REGULATIONS: Expect Rent Caps And Limits On Residual Receipts in 2012

Prepare now for policy changes coming down  the pike.

If you thought the new year would bring budget constrictions, you were right -- and those tightening purse strings could leave your property gasping for air.

On Nov. 18, 2011, President Obama signed into law the Department of Housing and Urban Development's 2012 budget, which adequately funded Section 8 Project Based Rental Assistance (PBRA) for 2012. However, HUD is intent on slowing PBRA expenditures in preparation for even tighter budget constraints in 2013.

Therefore, HUD sent out a memo on November 22 titled "Impact of HUD's Fiscal Year 2012 Budget on Section 8 Project Based Rental Assistance" that outlined several policy changes that will eventually be announced in an official housing notice. The agency stated that it will:

• Use funds currently held in project residual receipts  accounts to reduce assistance payments.
• Limit all Option 4 renewals and annual rent  adjustments to OCAF increases if proposed rents  exceed the market rate.
• Require rent comparability studies to justify  proposed rents that exceed 110 percent of small area  f......