HUD Announces COVID-19 Supplemental Payments for Properties

AAFCPAs would like to make clients aware that the U.S. Department of Housing and Urban Development (HUD) recently announced (in Notice H 20-8) the availability of funds for COVID-19 Supplemental Payments (CSPs) for properties receiving project-based rental assistance under the Section 8, Section 202, or Section 811 Programs.

Who is eligible?

Property owners who currently have Section 8, 202, or 811 contracts.

If you are anticipating surplus cash flow payments at the end of the year, you are generally not eligible for the CSPs. AAFCPAs advises clients to consult with your AAFCPAs Partner or property management company to discuss eligibility.

Amount available?

  • The CARES Act provides an additional $1 billion under the heading Project-Based Rental Assistance (PBRA) for Section 8 properties;
  • $50 million under the heading Housing for the Elderly (Section 202); and
  • $15 million under the heading Housing for Persons with Disabilities (Section 811)

These funds are provided to “prevent, prepare for, and respond to Coronavirus, including to provide additional funds to maintain normal operations and take other necessary actions during the period that the program is impacted by Coronavirus.”

Filing deadline?

This guidance includes an August 5, 2020, filing deadline for owners of properties assisted under these programs to be considered for CSPs.

Eligible costs?

The program acts as cost reimbursement supplemental payments for certain operating costs incurred relating to COVID-19.   Some examples are:

  1. Increased cleaning frequency in common areas
  2. Intensive deep cleaning and sanitation services, PPE, costs incurred to facilitate social distancing, temporary staffing increases

Covered Period?

HUD will consider requests to reimburse eligible costs incurred between the enactment of the CARES Act on March 27, 2020, and July 31, 2020. All requests to address expenditures for staffing, contractors, and other services must be for services provided during the eligible time frame. Costs for purchases of bulk supplies (such as PPE and sanitizer) may reflect inventory purchased during the eligible timeframe that can reasonably be anticipated for use through September 30, 2020.

What are eligible costs?

HUD is making available funds for two categories of CSP payments: Tier I Standard Payments and Tier II Exceptional Cost Payments.

Tier I requests allow for the reimbursement of expenses up to a capped amount, based on a formula that considers property size, whether the property has a service coordinator funded from HUD rent receipts, and whether the property’s rental assistance contract or other controlling documents specify that the property house elderly residents.

Owners may request larger sums under Tier II Exceptional Cost Payments, to address cost increases associated with responding to reported COVID-19 outbreaks among property residents or in response to extensive community exposure that creates a greater threat to the health and safety of residents within the community.

AAFCPAs advises clients to consult with your AAFCPAs Partner to discuss facts and circumstances specific to this funding and your organization.

AAFCPAs will continue to monitor federal and state stimulus initiatives and keep you informed as significant changes occur or provisions become clarified. If you have any questions please contact: Matthew McGinnis, CPA at, 774.512.4080; or your AAFCPAs Partner.

About the Author

Matt has been serving AAF clients since 2006. Matt has extensive experience auditing and consulting with nonprofit organizations in accordance with Uniform Guidance/Single Audit and Government Auditing Standards, as well as those with Massachusetts Uniform Financial Statement filing requirements. Matt’s experience within the not for profit industry includes: affordable housing, community development, charter schools and human services organizations. Matt’s for-profit clients include both commercial and residential real estate projects. Matt specializes in various tax credit deals such as Low Income Housing Tax Credit (LIHTC) and New Markets Tax Credit (NMTC) programs.