13-2. HUD’S DECISION NOT TO RENEW THE EXPIRING CONTRACT — HUD Section 8 Renewal Policy Guidebook

A. Regional and Headquarters Roles.

The Regional Center or Satellite Office must follow guidance issued by OAMPO in Headquarters when a decision is made by the Regional Center Director or Satellite Office Director to not renew the contract based on a REAC physical inspection before the contract can be abated or allowed to expire.

B. Process.

When OAMPO in Headquarters determines the contract should not be renewed, the following actions should be taken.

If more than 120 days remain on the contract the AE/CA must:
- a. Notify the owner that because the EH&S deficiencies have not been corrected and the re-inspection score is less than 60, a Notice of Default has been issued and that HUD intends to abate or allow the contract to expire and, if possible transfer the project’s budget authority to another project via the 8bb process. (See Housing Notice 2014-14 for details.)
- b. Immediately begin the process for obtaining regular Housing Choice Vouchers (HCVs) following the instructions in Notice PIH 2001-41 (HA), Section 8 Tenant-Based Assistance (Enhanced and Regular Housing Choice Vouchers) For Housing Conversion Actions – Policy and Guidance, or current guidance, allowing up to 120 days for issuance of the HCVs. Notice PIH 2001-41 (HA) can be found at:

http://www.hud.gov/offices/adm/hudclips/notices/pih/01pihnotices .cfm.

c. Monitor the processing of the vouchers with the assigned Public Housing Agency (PHA), the Office of Public and Indian Housing (PIH), and the owner, until the vouchers have been issued.

If less than 120 days remain on the contract the AE/CA must:
- a. Notify the owner that because the EH&S deficiencies have not been corrected and the re-inspection score is less than 60, a Notice of Default has been issued and that HUD intends to abate the contract and, if possible transfer the project’s budget authority to another project via the 8bb process. (See Housing Notice 2014-14 for details.).

Chapter Thirteen – Published March 2023

  - b. Immediately begin the process for obtaining regular Housing Choice Vouchers (HCVs) following the instructions in Notice PIH 2001-41 (HA), Section 8 Tenant-Based Assistance (Enhanced and Regular Housing Choice Vouchers) _For Housing Conversion Actions – Policy and Guidance_ , or current guidance. 

  - c. Enter into a short-term renewal of the contract at current rents with the owner, using the Basic Renewal One Year contract (HUD-9636) at current rents, or if a determination has been made as to market rents based on a RCS, renew at rents that do not exceed market rent. 

  - d. Monitor the processing of the vouchers with the assigned Public Housing Agency (PHA), PIH, and the owner, until the vouchers have been issued.

If the contract will be abated and HUD is going to relocate the tenants to other acceptable housing, the Regional Center/PC Director must obtain authority to conduct a relocation program from the Director of OAMPO in Headquarters. The AE must alert the Property Disposition Center that a request to relocate the tenants will be submitted to the OAMPO.
Make sure the Regional Center has a written disposition plan in place and shared with the owner before abating a contract with an underlying insured or Secretaryheld mortgage.
1. Terminate the contract after vouchers have been issued to eligible residents and, if possible transfer the project’s budget authority to another project via the 8bb process. (See Housing Notice 2014-14 for details.)
2. Flag the owner in the APPS/2530 system.
3. Designate the project as troubled.

C.
Appeals

If the owner appeals HUD’s decision to not renew the Section 8 HAP contract based on the physical inspection, or otherwise asks for relief from the physical inspection score, follow the instructions in Chapter 13, HUD’s Refusal to Renew Section 8 HAP Contract, of this Guide.

D.
iREMS Reporting Requirements.

The AE must record all activities related to bringing a project into regulatory and contractual compliance because of a REAC physical inspection in the Workload Management screen of iREMS.

Compliance with the EH&S and REAC physical inspection protocols must be entered as this may influence future decisions on renewal of the Section 8 HAP contract and because it is important to have a complete and accurate administrative record should HUD proceed with enforcement actions.
The AE must record all closeout activities regarding physical inspections and any related matters and must share them with the owner.

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The AE must record a project designated as troubled in the Risk Management screen, if applicable.