24 C.F.R. § 886.308
§ 886.308 Maximum total annual contract commitment. (24 CFR Part 886)
Operative Text
(a) Number of units assisted. Based on the final disposition program developed in accordance with 24 CFR part 290, HUD shall determine the number of units to be assisted up to 100 percent of the units in the project. (b) Maximum assistance. The maximum total annual housing assistance payments that may be committed under the contract shall be the total of the gross rents for all the contract units in the project. (c) Changes in contract amounts. In order to assure that housing assistance payments will be increased on a timely basis to cover increases in contract rents, changes in family composition, or decreases in family incomes: (1) A project account shall be established and maintained, in an amount as determined by HUD consistent with section 8(c)(6) of the Act, out of amounts by which the maximum annual contract commitment per year exceeds amounts paid under the contract for any fiscal year. This account shall be established and maintained by HUD as a specifically identified and segregated account, and payment shall be made therefrom only for the purposes of: (i) Housing assistance payments, and (ii) Other costs specifically authorized or approved by HUD. (2) Whenever a HUD-approved estimate of required housing assistance payments for a fiscal year exceeds the maximum annual contract commitment, causing the amount in the project account to be less than an amount equal to 40 percent of the maximum annual contract commitment, HUD, within a reasonable period of time, shall take such additional steps authorized by Section 8(c)(6) of the Act as may be necessary to carry out this assurance, including (as provided in that section of the Act) “the reservation of annual contributions authority for the purpose of amending housing assistance contracts or the allocation of a portion of new authorizations for the purpose of amending housing assistance contracts.”
Section 886.308 establishes the financial ceiling on federal housing assistance commitments for projects operating under this subpart. The total annual housing assistance payments that HUD may commit under a contract cannot exceed the combined gross rents for all contract units in the project, and HUD determines how many units in a project qualify for assistance based on a final disposition program. To keep payments current with rising rents, shifting family compositions, or falling family incomes, the provision requires a dedicated, segregated project account funded by any unspent contract balance, and it obligates HUD to take corrective steps when that reserve falls below 40 percent of the maximum annual contract commitment.
Plain English — not legal advice.
Property owners and managers operating under 24 CFR Part 886 § 886.308 generally ensure that their gross rent schedules for all contract units are accurately documented, since those figures collectively define the ceiling on annual housing assistance payments HUD may commit. Compliant operators stay attentive to changes in approved contract rents, because increases must be processed on a timely basis to draw on the project account established under this section. Operators also maintain records that support any changes in family composition or income that could affect the level of assistance drawn against the contract.
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 886 § 886.308 benefit from a structural protection: a dedicated project account must be maintained to ensure that housing assistance payments keep pace with rent increases, household changes, or income decreases. If payments appear to lag behind what the contract should cover, tenants can raise the adequacy of that account as a concern with HUD directly or through a HUD-approved housing counseling agency. Tenant-rights organizations familiar with Section 8 project-based programs can help residents understand how the project account and contract commitment ceiling under § 886.308 may affect their assistance.
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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