By. Stephen Niles and Scott Travers

HUD issued a new Rule and Housing Notice last week that should be of interest to owners of Mark-to-Market (M2M) projects that struggle to meet their financial and/or operational needs. Many M2M project owners have long awaited an approach to address M2M projects that have insufficient revenues because they were restricted to only Operating Cost Adjustment Factor (OCAF) rent increases under the M2M program. The new Rule and Notice invite different groups of M2M owners to apply for Budget-Based Rent Adjustments (BBRAs) that will increase their rents to a level intended to promote long-term sustainability. We think the new guidance is useful, but the priority groups set forth by HUD may mean that only those M2M properties in the most distressed condition will ultimately get the additional rental revenues they need. Click here to view our full Housing Alert addressing the new guidance.

Should you have any questions about this KH Housing Alert or require any further information, please contact Stephen Niles or Scott Travers.

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This housing alert is intended as a source of information for clients and friends of Klein Hornig LLP. The content should not be construed as legal advice, and readers should not act upon information in this publication without professional counsel. This housing alert may be considered advertising under certain rules of professional conduct. Copyright © 2024 Klein Hornig LLP. All rights reserved.