[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: 24CFR888.305]

[Page 172-173]
 
                 TITLE 24--HOUSING AND URBAN DEVELOPMENT
 
  CHAPTER VIII--OFFICE OF THE ASSISTANT SECRETARY FOR HOUSING-FEDERAL 
 
PART 888--SECTION 8 HOUSING ASSISTANCE PAYMENTS PROGRAM--FAIR MARKET RENTS AND CONTRACT RENT ANNUAL ADJUSTMENT FACTORS--Table of Contents
 
Subpart C--Retroactive Housing Assistance Payments for New Construction, 
 
Sec. 888.305  Amount of the retroactive Housing Assistance Payments.

    (a) Recalculating the total rent adjustment. To establish the amount 
of the retroactive HAP payment for which a project owner meeting the 
criteria in Sec. 888.301(c) is eligible, the total rent adjustment will 
be recalculated for the period from October 1, 1979 to May 31, 1991. For 
purposes of establishing the amount of the retroactive payment only, the 
total rent adjustment will be an amount equal to the Contract Rent, 
minus the amount of the Contract Rent attributable to debt service, 
multiplied by the applicable AAF, for each year.
    (b) Calculating the retroactive payment. HUD (or the Contract 
Administrator) will pay, as a retroactive Housing Assistance Payment, 
the amount, if any, by which the total rent adjustment, calculated under 
paragraph (a) of this section, exceeds the rent adjustments actually 
approved for the same time period, except that in no event will any 
payment be an amount less than 30 percent of the aggregate of the full 
Contract Rent multiplied by the applicable AAF, minus the sum of the 
rent adjustments actually approved for the same time period, adjusted by 
the average occupancy rate.
    (c) Occupancy rates. (1) Retroactive payments will be made only for 
units that were occupied, based on average occupancy rate, including 
units qualifying for vacancy payments under 24 CFR 880.611, 881.611, 
883.712, 884.106, 885.985, 886.109, or 886.309, during the time period 
from October 1, 1979 to May 31, 1991.
    (2) When requesting retroactive payment, a project owner must, if 
the information is available, submit documentation of occupancy rates, 
on either an annual or monthly basis, for the same time period. The 
average occupancy rate will be based on these records. If records are 
unavailable for the full time period, HUD (or the Contract 
Administrator) will establish an average occupancy rate, to be used for 
the entire period, from the occupancy rate for the three years 
immediately preceding May 31, 1991.
    (d) Revised AAFs. For any year during the period from October 1, 
1979 to May 31, 1991, where a HUD field office published a revised 
Annual Adjustment Factor that replaced the applicable AAF for a specific 
locality under 24 CFR 888.204, the revised Annual Adjustment Factor, 
which applied to all projects in that area, will be used to recalculate 
the total rent adjustment under paragraph (a) of this section, and to 
establish the amount of the retroactive payments.
    (e) Special adjustments. When calculating the total rent adjustments 
and establishing the amount of the retroactive payments under paragraphs 
(a) and (b) of this section, any special adjustments granted under 24 
CFR 880.609(b), 881,609(b), 883.710(b), 884.109(c), 886.112(c), or 
886.312(c) during the time period from October 1, 1979 to May 31, 1991, 
to reflect substantial general increases in real property taxes, 
assessments, utility rates, utilities not covered by regulated rates, or 
for special adjustments for any other purpose authorized by a waiver of 
the regulations, will be deducted from the Contract Rent before applying 
the AAF.
    (f) AAFs less than 1.0. For any area where an AAF of less than 1.0 
was published, a factor of 1.0 will be used to recalculate the total 
rent adjustments and to establish the amount of the retroactive payments 
under paragraphs (a) and (b) of this section.
    (g) Debt service. (1) For purposes of this section, debt service 
includes principal, interest, and the mortgage insurance premium, if 
any.
    (2) The monthly debt service set forth in the original mortgage 
documents for a project will be used to compute the debt service portion 
of the contract rent. The debt service will be compared to the spread of 
unit sizes included in the original HAP contract, and the amount used in 
the calculation will be based on the percentage of total rent potential 
of the various unit types.
    (3) If, in some cases, HUD or the Contract Administrator cannot 
determine

[[Page 173]]

the debt service for a project, the project owner will be asked to 
provide documentation of the debt service. The project owner will be 
notified by the HUD Field Office or the Contract Administrator of the 
need for documentation of the debt service, and allowed 30 days to 
respond, or for such longer period as approved by HUD or the Contract 
Administrator on a case-by-case basis. Where the debt service is not 
available to HUD or the Contract Administrator and the owner is unable 
to provide the necessary information, retroactive payments cannot be 
made.
    (h) Applicable AAF. The applicable AAF is the factor in effect on 
the anniversary date of the contract and appropriate for the area, for 
the size of the unit, and for the treatment of utilities; except where, 
for any year when AAFs were published after November 8 and made 
retroactive to November 8, a project owner was given the option to 
choose the factor in effect on the anniversary date or the retroactive 
factor, the applicable AAF is the factor chosen by the project owner in 
that year.

(Approved by the Office of Management and Budget under control number 
2502-0042)