit size guidelines.

(II) If the appropriate size unit is not available in the project, the family must then make a good faith effort to find a unit outside of the project that is the correct unit size. The family may be asked to submit documentation of their good faith effort to locate a unit, such as a list of the properties visited.

(III) If the family has not located an eligible unit at the end of the term of the voucher, including any extensions granted, despite making a good faith effort, the family may reside in their current oversized unit in the project. The payment standard is the gross rent of the oversized unit.

(v) Minimum Rent Requirement for Stayers.

(I) Families assisted with enhanced tenant-based assistance have a special statutory minimum rent requirement. The family must pay for rent no less than the rent the family was paying on the date of the "eligibility event" as determined by HUD, unless the family's income decreases to a significant extent, 15 percent or more, from the family's gross income on the effective date of the prepayment.

(II) The family must pay at least the gross rent they were paying on the date of the prepayment or contract termination. The THDA's utility allowance is used to calculate the gross rent at prepayment if all utilities were not included in the rent the family paid to the owner.

(III) If the family's income decreases at least 15 percent from the gross family income on the date of the eligibility event, the minimum family contribution will be reduced so that the percentage of income for rent does not exceed the greater of 30 percent or the percentage of monthly adjusted income actually paid by the family on the effective date of the prepayment.

(vi) HAP Contract Execution. The effective date of the Housing Assistance Payments Contract for special admissions due to housing conversion actions is based on whether the family stays in the property, assuming the units are eligible for assistance, or relocates. For families that stay in the property ("stayers"), the HAP Contract may not be effective prior to the target date of the Housing Conversion Action. HUD determines the target date. For families that choose to relocate, the HAP Contract may be effective prior to the target date, if the ACC funding increment is established. In this case, the HAP Contract date may be effective on the date the ACC funding increment is effective.

(vii) Calculating HAP. HAP is calculated in the manner outlined below depending on the situation.

(I) Stayers. Regardless of whether the owner's new gross rent after the eligibility event exceeds or is less than the THDA's payment standard, the housing assistance payment for a family who stays in their present unit, or moves to an appropriate size unit within the project, will equal the gross rent for the unit minus the greater of the following:

I. 30 percent of the adjusted family income;

II. 10 percent of the family monthly income (gross monthly income);

III. The applicable "rent" that the family was paying on the date of the prepayment or voluntary termination; or

IV. THDA minimum rent.

(II) Movers. If a resident decides to move from the unit with voucher assistance, the payment standard is not enhanced and the enhanced voucher minimum rent does not apply, except in cases where a family is moving to an appropriate size unit within the project. The housing assistance payment and the family contribution at the new unit are calculated in accordance with the regular rules of the Housing Choice Voucher Program.

(III) Turnover of Special Admissions Vouchers. Once a voucher issued to a family as the result of a housing conversion action turns over for any reason, the voucher is absorbed into the THDA's regular Housing Choice Voucher Program. If the voucher is an enhanced voucher, it loses its special enhanced characteristics and is subject to normal program rules.

Tenn. Comp. R. & Regs. 0770-01-05-.33

Original rule filed May 16, 1980; effective June 30, 1980. Repeal filed September 28, 2004; effective December 12, 2004. Repeal and new rule filed June 4, 2015; effective September 2, 2015. Amendments filed June 11, 2024; effective 9/9/2024.

Authority: T.C.A. §§ 13-23-104 and 13-23-115(18), 42 U.S.C. § 1437, and 24 C.F.R., Part 982.