[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: 24CFR886.309]

[Page 149-150]
 
                 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 C--Section 8 Housing Assistance Program for the Disposition of 
                           HUD-Owned Projects
 
Sec. 886.309  Housing assistance payment to owners.

    (a) General. Housing Assistance Payments shall be paid to Owners for 
units under lease by eligible Families, in accordance with the Contract 
and as provided in this section. These Housing Assistance Payments will 
cover the difference between the Contract Rent and the Tenant Rent. 
Where applicable, the Utility Reimbursement will be paid to the Family 
as an additional Housing Assistance Payment. The Contract will provide 
that the Owner will make this payment on behalf of HUD. Funds will be 
paid to the Owner in trust solely for the purpose of making this 
additional payment. If the Family and the utility company consent, the 
Owner may pay the Utility Reimbursement jointly to the Family and the 
utility company or directly to the utility company.
    (b) No assistance for owners. No Section 8 assistance may be 
provided for any unit occupied by an owner. However, cooperatives are 
considered rental housing rather than owner-occupied housing under this 
subpart.
    (c) Payments for vacancies from execution of contract to initial 
occupancy. If a Contract unit which is decent, safe and sanitary and has 
been accepted by HUD as available as of the effective date of the 
Contract is not leased within 15 days of the effective date of the 
Contract, the Owner will be entitled to housing assistance payments in 
the amount of 80 percent of the Contract Rent for the unit for a vacancy 
period not exceeding 60 days from the effective date of the Contract 
provided that the Owner (1) has submitted a list of units leased as of 
the effective date and a list of the units not so leased; (2) 60 days 
prior to the completion of the rehabilitation or the date the agreement 
was executed, whichever is later, had notified the PHA of any units 
which the owner anticipated would be vacant on the anticipated effective 
date of the contract; (3) has taken and continues to take all feasible 
actions to fill the vacancy including, but not limited to: contracting 
applicants on the Owner's waiting list, if any, requesting the PHA and 
other appropriate sources to refer eligible applicants, and advertising 
the availability of the units in a manner specifically designed to reach 
low-income families; and (4) has not rejected any eligible applicant 
except for good cause acceptable to HUD.
    (d) Payments for vacancies after initial occupancy. If an eligible 
family vacates its unit (other than as a result of action by the Owner 
which is in violation of the Lease or the Contract or any applicable 
law), the owner may receive housing assistance payments for so much of 
the month in which the Family vacates the unit as the unit remains 
vacant. Should the unit remain vacant, the Owner may receive from HUD a 
housing assistance payment in the amount of 80 percent of Contract Rent 
for a vacancy period not exceeding an additional month. However, if the 
owner collects any of the family's share of the rent for this period, 
the payment must be reduced to an amount which, when added to the 
family's payments, does not exceed 80 percent of the Contract Rent. Any 
such excess shall be reimbursed by the Owner to HUD or as HUD may 
direct. (See also Sec. 886.315.) The owner shall not be entitled to any 
payment under this paragraph unless he or she: (1) Immediately upon 
learning of the vacancy, has notified HUD of the vacancy or prospective 
vacancy and the reasons for the vacancy, and (2) has made and continues 
to make a good faith effort to fill the vacancy, including but not 
limited to, contacting applicants on the waiting list, if any, 
requesting the PHA and other appropriate sources to refer eligible 
applicants, and advertising the availability of the unit, and (3) has 
not rejected any eligible applicant, except for good cause acceptable to 
HUD.
    (e) Payments for units where family is evicted. If the owner evicts 
a family, the owner shall not be entitled to any payments pursuant to 
paragraph (d) of this section unless the request for such payment is 
supported by a certification that the provisions of Sec. 886.327 and 
part 247 of this title have been followed.

[[Page 150]]

    (f) Prohibition for double compensation for vacancies. The owner 
shall not be entitled to housing assistance payments with respect to 
vacant units under this section to the extent he or she is entitled to 
payments from other sources (for example, payments for losses of rental 
income incurred for holding units vacant for relocatees pursuant to 
Title I of the HCD Act or payments under Sec. 886.315).
    (g) Debt service payments. (1) If a contract unit continues to be 
vacant after the 60-day period specified in paragraph (c) or (d) of this 
section, the Owner may submit a claim and receive additional housing 
assistance payments on a semiannual basis with respect to such a vacant 
unit in an amount equal to the principal and interest payments required 
to amortize the portion of the debt attributable to that unit for the 
period of the vacancy, whether such vacancy commenced during rent-up or 
after rent-up.
    (2) Additional payments under this paragraph (g) for any unit shall 
not be for more than 12 months for any vacancy period, and shall be made 
only if:
    (i) The unit is not in a project insured under the National Housing 
Act except pursuant to section 244 of that Act.
    (ii) The unit was in decent, safe, and sanitary condition during the 
vacancy period for which payments are claimed.
    (iii) The owner has taken and is continuing to take the actions 
specified in paragraphs (c)(1), (2) and (3) or paragraphs (d)(1) and (2) 
of this section, as appropriate.
    (iv) The Owner has demonstrated in connection with the semiannual 
claim on a form and in accordance with the standards prescribed by HUD 
with respect to the period of the vacancy, that the project is not 
providing the Owner with revenues at least equal to the project costs 
incurred by the Owner, and that the amount of the payments requested is 
not in excess of that portion of the deficiency which is attributable to 
the vacant units for the period of the vacancies.
    (v) The Owner has submitted, in connection with the semiannual 
claim, a statement with relevant supporting evidence that there is a 
reasonable prospect that the project can achieve financial soundness 
within a reasonable time. The statement shall indicate the causes of the 
deficiency; the corrective steps that have been and will be taken; and 
the time by which it is expected that the project revenues will at least 
equal project costs without the additional payments provided under this 
paragraph.
    (3) HUD may deny any claim for additional payments or suspend or 
terminate payments if it determines that based on the Owner's statement 
and other evidence, there is not a reasonable prospect that the project 
can achieve financial soundness within a reasonable time.

[44 FR 70365, Dec. 6, 1979, as amended at 49 FR 19949, May 10, 1984; 53 
FR 3369, Feb. 5, 1988; 58 FR 43722, Aug. 17, 1993]