RAD PIH Notice 2012-32 (.pdf, 1 MB) - National Low Income ...

Attachment 1C – Calculation of HAP Contract Rents2. Step Two – Apply Bedroom Adjustment FactorThe weighted average current funding amount will then be adjusted by a bedroom adjustmentfactor to arrive at bedroom-specific rent schedule. HUD will use the same bedroomadjustment factors as reflected in the metropolitan FMR schedules for the area in which theproject is located. The following is an illustration:Current Funding: Bedroom Adjusted Based on FMRBedroom Size 0BR 1BR 2BR 3BR 4BR 5BR 6BR TOTALPIC Units 0 20 50 30 0 0 0 100Metropolitan FMRs $550 $650 $775 $900 $1,000 $1,150 $1,300FMR BedroomAdjustments0.710 0.839 1.000 1.161 1.290 1.484 1.677Bedroom AdjustedRent$646 $770 $894 $7833. Step Three – Apply Rent CapsFinally, HUD would compare the Current Funding Rents calculated in Step Two with theapplicable rent caps to determine the HAP Contract Rent for conversions to either PBRA orPBV (see Sections 1.6(B)(5) and 1.7(A)(5) of this Notice for a discussion of rent caps), asillustrated in the continuing example below.Conversion to PBRABedroom Size 1BR 2BR 3BRCurrent Funding Rents (Step Two) $646 $770 $894120% of FMR $780 $930 $1,080- Utility Allowance $50 $60 $70FMR Rent Cap $730 $870 $1,010Market Rent $640 $740 $830-- Lower of Current Funding Rent and FMR rent cap --PBRA Contract Rent $646 $770 $894When converting to PBRA, the contract rent is the lower of 120 percent of FMR or currentfunding. In this case, the Current Funding rents are below 120 percent of FMR (minus theUtility Allowance) and so the contract rent is unchanged from the current funding rentimplement an existing rent reform policy, HUD will re-calculate presumptive tenant rents based on tenant incomesand PBRA rent policies.PIH-2012-32 (HA) Rental Assistance Demonstration – Final Implementation 80