16-3. TIMELINESS

Owners of projects to which this Chapter applies are encouraged to submit a completed Extension Amendment or Contract Renewal Request Form and supporting documentation to the HFA within 120 days of the contract anniversary date.

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Attachment 1: List of Acronyms Used in this Guide

Attachment 2: Glossary – Published March 2023

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Attachment 1: Acronyms– Published March 2023

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Attachment 2: Glossary of Terms Used in this Guide

Account Executive/Contract Administrator (AE/CA ) . HUD staff in the case of a project manager or contract staff in the case of a contract administrator who are responsible for managing the relationship with individual projects, including the renewal of the Section 8 contract.

Adjusted Rents. Existing rents under the expiring contract, as adjusted by an operating cost adjustment factor (OCAF) established by the Secretary (which shall not result in a negative adjustment) or adjusted by budget-based method or by other means under the terms of the HAP contract..

Affiliate. Any person or entity (including, but not limited to, a general partner or managing member, or an officer of either) that controls an owner or purchaser, is controlled by an owner or purchaser, or is under common control with the owner or purchaser.

“After rehab” rents. In the context of a transaction that anticipates an increase in rents to cover capital improvements and the transfer of a Section 8 project, the comparable market rents as determined by a rent comparability study comparing the subject project, with all planned capital repairs, with comparable properties.

Annual Interest Subsidy. For Section 236 properties, the Annual Interest Subsidy equals the current Annual Interest Reduction Payment Amount, as defined in 24 CFR Part 236.520. For other properties, the Annual Interest Subsidy equals the unpaid principal balance of the subsidized loan multiplied by the difference between the annual original interest rate (7% if original market note rate is not available) and the annual subsidized interest rate (1% for Section 515, 3% for Section 221(d)(3) BMIR).

“As is” rents. In the context of a transaction that anticipates an increase in rents to cover capital improvements and the transfer of a Section 8 project, the comparable market rents as determined by a rent comparability study comparing the subject project in its current condition with comparable properties.

Assisted Dwelling Unit. A unit that is in a covered project and receives project-based rental assistance.

Budget-Based Rent Increase. A rent increase on the basis of a budget used to promote the efficient management and continued financial viability of projects when current rent levels are not sufficient to cover operating costs.

Capped Comparable Gross Rents. If the Final Comparable Gross Rent Potential is less than 150% of the FMR Potential, then the Capped Comparable Gross Rents are the Final Comparable Gross Rents. If the Final Comparable Gross Rent Potential is not less that 150% of the FMR Potential, then the Capped Comparable Gross Rents are 150% of the FMRs.

Capped Comparable Gross Rent Potential. The lesser of the Final Comparable Gross Rent Potential or 150% of the FMR.

Comparable Market Rents. Comparable market rents are the rents charged for properties determined to be comparable properties, which means, properties in the same market areas

Attachment 2: Glossary – Published March 2023

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that are similar to the eligible multifamily housing project as to neighborhood (including risk of crime), type of location, access, street appeal, age, project size, apartment mix, physical configuration, project and unit amenities, utilities, and other relevant characteristics; and are not receiving project-based assistance.

Comparability Study. Also known as a Rent Comparability Study (RCS). A method of estimating market rent for the Section 8 units in the subject project. The appraiser derives an indicated (market) rent by comparing the Section 8 units with similar, but unsubsidized properties, applying appropriate units of comparison and making adjustments as appropriate to the comparable rents. The results should then be correlated into an indicated market rent. The study must include all Section 8 units in the subject project and must be conducted according to the requirements established in Chapter Nine of this Guide.

Comparability Analysis. This analysis summarizes the results of the Comparability Study, however, only those unit types in the expiring contract will be considered in this report. The report will include an estimate of income generated by the Section 8 unit types as though they were generating income as market units.

Community-based nonprofit organization. A private nonprofit organization 1) that is organized under State or local laws, 2) for which no part of net income inures to the benefit of any individual, and 3) that has a long-term record of service in providing or financing quality affordable housing for low-income families through relationships with public entities.

Contract rent. The total monthly rent to owner for a contract unit, including the tenant rent (the portion of rent to owner paid by the assisted family).

Contract units. The units in the Project that are identified in Exhibit A by size and applicable contract rents.

Control. Direct or indirect power (under contract, equity ownership, the right to vote or determine a vote, or otherwise) to direct the financial, legal, beneficial or other interests of the owner or purchaser.

Coterminous. This term describes contracts terms or stages of contracts that are brought into alignment so that they expire on the same date.

Current Section 8 Rents. The rents specified by the Section 8 contract(s).

Current Section 8 Rent Potential. The sum of all current Section 8 Rents for the units in the Section 8 contract(s).

Current Section 8 Gross Rents. The Current Section 8 Rents plus the applicable Utility Allowances, if any.

Current Section 8 Gross Rent Potential. The sum of all Current Section 8 Gross Rents under the Section 8 contract(s).

Attachment 2: Glossary – Published March 2023

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Debt Restructuring Specialist. Staff at the Office of Affordable Housing Preservation who reviews Mark-To-Market transactions.

Eligible Multifamily Housing Project. A project as defined in section 512(2) of MAHRA.

Enhanced Vouchers. Vouchers that are provided to current residents of a Section 8 development undergoing an eligibility event. Section 8(o) of the United States Housing Act of 1937 provides the legal basis for providing such assistance.

Expiring Contract. Project-based assistance contract attached to an eligible multifamily housing project which, under the terms of the contract, will expire.

Fair Market Rent (FMR). The rent, including the cost of utilities (except telephone), that would be required to be paid in the housing market area to obtain privately owned, existing, decent, safe and sanitary rental housing of modest (non-luxury) nature with suitable amenities. Fair Market Rents for existing housing are established by HUD for housing units of varying sizes (number of bedrooms), and are published in the Federal Register in accordance with 24 CFR Part 888.

Final Comparable Gross Rents. The Final Comparable Market Rents plus the applicable Utility Allowances, if any.

Final Comparable Gross Rent Potential. The sum of all Final Comparable Gross Rents for units in the Section 8 contract(s).

Final Comparable Market Rents. The rents that will be used by HUD as the comparable market rents for determining rent increases under the Mark-Up-To-Market Procedure. The Final Comparable Market rents will be set based on the comparison of the Owner Comparable Market Rents and the HUD Comparable Market Rents.

Final Comparable Rent Potential. The sum of all Final Comparable Market Rents for units in the Section 8 contract(s).

FMR Potential. The sum of FMRs for all units in the Section 8 contract(s).

HAP Contract. A housing assistance payments contract between HUD (or the Housing Agency) and the owner. HUD (or the Housing Agency) pays housing assistance payments to the owner in accordance with the HAP contract.

Housing Conversion Actions. Housing conversion actions include Project-based Section 8 opt-out, preservation prepayment, HUD enforcement actions and HUD property disposition (PD).

HUD Comparable Gross Rents. The HUD Comparable Market rents plus the applicable Utility Allowances, if any.

HUD Comparable Gross Rent Potential. The sum of all HUD Comparable Gross Rents for the units in the Section 8 contract(s).

Attachment 2: Glossary – Published March 2023

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HUD Comparable Market Rents. The rents specified by the comparability study performed by the HUD appraiser.

HUD Comparable Rent Potential. The sum of all HUD Comparable Market Rents for the units in the Section 8 contract(s).

HUD Section 236 Fair Market Rental Charge. The rental charge in a Section 236 project based upon operating it with payments to principal and interest under the actual mortgage interest rate, and including payment of the mortgage insurance premium.

Interest Subsidy Adjustment Factor. The Interest Subsidy Adjustment Factor is the Annual Capped Comparable Gross Rent Potential minus the Annual Eligible Interest Subsidy, all divided by the annual Capped Comparable Gross Rent Potential.

Initial Renewal. The first renewal of a project’s contract or stage that is processed under Section 524 of MAHRA.

iREMS. The official source of data on Multifamily Housing's portfolio of insured and assisted properties. iREMS provides automated support to collect/maintain accurate data and enables Satellite Offices and Regional Centers, and Enforcement Center staff to perform servicing functions and implement enforcement actions where needed.

MAHRA. Multifamily Assisted Housing Reform and Affordability Act of

1997. Market Rents. Comparable market rents for the market area.

New Authorized Gross Rents. The New Authorized Rents plus the applicable Utility Allowances, if any.

New Authorized Gross Rent Potential. The sum of all New Authorized Gross Rents for the units in the Section 8 contract(s).

New Authorized Rents. For Section 236, Section 221(d)(3) BMIR and Section 515 properties, the rents calculated by following the existing guidance under Handbook 4350.1 Chapter 7 using a budget submitted by the owner, if any.

New Authorized Rent Potential. The sum of all new Authorized Rents for the units in the Section 8 contract(s).

New Regulation Contracts : Contracts where HUD issued the “notification of selection” on or after November 5, 1979 for the Section 8 New Construction Program or on or after February 20, 1980 for the Substantial Rehabilitation Program were intended to be new regulation projects and should have HAP contracts that contain restrictions as described in existing 24 CFR Parts 880 and 881. Properties that submitted an “initial application” on or after February 29, 1980 to a State Agency were intended to be new regulation projects and should have HAP contracts that contain restrictions as described in existing 24 CFR Part 883.

New Section 8 Gross Rents. The new gross rents for the Section 8 contract(s).

Attachment 2: Glossary – Published March 2023

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New Section 8 Gross Rent Potential. The sum of all New Section 8 Gross Rents for the units in the Section 8 contract(s).

New Section 8 Rents. The New Section 8 Gross Rents minus the applicable Utility Allowances, if any.

New Section 8 Rent Potential. The sum of all New Section 8 for the units in the Section 8 contract(s).

OCAF. Operating Cost Adjustment Factor . A factor that is established annually by HUD, which may not be negative, that is applied to the existing contract rent (less the portion of the rent that is paid for debt service).

Lite/Haircut. Request for contract renewal without restructuring, with rents marked down to market.

Old Regulation Contracts. Contacts where HUD issued the “notification of selection” before November 5, 1979 for the Section 8 New Construction Program or before February 20, 1980 for the Substantial Rehabilitation Program are considered old regulation projects and should have HAP contracts that do not contain restrictions as described in existing 24 CFR Parts 880 and 881. Properties that submitted an “initial application” before February 29, 1980 to a State Agency are considered old regulation projects and should have HAP contracts that do not contain restrictions as described in existing 24 CFR Part 883.

Original Section 8 HAP contract. A contract that has not yet been renewed under MAHRA.

Owner. Any private person or entity, including a cooperative, an agency of the Federal Government or a public housing agency, having the legal right to lease or sublease dwelling units.

Owner Comparable Gross Rents. The Owner Comparable Market Rents plus the applicable Utility Allowances, if any.

Owner Comparable Gross Rent Potential. The sum of all Owner Comparable Gross rents for units under the expiring Section 8 contract(s).

Owner Comparable Market Rents. The rents specified by the comparability study submitted by the owner.

Owner Comparable Rent Potential. The sum of all Owner Comparable Markets Rents for the units in the Section 8 contract(s).

Participating Administrative Entity. A public agency (including State housing finance agency or a local housing agency), a nonprofit organization, or any other entity (including a law firm or an accounting firm) or a combination of such entities, that meets the requirements under Section 513(b) of MAHRA.

Preservation Project. A project that is subject to a HUD-approved Plan of Action under the Emergency Low -Income Housing Preservation Act of 1987 (12 U.S.C. § 1715 l note) or the

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Attachment 2: Glossary – Published March 2023

Low-Income Housing Preservation and Resident Homeownership Act of 1990 (12 U.S.C. § 4113).

Project-Based Assistance. Rental assistance that is attached to a multifamily housing project.

Purchaser. Any private person or entity, including a cooperative, an agency of the Federal Government, or a public housing agency, that, upon purchase of the project, would have the legal right to lease or sublease dwelling units in the project, and also means an affiliate of the purchaser.

Renewal. Replacement of an expiring Federal rental contract with a new contract under Section 8 of the United States Housing Act of 1937, consistent with the requirements of Subtitle A of MAHRA.

Renewal Contract. A contract issued under MAHRA (including the applicable provisions of the Expiring Contract, as specified in the Renewal Contract) under which project-based section 8 rental assistance under the Expiring Contract is renewed.

Rent Adjustment. Adjustment of the existing Contract Rent at the contract anniversary based on an operating cost adjustment factor, a budget, a rent comparability study, or an annual adjustment factor, as appropriate, and as permitted under the terms of the HAP Contract or Renewal Contract.

Rent Increase. An increase in the Contract Rents under the Expiring Contract that occurs upon renewal of the HAP Contract (or Renewal Contract) and that is calculated based on the measure for renewal rents corresponding to the renewal option under which the HAP Contract (or Renewal Contract) was renewed.