May a PHA use the imputed debt service figures previously established by HUD to establish a system of flat rent?
A4: No. Flat rents must be based on the market. The imputed debt service figures were issued by HUD in 1989 in connection with the establishment of the old ceiling rents. These numbers would not reflect a market rent. PHAs may retain ceiling rents that were authorized and established before October 1, 1999, for a period of three years from October 1, 1999. After this period, the PHA must adjust ceiling rents to the level required for flat rents. After October 2002, the PHA may retain ceiling rents as part of its income-based rent policy but must absorb any cost associated with doing so.
