Rent Reasonableness and Fair Market Rents Under ESG

Rent Reasonableness and Fair Market Rents Under ESG

HUD has released a new guidance document, Rent Reasonableness and Fair Market Rent Under the Emergency Solutions Grants Program.

The Emergency Solutions Grants Program (ESG) Interim Rule allows short- and medium-term rental assistance to be provided to eligible clients only when the gross rent for the housing unit:

  1. Does not exceed the Fair Market Rent (FMR) established by HUD for each geographic area, as provided under 24 CFR part 888 and §982.503;and
  2. Complies with HUD’s standard of rent reasonableness, as established under 24 CFR 982.507.

These rules apply regardless of whether a household is seeking to maintain its current housing (Homelessness Prevention), or if the household is exiting homelessness into new housing (Rapid Re-Housing).Many ESG recipients and subrecipients have questions about how to apply these requirements and ensure that they are in compliance with the regulations. To aid in understanding the rules and implementing them, HUD has released Rent Reasonableness and Fair Market Rent Under the Emergency Solutions Grants Program. It explains the requirements and addresses how to determine whether the unit cost exceeds or does not exceed FMR, how to calculate the gross rent amount, and tips for determining and documenting compliance.Please submit any questions to HUD via OneCPD Ask A Question on the OneCPD Resource Exchange.