On March 27, 2023, HUD published an update to the Section 8 Renewal Guidebook for the first time since 2017. The updated guidance is centered around HUD’s standards for preparing, submitting, and reviewing Rent Comparability Studies (RCS) found in Chapter 9 of the Guidebook. These changes will apply to renewal and amended rent packages received by the Department (or post-marked) on or after May 1, 2023.
The changes published in Chapter 9 of HUD’s Section 8 Renewal Policy Guidebook are designed to streamline the contract renewal process by making it easier for owners to prepare and submit the Rent Comparability Studies (RCS) used to establish contract rents. The changes also clarify the conditions under which such rents may reflect the value of providing services to residents. Specifically, Chapter 9 has been comprehensively updated to improve clarity and address grammatical errors.
Some of the changes include:
- Fair housing language has been updated throughout the chapter to ensure consistency with current jurisprudence.
- Alternatives to a Rent Comparability Study (RCS) have been expanded (Section 9-4). For Option 2 renewals and comparability adjustments, some renewals may use 90 percent of the Small Area Fair Market Rent (SAFMR) in lieu of an RCS (Section 9-5). For Option 1 and 2 renewals and comparability adjustments, unassisted units in a project may be used in lieu of an RCS in some scenarios (Section 9-6).
- The criteria for identifying project amenities and services and assigning a valuation to those features was updated to provide clear appraiser guidelines (Section 9-9 C).
- For owners who intend to add amenities or services as part of capital repairs, we have provided a process for including those features in an as-renovated RCS submitted pursuant to Chapter Fifteen of the Guidebook (Section 9-9 C).
- The mandatory market rent threshold criteria have been updated. A HUD-commissioned independent RCS will be ordered only if a project’s gross rent exceeds 150 percent of the SAFMR (Section 9-14).
- The process for owner appeals of substantive review of an RCS has been clarified. Timelines are more specific, and the owner may submit one revised version of the RCS with the appeal (Section 9-18).
- Appraisers are asked not to use congregate care or assisted living projects as comparables due to the inclusion of meals and complex medical services (Appendix 9-4 E).
While substantive changes have been made only to Chapter 9, the formatting that appeared in the 2017 version to denote changes has been removed throughout the Guidebook (though the updated text remains). Inconsistent Guidebook formatting has also been addressed. More information on Section 8 Contract Renewals, including the updated Guidebook, memos, and forms associated with the renewal process, can be found here on HUD’s website.