Section 8 Renew Policy Guide
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Renewal of Section 8 Contract – Owner must send one of the below Letters to Tenants.
Original Section 8 Contracts Effective Prior to 1997
This is my introduction as a Housing Consultant.
I retired in 1989 from the Department of Housing and Urban
Development, as a Senior Asset Manager in the
If your original Section 8 Contract was effective in the 1980s and 1990s and is approximately a 20year Contract; your Contract Renewal Proposal is due for submission to Contract Administrator 120 days prior to expiration of the Contract and must be renewed pursuant to guidelines in revised HUD Section 8 Renewal Policy Guide (Guide). The Guide reflects major changes to amendment to the Housing Act; Multifamily Assisted Housing Reform and Affordability Act of 1997 (MAHRA), Title V of the HUD Fiscal Year 1998 Appropriations Act, Pub. L. 105-65, enacted on October 27, 1997. MAHRA established new policies for the renewal of Section 8 project-based contracts based on market rents instead of the Fair Market Rent (FMR) standard.
Pursuant to HUD Section 8 renewal Guide, you have 6 Options to choose from when you request a renewal of your Section 8 Contract.
Under some Options, Owners must submit the RCS to HUD (or the Section 8 Contract Administrator (CA) if there is one) no later than 120 days before the expiration of the Section 8 contract. Early submissions are allowed. Owners should not submit their requests no more than 180 days before the Section 8 Contract expires. Owners should submit the RCS along with the other information required in this GUIDE. If a RCS is submitted, HUD recommends the renewal request be submitted 180 days before the contract expires, because HUD will commission an Independent RCS when processing the request.
Keep in mind; under the current unexpired Contract your annual rents are adjusted through application of HUD published Annual Adjustment Factors (AAF). However, under the current revised Guide, request for Contract Renewals (and annual rent adjustments through the term of your renewed Contract) rents will be adjusted through Budget-based rent increase (BBRI) requests or application of HUD published Operating Cost Factors (OCAF).
In particular, Budget-Based Rent Increase (BBRI) requests must be prepared pursuant to Chapter 7 of HUD Servicing Handbook, and requests must be submitted on HUD approved Budget Worksheet, accompanied by required HUD forms. HUD BBRI formula consists of 2-components; a HUD Budget Worksheet and HUD Rent Computation Worksheet. To arrive at Owners’ BBRI Annual Gross Rent Potential, the HUD formula considers projected budget expense line items, other expense adjustments and Owners’ Annual Return on Initial Equity.
If you have not done so you are required to send all Tenants either CHICK One-Year Notification Letter-Owner Intends to Renew or CHICK One-Year Notification Letter-Owner Does Not Intend to Renew (Section 8 Contract).
Further, if Tenants receive Utility Allowances (UA), HUD published new instructions requiring owners to request annual UA adjustments.
If you need my assistance in preparing a Proposal for Contract renewal, please contact me.
Alvin L. Sutherlin
Post Office Box 162
Mount Rainier, MD 20712-0162
Office Address: 4104-29th Street
Mount Rainier, MD 20712-1820
The Section 8 Renewal Policy Guide provides Six Options available to Owners when choosing an Option to renew their Section 8 Contracts. The problem when assessing available Options, HUD does not provide Owners with an in-depth analysis and does not get down in the weeds when an Owner evaluates what Option to choose.
I can provide an analysis Option by Option, based on your project’s status, and by a process of elimination, provide you with best Options that would benefit the Owner.
If you provide me with requested data I can give you an assessment Option by Option for your evaluation. I will work with your staff in preparing a Proposal for renewal of your Section 8 Contract.
My 13-year as a HUD Project Manager, 23-years experience as a HUD Multifamily Consultant for HUD Multifamily Subsidized Projects, and participate as a Consultant in developing HUD Multifamily Preservation Training Modules, I have insight in available preservation tools available to Owners that is not integrated in the Section 8 Renewal Policy Guide.
The Section 8 Renewal Policy was revised in May 2012. This guidebook (Guide) summarizes a number of important housing policy laws and regulations and HUD Notices into a single resource from which owners can understand the complex procedure of renegotiating their HAP contract.
The contents of the guidebook (Guide) are as follows:
Chapter 3: Owner
Option One, Mark-Up-To-Market
In particular, exception is provided to Non-Profit Owners.
Chapter 4: Owner
Option Two, Other Contract Renewals with Current Rents at or Below
Comparable Market Rents
Chapter 5, Owner
Option Three, Referral to the Office of Affordable Housing Preservation
Chapter 6, Owner
Option Four, Renewal of Projects Exempted From OAHP
Chapter 7, Option
Five, Renewal of Portfolio Reengineering Demonstration or Preservation
Chapter 8, Option
Chapter 9, Rent
Comparability Studies (RCS)
Physical Condition of the Property
Chapter 13, HUD’s
Refusal to Renew/Section 8 Contract Owner’s Dispute and Appeal of
Nonprofit Rent Increases
Chapter 16, Other
Owners must read and understand the Section 8 Renewal Policy guidebook before attempting to renew an expiring HAP contract so as to insure that their actions represent the most appropriate and applicable choice for their property.
The Section 8 Renewal Policy contains complete explanations of the six possible renewal options as well as all of the required forms needed to complete a renewal. To order a copy of the guide: Click on this link
Contact me by phone 301-277-3465 by email at email@example.com and I can discuss the status of your project.
If you need assistance in preparing a request for a TPA or assignment of a Section 8 Contract, contact me. References will be provided upon request.
Alvin L. Sutherlin
Date Updated: 01/10/2021 09:07:00 AM
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