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1. Multifamily Housing - Section 8 Contract Renewal Options
   
   Section 8 Contract Renewal Options
   
   Welcome to the Section 8 Housing Assistance Payment Contract Renewal Options web page. This resource contains descriptions of options readily available to owners of Section 8 HAP-assisted residential or commercial properties who wish to renew their HAP contracts. The details supplied here is not comprehensive and rather is intended to assist owners browse the choices available to them. For complete instructions and requirements for renewal of a HAP contract, please describe the Section 8 Renewal Policy Guide.
   
   For particular question about a task's eligibility to renew a HAP contract, please call your regional HUD Multifamily Account Executive.
   
   Option 1: Increase to Market
   
   Eligibility: This option is readily available to owners whose agreement leas are below comparable market rents as determined by a lease comparability study. An owner may request that their eligible existing HAP agreement be terminated and renewed under this option.
   
   Term: Between 5 and 20 years.
   
   Renewal Rent Increase: At HAP renewal, rents are set at market similar levels, as figured out by an owner's RCS. Rents are topped at 150% of Fair Market Rents unless the owner fulfills particular criteria to certify under the discretionary criteria described at Section 9-3.
   
   Forms and documents for Option 1:
   
   Worksheets for Mark-up-to-Market. Blank worksheets as PDF files
   
   
   Sample worksheets as PDF files
   
   
   Worksheets as Microsoft Excel submits
   
   Option 2: Increase to Budget
   
   Eligibility: This option is readily available to owners whose agreement rents are listed below or equal to similar market rents. An owner might lower their leas to market levels to take part under Option 2.
   
   Renewal Rent Increase: At HAP renewal, leas are set at a level required to support a HUD-approved job budget. These rents might not surpass market similar levels, as shown by a rent comparability research study.
   
   Comparability Adjustment: At each 5th year anniversary of the HAP contract renewal, the agreement rents are changed to current market levels. The owner should submit a rent comparability study which is used to set the leas on the 5th, 10th, and 15th anniversaries of the HAP contract.
   
   Forms and files for Option 2:
   
   
   Section 8 Renewal Policy Guidebook: Chapter 4, Chapter 9
   
   
   Option 3: Mark-to-Market
   
   Eligibility: This alternative is available to particular tasks whose leas exceed market similar levels as identified by a lease comparability study. Typically, this applies to jobs whose mortgages are insured by the Federal Housing Administration. Congress granted HUD the authority to restructure an owner's mortgage so that debt service is lowered to a level that can be supported by market equivalent levels. If tasks can
   
   Term: 20 years.
   
   Increase: At HAP renewal, leas are reduced to a market equivalent level as shown by a lease comparability study.
   
   Mortgage Restructuring: The owner might ask for that their qualified mortgage be reorganized into a main mortgage and subordinate financial obligation. The new main mortgage will be sized so that market similar rents suffice to support the debt service on that mortgage. Use restrictions will stay in place at the residential or commercial property so long as the secondary debt balance remains. If the job can stay financially practical regardless of a rent decrease to market levels, then no mortgage restructuring may be needed.
   
   More Information for Option 3: Information about Option 3 can be discovered on the About Mark-to-Market site. All queries regarding a HAP renewal under Option 3 must be directed to m2minfo@hud.gov.
   
   Option 4: Exception Projects
   
   Eligibility: This choice is readily available to jobs which are exempt from restructuring under MAHRA. This usually indicates that the job is not subject to an FHA-insured mortgage, but rather has a conventional mortgage or is tax-credit funded.
   
   Term: Between 1 and twenty years.
   
   Rent Increase: At HAP renewal, leas are either changed by the Operating expense Adjustment Factor or by a HUD-approved budget plan (topped by market leas as identified by a Lease Comparability Study), whichever is lower.
   
   Annual Rent Adjustment: The agreement leas will be adjusted up each year by the Operating Cost Adjustment Factor published for the region. This multiplicative rent change is released by HUD in October of each year and is reliable in February of the list below year. The OCAF is based on a range of market indications and is meant to capture the effects of inflation and other market aspects on the cost of running rental housing.
   
   Forms and documents for Option 4:
   
   
   Section 8 Renewal Policy Guidebook, Chapter 6
   
   
   Option 5: Preservation Projects
   
   Eligibility: Certain projects based on a long-lasting HUD usage arrangement are required to restore under this Option. This generally consists of jobs with a Portfolio Reengineering Demonstration Use Agreement, an ELIHPA Use Agreement, or a LIHPRHA Use Agreement.
   
   Term: Varies depending on HAP contract requirements.
   
   Rent Increase at HAP Renewal: The rents upon HAP renewal depend on each job's particular HAP agreement, Use Agreement and, if applicable, Plan of Action. Please examine those files and call your HUD Account Executive with concerns concerning options for your residential or commercial property.
   
   Annual Rent Adjustment: Which rent modification mechanisms are readily available to your project differ depending upon the HAP agreement, Use Agreement, and Strategy. Please evaluate those documents and call your HUD Account Executive with questions regarding alternatives for your residential or commercial property. Many Preservation tasks might ask for a budget-based lease increase to assist with unanticipated circumstances at a residential or commercial property or to attend to physical conditions requires.
   
   Forms and files for Option 5:
   
   - The job's Use Agreement ought to be reviewed to determine HAP renewal choices.
   HAP Renewal Request Form (HUD-9624)
   
   
   HUD Handbook 4350.1 Chapter 7: Processing Budgeted Rent Increases
   
   
   OCAF Adjustment Worksheet (HUD-9625)
   
   
   Section 8 Renewal Policy Guidebook, Chapter 7
   
   
   Option 6: Opt-out
   
   Eligibility: An owner might elect to not renew their HAP contract upon expiration. This does not apply to owners based on a contractual obligation to restore the HAP contract resulting from an Use Agreement that is connected to the residential or commercial property.
   
   An owner must provide HUD and tenants notification of the opt-out one year prior to expiration of the HAP contract. Upon expiration, qualified renters will be provided boosted vouchers pursuant to 42 U.S.C. § 1437f( t).
   
   Full HUD requirements for an owner who wants to pull out of restoring their HAP contract can be found at Chapter 8 of the Section 8 Renewal Policy Guide. Please note that state and regional laws might affect an owner's capability to opt-out of renewing their HAP contract. These requirements would not appear in the Section 8 Renewal Policy Guide and HUD can not recommend an owner of their commitments under these laws.
   
   If you are preparing to pull out of HAP agreement renewal, please evaluate the 8( bb) Preservation Tool. This program permits HUD to make sure that inexpensive housing stays readily available in your community even if you do not wish to restore your HAP contract.
   
   Forms and files for Option 6:
   
   HAP Renewal Request Form (HUD-9624)
   
   
   Enhanced Voucher Fact Sheet
   
   
   Section 8 Renewal Policy Guidebook, Chapter 8
   remax.ca
   
   Section 8 Preservation Efforts
   
   Eligibility: An owner who is eligible to restore their HAP agreement under Option 1 or 2 might likewise take part in the Section 8 Preservation Efforts programs explained in Chapter 15 of the Section 8 Renewal Policy Guide. The Transfer program offers rewards for the task of a HAP agreement to a nonprofit, mission-oriented owner. The Capital Repairs program makes sure that the HAP renewal These programs supply a variety of benefits to owners who want to ensure long-lasting preservation of the housing assistance at their residential or commercial property.