811 PRA FAQ
Q

Does a Grantee require HUD approval whenever they approve an initial rent level above the Fair Market Rent (FMR)?

Date Published: November 2015

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A

PRA Program Guidelines PRA.207 state:

§ PRA.207 Approved Rent and Rent Adjustments.
The initial RAC rent level may not exceed the applicable or Fair Market Rent (FMR) level as determined by HUD, unless such rent level is substantiated by a market study that has been prepared in accordance with the requirements of a state housing agency or of Chapter 9 of HUD’s Section 8 Renewal Guide, or as approved by HUD. Rents can only be adjusted annually based upon: (1) HUD’s Operating Cost Adjustment Factor (OCAF), (2) other operating cost index approved by HUD as has been adopted by the Grantee for purposes of subsidizing affordable housing, or (3) approval by HUD.

As indicated in this section of the Guidelines, initial rent levels may exceed the FMR if they are substantiated by a market study that has been prepared in accordance with the requirements of a state housing agency or of Chapter 9 of HUD’s Section 8 Renewal Guide. If rents are substantiated in either of these two ways, HUD approval is not required.


Tags: 811 PRA Program Requirements - Calculating Rents and Utility Allowances

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FAQ ID:

2717