[Code of Federal Regulations]
[Title 24, Volume 4]
[Revised as of April 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 24CFR886.108]

[Page 134-135]
 
                 TITLE 24--HOUSING AND URBAN DEVELOPMENT
 
  CHAPTER VIII--OFFICE OF THE ASSISTANT SECRETARY FOR HOUSING-FEDERAL 
 
PART 886--SECTION 8 HOUSING ASSISTANCE PAYMENTS PROGRAM--SPECIAL ALLOCATIONS--Table of Contents
 
 Subpart A--Additional Assistance Program for Projects With HUD-Insured 
                         and HUD-Held Mortgages
 
Sec. 886.108  Maximum annual contract commitment.

    (a) Number of units assisted. Based on analysis of housing 
assistance needs of families residing or expected to reside in the 
project, HUD shall determine the number of units to be assisted up to 
100 percent of the units in the project. All units currently assisted 
under section 23 or section 8 shall be converted and included under the 
Contract pursuant to this subpart, unless the parties to the Lease or 
Contract object to such conversion. Units assisted under section 101 of 
the Housing and Urban Development Act of 1965 or under section 236(f)(2) 
of the National Housing Act shall not be included

[[Page 135]]

under the Contract pursuant to this subpart unless the Owner proposes 
and HUD approves such conversion.
    (b) Maximum annual Contract commitment. The maximum annual housing 
assistance payments that may be committed under the Contract shall be 
that amount which, when paid annually over the term of the Contract, is 
determined by HUD to be sufficient to provide for all housing assistance 
payments and fees under the Contract.
    (c) Project Account. In order to assure that housing assistance 
payments will be increased on a timely basis to cover increases in 
Contract Rents or decreases in Family Incomes:
    (1) A Project Account shall be established and maintained, in an 
amount as determined by the Secretary consistent with his 
responsibilities under section 8(c)(6) of the Act, out of amounts by 
which the maximum annual Contract commitment per year exceeds amounts 
paid under the Contract for any year. This account shall be established 
and maintained by HUD for each project as a specifically identified and 
segregated account, and payment shall be made therefrom only for the 
purposes of (i) housing assistance payments, and (ii) other costs 
specifically authorized or approved by the Secretary.
    (2) Whenever a HUD-approved estimate of required housing assistance 
payments for a fiscal year exceeds the maximum annual Contract 
commitment, and would cause the amount in the Project Account to be less 
than an amount equal to 40 percent of such maximum annual Contract 
commitment, HUD shall, within a reasonable period of time, take such 
additional steps authorized by Section 8(c)(6) of the Act as may be 
necessary to carry out this assurance, including (as provided in that 
section of the Act) ``the allocation of a portion of new authorizations 
for the purpose of amending housing assistance contracts.''