24 C.F.R. § 886.332
§ 886.332 Rehabilitation period. (24 CFR Part 886)
Operative Text
(a) Immediate start of rehabilitation after sales closing. After the execution of the Agreement and the sales closing, the owner shall immediately proceed with the rehabilitation work as provided in the Agreement. In the event the work is not immediately commenced, diligently continued, and/or completed by the deadline date stated on the Agreement, HUD will have the right, upon written notification to the owner, to rescind the Agreement and the sale, or take other appropriate action. (b) Extensions. Although extensions of time may be granted by HUD upon a written request from the owner stating the grounds for the extension, no increases in Contract Rents shall be granted for delays. (c) Changes. (1) The Owner must submit to HUD for approval any changes from the work specified in the Agreement which would materially reduce or alter the Owner's obligations or the quality or amenities of the project. HUD may condition its approval of such changes on a reduction of the Contract Rents. If changes are made without prior HUD approval, HUD will have the right to take action consistent with the purpose of this subpart, including action intended to preclude the owner from benefiting from a change in the work specified without HUD approval. HUD action shall include but is not limited to reducing the Contract Rents, requiring the owner to remedy the deficiency, or rescission of the Contract of Sale with reimbursement to the owner for the HUD determined reasonable cost of work items completed by the Owner and acceptable to HUD. (2) Contract Rents for project units being rehabilitated shall not be increased except in accordance with this subpart. Should an increase in Contract Rents be necessitated by changes in local codes or ordinances or other unanticipated changes in work items which could not have been anticipated by HUD, an increase will only be approved if HUD approval is obtained prior to incorporation of any changes in the project.
Under 24 CFR Part 886 § 886.332, once a rehabilitation agreement and sales closing are finalized under this HUD program, the property owner is required to begin, continuously pursue, and finish rehabilitation work by the deadline set in the Agreement. HUD retains authority to rescind the agreement and sale if work stalls or is not completed on time, though written extension requests may be considered—without any corresponding rent increase. Any changes to the agreed scope of work that would meaningfully reduce obligations or lower project quality must receive prior HUD approval, and unauthorized changes can trigger consequences ranging from rent reductions to full rescission of the sale.
Plain English — not legal advice.
Operators working under 24 CFR Part 886 § 886.332 generally ensure that rehabilitation work begins immediately after closing and is pursued without interruption through the Agreement's deadline. When unforeseen circumstances arise, compliant operators submit written extension requests to HUD before the deadline passes, understanding that no Contract Rent increases accompany approved extensions. When scope changes become necessary—whether due to code updates or unanticipated conditions—operators under § 886.332 seek written HUD approval before incorporating those changes into the project, since proceeding without approval can expose the owner to rent reductions, required remediation, or rescission of the Contract of Sale.
General guidance for property managers — not legal advice for your specific situation. Consult an attorney for advice on your case.
Under 24 CFR Part 886 § 886.332, tenants in properties subject to this HUD rehabilitation program have an interest in knowing that the owner is bound to complete rehabilitation work on schedule and to the quality standards set out in the Agreement. If rehabilitation work appears to have stalled, been altered without authorization, or fallen short of the agreed scope, tenants may consider contacting the local HUD field office to inquire about the project's compliance status. Tenant-rights organizations and HUD's own complaint processes can be useful starting points for understanding what remedies § 886.332 makes available when an owner's rehabilitation obligations may not have been met.
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.
Effective Timeline
References Out
No outbound references recorded yet for this provision.
References In
No inbound references recorded yet for this provision.