HUD Charts on Existing Non-Rent Fee Policy

HUD Charts on Existing Non-Rent Fee Policy

By Claire Bufalino, Program Analyst, Policy Development Division, Office of Policy Development and Research

Rental housing fees can create a significant burden for renters, especially when these fees are unexpected. In markets where renters already face high cost burdens, these additional charges on top of the rent (non-rent fees) make finding affordable housing particularly difficult for low-income renters, who may risk eviction when they are unable to pay the fees. In 2022, the White House announced the President's Initiative on Junk Fees and Related Pricing Practices to target unfair fee practices across industries, including the rental housing industry. As part of this effort — and to clarify current HUD policy for tenants, public housing agencies, owners, and landlords — HUD recently released charts compiling existing policy and guidance regarding non-rent fees in HUD's Multifamily, Public Housing, and Housing Choice Voucher programs. 

Some non-rent fees are one-time pretenancy fees such as application and screening fees. Other non-rent fees are recurring or circumstantial fees such as late fees, utility fees, processing fees, convenience fees, check cashing fees, pet fees, trash fees, and attorney fees.

Application and screening fees are the most prevalent types of non-rent fees and are the ones most targeted by recent federal efforts. In tight markets, renters often must apply for multiple units before finding one they can rent, paying an application fee for each unit. These application fees can be as high as several hundred dollars, often higher than the housing provider's actual cost to process applications. As a result, these costs can add up before a renter even signs a lease.

After securing a unit, other unavoidable and often unexpected fees can cause renter families to go into debt with their landlords and potentially face eviction. Some leases even include provisions allowing landlords to apply tenant rent payments to these fees before rent or categorize non-rent fees as additional rent. This "first in, first out" accounting practice, in which a rent payment is applied first to outstanding non-rent fees, leads to compounding late fees that leave tenants vulnerable to eviction for nonpayment even when they have paid their rent on time.

On March 7, 2023, HUD Secretary Marcia Fudge wrote an open letter to housing providers and state and local governments addressing the hidden, duplicative, or unnecessary fees that many renters face. Reiterating President Biden's call for federal agencies to act to crack down on "junk fees," Secretary Fudge urged housing providers and state and local leaders to adopt policies that limit fees for renters and make them more transparent. Following this call to action, on July 19, 2023, the White House and HUD announced commitments from three online rental platforms — Zillow, Apartments.com, and AffordableHousing.com — to provide tools to allow renters to calculate the actual price of a unit, including any required fees. This announcement also included the release of a Policy & Practice research brief from HUD's Office of Policy Development and Research summarizing recent research on non-rent fees and highlighting best practices, including limiting application fees, allowing renters to provide their own screening reports, and allowing a single application fee to cover multiple applications.

To build on these efforts to address non-rent fees, HUD is examining fees charged to tenants in HUD's rental assistance programs. HUD recently published three charts outlining the Department's existing policy on non-rent fees in the Multifamily, Public Housing, and Housing Choice Voucher programs. Until now, this guidance had been scattered across numerous regulatory provisions, handbooks, and notices. The charts compile the guidance for each program into easy-to-reference resources that list the type of fee, HUD's established policy regarding charging that fee to tenants, and where to find that guidance. These charts serve as a comprehensive guide to non-rent fees so that PHAs, owners, landlords, and tenants will better understand which fees are permissible. In addition to being a central repository documenting policies for non-rent fees for each program area, these resources will serve as an important reference in the ongoing discussion of the impact of non-rent fees on renters.

HUD welcomes feedback on these resources. If you have questions or suggestions, please email claire.e.bufalino@hud.gov.