Housing First Permanent Supportive Housing (PSH) Program Guide

Housing First PSH for Individuals with SMI PROGRAM GUIDE

Purpose

The Department of Human Services, Division of Mental Health is committed to, as a priority toward systems rebalancing, the development and expansion of Permanent Support Housing (PSH) for individuals who meet defined criteria of eligibility and who are diagnosed with a serious mental illness and/or have been institutionalized. The Housing First PSH Model is intended to:

  • Create housing opportunities for those who remain unserved by the Bridge Subsidy PSH Model;
  • Empower our providers to move particularly vulnerable populations with no or virtually no financial resources into housing directly without preconditions;
  • Provide subsistence to those residents so they can meet some of their own basic needs with choice and dignity;
  • Incentivize landlords to work with our most vulnerable populations and the organizations that serve them;
  • Enable our providers to maximize the impact of the robust array of supportive services they currently offer our residents in support of their commitment to recovery and community integration.

Eligible Grantees

  1. Must be certified by IDHS as a Community Mental Health Center (CMHC) providing Rule 132 services (Medicaid Mental Health Services) or have a contract/MOU with a partner CMHC to serve all eligible participants in this program;
  2. Must be an SSI/SSDI Outreach, Access, and Recovery (SOAR) provider or have a contract/MOU with a partner SOAR provider to serve all eligible participants in this program;
  3. Must be an Individual Placement and Support (IPS) Supported Employment Provider, a Community Rehabilitation Provider (CRP), or have a contract/MOU with a partner IPS/CRP provider to serve all eligible participants in this program; and
  4. Are currently qualified/authorized to provide services to one of the target populations (see Program Participant Eligibility Requirements - applicants may apply to serve more than one target population. Applicants should submit one application only even when applying to serve more than one target population. The application should be inclusive of and identify all populations to be served.

Program Participant Eligibility Requirements

  1. Single person households only (with an exception for participants requiring live-in aides);
  2. Diagnosed with a serious mental illness (with an exception only for Colbert Class Members);
  3. Income Eligibility:
    • At entry - Individuals must be receiving $300 or less per month from all sources;
    • At annual recertification (required minimally every 12 months; interim recertifications may be conducted as often as necessary when there are changes to income) - Individuals must be at or below 30% AMI to continue receiving financial assistance;
  4. Be a member of one of the following target populations:
    1. Williams or Colbert Consent Decree Class Members - grantee or partner must be currently providing contract services to transition class members out of institutions;
    2. Front Door Diversion Program eligible participants - grantee or partner must be currently providing contract services under this program;
    3. Currently homeless (HUD definition at 76 FR 75994) PATH Program participants - grantee or partner must be currently providing contract services under the Projects for Assistance in Transition from Homelessness (PATH) Program; or
    4. Forensic Services Patients - those residing in State-Operated Psychiatric Hospitals (SOPHs) eligible for conditional release into outpatient treatment services and are referred by DMH program staff for housing placement.

Eligible Costs

Rental Application Fees - funds may pay for a reasonable rental housing application fee that is charged by the owner to all applicants according to their regular business practices. These costs typically range from $25 to $80 in Illinois but are not currently regulated or limited under Illinois law.

Inspection Costs - HUD Housing Quality Standards (HQS, 24 CFR 982.401) will apply to all assisted units and an HQS inspection must be completed prior to any assistance being provided for a unit and must also be conducted annually (within 12 months after the previous inspection). HUD inspection form (HUD-52580A) and checklist (HUD-52580) can be used to ensure that a property meets HQS guidelines. If a unit fails initial inspection, the owner or designated agent must be informed of the deficiencies and agree to remediate noted deficiencies in a timely manner and a follow-up inspection must be completed within 14 days. If the owner or designated agent refuses to remediate noted deficiencies or if the unit fails the follow-up inspection, the unit will be ineligible for any financial assistance. Extensions beyond 14 days may be granted if the owner or designated agent demonstrates a good faith effort to remediate the deficiencies within a mutually agreed upon time frame. Program funds may be used for the following activities:

  • Staff time necessary to perform and document inspections;
  • Reasonable per inspection fees charged by a third-party vendor to conduct HQS inspections (must have contract/MOU in place); and/or
  • HQS certification fees (including any recertification or CEU fees for maintaining third-party certification) for grantee staff (certification fees for staff of third-party vendors is not an eligible cost).

Security Deposits - funds may pay for a security deposit on behalf of a program participant that is equal to no more than 2 months' rent and will be refundable to the program participant as stipulated in the lease agreement as an incentive for the program participant to care for the property. Additionally, the following conditions apply:

  • Program funds may not be used to pay security deposits for subsequent moves beyond the initial move-in while a participant remains in the program without approval in advance in writing by DMH staff.
  • Non-refundable move-in fees charged by a property may be paid in lieu of security deposits (not in addition to) if those fees total no more than 75% of one month's rent - fees for subsequent moves beyond the initial move-in require approval in advance in writing by authorized DMH staff.

Utility Deposits - funds may pay for a standard utility deposit (and/or standard connection fees) required by the utility company for all customers of the utility services eligible for Utility Allowances/Payments under this program. Providers are responsible for ensuring that all program participants complete applications for the Low-Income Home Energy Assistance Program (LIHEAP) on an ongoing basis. Utility arrearages are not an eligible cost under Utility Deposits or Utility Allowances/Payments for this program.

Landlord Incentives - if necessary, to obtain a housing unit for a program participant, the following incentives may be paid on behalf of the program participant at the time the owner is paid the security deposit and the first month's rent:

  1. The Security deposit may be increased by an additional (third) months' rent - still must be refundable to the program participant as stipulated in the lease agreement as an additional incentive for the program participant to care for the property;
  2. A one-time, non-refundable signing bonus that is equal to no more than 2 months' rent; and/or
  3. Paying the cost to repair damages or remediate conditions (such as infestations incurred/caused by the program participant) that clearly documented and not covered by the security deposit and/or that are incurred while the program participant is still residing in the unit.

Program funds may not be used to pay for landlord incentives for subsequent moves while a participant remains in the program without approval in advance in writing by DMH staff. Grantees are also strongly encouraged to "negotiate up" when offering incentives to owners or their designated agents in order to offer the minimize the cost necessary to secure a housing unit for a program participant and maximize the number of program participants that can be served by each grantee.

Transition Assistance Funds - other necessary and reasonable costs associated with placement into an assisted unit under this program are one-time, capped at $1500 total, must be paid for directly by the grantee (not the program participant), may only be offered at initial program move-in (subsequent moves while remaining in the program are ineligible), must be approved in advance in writing by authorized DMH Staff, and may include (but are not necessarily limited to):

  • Moving costs, such as truck rental or hiring a moving company;
  • Basic living and storage furniture;
  • Window AC units (when not provided under lease for housing units with no central air conditioning);
  • Basic kitchenware, dishes, and utensils necessary for food preparation, storage, and consumption;
  • Linens necessary for bedding and hygiene; and/or
  • Other basic supplies needed for hygiene, garbage disposal, and cleaning/disinfecting.

Grantees must make a good faith effort to cover/minimize these costs and/or acquire necessary furnishings through other resources and describe those efforts and/or lack of other resources in their request to authorized DMH staff to fund these costs.

Rental Assistance/Leasing Payments - Contract Rent may be paid directly to a property owner or their designated agent as stipulated in the lease agreement and in accordance with the Rent and Utility Payment Standards for this program.

Utility Allowances/Payments - in cases where utility costs are not included in Contract Rent-meaning utilities are tenant-paid-program participants must be provided with a Utility Allowance or Utility Payments must be made directly in accordance with the Rent and Utility Payment Standards for this program. Utility arrearages are not an eligible cost under Utility Deposits or Utility Allowances/Payments for this program.

Subsistence Allowances - funds may be made payable directly to program participants (or representative payee) in the maximum amount of $300 per month for basic expenses only under the following conditions:

  • Participants/grantees must meet one of the following requirements;
    • Currently enrolled and engaged in documented SSI/SSDI Outreach, Access, and Recovery (SOAR) services and participating in at least 4 hours of vocational activity per month (as documented for the previous month) with an Individual Placement and Support (IPS) Supported Employment Provider or a Community Rehabilitation Provider (CRP); AND/OR
    • Participating in at least 8 hours of vocational activity (as documented for the previous month) with an Individual Placement and Support (IPS) Supported Employment Provider or a Community Rehabilitation Provider (CRP).
  • The number of vocational activity hours must be documented by the supporting ISP/CRP Provider every month via progress notes submitted with monthly billing; Eligible vocational activities include:
  • Discovery
  • Visual resume
  • Job club
  • Job shadow
  • Volunteering
  • Informational interviews
  • Financial counseling
  • Transitional jobs (i.e. agency enterprises)
  • Work trials
  • Internships
  • Other activities approved in advance and in writing by DMH staff
  • Participants are eligible for allowances only after they have moved into and remain living in a unit assisted by this program;
  • Those receiving SSI/SSDI benefits are not eligible to receive the Benefit Bridge Allowance - the allowance must be terminated after payment is made the month following the first and/or lump sum payment received from the Social Security Administration;
  • Those obtaining employment must have their allowance terminated after payment is made the month following the first full month of employment - those working at least 6 hours/week at $13/hour will earn more by working than by receiving the allowance; and
  • Program participants are eligible for the Benefit Bridge Allowance for a maximum of 24 months ($7200 total) - extensions may be requested of and authorized by DMH program staff in writing and will only be granted where considerable efforts to secure benefits and/or employment are evident and documented.

Case Management/Support Services - Up to 20% of grant funds can be used for Case Management that is directly related to the requirements of this program. Support services that are Medicaid-reimbursable or are eligible under DMH's Supportive Housing Program (Program 220) are ineligible under this program. Applicant organizations for this program will be given the opportunity to either increase their current Program 220 contract funding in proportion to the number of people they propose to serve under this program or, for those who are not currently grantees of Program 220, will be given the opportunity to apply for funding under Program 220 in proportion to the number of people they propose to serve under this program. Eligible Case Management services under this grant include staff time spent:

  • Determining and documenting program eligibility for participants;
  • Housing search and placement activities;
  • Arranging inspections (though conducting inspections falls under Inspection Costs);
  • Negotiating and communicating with property owners or designated agents;
  • Determining, documenting, and arranging payments for costs eligible under this program;
  • Any other activities necessary to ensure compliance with this program that are not reimbursable/billable to other sources.

Administrative Costs - limited to 10% of the overall grant amount.

Rent and Utility Payment Standards

Income Eligibility - Calculations for program eligibility and any financial assistance under this program will be in accordance with HUD regulations for Assisted Housing for Annual Income (24 CFR §5.609) and written documentation of the specific sources of income included in the gross income calculation must be retained. Calculation summaries must also include signatures by the both the Grantee and program participants to certify that the calculation is inclusive of all applicable sources of income or that the program participant has no income from any applicable sources at the time of calculation.

  • At entry - Individuals must be receiving $300 or less per month ($3600 annualized);
  • At annual recertification (required minimally every 12 months or when a new lease is executed, whichever comes first) - Individuals must be at or below 30% AMI.

Fair Market Rent - In general, Payment Standards for Rental Assistance Payments and Utility Allowances/Payments will be at or below 110% of Fair Market Rent (FMR) for the unit size and the geographical area in which the unit is located. Metropolitan and Small Area FMRs apply where applicable.  Click here for the updated FMRs for each Federal fiscal year by geographical area. 

Rent Reasonableness - The Contract Rent charged for a unit must be reasonable in relation to rents currently being charged for comparable units in the private unassisted market and must not be in excess of rents currently being charged by the owner for comparable unassisted units. Grantees must complete and retain documentation of a rent comparison for that unit and no less than 3 other units in the private unassisted market that take into consideration:

  1. The location, quality, size, unit type, and age of the contract unit; and
  2. Any amenities, housing services, maintenance and utilities to be provided by the owner in accordance with the lease.

Unit Size - Since this program is limited to single person households, Payment Standards for units larger than 1-bedroom may be assigned only for program participants requiring a live-in aid and/or need an additional room to store medical equipment (must retain documentation of need from a professional that is licensed or certified to make such a determination). All units must still pass the required HQS Inspection(s). The number of bedrooms needed for an individual must be used for calculation of Payment Standards but is not intended to restrict program participants from moving into available units with additional space/bedrooms if the total rent and utility costs for the units meet the Payment Standards for the prescribed unit size and smaller units are not readily available in the market where the program participant chooses to reside. For example, a program participant assigned a Payment Standard for a 0- or 1-bedroom unit may move into a 2-bedroom unit if the rent and utility costs do not exceed 110% of FMR for a 1-bedroom unit and no appropriate 1-bedroom units are readily available.

Leasing Requirements - Grantees will have two options for leasing arrangements: Rental Assistance (RA) Option or the Leasing Option. This determination can be made for each individual program participant based on their individual needs, unit availability in the housing market, and conditions necessary for grantees to establish relationships with property or owners or their designated agents for securing units.

  1. Rental Assistance (RA) Option - Grantees will need to have two agreements in place - a lease and a housing assistance payments (HAP) contract under the following conditions:
    1. The program participant will be sole liable party to the lease, which must require the program participant to pay rent directly to the owner or designated agent.
    2. The grantee must have a housing assistance payments (HAP) contract with the owner or designated agent governing the payment of rental assistance.
    3. The grantee must make rental assistance payments to the owner or designated agent based on the difference between the Contract Rent and the Total Tenant Payment less the Utility Allowance.
    4. The grantee is not responsible for the portion of the rent paid by the program participant if the program participant misses a rent payment in any given month.
    5. The grantee cannot make rental assistance payments on a vacant unit except:
      1. If a unit assisted under this program is vacated before the expiration of the lease, the assistance for the unit may continue for a maximum of 30 days from the end of the month in which the unit was vacated, unless occupied by another eligible person;
      2. No additional assistance will be paid until the unit is occupied by another eligible person; and
      3. Brief periods of stays in institutions, not to exceed 90 days for each occurrence, are not considered vacancies.
    6. HAP contract templates can be provided to grantees but will not be intended to be used by grantees without revision. Grantees should consult with legal counsel and use a form that complies with state and local law in addition to the requirements of this program. The Illinois Department of Human Services assumes no liability for the use or content of HAP agreements between grantees and property owners/agents.
  2. Leasing Option - Grantees will need to have either one or two agreements in place - a Lease and Sublease Agreement (combined); or a Lease Agreement and either a Sublease Agreement or an Occupancy Agreement under the following conditions:
    1. The Grantee will be sole liable party to the lease, or the lease must clearly indicate that the tenant shall have no liability of any kind with respect to any amounts which may be payable under the Lease and Sublease Agreement.
    2. Program funds may not be used to lease units or structures owned by the grantee, their parent organization(s), any other related organization(s), or organizations that are members of a partnership, where the partnership owns the structure unless authorized DMH staff has granted an exception in writing for good cause.
    3. The grantee is responsible for paying the full Contract Rent regardless of whether the program participant pays their portion of the rent.
    4. The grantee may make leasing payments on vacant units under the following limitations:
      1. When a unit is newly leased by a grantee, rent can be paid for out of program funds for up to 90 days prior to occupancy by a program participant, only when an eligible program participant has been identified for occupancy in the unit;
      2. If a unit assisted under this program is vacated before the expiration of the lease, the leasing payments for the unit may continue for a maximum of 30 days from the end of the month in which the unit was vacated, unless:
        1. The unit is occupied by another eligible program participant; or
        2. Another eligible program participant has been identified for occupancy in the unit and will occupy the unit within 90 days of
      3. When a program participant moves out of unit
      4. No additional assistance will be paid until the unit is occupied by another eligible person; and
      5. Brief periods of stays in institutions, not to exceed 90 days for each occurrence, are not considered vacancies.

Total Tenant Payment (TTP) - the monthly amount that a program participant will have to contribute toward their rent and utilities will be the highest of the following amounts, rounded to the nearest dollar:

  1. 30 percent of the family's monthly adjusted income - calculated by dividing the adjusted income (24 CFR §5.611) by 12 months; or
  2. 10 percent of the family's monthly income - calculated by dividing the annual income (24 CFR §5.609) by 12 months.

The following conditions also apply to Total Tenant Payments:

  • Any lost or terminated income sources can be immediately discounted upon documentation of termination being provided by the program participant and a new income calculation may be made to determine the subsequent TTP.
  • Any increase in income can be discounted until the next Income Eligibility calculation is required (required minimally every 12 months or when a new lease is executed, whichever comes first).
  • Subsistence Allowances provided through this program are exempt and will not be included in any income or rent/utility payment calculations for program participants;
  • TTP must be applied first toward Utility Allowances before being applied to Contract Rent - where a utility allowance exceeds a program participant's monthly rental contribution, a utility reimbursement may be paid to the program participant (or representative payee);
  • The remaining portion of the Total Tenant Payment after Utility Allowances are subtracted will be the amount of Contract Rent that the program participant will be responsible for paying (Tenant Rent Payment or TRP);
  • Grantees must have program participants make Tenant Rent Payments (TRPs):
    • Directly to the property owner or designated agent (when the program participant is sole liable party to the lease - Rental Assistance option; must be documented also in the HAP contract); or
    • Either directly to the property owner or designated agent or collect the TRPs and pay the full Contract Rent amount to the property owner or designated agent as stipulated in the lease (when the grantee is the sole liable party to the lease - Leasing option).

Utility Allowances/Payments - for any tenant-paid utilities (not included in the lease and paid for by the owner or designated agent) grantees must either provide a Utility Allowance to program participants when the program participant is sole liable party to the lease (Rental Assistance option); or must make full payments for the actual costs of utilities when the grantee is the sole liable party to the lease (Leasing option). Utility Allowances are meant to cover the approximate cost of tenant-paid utilities (not actual cost) and must be based on the utility allowance schedule developed by the Public Housing Authority (PHA) covering the geographic location where the property is located. Utility allowances must be deducted from a program participant's Total Tenant Payment, or, in the case where a utility allowance exceeds a program participant's monthly rental contribution, a utility reimbursement must be paid directly to the program participant (or representative payee). Providers are responsible for ensuring that all program participants complete an application for the Low-Income Home Energy Assistance Program (LIHEAP). Eligible utilities are only those that are not included in the PHA's utility allowance schedule and are required for:

  • Heating;
  • Cooking;
  • Water Heating;
  • Electricity;
  • Water Supply;
  • Sewer waste;
  • Trash Collection; and/or
  • Air Conditioning.