How much rent can I charge? 

An owner should charge a rental amount similar to what is being charged to non-voucher tenants for comparable units in the same area.  HCVP rules require CMHA approval of all rent amounts. 

CMHA must verify that each potential gross rent passes three tests:

1. Voucher Payment Standard (2008)
2. Renter Income Affordability
3. Rent Reasonableness Acceptability

(Whether the renter or the landlord is responsible for utilities, all program rents must include cost provisions based on CMHA’s utility allowance schedule for 2008) 

The voucher payment standard and renter income affordability are calculated prior to the HQS inspection, and rent reasonableness is calculated after the HQS inspection.  CMHA will first verify that the requested rent and all applicable utilities fall within the agency’s voucher payment standard guidelines. 

Voucher Payment Standard

In order to fully understand the voucher payment standard, the Fair Market Rent (FMR) needs to be explained.  The FMR  is HUD's annually established schedule of local subsidy maximums for gross rent (total rent and utilities based on bedroom size).  HUD requires that individual agencies set their own per contract subsidy maximums for all bedroom sizes by using a percentage of the FMR.  This is called the voucher payment standard and it must fall between 90 and 110 percent of FMR. 

CMHA operates under a two-tiered payment system:

1. Non-Exception Rent Areas – includes most areas in the city and a few in the county with typical market values.
   1. CMHA pays 100 percent of FMR as a voucher payment standard.
2. Exception Rent Areas – includes many suburban areas and a few select city neighborhoods.  The rent charged can be 10 percent higher because the area demands higher rents.
   1. CMHA pays 110 percent of FMR as a voucher payment standard.

    

Renter Income Affordability

Every HCV renter must pay at least 30% of his or her adjusted monthly income toward rent and utilities, but no more than 40%.  CMHA verifies that the renter’s projected rent portion will fall within these guidelines.  Since CMHA cannot pay more than the applicable voucher payment standard, a renter may choose to pay additional funds toward the gross rent, up to 40% of their adjusted income.  CMHA’s team of HCV professionals must approve all final rent amounts and will help to navigate these issues during the contracting process.

Rent Reasonableness Acceptability

The third and final test is the rent reasonableness assessment.  CMHA verifies that the voucher holder will pay a rent that is comparable to non-assisted renters in the area.