Part G. Adjusted Rents (lines 44 through 45)

HUD’s Excel form automatically calculates these items, except for Line 46. RCS appraisers do not need to compute entries for Lines 44 and 45 manually.

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Line 44. Adjusted Rent. Excel computes this line by adding the net adjustments (Line 43) to the Effective Rent (Line 5) to derive an adjusted rent for each comparable.

Line 45. Adjusted Rent/Last Rent. Excel computes this line by dividing the Adjusted Rent (Line 44) by the Last Rent (Line 1) and expresses the answer as a percent. This shows the impact of all adjustments made for all Parts of the form. The totals in Part F do not include the adjustments in Part A.

Line 46. Estimated Market Rent. In this line, the RCS appraisers will determine, using their professional judgment, the point in the range of adjusted rents that best represents the rent a knowledgeable tenant would most probably pay for that unit type at the subject. HUD’s Excel form will divide that rent by the square footage shown for the subject in Part C to compute estimated market rent per square foot. When entering the estimated market rent, the RCS appraiser must explain the points listed below. The RCS appraiser is required to present these explanations immediately after his/her comments on Item 46. RCSs without these explanations will be rejected by the substantive reviewer.

’ How the estimated market rent was derived from comparables adjusted rents. The RCS appraiser must explain how the estimated market rent was derived and why it was derived that way. He/she must note which comparables were given the most weight and why, including which attributes of those respective comparables resulted in their being weighted more or less than others. If the estimated market rent is set at the high or low end of the adjusted rents’ range, the RCS appraiser must explain why. For example, the narrative may note that a comparable located within the same master-planned community deserves proportionately more weight than another comparable which is outside the master-planned community and only slightly farther from the subject, but is within walking distance to a neighborhood shopping district. Alternatively, the RCS appraiser may support his/her estimation by stating that comparable A that may not be as close in distance as other four comparables, was given a higher weight than others because leasing agents have observed that prospective tenants often consider both projects (subject and comparable A) “family-friendly” due to on-site day-care facilities and similar services.

How the estimated market rent was derived for a secondary unit type. When a subject has primary and secondary units, the RCS appraisers may start with the market rent for a primary type and adjust for the minor difference(s) between the secondary type and related primary type. RCS appraisers must explain why adjustments were made and how they were made in deriving rents for a secondary unit type.

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Appendix 9-1-1 – Published March 2023