Note that this Chapter information the lease estimations used for Units restored prior to the development of this current draft of the Mod Rehab Administrative Plan that are still functional, along with the lease calculations to be used when it comes to 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 regular monthly expense of housing an Eligible Family and is the sum of the Contract Rent and any energy allowance. See 24 C.F.R. § 882.102.

The initial Gross Rent for any Unit must not exceed the Mod Rehab FMR [12] relevant 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 preliminary Gro ¬ ss Rents which exceed the relevant Mod Rehab FMRs by up to 10% for all Units of a provided size in specified areas where HUD has identified that the leas for standard Units suitable for the Existing Housing Program are more than 10% greater than the Existing Housing FMRs. [13] The BHA will submit documents demonstrating the necessity for such exceptions leas in the location to the HUD Field Office. See 24 C.F.R. § 882.408(a) and (b).

(b) The BHA might approve changes in the Contract Rent subsequent to execution of the AHAP (see area 5.2) which lead to an initial Gross Rent which goes beyond the Mod Rehab FMR suitable 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 4 or less SRO Units, the FMR for that size structure (the FMR for a 1-, 2-, 3-, or 4-bedroom Unit, as suitable) need to be utilized to identify the FMR constraint instead of utilizing the different FMR for each SRO Unit. To figure out the FMR restriction for each SRO Unit, the FMR for the structure must be allocated similarly 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 effectiveness Units might be no higher 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 initial Contract Rent and Base Rent for each Unit will be calculated in accordance with HUD requirements. See 24 C.F.R. § 882.408(c). The quantities may be identified in accordance with the following methods:

(a) Initial Contract Rent: The preliminary Contract Rent amounts to the base lease plus the month-to-month expense of a rehab loan but not more than the optimum stated at the end of this area. See 24 C.F.R. § 882.408(c)( 2 ).

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

(c) Monthly Cost of a Rehab Loan: The regular monthly cost of a rehabilitation loan need to be computed utilizing:

1. The real rate of interest on the part of the rehabilitation costs borrowed by the Owner