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This rule establishes a new methodology for determining the amount of funding a PHA will receive for administering the Housing Choice Voucher (HCV) Program. Ongoing administrative fees under the HCV program are currently calculated based on the number of vouchers under lease and a percentage of the 1993 or 1994 local fair market rent, with an annual inflation adjustment. The new administrative fee formula established by this rule is based on a study conducted by Abt Associates for HUD that measured the actual costs of operating high-performing and efficient HCV programs and recommended a new administrative fee formula. The final report for this study was published in August 2015. In this rule, HUD adopts the recommended formula as modified based largely on comments HUD received in response to the June 26, 2015, notice that solicited comment on the study.

This rule establishes an ongoing administrative fee for a PHA that would be calculated based on six variables: program size, wage rates, benefit load, percent of households with earned income, new admissions rate, and percent of assisted households that live a significant distance from the PHA’s headquarters. The PHA’s fee would be calculated each year based on these cost factors and a revised inflation factor would be applied to the calculated fee. This rule also provides HUD with the flexibility to provide additional fees to PHAs to address program priorities such as special voucher programs (e.g., the HUD-Veterans Affairs Supportive Housing program), serving homeless households, and expanding housing opportunities.