[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: 24CFR888.305]



[Page 171-173]

 

                 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,



[[Page 172]]



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 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,



[[Page 173]]



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)