As Public Housing Authorities (PHAs) reposition their public housing units, they must consider what they are going to do with their Public Housing Program if and when they end up in a position where they have no public housing units remaining. Please note that closing a Public Housing Program is not equivalent to closing a PHA. PHAs are locally established government entities and continue to exist without a Public Housing Program.
When a PHA submits an IMS/PIC application (e.g., RAD, Section 18, Section 22 Streamlined Voluntary Conversion) to HUD that proposes to remove the last of their public housing units, the PHA must include a Notification of Public Housing Closeout or Future Development (Form HUD-5837) that expresses the PHA’s intention to either closeout its public housing or develop new public housing ACC units in the future.
Some removal tools (including Streamlined Voluntary Conversion (PIH Notice 2019-05), Disposition by Very Small PHAs with 50 or fewer unit under Section 3(A)(3)(b) of PIH Notice 2018-04, and Streamlined RAD authority for PHAs with 50 or fewer units) are required to closeout their Public Housing Programs and terminate their ACCs with HUD. Other removal tools do not require PHAs to close-out. In this case, the PHA may choose to close-out (at its discretion), or may choose to develop new public housing units, with or without HUD funds, provided the PHA has the required “Faircloth” authority.
A PHA may close-out its Public Housing Program through two different administrative paths:
- PIH Notice 2019-13: Public Housing ACC Termination and PHA closeout (link to notice); or
- PIH Notice 2014-24: Process for Public Housing Agency Voluntary Transfers and Consolidations of the Public Housing Program (link to notice)
In both instances, at the end of the close-out process, HUD will terminate its Public Housing Annual Contributions Contract (ACC) with the PHA and the PHA will become either a “Section 8 Housing Choice Voucher (HCV) only” agency in HUD’s records (if the PHA has a Section 8 HCV Program) or a local entity under state law (if the PHA does not have a Section 8 HCV Program).