§ 26-120Introduction.
§ 26-121Rent to owner in Housing Choice Voucher Program.
§ 26-122Making payments to owners. [24 CFR 982.451]
§ 26-123Rent-reasonableness determinations. [24 CFR 982.507]
§ 26-124Payment standards for voucher program. [24 CFR 982.503]
§ 26-125Adjustments to payment standards. [24 CFR 982.503]
§ 26-126Exception payment standards.
§ 26-127Owner payment in Housing Choice Voucher Program.
The policies in this article reflect the amendments to the HUD regulations which were implemented by the Quality Housing and Work Responsibility Act of 1998 for the Section 8 Tenant-Based Assistance Program. These amendments became effective on October 1, 1999, which is referred to as the "merger date." These amendments complete the merging of the Section 8 certificate and voucher programs into one program, called the Housing Choice Voucher Program.
All Section 8 participant families have been transitioned to the Housing Choice Voucher Program on or before October 1, 2001. Rent calculation methods for the Housing Choice Voucher Program are described at 24 CFR 982.505. The rent calculation formula is specific and is not subject to interpretation.
The WHA will determine rent reasonableness in accordance with 24 CFR 982.507(a). It is the WHA's responsibility to ensure that the rents charged by owners are reasonable, based upon unassisted comparables in the rental market, using the criteria specified in 24 CFR 982.507(b).
This article explains the WHA's procedures for determination of rent-reasonableness, payments to owners, adjustments to the payment standards, and rent adjustments.
The rent to owner is limited only by rent reasonableness. The WHA must demonstrate that the rent to owner is reasonable in comparison to rent for other comparable unassisted units.
The only other limitation on rent to owner is the maximum rent standard at initial occupancy (24 CFR 982.508). At the time a family initially receives tenant-based assistance for occupancy of a dwelling unit, whether it is a new admission or a move to a different unit, if the gross rent for the unit exceeds the applicable payment standard for the family, the family share may not exceed 40% of the family's monthly adjusted income.
During the initial term of the lease, the owner may not raise the rent.
Once the HAP contract is executed, the WHA begins processing payments to the landlord. A HAP Register will be used as a basis for monitoring the accuracy and timeliness of payments. Changes are made manually to the HAP Register for the following month. Checks are disbursed by the Housing Choice Voucher Department to the owner each month. Checks may not be picked up by owner at the WHA.
Excess payments.
The total of rent paid by the tenant plus the WHA housing assistance payment to the owner may not be more than the rent to owner. The owner must immediately return any excess payment to the WHA.
Late payments to owners.
It is a local business practice in Woonsocket for property managers and owners to charge tenants a reasonable late fee for rents not received by the owner or property manager by the due date, not withstanding any grace period which is typically five days past the first of the month.
Therefore, in keeping with generally accepted practices in the local housing market, the WHA must make housing assistance payments to the owner promptly and in accordance with the HAP contract.
The WHA will not be obligated to pay any late payment penalty if HUD determines that late payment is due to factors beyond the WHA's control, such as a delay in the receipt of program funds from HUD. The WHA will use administrative fee income or the administrative fee reserve as its only source for late payment penalty.
The WHA will not use any program funds for the payment of late fee penalties to the owner.
The WHA will determine and document on a case-by-case basis that the approved rent is reasonable in comparison to rent for other comparable unassisted units in the market. This applies to all programs.
The WHA will not approve a lease until the WHA determines that the initial rent to owner is a reasonable rent. The WHA must redetermine the reasonable rent before any increase in the rent to owner, and if there is a five-percent decrease in the published FMR in effect 60 days before the contract anniversary (for the unit size rented by the family) as compared with the FMR in effect one year before the contract anniversary.
The WHA must redetermine rent reasonableness if directed by HUD and based on a need identified by the WHA's auditing system. The WHA may elect to redetermine rent reasonableness at any other time. At all times during the assisted tenancy, the rent to owner may not exceed the reasonable rent as most recently determined or redetermined by the WHA.
The owner will be advised that, by accepting each monthly housing assistance payment, he/she will be certifying that the rent to owner is not more than rent charged by the owner for comparable unassisted units in the premises.
If requested, the owner must give the WHA information on rents charged by the owner for other units in the premises or elsewhere.
The data for other unassisted units will be gathered from newspapers, realtors, professional associations, inquiries of owners, market surveys, and other available sources.
The market areas for rent reasonableness are the 02895 zip code within the WHA's jurisdiction. Subject units within a defined housing market area will be compared to similar units within the same area.
Rent-reasonableness methodology.
The WHA utilizes a rent-reasonableness system which includes and defines the HUD factors listed above. The system has a total point count which is divided into rating categories.
Information is gathered on rental units in the Woonsocket Housing Authority market area, and each unit is rated using the WHA's rent-reasonableness system.
The WHA maintains a database, which includes data on unassisted units, for use by staff in making rent-reasonableness determinations. The data is updated on an ongoing basis and purged when it is more than 12 months old.
The payment standard is used to calculate the housing assistance payment for a family. In accordance with HUD regulations, and at the WHA's discretion, the voucher payment standard amount is set by the WHA between 90% and 110% of the HUD-published FMR. This is considered the basic range. The WHA reviews the appropriateness of the payment standard annually when the FMR is published. In determining whether a change is needed, the WHA will ensure that the payment standard is always within the range of 90% to 110% of the new FMR, unless an exception payment standard has been approved by HUD.
The WHA will establish a single voucher payment standard amount for each FMR area in the WHA jurisdiction. For each FMR area, the WHA will establish payment standard amounts for each unit size. The WHA may have a higher payment standard within the WHA's jurisdiction if needed to expand housing opportunities outside areas of minority or poverty concentration, as long as the payment standard is within the range of 90% to 110% of FMR.
The WHA may approve a higher payment standard within the basic range, if required as a reasonable accommodation for a family that includes a person with disabilities.
Payment standards may be adjusted, within HUD regulatory limitations, to increase housing assistance payments in order to keep families' rents affordable. The WHA will not raise payment standards solely to make "high end" units available to voucher holders. The WHA may use some or all of the measures below in making its determination whether an adjustment should be made to the payment standards.
Assisted families' rent burdens. The WHA will review its voucher payment standard amounts at least annually.
Quality of units selected. The WHA will review the quality of units selected by participant families when making the determination of the percent of income families are paying for housing, to ensure that payment standard increases are only made when needed to reach the mid-range of the market.
WHA decision point.
The WHA will review the average percent of income of families on the program. If more than 25% of families are paying more than 30% of monthly adjusted income, the WHA will determine whether there is a difference by voucher size, whether families are renting units larger than their voucher size, and whether families are renting units which exceed HUD's HQS and any additional standards added by the WHA in the administrative plan.
If families are paying more than 30% of their income for rent due to the selection of larger bedroom size units or luxury units, the WHA may decline to increase the payment standard. If these are not the primary factors for families paying higher rents, the WHA will continue increasing the payment standard.
Rent-to-owner increases. The WHA may review a sample of the units to determine how often owners are increasing rents and the average percent of increase by bedroom size.
Time to locate housing. The WHA may consider the average time period for families to lease-up under the voucher program. If more than 30% of voucher holders are unable to locate suitable housing within the term of the voucher, and the WHA determines that this is due to 30% of rents in the jurisdiction being unaffordable for families even with the presence of a voucher, the payment standard may be adjusted.
Lowering of the payment standard. Lowering of the FMR may require an adjustment of the payment standard. Additionally, statistical analysis may reveal that the payment standard should be lowered. In any case, the payment standard will not be set below 90% of the FMR without authorization from HUD.
Financial feasibility.
Before increasing the payment standard, the WHA may review the budget to determine the impact projected subsidy increases would have on funding available for the program and number of families served.
For this purpose, the WHA will compare the number of families who could be served under a higher payment standard with the number assisted under current payment standards.
File documentation. A file will be retained by the WHA for at least three years to document the analysis and findings to justify whether or not the payment standard was changed.
If the dwelling unit is located in an exception area, the WHA must use the appropriate payment standard amount established by the WHA for the exception area in accordance with regulations at 24 CFR 982.503(c).
The owner is required to notify the WHA, in writing, at least 60 days before any change in the amount of rent to owner is scheduled to go into effect. Any requested change in rent to owner will be subject to rent-reasonableness requirements. See 24 CFR 982.503.
