Finding Text
ITEM # 2023-001 SPECIAL TESTS – RENT REASONABLENESS
Continuum of Care
Assistance Listing No. 14.267
Department of Housing and Urban Development
Criteria
For Continuum of Care grants, Uniform Guidance requires a compliance special test for
reasonable rental rates stating “where grants are used to pay rent for individual housing units, the
rent paid must be reasonable in relation to rents being charged for comparable units taking into
account relevant features. In addition, the rents may not exceed rents currently being charged by
the same owner for comparable unassisted units, and the portion of rents paid with grant funds
may not exceed HUD-determined fair market rents.”
Condition and Context
Safe Haven used grant money to pay rent for an individual housing unit in excess of the HUDdetermined
fair market rent for Davidson County.
Questioned Cost
The costs in excess of fair market rents totaled $206.50.
Cause
Safe Haven performed and reasonable rent analysis and concluded the rent was not reasonable;
however, approval to pay and proceed with the lease still occurred.
Effect
Safe Haven was not in compliance with the special tests compliance requirement of the
Continuum of Care agreements.
Recommendation
We recommend Safe Haven pay up to the HUD-determined fair market rent when leases exceed
these rates and use non-grant money to cover the amount in excess. Views of Responsible Officials and Planned Corrective Action
Safe Haven concurs with the finding and will adhere to the rent reasonableness requirements of
Continuum of Care awards. To ensure compliance with rent reasonableness, management will
vouch all rent reasonableness analyses to their respective disbursement request and ensure
amounts disbursed do not exceed HUD-determined fair market rent rates.