Initial RAD PBV contract rents are capped at the lower of reasonable rent, 110 percent of FMR less the utility allowance, or the rent the owner requested

rad_pbv.rent_limit.initial_contract_rent_cap · v1.0.0

HUD calculates the initial contract rent for a converting public housing project from that project's own subsidy under the public housing program, using the RAD rent base year, and a PHA may raise it only through the flexibilities the Notice lists (MTW fungibility, rent bundling, foregone Demolition Disposition Transition Funding, site-specific utility allowances, tenant-paid utility savings, Restore-Rebuild reserves, and RAD/Section 18 blended rents). Whatever that calculation produces, the initial contract rent may not exceed the lower of the reasonable rent as defined in 24 CFR 982.4; an amount set by the PHA not exceeding 110 percent of the applicable fair market rent, or the applicable exception payment standard or an MTW-approved rent cap, minus any utility allowance; or the rent the owner requested.

Confidence

high

Effective from

2019-09-05

Last reviewed

2026-08-31