New Construction, Rehabilitation and the AHAP

The AHAP is the Agreement to enter into a Housing Assistance Payments contract. The purpose of the AHAP is to create a formal agreement between the PHA and the project owner before construction begins. The AHAP gives the owner assurance that the PHA will provide project-based vouchers when construction is completed, and it gives PHAs assurance that the owner will follow all required federal regulations prior to and during construction.

HUD is responsible for ensuring that a number of regulations, which are governed by other federal departments, are followed when a project receiving HUD subsidies undergoes construction. HUD requires that PHAs adhere to these regulations, and PHAs require that project owners adhere to these regulations. (See below for a list of the most significant regulatory requirements that must be monitored.)

PHAs must use the HUD form of the Agreement to enter into a Housing Assistance Payments Contract (AHAP). The Agreement comes in two parts: AHAP for Rehab/NC Part 1 and AHAP for Rehab/NC Part 2. You’ll definitely want to read these documents before implementing a program. They offer a greater level of specificity around the construction-related aspects of project-basing. The environmental review and subsidy layering reviews must be completed and approved prior to signing the AHAP, and the AHAP must be signed prior to the start of any construction or rehabilitation. Construction begins with excavation or site preparation (including clearing of the land) and Rehabilitation begins with the physical commencement of rehabilitation activity on the housing.

 

Monitoring for Compliance of “Other Federal Regulations”
Capital funders may be very motivated to see that project-based vouchers are awarded to the projects they finance. As a result, they may be willing to do some of the related monitoring of construction-related regulations on behalf of your PHA. As well, federal sources of capital funds (used to rehabilitate or build new housing) sometimes trigger the same regulations that project-based vouchers trigger. When a project has multiple triggers for the same requirements, only one entity needs to monitor them.

If a partner agency agrees to monitor for regulatory compliance on your behalf, be sure to get the documentation you need from them to include in your AHAP and HAP contracts. Following is an overview of the key related regulations and possible partners you might find to assist you in assuring that your projects meet them.

Related Regulations

Description

Possible Partners

Section 3

Contracting and employment opportunities for low-income workers and companies.

The administrators of HOME and CDBG funds.

Uniform Relocation Act

Protection for displaced households and businesses.

Relocation consultants.

Davis-Bacon

Wage rate requirements for construction and related workers. (This is triggered when 9 or more units are project-based.)

The administrators of HOME and CDBG funds.

National Environmental Protection Act (NEPA) Environmental Reviews

Protecting, enhancing and restoring environmental quality.

Your jurisdiction's local Responsible Entity (RE) is required to perform these.

Subsidy Layering Review

Ensures that projects do not receive more subsidy than necessary.

May be conducted by your State's Housing Credit Agency. 

 

The HAP Contract
The purpose of the HAP contract is to provide housing assistance payments for all eligible families in an assisted development. PHA’s must use the HUD form of the Housing Assistance Payments Contract.

  • The HAP Contract for rehabilitated and newly constructed housing comes in two parts.

HAP for Rehab/NC Part 1 and HAP for Rehab/NC Part 2

  • For existing housing contracts, use the HAP for existing housing, which also comes in two parts:

HAP for Existing Housing Part 1 and HAP Contract for Existing Housing Part 2.

The term of the HAP contract for any contract unit may not be less than one year or more than 15 years. Additional extensions may be granted for up to an additional 15 years if the PHA determines that extension is appropriate.

 

 Go to the next section to learn about waitlists and preferences.

Go back to the PHA Toolkit Homepage.

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