General. In order to qualify for tenant-based rental assistance, a tenant-based rental assistance project or program shall meet the applicable requirements of this regulation. Tenant-Based Rental Assistance — General Conditions. Tenant-based rental assistance may only be provided to income-eligible households. Except as provided in §B(3) of this regulation, recipients of tenant-based rental assistance shall be selected on the basis of written tenant selection criteria, developed by the Department or its designee. Relocation Exception for HOME-Assisted Units. The Department or its designee may select income eligible households who currently reside in units that are designated for rehabilitation or acquisition under the HOME program without requiring that the household meet the written tenant selection criteria. Households selected under §B(3)(a) of this regulation may use the tenant-based rental assistance in the rehabilitated or acquired unit or in any other qualified housing. Tenant-based rental assistance shall be used within the boundaries of the State. The Department or its designee shall enter into a rental assistance contract or agreement with an owner leasing a unit to an assisted household or directly with an eligible household. Before entry into a rental assistance contract or agreement, the Department or its designee shall review each lease and shall disapprove a lease if the: Rent is not reasonable, based on rents that are charged for comparable unassisted rental units; or Lease does not comply with the requirements in Regulation .16C of this chapter. Housing occupied by a household receiving HOME tenant-based rental assistance under this regulation shall meet the housing quality standards set forth in 24 CFR §982.401 or the successor requirements as established by HUD. Rental Assistance. Rental assistance shall meet the requirements in §C(2)—(5) of this regulation. The term of assistance shall begin on the 1st day of the term of the lease and may not exceed 24 months, except if renewed by the Department or its designee. The term of a rental assistance contract or other agreement shall provide that if the contract or agreement is with: An owner, assistance shall end upon termination of the lease; A household, assistance need not end upon termination of the lease, but payments may not be made after termination of the lease until the household enters into a new lease. Monthly Assistance. The amount of the monthly assistance may not exceed the difference between: A rent standard for the unit size established by the Department or its designee, which standard shall be based on the Section 8 Housing Choice Voucher Program (24 CFR Part 982) or on local market conditions; and 30 percent of the household's monthly adjusted income, subject to a minimum tenant contribution to rent established by the Department or its designee. The Department may approve, on a unit-by-unit basis, a subsidy based on a rent standard that exceeds the applicable fair market rent by up to 10 percent for 20 percent of units assisted. In any case when assistance under §8 of the United States Housing Act of 1937 becomes available, recipients of tenant-based rental assistance under this regulation shall qualify for tenant selection preferences to the same extent as when they received the HOME tenant-based rental assistance under this regulation. Security Deposits. Tenant-based rental assistance for security deposits shall meet the following requirements: Assistance shall be in the form of loans or grants to income eligible households for security deposits for rental of dwelling units; Assistance provided in the form of a loan shall be evidenced by a promissory note, which may or may not be secured; HOME security deposit assistance may not exceed the equivalent of 2 months rent for the dwelling unit; Only the prospective tenant may apply for HOME assistance under this regulation, although assistance may be paid directly to the tenant or to the landlord.