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Voluntary Conversion

Section 22 of the U.S. Housing Act of 1937 authorizes PHAs to voluntary convert public housing to tenant-based assistance.  Conversions must be cost-effective. HUDā€™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. The cost methodology for Required Conversion is different than that for Voluntary Conversion.

A sample of a completed spreadsheet has been included as well.

The cost methodology for Required Conversion is different than that for Voluntary conversion.

A sample of a completed spreadsheet has been included as well.

Proceeds

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 Section 18 of the 1937 Act 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 PHAā€™s use of proceeds is subject to HUD (SAC) approval as part of the Voluntary Conversion Plan.


If you have any questions please contact SAC Management.