Finding Text
Department of Housing and Urban Development
14.871 Housing Voucher Cluster
Non-compliance with HUD Reasonable Rent Requirement
Repeat Findings: No
Criteria:
The PHA must determine that the rent to the owner is reasonable at the time of initial leasing. Also,
the PHA must determine reasonable rent during the term of the contract (a) before any increase in
the rent to owner, and (b) at the HAP contract anniversary if there is a 10 percent decrease in the
published Fair Market Rent in effect 60 days before the HAP contract anniversary. The PHA must
maintain records to document the basis for the determination that rent to owner is a reasonable rent
(initially and during the term of the HAP contract) (24 CFR sections 982.4, 982.54(d)(15),
982.158(f)(7), and 982.507).
Condition and Context:
We tested a sample of 25 HAP contracts and found 1 tenant where the rent reasonableness
documentation was missing from the tenant file and therefore we could not determine if rent
reasonableness was properly completed or reviewed.
Cause:
The City does not have an effective policy in place to ensure proper documentation of rent
reasonableness.
Effect or Potential Effect:
The City would fail to comply with HUD’s reasonable rent guidelines.
Questioned Costs:
Unknown.
Recommendation:
We recommend that the City implements a policy to track documents necessary for a tenant’s
evaluation and annual re-evaluation to ensure all are properly documented in the tenant files.
Views of Responsible Officials:
The City agrees with the finding. See Section V for the corrective action plan.