NC ESG RENT REASONABLENESS DETERMINATIONS (if not available at nchousingsearch.com)

Before providing rent assistance to anESG household, the grantee must determine that the rent is a reasonable rent in comparison to rent for other comparable unassisted units. To make this determination, the grantee 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 theowner in accordance with the lease.

Determination of Rent Reasonableness is required BEFORE:

  • Paying any portion of unpaid back rent.
  • Providing security deposit assistance.
  • Entering into a contract, or making a one time payment, to assist the household with their rent in an existing unit or if they are moving in a new unit.

Documentation of Rent Reasonableness must be retained in the ESG household file.

Rent Reasonableness Documentation Requirements

If SocialServe.com is not able to provide a rent reasonableness determination in your area,you must conduct and document the subject uniton the attached form. When gathering the subject unit information, focus on the following:

  • Three (3) comparable unitsare required to support the subject unit’s rent.
  • Use similar unassisted (i.e. non-subsidized) units, currently vacant unassisted units, or unassisted units leased within the past twelve months. Units cannot be subsidized units, tax credit units, or units currently using federal housing assistance. Comparableunits must be unassisted units and may not be located in a substantially assisted apartment complex/multifamily property.
  • Comparable units must be dated less than six months from the transaction effective date.
  • Comparable unitsmust be in close proximity to the subject unit, in the surrounding neighborhood, whenever possible. If necessary, the geographic area can be expanded.
  • The comparable unit’sbedroom size and unit type must be identical to the subject unit.
  • Comparableunits may be located in the same building, or group of buildings, as the subject unit of an apartment complex/multifamily property.
  • The Gross Rent of each comparableunitmust equal or exceed the Gross Rent of the subject unit. Gross rent equals contract rent plus utility allowance. NOTE: Any changes to the contract rent or utilities will change the gross rent amount.
  • Use the local PHA utility schedule allowances based on the actual unit size for the subject unit and the comparable unitswhen determining Gross Rent.
  • In rare circumstances, if comparables are not available for the same unit size and type, surveys for a smaller unit of the same type would be acceptable. For example, if no 4BR apartment rent unitsare available in your subject area, you would use a 3BR apartment. The smaller unit must have similar services, amenities, etc.

Calculating Gross Rent Amount

To calculate the gross rent of a unit that is being tested by the FMR standard:

Refer to:

References

Apartment Listings/Ads in Telephone Directories; Telephone Surveys : Landlord Associations; City/Town List of Registered Landlords; Other local Public Housing Agencies (PHAs); Newspaper Rental Ads; Apartment Shopper’s Guides;Realtors; and Rental Referral Services.

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Informational - NC ESG Rent Reasonableness Determination