All Topics     |     Industry News     |     Knowledge Base     |     Company News     |     Product Updates

FAQ Friday: Flat rent annual review

Posted by Annie Stevenson on Sep 7, 2018 11:22:45 AM

Question

I’m confused about all of the flat rent changes over the past few years. Fair market rents for 2019 were just posted and I’m not sure what I’m supposed to do with them. Help, please!

Answer

You’re correct that HUD published the fair market rents (FMRs) for federal fiscal year (FFY) 2019 on August 31. The FMR data set includes tables of unadjusted rents and small area fair market rents (SAFMRs). Your agency will need one or more of these data sets in order to comply with HUD’s current requirements for reviewing flat rents on an annual basis. The review must be completed within 90 days after the issuance of new FMRs.

The current requirements for determining public housing flat rents were published in the streamlining final rule (published March 8, 2016 in the Federal Register) and in Notice PIH 2017-23 (published November 30, 2017). The corresponding regulations are at 24 Code of Federal Regulations 960.253. PHAs are now required to set flat rents at no less than the lower of:

  • 80 percent of the applicable fair market rent (FMR)
  • 80 percent of the small area fair market rent (SAFMR) for metropolitan areas
  • 80 percent of unadjusted rents (published for nonmetropolitan areas)

Alternatively, PHAs may apply for an exception waiver through HUD to allow a lower flat rent. HUD has recently published a flat rent exception request training and a flat rent market analysis tool to assist PHAs with the exception process.

Since FMRs are published annually, PHAs must now review flat rents each year to ensure compliance with the current rule. The following is an excerpt from Notice PIH 2017-23 which describes the requirements for the annual review:

In order to comply with the flat rent requirements annually, no later than 90 days after the effective date of new FMRs or SAFMRs published by HUD, the PHA must:
1. Compare the current flat rent amount to the applicable FMR and SAFMR/unadjusted rent. If the PHA is in compliance with the law, no further steps are necessary:
a) If the flat rent is at least equal to the lower of:
a. 80 percent of the FMR, or
b. 80 percent of the SAFMR (or if no SAFMR is available, 80 percent of unadjusted rent).
b) If the current flat rent is less than the lower of option a or option b above, the PHA must set flat rents at no less than the lower of the 80 percent FMR or 80 percent SAFMR/80 percent unadjusted rent, subject to the utilities adjustment in Section 6 of this Notice, or the PHA may request an exception flat rent pursuant to the requirements of Section 5 of this Notice;
2. Update the flat rent policies in the Admissions and Continued Occupancy Policies (ACOP) as necessary;
3. Permit the family to choose between the flat rent amount and the income-based rent for all new admissions; and
4. Offer the updated flat rent amount at the next annual rent option for families that are current public housing residents, and permit the family to choose between the flat rent amount and the income-based rent, subject to the phase-in requirements in Section 8 of this Notice.

Flat rent increases must be capped at 35 percent per year. PHAs are no longer permitted to phase in increases of 35 percent or less.

Learn more about how to  correctly calculate rent

Topics: flat rent, FMR

HUD publishes 2019 FMRs

Posted by Annie Stevenson on Sep 5, 2018 3:35:33 PM

In a notice published Friday in the Federal Register, HUD announced that it has published fair market rents (FMRs) for federal fiscal year (FFY) 2019 (October 1, 2018 through September 30, 2019). As explained in the notice:

Section 8(c)(1) of the United States Housing Act of 1937 (USHA), as amended by the Housing Opportunity Through Modernization Act of 2016 (HOTMA), requires the Secretary to publish FMRs not less than annually, adjusted to be effective on October 1 of each year. This notice describes the methods used to calculate the FY 2019 FMRs and enumerates the procedures for public housing agencies (PHAs) and other interested parties to request reevaluations of their FMRs, as required by HOTMA.

The deadline date for comments on the 2019 FMRs is October 1, 2018. The revised FMRs will be effective on October 1, 2018 (unless HUD receives a request for reevaluation of specific area FMRs).

Materials posted today on PD&R’s FMR page include the FFY 2019 FMRs for all areas (see Schedule B) and the FFY 2019 small area FMRs (SAFMRs) for metropolitan FMR areas (see Schedule B addendum).

HUD has also posted a schedule of unadjusted rents, which are used for setting public housing flat rents in non-metropolitan areas. The accompanying county-level data set was also posted to the FMR page. HUD no longer publishes exception FMRs for manufactured home spaces in the HCV program since PHAs now use their regular FMRs/SAFMRs for subsidy determinations.

Learn more about how to  correctly calculate rent

Topics: flat rent, FMR, HOTMA, SAFMR

Model policy revisions now available online

Posted by NMA on Jul 23, 2018 9:22:10 AM

Our writing team has been working hard to make our policy updates available immediately, so our revision services customers don't have to wait to receive a CD with updates in the mail. (And a lot of our customers don't even have CD drives anymore to access the files with!)

With that in mind, we've created a new site where agencies who have signed up for policy updates can access the files as soon as we upload them. If you're a subscriber, you should have received an email with your login information. If you haven't, please contact revisions@nanmckay.com.

The new site will include policy updates for the following products:

It will also provide:

  • Our searchable and updated CFRs as a free service for all revisions subscribers
  • Two years of back policies for subscribers who may need to catch up
  • A hands-on video to help you step-by-step through the download process

If you're a subscriber to our model admin plan updates, you can get on the site now and download the brand-new 2018 revision! The model plan has been brought current with all recent HUD requirements and guidance, including the following:

  • Changes to account for the updated administrative guidance for the effective and mandated use of the EIV system, as outlined in Notice PIH 2017-12
  • Updates concerning Notice PIH 2017-13, which discusses the Lead Safe Housing Rule as it relates to elevated blood lead levels (EBLLs) in the Housing Choice Voucher (HCV) and Project-Based Voucher (PBV) programs
  • Revisions for the implementation guidance on the Housing Opportunity Through Modernization Act of 2016 (HOTMA) HCV and PBV provisions described in Notice PIH 2017-21
  • Modifications pertaining to the interim final rule published December 12, 2017, which implemented the Fixing America’s Surface Transportation (FAST) Act, slightly revising some of the streamlining options allowable under the streamlining final rule from March 2016
  • Changes for guidance set forth in Notice PIH 2018-01 on recent changes in Fair Market Rent (FMR) payment standard, and rent reasonableness requirements

The 2018 model ACOP revisions will be posted in a few weeks.

View our library of model policies

Topics: books and revision services, EIV, FMR, HOTMA, rent reasonableness, streamlining, lead-based paint, product updates

HUD Releases Additional Resources on SAFMR Implementation

Posted by NMA on Mar 21, 2018 2:23:09 PM

Recently on HUD Exchange, the Department of Housing and Urban Development (HUD) posted several new resources to aid in the implementation of the Small Area Fair Market Rents (SAFMR) final rule. Chief among these resources is a new guidebook, which provides guidance and practical examples for PHAs implementing SAFMRs. Topics covered in the guidebook include the policy background of SAFMRs, how SAFMRs will affect payment standards, and administrative and programmatic impacts of the rule.

In addition to the guidebook, HUD has also posted several other resources providing additional information and guidance on the rule. These include:

You can find links to all of these resources here, on the Small Area Fair Market Rents webpage, at HUD Exchange.

Does SAFMR implementation sound like a headache for your time-crunched, budget-burdened agency? Let us take on that project for you. We’ll conduct rent burden analyses, analyze vacancy rates, and conduct other required actions to ensure you’re in full compliance with all HUD rules and regulations. Click here to learn more

Topics: FMR, PIH Alert, Program News and Notices, Industry News, SAFMR

HUD Issues Guidance on SAFMR Final Rule

Posted by NMA on Jan 25, 2018 5:00:00 AM

HUD’s Office of Public and Indian Housing (PIH) recently issued Notice PIH 2018-01 providing guidance on recent changes in fair market rent (FMR), payment standard, and rent reasonable requirements set forth in the Small Area FMR (SAFMR) final rule. As you know, in August of last year HUD exercised its authority to suspend SAFMRs for 23 out of the 24 designated areas that would have gone into effect on October 1, 2017. However, in late December, the U.S. District Court for the District of Colombia entered a preliminary injunction voiding that suspension, meaning that the mandatory use of SAFMRs is now in effect for all 24 areas (listed in Appendix A of the notice). PHAs must now complete the SAFMR implementation as quickly as possible—no later than April 1, 2018. The notice is meant to help with that task, allowing PHAs to better understand their options under the final rule.

  • The notice primarily summarizes the changes and requirements specified in the final rule, with some examples and additional guidance provided for implementation purposes. Highlights include, but are not limited to, the following:
  • he notice provides scenarios that may apply when a new payment standard schedule goes into effect, i.e., specifically when to use the old vs. the new payment standard schedule.
  • HUD recommends that PHAs provide both the old and new payment standard schedules to families issued a voucher whose search term extends beyond the effective date of the new schedule.
  • PHAs adopting an exception payment standard area must revise their briefing materials to make families aware of the exception payment standard and the area it covers.
  • The notice provides policy possibilities that may be adopted if there is a decrease in the payment standard schedule during the term of a family’s HAP contract.
  • Where the PHA chooses to reduce the payment standard for a family under HAP contract, the initial reduction cannot take place before the effective date of the family’s second regular reexam following the effective date of the decrease—meaning PHAs must conduct a reexamination of family income and composition at least annually. This is the case even if the PHAs had implemented a streamlined income determination for fixed-income families.
  • Notice to families is required for any reduction in payment standard, even if choosing to do so gradually. Appendix B of the notice provides tips for strengthening written notices to such families.
  • HUD recommends that any agency required to adopt SAFMRs review the SAFMRs for the fiscal year prior to mandatory adoption to estimate the effect of moving from metropolitan area FMRs (MAFMRs) to SAFMRs, and to use this to inform its policy.
  • The notice provides various considerations PHAs can use to evaluate whether to “opt in” to using SAFMRs. Of course, such agencies must request approval from HUD to voluntary adopt SAFMRs.
  • The notice provides examples of “grouping” by ZIP code areas for agencies adopting SAFMRs, since the percent of the SAFMR that the payment standard equals may vary between different unit sizes and from ZIP code area to ZIP code area, and PHAs have the flexibility to do so.
  • The notice also offers various considerations and recommendations for whether an agency should adopt SAFMRs for its Project-Based Voucher (PBV) program, including examples.
  • The vouchers of families who port will be administered according to the policies of the receiving PHA (RHA)—if the RHA is operating under SAFMRs, the family’s voucher will be administered using SAFMRs. If the RHA is not, the family’s voucher will not.
  • If the use of SAFMRs has been designated for a metropolitan area or the PHA has voluntarily chosen to use SAFMRs, the SAFMRs would apply to all tenant-based vouchers, including special housing vouchers such as single room occupancy (SRO) and the homeownership option.
  • MTW PHAs are exempt from the requirement to use SAFMRs if that agency has an alternative payment standards policy in its HUD-approved Annual MTW plan.
  • With regard to the transition out 50th percentile rents over a three-year period, if the PHA scored the maximum number of points on the SEMAP deconcentration bonus indicator in the prior year or in two of the last three years, then upon expiration of the three-year period, the PHA may request HUD approval of payment standard amounts based on the 50th percentile rent. The request must be made to the local HUD field office during the period between the release of the revised FMRs and the effective date of those FMRs.
  • For PHAs requesting a suspension of the SAFMR designation for the metro area due to an adverse housing market condition, the PHA must administer more than 50 percent of the vouchers leased in that metro area. The notice also defines what constitutes an adverse housing market condition.

In addition to developing this guidance, HUD has also established a set of FAQs specific to SAFMRs, available here. Questions may be sent to SAFMRs@hud.gov.

Does SAFMR implementation sound like a headache for your time-crunched, budget-burdened agency? Let us take on that project for you. We’ll conduct rent burden analyses, analyze vacancy rates, and conduct other required actions to ensure you’re in full compliance with all HUD rules and regulations. Click here to learn more

Topics: FMR, PIH Alert, Program News and Notices, Industry News, SAFMR

Subscribe to our blog via email!    

Recent Posts

Posts by Topic

see all