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Note that this Chapter details the rent calculations utilized for Units rehabilitated prior to the production of this existing draft of the Mod Rehab Administrative Plan that are still functional, along with the rent calculations to be utilized when it comes to the rehab of brand-new SRO Units under 24 C.F.R. part 882, subpart H.

12.1 Calculating Initial Gross Rents

Gross Rent is the overall regular monthly cost of housing a Qualified Family and is the amount of the Contract Rent and any utility allowance. See 24 C.F.R. § 882.102.

The initial Gross Rent for any Unit must not go beyond the Mod Rehab FMR [12] relevant to the Unit on the date that the AHAP is carried out. See 24 C.F.R. § 882.408(a). Note that the following exceptions apply:

(a) Exception Rents. With HUD Field Office approval, the BHA might authorize initial Gro ¬ ss Rents which go beyond the relevant Mod Rehab FMRs by approximately 10% for all Units of a given size in defined areas where HUD has determined that the leas for standard Units appropriate for the Existing Housing Program are more than 10% higher than the Existing Housing FMRs. [13] The BHA will send paperwork showing the requirement for such exceptions leas in the location to the HUD Field Office. See 24 C.F.R. § 882.408(a) and (b).

(b) The BHA might authorize modifications in the Contract Rent subsequent to execution of the AHAP (see area 5.2) which result in an initial Gross Rent which exceeds the Mod Rehab FMR suitable to the Unit by approximately 20%. See 24 C.F.R. § 882.408(a) and (d).

12.1.1 FMR for Structures Containing Four or Fewer SRO Units

If a structure consists of 4 or fewer SRO Units, the FMR for that size structure (the FMR for a 1-, 2-, 3-, or 4-bedroom Unit, as relevant) should be used to figure out the FMR constraint rather of using the separate FMR for each SRO Unit. To figure out the FMR limitation for each SRO Unit, the FMR for the structure must be assigned equally to each SRO Unit. See 24 C.F.R. § 882.805(d)( 3 ).

12.1.2 FMR Limits for Efficiency Units

The gross lease for performance Units might be no greater than for SRO systems (i.e., 75 % of the 0-bedroom Mod Rehab Fair Market Rent). See 24 C.F.R. § 882.805(d)( 4 ).

12.2 Calculating Initial Contract Rents

The initial Contract Rent and Base Rent for each Unit will be computed in accordance with HUD requirements. See 24 C.F.R. § 882.408©. The quantities might be figured out in accordance with the following techniques:

(a) Initial Contract Rent: The preliminary Contract Rent is equivalent to the base lease plus the regular monthly expense of a rehabilitation loan but not more than the maximum stated at the end of this area. See 24 C.F.R. § 882.408©( 2 ).

(b) Base Rent: The base rent should be determined using the rent charged for the Unit or the estimated expenses to the Owner of owning, managing and keeping the rehabilitated unit. See 24 C.F.R. § 882.408©( 2 ).

© Monthly Cost of a Rehab Loan: The regular monthly expense of a rehabilitation loan need to be determined utilizing:

1. The real rate of interest on the part of the rehabilitation costs borrowed by the Owner