24 C.F.R. § 883.602
§ 883.602 The contract. (24 CFR Part 883)
Operative Text
(a) Contract. The Housing Assistance Payments Contract sets forth rights and duties of the owner and State Agency with respect to the project and the Housing Assistance payments. (b) Housing Assistance Payments to Owners under the Contract. The Housing Assistance Payments made under the Contract are: (1) Payments to the owner to assist eligible families leasing assisted units, and (2) Payments to the owner for vacant assisted units (“vacancy payments”) if the conditions specified in § 880.611 of this chapter are satisfied. (c) Amount of Housing Assistance Payments to the Owner. (1) The amount of the housing assistance payments made to the owner of a unit being leased by an eligible family is the difference between the contract rent for the unit and the tenant rent payable by the family. (2) A housing assistance payment will be made to the owner for a vacant assisted unit in an amount equal to 80 percent of the contract rent for the first 60 days of vacancy, subject to the conditions in § 880.611 of this chapter. If the owner collects any tenant rent or other amount for this period which, when added to this vacancy payment, exceeds the contract rent, the excess must be repaid as the Agency directs in accordance with HUD guidelines. (3) For a vacancy that exceeds 60 days, a housing assistance payment for the vacant unit will be made, subject to the conditions in § 880.611 of this chapter, in an amount equal to the principal and interest payments required to amortize that portion of the debt attributable to the vacant unit for up to 12 additional months. (d) Payment of utility reimbursement. Where applicable, the Utility Reimbursement will be paid to the Family as an additional Housing Assistance Payment. The Contract will provide that the Owner will make this payment on behalf of the Agency. Funds will be paid to the Owner in trust solely for the purpose of making this additional payment. If the Family and the utility company consent, the Owner may pay the Utility Reimbursement jointly to the Family and the utility company or directly to the utility company.
Under 24 CFR Part 883 § 883.602, a Housing Assistance Payments (HAP) Contract governs the financial relationship between a property owner and a State Agency for assisted housing projects. The subsidy paid to the owner covers the gap between the contract rent and what the eligible tenant household actually pays. For vacant assisted units, the rule sets a tiered payment structure — 80 percent of contract rent for the first 60 days, then a reduced amount tied to debt-service costs for up to 12 additional months — and any overpayment collected during a vacancy period must be returned as directed by the Agency.
Plain English — not legal advice.
Owners operating under a HAP Contract governed by 24 CFR Part 883 § 883.602 generally maintain accurate records of unit occupancy status, tenant rent amounts, and contract rents to ensure assistance payments are correctly calculated. When an assisted unit becomes vacant, compliant operators track the vacancy duration carefully, since the payment formula shifts after 60 days and any amounts collected from other sources that push total receipts above the contract rent must be repaid to the Agency. Where utility reimbursements apply, owners receive those funds in trust and are responsible for passing them through to the eligible family — or, with proper consent, directly to the utility company.
General guidance for property managers — not legal advice for your specific situation. Consult an attorney for advice on your case.
Under 24 CFR Part 883 § 883.602, eligible families in assisted units have a right to have their housing assistance payment calculated as the difference between the contract rent and the tenant rent they owe, meaning the subsidy is designed to cover that gap on their behalf. If a utility reimbursement applies to a household's unit, that reimbursement is an additional Housing Assistance Payment that the owner is obligated to deliver to the family. Tenants who believe their reimbursement has not been properly paid or that their rent share has been miscalculated may raise the issue with the State Agency administering the contract or seek guidance from a local tenant-rights organization familiar with HUD-assisted housing programs.
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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