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HUD Suspends RCS Requirements in Section 8 Renewal Policy Guide

HUD sent a memorandum to its Hubs, Field Offices, Project Managers, and Contract Administrators regarding the changes to the Section 8 Renewal Policy Guide specific to the Rent Comparability Studies (RCS).

In response to feedback from NAHMA and other industry stakeholders, the Department has decided to suspend the RCS requirements effective immediately. Appraisers do not have to follow these guidelines, nor can field staff or PBCAs enforce these provisions.

HUD will consider further revisions to the RCS guidance and has indicated to NAHMA that the Department currently plans to put any revisions to the RCS policy out for public comment before implementation.

A copy of this memo may be found here:

Background on Changes to RCS

Section 9-23, 9-24, and 9-25 of the Section 8 Policy Renewal Guide page changes provided new procedures for appraisers to follow when market rents in an owner’s RCS exceeded 110 percent for small area Fair Marker Rents (SAFMR) in metropolitan areas or Fair Market Rents (FMR) in non-metropolitan areas.

In a June 22 letter to HUD Secretary Shaun Donovan, NAHMA and other industry stake holders strongly opposed the RCS policy changes. The requirements that called for appraisers to include data in the RCS were arbitrary and statistically flawed because:

· Information on the percentage of properties in the market area that exceed SAFMRs does not exist; and

· SAFMR and property characteristics used in the paired rent analysis are two different, unrelated types of data.

The letter urged HUD to rescind the guidance. A copy of that letter may be found here:

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