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Equal Housing Opportunity

 

If you are not certain of which option you would like to select, or need information about Notices, Options or Forms for Renewals, please see the appropriate links below.

Notices

Options at Renewal of Contract

Summary of Options for Expiring Contracts

Please read the Section 8 Contract Renewal Policy Handbook for more detailed information.

Forms

 

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Option 1:  Request Renewal Under The Mark Up To Market Procedure

Option 1 is divided into Option 1-A and Option 1-B. The following information should be considered when considering eligibility under the Mark up to Market procedure:  

Option 1-A

Rents may be renewed at the lesser of comparable market rents or 150% of the FRM.

Eligibility Requirements:

1.   Must Produce a Rent Comparability Study (RCS)

2.   A Real Estate Assessment Center (REAC) physical inspection score of 60 or above with no uncorrected Exigent Health and Safety (EHS).

3.   Profit motivated or a limited distribution ownership.

4.   Comparable Market Rents at or above 100% of the Fair Market Rent (FMR) potential.

5.   The project does not have a low-and-moderate income use restriction that cannot be eliminated by unilateral action by the owner.

Option 1-B

To further preserve the affordable housing stock, HUD has the discretionary authority to mark rents up to market for projects that meet certain criteria but do not qualify under Option 1-A.  For owners who request participation in Option 1-B, and for owners of projects that request an increase in rents above the cap on comparable rents of 150% of FMR, HUD will consider these requests if the project meets at least one of the following three characteristics.

  1. Vulnerable Populations. The tenants of the property are a particularly vulnerable population, demonstrated by a high percentage of units rented to elderly families, disabled families, or large families.
  2. Vacancy Rates. The property is located in a low-vacancy market where there is a lack of affordable housing and where tenant-based vouchers would be difficult to use.
  3. Community Support. The property is a high priority for the local community as demonstrated by a contribution of state or local funds to the property.

Requests under Option 1-B require HUD approval after recommendation from NTHDC.

Documents for Option 1: Mark Up to Market submission include:

Table of Content

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Option 2: Request Renewal of Contracts with Current Rents At Or Below Comparable Market Rents:

Option Two 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, but who are not applying for Mark-Up-To-Market.

Owners of exception projects have a choice of having their initial renewal processed under Option 1, Option 2, (or Option 4) may switch back to Option 4 at a later date. 

  1. 1.      Eligibility Requirements:

     a) Contract Renewal Request Form. Owner's Option Checklist and OCAF Worksheet.

    b) Acceptable Rent Comparability Study (RCS)

  2. 2.      Rent Adjustments

    a)    At initial renewal

  3. Shall be adjusted by:

    1)      An Operating Cost Adjustment Factor (OCAF) or

    2)      At Owner’s request, by budget-based increase.

  4. Initial renewal rents may not exceed the comparable market rents.

    b) At subsequent renewal

      1. i.         Shall be adjusted by:
        1. 1)      An Operating Cost Adjustment Factor (OCAF) or
        2. 2)      At Owner’s request by budget based increase.
      1. ii.       Subsequent renewals may not exceed OCAF adjusted RCS.

Documents for Option 2: Current Rents At or Below Comparable Market Rents submission include:

Table of Content

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Option 3: Request Referral to Office of Affordable Housing Preservation (OAHP):

Regardless of your option selection, NTHDC will refer your contract to OAHP for restructuring if the contract rents exceed comparable market rents and if the contract is eligible for referral.

Eligibility Requirements:

  1. Current Rents must be above Rent Comparability Study (RCS)
  2. The Owner requests either:
    1. Renewal of the contract without restructuring, with rents marked down to market (OAHP-LITE) or
    2. A mortgage or rent restructuring and contract renewal with the rents marked down to market (FULL).
     

Documents for Option 3: OAHP-Lite submission include:

Documents for Option 3: OAHP-Full submission include:

 

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Option 4:  Request for Renewal for Projects Exempted From OAHP:

  1. Certain project types are not eligible for OAHP even though the contract rents may exceed market. Projects without FHA-insured loans are exempt, as are certain FHA-insured properties

Specifically, the following projects are identified by the statute as "exception properties".

  1. Project(s) with primary financing or mortgage insurance that were provided by a unit of state or local government and not insured under the National Housing Act.
  2. Projects financed under section 202 of the Housing Act of 1959 or section 515 of the housing act of 1949 (includes 202/8, 515/8: does not include 202 and 811 Capitol Advance projects, which do not have section 8 contracts)
  3. Projects that have an expiring contract 1937 Act pursuant to section 441 or the Stewart B. McKinney Homeless Assistance Act (SRO Mod Rehab)
  4. Projects that do not qualify as projects pursuant to 512 of   MAHRA. Such as:
  1. A project that is not subject to a HUD-held or insured mortgage;
    or
  2. A project that has FHA mortgage insurance or is HUD-held with rents at or below comparable market rate.
  1. Owners of "exception projects" have a choice of having their initial renewal processed under Option One, Two, (or Four) may switch back to Option Four at a later date.

Note: For an owner of an FHA-insured or HUD-held project to claim eligibility under 4b, they must obtain an RCS.

Recent HUD Change

Starting with contract renewals effective April 20, 2007 and after, subsequent renewals are subject to the “lesser of” test just as initial contracts are.

For the “lesser of” test, Owner must submit both a Budget and an OCAF in order to have a complete package.  The “lesser of” test is only for contract renewals not multi-year rent adjustments.

Document for Option 4: Projects Exempted from OAHP (OMHAR) submission include:

Table of Content

 

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Option 5: Request Renewal of Portfolio Reengineering Demonstration or Preservation Contract: 

PORTFOLIO REENGINEERING DEMONSTRATION

A.       Mortgage Restructured/Rents Reduced. Properties that closed a transaction under the Portfolio Reengineering Demonstration Program and had their mortgages restructured and/or had their rents reduced to market should not be forwarded to OAHP. They should be renewed as followed:

1. OCAF. Each year for the four years following the execution of the Demonstration Contract, rents will be adjusted by the published OCAF.

2. At the end of each 5 year period the owner must obtain an RCS to ensure that the rents are not above comparable rents. The owner will be eligible to renew under Option 1 or 2. If necessary, the rents will be reduced to comparable rents.

B.       No Restructuring/No Rent Reduction.  If the mortgage was not restructured and the project's rents were not reduced to market, the owner must submit rationale as to why debt restructuring is inappropriate. The rational and the renewal request should be submitted to Headquarters, Office of Housing Assistance and Grant Administration, attention, Willie Spearmon.  If the rational is not acceptable the project will be referred to OAHP for restructuring.

C.      Owner Submission for Demonstration Projects.  Initial Renewal: HUD is no longer doing initial renewals under the Portfolio Reengineering Demonstration Program.

Rent Adjustments: OCAF only, years two through five.

At the end of each 5 year period the owner must obtain an RCS to ensure that the rents are not above comparable rents. The owner will be eligible to renew under Option 1 or 2. If necessary the rents will be reduced to comparable rents.

PRESERVATION

  1. A.Renew a Preservation contract according to the provisions outlined in the project’s Plan of Action (POA).  Preservation contracts cannot be renewed under any option other than Option 5.
  1. B. Corrections.  There are instances where some contracts of Preservation projects were renewed under terms different than the terms in the approved POA.  In these cases PM/CA’s should calculate the rent as it would have been if the contract(s) had been renewed under terms consistent with the POA.  This is the “current rent” that should be used as the basis for determining the renewal rent.  There is no reimbursement for income lost due to the past renewals.

Documents for Option 5: Reengineering Demonstration submission include:

Documents for Option 5: Preservation submission include:

If applicable – Utility Allowance (UA) Analysis and  the owner’s UA

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Option 6:  Notification of Intention to Opt Out of the Section 8 Contract

NTHDC will make every effort to maintain the inventory of Affordable Housing within the State of Florida. Owners selecting Option 6 will be made aware of all available options, including Mark-up-to-Market. However, if the owner chooses to opt out and has satisfied all the relevant requirements, NTHDC will process his/her request in an expeditious manner. The following requirements must be met before an owner may opt-out:

  1. The owner must be eligible to opt-out. This would include the absence of any restrictions placed on the property that are outlined in chapter eight of the Section 8 Contract Renewal Policy Handbook.
  2. The owner must have provided an acceptable one year notification to the residents and NTHDC.  The notice must contain the required language as outlined within chapter 8 of the Section 8 Contract Renewal Policy Handbook.
  3. The owner must have provided NTHDC with all required documentation, more specifically, The Contract Renewal Form and Worksheet for Option 6. This is due no later than 120 days before contract expiration.

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