Conversions must be cost-effective. HUD’s rule implementing Section 22 was published in the Federal Register on September 17, 2003, with an effective date of March 15, 2004 as 24 CFR Part 972, Subpart B.
The cost methodology that PHAs must use to compare the cost of continuing to operate developments as public housing to the cost of providing tenant-based assistance was also published as a final rule on March 21, 2006. Notice PIH 2011-62 which indefinitely extends Notice PIH 2008-35 (HA), assists PHAs in completing the cost-test analysis and in complying with the applicable cost-test requirements. Excel spreadsheets containing the calculations associated with the cost methodology are available below.
PHAs may realize proceeds when they sell, transfer, ground lease or otherwise dispose of public housing property under a Voluntary Conversion Plan. PHAs retain flexibility to determine the use of proceeds, provided the use is consistent with the 1937 Housing Act and PIH Notice 2020-23, which requires that proceeds be used for the provision of low-income housing or to benefit the residents of the public housing agency; or leveraging amounts for securing commercial enterprises, onsite in public housing projects of the PHA appropriate to serve the needs of the residents. A PHA’s use of proceeds is subject to HUD (SAC) approval as part of the Voluntary Conversion Plan.
APPLICATION SUBMISSION REQUIREMENTS
All requests for HUD's consent for a Voluntary Conversion (Section 22) removal of public housing operated under ACC with HUD must be made electronically through PIC. The PHA must complete the applicable sections of the HUD-52860 (see Detail Matrix on page 9 of HUD-52860). Note: The cost methodology for Required Conversion is different than that for Voluntary Conversion.
Required Forms:
For Guidance:- Notice PIH 2008-35 (HA): Cost-Test & Market Analysis Guidelines for the VC of public housing units pursuant to 24 CFR 972
- Notice PIH 2009-42 (MS-Word): Extension of Cost-Test & Market Analysis Guidelines for the VC
- Notice PIH 2020-23: Use of Proceeds under Section 22
- Calculator Rule 24 CR 972 (Adobe PDF)
- Sample completed Cost Comparison Spreadsheet (MS-Excel)
Cost Comparison Spreadsheet for Conversions
TDC Limits Chart (Obsolescence)
Helpful Resources & Document Library
Special Applications Center • US Department of Housing and Urban Development
77 W. Jackson Blvd., Room 2401, Chicago, IL 60604-3507
Phone: 312-353-6236 • Email: SACTA@HUD.gov • Fax: 312-913-8892 • Staff Directory