24 C.F.R. § 882.403
§ 882.403 ACC, housing assistance payments contract, and lease. (24 CFR Part 882)
Operative Text
(a) Maximum Total ACC Commitments. The maximum total annual contribution that may be contracted for is the total of the Moderate Rehabilitation Fair Market Rents for all the units. The fee for the costs of PHA administration is payable out of the annual contribution. (b) Project account. (1) A project account will be established and maintained by HUD as a specifically identified and segregated account for each project. The account will contain the sum of the amounts by which the maximum annual commitment exceeds the amount actually paid out for the project under the ACC each year. Payments will be made from this account when needed to cover increases in Contract Rents or decreases in Gross Family Contributions for (i) housing assistance (including vacancy) payments, (ii) the amount of the fee for PHA costs of administration, and (iii) other costs specifically approved by the Secretary. (2) When a HUD-approved estimate of required payments under the ACC for a fiscal year exceeds the maximum annual commitment, and would cause the amount in the project account to be less than 40 percent of the maximum, HUD will, within a reasonable period of time, take such additional steps authorized by Section 8(c)(6) of the U.S. Housing Act of 1937, as may be necessary, to assure that payments under the ACC will be adequate to cover increases in Contract Rents and decreases in Gross Family Contributions. (c) Term of Housing Assistance Payments Contract. The Contract for any unit rehabilitated in accordance with the Program must be for a term of 15 years. (d) Term of Lease. (1) The initial lease between the family and the Owner must be for at least one year or the term of the HAP contract, whichever is shorter. In cases where there is less than one year remaining on the HAP contract, the owner and the PHA may mutually agree to terminate the unit from the HAP contract instead of leasing the unit to an eligible family. (2) Any renewal or extension of the lease term for any unit must in no case extend beyond the remaining term of the HAP contract.
Section 882.403 establishes the financial and contractual framework for the Moderate Rehabilitation program under Section 8. It caps the total annual contribution commitment at the sum of Moderate Rehabilitation Fair Market Rents for all covered units, and requires HUD to maintain a segregated project account that holds surplus funds to cover future increases in contract rents or decreases in family contributions. The Housing Assistance Payments (HAP) contract for any rehabilitated unit must run for exactly 15 years, and lease terms are bounded by that contract — initial leases must be at least one year (or the remaining HAP term if shorter), and no renewal may extend past the HAP contract's expiration.
Plain English — not legal advice.
Under § 882.403, compliant operators in the Moderate Rehabilitation program structure their HAP contracts for the full required 15-year term and ensure that initial leases meet the minimum one-year requirement or align with whatever time remains on the HAP contract. When a HAP contract is nearing its end with less than one year remaining, owners and the PHA have the option to mutually agree to remove the unit from the contract rather than lease it to a new eligible family. Operators generally track the HAP contract's remaining term carefully when drafting or renewing leases, since § 882.403(d)(2) prohibits any lease renewal or extension from running beyond the contract's expiration date.
General guidance for property managers — not legal advice for your specific situation. Consult an attorney for advice on your case.
Section 882.403 provides tenants in Moderate Rehabilitation program units with a baseline lease-term protection: the initial lease must be for at least one year, unless the HAP contract itself has less than one year remaining. Tenants can review their lease and HAP contract end dates to understand whether a proposed renewal or extension complies with § 882.403(d)(2)'s requirement that no lease term extend beyond the HAP contract. Tenants who believe their lease terms may not conform to this provision can raise the issue with their local Public Housing Authority, consult a tenant-rights organization, or seek guidance from a housing attorney familiar with federal Section 8 regulations.
General guidance for tenants — not legal advice for your specific situation. Consult a tenant-rights organization or attorney for advice on your case.
Generated September 4, 2026 — auto-generated, not yet human-reviewed. See /transparency for methodology.
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