HUD Budget-based Proposals
HUD Budget-based
Rent Increases
Rentals/Carrying Charge Increases (Cooperatives)
If you want me to
give you a rough analysis of a proposed Budget-based rent increase, I can
provide you with an estimate of computed rent increase.
In order for me to
compute a proposed increase in rental rates, I will need current rental rates
and recent Audited Annual Financial Statement (AFS) data, I can give you a
preliminary guesstimate of what a proposed computed rent increase would be.
Complete the
below links to my Checklist and other documents and either fax or email the
Checklist to me. I will respond to your request and discuss it by phone with
you.
 Budget Checklist
HUD
Budget Worksheet w/HUD Chart of Accounts
HUD
Chart of Accounts
Owner Equity (*)
(*)
Exception: From time-to-time Contract Administrators/HUD Multifamily Asset
Management Staff are asked to process special rent increases for projects that
have been sold at foreclosure sales to third parties or sold by HUD, as a
HUD-owned property. In either case, if a property was sold without
financing, there are special processing procedures that must
be followed. These procedures are intended to provide a mechanism to deal
with projects that were financed by the owner after acquisition on an all-cash
basis.
Note: To do a comprehensive analysis, based on HUD outstanding instructions,
my services would include a complete submission in collaboration with your
staff, which consist of completing all HUD required forms, completed proposal on
your company letterhead, with one original bound copy for mailing to
Contract Administrator/HUD and two bound office copies.
HUD Directives, provides
procedures for processing budgeted carrying charge and rent increases in certain
HUD projects. All project owners whose mortgages are insured under Section 231,
232, 202 projects (who do not use the Section 8 Annual Adjustment Factor (AAF)),
213, 236 (including cooperatives), Rent Supplement, 221(d)(3) Market Rate and
221(d)(3) Below Market Interest Rate (BMIR) rental and cooperative projects,
207's and 231's both regulated and controlled by alternative rent mechanism;
Section 220 and 221(d)(4)'s that are regulated; and all of the above that are
not automatically preempted by HUD and request exemption from local rent
control, are required to use the Budget Approach when requesting HUD to increase
the Maximum Allowable Rent Potential.
We have developed a computerized
version of the budgeted carrying charge/rent increase process. Our prepared
proposals have been accepted and approved by HUD Field Offices in several
states. If you provide us with the necessary information, we will prepare
complete budget proposals for rentals and cooperatives projects.
From HUD’s standpoint, the
expenses from the Profit & Loss of the owner’s annual financial audit for
the most recent fiscal year is their primary consideration. They consider the
demonstrated expenses for that period as a starting point for the new budget
period. Their thinking is that the demonstrated expenses for the audit period is
a measuring stick against the current annual gross rent income potential.
Theoretically, in order for the
project owner to break even, he must recoup any shortfall in income from the
previous fiscal year, due to any increase in expenses. When you think it
through, HUD’s Budget-based method for processing rent increases makes sense.
This process has served my
clients well and gotten them rent increases.
Proposals are prepared on your
letterhead, and packaged for submission to your local HUD Field Office at a
reasonable cost. You only have to sign it. We can offer guidance to walk
you through the steps, and prepare the formal request to HUD.
Contact me by:
phone (301-277-3465)
fax (301-779-6716)
email (alvinl.sutherlin@verizon.net)
and I can discuss the status of your project.
My Resume
References provided upon request
Date Updated:
04/22/2010 06:19:16 AM |
