HUD Handbook 4350.3 § 3-23
Occupancy Standards (HUD Occupancy Handbook 4350.3 REV-1 CHG-4)
HUD guidance — not codified law
In Force
Verified 9/24/2026 · Next check 10/1/2026
effective 9/24/2026FederalOccupancy StandardsOperative Text
HUD Handbook 4350.3 § 3-23
A. Overview
1. Owners must develop and follow occupancy standards that take into
account the size and number of bedrooms needed based on the number
of people in the family.
2. Occupancy standards serve to prevent the over- or underutilization of
units that can result in an inefficient use of housing assistance.
Occupancy standards also ensure that tenants are treated fairly and
consistently and receive adequate housing space. By following the
standards described in this paragraph, owners can ensure that applicants
and tenants are housed in appropriately sized units in a fair and
consistent manner as prescribed by law. Occupancy standards must be
part of an owner’s tenant selection procedures. Refer to paragraph 4-4
for more details on developing tenant selection procedures.
B. Key Requirements
1. Owners of all properties subject to this handbook, including subsidized
housing cooperatives, must assign a family to a unit of appropriate size,
taking into consideration all persons residing in the household.
2. Owners must have written standards describing the project eligibility
criteria. Owners have discretion in developing specific occupancy
standards for a property, as long as the standards do not violate fair
housing requirements or contain prohibited policies and comply with the
following (see Exhibit 3-2 for HUD policy guidance).
a. Federal, State, and local fair housing and civil rights laws;
b. Tenant-landlord laws;
c. Zoning restrictions; and
d. HUD’s Equal Opportunity and nondiscrimination requirements
under HUD's administrative procedures.
C. Timeframe for Applying Occupancy Standards
1. Owners apply their occupancy standards before assigning the family to a
unit. Owners should review family size and occupancy standards prior to
completing all of the required verifications so that if the property cannot
accommodate the family, the owner may immediately inform the family of
its ineligibility.
2. Owners also compare family composition to occupancy standards when
there is a change in family size. This comparison is done to determine
whether the family needs to transfer to another unit.
D. Prohibition of Occupancy Standards that Exclude Children
1. The Fair Housing Act prohibits housing providers from discriminating on
the basis of familial status, making it illegal to discriminate against
families because of the presence of children.
2. Owners may neither exclude families with children from their properties,
nor may they develop policies or procedures that have the purpose or
effect of prohibiting children (e.g., policies in tenant selection plan,
occupancy standards and house rules).
3. Owners may not exclude otherwise eligible elderly families with children
from elderly properties or elderly/disabled properties covered by this
handbook.
E. General Occupancy Standards
1. Owners have discretion in developing occupancy policies that meet the
needs of the specific property. HUD does not prescribe specific policies
owners must implement but provides guidelines owners must follow when
developing written occupancy standards.
2. HUD’s occupancy guidelines are provided in Exhibit 3-2. Generally a
two-persons-per-bedroom standard is acceptable. An owner may
establish a different standard for assigning unit size based on specific
characteristics of the property (e.g., some bedrooms are too small for two
persons).
3. An owner’s occupancy standards establish the size of the unit a family will
occupy, but owners must avoid making social judgments on a family’s
sleeping arrangement. For example, it is not for the owner to determine
whether an unmarried couple may share the same bedroom or whether a
young child can share a bedroom with a parent.
4. Owners may consider the size of the unit, the size of the bedrooms, and
the number of bedrooms so long as their policy allows for family
preferences (within HUD guidelines) to be considered. As owners
develop and implement occupancy standards, they must take into
consideration the following factors:
a. The number of persons in the family;
b. The age, sex and relationship of family members;
c. The family's need for a larger unit as a reasonable
accommodation; and
d. Balancing the need to avoid overcrowding with the need to avoid
underutilization of the space and unnecessary subsidy.
5. If a family, based on the number of members, would qualify for more than
one unit size, the owner must allow the family to choose which unit size
they prefer.
6. Counting family members. In order to determine the size of unit that
would be appropriate for a particular family, the owner needs to determine
the number of family members.
a. The owner must count all full-time members of the family.
b. The owner must also count all anticipated children. Anticipated
children include the following:
(1) Children expected to be born to a pregnant woman;
(2) Children in the process of being adopted by an adult family
member;
(3) Children whose custody is being obtained by an adult
family member;
(4) Foster children who will reside in the unit;
(5) Children who are temporarily in a foster home who will
return to the family; and
(6) Children in joint custody arrangements who are present in
the household 50% or more of the time.
c. The owner may count children who are away at school and who
live at home during recesses.
NOTE: Owners should not count children who are away at school
who have established residency at another address or location as
evidenced by a lease agreement. The new address or location is
considered the student’s principle place of residence.
d. The owner must count live-in aides for purposes of determining
appropriate unit size.
e. The owner may establish reasonable standards for counting family
members that are temporarily in a correctional facility. For
example, it is reasonable for an owner to count a teenager who
will return to the family in six months from a detention center. It is
not reasonable to count an adult member who may return to the
family in two years following incarceration.
f. The owner must not count nonfamily members, such as adult
children on active military duty, permanently institutionalized
family members, or visitors.
g. The owner must count foster adults living in the unit.
F. Assigning a Smaller Unit Than Required
An owner may assign a family to a smaller unit size than suggested by the
owners’ occupancy policies if the family requests the smaller unit and if all of the
following apply:
1. The family is eligible for the smaller unit based upon the number of family
members, and occupancy of the smaller unit will not cause serious
overcrowding;
2. Assigning a smaller unit results in a lower rent payment for the occupant
in a Section 236 or BMIR property; and
3. The assignment will not conflict with local codes.
G. Assigning Units Larger Than Required
1. An owner may assign a family to a larger unit than suggested by the
owner’s occupancy standards if one of the following conditions exists (see
exception for assigning a larger unit to a single person in G.2 below):
a. No eligible family in need of the larger unit is available to move
into the unit within 60 days, the property has the proper size unit
for the family but it is not currently available, and the family agrees
in writing to move at its own expense when a proper size unit
becomes available.
b. A family needs a larger unit as a reasonable accommodation for a
family member who is a person with a disability.
2. However, a single person must not be permitted to occupy a unit with two
or more bedrooms, except for the following persons:
a. A person with a disability who needs the larger unit as a
reasonable accommodation.
b. A displaced person when no appropriately sized unit is available.
c. An elderly person who has a verifiable need for a larger unit.
d. A remaining family member of a resident family when no
appropriately sized unit is available.
H. Change in Family Size After Initial Occupancy
1. After a family moves into a unit, the unit may become overcrowded or
underutilized due to a change in family size.
a. Rental properties.
(1) The owner may require the family to move to a unit of
appropriate size. If a unit of appropriate size is not
available, the owner must not evict the family and must not
increase the family’s rent to the market rent. See the
example below.
Example - Change in Family Size
Atta and Kumari Gupta live in a 3-bedroom unit at Elmwood Terrace. The Guptas
have lived in the unit with their three children for 12 years. However, all of the Gupta
children are grown and have moved out of the family. Atta and Kumari Gupta no
longer need a 3-bedroom unit and could move into a 1-bedroom unit. Elmwood
Terrace has only 2- and 3-bedroom units. If a 2-bedroom unit becomes available, the
owner may require the Guptas to move into the smaller unit, but must not require them
to move out of the property. If the owner asks the Guptas to move into a 2-bedroom
unit, the Guptas may choose to move into it and continue to receive assistance, or
remain in the 3-bedroom unit and pay market rent.
If a family refuses to move to the correct size unit, the
family may stay in the current unit and pay the market rent.
The owner must not evict the tenant for refusing to move
but may evict the family if it fails to pay the market rent in
accordance with the lease.
b. Subsidized housing cooperatives.
(1) Units occupied by families who are not receiving rental
assistance under a contract for assistance. In Section 236
and BMIR cooperatives in which the member is receiving
no other assistance, the cooperative may establish its own
policy on whether the cooperative should:
Offer over-housed members smaller units; and
Require members who refuse such offers to pay the
market rate carrying charge.
(2) Units occupied by families receiving assistance through an
assistance contract. These will typically be families
receiving Rent Supplement, RAP, or Section 8 assistance.
When an appropriately sized unit becomes available, the
cooperative must require an over-housed member to
either:
Transfer to the appropriately sized unit offered by the
cooperative and continue to receive assistance; or
Remain in the same unit and pay a higher carrying
charge.
The choice remains with the member. If an appropriately
sized unit is available, a cooperative may permit an over-
housed member to remain in the same unit and continue to
receive Section 8/Rent Supplement/RAP assistance only
as long as there is no market for the size of unit the
member would be vacating.
(3) If a family refuses to move to the correct size unit, the
family may stay in the current unit and pay the market rate
carrying charge. The owner must not evict the tenant for
refusing to move but may evict the family if it fails to pay
the market rate carrying charge in accordance with the
lease.
2. See Chapter 7, Section 3, for additional information about unit transfers
for tenants.
I. Change in Need for Accessible Features
If a family is in an accessible unit but no longer needs the accessible features,
the owner may request that the family move to another unit in the project. For
such a request to be enforceable, this provision must be made in the lease.Source: Legislative text reproduced verbatim
Effective Timeline
Current
Sep 24, 2026
Click on timeline segments to view historical versions.
References Out
No outbound references recorded yet for this provision.
References In
No inbound references recorded yet for this provision.
Related Rules
§ 244.810
Required space in dwelling units
§ 244.820
Dwelling unit to be occupied by one (1) family
§ 244.830
Arrangement of rooms