HUD recently issued guidance to Public Housing Authorities (PHAs) managing a Mainstream Voucher (MSV) program. The guidance includes funding information for pre-2026 MSV HUD Held Reserves (HHR) and administrative fees, as well as accounting and reporting requirements for the Financial Data Schedule (FDS) and the Voucher Management System (VMS).
What’s Changed?
Beginning with the Consolidated Appropriations Act of 2026 (the 2026 Act), HUD consolidated MSV Housing Assistance Payment (HAP) renewal funding and administrative fee funding with Housing Choice Voucher (HCV) funding. As a result, PHAs may use their 2026 HCV funding to make HAP available for:
- MSVs
- HCVs
- Veterans Affairs Supportive Housing (VASH) vouchers
- Other eligible HCV special purpose vouchers
- Other HAP eligible costs (e.g. Family Self-sufficiency escrow payments)
Administrative fees from the 2026 Act may also be used to support the day-to-day administrative operations and activities designed to help families lease and maintain units for these voucher types listed above, including MSV beginning January 1, 2026.
What’s Not Changed?
Although funding has been consolidated, MSVs continue to operate under existing regulations to serve non-elderly participants with disabilities. The primary change is the funding structure, not the program itself.
Reporting under ALN 14.879 MSVs will continue until all pre-2026 Mainstream funding has been fully expended. This includes:
- Pre-2026 MSV HAP funding
- 2025 administrative fee carryover
- Unrestricted Net Position (UNP) associated with the MSV program
Reporting During the Transition
Although funding has been consolidated, PHAs must continue reporting MSV activity separately until all pre-2026 Mainstream funding has been exhausted. Once the funding has been exhausted, any remaining activity, assets, and liabilities will be reported as HCV, ALN 14.871, on the FDS.
For example, if the PHA expended all MSV HHR from pre-2026 funding, but still has pre-2026 UNP, administrative costs must still be allocated to MSV until all UNP has been exhausted, even though MSV HAP costs are now being paid from 2026 HCV HAP funding. Typically, the PHA will still allocate administrative costs in the same manner as they did before based on their cost allocation plan. The HAP costs will be reported as HCV, ALN 14.871.
If pre-2026 MSV administrative fees are fully expended first: the PHA will continue to charge MSV HAP costs against the remaining pre-2026 MSV HAP funding until those funds are fully exhausted. The administrative costs of operating the MSVs will then be reported under ALN 14.871 (HCV) and funded with HCV administrative fees.
Closing Out MSV Funding
HUD recommends that PHAs prioritize using their pre-2026 MSV funds to cover MSV expenses first. Using this funding first minimizes the time that PHAs must maintain separate accounting records for the MSV program for FDS and Single Audit purposes. To support this transition, HUD is disbursing any remaining pre-2026 MSV funds, so PHAs can close ALN 14.879 as soon as possible.
When the PHA reports on the FDS, the PHA will continue to report as they did before. Pre-2026 HHR funding will be reported as MSV on the FDS, ALN 14.879 along with the related MSV HAP costs. Once the pre-2026 MSV HAP funding is fully expended, then any HAP expenses associated with MSV will be reported on the FDS in HCV, ALN 14.871.
Any carryover administrative fees being received in 2026 for MSV and pre-2026 UNP for MSV will continue to be reported on the FDS in the MSV, ALN 14. 879 along with any expenditures. Once the carryover administrative fees and pre-2026 UNP is fully expended, the administrative costs related to MSV will be reported on the FDS in HCV, 14.871. If funding is exhausted midway during the PHA’s fiscal year, for either HAP or admin, then the PHA would have to allocate costs to HCV and split the reporting.
Fraud Recovery Revenue
For ease of reporting on Fraud Recovery Revenue, a repayment agreement executed in 2026 or later with a MSV family constitutes a revenue recognition event for the HCV program and must be reported under ALN 14.871. Likewise, any fraud repayment amounts collected in 2026 or later may be used for eligible HCV program expenses and should also be reported in ALN 14.871
Unit Month Reporting
When reporting Unit Months Available (UMA), FDS line 11190, and Unit Months Leased (UML), FDS line 11210, the PHA will report all of the UMA based on the number of HAP payments made in 2026.
For example, if the PHA had 100 units in their MSV authorized vouchers, then the UMA would be 1,200 UMA if the funding was available for 12 months. But, if the pre-2026 HAP funding could only support 700 unit months being leased, then the UMA would be 700 and the UML would be 700 for FDS reporting, MSV ALN 14.879, reporting purposes. The remaining 500 UMA would be added to the UMA for FDS reporting purposes to HCV 14.871 along with the related UML.
SEFA Reporting
For Schedule of Expenditures of Federal Awards (SEFA) reporting:
- Federal Expenditures reported under ALN 14.879 MSV should only include expenditures associated with pre-2026 Mainstream funds.
- Federal Expenditures reported under ALN 14.871 HCV should include expenditures associated with pre-2026 HCV funds and all funding associated with the 2026 Act related to HCV funding.
The Mainstream Voucher program has not changed, but its funding structure has. PHAs should focus on tracking and expending remaining pre-2026 Mainstream funding, maintaining accurate reporting during the transition period, and preparing for the eventual closeout of ALN 14.879 once legacy funding has been exhausted.
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