DSHS Annual STRMU Cap and Rent Reasonableness

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					DSHS Annual STRMU Cap and
   Rent Reasonableness
What is the DSHS Annual STRMU Cap?



It is a formula that Project Sponsors can use
to establish a dollar amount limit on the total
amount of STRMU assistance a HOPWA
eligible client can receive in a year.
Section 10-12 in the HOPWA Program
Manual
Why would a Project Sponsor want to
set a limit on the amount of money a
client can receive for STRMU?

There may be many different reasons:
1. A Project Sponsor’s budget for STRMU is not enough to
   meet the established goal of STRMU households to be
   served.
2. A Project Sponsor wants to serve the individuals on the
   STRMU waitlist and so needs to reduce the amount of
   STRMU assistance to current STRMU clients.
3. A Project Sponsor experiences STRMU clients
   strategically using STRMU assistance as long-term
   perpetual assistance, and not demonstrating emergency
   need.
What is the DSHS STRMU Cap
formula?

   No less than 1 month of the FMR for the
    appropriate unit size and no more than the
    Project Sponsor’s budget STRMU funds per
    client per year (52-week period).
   Note: the STRMU Cap includes rent and
    utility assistance.
Do PS have to set an Annual STRMU
Cap?

   No. Project Sponsors have the option to set
    a cap if needed.
What does a PS do if they want to set
an Annual STRMU Cap?

   The PS must get approval from their AA.
   Establish a written policy for the cap and
    ensure the cap is applied in a consistent,
    uniform, and non-discriminatory manner.
Can a PS set multiple caps?

   Yes, if you serve multiple counties with a
    wide range of rent prices then you may want
    to ensure STRMU assistance is equitable
    among your clients.
   This must be approved by your AA.
Example

   PS STRMU budget for 2008 is $25,000 and the goal
    is to serve 10 clients ($2,500/client/year).
   The 1 month FMR for a 1 bedroom unit is $450.
   Cap can be from $450 to $2,500 per client per year
   If the Cap is set at $1,500/client/year, then the PS
    can serve 6 to 7 more clients.
What if a PS wants a monthly STRMU
cap?

   A monthly STRMU Cap can be calculated
    from your Annual STRMU Cap.
   Since clients can receive no more than 21
    weeks (147 days) of STRMU assistance,
    then take the Annual STRMU Cap/147 days
    x 30 days = STRMU monthly cap per client.
   Monthly STRMU cap can be used for
    planning/forecasting purposes
   There is no official cap on the amount of
    monthly STRMU assistance a client can
    receive (unlike TBRA) but if a PS feels a
    need to set a monthly cap, a policy must be
    established and approved by the AA.
What if we already have a monthly
STRMU Cap?

   Project Sponsors must ensure the current
    monthly STRMU Cap is within the DSHS
    formula and a written policy is established.
   AAs must ensure PS apply the formula in a
    uniform, consistent, and non-discriminatory
    manner.
If an Annual STRMU Cap is
established, does the 21 weeks (147
days) regulation still apply?

 Yes. No client can receive more than
  21-weeks (147 days) worth of STRMU
  assistance. This is a federal regulation.
 The STRMU Cap allows Project
  Sponsors to place stricter limits on the
  amount of STRMU assistance a client
  can receive for a year.
What is Rent Reasonableness?

This means that “rent charged for a unit must
  be reasonable in relation to rents currently
  being charged for comparable units in the
  private unassisted market and must not be in
  excess of rent currently being charged by the
  owner for comparable unassisted units.”
  24 CFR 574.320(a)(3) Sections 10-9 and 11-4 in the HOPWA
  Program Manual
Is this required for all HOPWA
households?

   No. This is required only for TBRA
    households and rent reasonableness must
    be verified before assistance is provided.
   Although it is not directly required for STRMU
    households, an assessment of the client’s
    current housing situation is required and the
    client should not be living in a unit beyond
    their means and perpetually dependent on
    STRMU assistance.
How do we determine Rent
Reasonableness?

There are a couple ways:
1. Use Form H in the Client Enrollment Packet
   for each TBRA household to be assisted
   (updated at least annually or as unit
   changes)
2. Create a local housing spreadsheet
   comparing units within the same area (i.e.
   by county, zip code, building complex, etc.)
   (updated at least annually)
Where do we get this information?

   MLS listings
   Newspapers
   Apartment locating books and/agencies
   Lease information from landlords
   Local Housing Authority
How do PS document this?

   Document the rent reasonableness on the
    TBRA worksheet in Form I
   Include Form H with the client file or copy the
    appropriate section of the proposed unit from
    the local housing spreadsheet.
How do we determine what is NOT
reasonable?

Reminder: the program cannot pay more than
  the FMR (including utilities).
 Average the gross rent (unit rent and utility
  allowance) of a minimum of 2 comparable
  units and the proposed unit cannot be more
  than 10% above the average of the 2 units
  (or the average of the units by area if using
  the local housing spreadsheet).
What’s next?

   Tuesday, 10-11am, January 22, 2008 –
    Comprehensive Housing Plan and Case
    Management.
   Submit questions for HOPWA TA sessions
    to HIVSTDReport.tech@dshs.state.tx.us
   http://www.dshs.state.tx.us/hivstd/hopwa/default.shtm