wikipedia.org
A.gov site belongs to a main federal government organization in the United States.

Secure.gov websites use HTTPS A lock (A locked padlock) or https:// indicates you've safely linked to the.gov website. Share sensitive information only on authorities, safe and secure sites.
iteslj.org
FHA/Housing Resources
Assist with Homeownership
Find Affordable Places to Live
Find a HUD-certified therapist
Housing Choice Voucher
Experiencing Homelessness
Report a Concern
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.

1. Multifamily Housing - Section 8 Contract Renewal Options
   
   Section 8 Contract Renewal Options
   
   Welcome to the Section 8 Housing Assistance Payment Contract Renewal Options web page. This resource contains descriptions of choices readily available to owners of Section 8 HAP-assisted residential or commercial properties who wish to restore their HAP contracts. The information supplied here is not detailed and rather is intended to help owners navigate the options available to them. For full instructions and requirements for renewal of a HAP contract, please describe the Section 8 Renewal Policy Guide.
   
   For particular question about a project's eligibility to restore a HAP contract, please contact your local HUD Multifamily Account Executive.
   
   Option 1: Mark up to Market
   
   Eligibility: This alternative is offered to owners whose agreement rents are below equivalent market rents as figured out by a rent comparability research study. An owner might request that their qualified present HAP contract be ended and renewed under this alternative.
   
   Term: Between 5 and twenty years.
   
   Renewal Rent Increase: At HAP renewal, rents are set at market similar levels, as figured out by an owner's RCS. Rents are capped at 150% of Fair Market Rents unless the owner meets certain requirements to certify 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 alternative is available to owners whose agreement rents are below or equivalent to similar market rents. An owner might minimize their leas to market levels to participate under Option 2.
   
   Renewal Rent Increase: At HAP renewal, leas are set at a level required to support a HUD-approved task budget. These rents might not exceed market equivalent levels, as demonstrated by a lease comparability research study.
   
   Comparability Adjustment: At each 5th year anniversary of the HAP contract renewal, the contract rents are adjusted to present market levels. The owner should send a rent comparability 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 leas go beyond market comparable levels as identified by a lease comparability research study. Typically, this applies to projects whose mortgages are guaranteed by the Federal Housing Administration. Congress approved HUD the authority to restructure an owner's mortgage so that financial obligation service is lowered to a level that can be supported by market similar levels. If projects can
   
   Term: twenty years.
   
   Annual Rent Increase: At HAP renewal, leas are decreased to a market equivalent level as shown by a rent comparability research study.
   
   Mortgage Restructuring: The owner might ask for that their eligible mortgage be reorganized into a primary mortgage and secondary debt. The new main mortgage will be sized so that market equivalent leas suffice to support the debt service on that mortgage. Use constraints will remain in location at the or commercial property so long as the subordinate debt balance remains. If the task can remain economically practical in spite of a lease reduction to market levels, then no mortgage restructuring might be needed.
   
   More Information for Option 3: Information about Option 3 can be found on the About Mark-to-Market website. All inquiries relating to a HAP renewal under Option 3 ought to be directed to m2minfo@hud.gov.
   
   Option 4: Exception Projects
   
   Eligibility: This choice is readily available to jobs which are exempt from restructuring under MAHRA. This generally implies that the project is exempt to an FHA-insured mortgage, but instead has a traditional mortgage or is tax-credit financed.
   
   Term: Between 1 and twenty years.
   
   Rent Increase: At HAP renewal, rents are either changed by the Operating expense Adjustment Factor or by a HUD-approved spending plan (topped by market leas as identified by a Rent Comparability Study), whichever is lesser.
   
   Annual Rent Adjustment: The contract rents will be changed up each year by the Operating Cost Adjustment Factor published for the area. This multiplicative rent adjustment is released by HUD in October of each year and is reliable in February of the following year. The OCAF is based upon a variety of market indications and is meant to catch the impacts of inflation and other market factors on the cost of running rental housing.
   
   Forms and files for Option 4:
   
   
   Section 8 Renewal Policy Guidebook, Chapter 6
   
   
   Option 5: Preservation Projects
   
   Eligibility: Certain projects subject to a long-term HUD use agreement are required to renew 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 upon HAP agreement requirements.
   
   Rent Increase at HAP Renewal: The leas upon HAP renewal depend upon each task's specific HAP contract, Use Agreement and, if suitable, Plan of Action. Please evaluate those documents and call your HUD Account Executive with concerns relating to options for your residential or commercial property.
   
   Annual Rent Adjustment: Which lease change mechanisms are offered to your project differ depending on the HAP agreement, Use Agreement, and Plan of Action. Please evaluate those documents and call your HUD Account Executive with questions regarding choices for your residential or commercial property. Many Preservation tasks might request a budget-based lease boost to assist with unanticipated scenarios at a residential or commercial property or to resolve physical conditions requires.
   
   Forms and documents for Option 5:
   
   - The job's Use Agreement must be evaluated to figure out HAP renewal choices.
   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 choose to not renew their HAP contract upon expiration. This does not apply to owners subject to a legal obligation to restore the HAP contract arising from an Usage Agreement that is attached to the residential or commercial property.
   
   An owner should provide HUD and occupants notice of the opt-out one year prior to expiration of the HAP contract. Upon expiration, qualified occupants will be released improved coupons pursuant to 42 U.S.C. § 1437f( t).
   
   Full HUD requirements for an owner who wishes to choose out of restoring their HAP agreement can be found at Chapter 8 of the Section 8 Renewal Policy Guide. Please note that state and local laws might affect an owner's ability to opt-out of restoring their HAP contract. These requirements would not appear in the Section 8 Renewal Policy Guide and HUD can not advise an owner of their commitments under these laws.
   
   If you are preparing to pull out of HAP contract renewal, please review the 8( bb) Preservation Tool. This program permits HUD to ensure that budget-friendly housing remains available in your neighborhood even if you do not want 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 restore their HAP agreement under Option 1 or 2 may likewise take part in the Section 8 Preservation Efforts programs described in Chapter 15 of the Section 8 Renewal Policy Guide. The Transfer program supplies rewards for the task of a HAP contract 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 want to guarantee long-term preservation of the housing assistance at their residential or commercial property.