Owners Say Tax Credit Rent Cap For Nonprofit Transfer Program May Hamper Project Rehab Efforts

摘要

A HUD revision to the mark-up-to-market (MU2M) nonprofit transfer program which caps Section 8 rents at the low-income housing tax credit rents has raised concern among Section 8 project owners, who want HUD to rescind the policy. Section 8 groups said that in some markets, the tax credit rent cap significantly limits the extent of rehabilitation that can be done. HUD recently revised Chapter 15 of the Section 8 renewal policy guide, which applies to the MU2M nonprofit transfer program and capital repair program. In the transfer program, HUD marks Section 8 rents up to market to facilitate a change in ownership from a for-profit or limited-dividend owner to a nonprofit or from one nonprofit to another. The capital repair program allows budget-based rent increases for nonprofit owners.