[Code of Federal Regulations]

[Title 24, Volume 4]

[Revised as of April 1, 2006]

From the U.S. Government Printing Office via GPO Access

[CITE: 24CFR886.112]



[Page 136-137]

 

                 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.  886.112  Rent adjustments.



    This section applies to adjustments of the dollar amount stated in 

the Contract as the Maximum Unit Rent. It does not apply to adjustments 

in rents payable to Owners as required by HUD in connection with its 

mortgage insurance and/or lending functions.

    (a) Funding of adjustments. Housing Assistance Payments will be made 

in increased amounts commensurate with Contract Rent adjustments up to 

the maximum annual amount of housing



[[Page 137]]



assistance payments specified in the Contract pursuant to Sec.  

886.108(b).

    (b) Annual adjustments. The contract rents may be adjusted annually, 

or more frequently, at HUD's option, either (1) on the basis of a 

written request for a rent increase submitted by the owner and properly 

supported by substantiating evidence, or (2) by applying, on each 

anniversary date of the contract, the applicable Automatic Annual 

Adjustment Factor most recently published by HUD in the Federal Register 

in accordance with 24 CFR part 888, subpart B. Published Automatic 

Annual Adjustment Factors will be reduced appropriately by HUD where 

utilities are paid directly by Families. If HUD requires that the owner 

submit a written request, HUD, within a reasonable time, shall approve a 

rental schedule that is necessary to compensate for any increase in 

taxes (other than income taxes) and operating and maintenance costs over 

which owners have no effective control, or shall deny the increase 

stating the reasons therefor. Increases in taxes and maintenance and 

operating costs shall be measured against levels of such expenses in 

comparable assisted and unassisted housing in the area to ensure that 

adjustments in the Contract Rents shall not result in material 

differences between the rents charged for assisted and comparable 

unassisted units. Contract Rents may be adjusted upward or downward as 

may be appropriate; however, in no case shall the adjusted rents be less 

than the contract rents on the effective date of the contract.

    (c) Special additional adjustments. Special additional adjustments 

shall be granted, when approved by HUD, to reflect increases in the 

actual and necessary expenses of owning and maintaining the Contract 

units which have resulted from substantial general increases in real 

property taxes, utility rates or similar costs (i.e., assessment, and 

utilities not covered by regulated rates), but only if and to the extent 

that the Owner clearly demonstrates that such general increases have 

caused increases in the Owner's operating costs which are not adequately 

compensated for by automatic annual adjustments. The Owner shall submit 

to HUD financial statements which clearly support the increase.

    (d) Overall limitation. Notwithstanding any other provisions of the 

subpart, adjustments as provided in this section shall not result in 

material differences between the rents charged for assisted and 

comparable unassisted units, as determined by HUD.

    (e) Incorporation of rent adjustments. Any adjustment in Maximum 

Unit Rents shall be incorporated into the Contract by a dated addendum 

to the Contract establishing the effective date of the adjustment.



[42 FR 5603, Jan. 28, 1977, as amended at 45 FR 59149, Sept. 8, 1980; 47 

FR 24700, June 8, 1982]