The window for
submitting a rent increase request is October 1st – December 31st.
to enter the property’s rent increase request on-line. MHDC will
not accept mailed rent increase requests unless the property has
12 units or less.
Important Note - Rent increase
requests for senior designated properties (i.e., properties for
residents age 55 and older) are capped at the lower of the prior
year Social Security Cost Of Living Adjustment (COLA) or the allowed 7%
maximum. However, in years of back-to-back 0% COLA adjustments, the
owner will be allowed to increase rents by a maximum of 2% in the 2nd
year. MHDC will use the 2012 COLA for all rent increases approved with
an effective date in 2013. Please visit
www.ssa.gov/cola/automatic-cola.htm for previous year COLA
2012 COLA – 3.6%; Owner may increase rents by a maximum of 4% for 2013
during the budget process, you may budget an increase up to 7% or the
Social Security COLA adjustment. The system will recognize that the
amount exceeds your current MHDC approved gross potential rent amount,
and will ask you if you want to submit a rent increase – yes or no.
Answering yes will pull up a rent increase packet with all the fields
that are needed to submit a rent increase. If you answer no, the system
will warn you that no rent increase is approved and you will need to
submit your rent increase on-line by December 31st.
User name and
password is the same user name and password used to access the budget
and financial statement modules.
The new process
will not change the property’s effective date. The effective date will
still need to be at least one year from the effective date of your last
rent increase submission as noted on the approved Schedule II.
All TC only
properties will be required to update the provided Rent Grid with
requested rent increase amounts for each bedroom type.
Note: All information on the Rent Grid has been entered by MHDC. Rent
Grid information is based on previous MHDC-approved rent schedules or
the property’s Land Use Restriction Agreement.
All TC only
properties are required to enter current utility allowance information.
Utility allowances should not be older than 1/1/2012. If a current
utility allowance is not available an explanation is required.
Attach Copy of
Exhibit A-21 Notice to Residents of Management’s Intention to Submit a
Rent Increase Request to MHDC for Approval
Note: Owner/Management is required to
deliver to residents and post for public viewing
MHDC Exhibit A-21 Notice to Residents of Management’s Intention to
Submit a Rent Increase Request to MHDC for Approval prior to
submitting the rent increase request to MHDC. A copy of the notice to
residents must be included with the submitted rent increase request.
This notice may not be substituted with alternative language.
Attach copy of
current rent roll. Note: Make sure rent roll includes lease
move-in/renewal effective dates for each resident.
MHDC will review the submitted
rent increase for the following:
1. Is the property inspection closed?
2. Have 12 months passed since the last rent increase?
3. Are the most current approved rents being charged?
4. Requested rent increase amounts do not exceed 7% or the Social
5. Does the increase meet Sec 42 requirements?
6. Is the property listed on MHDC's non-compliance log?
7. Are non-compliance issues listed in AOD?
8. Budget turned in?
9. AFS turned in?
Note: Rents MUST NOT be implemented until
the Schedule II is signed by MHDC and returned to the owner with the
effective date specified. In the event the owner/management has not
complied with the list above, the Schedule II will be placed on hold
until the non-compliance is corrected.
If Section 8 voucher
rent is collected at a higher amount than the tax credit rent and the
Section 8 rent exceeds the 7% maximum increase or the Social Security
COLA adjustment, MHDC will recognize the higher amount provided that
documentation is submitted showing the rent amount and the effective
date (i.e., signed lease). This rent is known as the “Section 8 Tenant
Rent” and is contingent on the resident receiving Section 8 vouchers.
The Schedule II must reflect the two rent types.
If a Program Agency
(i.e., HUD/MHDC and Rural Development) is responsible for setting rents,
a copy of the approved rents must be submitted to MHDC along with the
proposed Schedule II