TO:                Owners/Management Agents 
FROM:          Asset Management, Management & Development Division
SUBJECT:    Section 8 Renewal Guidebook - Chapter 9 "Rent Comparability
                        Study" Revision
DATE:           March 30, 2017
HUD issued a revised Chapter 9 of the HUD Section 8 Renewal Guidebook on December 1, 2016. The revised guidance applies to any Rent Comparability Study signed by the appraiser on or after March 1, 2017. The Revision can be found here: Please review the Revised Chapter Nine in order to ensure that any Rent Comparability Studies performed for a Contract Renewal are submitted as specified by HUD.

Here are the highlights of changes relative to Rent Comparability Studies and their submission to New Hampshire Housing:
  • HUD has incorporated an Owner's Checklist which needs to be submitted, along with the Owner's RCS Cover Letter, with all materials.
  • Owners (and their RCS appraisers) must ensure that all materials are submitted in electronic copy reports in the same order as shown on the owner's checklist.
  • The RCS appraisers must download the electronic versions of Word or Excel files for any table/grids in the RCS, as provided under Appendix 9-1 of Chapter 9.
  • RCS appraisers are required to explain the rationale for the amount of adjustments when adjusting comparables to the subject property.
  • HUD has come up with thresholds for adjustments beyond a "nominal amount".  If the adjustments exceed the nominal dollar amount or percentage of unadjusted rents of the comparable, the appraiser must present market data to support his/her adjustments/conclusions.  There are specific thresholds for each RCS category.
  • The RCS appraiser must explain how the market rent was derived, why it was derived that way and note which comparables were given the most weight and why.  If the estimated market rent is set at the high or low end of the range of adjusted rents, the RCS appraiser must explain why.
  • It is mandatory for the RCS appraiser to compare the RCS market rent to the "Median Rent by Zip Code" rent to determine if the RCS median rent exceeds 140% of the zip code rent.
  • The RCS appraiser must rate the subject and comparables on a five-point scale:  Excellent, Good, Average, Fair or Poor.  No other classifications like G+ G- are acceptable.
  • HUD has become very specific in how an appraiser answers the grid and category questions.  For example, for Line 15 AC:  Central/Wall, the appraiser must use "C" for central, "W" for wall or "N" for none.  All specifics are outlined in Appendix 9-1-2 of Chapter 9.
  • Rent Comparability Studies that do not include explanations immediately after comments on Item 46 must be rejected by the New Hampshire Housing substantive reviewer.



As with all Section 8 Contract Renewals, please be certain to use the most current version of the (1) Contract Renewal Request form HUD-9624:

Please also be reminded that if you are renewing under Option 1 (Mark Up to Market) or Option 4 (Budget Based), the Owner and Contract Administrator must follow the tenant notification procedures in 24 CFR Part 245 Subpart D. This means that at least 30 days before submitting a request to New Hampshire Housing for approval of an increase in maximum permissible rents, the owner must notify the residents of the proposed rent increase. The Notice must be in the format prescribed by HUD. The Notice must allow for a 30-day comment period.
For properties with a Utility Allowance, please remember that if a Utility Allowance Analysis results in a decrease in the Utility Allowance for any Contract Renewal or annual Rent Adjustment, that the Owner and Contract Administrator must follow the same tenant notification procedures.
If you have any questions, please feel free to contact your Asset Manager.