FEMA Apartments

From FEMA Answers

FEMA has subsidized over 65,000 apartments through state and local governments. FEMA began transitioning this program away from local governments in late March 2006. For a rough map describing the location of these apartments by County as of April 2006, see apartments map. More than half of these apartments are located in Houston, for more information on those, see the Houston Hurricane Recovery web site.

Contents 1 Transition Guidance 2 Apartment Program Overview 3 FEMA-FUNDED VOUCHER PROGRAMS (Section 403 Assistance) 4 INDIVIDUAL RENTAL ASSISTANCE (SECTION 408 ASSISTANCE)

Transition Guidance

FEMA Transitions from 403 to 408 Assistance

In the immediate aftermath of the hurricane, cities across the country welcomed the hurricane evacuees with open arms. With FEMA’s approval, many created city-run voucher programs and offered evacuees six-and 12-month apartment leases. These programs are funded through FEMA's Section 403 public assistance program.

On November 15, however, FEMA reversed position and announced that it would stop reimbursing cities for voucher lease payments as of March 1, 2006 and would instead begin transitioning voucher holders into FEMA's individual rental assistance program (Section 408).

Six days before that deadline, on February 22, FEMA finally issued a notice outlining the specific steps it will take to end the voucher leases and move evacuees into FEMA's Section 408 individual assistance programs.

On March 14, NMHC/NAA met with FEMA’s Acting Director of Recovery, David Garratt, to discuss the 403-to408 transition. His staff estimates that 90 percent of the evacuees will qualify, and that anyone who is ineligible will be given 30 days before being cut off from the 403 program.

Because of privacy concerns, FEMA says it cannot tell apartment owners if an individual is eligible. According to its latest notice, the state is responsible for notifying owners if evacuees are eligible. FEMA officials also suggested that owners ask evacuees for a copy of their eligibility letter before entering into new leases.

On March 26, FEMA issued additional guidance detailing how the transition from 403 (vouchers) to 408 (individual assistance) would be handled and extending the timetable for completing the transition to May 31. (A FEMA Q&A has also been posted here.)

PROGRAM BASICS

Cities with voucher programs are are supposed to submit a list of those leases and all pertinent information about them to the Agency's contractor, Corporate Lodging Consultants (CLC). FEMA will then determine which voucher holders are eligible for 408 assistance. FEMA will notify its regional offices of eligible and ineligible evacuees. The regional offices will, in turn, notify the state, and the state (through the host jurisdiction/local government), must notify the evacuee and the apartment owner within 15 days.

Evacuees do not need to take action until they are contacted by FEMA to determine eligibility for 408 assistance.

408 Eligible Evacuees, Voucher Lease Expires Before March 31.

Evacuees must assume the lease (or sign a new one). They will receive rental assistance from FEMA in three-month increments, which they must use to pay their rent. They can request additional assistance by completing a recertification form.

Three Month Leases:

In response to NMHC/NAA’s requests for direct payments to all property owners, FEMA’s Acting Director of Recovery, David Garratt, suggested that owners provide evacuees with three-month leases and seek payment for all three months of rent in advance. Concerned about possible fair housing violations, the Texas Apartment Association reports that a HUD regional office has informed them that requiring three-month leases would not violate fair housing laws as long as they are required consistently of all Section 408 recipients. Firms are encouraged to check with their own legal counsel before adopting these policies, however.

408 Eligible Evacuees, Voucher Leases Expire After March 31

The state/city will terminate its lease obligations. Owners can continue to receive rental payments directly from Corporate Lodging Consultants (CLC) on a month-by-month basis for the duration of the lease, but they must:

1. allow the evacuee to assume the original lease, or execute a new lease not to exceed the original term; and
2. register with CLC. ( Additional information on the CLC sign up process, including a FAQ document, are posted here)

At the end of the original lease term, FEMA will provide evacuees with direct rental assistance in three-month increments as long as the evacuee remains eligible for 408 rental assistance, or up to 18 months.

Direct Payment Program

CLC is in the process of trying to contact properties that have residents eligible to receive payment through the direct payment process. Property owners MUST register with CLC to participate in the direct payment program. Properties that may have eligible residents but haven’t received notice from CLC can either register online at http://www.corplodging.com/femadap/ or call CLC at 866/362-0742. Questions can also be directed to femahousing@corplodging.com. An extensive Q&A is available online.

Some important items of note:

1. Evacuees will be responsible for their own utilities, unless the apartment is not separately metered and utilities are included as part of the rent payment. FEMA says federal law prohibits it from doing so and it has launched what it calls its "Utility Relief Initiative" to seek Congressional approval to pay utilities. The request is included in the Administration's Emergency Supplemental request of February 16, 2006.
2. Direct payments made through CLC are automatically deducted from the maximum amount of $26,200 in individual assistance to evacuees.
3. Evacuees who exceed this maximum may still be eligible for assistance, but must work with FEMA to qualify for this additional funding.
4. The City of Houston has signed a letter of agreement with FEMA to continue its voucher program according to the original lease terms. The city will continue reimbursing owners, and CLC will not have a role in processing payments for properties participating in the Houston voucher program. We understand that the city is now exploring the possibility of removing itself from the voucher payment process and having owners paid by FEMA through Corporate Lodging Consultants (CLC).)

408 Ineligible Evacuees

Evacuees who are not eligible for 408 will have 30 days to vacate the property or to make alternate payment arrangements with the property owner. FEMA will reimburse the local jurisdiction for lease termination costs, including an additional 30 days rent if a 30-day notice was required in the lease.

RESOURCES

• FEMA's February 22 Notice
• FEMA's March 26 403-to-408 Transition Guidance
• FEMA FAQ on 403-to-408 Transition
• CLC's Landlord Direct Payment Web Site
• Overview of the Section 403 Assistance Program
• Copies of the Approval/Denial Letters Evacuees Receive

Apartment Program Overview

The National Multi Housing Council has created a document providing an overview of FEMA/HUD housing assistance programs for the Gulf Coast hurricane victims. It includes updated information on new deadlines and changes in prior programs. (02/27/06)

The IRS has waived many of the requirements for Low-Income Housing Tax Credit (LIHTC) properties. An official notice outlining the changes for Hurricane Katrina victims is posted here. A second notice extending those waivers to Hurricane Rita victims is posted here. The changes make it easier for LIHTC property owners to house evacuees without losing their tax credits.

FEMA-FUNDED VOUCHER PROGRAMS (Section 403 Assistance)

With FEMA's approval, many cities around the country created six- and 12-month voucher programs to house the hurricane evacuees. On November 15, however, FEMA reversed position and announced that it would stop reimbursing cities for voucher lease payments as of March 1, 2006.

On February 24, FEMA signed an agreement in principle with Houston Mayor Bill White to continue funding for that city's 12-month voucher leases. The City and FEMA will use the agreement in principle as the basis of a more detailed contract.

Apartment owners renting to evacuees with a Houston voucher should note, however, that the agreement says FEMA will not cover utilities that are billed separately from the rent after March 31, 2006. This contradicts the Houston voucher leases, which include utility payments for all units.

Importantly, the agreement does note that FEMA will work in good faith with the City of Houston to "implement the utility payment flexibility provisions of the Administration's Emergency Supplemental request of February 16, 2006, if approved by the U.S. Congress."

In a February 24 letter to Texas Governor Rick Perry, FEMA notified the state that the Agency will continue funding for that state's vouchers one more month--until March 31, 2006--to ensure a smooth transition of all eligible individuals to the Section 408 program by April 1, 2006.

The National Multi Housing Council's web site includes updated information on FEMA and HUD rental assistance programs, including more more information on FEMA's plans to end the city voucher programs and implement a direct payment plan to apartment owners for eligible voucher holders.

Two documents detailing the most frequently asked questions about the Section 403 program are posted here.

INDIVIDUAL RENTAL ASSISTANCE (SECTION 408 ASSISTANCE)

Many evacuees are eligible for rental assistance through FEMA’s Individual and Households Program (IHP). An overview of who is eligible for IHP assistance is posted here. A full FEMA guide to the IHP program is posted here. A FEMA fact sheet describing the program is posted here.

Initial Payments. Qualified owners and renters whose housing was destroyed by Hurricane Katrina were automatically sent a check for $2,358 in the fall of 2005 to cover three months of rent. The amount is based on the average national fair market rent of $786 a month. Payment were made automatically to households who have already applied to FEMA.

FEMA representatives say they understand that the average fair market rent will be less than is needed to cover rental costs in some areas where families have relocated. However, they say that by making the initial three-month rental assistance payment a single amount for all households FEMA is able substantially to reduce up-front paperwork and expedite these IHP grants.

Extended Housing Assistance. If participants remain eligible, housing assistance will be available for up to 18 months. After the first three months, the rental subsidy will be adjusted to reflect the FMRs for the location where the evacuee is living and for actual household size. Overpayments in this initial distribution must be repaid, credited against future rental assistance or deducted from any additional funds paid under the IHP. Additional information is posted here.