NAHMA HUD Update: 140% Thresholds for RCS, PAC renewals, and Annual Adjustment FactorsBelow, please find three HUD updates, including updates on Rent Comparability Studies (RCS), FY17 Project Assistance Contract (PAC) renewals, and FY17 Annual Adjustment Factors (AAF)
1. HUD releases CY 2017 140% Thresholds for Rent Comparability Studies
In August 2015, HUD issued a new Section 8 Renewal Policy Guide. Section 9-23 of the Guide provides instructions for comparing the median rents as derived by the appraiser in RCS with Census Bureau estimates of the median rents in the project's zip code. Should the rents in the owner's study exceed 140 percent of the median zip code rent threshold, then HUD would secure a third party to create a RCS for comparison purposes. When HUD issued the Guide, they also published the list of median zip code rents as of December 2014.
HUD published the new median zip code rents and the 140 percent thresholds. Members can find these new numbers under "What's New" on HUD's website here . According to HUD, the Census Bureau has updated their estimates of median rents and increased the median rents above the previous high of $2,000 to a new high of over $4,000. Staff and appraisers can find the instructions for comparing the numbers and determining the final rent, should a HUD study be required in Section 9-23.
These numbers will be effective for any RCS signed by the owner's appraiser on or after February 11, 2017.
2. Expiring PAC Renewal under Section 202 for FY 2017
HUD issued the following memo containing instructions for renewing PACs under Section 202 for Fiscal Year 2017. The instructions provide guidance to field offices processing renewals for PACs expiring between October 1, 2016 and April 28, 2017.
Offices can continue to process renewal contracts expiring after April 28, 2017, but these contracts may not be signed until Congressional action covering the timeframe of renewal. PAC renewal requests should be submitted to field offices no later than 120 prior to the expiration of the contract and shall not exceed a renewal term of one year.
Owners must submit an operating budget for all projects with an expiring PAC. If an increase in project assistance is requested, a detailed report on project needs and reasons for the increase must be provided, including the necessary increases to the Reserve for Replacement Account.
To view this memo, please click here.
3. Section 8 Housing Assistance Payments Program: Annual Adjustment Factors for FY 2017
HUD announced the Fiscal Year 2017 AAFs for assistance contract rents, which are required to be adjusted annually. The factors are based on a formula using residential rent and utility cost changes and are applied at the anniversary of the Housing Assistance Payment (HAP) contracts for which rents are to be adjusted. A separate notice identifying the inflation factors for FY 2017 tenant-based rental assistance funding is forthcoming. |