DSHS Annual STRMU Cap and Rent Reasonableness

1. DSHS Annual STRMU Cap and Rent Reasonableness

2. 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

3. 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: • 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.

4. 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.

5. Do PS have to set an Annual STRMU Cap? • No. Project Sponsors have the option to set a cap if needed.

6. 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.

7. 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.

8. 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.

9. 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.

10. 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.

11. 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.

12. 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.

13. 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

14. 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.

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

16. Where do we get this information? • MLS listings • Newspapers • Apartment locating books and/agencies • Lease information from landlords • Local Housing Authority

17. 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.

18. 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).

19. 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