Program Compliance Accounting
Increases > Frequently Asked Questions
Q: When can I submit my
Calendar year end properties - The window for submitting a rent
increase is October 1st - December 31st.
Fiscal Year end properties - The window for submitting a rent
increase is the three months prior to the start of the properties
new fiscal year. Example: Rent increase window for a 6/30 fiscal
year would be April 1st – June 30th.
Note: All rent increase submitted outside of the applicable
window will not be processed.
Are we still allowed to request up to a 7%
7% rent increases will be allowed only
for properties that are not senior designated (i.e., properties for
residents age 55 and older). Rent increase requests for all senior
designated properties 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
While 7% is the maximum amount that can be requested, MHDC
encourages rent increase requests to reflect what the management
company thinks the market can support.
Q: The COLA is 2.3%.
Does my property’s rent increase get increased the full 2.3%, or is my
property’s rent increase rounded to the nearest %?
A: The COLA amount is
rounded up or down depending on the decimal position. A 2.3% COLA
equals a 2% rent increase. A 2.5% COLA would equal a 3% rent
Q: How do I submit my rent increase?
A: All rent
increase requests are required to be submitted on-line thru MHDC’s
on-line system. Please log on to
https://amrs.mhdc.com to submit your rent increase.
The user name and password are the same as the user name and
password used to access the budget and financial statement systems.
will not accept mailed rent increase requests unless your
property has 12 units or less.
Q: How do I determine my
effective Date for my rent increase submission?
effective date needs to be at least one year from the effective date
of your last rent increase as indicated on the approved Schedule II.
The earliest a property can request a rent increase is one year from
when the property’s last building was place in service.
Example: Property received a rent increase in 2012 effective
July 1, 2012. The earliest a 2013 rent increase may become effective
is July 1, 2013.
Q: Do I have to request a
rent increase every year?
No – However, it is strongly
encouraged. Failure to request a rent increase may cause the
property to experience financial hardship. MHDC will not allow
a property to request an increase that is more than 7% or the Social
Security COLA adjustment % to help make-up for not requesting rent
increases in previous years.
Q: Do I have to
implement the full MHDC approved rent increase in any given year?
No – However, keep in mind MHDC’s
approval process is based on what the property requests.
The property’s request should be based on what the market can
support. Failure to implement a MHDC approved rent increase
may lead to future rent increase being denied until the property can
provide proof that the market can now support a rent increase.
Q: Does MHDC have a required format for notifying residents of a
Owner/Management is required to post for public viewing
- “Notice to Residents of Management’s Intention to Submit a Rent
Increase Request to MHDC for Approval.” The notification must be
given prior to submitting an increase to MHDC for approval
A copy of the notice to residents must be included with the
submitted rent increase request to MHDC. This notice may not be
substituted with alternative language. MHDC may reduce or deny a
property’s rent increase, but MHDC will not increase rents higher
than the requested amount. Note: the requirement is in
addition to providing notice to each resident.
Owner/Management may send customized
letters to each resident or use the Exhibit A-21 form. The
language on the customized resident letter must be consistent with
the information on Exhibit A -21.
Can I request a rent increase at the same time I submit my
Yes - the rent increase request
window is October 1st – December 31st.
To submit during the budget process, the system will recognize that
the requested 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.
Q: Is my approved
rent increase tied to my approved budget?
properties that have more than a tax credit only relationship with
MHDC (i.e. MHDC or HOME loan) will have their rent increases tied to
an MHDC approved budget. Tax Credit Only properties are
exempt. Since the rents are tied to the budget, it is
imperative that the property submits a realistic, itemized operating
income and expense budget.
Q: What are
the performance indicators that MHDC looks at when approving, reducing,
or denying a rent increase?
A: The two main
performance indicators MHDC looks at when approving rent increases
are cash flow and DCR. MHDC considers a healthy property to maintain
a 1.20 DCR. Any budget that projects a property to exceed a 1.20 DCR
may have their rent increase reduced or denied. Higher DCRs may be
allowed for properties to achieve their agreed upon owner
distribution and re-pay surplus cash notes and remaining deferred
developer fees. In any event, MHDC will not approve an increase that
is more than 7% or the Social Security COLA adjustment.
many rent comparables do I need to submit?
Properties must submit Three (3)
comparable rents in the area for each bedroom type.
Explanations are required if three comparable rents cannot be
provided. Rents from newspapers are acceptable. MHDC’s
AMRS system also includes the names of other MHDC properties that
are located near the submitting property.
Why do I
need to submit a rent roll?
MHDC reviews the property’s rent roll to
verify current rents and occupancy levels. This information is
used to help MHDC determine if a rent increase is needed. Rent
increase may be denied if MHDC determines a significant number of
tenants are not being charged current rents.
Q: Can I appeal MHDC’s
rent increase decision?
Yes - A property may appeal
MHDC’s decision to amend or deny a rent increase request. The
property must submit their appeal in writing within 30 days from the
date of the initial decision letter. Appeals must include additional
information for consideration. The appeal process is your
opportunity to provide additional information that you hope would
change the outcome of our decision. Please refer to the
MHDC Rent Increase Appeal Process
section of MHDC’s website for further information.