Are your current contract rents at or above 100% of Fair Market Rents (FMR)? But less than comparable market rents on your Rent Comparability Study (RCS)?
Eligible for Option 1 or 2
You may be eligible for one or both of the following options:
This option is for limited distribution owners, for-profit owners, and any owner, non-profit included, transferring the property to an eligible non-profit. If the rent comparability study (RCS) and the "Initial Eligibility Worksheet" determine that the comparable market rent is at or above 100% of the most recently published HUD Fair Market Rents (FMR's), the project may be eligible to renew their rents at the lesser of comparable market rents or 150% of FMR
Owners that do not meet the preceding qualifications may be eligible for HUD Discretionary Authority Eligibility under Option 1-B.
Option 2 should be considered by owners who want to renew their contract and the rent comparability study (RCS) indicates that the contract's current rents are equal to or less than comparable market rents. At the owner's request, the initial renewal of the current rents under this option can be adjusted by an operating cost adjustment factor (OCAF) or budget-based adjustment. The initial renewal rents may not exceed the comparable market rent potential.
At subsequent renewal the current rents may be adjusted by an OCAF or a budget based increase, as long as the resulting rents are below the OCAF-adjusted RCS.
No matter what renewal option you select, if it is determined that contract rents exceed comparable market rents and the project is eligible for OAHP, it will be forwarded to OAHP for processing.