HUD Issues CY 2017 140 Percent Thresholds for Rent Comparability Studies
In August 2015, HUD issued a new Section 8 Renewal Policy Guide. Section 9-23 of the Guide provides instructions for comparing the median rents as derived by the appraiser in a rent comparability study (RCS) with Census Bureau estimates of the median rents in the project’s ZIP code. Should the rents in the owner’s study exceed 140 percent of the median ZIP code rent threshold, then HUD would secure a third party to create a RCS for comparison purposes. When HUD issued the guide, the median ZIP code rents as of December 2014 were also published.
HUD has recently published the new median ZIP code rents and the 140 percent thresholds. Users can find these new numbers under “What’s New” on http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/mfh/mfhsec8. The Census Bureau has updated its estimates of median rents and increased the median rents above the previous high of $2,000 to a new high of over $4,000. Staff and appraisers can find the instructions for comparing the numbers and determining the final rent, should a HUD study be required in Section 9-23.
These numbers will be effective for any RCS signed by the owner’s appraiser on or after Feb. 11, 2017.