Source: http://radresource.net/search_categories.cfm?xid=57
Timestamp: 2018-10-20 10:36:35
Document Index: 190176715

Matched Legal Cases: ['§ 983', '§ 983', '§ 983', '§ 983', '§ 983', '§ 880']

RAD Category Search
RAD Knowledge Base
Notice Listings on Contract Rents
Notice Section 1.6.B.5 Initial Contract Rent Setting
Initial Contract Rent Setting. HUD has calculated initial contract rents for every public housing project based on each project’s subsidy under the public housing program. (See Attachment 1C for a full description of the methodology.) All RAD applications, including applications for Portfolio or Multi-Phase awards, will have initial contract rents based on their “RAD rent base year:”
All properties awarded under the original 60,000 unit cap have initial contract rents based on FY 2012 funding levels (“FY 12 RAD rent base year”). These rents will be adjusted each year by HUD’s published OCAF starting in CY 14 and established in the HAP Contracts at the time of conversion. Thus, for a project in this category that closes in 2015, the initial contract rents will be based on 2012 funding, with an OCAF adjustment for both 2014 and 2015.
All properties awarded above HUD’s original 60,000 unit cap but subject to the increased 185,000 cap in effect as of the date of this Notice will have initial contract rents based on FY 2014 funding levels (“FY 14 RAD rent base year”). These rents will be adjusted each year by HUD’s published OCAF starting in CY 15 and established in the HAP Contracts at the time of conversion. Thus, for a project in this category that closes in 2015, the initial contract rents will be based on 2014 funding, with an OCAF adjustment for 2015.
Subsequent to authority to convert additional units, properties will have initial contract rents based on a future RAD rent base year in HUD’s sole discretion.
PHAs have additional discretion in establishing initial contract rents using the following flexibilities:
MTW Fungibility. MTW agencies may use their MTW block grant funds to set their initial contract rents, subject to applicable program caps. The agency must use existing voucher funding to supplement rents; no additional voucher funding will be provided. Any use of MTW block grant funds in setting initial contract rents shall be subject to subsidy layering review and MTW continued service requirements, as calculated using the MTW Baseline Methodology described in PIH Notice 2013-02, or successor notice.
Rent Bundling. PHAs may adjust subsidy (and initial contract rents) across multiple projects as long as the PHA does not exceed the aggregate subsidy for all of the projects the PHA has submitted for conversion under RAD. This use, which HUD refers to as “bundled” rents, is permissible when a PHA submits applications for two or more projects. There is no limit to the number of projects that a PHA may bundle. The conversion of the donor property must close prior to or simultaneous with the conversion of the recipient property.
Further, PHAs are permitted to rent bundle from any non-RAD Project-Based Vouchers to the Project-Based Voucher assistance provided through RAD. The PHA must use its own voucher funding to supplement rents; no additional voucher funding will be provided through RAD. HUD will review the rents proposed for the non-RAD PBV contract to ensure that the PHA does not exceed the aggregate subsidy otherwise available for all of the rent-bundled projects. The execution of the HAP contract for the donor HAP contract must occur prior to or simultaneous with the conversion of the recipient HAP contract and the donor HAP contract must have a remaining contract term at least as long as the recipient HAP contract. The owner of the property with the non-RAD PBV contract must request an initial rent (or redetermined rent if the contract has already been executed) in accordance with 24 CFR §§ 983.301(b)(3) and 983.302 that reflects the amount approved by HUD. To ensure that aggregate HAP costs do not exceed the costs incurred absent this provision, the owner of the property with the non-RAD PBV contract must agree not to request, in accordance with 24 CFR § 983.301(b)(3), a redetermined rent that exceeds the OCAF-adjusted rent. This OCAF limitation is in addition to the existing PBV rent limitations in 24 CFR § 983.301(b) more generally.
Please note that per Section 1.13.B.5, regardless of the initial contract rents for the RAD HAP contract, including as modified by this provision, in the year of conversion the Covered Project will only be assisted by the Operating and Capital Funds obligated to the PHA for that project.
For example, assume that a PHA is considering bundling two identical projects, both consisting of 100 units. In Project A, the contract rent is $500; and in Project B, the contract rent is $600. The PHA could bundle the two projects such that the initial contract rents for both projects will be $550.
See Section 1.9 for instructions on submitting applications with bundled rents.
Future Replacement Housing Factor (RHF) or Demolition Disposition Transition Funding (DDTF).28 PHAs that are scheduled to receive ongoing RHF or DDTF funding (funds that have not been awarded and, with HUD permission, funds that have been awarded but not yet disbursed) may choose to forgo any ongoing RHF or DDTF grants for the purpose of offsetting an increase to the RAD rent. See Attachment 1C for the calculation of how RHF or DDTF funding may offset increased RAD rent.
PBV Site-Specific Utility Allowances. Except for Converting Projects that will include non-RAD PBV units, PHAs may elect to establish a site-specific Utility Allowance for any Covered Project. HUD is waiving 24 CFR 983.2©(6)(iii), which requires the PHA to apply the HCV Utility Allowance schedule for PBV properties, and HUD is establishing an alternative requirement. The Utility Allowance shall be calculated consistent with Housing Notice 2015-04 unless PIH promulgates guidance specific to the PBV program. The Project Owner may carry out all of the responsibilities associated with Housing Notice 2015-04, but the PHA must ensure that the Utility Allowance is calculated correctly.
For Converting Projects that include non-RAD PBV units, a PHA may request a waiver from HUD in order to establish a site-specific utility allowance schedule for both the RAD and non-RAD PBV units. To be approved, a PHA must demonstrate good cause that the utility allowance schedule used in its voucher program would either create an undue cost on families because the utility allowance provided under the voucher program is too low, or discourage conservation and efficient use of HAP funds because the utility allowance provided under the voucher program would be excessive if applied to the Covered Project. For HUD to consider such a waiver, the PHA must submit an analysis of utility rates for the community and consumption data of project residents in comparison to community consumption rates; and a proposed alternative methodology for calculating utility allowances on an ongoing basis.
Tenant-Paid Utility Savings. When conversion will result in the reduction of one or more utility components (e.g., gas, water & sewer, electric) used to establish the Utility Allowance, HUD will permit the RAD contract rent to be increased by a portion of the utility savings. See Attachment 1C for additional detail.
Not withstanding HUD’s calculation or the above-mentioned flexibilities, initial PBV contract rents are subject to the statutory and regulatory PBV requirements governing contract rents (see 24 CFR § 983.301), (except where alternative rent caps have been approved in a MTW Plan). To this effect, initial contract rents cannot exceed the lower of: (a) the reasonable rent (as defined under 24 CFR § 983.303); (b) an amount determined by the PHA, not to exceed 110 percent of the applicable FMR (or applicable exception payment standard, or rent cap approved in an MTW Plan), minus any utility allowance; or © the rent requested by the owner.
Notice Section 1.7.A.5 Initial Contract Rent Setting
Initial Contract Rent Setting. No additional or incremental funding is associated with this Demonstration. Consequently, HUD is specifying alternative requirements for section 8(c)(1) of the Act, which governs rent setting for project-based Section 8 units, and for section 8(c)(5) of the Act or 24 CFR § 880.503(b), which govern the “project account.” HUD has calculated initial contract rents for every public housing project based on each project’s subsidy under the public housing program. (See Attachment 1C for a full description of the methodology.) All RAD applications, including applications for Portfolio or Multi-Phase awards, will have initial contract rents based on their “RAD rent base year:”
PHAs have additional discretion in establishing initial contract rents using the following flexibility:
MTW Fungibility. MTW agencies may use their MTW block grant funds to set their initial contract rents. In addition to the rent cap described below, contract rents cannot exceed comparable market rent, as determined by a Rent Comparability Study. Any use of MTW block grant funds in setting initial contract rents shall be subject to subsidy layering review and MTW continued service requirements, as calculated using the MTW Baseline Methodology described in PIH Notice 2013-02, or successor Notice. If an MTW agency converts a project to PBRA and uses this flexibility to increase their initial contract rents, HUD will reduce the agency’s public housing subsidy by the additional amount (in addition to any funding modifications that would occur as a result of the conversion absent the rent increase) required to fund the PBRA HAP (see Attachment 1C). HUD will limit the number of projects a MTW agency may convert to PBRA if the PHA does not have sufficient public housing subsidy to convert into PBRA assistance.
For example, assume that a PHA is considering bundling two identical projects, both consisting of 100 units. In Project A, the contract rent is $500; and in Project B, the contract rent is $600. The PHA could bundle the two projects such that the initial contract rent at both projects will be $550.
Future Replacement Housing Factor (RHF) or Demolition Disposition Transition Funding (DDTF).41 PHAs that are scheduled to receive ongoing RHF or DDTF funding (funds that have not been awarded and, with HUD permission, funds that have been awarded but not yet disbursed) may choose to forgo any ongoing RHF or DDTF grants for the purpose of offsetting an increase to the RAD rent. See Attachment 1C for the calculation of how RHF or DDTF funding may offset increased RAD rent.
Tenant Paid Utility Savings. When conversion will result in the reduction of one or more utility components (e.g., gas, water & sewer, electric) used to establish the Utility Allowance, HUD will permit the RAD contract rent to be increased by a portion of the utility savings. See Attachment 1C for additional detail. The Utility Allowance shall be recalculated based on actual consumption within a reasonable period following completion of the work.
Notwithstanding HUD’s calculation or the above-mentioned flexibilities, initial contract rents will be capped at 120 percent of the Section 8 FMR, adjusted by the number of bedrooms, and after subtracting any applicable utility allowance. However, when HUD’s calculation of contract rents exceeds 120 percent of the FMR but where the PHA believes that such rents are below the comparable market rent, the PHA may request an exception under which the project may receive rents in excess of 120 percent of the FMR but not in excess of the lower of comparable market rents or 150 percent of FMR. HUD will grant such a request only when HUD determines that a Rent Comparability Study (RCS), which the PHA must procure and pay for, establishes that rents are below comparable market rents.42 Any such determination will be made by HUD in its sole and absolute discretion. Where initial contract rents are at or below 120 percent of the FMR, no RCS is required.
Documents on Contract Rents
Your search did not return any document references on Contract Rents.
Question on Contract Rents
Your search did not return any questions on Contract Rents.
Rental Assistance Demonstration Resource Desk copyright 2012-2018