Asset Management > Program Compliance Accounting

 

> Rent Increases > Tax Credit (TC) Only On-line Rent Increase Submission Procedures

 

MHDC’s approval for Tax Credit (TC) Only rent increases are not based on the property’s approved budget. Note: Please refer to the separate On-line Rent Increase Submission Procedures for Tax Credit Properties with MHDC or HOME Funds.

 

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The window for submitting a rent increase request is October 1st – December 31st. Go to amrs.mhdc.com 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.
 

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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 adjustments.

2012 COLA – 3.6%; Owner may increase rents by a maximum of 4% for 2013
 

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To submit 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.
 

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User name and password is the same user name and password used to access the budget and financial statement modules.
 

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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.
 

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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.
 

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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.
 

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Attach Copy of MHDC 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.
 

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Attach copy of current rent roll. Note: Make sure rent roll includes lease move-in/renewal effective dates for each resident.
 

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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 Security COLA

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.
 

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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.
 

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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





 

 

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