SUPPLEMENTARY INFORMATION:

A. Background

This notice provides HUD's methodology used to determine the CY 2025 administrative fee rates by area, which HUD uses to determine PHA administrative fees for the HCV, Mainstream Vouchers, EHV (column A rate only), and Moderate Rehabilitation programs, including the Single Room Occupancy (SRO) program for homeless individuals. The HCV Program is the Federal government's major program for assisting very low-income families, persons who are elderly, or persons with disabilities to afford decent, safe, and sanitary housing in the private market. Mainstream Vouchers are tenant-based vouchers under section 8(o) of the U.S. Housing Act of 1937, serving households that include a non-elderly person with a disability. The EHV program was authorized by the American Rescue Plan Act (ARPA) PL 117-2, enacted on March 11, 2021. Through EHV, HUD is providing housing choice vouchers to local PHAs to assist approximately 60,000 participants who are homeless, at-risk of homelessness, fleeing, or attempting to flee domestic violence, dating violence, sexual assault, stalking, or human trafficking, or were recently homeless or have a high risk of housing instability. Section 3202(b)(6) of the ARP provides that PHAs may not reissue turnover EHVs after September 30, 2023, with EHVs effectively sunsetting after this date when families leave the program. In addition to the sunsetting requirement, the ARP made EHV funds available for obligation by HUD until September 30, 2030, with these funds being cancelled as a matter of law effective September 30, 2035. However, due to historic increases in rental prices resulting in a higher per unit cost (PUC) for EHVs, HUD has informed PHAs through a recent letter that available EHV funds are likely sufficient to cover EHV families through calendar year (CY) 2026. The Moderate Rehabilitation Program provides project-based rental assistance for low-income families and the SRO program provides project-based rental assistance for individuals experiencing homelessness. Both programs have been repealed and no new projects are authorized for development. Assistance is limited to previously rehabilitated properties, with assistance being provided pursuant to a housing assistance payments (HAP) contract between an owner and a PHA.

B. CY 2025 Methodology

For CY 2025, administrative fees are determined based on vouchers leased as of the first day of each month and in accordance with the requirements of the Full-Year Continuing Appropriation and Extensions Act, 2025 (Pub. L. 119-4), which provides the same amount of administrative funding as the 2024 Appropriations Act (Pub. L. 118-42). This data is extracted from the Voucher Management System (VMS) at the close of each reporting cycle and validated prior to use. For the Moderate Rehabilitation programs, including the SRO program, administrative fee eligibility is based on the units under a HAP contract. Administrative fee advances made prior to the 2025 fee rate availability are reconciled and adjusted per the information provided in the CY 2025 Administrative Fee Rate Description document available through the following link: https://www.hud.gov/​program_​offices/​public_​indian_​housing/​programs/​hcv/​guidance_​and_​notices.

The included table provides two fee rates for each PHA. The first rate, Column A, applies to the first 7,200 voucher unit months leased in CY 2025. The second rate, Column B, applies to all remaining voucher unit months leased in CY 2025. However, in the case of EHVs, PHAs are allocated the full Column A administrative fee amount for each EHV that is under HAP contract as of the first day of each month in accordance with PIH Notice 2021-15, Emergency Housing Vouchers—Operating Requirements, issued on May 5, 2021. The funding for EHVs, including administrative fee funding, was appropriated through the ARPA, separate and apart from the regular HCV program appropriations provided through HUD's annual appropriations acts. Eligibility for EHVs is limited to the vulnerable populations described earlier, and EHVs may not be reissued after September 30, 2023. In addition to the post-September 30, 2023, prohibition, the ARPA made EHV funds available for obligation by HUD until September 30, 2030, with these funds being cancelled as a matter of law effective September 30, 2035. However, due to historic increases in rental prices resulting in a higher per unit cost (PUC) for EHVs, HUD has informed PHAs through a recent letter that available EHV funds are likely sufficient to cover EHV families through Calendar Year (CY) 2026.

Increases in administrative fee rates are based on the year-to-year change in average wages paid to workers in establishments owned by local governments, as reported by the Bureau of Labor Statistics Quarterly Census of Employment and Wages. HUD calculates the average change for the metropolitan and non-metropolitan portions of each State. For 2025, the national average increase in administrative fee rates is 3.8 percent for metropolitan areas and 3.9 percent for non-metropolitan areas. In some cases, the fee rates calculated for CY 2025 are lower than those established for CY 2024. In these cases, the affected PHAs are held harmless at the CY 2024 fee rates. ( printed page 21493)

The fee rates for each PHA generally cover the fees for areas in which the PHA has the greatest proportion of its participants, based on Public Housing Information Center (PIC), or superseding system, data submitted by the PHA. In some cases, PHAs have participants in more than one fee area. If such a PHA chooses, the PHA may request HUD establish a blended fee rate that proportionally considers all areas in which participants are located. Once a blended rate is established, it is used to determine the PHA's fee eligibility for all months in CY 2025. The forthcoming notice, Implementation of the Federal Fiscal Year (FFY) 2025 Funding Provisions for the Housing Choice Voucher Program (the Funding Notice), will describe how to apply for blended fee rates and will provide a deadline date for submitting such requests. Once the notice is published, PHAs will be able to access it through the following link: https://www.hud.gov/​program_​offices/​public_​indian_​housing/​publications/​notices.

PHAs operating over large geographic areas, defined as multiple counties, may request a higher administrative fee rate if eligible. The Funding Notice will describe how to request higher fee rates and the deadline date for such requests. Higher administrative fee rates differ from blended administrative fee rates in how they are calculated. Requests for higher administrative rates must clearly demonstrate that the PHA's published rate cannot cover their projected expenses. For approved higher administrative fee rates, HUD calculates a breakeven rate to ensure the PHA receives sufficient funds to cover their expenses while also ensuring the administrative fee reserves do not grow.

This notice identifies the monthly per-voucher-unit fee rates to be used to determine PHA administrative fee eligibility. The current fee rates remain accessible through the following link: https://www.hud.gov/​program_​offices/​public_​indian_​housing/​programs/​hcv/​guidance_​and_​notices, under the Notices and Guidance for PHAs section.

Direct questions to the PHA's assigned representative at the Financial Management Center or the Financial Management Division at PIHFinancialManagementDivision@hud.gov.

C. Moving to Work (MTW) Agencies

In cases where an MTW Agency has an alternative formula for determining HCV Administrative Fees in Attachment A of their MTW Agreements, HUD calculates the HCV Administrative Fees in accordance with that MTW Agreement provision.