Note that this Chapter information the lease estimations used for Units rehabilitated prior to the production of this current draft of the Mod Rehab Administrative Plan that are still functional, in addition to the lease calculations to be used in the case of the rehab of new SRO Units under 24 C.F.R. part 882, subpart H.

12.1 Calculating Initial Gross Rents

Gross Rent is the overall monthly expense 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 need to not surpass the Mod Rehab FMR [12] suitable to the Unit on the date that the AHAP is executed. See 24 C.F.R. § 882.408(a). Note that the following exceptions use:

(a) Exception Rents. With HUD Field Office approval, the BHA might approve initial Gro ¬ ss Rents which go beyond the relevant Mod Rehab FMRs by up to 10% for all Units of a given size in defined locations 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 necessity for such exceptions rents in the area to the HUD Field Office. See 24 C.F.R. § 882.408(a) and (b).

(b) The BHA may approve modifications in the Contract Rent subsequent to execution of the AHAP (see area 5.2) which lead to an initial Gross Rent which surpasses the Mod Rehab FMR applicable 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 four or fewer SRO Units, the FMR for that size structure (the FMR for a 1-, 2-, 3-, or 4-bedroom Unit, as applicable) need to be used to identify the FMR constraint rather of using the separate FMR for each SRO Unit. To determine the FMR restriction for each SRO Unit, the FMR for the structure should be allocated equally to each SRO Unit. See 24 C.F.R. § 882.805(d)( 3 ).

12.1.2 FMR Limits for Efficiency Units

The gross rent for efficiency Units may 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 preliminary Contract Rent and Base Rent for each Unit will be computed in accordance with HUD requirements. See 24 C.F.R. § 882.408(c). The quantities might be determined in accordance with the following approaches:

(a) Initial Contract Rent: The initial Contract Rent amounts to the base rent plus the month-to-month expense of a rehab loan however not more than the maximum specified at the end of this section. See 24 C.F.R. § 882.408(c)( 2 ).

(b) Base Rent: The base rent should be computed utilizing the rent charged for the Unit or the approximated expenses to the Owner of owning, managing and preserving the rehabilitated unit. See 24 C.F.R. § 882.408(c)( 2 ).

(c) Monthly Cost of a Rehabilitation Loan: The regular monthly cost of a rehab loan need to be determined utilizing:

1. The real interest rate on the portion of the rehabilitation costs obtained by the Owner