24 C.F.R. § 883.604
§ 883.604 Maximum annual commitment and project account. (24 CFR Part 883)
Operative Text
(a) Maximum annual commitment. The maximum annual contribution that may be contracted for in the ACC is the total of the contract rents and utility allowances for all assisted units in the project, plus the HUD-approved fees, if any, for State Agency administration of the Contract. (See § 883.606) (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 be established out of the amounts by which the maximum annual commitment exceeds the amount actually paid out under the ACC each year. Payments will be made from this account for housing assistance payments (and fees for Agency admininstration, if appropriate) when needed to cover increases in contract rents or decreases in tenant rents and for other costs specifically approved by the Secretary. (2) Whenever 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 1937 Act, as may be necessary, to assure that payments under the ACC will be adequate to cover increases in contract rents and decreases in tenant rents.
Under 24 CFR Part 883 § 883.604, the annual amount that can be committed through an Annual Contributions Contract (ACC) is capped at the sum of all contract rents, utility allowances for assisted units, and any HUD-approved State Agency administration fees. HUD separately maintains a dedicated project account for each development, funded by the difference between that maximum commitment and what is actually paid out each year. If projected payments would draw the project account below 40 percent of the maximum annual commitment, HUD is required to take additional steps authorized by federal law to ensure the account remains sufficient to cover rent increases or tenant rent decreases.
Plain English — not legal advice.
Property owners and State Agency administrators operating under 24 CFR Part 883 § 883.604 generally ensure that their contract rents, utility allowances, and any applicable administration fees are accurately documented, since these figures collectively define the ceiling on annual HUD contributions. Compliant operators typically monitor the project account balance, understanding that HUD tracks the gap between the maximum annual commitment and actual disbursements to maintain that reserve. When projected costs approach the 40-percent threshold described in § 883.604(b)(2), operators can expect HUD to initiate steps to shore up funding, and maintaining accurate and current rent and allowance records supports that process.
General guidance for property managers — not legal advice for your specific situation. Consult an attorney for advice on your case.
Tenants living in projects covered by 24 CFR Part 883 § 883.604 benefit from a federal requirement that HUD maintain a dedicated project account designed to cover situations where contract rents rise or tenant rents fall, helping to ensure housing assistance payments remain available. If the project account is projected to drop below 40 percent of the maximum annual commitment, the provision obligates HUD to act to protect the adequacy of those payments. Tenants who have concerns about whether housing assistance payments are being properly administered may contact their local HUD field office, reach out to a tenant-rights organization familiar with Section 8 programs, or request information from the State Agency administering the contract under § 883.604.
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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