A.gov website belongs to a main government company in the United States.

Secure.gov websites use HTTPS
A lock (A locked padlock) or https:// implies you have actually securely linked to the.gov website. Share sensitive details only on official, protected sites.

FHA/Housing Resources

Aid with Homeownership

Find Affordable Places to Live

Find a HUD-certified therapist

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 website. This resource consists of descriptions of options readily available to owners of Section 8 HAP-assisted residential or commercial properties who wish to renew their HAP contracts. The information provided here is not thorough and instead is meant to assist owners browse the options readily available to them. For complete directions and requirements for renewal of a HAP agreement, please refer to the Section 8 Renewal Policy Guide.

For particular question about a task's eligibility to restore a HAP agreement, please call your regional HUD Multifamily Account Executive.

Option 1: Mark up to Market

Eligibility: This option is available to owners whose contract leas are below comparable market leas as identified by a lease comparability study. An owner might request that their qualified existing HAP agreement be ended and renewed under this alternative.

Term: Between 5 and 20 years.

Renewal Rent Increase: At HAP renewal, rents are set at market equivalent levels, as identified by an owner's RCS. Rents are topped at 150% of Fair Market Rents unless the owner meets certain requirements to qualify under the discretionary criteria explained 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 submits

Option 2: Increase to Budget

Eligibility: This option is offered to owners whose agreement rents are listed below or equivalent to similar market leas. An owner might reduce their rents to market levels to get involved under Option 2.

Renewal Rent Increase: At HAP renewal, rents are set at a level needed to support a HUD-approved task budget. These leas may not go beyond market similar levels, as shown by a rent comparability research study.

Comparability Adjustment: At each fifth year anniversary of the HAP agreement renewal, the agreement rents are adapted to present market levels. The owner must send a lease comparability study which is utilized to set the leas on the 5th, 10th, and 15th anniversaries of the HAP agreement.

Forms and files for Option 2:

Section 8 Renewal Policy Guidebook: Chapter 4, Chapter 9

Option 3: Mark-to-Market

Eligibility: This option is offered to particular jobs whose leas exceed market similar levels as determined by a rent comparability research study. Typically, this uses to tasks whose mortgages are insured by the Federal Housing Administration. Congress approved HUD the authority to restructure an owner's mortgage so that financial obligation service is decreased to a level that can be supported by market comparable levels. If jobs can

Term: 20 years.

Annual Rent Increase: At HAP renewal, leas are lowered to a market equivalent level as shown by a lease comparability study.

Mortgage Restructuring: The owner may request that their eligible mortgage be restructured into a primary mortgage and secondary financial obligation. The new primary mortgage will be sized so that market comparable rents suffice to support the debt service on that mortgage. Use restrictions will stay in location at the residential or commercial property so long as the secondary debt balance remains. If the project can remain economically feasible despite a rent 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 relating to a HAP renewal under Option 3 need to be directed to m2minfo@hud.gov.

Option 4: Exception Projects

Eligibility: This alternative is offered to projects which are exempt from reorganizing under MAHRA. This usually indicates that the job is exempt to an FHA-insured mortgage, but rather has a standard mortgage or is tax-credit financed.

Term: Between 1 and 20 years.

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

Annual Rent Adjustment: The contract rents will be changed upward each year by the Operating expense Adjustment Factor published for the area. This multiplicative rent change is published by HUD in October of each year and is efficient in February of the list below year. The OCAF is based on a variety of market indications and is planned to capture the effects of inflation and other market factors on the cost 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 contract are required to restore under this Option. This normally includes projects with a Portfolio Reengineering Demonstration Use Agreement, an ELIHPA Use Agreement, or a LIHPRHA Use Agreement.

Term: Varies depending on HAP contract requirements.

Rent Increase at HAP Renewal: The leas upon HAP renewal depend on each task's particular HAP agreement, Use Agreement and, if appropriate, Plan of Action. Please evaluate those documents and call your HUD Account Executive with concerns relating to alternatives for your residential or commercial property.

Annual Rent Adjustment: Which lease modification mechanisms are offered to your task differ depending on the HAP agreement, Use Agreement, and Plan of Action. Please examine those files and call your HUD Account Executive with concerns concerning choices for your residential or commercial property. Many Preservation jobs may ask for a budget-based rent boost to help with unexpected circumstances at a residential or commercial property or to resolve physical conditions needs.

Forms and files for Option 5:

- The project's Use Agreement ought to be examined to figure out 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 may choose to not restore their HAP contract upon expiration. This does not use to owners subject to a contractual responsibility to renew the HAP contract arising from an Usage Agreement that is connected to the residential or commercial property.

An owner should supply HUD and occupants notice of the opt-out one year prior to expiration of the HAP contract. Upon expiration, qualified occupants will be released enhanced coupons pursuant to 42 U.S.C. § 1437f( t).

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

If you are planning to pull out of HAP agreement renewal, please examine the 8( bb) Preservation Tool. This program permits HUD to ensure that budget friendly housing stays available in your neighborhood even if you do not want to restore your HAP agreement.

Forms and documents 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 explained in Chapter 15 of the Section 8 Renewal Policy Guide. The Transfer program provides rewards for the project of a HAP agreement to a not-for-profit, mission-oriented owner. The Capital Repairs program ensures that the HAP renewal These programs offer a range of advantages to owners who wish to guarantee long-lasting conservation of the housing help at their residential or commercial property.