24 C.F.R. § 888.405
§ 888.405 Amount of the retroactive Housing Assistance Payments. (24 CFR Part 888)
Operative Text
(a) Recalculating the total rent adjustment. To establish the amount of the retroactive HAP payment for which a project owner meeting the criteria in § 888.401(c) is eligible, the total rent adjustment will be recalculated for the period from October 1, 1979 to May 31, 1991. Rents for that period will be recalculated, under the procedures set out in 24 CFR 882.410(a)(1), by applying the AAF for any affected year, and recalculating the rents for the remainder of the period as necessary. For each year thereafter, all rent adjustments made at the request of the owner at the time will be recalculated, under the procedures in 24 CFR 882.410(a)(1), to account for the new adjustments. (b) Calculating the retroactive payment. HUD will pay, through the PHA, as a retroactive Housing Assistance Payment the amount, if any, by which the total rent adjustment, calculated under paragraph (a) of this section exceeds the rent adjustments actually approved for the same time period. (c) Occupancy rate. (1) Retroactive payments will be made only for units that were occupied, based on average occupancy rate, including units qualifying for vacancy payments under 24 CFR 882.411, during the time period from October 1, 1979 to May 31, 1991. (2) When requesting a retroactive payment, a project owner must, if the information is available, submit documentation of occupancy rates, on either an annual or monthly basis, for the same time period. The average occupancy rate will be based on these records. If records are unavailable for the full time period, the PHA will establish an average occupancy rate, to be used for the entire period, from the occupancy rate for the three years immediately preceding May 31, 1991. (d) Revised AAFs. For any year during the period from October 1, 1979 to May 31, 1991, where a HUD field office published a revised Annual Adjustment Factor that replaced the applicable AAF for a specific locality under 24 CFR 888.204, the revised Annual Adjustment Factor, which applied to all projects in that area, will be used to recalculate the total rent adjustment under paragraph (a) of this section, and to establish the amount of the retroactive payments. (e) Special adjustments. When calculating the total rent adjustments and establishing the amount of the retroactive payments under paragraphs (a) and (b) of this section, any special adjustments granted under 24 CFR 882.410(a)(2) during the period from October 1, 1979 to May 31, 1991, to reflect substantial general increases in real property taxes, assessments, utility rates, utilities not covered by regulated rates, or for special adjustments for any other purpose authorized by a waiver of the regulations, will be deducted from the base rent before applying the AAF. (f) AAFs less than 1.0. For any area where an AAF of less than 1.0 was published, a factor of 1.0 will be used to recalculate the total rent adjustments and to establish the amount of the retroactive payments under paragraphs (a) and (b) of this section.
Under 24 CFR Part 888 § 888.405, this rule establishes the method for calculating retroactive Housing Assistance Payments (HAP) owed to eligible project owners under the Section 8 program. The calculation involves recalculating rent adjustments for the period from October 1, 1979 through May 31, 1991 using Annual Adjustment Factors (AAFs), then comparing those recalculated rents to what was actually approved — with any positive difference constituting the retroactive payment. Several specific rules govern the calculation, including occupancy-rate requirements, the use of revised AAFs where applicable, treatment of special adjustments, and a floor of 1.0 for any AAF that was published below that threshold.
Plain English — not legal advice.
Project owners who meet the eligibility criteria referenced in § 888.401(c) and seek a retroactive HAP payment under § 888.405 generally work through their Public Housing Authority (PHA) to submit documentation of occupancy rates — on an annual or monthly basis — for the covered period. Compliant operators typically gather whatever historical occupancy records are available, understanding that if full records cannot be produced, the PHA will derive an average rate from the three years immediately preceding May 31, 1991. Owners should also be aware that any special adjustments previously granted for items such as real property tax increases or utility rate changes during the covered period will affect the base rent calculation under § 888.405(e).
General guidance for property managers — not legal advice for your specific situation. Consult an attorney for advice on your case.
While § 888.405 primarily governs financial calculations between project owners, PHAs, and HUD rather than individual tenant rights, tenants living in Section 8 projects during the covered period may have an indirect interest in understanding how retroactive HAP payments were determined. Tenants who believe their housing assistance was affected by improper rent calculations during this historical period can consult a local tenant-rights organization or HUD's regional office for general information about how § 888.405 applies to their project. Public records requests to the relevant PHA may also help tenants understand what occupancy documentation was submitted and how retroactive payment amounts were established.
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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