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Monday, October 28, 2013
Contact: Jesse Broder Van Dyke (808) 768-6928
Tenant-based enhanced voucher benefits for eligible residents of Kulana Nani Apartments
Only Kulana Nani Apartments affected by rent restructure
The City and
Residents earning at or below 80 percent of
The issuance of tenant-based enhanced vouchers is effective upon the first rent increase after paying off the mortgage. To initiate the benefit process, the cityís Department of Facility Maintenance (DFM) announced today that Kulana Nani Apartments will undergo a rent structure adjustment. The purpose and necessity of the rent adjustment is to replace rent standards and rates that lapsed upon prepayment of the Section 236 loan, and to trigger issuance of the vouchers.
A team from the cityís Department of Community Services will work directly with Kulana Nani tenants to complete the tenant-based enhanced voucher application process.
Rents for residents with incomes in excess of 80 percent of median income, and who do not qualify for a tenant-based enhanced voucher, will be set at 30 percent of the tenantís income.
Kulana Nani is one of 12 city-owned rental properties being sold to private entities under the Honolulu Affordable Housing Preservation Initiative (HAHPI). It is the only property that will experience changes to its rent structure. None of the other 11 complexes will be affected.
Kulana Nani Apartments - Rent Adjustment
Tax Map Key: (1) 4-6-31: 15
Owner: City and
Property Manager: EAH, Inc.
Unit Mix: (40) 2-Bedroom, (80) 3-Bedroom, and (40) 4-Bedroom Rental Apartments
Parking: 206 Parking Stalls
Frequently Asked Questions:
Q. Why is the city adjusting rents at Kulana Nani now?
A. Kulana Nani was originally developed under the HUD Section 236 loan program. When the city pre-paid the mortgage in February 2013, the existing qualified tenants became eligible to receive a tenant base enhanced voucher which is very similar to a Section 8 voucher. However, as a pre-condition to issuing the enhanced voucher the owner of the property must reset the rent structure.
Q. Why did the city chose to prepay the HUD 236 mortgage in the first place?
A. The city wanted every qualifying family in Kulana Nani to receive a tenant based enhanced voucher in order to provide the family with the security of a dedicated source of rental assistance designed to protect the family from any future rent increases. The HUD Section 236 Mortgage would have matured (been fully repaid) in June 2013. Had the city elected to just let the mortgage mature, the existing tenants at Kulana Nani would not have been eligible for tenant based enhanced vouchers. It was the Cityís affirmative action to pre-pay the HUD Section 236 mortgage that provided tenants with eligibility for the tenant based enhanced vouchers.
Q. How were the new rents determined?
A. HUD rules require conducting a rent comparability study to determine a comparable market rent that will be used as the new rent for determining the value of enhanced vouchers. For Kulana Nani the city accepted a Rent Comparability Study commissioned by the purchasers of the property, Honolulu Affordable Housing Partners, to establish the comparable market rent. The study was conducted by Novogradac and Company, LLC, Certified Public Accountants in July 2013.
Q. Who qualifies for a tenant based enhanced voucher?
A. In general households earning up to 80 percent of median income. Senior citizens and the disabled earning up to 95 percent of median income may also qualify for a tenant based enhanced voucher.
80% of Median Income by Household Size
Q. How much do families with a tenant based enhanced voucher pay for rent?
A. As a general guideline, households with a tenant based enhanced voucher will pay 30 percent of their household income for rent. The federal government will pay the difference between the posted rent and the tenant contribution.
Q. What about families who do not qualify for a tenant based enhanced voucher?
A. Rent for families with incomes above 80 percent of median income, who do not qualify for a tenant based enhanced voucher, will pay 30 of the household income for rent. Note: there is no cap on the rent; it is 30 percent of income. Therefore, if the family is earning $10,000 per month, the rent will be $3,000 and there is no rent subsidy.
Q. What happens next?
A. Staff from the cityís Department of Community Services will begin the process of income certifying all tenants at Kulana Nani. This will include having tenants fill out applications and submit income verification documents like tax returns and pay check stubs.
Q. How many families are involved?
A. Kulana Nani has 160 rental units of which 32 already receive Section 8 rental assistance through an existing contract with HUD. There are also a handful of tenants who have a Section 8 tenant based voucher. The remaining tenants will participate in the income verification process to determine if they qualify for a tenant based enhanced voucher.