HUD Handbook 4350.3 § 1-4

A.     Subsidy contract administration involves a broad range of responsibilities,
              including program compliance functions to ensure that HUD-subsidized
              properties are serving eligible families at the correct level of assistance, and
              asset management functions to ensure the physical and financial health of HUD
              properties.

       B.     HUD has primary responsibility for contract administration but has assigned
              portions of these responsibilities to other organizations that act as Contract
              Administrators for HUD. These Contract Administrators are generally housing
              agencies, such as State Housing Finance Agencies or local housing authorities.
              There are two types of Contract Administrators that assist HUD in performing
              contract administration functions.

              1.      Traditional Contract Administrators. These Contract Administrators have
                      been used for over 20 years and have Annual Contributions Contracts
                      (ACCs) with HUD. Under their ACCs, Traditional Contract Administrators
                      are responsible for asset management functions and HAP contract
                      compliance and monitoring functions. They are paid a fee by HUD for
                      their services.

              2.      Performance-Based Contract Administrators (PBCAs). The use of
                      PBCAs began as an initiative in 2000. Under a performance-based ACC,
                      the scope of responsibilities of a Contract Administrator is more limited
                      than that of a Traditional Contact Administrator. A PBCA’s
                      responsibilities focus on the day-to-day monitoring and servicing of
                      Section 8 HAP contracts. PBCAs are generally required to administer
                      contracts on a statewide basis and have strict performance and reporting
                      requirements as outlined in their ACC.