HUD Announces Upcoming Preservation Policy Changes

On November 22, following the passage of the FY12 “minibus” appropriations bill, HUD announced three additional policy changes designed to help mitigate annual appropriations increases needed to fund all its project-based rental assistance commitments. HUD intends to use residual receipt account balances to offset assistance payments (only applicable to "New Regulation" contracts); require that rent comparability studies substantiate the need for proposed rents that exceed 110% of Small Area Fair Mark Rents; and limit annual rent adjustments under Option 4 renewals to OCAF increases if proposed rents exceed the market rents. The later was already outlined in recent drafts of the soon-to-be-released revised Section 8 Renewal Guide, but the former are yet to be described in detail. Check back for updates as HUD will release guidance in the coming months. Click here to read HUD’s memo to multifamily owners.

— Posted on 11/23/2011