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16-II.B. PAYMENT STANDARDS [24 CFR 982.503; HCV GB, Chapter 7] The payment standard sets the maximum subsidy payment a family can receive from SARA each month [24 CFR 982.505(a)]. Payment standards are based on fair market rents (FMRs) published annually by HUD. FMRs are set at a percentile within the rent distribution of standard quality rental housing units in each FMR area. For most jurisdictions FMRs are set at the 40th percentile of rents in the market area. SARA will establish a payment standard schedule that establishes payment standard amounts for each unit size within the FMR area. Unless HUD grants an exception, SARA is required to establish a payment standard within a "basic range" established by HUD -between 90 and 110 percent of the published FMR for each unit size. Updating Payment Standards When HUD updates its FMRs, SARA must update its payment standards if the standards are no longer within the basic range [24 CFR 982.503(b)]. HUD may require SARA to make further adjustments if it determines that rent burdens for assisted families in SAHA's jurisdiction are unacceptably high 24 CFR 982.503(g)]. SARA will review the appropriateness ofthe payment standards on an annual basis when the new FMR is published. In addition to ensuring the payment standards are always within the "basic range" SARA will consider the following factors when determining whether an adjustment should be made to the payment standard schedule: Funding Availability: SARA will review the budget to determine the impact projected subsidy adjustments will have on funding available for the program and the number of families served. SARA will compare the number of families who could be served under revised payment standard amounts with the number assisted under current payment standard amounts. Rent Burden of Participating Families: Rent burden will be determined by identifying the percentage of families, for each unit size, that are paying more than 30 percent of their monthly adjusted income as the family share. When 40 percent or more of families, for any given unit size, are paying more than 30 percent of adjusted monthly income as the family share, SARA will consider increasing the payment standard. In evaluating rent burdens, SARA will not include families renting a larger unit than their family unit size. Quality of Units Selected: SARA will review the quality of units selected by participant families when making the determination of the percent of income families are paying for housing, to ensure that payment standard increases are only made when needed to reach the mid-range of the market. Changes in Rent to Owner: SARA may review a sample of the units to determine how often owners are increasing or decreasing rents and the average percent ofincreases/decreases by bedroom size. Unit Availability: SARA will review the availability of units for each unit size, particularly in areas with low concentrations of poor and minority families. o~ro2~12 Page 16-3