Rent Adjustments

(1) Annual and Special Adjustments. (a) Contracts Rents will be adjusted as provided in this rule upon submittal to the Agency by the Owner of a revised schedule of Contracts Rents, provided that the unit is in decent, safe, and sanitary condition and that the Owner is otherwise in compliance with the terms of the Lease and Contract. Subject to the foregoing, adjustments of Contract Rents will be as follows: 1. The Annual Adjustment Factors which are published annually by HUD (see 24 CFR Part 888) will be utilized. On or after each anniversary date of the Contract, the Contract Rents may be adjusted effective with the month following the submittal by the Owner of a revised schedule of Contract Rents which may be no higher than Rents established by applying the applicable Annual Adjustment Factor most recently published by HUD to the Contract Rent minus the monthly amortization amount of the rehabilitation loan, or the Contract Rent established at the end of the rehabilitation loan term. These increased Contract Rents must then be examined in accordance with Rule 0770-31-.09 (2) and may adjusted accordingly. Contract Rents may be adjusted upward or downward, as may be appropriate; however, in no case may the adjusted rents be less than the Contract Rents on the effective date of the Contract except as otherwise provided. 2. A special adjustment, subject to HUD approval, to reflect increases in the actual and necessary expenses of owning and maintaining the unit which have resulted from substantial general increases in real property taxes, utility rates, assessments and utilities not covered by regulated rates, may be recommended by the Agency for approval by HUD but only if and to the extent that the Owner clearly demonstrates that these general increases have caused increases in the Owner’s operating costs which are not adequately compensated for by annual adjustments. The Owner must submit financial information to MODERATE REHABILITATION PROGRAM CHAPTER 0770-3-1 the Agency which clearly supports the increase. For Contracts of more than twenty units, the Owner must submit audited financial information. (2) Overall Limitation. (a) Notwithstanding any other provisions of this part, adjustments as provided in this section must not result in material differences between the rents charged for assisted and comparable unassisted units, as determined by Agency (and approved by HUD in the case of adjustments under Rule 0770-3-1-.09 (1) (b). However, unless the rents have been adjusted this limitation should not be construed to prohibit differences in rents between assisted and comparable unassisted units to the extent that differences existed with respect to the initial Contract Rents. Authority: T.C.A. §13-23-115 (18). Administrative History: Original rule filed July 13, 1982; effective August 12, 1982. 0770-3-1-.10 ESTABLISHMENT OF INCOME LIMIT Schedules: 30 percent occupancy by very low-income families. (1) Income limit Schedules for Moderate Rehabilitation are the same as those established pursuant to 24 CFR 882.112 (c). (2) Occupancy by Very Low-Income Families. (a) Owners in the Moderate Rehabilitation Program will be required under the Contract to lease, to the maximum extent feasible, at least 30 percent of the units under Contract to Very Low- Income Families (b) The Agency must administer its Moderate Rehabilitation Program and Existing Housing Program under this Part so that at least 30 percent of the Families assisted by the Agency under these Programs are Very LowIncome Families. To this end the Agency may refer Very Low- income Families to other Owners rehabilitating vacant units under the Moderate Rehabilitation Program or provide assistance to such Families through its Existing Housing Program.