Federal programs & compliance
HAP contract
The housing assistance payments contract under which HUD or a housing authority pays an owner the gap between contract rent and the tenant's income-based share.
Definition
The housing assistance payments (HAP) contract is the instrument behind every Section 8 revenue stream. It fixes each unit's contract rent, the contract term, the annual adjustment mechanism, and the owner's obligations on physical condition and income certifications; the subsidy pays the difference between contract rent and the tenant contribution (generally 30% of adjusted income) under 42 U.S.C. § 1437f.
PBRA contracts run with HUD under 24 C.F.R. Parts 880–886; project-based voucher contracts run with a housing authority under 24 C.F.R. Part 983, with initial terms up to 20 years plus extensions.
Why it matters in an underwrite
The HAP is the underwritable document: lenders size debt to contract rents, not market rents. Diligence the remaining term and renewal option, the adjustment method (OCAF versus budget-based), transfer and previous-participation approvals on a sale, and the abatement triggers tied to inspections — an abated HAP is a revenue outage that a market re-lease at those rent levels usually cannot backfill.
Sources & related guides
See also
See the term in the law itself
Read the controlling text in the Code Library, or ask the AI how it applies to your project.
Last reviewed 2026-07-29. General information, not legal advice.