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6 <br /> 4. Prohibited Augmentation of HCV Funds from Outside Sources of Funds to Expand the <br /> HCV Program. No other funds, other than the sources of funds identified in Paragraph 2 <br /> above,may be used to expand the HCV program through additional leasing of units, either to <br /> lease up to baseline,maintain current leasing levels, or to otherwise mitigate the loss of <br /> leased units through attrition necessitated by funding limitations. The following sources of <br /> funds are examples of prohibited sources of funds which cannot be used to admit new <br /> families under the HCV program: HOME funds, net proceeds from Public Housing <br /> demo/dispo, Central Office Cost Center(COCC) funds, State funds, donations from <br /> philanthropic parties, and Mod Rehab admin fee reserves emanating from the Housing <br /> Certificate Fund. The use of these outside sources of funds for additional leasing of <br /> vouchers is prohibited;therefore,PHAs may not report the leasing and costs covered by the <br /> prohibited sources in VMS since they cannot be included in the calculation of renewal <br /> funding in the subsequent calendar year(CY). PHAs which have funds from outside sources <br /> may use those funds to operate a separate and distinct local rental assistance program; <br /> however,units leased under that program are not part of the federally funded HCV program <br /> and are not eligible for HCV renewal funds or administrative fees. Should a PHA use these <br /> types funds to operate a separate and distinct rental assistance program,the leasing and costs <br /> associated with these funds may not be reported in the Voucher Management System(VMS). <br /> 5. Exception Regarding the Augmentation of HCV funds from Outside Sources of Funds <br /> to Prevent the Termination of Assistance of Current Participants. There is one <br /> exception for use of outside sources to augment the HCV program. The exception is for <br /> PHAs that, despite taking reasonable cost-saving measures, are in a HUD-confirmed shortfall <br /> position and need additional funds in order to prevent the termination of current <br /> participants. In this instance, PHAs may use outside sources of funds such as net proceeds <br /> from Public Housing demo/dispo, Central Office Cost Center(COCC)funds, State funds, <br /> donations from philanthropic parties, and Mod Rehab admin fee reserves emanating from the <br /> Housing Certificate Fund. Prior HUD approval is required before PHAs may <br /> supplement the HCV program with these,or any other,sources of funds. PHAs would <br /> then report the leasing and costs covered by these sources in VMS which would then be <br /> included in the calculation of renewal funds in the subsequent calendar year. <br /> HOME funds may not, in any instance,be used to augment funds for the HCV <br /> program. It is noted,however,that HCV participants whose voucher HAP contracts are <br /> being terminated due to insufficient funding could be assisted under the HOME TBRA <br /> program. These families could then be provided a local preference to return to the HCV <br /> program once funds are available under the HCV program to support the HAP payments of <br /> these participants. <br /> 6. Confirmation of a Shortfall by HUD: Before determining if a PHA may use an outside <br /> source of funds to cover a shortfall in the HCV program,HUD must confirm if a shortfall <br /> exists. In determining the shortfall,HUD will use the Two Year Forecasting Tool. PHAs <br /> should refer to Appendix B of Notice PIH 2O13-12 which provides the criteria HUD will use <br /> to determine if the PHA has a HUD-confirmed shortfall and the calculation of the shortfall <br /> amount. HUD's Two Year Forecasting Tool can be found at <br /> I' <br />