February 9, 2016
If the rents in the owner’s study exceed 140% of the median zip code rent threshold, then HUD will require a third party RCS.
In August 2015, the U. S. Department of Housing and Urban Development issued a new Section 8 Renewal Policy Guide. Section 9-23 of the new Guide provided instructions for comparing the median rents as derived by the appraiser in a rent comparability study (RCS) with Census Bureau estimates of the median rents in the project’s zip code.
Should the rents in the owner’s study exceed 140% of the median zip code rent threshold, then HUD would secure a third party to create a RCS for comparison purposes. HUD has recently published the new median zip code rents and the 140% thresholds, – these numbers will be effective for any RCS signed by the owner’s appraiser on or after February 11, 2016.
If the project is located in a zip code with a $2,800+, then a HUD RCS is only required if the new comparable market rents exceed $2,800 ($2000 X 140%), and the project’s overall rent increase would exceed 5%. For those projects located in zip codes with “**”, a HUD RCS is only required if the project’s overall rent increase would exceed 5%.
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