24 C.F.R. § 884.121
§ 884.121 Rights of owner if PHA defaults under agreement (private-owner/PHA projects). (24 CFR Part 884)
Operative Text
The ACC and the Agreement shall contain a provision to the effect that in the event of failure of the PHA to comply with the Agreement with the Owner, the Owner shall have the right, if he is not in default, to demand that HUD determine, after notice to the PHA giving it a reasonable opportunity to take corrective action, whether a substantial default exists, and if HUD determines that such a default exists, that HUD assume the PHA's rights and obligations under the Agreement, and carry out the obligations of the PHA under the Agreement, including the obligation to enter into the Contract.
Under 24 CFR Part 884 § 884.121, both the Annual Contributions Contract (ACC) and the Agreement between a private owner and a Public Housing Authority (PHA) must include a clause addressing what happens if the PHA fails to meet its obligations. Specifically, this clause gives a non-defaulting owner the ability to trigger a formal review by HUD, which must first notify the PHA and allow it a reasonable chance to correct the problem. If HUD concludes that a substantial default exists, it may step into the PHA's role and take over the PHA's rights and responsibilities under the Agreement, including the obligation to execute the Housing Assistance Payments Contract.
Plain English — not legal advice.
Private owners participating in projects governed by 24 CFR Part 884 § 884.121 generally ensure that their Agreement and ACC contain the required default-remedy clause before execution. A compliant owner keeps records demonstrating their own performance under the Agreement, since the right to demand HUD intervention under this provision is available only to an owner who is not themselves in default. Owners familiar with this provision understand that the process involves formally requesting HUD's determination and allowing the PHA a reasonable corrective-action period before HUD assumes the PHA's obligations.
General guidance for property managers — not legal advice for your specific situation. Consult an attorney for advice on your case.
While 24 CFR Part 884 § 884.121 primarily governs the contractual relationship between private owners and the PHA, the provision's ultimate effect—ensuring that HUD can step in to carry out the PHA's obligations, including executing the Housing Assistance Payments Contract—can have direct bearing on whether housing assistance remains in place for residents. Tenants in private-owner/PHA projects who experience disruptions in assistance or contract execution may find it useful to contact their local HUD field office or a tenant-rights organization to understand how this provision applies to their project. Raising the existence of a PHA default and HUD's obligations under § 884.121 may be relevant in administrative proceedings or other forums where housing assistance continuity is at issue.
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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