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Understanding Tenant Based

Rental Assistance

Presented By:Candace Baldwin

NCB Capital Impact&

Brenda HamptonIllinois Department of Human

Services

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Agenda• Introduction of Speakers• Discussion Points

– Current development subsidies do not “drill down” to income levels of MFP participants

– Housing Choice Voucher (a.k.a. Section 8) are over subscribed and not readily available

– Alternative sources of funding for rental assistance that could be utilized

– States have implemented bridge rental subsidy programs linked to Housing Choice Voucher

• Open Discussion

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Development subsidies do not create affordable housing for MFP

population

• Traditional affordable housing finance tools do not drill rents down far enough to meet MFP participant’s level of income

• Housing Choice Vouchers (HCV) are over-subscribed

• Tenant based rental assistance is needed to make rents affordable for community integration

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Tenant Based Rental Assistance (TBRA) is derived based upon

recipient’s income • No more than 30% of resident’s income• Like vouchers, tenant based rental

assistance programs fill the gap • “Gap” is difference between 30% of

resident’s income and fair market rent (FMR)

• FMR* set annually by HUD based upon local markets

*For more information on how to find the fair market rent for local area visit: http://www.huduser.org/datasets/fmr/fmr2008f/FY2008_FMR_SCHEDULEB.pdf

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There are a number of Alternative Sources for TBRA

• Tenant based rental assistance can be sourced from:– HOME funds– Housing Trust Funds

• Typically locally controlled• Follow similar eligibility guidelines as

housing choice vouchers

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HOME funds are Typically Overlooked as a Source for Rental

Assistance• HOME funds are administered through a

participating jurisdiction (PJs)• State or local government designated by HUD

to administer HOME funds• Small cities and counties are administered by

State HFA• Rental housing units must meet HUD

qualification• Length of rental assistance contract set by

program guidelines

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HOME funds can Assist in Transitioning MFP participants into

the Community• Uses for HOME funds can cover:

– Housing costs such as rent– Utility costs and/or deposits– Security deposits

• Limited to tenants with incomes at or below 80 percent of area median income

• Participating jurisdiction has to include TBRA as an activity in consolidated plan

• Contracts for two years and are renewable

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Housing Trust Funds can also be Used for Rental Assistance

• Trust funds can be administered by state or local governments

• 38 state housing trust funds in the U.S. • Funded through fees assessed – e.g.

real estate transfer tax, document recording fees, application fees

• Not subject to federal regulations – leads to flexibility of eligible uses

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A Number of States use Housing Trust Funds for Rental Assistance

• Minnesota Housing Trust Fund– Established in 1988– 2002 expanded use of funds for rental

assistance– Funds administered through designated

agencies and organizations through RFP process

• Oregon Low Income Rental Assistance– Department of Housing and Community

Development– Referrals through community partner

organizations

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HOME and Trust Funds face similar challenges to HCV

• Funding for both programs subject to availability of funds annually

• Annualized payment creates a long term funding commitment rather than one time development subsidy

• Not all HOME or Trust Funds are designated for tenant based rental assistance

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Expanding use of TBRA funds for MFP Participants Requires Outreach

• HOME Funds– Contact PJ and state HFA to discern if TBRA

is use of program– Consolidated Plan updates – public process– Request prioritization of funds to be

directed to MFP initiative

• Housing Trust Funds– Similar strategy to HOME funds– Identify innovative sources of funds to

increase trust fund appropriation

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Bridge Rental Subsidy Programs can also be tied to more than just

Vouchers• Number of states have employed bridge

rental subsidy programs– Iowa HCBS Bridge Rental Subsidy Program– Maryland Bridge Rental Subsidy Program

• Focused on participant securing housing choice voucher

• May consider allowing TBRA through HOME or Trust Funds to be the transition to permanent rental assistance

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For more information

Candace BaldwinSenior Policy AdvisorNCB Capital Impact

cbaldwin@ncbcapitalimpact.org703-647-2352

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MFP PresentationOctober 8, 2008

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Illinois Department of Human Services/Division of Mental Health

Permanent Supportive Housing and Bridge Subsidy Program

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Participating partners:

Technical Assistance Collaborative, Inc. (TAC), Boston, MA

Corporation for Supportive Housing (CSH), Chicago, IL

Illinois Housing Development Authority (IHDA)

Pubic Housing Authorities (contractual agreement)

Regional Housing Support Facilitators

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Permanent Supportive Housing Housing Policy (PSH) Statement:

The Department of Human Services, Division of Mental Health is committed to, as a priority toward systems rebalancing, the development and expansion of Permanent Supportive Housing (PSH) for individuals who meet defined criteria of eligibility and who are diagnosed with a serious mental illness.

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Permanent Supportive Housing Housing Policy Statement (cont):The goal of this initiative is to promote

and stabilize consumer Recovery with elective support services in one’s leased or owned home that (1) provides safety ; (2) ensures comfort and decency ; (3) is financially manageable within resources that the consumer has available.

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Illinois - PSH model:

Typically rental apartments linked with flexible community-based support services:

Self contained unit (bathroom & kitchen)

Scattered sitesStudio or efficiency unitsone bedroom apartmentstwo bedroom shared apartment

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Illinois - PSH model (cont)

Sites with three or more unrelated individuals are considered as Group Homes

Group Homes will not qualify as acceptable residential options under the PSH model .

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Illinois - PSH model (cont)

Services are linked to housing, but are considered voluntary.

Services are not a contingency to retain housing.

Housing is considered permanent. Landlord/tenant law governs.Tenant hold the lease, sublease or

rental agreement.

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Illinois - PSH model (cont)

Tenant controls access to his or her dwelling unit in accordance with applicable landlord/tenant law.

Tenant-based rental assistance dollars (one-time) available to eligible/approved DMH consumers - Bridge Subsidy Program*

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Support Services:

The full array of DMH Support Services are available based on medical necessity.

Support Services are flexible based on consumer choice.

Community mental health engagement is a requirement in the PSH referral and application processes.

Community providers have an expectation to continue outreach to consumers in PSH.

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PSH priority population

Residents of Long Term Care (nursing homes-NF)

Extended care patients of State Psychiatric Hospitals

Individuals at risk of placement in a NFAging out young adults (DCFS wards or

Individual Care Grant )Residents of existing DMH contracted

Supervised or Supported Residential settings.

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PSH Eligibility Criteria

Diagnosis of Serious Mental Illness.Income within 30% or below Area

Medium Income (AMI).Referred and approved by a DMH

contracted vendor through outlined processes.

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PSH - Bridge Subsidy Program

Financing - $7.5 million dollars over five years were allocated by State legislative appropriation (Hospital Tax_Lock Box) to develop opportunities for eligible/identified individuals to transition to affordable community-living alternatives.

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Bridge Subsidy Program . . .

Requires income at or below 30% Medium Area Income.

Pays 70% of the rental cost - applied to the lease.

Requires that the consumer pay 30% of his/her income - applied to the lease (if a consumer has no income, Bridge will cover 100% cost).

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Bridge Subsidy Program . .

Requires that all individuals approved for Bridge either apply for a Section 8 Voucher or other rental programs or get on a waiting list for a rental voucher.

Rental cost is calculated against the Fair Market Rental rate, by county (rental units cannot exceed this amount).

Includes a $2,000 one time Transition Fund, (maximum $2,800 for a lifetime).

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Bridge Subsidy Administration

DMH has contracted with (at least one) Local Housing Authority in each Region to serve as a Subsidy Administrator (SA)

Two contracts are with entities that have subsidy administration experience: one of the two will serve as a SA in all areas of the state without a contracted HA.

SA will conduct initial Housing Quality

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Bridge Subsidy Administration

standard unit inspections according to HUD specifications.

SA will assist as a resource with landlord search.

SA will certify consumer income.SA will respond to Request to Lease.SA will negotiate unit rental price that

meets HUDs rent reasonableness test.

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Bridge Subsidy Administration

SA will conduct initial income certification.SA will execute Housing Assistance

Payment (HAP) contract with landlord.SA will pay security deposit, utility deposit

and monthly rent according to the BHAP.SA will conduct annual income

recertification.SA will submit monthly reports and

quarterly fiscal reconciliation to DMH.

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Transition Fund Requisition Forms A&B (attachments)

One SA will process Transition Fund request (Form B) for household purchases for the entire state.

Transition Form - InstructionsTransition Form A - Used by SA for

identification of payment for security deposit, utility deposit and reimbursement fees.

Transition Form B - Used by care managers to access a ‘bank card’ for consumer household purchases.