View Rule

The Mark-to-Market program preserves affordability and availability of affordable rental multifamily properties with federally insured mortgages. The purpose of the Mark-to-Market program is to reduce rents to market levels by restructuring existing debt to levels supportable by these rents. This rule revises the Mark-to-Market program regulations to clarify that annual adjustment of restructured rents under the program will be based on an operating cost adjustment factor determined by HUD and to further clarify when HUD may approve rent adjustments on a budget basis. The current regulations authorize HUD to approve rent adjustments on a budget basis; however, HUD has never exercised this authority.  Mark-to-Market program renewal contracts specify that contract rents will be adjusted annually by an operating cost factor and that no other rent adjustments will be made during the term of the contract. The rules will bring greater clarity to the Mark-to-Market program and will align the Mark-to-Market regulations with recent legislative changes, specifically the Consolidated Appropriations Act, 2023 (Pub. L.117-328, December 29, 2022), which amended MAHRA section 515 to add a new subsection allowing budget-based rent adjustments for Mark-to-Market projects.