HUD’s Office of Multifamily Housing Programs published Housing Notice 2024-05, which allows budget-based rent adjustments (BBRA) for Section 8 project-based rental assistance housing assistance payment contracts at properties subject to a M2M Use Agreement. First-priority properties are eligible to apply now for the first-come, first-served funding. Properties in Group A must meet one of the following criteria:
- In the most recent REAC inspection, the property received an aggregate score below 30.
- In each of the last two REAC inspections, the property received an aggregate score below 60. The two inspections may not occur within ten months of each other. If two inspections occur within ten months, the latter will generally be considered for this purpose. In the event of a dispute, request for adjustment or appeal, the score representing the final disposition of the dispute, adjustment or appeal will be used.
- The Financial Statements for the Property’s most recent fiscal year indicate that the Property’s Operating Cost Coverage Ratio is less than 1.0.
- The Financial Statements for the Property indicate that the owner made Owner Contributions of over $3,000 per unit in the most recent fiscal year or in excess of $1,500 per unit in each of the last three fiscal years.
- The first mortgage debt on the property has been acquired by HUD through a payment of claim on a loan insured by the FHA; the property has been acquired by HUD through foreclosure; the property has received a notice of a pending foreclosure issued by the lender or HUD; the property is being transferred from the borrower to a third party in lieu of foreclosure pursuant to a transfer of physical assets consistent with a plan approved by OAMPO’s Property Disposition Division; or the property is otherwise subject to a property disposition action administered by OAMPO’s Property Disposition Division.
- The average physical vacancy rate of the residential units at the property has exceeded or equaled 25 percent for the most recent 24-month period.
If you have a M2M property that meets HUD’s definition of the First Priority Group, please submit the Initial Submission through the form available on HUD’s Post M2M website. Requests will be reviewed on a first-come-first-served basis, but applications received before 11:59 p.m. ET on March 28 will be deemed received simultaneously. HUD will invite owners who qualify to submit a final submission, pending funding availability. The final submission will contain all the necessary documentation to confirm eligibility and allow HUD to conduct a complete evaluation of the project to assess the needed BBRA.
HUD is planning a training on the notice on March 12 at 1 p.m. EST, register here. If you have any questions about the notice, please email bbra@hud.gov.
