Are SAFMR guaranteed?

8 Replies

Not sure if the other background info is displaying but: I am currently in the process of purchasing a duplex. If I where to rent each unit out to section 8, would I receive the SAFMR for my zip code? Will it be without question as long as it passes inspection? SAFMR are at at 2200 for a 3 bedroom. 

No! In my market the best I've gotten is about $100 under what the HUD website says. Here is some info I copied out of the BP Blog I wrote about the truths vs. perceptions of SEC 8.

HOW RENTS ARE DETERMINED

  • HUD dictates the maximum amount they will pay per bedroom size per market. This is what the HUD chart shows for max rents allowance for every city in our market.
  • You can find the Far Market Rent amounts for every Housing Office in the country on the HUD website at this link. https://www.huduser.gov/portal/datasets/fmr.htm
  • Below is an example of the data that will be displayed.
Res Reader
  • Comparable Rent Test. SEC 8 compares your requested rent to non-SEC8 properties of the same bedroom size, same property type, similar size and age, same city, within 5 miles.

In Hampton Roads all of our cities pay 100% of market rent. Ask your Housing Office what their allowance is so you know how to guesstimate what your rent will be based on rent comps.

Some HAs use an outside vendor to determine their comparable rents. Most HAs, however,do their own comparable rent test analysis by using rent comps from similar units that have rented outside of the SEC 8 program in the same city within the last 6 months. If you have the ability to pull rent comps, print them and use the cover sheet on the next page to submit them with the RFTA.

Comps used have to be within 5 miles of the subject, within the same city, same number of bedrooms (as the unit, not the voucher), same or similar property type (single family, town home, apartment, condo, etc), similar size and similar age. The closer you can get your comps to the property you are submitting, the more likely your HA will use them.

  • Affordability Test. For this test the voucher holder cannot spend more than 30% of their income on housing – rent + utilities.

You could meet your requested rent amount based on comparable rents, but not get approved because the tenant doesn’t have enough income.


8 Myths About Section 8, Corrected: Here’s the Profitable Truth

This guy says something different... Maybe in communities where rent isn't so highly competitive and are considered "ghetto" but none of that exists in Boulder County. Anyways I'm willing to take the risk on the duplex if my objections are met and I guess I'll know my answer in about 6 months. 

@Patti Robertson - Is your area one of the 24 mandatory MSA's that must use SAFRM's? If not, do you have any experience with PHA's in these areas?

1. If your given rent is equal to the SAFMR in a mandatory SAFMR MSA, will the local PHA typically determine that the rent is reasonable? Are there instances where they have considered your rent to be unreasonable, and why?

2. How can get comfort with a rental amount that i know the PHA will consider reasonable? Craigslist comps? The Go section8 rental comp tool seems way off for a 5/6 bedroom rental. Is there a comp website or tool that you use?

Originally posted by @Lluis Allen :

@Patti Robertson - Is your area one of the 24 mandatory MSA's that must use SAFRM's? If not, do you have any experience with PHA's in these areas?

I’m not familiar with this list of 24 MSAs.  I thought all HAs had to stay at 110% or less and each set that on an annual bases along with the bedroom formula.  My HAs pay 100-110%, depending on the HA.

1. If your given rent is equal to the SAFMR in a mandatory SAFMR MSA, will the local PHA typically determine that the rent is reasonable? Are there instances where they have considered your rent to be unreasonable, and why?

They all determine if rent is reasonable.  It is one of the HUD requirements.  The rent must be reasonable, affordable, and within budget.  They have to find comparable non-sec 8 rented properties that substantiate the requested rent to determine if it is reasonable.  Personally, I submit my own comps when I submit a RFTA.

2. How can get comfort with a rental amount that i know the PHA will consider reasonable? Craigslist comps? The Go section8 rental comp tool seems way off for a 5/6 bedroom rental. Is there a comp website or tool that you use?

I don’t look at gosection8 for rent determination often, but when I have it has been a decent source.  Just stick with the high range if you have a really nice place.  I don’t sweat it too much.  I advertise to all possible tenant groups.  If I get a SEC 8 applicant first, we submit for rent approval, but keep advertising.  You are not committed until a lease is signed.  We give the voucher hold the option of paying a reservation fee equal to the rent amount to pull it off the market, but they generally don’t come up with that until after the rent determination is made.  If we get an applicant that can move in faster and we have not yet received a full reservation fee, we take it an decline the SEC 8 applicant.  

No point sweating this too much.  Just advertise for the rent you want and submit if the applicant has verifiable income of at least one times your rent.  If you don’t like the amount they approve, you aren’t committed.

@Patti Robertson thanks for the response Patti. This site provides some background on the markets that use mandatory SAFMR. 

I think i was a little confused because i didn't see the point of publishing a fair market rent for a given area if they were going to second guess what was considered a fair market rent by doing a reasonableness test. What if there aren't any properties with 5 or 6 bedrooms in an area? How can they determine what is reasonable? Do they extrapolate by adding 30% to the 4bd in the area (just like the FMR calc does)?

@Lluis Allen - They will find comparable properties.  Personally, I always submit comps with my tenant’s RFTAs.  You need to stay in the same city, within 10 miles (the closer the better), same type - single family, townhome, apartment - looking for same number of shared walls, same bedroom size as your unit - not the voucher, similar age, and similar size.