HUD HCV Guidebook § 2.3

PHAs located in a mandatory SAFMR area, or that have fully opted in to SAFMRs may elect to, but are not
required to, apply SAFMRs to its PBV program. PHAs that choose to apply SAFMRs to its PBV program must23

23
     24 CFR 888.113(c)(5)

adopt such a policy in the Administrative Plan.24 If the PHA adopts such a policy, then SAFMRs apply to
projects in the following circumstances:
        • Where the proposal or project selection date under 24 CFR 983.51(g) was on or before the
             effective dates of either or both the SAFMR designation/implementation and the Administrative
             Plan policy, the PHA and owner may mutually agree to apply the SAFMR. The owner and PHA may
             not subsequently choose to revert back to the use of the metropolitan area or nonmetropolitan
             county FMRs for the PBV project.; or
        • Where the proposal or project selection date under 24 CFR 983.51(g) was after the effective dates
             of both the SAFMR designation/implementation and the Administrative Plan policy, the SAFMR
             shall apply to the PBV project if the Administrative Plan provides that SAFMRs are used for all
             future PBV projects. An owner and the PHA may not subsequently choose to apply the
             metropolitan area or non-metropolitan county FMR to the project, regardless of whether the PHA
             subsequently changes its Administrative Plan to revert to the use of metropolitan or
             nonmetropolitan county FMR for future PBV projects.
In considering whether to adopt SAFMRs for its PBV program, PHAs may want to consider the following:
       •    In what ZIP Code areas are the existing PBV projects located, and are the SAFMRs in those areas
            higher or lower than the metropolitan or non-metropolitan county FMR?
       •    How would SAFMRs impact the budget authority and the number of families the PHA can serve in
            the HCV program?
       •    Will adopting SAFMRs be a disincentive for owners of future PBV projects if the SAFMRs are lower
            than the FMRs?
       •    Will adopting SAFMRs help the PHA achieve its affordable housing goals?
       •    Will adopting SAFMRs and applying SAFMRs to only future projects create a discrepancy in the
            rent to owner between proposals and projects previously selected and future PBV projects in the
            SAFMR same area?
A PHA’s decision to apply the SAFMR to the PBV program (whether for upcoming projects or by mutual
agreement for projects underway before the PHA decision) impacts the maximum rent to owner for individual
projects, because that decision dictates whether the “applicable FMR” for purposes of PBV rent determination
rules is the SAFMR versus the metropolitan area or non-metropolitan county FMR.
For the PBV program, except for certain tax credit units, the amount of rent to owner must not exceed the
lowest of:25
       •    An amount determined by the PHA in accordance with the Administrative Plan, not to exceed 110
            percent of the applicable FMR (or the amount of any applicable exception payment standard),
            minus any utility allowance;
       •    The reasonable rent; or
       •    The rent requested by the owner.

24
   24 CFR 983.10(b)(23)
25
   24 CFR 983.301(b). Please also note that additional rent limitations may apply; for instance, the subsidy
layering review may cap the rent for a PBV project below the amount normally allowable under 24 CFR 983.301
if the project is determined to be over-subsidized based on the subsidy layering review thresholds. See 24 CFR
983.304-983.305.

As a result, the maximum rent that the PHA may permit for any PBV project located in an area without an
exception payment standard is 110 percent of the applicable FMR, minus the utility allowance, where this
amount is equal to or lower than the reasonable rent and the owner-requested rent.26