4381.5 REV-2

APPENDIX 4

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SPECIAL INSTRUCTIONS FOR PROCESSING RENT INCREASES FOR PROJECTS

THAT USE A COST-BASED RENT FORMULA

These instructions tell how to integrate the four types of management

fees into the rent computation worksheet. They also tell how to process

cost-based rent increases when the fee is held harmless under Section VI
of

Chapter 2.

A.Unsubsidized Projects Using Form HUD-92547A Rent Computation Worksheet

for Unsubsidized Programs (dated 3/84)

1.Part I, Line 5 - Management Fee. Include:

a.Annual yield from any special fees that are not quoted as a

percentage of collections.

b.Any residential fee YIELD that was capped under the hold

harmless provisions of Paragraph 2-34. Use the following

fomula to determine the annual capped yield.

Annual Capped Capped PUPM No. of

Management Fee Yield = Fee Yield X 12 X Units

2.Part II, Section I - Annual Income from Other Sources. Subtract

the MISCELLANEOUS income management fee YIELD from each type of

income listed on which a miscellaneous income fee is collected.

(See Line 3b of Attachment 1 of the Management Certification for

a list of miscellaneous income on which HUD allows a fee to be

taken but on which the agent is NOT collecting a fee.) Show your

calculations on the Rent Computation Worksheet.

EXAMPLE:

I. Annual Income From Other Sources

(Except Income from Commercial Space)

1\. Parking \$20,000 - (6% x \$20,000) = \$20,000 - \$1,200 = \$18,800

2\. Laundry 5,000 - (6% x \$5,000) = \$5,000 - \$300 = 4,700

3\. Other 10.000\* 10,000

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4\. Total \$35,000 \$33,500

\*No fee allowed on \$10,000 interest income.

3.Part II, Line K2 - Percentage Management Fee

a.If the residential fee YIELD was capped under Paragraph

2-34, enter 0.

NOTE: The instructions in Paragraph A1b above require the

whole residential fee to be included in Part I, Line 5. You

cannot use a percentage because you do not yet know the rent

potential.

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4381.5 REV-2

APPENDIX 4

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C.Non-Profit 221(d)(3) Rent Supplement and BMIR Projects Using Form

HUD-92457, Rent Computation Form (dated 6/72)

1.General

a.Following Paragraphs B1 and 2 above.

b.Use the rent fomula in Appendix 1 of Chapter 4, Section 3 of

HUD Handbook 4350.1, SUPP-1, instead of the rent fomula on

the back of the Form HUD-92457.

2.Rent Formula

a.Lines 5b and c. Do NOT use these lines.

b.Line 6. Enter the sum of Lines 4 and 5a.

c.Line 7a. Enter the residential management fee percentage

according to the instructions in Paragraph B4 above.

D.Limited-Distribution 221(d)(3) Rent Supplement and BMIR Projects Using

Form HUD-92457, Rent Computation Form (dated 6/72)

1.General

a.Follow Paragraphs B1 and 2 above.

b.Use the rent fomula in Appendix 2 of Chapter 4, Section 3 of

HUD Handbook 4350.1, instead of the rent formula on the back

of the Form HUD-92457.

2.Rent Formula

a.Lines 6b and c. Do NOT use these lines.

b.Line 7. Enter the sum of Lines 4, 5 and 6a.

c.Line 8a. Enter the residential management fee percentage

according to the instructions in Paragraph B4 above.

E.236 Projects Using Form HUD-92457, Rent Computation Form (dated 6/72)

1.General

a.Follow Paragraphs B1 and 2 above.

b.Use the rent formula in Appendix 3 of Chapter 4, Section 3

of HUD Handbook 4350.1, instead of the rent formula on the

back of the Form HUD-92457.

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