They are Capital Fund Grants that are awarded to PHAs that have removed units from inventory for the sole purpose of developing new public housing units. The Capital Fund formula rule at 24 CFR 905.10(i) provides that a PHA may receive RHF grants for public housing units demolished or sold for a period of up to five years. A PHA may only be given RHF funding for public housing units that have not already been funded for replacement public housing units under public housing development, Major Reconstruction of Obsolete Public Housing (MROP), HOPE VI, or any other programs that would otherwise provide replacement housing. A PHA must report the units as removed from inventory in the PIC system before it will receive RHF funding.
- PIH 2010-21 (HA): Processing Information for the Submission of Replacement Housing Factor (RHF) Plans
- RHF Plan Preparation and Guidance
Second Increment Funding: A PHA is eligible for another five years of second increment RHF funding, but the funding is not automatic. In order to receive an additional (or second) five years of RHF funding, the PHA must apply every time it is eligible for another "tier". If the PHA does not apply for this second increment funding or fails to meet the requirements for second increment RHF funding, than it becomes ineligible for the entire five years of second increment RHF funding associated with that tier.
A list of PHAs eligible for one or more new tiers of second increment RHF funding is posted annually on the Capital Fund home page, along with a deadline for submission of a second increment RHF Plan (or revision if applicable) and any other submission instructions.
- number of units removed from the inventory;
- project(s) associated with the removed units;
- number of years the PHA has been receiving RHF funding.
- Units planned for replacement are being funded by Hope VI, MROP and other sources
- Units removed by sales to home ownership
- Units removed because of eminent domain
- Units that have been added to the PHA inventory since 10/1/1999 that are not attributed to HOPE VI ( The ineligible units are removed using first in first out scenario so the units that first entered RHF are made ineligible as new units are added to inventory)
- Conversion, or units removed as a result of reconfiguration.
Additionally, removing units from multiple projects in the inventory over time adds layers to the calculation. The RHF Matrix summarizes the RHF funding awarded to a PHA by project (with the approved demolition or disposition). An RHF Matrix for each PHA receiving RHF funding can be found at the Capital Fund webpage.
The following is a table giving an example for a hypothetical PHA receiving RHF. The Matrix shows project distribution on an annual basis. In the Matrix, "1-1" signifies that the project is receiving the first year of 1st increment funding; "1-2" signifies that the project is receiving funding for the second year of the first increment and so on.
RHF Funding (by Project) First Increment Only
In the Matrix above, as of FY 2002 Project A has received 5 years of first increment RHF funding (1-5); Project B has received 4 years of first increment funding (1-4); and Project C has received 3 years of first increment funding (1-3). Using the Matrix, the first increment RHF grant for the PHA in Fiscal Year 2002 was a combined total of RHF funds for the three developments, Projects A+ Project B+ Project C as identified in the last column.
RHF Funding-Multiple Tiers by Project for AJAX PHA First and Second Increment
|Project D||1-1 $500||1-2 $500||1-3 $ 525||1-4 $550||1-5 $580||2-1 $500||2-2 $500||2-3 $525|
|Project E||1-1 $200||1-2 $210||1-3 $240||1-4 $300||1-5 $375||2-1 $200||2-2 $205|
|Project F||1-1 $100||1-2 $110||1-3 $125||1-4 $225||1-5 $100|
|Subtotal - 1st Increment Grant||$500||$700||$835||$900||$1,005||$600||$100||$0|
|Subtotal - 2nd Increment Grant||0||0||0||0||0||$500||$700||$730|
|Total RHF Funding||$1100||$800||$730|
This Matrix shows the combined effect of both first and second increments. Project D qualifies for second increment funding in FY 2003 and Project E qualifies for second increment funding in FY 2004. Project F was not approved for second increment funding. Also note that in FY 2003 and FY 2004 the PHA could be receiving two RHF grants, a first increment grant of $600 for Projects E and F and a second increment grant of $500 for Project D. In FY 2005, the second increment grant will be $730; a combination of the RHF amounts for Projects D and E. The PHA will not have a first increment grant in FY 2005.
The shaded portion of the Matrix identifies all of the PHA's first increment grants. These should be included in the PHA's RHF Plan for the first increment. In the example below, as the result of having multiple projects receiving RHF funding in different years the first increment spans from FYs 1998 -2004. The non-shaded portion of the Matrix FY 2003-2005 is all of the PHA's second increment grants that should be included in the RHF Plan for the second increment.
What amount of RHF funds does a PHA receive? How can RHF funding be estimated for planning purposes?A PHA receives approximately the same amount of RHF for the units it has removed from its inventory that it would have received in formula funding when the units were standing. (There is an adjustment based on certain "off-sets" or units removed from inventory that are not eligible for RHF funding.)
For planning purposes, a good way to estimate this amount (Notwithstanding annual Appropriations, variations in the capital fund calculation, etc) is to take the number of units reported as removed, and multiply it by the per unit funding the PHA received for the particular development in the prior year. The per unit funding report for all PHAs receiving Capital Funds can be found at the Capital Fund webpage. The information is updated annually.
- That the PHA intends to accumulate its RHF grants for several years and delay the obligation start date and the reason (s) why it needs to do so.
- The number of years of grants is the PHA accumulating (up to five years).
- The grants, by fiscal year (and grant number if known) the PHA accumulating, including any future years of funding.
- The total amount of the grants being accumulated.
- That the PHA is using the funds consistent with the terms of RHF -- the development or acquisition for the purpose of developing Public Housing ACC units in accordance with 24 CFR Part 941.
- That the PHA will revise its RHF Plan if any one of the many factors that affect its RHF funding cause RHF to end earlier that anticipated. (This will affect the obligation end date because not as many years of funding will be accumulated.)
A PHA must submit separate first and second increment RHF Plans to cover up to five years of each type of RHF. Note: because of the continuing nature of both first and second increment grants there may be the need for multiple first and second increment plans to cover the entire period of funding for each type of RHF grant.
Note: If the PHA requests an additional five years of funding, it must proceed with the development of the first five-year increment and submit a second, discrete, RHF Plan based on the funding provided in years 6 - 10. In no case should the development or developments planned with first increment RHF funding be planned in such a way that completion of that development or developments relies on HUD funding of the second increment of RHF.
Additionally, for PHAs requesting a second increment of RHF funding, the previous requirement that as a condition for receiving grants in years 6-10 that all funding (increments one and two) be fully expended by the end of the 10th year of funding No Longer is Applicable. Like first increment RHF grants, second increment RHF grants must be expended within forty-eight months after the obligation start date.
How are obligation and expenditure deadlines established in instances where a PHA wishes to accumulate its RHF prior to undertaking development?As stated above, a PHA may accumulate up to five years of RHF funds prior to starting development activities. The obligation deadlines are set as follows:
For both first and second increment RHF funds awarded through FY 2008: The obligation deadline is set 120 days after receipt of funds in the last year of funds to be accumulated. So, if a PHA is accumulating funds from FY 2003- FY 2007, the obligation start date for all five grants is 1/2008. The obligation end date is 24 months after that and the expenditure deadline 48 months from the obligation start date.
For RHF funds awarded FY 2009 and after: The obligation deadline is set to 10/30 in the last year of funds being accumulated. Again, the obligation end date is 24 months after that and the expenditure deadline 48 months from the obligation start date.
The Chart Below shows the latest possible obligation end dates for RHF grants that are being accumulated.
|Chart of Obligation and Expenditure end dates|
|Last Year of Accumulation||Obligation End Date||Disbursement End Date|
Once a PHA has submitted an RHF Plan and the local HUD office has approved it, the information is entered into the RHF Data Collection Tool, and the obligation and expenditure deadlines are reset in LOCCS.
What is the relationship between the submission of a development proposal and establishment of obligation and expenditure deadlines - does one still exist?Previously, when a PHA decided to accumulate RHF funds, HUD guidance explained that the latest date that the PHA could submit a development proposal for its first five years of RHF funding was 90 days after execution of the RHF ACC by the HUD Field Office for the fifth year of RHF funding. A PHA could submit a development proposal earlier than that date, however, if it submitted the development proposal after that time, the obligation start date was still established as if the PHA had submitted the proposal by the latest possible permissible date.
Now, the establishment of alternate obligation and expenditure deadlines is based solely on a PHA's intent to accumulate funds. The PHA is responsible for proceeding with development activities, including but not limited to the submission of a development proposal, in a timely fashion that complies with the obligation deadlines.