24 C.F.R. § 884.114
§ 884.114 Financing. (24 CFR Part 884)
Operative Text
(a) Types. Eligible projects under this program shall be financed under Section 515, Title V of the Housing Act of 1949. (b) Use of contract as security for financing. (1) An Owner may pledge, or offer as security for any loan or obligation, an Agreement or Contract entered into pursuant to this part: Provided, however, That such security is in connection with a project constructed pursuant to this part, and the terms of the financing or any refinancing have been approved by HUD. It is the Owner's responsibility to request such approval in sufficient time before he needs the financing to permit review of the method and terms of the financing and the instrument of pledge, offer or other assignment that HUD is requested to approve. (2) Any pledge of the Agreement, Contract, or ACC, or payments thereunder, shall be limited to the amounts payable under the Contract or ACC in accordance with its terms. (3) In the event of foreclosure and in the event of assignment or sale agreed to by HUD, housing assistance payments shall continue in accordance with the Terms of the Contract.
Section 884.114 establishes the financing framework for projects under the Section 8 New Construction program for Rural Housing. Under subsection (a), eligible projects must be financed through Section 515 of the Housing Act of 1949. Subsection (b) permits project owners to use their Housing Assistance Payments Agreement or Contract as collateral for loans, but only when HUD has approved the financing terms, and any such pledge is capped at the amounts actually payable under those agreements. If a foreclosure or HUD-approved sale or assignment occurs, housing assistance payments are required to continue under the existing Contract terms.
Plain English — not legal advice.
Under § 884.114, operators of eligible projects who wish to use a Housing Assistance Payments Agreement or Contract as loan collateral must secure HUD approval of the financing terms before the transaction closes. Compliant owners submit their approval requests well in advance, providing HUD sufficient time to review the method, terms, and pledge instruments involved. Owners also ensure that any pledge does not exceed the payment amounts specified in the Contract or ACC, and they maintain awareness that housing assistance payments must continue uninterrupted through any foreclosure or HUD-approved transfer event.
General guidance for property managers — not legal advice for your specific situation. Consult an attorney for advice on your case.
Section 884.114 contains protections that are relevant to tenants living in projects financed under this program: even if a project undergoes foreclosure or is sold or assigned with HUD's agreement, housing assistance payments are required to continue according to the Contract's terms. This means the financial arrangements between an owner and a lender are not supposed to disrupt the assistance that supports your tenancy. Tenants who believe assistance payments have been interrupted or improperly affected by a financing event may wish to contact a local HUD field office, a tenant-rights organization, or a legal aid provider familiar with Section 8 program rules under § 884.114.
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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