Federal programs & compliance
Mark-up-to-market
A Section 8 renewal option that raises below-market HAP contract rents to the comparable market level shown by a rent comparability study.
Definition
Mark-up-to-market is the renewal option in HUD's Section 8 Renewal Policy Guidebook for project-based Section 8 contracts whose rents sit below market. At renewal, contract rents rise to the comparable market level demonstrated by a rent comparability study (RCS), subject to the Guidebook's eligibility tests and FMR-based rent caps; HUD retains discretionary authority for preservation-priority projects that miss the standard tests. Between renewals, rents adjust annually by OCAF.
The option applies to the legacy PBRA programs at 24 C.F.R. Parts 880–886; the Guidebook's option chapters control eligibility, term and rent-setting mechanics.
Why it matters in an underwrite
Below-market HAP rents are latent NOI: a successful mark-up-to-market renewal converts the gap into contract revenue — often the single largest value lever on a legacy Section 8 acquisition. The RCS is where the money is decided: comparable selection and adjustments set the approved rents, and HUD review can trim an aggressive study. Model the renewal calendar and a haircut scenario, not just the broker's comp set.
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.