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PART VIII: DETERMINING RENT TO OWNER 17-VIILA. OVERVIEW The amount of the initial rent to an owner of units receiving PBV assistance is established at the beginning of the HAP contract term. Although for rehabilitated or newly constructed housing, the agreement to enter into HAP Contract (Agreement) states the estimated amount of the initial rent to owner, the actual amount of the initial rent to owner is established at the beginning of the HAP contract term. During the term of the HAP contract, the rent to owner is redetermined at the owner's request in accordance with program requirements, and at such time that there is a five percent or greater decrease in the published FMR. 17-VIILB. RENT LIMITS [24 CFR 983.301] Except for certain tax credit units (discussed below), the rent to owner must not exceed the lowest of the following amounts: ~ An amount determined by SAHA, not to exceed 110 percent of the applicable fair market rent (or any HUD-approved exception payment standard) for the unit bedroom size minus any utility allowance; ~ The reasonable rent; or ~ The rent requested by the owner. Certain Tax Credit Units [24 CFR 983.301(c), FR Notice 11/24/08] For certain tax credit units, the rent limits are determined differently than for other PBV units. These different limits apply to contract units that meet all of the following criteria: ~ The contract unit receives glow-income housing tax credit under the Internal Revenue Code of 1986; ~ The contract unit is not located in a qualified census tract; ~ There are comparable tax credit units of the same bedroom size as the contract unit in the same building, and the comparable tax credit units do not have any form of rental assistance other than the tax credit; and ~ The tax credit rent exceeds aSAHA-determined amount (not to exceed 110 percent of the fair market rent or any approved exception payment standard); For contract units that meet all of these criteria, the rent to owner must not exceed the lowest of: ~ The tax credit rent minus any utility allowance; ~ The reasonable rent; or ~ The rent requested by the owner. However, SAHA is permitted to use the higher Section 8 rent for a tax credit unit if the tax credit rent is less than the amount that would be permitted under Section 8. In these cases, Section 8 rent reasonableness requirements must continue to be met. iii29iio Page 17-25