[Code of Federal Regulations]
[Title 24, Volume 4]
[Revised as of April 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 24CFR983.256]

[Page 658-659]
 
                 TITLE 24--HOUSING AND URBAN DEVELOPMENT
 
CHAPTER IX--OFFICE OF ASSISTANT SECRETARY FOR PUBLIC AND INDIAN HOUSING, 
               DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
 
PART 983--SECTION 8 PROJECT-BASED CERTIFICATE PROGRAM--Table of Contents
 
             Subpart F--Rent and Housing Assistance Payment
 
Sec. 983.256  Reasonable rent.

    (a) Requirement. (1) The HA may not enter an agreement to enter into 
housing assistance payments contract until the HA determines that the 
initial rent to owner under the HAP contract is a reasonable rent.
    (2) During the term of a HAP contract, the rent to owner may not 
exceed the reasonable rent as determined by the HA.
    (3) At least annually during the HAP contract term, the HA must 
redetermine that the current rent to owner does not exceed a reasonable 
rent.
    (b) Comparability. The HA must determine whether the rent to owner 
is a reasonable rent in comparison to rent for other comparable 
unassisted units. To make this determination, the HA must consider:
    (1) The location, quality, size, unit type, and age of the contract 
unit; and
    (2) Any amenities, housing services, maintenance and utilities to be 
provided by the owner in accordance with the lease.
    (c) Appraisal--(1) Determining initial rent. (i) To determine that 
the initial rent to owner is reasonable, the HA must use a qualified 
State-certified appraiser who has no direct or indirect interest in the 
property or otherwise.
    (ii) For each unit type, the appraiser must submit a completed 
comparability analysis on Form HUD-92273 (Estimates of Market Rent by 
Comparison--the form is available at the Department of Housing and Urban 
Development, HUD Custom Service Center, 451 7th Street, SW, Room B-100, 
Washington, DC 20410) for HA review and approval. The appraisal must use 
at least three comparable units in the private unassisted market.
    (iii) The HA must certify to HUD that the initial rent to owner for 
a unit does not exceed the reasonable rent.
    (2) Annual Adjustment: Comparability study. (i) In determining the 
annual adjustment of rent to owner (in accordance with Sec. 983.254), 
the adjusted rent to owner must not exceed a reasonable rent as 
determined by an HA ``comparability study.''
    (ii) The comparability study is an analysis of rents charged for 
comparable units. The HA comparability study must determine the 
reasonable rent for the contract units as compared with rents for 
comparable unassisted units. The adjusted rent for a contract unit may 
not exceed the reasonable rent as shown by the comparability study.
    (iii) The comparability study must include a completed comparability 
analysis for each unit type on Form HUD-92273 (Estimates of Market Rent 
by Comparison). The comparability

[[Page 659]]

study may be prepared by HA staff or by another qualified appraiser. The 
appraiser may not have any direct or indirect interest in the property 
or otherwise.
    (iv) The comparability study must show how the reasonable rent was 
determined, including major differences between the contract units and 
comparable unassisted units.
    (v) If the owner requests a rent increase by the 120 day deadline 
(in accordance with Sec. 983.254(a)), the HA must submit a comparability 
study to the owner at least 60 days before the HAP contract anniversary. 
If the HA does not submit the comparability study to the owner by this 
deadline, an increase of rent by application of the annual adjustment 
factor (in accordance with Sec. 983.254(b)) is not subject to the 
reasonable rent limit.
    (d) Owner certification of rents charged for other units. By 
accepting each monthly housing assistance payment from the HA, the owner 
certifies that the rent to owner is not more than rent charged by the 
owner for comparable unassisted units in the premises. The owner must 
give the HA information requested by the HA on rents charged by the 
owner for other units in the premises or elsewhere.

(Information collection requirements in this section have been approved 
by the Office of Management and Budget under control number 2577-0169.)