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HUD Housing Programs: Tenants’ Rights (The Green Book): 4.2.3 Project-Based Rental Assistance

For the project-based rental assistance programs, the assistance paid by HUD or the PHA fully covers the difference between the tenant’s portion of the rent and the contract rent for the unit. Most of the project-based rental assistance programs (with the exception of Section 8 Moderate Rehabilitation42) are governed by HUD Handbook 4350.3.43 These properties adhere to the following rent requirements and options:

HUD Housing Programs: Tenants’ Rights (The Green Book): 4.2.4.1 Overview

A voucher tenant receives a housing subsidy that is based on the tenant’s income and the PHA’s maximum subsidy (the “payment standard”), which may not fully cover the actual rent charged (including tenant-paid utilities as determined by utility allowances).48 The ordinary tenant contribution is determined in the same manner as for the other income-based programs.49 However, a voucher tenant may pay more than that amount.

HUD Housing Programs: Tenants’ Rights (The Green Book): 4.2.4.2 Determining the “Reasonable Rent”

As noted above, each PHA must have a rent reasonableness policy under which it evaluates contract rents.66 In determining whether the rent is “reasonable,” in comparison to rents charged for comparable dwelling units in the unassisted local market,67 a PHA must consider the location, quality, size, unit type, and age of the contract unit, as well as any amenities, housing services, maintenance and utilities provided by the owner under the lease.68

HUD Housing Programs: Tenants’ Rights (The Green Book): 4.2.4.3 Payment and Subsidy Standards

If the PHA determines that the contract rent is “reasonable,” it must then determine the subsidy payable. This is based on the “payment standard” used by the PHA for different sized apartments, as well as the “subsidy standard” used by the PHA to determine the unit size for which the household qualifies (regardless of the unit size occupied). From this amount, the PHA subtracts the tenant’s statutory TTP contribution to determine the actual assistance payment to the owner.

HUD Housing Programs: Tenants’ Rights (The Green Book): 4.2.4.4 Changes in the Payment Standard

PHAs often revise their payment standards as of October 1 of each year when HUD publishes new FMRs. In addition, PHAs may revise their payment standards as part of the PHA plan process, or in conjunction with HUD approval of exception or success payment standards. Such changes are effective immediately for voucher holders who are leasing up. However, some special rules apply regarding the implementation of such changes for voucher participants under pre-existing HAP Contracts.

HUD Housing Programs: Tenants’ Rights (The Green Book): 4.4.2.2.4.5 How Minimum Rent Relates to Utility Allowance

Because the Brooke Amendment requires tenants’ income-based rent contributions to cover both rent and a reasonable amount of utilities, tenants paying their own utilities must receive a utility allowance credited toward the minimum rent.496 The regulations for public housing, Section 8 Moderate Rehabilitation, and Project-Based Section 8 maintain the policy that minimum rent tenants are credited with amounts that they should pay for tenant-paid utilities (i.e., the utility allowance, not the actual bills).

HUD Housing Programs: Tenants’ Rights (The Green Book): 4.4.2.3 Special Rules for Enhanced Voucher Tenants

Tenants who received Enhanced Vouchers, because their owners prepaid HUD-subsidized mortgages or opted out of Project-Based Section 8 program,500 are not subject to the usual Voucher minimum rent rules. Their minimum rent is instead initially equal to the dollar amount of rent required at the time of the owner’s prepayment or opt-out,501 not an amount between $0 and $50 set by the PHA.

HUD Housing Programs: Tenants’ Rights (The Green Book): 4.4.2.4 Welfare Rent

Congress has adopted a welfare rent provision that permits the PHA or owner to charge as rent the shelter portion of the welfare grant, but only where that component is specifically designated and adjusted in accordance with actual housing costs.508 HUD’s implementing regulations and guidance parrot the statute.509 Thus, not all shelter components of a welfare grant may be used to determine rent under the Brooke Amendment.510 The pur

HUD Housing Programs: Tenants’ Rights (The Green Book): 4.4.4.2 Rent Choice and “Switching” From Flat Rent to Income-Based Rent

Under a policy known as “rent choice,”548 all public housing tenants have the right, once each year, to choose between having their rent set at the flat rent or based on their income. Ordinarily tenants will only choose a flat rent if they have relatively high income, which would result in a higher income-based rent. If a family chooses a flat rent, the PHA does not pay any utility allowance for any tenant-paid utilities,549 which an income-based rent tenant would receive.

HUD Housing Programs: Tenants’ Rights (The Green Book): 4.4.4.3 Pro-Ration of Assistance for Non-Citizens

Rents for families with some household members who are immigrants ineligible for HUD assistance have their own special rules. Although Congress has made certain categories of immigrants ineligible for HUD assistance, other members of their families (e.g., citizens or legal permanent residents) remain eligible. To reconcile these conflicts, HUD requires pro-ration of the housing assistance for “mixed families,” i.e., ones with both eligible and ineligible members.556

HUD Housing Programs: Tenants’ Rights (The Green Book): 4.5.1 Overview

Virtually all subsidized tenants residing in public or HUD-assisted housing must have initial and regular certifications of income and family composition.581 Annual recertification is not required for those tenants paying full contract or market rent in a property with project-based rental assistance, Section 236 market rent, 110% of the Section 221(d)(3) BMIR rent, or tenants with fixed incomes.582 Importantly, families on fixed incomes only need to recertify their income every three years.

HUD Housing Programs: Tenants’ Rights (The Green Book): 4.5.2 Steps in the Process

The recertification policy for public housing tenants is set forth in their lease, the PHA Plan, and the federal regulations.585 For tenants in HUD multifamily subsidized housing (Project-Based Section 8 tenants and Sections 236 and 221(d)(3) BMIR, Rent Supplement, or Rental Assistance Program (RAP) tenants), the policy and procedures are set forth in the tenant leases, federal regulations, and the HUD Multifamily Occupancy Handbook.586 For tenants with Section 8 administered by a PHA (i

HUD Housing Programs: Tenants’ Rights (The Green Book): 4.2.4.7 Contract Rent Increases

Under the Voucher program, an owner must notify the PHA of any proposed changes in the amount of the contract rent at least 60 days before their effective date.150 The PHA must also determine that the contract rent is “reasonable” in comparison to the rent for other comparable unassisted units.151 The owner cannot increase the contract rent during the initial term of the lease (ordinarily one year, unless the PHA has approved a shorter initial lease term).

HUD Housing Programs: Tenants’ Rights (The Green Book): 4.2.5 Project-Based Vouchers

Under the rent rules for the Project-Based Voucher (PBV) program, the amount of rent that the landlord may charge (the “rent to owner”) is effectively capped at the amount authorized by the housing assistance payments (HAP) contract.155 Thus, tenant rent contributions are generally determined in the same way as for the Housing Choice Voucher program, except there is no excess over the payment standard that the tenant must absorb.

HUD Housing Programs: Tenants’ Rights (The Green Book): 4.2.6 Enhanced Vouchers

The Enhanced Voucher program159 is intended to protect residents of certain developments that were formerly HUD-subsidized or assisted under Project-Based Section 8 from displacement when the building’s subsidy ends. It provides eligible tenants with unique Vouchers that they can use to stay in the development or relocate to other housing. Only tenants in residence at the time of the qualifying event (e.g., prepayment or expiration or termination of the project-based assistance) who are income-eligible can receive such assistance.

HUD Housing Programs: Tenants’ Rights (The Green Book): 4.2.7 Section 8 Moderate Rehabilitation

For the Section 8 Moderate Rehabilitation program, most of the same general rules applicable to the Section 8 Housing Choice Voucher program on calculating the tenant’s portion of the rent apply, including minimum rent rules.171 However, as with the other Project-Based Section 8 programs, the key distinction from regular Vouchers is that, because the contract rent is capped,172 the tenant has nothing extra above the contract rent to absorb.

HUD Housing Programs: Tenants’ Rights (The Green Book): 4.2.8.2 Section 236 without Additional Rental Subsidy

For a Section 236 unit without additional rental subsidy, there is a minimum rent (“basic rent”) and a maximum rent (“market rent”).174 Basic rent is based on the cost of operating the project with a hypothetical mortgage interest rate of 1%.175 The market rent approved by HUD for the unit is not actual true market rent, but instead the rent calculated using operating costs and a mortgage with the actual market interest rate at origination.176