Section 8 owners have been informed of their contracts and their due dates. Depending on their contracts that vary from 5 to 20 years based on different applications and units, if your Section 8 contract is closing to the deadline; your contract renewal is due for submission to the contract administrator. This renewal proposal must be submitted 120 days prior to the expiration date. Although early submission is allowed, submissions start 180 days before the expiry date and not before.
Nature of the Section 8 Renewal Program
Regardless of the option selected by the owners, a contract renewal request form (Form HUD-9624) and the required supporting documents must be submitted to HUD. The submission of the forms needs to be done within the time limit stated by HUD.
The renewal proposal of the contract needs to be pursuant to the HUD revised guidelines which include the MAHRA (Multifamily Assisted Housing Reform and Affordability) Act of 1997. These Acts and new policies were established based on market prices and not the Fair Market Rent standard. These policies are established for the renewal procedure of section 8 project-based contracts.
What are the Renewal options?
For the renewal of the contract, it’s important to first understand the contract renewal options available and their implications.
- Mark-Up-To-Market contract renewal. In case your current expiring contract rents are less than the market price or the contract contains an adjustment amount.
- Renewing the contract without any rent adjustments.
- Renewal of contract for “exception projects.”
- Renewing Section 8 HAP contract.
Who is eligible for renewal of Section 8 Contracts?
Private owners of profit-motivated companies and also nonprofit organizations, and extremely low-income families with incomes less than 50 percent of the median income for the area they live in are eligible to occupy section 8 assisted units and for the renewal of contracts.
Households with incomes between 50 to 80 percent of the median area income are also eligible in some exceptional cases and are provided with the same facilities and assisted units available. Tenant selections are solely done based on eligibility guidelines by HUD.
Final words
Must remember that with your current contract, your annual rents are adjusted through AAF (Annual Adjustment Factors), however, upon the renewal and according to the revised guide, rents will be adjusted through BBRI (Budget-based rent increase) requests or OCAFs.
