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Your Rights and Benefits as a Displaced Person under the Federal Relocation Assistance Program

Section 2 - Individuals and Families

This publication was superseded October 2014. This version was retained for archival purposes.


Moving Costs

If you qualify as a displaced person, you are entitled to reimbursement of your moving costs and certain related moving expenses. Displaced individuals and families may choose to be paid either on the basis of actual, reasonable moving costs and related expenses, or according to a fixed moving cost schedule. To assure your eligibility and prompt payment of moving expenses, you should contact the relocation counselor from the Agency before you move.

Actual, Reasonable Moving Costs

You may be paid for your actual, reasonable moving costs by a professional mover plus related expenses, or you may move yourself. Reimbursement will be limited to a 50-mile distance in most cases. Related expenses involved in the move may include

All expenses must be considered necessary and reasonable by the Agency and supported by paid receipts or other evidence of expenses incurred.

Fixed Moving Cost Schedule

If you are the owner of a displaced mobile home, you may be entitled to a payment for the cost of moving the mobile home to a replacement site on an actual cost basis. Displaced mobile home occupants (owners or tenants) may also be eligible for a payment for moving personal property from the mobile home such as furniture, appliances and clothing on an actual cost basis, or on the basis of a moving cost schedule. For a complete explanation of all moving cost options involving a mobile home, please discuss the matter with your relocation counselor.

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Replacement Housing

There are three types of replacement housing payments: purchase supplement, rental assistance, and downpayment. To understand replacement housing payments you first need to become familiar with the terms Comparable; Financial Means; Decent, Safe, and Sanitary (DSS); and Last Resort Housing.

Comparable

A comparable replacement dwelling must be DSS and functionally equivalent to your present dwelling. While not necessarily identical to your present dwelling, a comparable replacement dwelling should provide for the same utility and function as the dwelling from which you are being displaced. In addition, a comparable replacement dwelling should be

Financial Means

For a homeowner, if a purchase supplement is needed and provided, in addition to the acquisition price for your dwelling, then the replacement dwelling is considered to be within your financial means.

For a tenant, the monthly rent and estimated average monthly utility (electricity, gas, other heating and cooking fuels, water and sewer) cost for a comparable replacement dwelling is considered to be within financial means if, after receiving rental assistance, this amount does not exceed the base monthly rent (including average monthly utility cost) for the dwelling from which the tenant is displaced.

The Agency may need to calculate the base monthly rent using 30% of the displaced tenant's total monthly gross household income, if that income qualifies as low income in accordance with established low income amounts determined by the U.S. Department of Housing and Urban Development (HUD).

The Agency will also evaluate the amounts designated for shelter and utilities for a tenant that receives government assistance.

The rental assistance payment will be computed using the lesser of the three (rent and average monthly utility cost; 30% of the total monthly gross household income for a qualified low income tenant; or the total amount designated for shelter and utilities for a tenant receiving government assistance). To ensure the maximum benefit, it is important to provide the Agency appropriate evidence of total monthly household income when asked. There are some amounts that are not included as monthly household income, including income earned by dependents. The Agency will explain this procedure in greater detail.

Decent, Safe, and Sanitary

The DSS standard means the replacement dwelling meets the minimum requirements established by Federal regulations and conforms to applicable local housing and occupancy codes. The dwelling shall

IMPORTANT NOTICE

Please understand that the replacement dwelling inspection for decent, safe, and sanitary requirements is conducted by Agency personnel for the sole purpose of determining your eligibility for a relocation payment. Therefore, you must not interpret the Agency's approval of a dwelling to provide any assurance or guarantee that there are no deficiencies in the dwelling or in its fixtures and equipment that may be discovered at a later date. It is your responsibility to protect your best interest and investment in the purchase or rental of your replacement property and you must clearly understand that the Agency will assume no responsibility if structural, mechanical, legal, or other unforeseen problems are discovered after the inspection has been conducted.

Last Resort Housing

The term Last Resort Housing is an administrative procedure authorized by law to address those times when comparable replacement housing is not available under statutory limits specified in law. The law and regulation allow the Agency to provide a replacement housing payment in excess of the statutory maximums of $5,250 and $22,500. Because this provision is commonly used, the statutory maximums will not be restated throughout this brochure.

The Agency must provide comparable replacement housing, that is DSS and within your financial means, before you are required to move. The Agency may provide the necessary housing in a number of ways, such as

Freedom of Choice

All eligible displaced persons have the freedom of choice in the selection of a replacement dwelling. The Agency will not require you, without your written consent, to accept a replacement dwelling provided by the Agency. If you decide not to accept the replacement housing offered by the Agency, you may secure a replacement dwelling of your choice but it must meet the DSS standard.

If you are eligible for Last Resort Housing, your relocation counselor will thoroughly explain the program to you.

Length of Occupancy - Basic Occupancy Requirements

The type of payment you are eligible for depends on whether you are an owner or a tenant, and how long you have lived in the property being acquired prior to the initiation of negotiations. "Length of occupancy" simply means counting the number of days that you occupied the dwelling before the date of initiation of negotiations by the Agency for the purchase of the property.

The term "initiation of negotiations" is usually the date the Agency makes the first personal contact with the owner of real property, or his/her representative, to provide a written offer to purchase the property being acquired.

Owners who were in occupancy 180 days or more prior to the initiation of negotiations may be eligible for a purchase supplement or a rental assistance payment.

Tenants who were in occupancy 90 days or more prior to the initiation of negotiations may be eligible for a rental assistance payment or a downpayment.

Owners who were in occupancy 90 days to 179 days prior to the initiation of negotiations, may be eligible for a rental assistance payment or a downpayment, however, the downpayment cannot exceed the amount you would have received if you had been a 180-day owner.

If you were in occupancy at the time of the initiation of negotiations, but less than 90 days prior to that date, you are considered a displaced person entitled to relocation assistance advisory services and moving payments. You may be entitled to a rental assistance payment if comparable replacement rental housing is not available within your financial means. The Agency will use the financial means test described earlier in this brochure. This involves checking to see if you qualify as low income using the HUD definition. If so, and you are required to pay rent and utilities in excess of 30% of your average monthly gross household income for a comparable replacement dwelling unit, you may be eligible for a rental assistance payment under Last Resort Housing because comparable replacement housing is not available within your financial means. You should meet with your relocation counselor for an explanation of the relocation benefits that you may be eligible to receive.

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Replacement Housing - Purchase Supplement

For Owner Occupants of 180 Days or More

If you are an owner and occupied your home for 180 days or more immediately prior to the initiation of negotiations for your property, you may be eligible - in addition to the fair market value of your property - for a supplemental payment for costs necessary to purchase a comparable DSS replacement dwelling. The Agency will compute the maximum payment you are eligible to receive. You must purchase and occupy a DSS replacement dwelling within one year. A purchase supplement has three components: a price differential, an amount for increased mortgage interest and incidental expenses. The purchase supplement is in addition to the acquisition price paid for your property.

Price Differential

The price differential payment is the amount by which the cost of a replacement dwelling exceeds the acquisition cost of the displacement dwelling.

Increased Mortgage Interest

You may be reimbursed for increased mortgage interest costs if the interest rate on your new mortgage exceeds that of your present mortgage. To be eligible your acquired dwelling must have been encumbered by a bona fide mortgage which was a valid lien for at least 180 days prior to the initiation of negotiations.

Incidental Expenses

You may be reimbursed for other expenses such as reasonable costs incurred for title search, recording fees, and certain other closing costs, but not for prepaid expenses such as real estate taxes and property insurance.

Example of a Price Differential Computation

Example A: Assume the Agency purchases your property for $100,000. After a thorough study of available comparable residential properties on the open market, the Agency determines that a comparable replacement property will cost $116,500. If you purchase a DSS replacement property for $116,500, you will be eligible for a price differential payment of $16,500.

Example B: If you purchase a DSS replacement property costing more than $116,500, you pay the difference as shown in Example B.

Example C: If your purchase price is less than $116,500, the price differential payment will be based on your actual cost.

Agency Computation of Maximum Price Differential Payment Cost of Comparable Replacement
Acquisition Price of Your Property
Maximum Price Differential Payment
$116,500
- 100,000
$ 16,500
Example A Actual Cost of Replacement Property
(Same Purchase Price as Comparable)
Acquisition Price of Your Property
Price Differential Payment
$116,500

- 100,000
$ 16,500
Example B Actual Cost of Replacement Property
Acquisition Price of Your Property
Difference

Price Differential Payment

You Are Responsible for This Amount
$125,000
- 100,000
$ 25,000

$16,500

$8,500
Example C Actual Cost of Replacement Property
Acquisition Price of Your Property
Price Differential Payment

Payment is Based on Actual Cost
$114,000
- 100,000
$ 14,000

Graph showing Aquisition Cost $100,000 and Comparable Replacement $116,500 for Displaced Properties. Price Differential Payment may be any amount up to $16,500.

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Replacement Housing - Rental Assistance

180-Day Owners Who Elect to Rent

A rental computation will be computed based on a determination of the fair market rent for the acquired dwelling compared to a comparable rental dwelling available on the market. The difference will be multiplied by 42. In no circumstances will the rental assistance payment exceed the amount the owner would have received as a price differential described previously.

For Owner Occupants and Tenants of 90 Days or More

Owner occupants and tenants of 90 days or more may be eligible for a rental assistance payment. To be eligible for a rental assistance payment, tenants and owners must have been in occupancy at least 90 days immediately preceding the initiation of negotiations for the acquisition of the property.

This payment is designed to enable you to rent a comparable decent, safe, and sanitary replacement dwelling for a 42-month period. If you choose to rent a replacement dwelling and the cost of rent and utilities are higher than you were paying, you may be eligible for a rental assistance payment. The Agency will determine the maximum payment you may be eligible to receive in accordance with established procedures.

The rental assistance payment will be paid in a lump sum unless the Agency determines that the payment should be paid in installments. You must rent and occupy a DSS replacement dwelling within one year to be eligible.

Example

Assume you have been paying $500 per month rent for the dwelling unit occupied by you and purchased by the Agency. You also pay $150 per month for utilities (electricity, gas, other heating and cooking fuels, water, and sewer). The rental assistance payment computation always includes the cost of basic utilities (electricity, gas, other heating and cooking fuels, water, and sewer), as well as the cost of rent. If rent includes utilities, a separate computation is not necessary.

After a study of the rental market, the Agency determines that replacement rental unit, that is DSS and comparable to your unit, is available for $600 per month. It is estimated that average monthly utility costs for the replacement unit will be $175 per month. The maximum rental assistance payment you can receive is $125 per month for a 42-month period, or a total of $5,250.

Graph showing difference between present rent and utilities and replacement rent and utilities for displacement properties. Total Payment may be up to $5,250 for a 42 month period.

Example A: If you select a DSS replacement dwelling unit that rents for $650 per month plus $175 for utilities, despite the availability of comparable DSS replacement rental units that rent for $600 per month plus $175 for utilities, you will receive the maximum amount computed by the Agency, or $5,250. You will be required to pay the additional $50 per month yourself.

Example B: If you select a DSS replacement dwelling unit that rents for more than your present unit, but less than amount determined by the Agency as necessary to rent a comparable unit, your payment will be based on actual cost. For example, assume you select a replacement dwelling unit that rents for $575 per month plus $165 for utilities. On the basis of actual cost, you will be eligible for a payment of $90 per month for 42 months, or $3,780.

Agency Computation of Maximum Rental Assistance Payment Rent You are Currently Paying
Plus Cost for Utilities You are Paying


Rent for a Comparable DSS Dwelling
Estimated Cost for Utilities


Difference ($775-650=$125) x 42 months
Maximum Rental Assistance Payment
$500
+150
$650

$600
+175
$775

$5250
$5250
Example A Actual Rent for DSS Replacement Property
Plus Estimated Cost for Utilities


Difference ($825-650=$175) x 42 months
Rental Assistance Payment
$650
+175
$825

$7350
$5250
Example B Actual Rent for DSS Replacement Property
Plus Estimated Cost for Utilities


Difference ($740-650=$90) x 42 months
Rental Assistance Payment
$575
+165
$740

$3780
$3780
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Replacement Housing - Downpayment

Owner Occupants of 90 to 179 Days and Tenants of 90 Days or More

Owner occupants of 90 to 179 days and tenants of 90 days or more may be eligible for a downpayment and incidental expenses. The Agency will determine the maximum downpayment you may be eligible to receive based on its computation for a rental assistance payment. However, the payment for a displaced owner occupant shall not exceed the amount that would have been received by a 180-day owner for the same property.

To be eligible for the full amount of the downpayment assistance payment, the entire payment must be used to purchase a DSS replacement dwelling. The payment may be utilized for a downpayment toward the purchase price and/or eligible incidental expenses. Incidental expenses include the reasonable costs of title search, recording fees, and certain other closing costs but do not include prepaid expenses such as real estate taxes and property insurance. You may be eligible for the reimbursement of loan origination or loan assumption fees if such fees are normal to real estate transactions in your area and do not represent prepaid interest. The combined amount of the downpayment and incidental expenses cannot exceed the amount the Agency computed as your maximum rental assistance payment.

The relocation counselor will explain how the Agency determines the maximum downpayment assistance payment.

DSS REMINDER

It is very important to remember that the replacement dwelling you select must meet the basic DSS standard. Do not execute a sales contract or a lease agreement until a representative from the Agency has inspected and certified in writing that the dwelling you propose to purchase or rent meets the DSS standard. Please do not jeopardize your right to receive a replacement housing payment by moving into a substandard dwelling.

Fair Housing Laws

Title VI of the Civil Rights Act of 1964 and Title VIII of the Civil Rights Act of 1968 set forth the policy of the United States to provide, within constitutional limitations, for fair housing throughout the United States. These Acts and Executive Order 11063 make discriminatory practices in the purchase and rental of residential units illegal if based on race, color, religion, sex, or national origin.

Whenever possible, a minority person shall be given reasonable opportunity to relocate to a DSS replacement dwelling which is not located in an area of minority concentration, that is within their financial means. This policy does not require an Agency to provide a displaced person with a larger payment than is necessary to enable the person to relocate to a comparable replacement dwelling.

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Updated: 10/20/2014
HEP Home Planning Environment Real Estate
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