Additional Management Fees May Be Allowed for Properties with a Homeless Preference

HUD released a memo, dated October 26, 2016, regarding allowing special and add on management fees for properties with an approved homeless preference. These fees will cover the cost of staff time spent establishing and managing a Homeless Preference.

What are the two different types of fees?

Special Management Fee:
A special management fee will be permitted during a 9 month start-up period while O/As are creating and implementing the homeless preference process.

• The special fee is $2.50 PUPM (Per Unit Per Month)
  • Example: 100 unit property can collect up to $2.50 x 100 units x 9 months = $2250.
• The fee cannot be taken for longer than a continuous nine-month period.
  • If the process to create and begin implementation for the plan exceeds the 9 month period, the term of the special fee cannot be extended.
  • Management Agents may collect the special fee for the entire 9 month period, even if they complete the process in a shorter period of time.
• The maximum annual fee cannot exceed $4500 per property
• Staff time costs for which the funds may be used include:
  • Identifying and engaging the local HUD-funded Continuum of Care (CoC) and other homeless Service Providers.
  • Learning about the local area’s needs and determining which applicants experiencing homelessness will be the best match for the property.
  • Formalizing agreements and establishing a referral process with the local CoC and homeless service providers.
  • Amending the Tenant Selection Plan and submitting to HUD for approval
  • Receiving applicant referrals from the CoC and homeless service providers and screening applicants to ensure they meet the property’s eligibility criteria.
  • Providing support, education, and tools to property management staff when coordinating services and resources during the lease up and duration of tenancy.

Add-On Management Fee:
Management agents may collect a monthly add-on fee once Homeless Preference has been implemented

• Management agents can begin collecting this fee only after the initial 9-month special fee term has expired or when a special fee has been requested.
  • Management agents cannot collect a special management fee and an add-on management fee at the same time.
  • Management agents can collect an add-on fee even if a special fee is not requested or approved.
• The add-on fee is $2.00 PUPM (Per Unit Per Month)
  • Example: 100 unit property can collect up to $2.00 x 100 units x 12 months = $2400 in a one-year period.
• The maximum annual fee cannot exceed $3600 per property
• At least one previously homeless individual or household must have been admitted to this property during a one year period in order for the monthly add-on management fee to be allowable.
• The add-on fee can be collected on an ongoing monthly basis as long as the following conditions are met:
  • A property’s homeless preference is active
  • Local homeless service providers continue to refer eligible applicants, and
  • TRACS shows the project had at least one Previous Housing code 5 move-in with a one-year period.
• Staff time costs for which the funds may be used include:
  • Facilitating a household’s move-in and access to necessary household items.
  • Documenting results, including maintaining tenant application materials, using TRACS Previous Housing code 5 for new move-ins, and including all management fee information in each year’s Annual Financial Statement (AFS) or other annual recertification.
  • Sharing success stories

Special and Add-On fees cannot be retroactive.

How do I get approved?

• Submit a new management certification form, on the appropriate 9839 form
  • Both the special and add-on fees can be requested on the same certification.
• HUD will approve the management certification request in writing. The letter from HUD will include terms and conditions for the continued collection of both fees

How do I collect?

• O/A can start collecting the special fee beginning on the start date indicated in the management certification
• O/A can start collecting the add-on fee the same month the first (or next) previously homeless household is admitted, provided the below conditions are met:
  • The applicable HUD office has approved an amended TSP containing a homeless preference;
  • The O/A has notified the waiting list applicants and emailed the property’s Account Executive at HUD a copy of the notification letter sent to the waiting list, and
  • The first homeless household has moved-in following either the special fee period (if applicable) or the approval date of the management certification if no special fee has been requested

O/A Reporting and Monitoring

• Maintain documentation on file that verifies the homeless status of new move-ins.
• Code all previously homeless new move-ins with a Previous Housing code of 5.
• Include relevant management fee information in each year’s AFS
  • If the property is not required to submit an AFS, the O/A must submit an annual certification containing the same information on a designated annual date.

For additional resources and contact information, refer to the HUD memo and/or contact your HUD Account Executive.