proptisgh

A.gov site belongs to an official government organization in the United States.
google.ch
Secure.gov sites utilize HTTPS A lock (A locked padlock) or https:// implies you've safely linked to the.gov site. Share sensitive information just on official, safe and secure sites.

FHA/Housing Resources
Assist with Homeownership
Find Affordable Places to Live
Find a HUD-certified counselor
Housing Choice Voucher
Experiencing Homelessness
Report an Issue
Current HUD Residents
Experiencing a Natural Disaster
Find State Resources
HUD Partners

FHA/Housing Resources
Public and Indian Housing Resources
Policies, Guidance, & Forms
IT Systems
Grants.
Native American Programs.
Affordable Places to Live.
Inspections for HUD Housing.
Housing Financing & Counseling.
Opportunity Zones & Community Development.
Healthy Homes.
Fair Housing.
Researchers

HUDuser.gov.
Data.hud.gov.
News About Contact

Search

U.S. Department of Housing and Urban Development

Helping Americans

HUD Partners

Researchers

News

About

Contact

1. HUD Partners. 2. Multifamily Housing - Section 8 Contract Renewal Options

Section 8 Contract Renewal Options

Welcome to the Section 8 Housing Assistance Payment Contract Renewal Options webpage. This resource includes descriptions of options offered to owners of Section 8 HAP-assisted residential or commercial properties who wish to restore their HAP contracts. The details provided here is not thorough and rather is intended to assist owners navigate the alternatives offered to them. For complete guidelines and requirements for renewal of a HAP contract, please refer to the Section 8 Renewal Policy Guide.

For particular concern about a task's eligibility to restore a HAP contract, please contact your local HUD Multifamily Account Executive.

Option 1: Increase to Market

Eligibility: This option is available to owners whose agreement rents are below equivalent market leas as identified by a lease comparability research study. An owner may ask for that their eligible existing HAP contract be terminated and renewed under this choice.

Term: Between 5 and 20 years.

Renewal Rent Increase: At HAP renewal, rents are set at market equivalent levels, as determined by an owner's RCS. Rents are capped at 150% of Fair Market Rents unless the owner fulfills specific requirements to qualify under the discretionary criteria described at Section 9-3.

Forms and files for Option 1:

Worksheets for Mark-up-to-Market. Blank worksheets as PDF files

Sample worksheets as PDF files

Worksheets as Microsoft Excel files

Option 2: Mark up to Budget

Eligibility: This option is available to owners whose agreement leas are below or equivalent to comparable market leas. An owner might reduce their leas to market levels to take part under Option 2.

Renewal Rent Increase: At HAP renewal, rents are set at a level needed to support a HUD-approved project budget plan. These rents might not surpass market similar levels, as shown by a lease comparability study.

Comparability Adjustment: At each fifth year anniversary of the HAP agreement renewal, the contract leas are gotten used to existing market levels. The owner must submit a lease comparability research study which is used to set the rents on the 5th, 10th, and 15th anniversaries of the HAP contract.

Forms and documents for Option 2:

Section 8 Renewal Policy Guidebook: Chapter 4, Chapter 9

Option 3: Mark-to-Market

Eligibility: This option is offered to certain tasks whose rents surpass market similar levels as figured out by a lease comparability research study. Typically, this applies to jobs whose mortgages are guaranteed by the Federal Housing Administration. Congress gave HUD the authority to restructure an owner's mortgage so that financial obligation service is minimized to a level that can be supported by market similar levels. If jobs can

Term: 20 years.

Annual Rent Increase: At HAP renewal, leas are minimized to a market similar level as shown by a rent comparability study.

Mortgage Restructuring: The owner might ask for that their qualified mortgage be restructured into a main mortgage and subordinate financial obligation. The new primary mortgage will be sized so that market equivalent rents are enough to support the financial obligation service on that mortgage. Use constraints will remain in place at the residential or commercial property so long as the subordinate debt balance stays. If the project can stay financially practical despite a lease decrease to market levels, then no mortgage restructuring may be required.

More Information for Option 3: Information about Option 3 can be discovered on the About Mark-to-Market website. All queries concerning a HAP renewal under Option 3 ought to be directed to m2minfo@hud.gov.

Option 4: Exception Projects

Eligibility: This option is readily available to jobs which are exempt from reorganizing under MAHRA. This normally suggests that the job is exempt to an FHA-insured mortgage, however rather has a traditional mortgage or is tax-credit funded.

Term: Between 1 and twenty years.

Rent Increase: At HAP renewal, rents are either adjusted by the Operating expense Adjustment Factor or by a HUD-approved budget (capped by market rents as figured out by a Lease Comparability Study), whichever is lower.

Annual Rent Adjustment: The agreement rents will be changed up each year by the Operating Cost Adjustment Factor released for the region. This multiplicative lease change is released by HUD in October of each year and works in February of the following year. The OCAF is based upon a variety of market signs and is planned to catch the results of inflation and other market factors on the expense of operating rental housing.

Forms and documents for Option 4:

Section 8 Renewal Policy Guidebook, Chapter 6

Option 5: Preservation Projects

Eligibility: Certain jobs based on a long-lasting HUD use arrangement are needed to restore under this Option. This generally includes jobs with a Portfolio Reengineering Demonstration Use Agreement, an ELIHPA Use Agreement, or a LIHPRHA Use Agreement.

Term: Varies depending upon HAP contract requirements.

Rent Increase at HAP Renewal: The rents upon HAP renewal depend upon each task's specific HAP agreement, Use Agreement and, if relevant, Plan of Action. Please evaluate those documents and call your HUD Account with questions concerning options for your residential or commercial property.

Annual Rent Adjustment: Which rent modification mechanisms are available to your task vary depending upon the HAP contract, Use Agreement, and Plan of Action. Please evaluate those documents and contact your HUD Account Executive with questions concerning alternatives for your residential or commercial property. Many Preservation tasks may ask for a budget-based lease boost to help with unanticipated situations at a residential or commercial property or to address physical conditions needs.

Forms and documents for Option 5:

- The job's Use Agreement need to be examined to identify HAP renewal options.
HAP Renewal Request Form (HUD-9624)

HUD Handbook 4350.1 Chapter 7: Processing Budgeted Rent Increases

OCAF Adjustment Worksheet (HUD-9625)

Section 8 Renewal Policy Guidebook, Chapter 7

Option 6: Opt-out

Eligibility: An owner might elect to not renew their HAP agreement upon expiration. This does not apply to owners subject to a contractual commitment to restore the HAP contract arising from an Usage Agreement that is connected to the residential or commercial property.

An owner must supply HUD and renters notification of the opt-out one year prior to expiration of the HAP contract. Upon expiration, qualified tenants will be issued boosted vouchers pursuant to 42 U.S.C. § 1437f( t).

Full HUD requirements for an owner who wants to pull out of restoring their HAP contract can be discovered at Chapter 8 of the Section 8 Renewal Policy Guide. Please note that state and regional laws might impact an owner's ability to opt-out of renewing their HAP agreement. These requirements would not appear in the Section 8 Renewal Policy Guide and HUD can not advise an owner of their obligations under these laws.

If you are planning to pull out of HAP contract renewal, please evaluate the 8( bb) Preservation Tool. This program permits HUD to make sure that economical housing stays readily available in your community even if you do not wish to restore your HAP contract.

Forms and files for Option 6:

HAP Renewal Request Form (HUD-9624)

Enhanced Voucher Fact Sheet

Section 8 Renewal Policy Guidebook, Chapter 8

Section 8 Preservation Efforts

Eligibility: An owner who is eligible to renew their HAP agreement under Option 1 or 2 might also take part in the Section 8 Preservation Efforts programs described in Chapter 15 of the Section 8 Renewal Policy Guide. The Transfer program provides rewards for the assignment of a HAP contract to a nonprofit, mission-oriented owner. The Capital Repairs program ensures that the HAP renewal These programs provide a range of benefits to owners who wish to guarantee long-lasting preservation of the housing help at their residential or commercial property.