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 FSS Final Rule Published: Important Changes for Multifamily Owners and Operators
Dear Multifamily Owners and Program Operators,
We are happy to announce that the Final Rule implementing the re-authorization of the FSS program was published in the Federal Register on May 17, 2022. FSS is a voluntary program for multifamily owners and residents that provides incentives and support to help families living in HUD-assisted housing to increase their earnings and build financial assets.
The new final rule updates regulations under 24 CFR 984 and 24 CFR 877 and creates important changes for FSS programs in Multifamily properties, highlights of which are described below. We expect these changes will significantly simplify the operation of Multifamily FSS programs and unlock new opportunities for FSS programs at Multifamily properties.
Major Changes to Highlight for Operating Programs:
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New Reporting Forms and escrow calculation worksheets (listed below under New Forms)
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Reduced burden of reporting – from quarterly reports to annual reports
- New requirements for action plans; most owners will need to submit new action plans to match the new reporting requirements, but we expect most required changes to be small.
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More ability to pool resources with other FSS programs, including those operated by PHAs
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PBRA (Multifamily) programs are now eligible for HUD program funding, and can apply for funding in future FSS notices of funding opportunity
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Programs now need to work with a Program Coordinating Committee (PCC) if one is available. Owners may also start their own PCC, and are encouraged to do so if there isn’t an existing PCC they can join.
New Forms
There are three new reporting forms for Multifamily FSS programs, all of which can be found on the HUD Multifamily website under “Asset Management Quick Links”:
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HUD 52650 Contract of Participation – incorporating all of the regulatory changes through the new final rule;
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Multifamily FSS Reporting Tool Instructions 2022; and
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Monthly FSS Escrow Credit Worksheet 2022
These reporting forms will additionally be added to HUDclips soon.
Additionally, you must submit your action plan with the action plan checklist. This can be found on the FSS Program Website
Important Dates
The final rule goes into effect on June 17th, and all required changes to programs (e.g., new action plans) must occur before November 14th.
This means that starting on June 17th Multifamily FSS program operators should discontinue submitting quarterly reports and that all changes to action plans must be submitted before November 14th. Note that edited action plan must be approved by HUD before owners can begin using the new forms and that all participants (including existing participants) must sign the new contract of participation. You cannot enroll new participants in your FSS program until your revised action plans are approved.
An updated version of Housing Notice H-2016-08 to incorporate changes to the Multifamily FSS program is currently being drafted, as are updates to the FSS guidebook, including a chapter dedicated to running FSS at PBRA properties.
Webinars for Program Operators
In addition to PIH-run webinars, which are relevant to Multifamily FSS programs and can help answer clarifying questions for existing programs, Multifamily will host a webinar for Multifamily FSS program operators. More information on the date and time for the webinar is forthcoming and will be communicated through email. This webinar will provide more information on needed changes, and we are planning to record it for access for those who are unable to attend.
Reach out to MF_FSS@hud.gov with any urgent questions on reporting; we will dedicate a substantial portion of the webinar to owner Q&A. Details about how to sign up for the webinar will be communicated via future email. Multifamily FSS program operators are encouraged to join the Family Self-Sufficiency (FSS) Program HUD Mailing List at https://www.hud.gov/subscribe/mailinglist to receive periodic emails with FSS program updates and resources.
Short FAQ
Q: I currently operate an FSS program. How does the final rule impact me?
A: First off – as mentioned above, these changes are mostly small and meant to help you run your program and reduce your reporting burden – we want you to be successful at providing this critical program!
As of June 17, 2022, you no longer need to submit quarterly reports. Going forward, owners will submit one annual report. Details on annual reporting will be communicated in an updated Housing Notice on FSS at a later date.
You must fill out the new contract of participation with participants (you can amend your initial contracts), update your action plan, and confirm your PCC (if applicable) by November 14th as well.
The webinar will help you walk through these updates and will give you plenty of time to make the necessary changes to your action plan and program ahead of November 14th. Note that you cannot begin using the new reporting forms until your new action plan is approved by HUD staff.
For the time being, you should continue to refer to HUD’s existing resources for FSS programs – the 2016 and handbooks found on HUD exchange; updates to these are forthcoming and will be communicated out when available.
Q: I am an owner interested in operating an FSS program. What should I do?
A: You should reach out to your account executive and express interest in the program and sign up for the general FSS listserv. The multifamily FSS page on HUD exchange is the best resource for you and will help you through how to set up a program; it will be updated with new resources as they are published. You should use the new forms highlighted above and available on the HUD website, and continue to check HUD Exchange as updated guidance is posted. If interested, you can apply to future Notices of Funding Opportunity for HUD FSS program funding. Note that you cannot begin your FSS program and start enrolling participants until your action plan is approved.
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