Option 2 is for owners who request a renewal of their Section 8 contract where the RCS indicates that the contract’s current rents are at or below comparable market rents.
- Current Rents are at or below market rents as determined by the RCS.
- OR the contract’s current rents exceed comparable market rents but the project is exempt from OAHP restructuring and the owner is willing to cut the rents to comparable market rents.
Third Party Rent Comparability Study
It is important to note that the owner’s Rent Comparability Study will undergo a test to ensure that they do not exceed 140 percent of the median “Gross Rent By Zip Code Tabulation Area” as published by the U.S. Bureau of the Census. If the owner’s RCS rent exceeds this amount, a third party RCS will be ordered from HUD. Therefore, it is important to review both Chapter Nine of the Section 8 Renewal Policy and your study to determine whether a 3rd party RCS will be ordered. There is no appeal process or negotiations allowed when there are differences between comparability studies. HUD’s median rent figures.
- Contract Renewal Request Forms
- OCAF Worksheet or Budget-based Rent Adjustment Request: Any rent adjustment will be limited by the comparable rents from the current RCS.
- Rent Comparability Study (RCS): Since an RCS is good for five years, this will only be required every fifth year.
Chapter Four of the Section 8 Renewal Policy has complete guidance regarding Option 2.
Rent Adjustments with Multi-year Contracts
Annual rent adjustments can be either OCAF Rent Adjustments or Budget-Based, as determined by the owner. Every 5th year (from the contract effective date), an RCS is required to adjust the rents to comparables.