[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: 24CFR886.309]



[Page 148-150]

 

                 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



[[Page 149]]



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.

    (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



[[Page 150]]



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]