HUD Handbook 4350.3 § 2-43

A.       Fundamental Alteration. Owners are not required to take any action that would
                  result in a fundamental alteration in the nature of the program. A fundamental

alteration is a change so significant that it alters the essential nature of a
                 provider’s operations. For a detailed explanation of fundamental alteration, see
                 Exhibit 2-5.

       B.        Undue Financial and Administrative Burden. The determination of undue
                 financial and administrative burden must be made on a case-by-case basis,
                 involving various factors, such as the cost of the reasonable accommodation, the
                 financial resources of the provider, the benefits the accommodation would
                 provide to the requester, and the availability of alternative accommodations that
                 would adequately meet the requester’s disability–related needs. For examples of
                 undue financial and administrative burden, see Exhibit 2-6.

       C.        Owners are not required to make structural changes that would impose an undue
                 financial and administrative burden, even if alternatives to making housing
                 programs or activities readily accessible to and usable by persons with
                 disabilities are not effective.

                 1.     HUD Field Offices will consider a request to use the residual receipts
                        account to pay for alterations under Section 504.

                 2.     Under HUD requirements, the reserve for replacement account is to be
                        used for replacing existing items. (See Handbook 4350.1, Multifamily
                        Asset Management and Project Servicing.) If HUD approval is received
                        for using the reserve for replacement account for any other purpose (e.g.,
                        Section 504 alterations), then the account must be replenished through
                        property rental income, generally within one year.

       D.        When a request for a reasonable accommodation will result in an undue financial
                 and administrative burden, the owner must provide all other needed
                 accommodations up to the point at which further accommodations would result in
                 an undue financial and administrative burden.

   Example – Reasonable Accommodation that Creates an Undue Financial and Administrative
                                        Burden
 Project A is a 100-unit HUD assisted project. A tenant in this project needs more than $5,000 in
 structural changes for his unit to be accessible to him. The owner of Project A could not cover the
 costs of such extensive structural changes without a rent increase. Residual receipts are insufficient
 to cover the changes, and the replacement reserve cannot be replenished within one year. The
 project does not have sufficient administrative staff to explore numerous possibilities for obtaining
 funding for such structural changes. Generally an owner would not be required to make such
 extensive structural changes because of the burden involved. Note that the amount an owner is
 required to spend to make units accessible could vary based on the size of the project – what the
 owner of a large project may be able to spend in making units accessible may be an undue burden on
 smaller projects.

Example – Reasonable Accommodation that Does Not Create an Undue Financial and
                                  Administrative Burden
  An applicant with a mobility impairment wants to live in a dwelling unit in a particular rental housing
  property. The owner requires all tenants to hand-deliver their rent to the rental office. The unit is
  almost a block away from the rental office, but there is a mailbox located just a few yards from the unit
  entry door. Under 24 CFR 100.204, the owner or manager of an apartment complex must permit the
  applicant to mail the rent payment to the rental office. This policy accommodation would not pose an
  undue financial and administrative burden on the owner and allows the applicant to have equal
  opportunity to use and enjoy the unit.

E.       For other guidance on how to determine whether a reasonable accommodation
                  would result in an undue financial and administrative burden, refer to HUD
                  Handbook 4350.1, Multifamily Asset Management and Project Servicing.