Required Contents of a Rent Comparability Study

• A. Transmittal Letter signed by the RCS appraiser. The RCS appraiser must address the Transmittal Letter to the project Owner, and the letter must be dated as of the date it is submitted along with the RCS to the Owner. A sample transmittal letter is included under Appendix 9-1-6. This letter must include the following five components:

  1. RCS appraiser's name, company name, address, telephone, fax number (optional), and email address.

  2. Project name, FHA/other project number of the Section 8 project.

  3. Table of estimated market rent for each unit type included in the study. The RCS appraiser should use table format shown below. In last column, the RCS appraiser should enter “Y” for yes if a Rent Comparability Grid was prepared for that unit type, or enter “N” for No, if a grid was not prepared for secondary unit types, but instead the RCS appraiser adjusted the primary type’s estimated rent. If the study reflects both pre-repair and post-repair rent conclusions, two tables should be provided reflecting each scenario.

4. A statement that market rents were defined and estimated in accordance with Sections 9-9 through 9-13 of this Chapter and the RCS report was prepared in accordance with Sections 9-8 through 9-14 of this Chapter.

5. An acknowledgment of how his/her report will be used. Suggested language: “I understand that HUD/the Section 8 Contract Administrator (CA) and the project Owner will use my estimate of market rents to determine: 1) the Owner’s options for renewing the project’s Section 8 contracts; and 2) the maximum rents allowed under any renewal contract.”

• B. Scope of Work. The RCS appraiser must acknowledge that all work was done in accordance with the requirements set forth in this notice, and provide a narrative describing:

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1. Dates, number and types of inspections, and how unit sizes were verified.

2. How rent, condition and amenity data were collected and verified. The RCS appraiser should also note all interviews completed, records reviewed, and internet sites used. The RCS appraiser should indicate the period during which data was collected.

3. Any data that was unobtainable or estimated and all efforts to obtain that data.

4. Any assistance from assistant RCS appraisers.

• C. Description of Subject Project. The RCS appraiser must address the items listed under this section by creating a chart or table like the template shown below. If the units being renewed are located on scattered sites and those sites differ significantly on condition, services, street appeal or other factors listed below, the RCS appraiser must need to create a separate chart for each site:

  1. Project name and address (street, city, county, cross streets) and neighborhood name if applicable).

2. Site characteristics and improvements: number of buildings and their design (construction material, structure type), number of units; topography and density; and access to site.

   3. Unit mix for all units in the project, not just the Section 8 units. The RCS appraiser should use the table format below, and ensure that he/she includes all revenueproducing units in the project & group them by major unit types (e.g., # bedrooms/# baths). The RCS appraisers should review Section 9-10 for a definition of rent restricted units.

4. Condition: age of project, state of repair, any recent/ planned rehab or refurbishing.

5. Schedule of charges collected in addition to rent.

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6. 3 to 5 labeled, color photos of exterior and interior. The RCS appraiser must review Section 9-9 regarding requirements on photos, and insert the photos at the end of the RCS or in the body of RCS’s description of the subject.)

7. Population or occupancy group targeted for this project (e.g., elderly), if any.

8. Summary of unit design and amenities.

9. Summary of project service/ site amenities: parking, recreational facilities, community areas, security, service coordination, neighborhood networks, transportation, meal services, social or educational activities, emergency call systems, laundry or housekeeping, and any other amenities for elderly or disabled.

10. Name and phone number of contact person. This would include the information for the individual who the RCS appraiser verified or collected information on the subject project.

• D. Owner’s Scope of Repairs. As required under Section 9-9. D, the RCS appraiser must review the complete list of repairs to the subject project, and if needed prepare a separate set of HUD Form 92273-S8 Rent Comparability Grids to differentiate between pre-repair and post-repair conditions.

• E. Definition of the Subject’s Market Area. The RCS appraiser must identify the geographic area from which the subject would normally draw its applicants, or the area where competitive alternative apartment buildings are located .

• F. Description of Neighborhood. Under this section, the RCS appraiser should provide a discussion of the project’s location noting factors that would impact market rent level, as required under Section 9-9 of this Chapter.

• G. Narrative Describing Selection of Comparables. The RCS appraiser must provide an overall assessment of the availability of comparables and the quality of the comparables selected and state why the comparables used were selected, as required under Sections 9- 10 and 9-11 of this Chapter. The RCS appraiser must document the search process in accordance with the Section 9-10.C requirements. If insufficient comparables or dissimilar comparables are utilized, the RCS appraiser must explain why in the narrative, and outline what research was performed to determine that more similar comparables were not available. If the comparables chosen have an identity-of-interest with the Owner, management agent of the subject project, the RCS appraiser must identify those and explain why such a comparable was selected.

• H. Locator Map for Subject and Comparables. The RCS appraiser must include a locator map identifying the subject project and each comparable. He/she must also clearly mark major roadways and natural or man-made barriers (e.g., rivers, freeways, railways, etc.) on the map.

• I. Rent Comparability Grid HUD-92273-S8. The RCS appraiser must complete one grid for each primary unit type using instructions in Appendix 9-1-1 and guidance in Section 9-9 through 9-13 of this Chapter.

• J. Explanation of Adjustments & Market Rent Conclusions. As required under Sections 9-9 through 9-13 and the line-by-line instructions in Appendix 9-1-1, the RCS appraiser must provide a narrative for each adjustment.

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• K. Comparable Project Profiles. The RCS appraiser must provide a one-page, table/grid profile of each comparable project used in the RCS. The RCS appraiser must profile each project only once, regardless of the number of unit types for which the project was used. The Sample RCS under Appendix 9-2-2 provides a sample profile that RCS appraisers may use, or they can create their own table/grid formats. The RCS appraisers must include at least the following items in their comparable project profiles:

  1. Project name and address (street, city, county, cross streets) and neighborhood name.

  2. Name and phone number of contact person with whom the RCS appraiser verified or collected information on the project and the date of verification.

  3. A color photo (at least 3” by 5”) of the project’s exterior. (Interior photos may be included if available, but they are not required).

  4. A rent and unit mix table. Showing all units in the project and grouped by major unit types (e.g., # bedrooms/# baths). The RCS appraiser must indicate which unit types are used as comparables in the RCS.

5. Total number of units at the project and project-wide occupancy.

6. List of any charges tenants pay in addition to rent.

7. Description of any rent, income, and use restrictions or tenant rent subsidies (Section 8, certificates, vouchers, state/local payments on behalf of residents) in effect at the project. The RCS appraiser must provide this information even if the units covered by the restriction/subsidy were not the units studied in the RCS.

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• L. RCS Appraiser’s Certification (Appendix 9-1-5). The RCS appraiser must fill in the blanks and sign and date the Certification. When entering names, the RCS appraiser must also give title (e.g., Sharon Jones, Assistant RCS Appraiser). The RCS appraiser may enter “ none ” in items 8 and 10 if there is nothing to disclose.

• M. Copy of any Temporary License the RCS appraiser is relying upon for this RCS. Any temporary license relied upon must be issued by the state where the project is located.

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Appendix 9-1-2 – Published March 2023