The Michigan State Housing Development Authority (MSHDA) and the U.S. Department of Agriculture’s Office of Rural Development (RD) released the allowable multifamily property management fees for 2020.
The maximum fees allowed by MSHDA for the 2020 calendar year are as follows:
- Management fee per unit – $534
- Premium management fee per unit – $82
- This is slightly more than a one percent increase from the 2019 maximum fees of $527 for the management fee per unit and $81 for the premium management fee per unit.
See MSHDA’s 2020 Annual Budget Guide Policy
RD management fees vary from state to state based on the increase of HUD’s Operating Cost Adjustment Factor.
The fees in effect for 2020 can be found in the attachments to HB 3560-2, Chapter 3.
Highlights for Michigan include an approximate four percent increase from the 2019 fee of $52 to $54 per occupied unit per month beginning in 2020.
Multifamily projects subject to the U.S. Department of Housing and Urban Development (HUD) should review the guidelines in The Management Agent Handbook for requirements in determining allowable fee amounts to be paid with project funds.
HUD management fees are typically calculated using a fee per unit, per month calculation that is converted to a percent of the total rental income of a property. Management fee agreements may be open-ended or define a set period, such as three years.
For more information, please contact your Yeo & Yeo advisor.