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1-2. LEGISLATIVE HISTORY

HUD Section 8 Renewal Policy Guidebook · 2026 edition · updated 2026-07-29 · United States

  • A. The Multifamily Assisted Housing Reform and Affordability Act of 1997 (MAHRA), Title V of the HUD Fiscal Year 1998 Appropriations Act, Pub. L. 105-65, was enacted on October 27, 1997. MAHRA established new policies for the renewal of Section 8 project-based contracts based on market rents instead of the Fair Market Rent (FMR) standard. For most insured projects with rents above market, the Act transferred Section 8 processing functions from the Multifamily Regional Centers and Satellite Offices Centers to Recap. For further information on renewals by Recap, see Chapter Five.

In general, MAHRA originally required that expiring Section 8 project-based contracts be renewed under Section 524(a)(1) or 524(a)(2).

  1. Section 524(a)(1) renewals required a RCS. If the RCS indicated rents were at or below comparable market rents, the contract was renewed at current rents adjusted by OCAF, unless the owner submitted documentation justifying a budget-based rent increase or participation in MUTM. In no case could renewal rents exceed comparable market rents. If the RCS indicated rents above comparable market rents, the contract was referred to Recap for debt restructuring and/or rent reduction.

  2. Section 524(a)(2) renewals were for projects identified as “exception” projects that were not eligible for Recap. In some cases, these projects had rents greater than market. Examples of projects that do not qualify as eligible multifamily housing projects pursuant to Section 512(2) of MAHRA include a project that is not subject to a HUD-held or insured mortgage; or, a project that has FHA mortgage insurance or is HUD-held with rents at or below comparable market rents.

  • B. The Preserving Affordable Housing for Senior Citizens and Families Into the 21[st] Century Act of 1999, Titles II and V of the HUD Fiscal Year 2000 Appropriations Act, Pub. L. 106-74, was enacted on October 20, 1999. This legislation made modifications to the previous Section 8 renewal policies and established specific provisions for rent adjustments in subsequent years after an initial renewal under MAHRA. On December 29, 1999, Notice H99-36 was issued to implement these changes. Specifically, the Act

    1. Modified Sections 524(a)(1) and 524(a)(2) of the original MAHRA. Projects that previously fell under section 524(a)(1), are now covered under section 524(a), and projects that previously fell under section 524(a)(2), are now covered by section 524(b).

Chapter One – Published March 2023

4

  1. Specifically addressed Preservation projects and Portfolio Reengineering Demonstration projects in sections 524(e)(1) and 524(e)(2) of MAHRA.
    1. Was the impetus for Notice H 1999 36 which created six options for owners to choose from when their Section 8 contracts expire. These options are detailed throughout this Guide.
  • C. The Quality Housing and Work Responsibility Act (QHWRA) of 1998, Title V of HUD’s Fiscal Year 1999 Appropriations Act, enacted on October 21, 1998, made only minor modifications to the tenant notification requirements stated in MAHRA. On May 27, 1999, HUD issued Notice H 99-08 implementing these changes. Specifically, QHWRA:

    1. Required owners who intended to renew their expiring Section 8 contract to notify their tenants of their intent to do so. This requirement was amended by subsequent legislation (see Chapter Eleven for tenant notification requirements).

    2. QHWRA changed the tenant notification requirement from one year to six months for contracts that were renewed for five year terms. The six-month notification was to be provided to the tenants by the owners six months before expiration of the five-year contract. This requirement was changed back to a one-year notification by subsequent legislation.

  • D. The FY 2001 Military Construction and FY 2000 Emergency Supplemental Appropriations Act amended the enhanced voucher statute at Section 8(t) of the United States Housing Act to grant enhanced voucher families the right to remain.

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Contents — HUD Section 8 Renewal Policy Guidebook
HUD Section 8 Renewal Policy Guidebook
  1. U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
  2. SPECIAL ATTENTION OF
  3. TRANSMITTAL
  4. A. Purpose
  5. Explanation of Changes
  6. Section 8 Renewal Policy Guidebook
  7. Office of Multifamily Housing
  8. Table of Contents
  9. Chapter One
  10. Introduction
  11. Chapter 1: Introduction
  12. Chapter 2: Section 8 Renewals
  13. Chapter 3: Option One: Mark-Up-To-Market
  14. Chapter 4: Option Two: Contract Renewals For Other Projects wi…
  15. Chapter 5: Option Three: Referral to Recap
  16. Chapter 6: Option Four: Renewal of Projects Exempt from or not…
  17. Chapter 7: Option Five: Renewal of Portfolio Reengineering Dem…
  18. Chapter 8: Option Six: Opt-Outs
  19. Chapter 9: Rent Comparability Studies
  20. Chapter 10: Residual Receipts
  21. Chapter 11: Tenant Issues
  22. Chapter 12: Physical Condition of the Project
  23. Chapter 13: HUD’s Refusal to Renew Section 8 Contracts
  24. Chapter 14: Rural Housing Service (RHS) Section 515/8
  25. Chapter 15: Section 8 Preservation Efforts
  26. — Chapter 16: “Old Regulation” State Housing Finance Agency Pr…
  27. 1-2. LEGISLATIVE HISTORY
  28. 1-3. RULEMAKING
  29. 1-4. ADMINISTRATIVE POLICY
  30. 1-5. APPLICABILITY
  31. 1-6. PAPERWORK REDUCTION ACT
  32. Chapter Two
  33. Section 8 Renewals
  34. 2-1. INTRODUCTION
  35. 2-2. OWNER OPTIONS
  36. 2-3. TYPES OF RENEWALS
  37. 2-4. EARLY TERMINATION OF A CONTRACT
  38. 2-5. RENT COMPARABILITY STUDY (RCS)
  39. Note: The AE/CA shall not lower the comparable market rents in…
  40. Note: A RCS is not required at any subsequent renewal of an EL…
  41. 2-6. CONTRACTS
  42. 2-8. SHORT-TERM CONTRACT RENEWALS
  43. 2-10. COMBINING CONTRACTS
  44. 2-11. REQUEST FOR A CONTRACT EXTENSION
  45. 2-12. DISTRIBUTIONS
  46. Note: The conditions listed above for receiving access to incr…
  47. 2-13. RENT ADJUSTMENTS
  48. 2-14. OPERATING COST ADJUSTMENT FACTOR (OCAF)
  49. 2-15. BUDGET-BASED RENT ADJUSTMENT REQUESTS
  50. 2-16. INCREASES IN DEPOSITS TO THE RESERVE FOR REPLACEMENT
  51. 2-17. PROCESSING INSTRUCTIONS
  52. Note: If the project has a budget approved by the AE/CA less t…
  53. Note: HUD does not accept the RHS utility analysis. The owner …
  54. 2-18. WAIVERS
  55. 2-19. DUNS NUMBER
  56. Chapter Three
  57. 3-1. OVERVIEW
  58. 3-3. OPTION ONE-A ENTITLEMENT MARK-UP-TO-MARKET ELIGIBILITY
  59. Note: Nonprofit controlled for profit entities as described in…
  60. 3-4. 150 PERCENT RENT CAP FOR OPTION ONE-A
  61. 3-5. EXCEEDING THE 150 PERCENT OF FMR CAP
  62. 3-6. OPTION ONE-B DISCRETIONARY MUTM ELIGIBILITY
  63. Note: Non-profit owned projects that meet one of the three cri…
  64. 3-7. RENEWAL REQUESTS
  65. 3-8. PROCESSING INSTRUCTIONS
  66. 3-9. ANNUAL RENT ADJUSTMENTS DURING A MULTIYEAR CONTRACT
  67. Chapter Four
  68. 4-1. ELIGIBILITY
  69. Note: Projects currently renewed under either Option Two or Op…
  70. 4-2. CONTRACT RENEWAL
  71. 4-3. ANNUAL RENT ADJUSTMENTS DURING A MULTIYEAR CONTRACT
  72. 4-4. PROCESSING INSTRUCTIONS
  73. Chapter Five
  74. Note: WAIVERS TO CHAPTER FIVE WILL BE IN ACCORDANCE WITH RECAP…
  75. Note: Risk Sharing Projects do not meet the definition of “eli…
  76. 5-2. BINDING COMMITMENT
  77. 5-3. ENTRY INTO RECAP
  78. Note: In cases where a CA makes the determination that contrac…
  79. 5-4. CONTRACT RENEWALS — RENT OR DEBT RESTRUCTURING
  80. 5-5. SUBSEQUENT RENEWALS
  81. 5-6. “WATCH LIST” MTM PROJECTS
  82. 5-7. GENERAL INFORMATION
  83. Chapter Six
  84. 6-1. ELIGIBILITY
  85. Note: State and local government financed projects that are no…
  86. Note: In cases where referral to Recap is necessary, CAs must …
  87. Note: Section 202 and 811 Capital Advance projects are not eli…
  88. Note: Projects financed under the risk-sharing loan programs u…
  89. 6-2. RENEWALS
  90. Reminder: For projects (including 202 projects) that are being…
  91. 6-3. RENT ADJUSTMENTS FOR MULTI-YEAR CONTRACTS
  92. 6-4. SECTION 202 REFINANCINGS
  93. Chapter Seven
  94. 7-1. ELIGIBILITY
  95. Portfolio Reengineering Demonstration Program Projects
  96. 7-2. RENEWAL OF PORTFOLIO REENGINEERING DEMONSTRATION PROJECTS
  97. FIVE
  98. Note: Owners can request that the existing Demo Program Use Ag…
  99. 7-4. PROCESSING INSTRUCTIONS FOR DEMONSTRATION PROJECTS
  100. 7-5. PRESERVATION PROJECTS (LIHPRHA AND ELIHPA)
  101. 7-6. OWNER’S SUBMISSION FOR PRESERVATION PROJECTS
  102. Note: Owners can request that the existing Preservation Use Ag…
  103. 7-7. PROCESSING INSTRUCTIONS FOR PRESERVATION PROJECTS
  104. 7-8. PROJECT SPECIFIC RENTS (PSRS)
  105. Chapter Eight
  106. 8-1. OVERVIEW
  107. 8-2. OWNER REQUIREMENTS FOR TENANT NOTIFICATION
  108. 8-3. PROCESSING INSTRUCTIONS
  109. Note: If proper notification was not provided, the owner must …
  110. Chapter Nine
  111. 9-1. BACKGROUND
  112. 9-2. APPLICABILITY OF CHAPTER NINE
  113. 9-3. ROAD MAP TO CHAPTER NINE
  114. 9-4. ALTERNATIVES TO RENT COMPARABILITY STUDY
  115. 9-6. METHOD TWO: COMPARING PROPOSED SECTION 8 RENTS WITH RENTS…
  116. 9-7. PREPARING A RENT COMPARABILITY STUDY
  117. 9-8. APPRAISER QUALIFICATIONS
  118. 9-9. ANALYZING THE SUBJECT PROJECT
  119. Note: Appraisers should not take into consideration demographi…
  120. Note: Government boundaries like state or county lines often d…
  121. 9-10. SELECTING COMPARABLE UNITS
  122. 9-11. COLLECTING AND DOCUMENTING DATA ON COMPARABLE UNITS
  123. 9-12. COMPUTING ADJUSTED RENTS FOR COMPARABLE UNITS
  124. 9-13. DERIVING ESTIMATED MARKET RENTS
  125. 9-14. PROCEDURE FOR MANDATORY MARKET RENT THRESHOLD
  126. Example Project in ZIP code 76469
  127. 9-15. HUD REVIEW OF RENT COMPARABILITY STUDY
  128. 9-16. INITIAL AND SUBSTANTIVE REVIEW OF OWNER’S RCS
  129. 9-17. COMMUNICATING RESULTS OF HUD/CA REVIEWS
  130. 9-18. OWNER APPEALS
  131. 9-19. IMPOSING SANCTIONS ON APPRAISERS
  132. APPENDICES
  133. - Instructions for Completing the HUD Form 92273 S8
  134. Part A: Rents Charged (lines 1 through 5)
  135. Part B. Design, Location, Condition (lines 6 through 10)
  136. Part C. Unit Equipment/Amenities (lines 11 through 23)
  137. Part D. Site Equipment/Amenities (lines 24 through 32)
  138. Part E. Utilities (lines 33 through 39)
  139. Part F. Adjustments Recap (lines 40 through 43)
  140. Part G. Adjusted Rents (lines 44 through 45)
  141. Required Contents of a Rent Comparability Study
  142. Comparable Project Profile

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