HUD Handbook 4350.3 § 3-8

This paragraph describes the circumstances under which a property owner may admit
         families that do not meet income limits. The exceptions are listed by program.

         A.       Section 8, Section 202/8, Section 202 PAC, Section 202 PRAC and Section
                  811 PRAC Units

                  If the owner is temporarily unable to lease all units to income eligible families, he
                  may admit applicants with incomes that exceed the applicable program income
                  limits with prior written HUD approval. The owner must request HUD approval as
                  follows:

                  1.      For units with Section 8 assistance, the request must be submitted to the
                          Field Office in accordance with the procedures above in paragraph 3-7.

                  2.      For units with Section 202/8 or Section 202 PAC assistance, the owner
                          must submit the information specified in Situation #6 of Exhibit 3-1 to the
                          Field Office. (See paragraph 3-20.G.)

                  3.      For Section 202 or Section 811 PRAC units, the owner must submit the
                          information specified in Situation #6 of Exhibit 3-1 to the Field Office. The
                          Field Office will forward the waiver request with a recommendation to
                          HUD Headquarters for the final decision on the approval. (See
                          paragraph 3-20.G)

                  4.      For Section 202/8, Section 202 PAC, Section 202 PRAC and Section 811
                          PRAC, also see paragraph 3-20.G for a discussion of waiver requests for
                          approval to rent to families that are not elderly or disabled.

B.       BMIR Units

                  The owner must not admit income-ineligible applicants without prior written HUD
                  approval. Any ineligible families that are admitted must pay market rent.

         C.       Section 236, Rent Supplement, and RAP Units

                  1.       In some situations, owners may admit families with incomes that exceed
                           the applicable program income limits to Section 236, Rent Supplement, or
                           RAP units without HUD approval if there are no income-eligible applicants
                           available and fewer than 10% of the units are already occupied by tenants
                           paying market rent.

                  2.       Any ineligible families that are admitted must pay market rent.

Example – Admission of Market Rent Applicants

                      Brookside Gardens is a 100-unit Section 236 project. Currently 92 tenants
                       pay basic rent, 5 tenants pay market rent, and 3 units are vacant. The
                       owner may fill the 3 vacant units with tenants paying market rent if there
                       are no income-eligible applicants available and the owner has taken all
                       reasonable steps to attract eligible families.

                      Shady Grove is a 100-unit Section 236 project where 88 current tenants
                       pay basic rent and 10 tenants pay market rent. The owner must fill the 2
                       current vacancies with income-eligible tenants.

3.       The owner must obtain HUD's approval to admit over-income applicants
                           who pay market rent if at least 10% of the units authorized under the
                           interest reduction subsidy are already occupied by tenants paying market
                           rent.

                  4.       For determining the 10% of units described in subparagraphs 2 and 3
                           above, a unit is defined as follows:

                           a.      For properties with Rent Supplement or RAP, “units” include only
                                   those units covered by the RAP or Rent Supplement contract.

                           b.      For Section 236 properties, “units” include all units in the project.

                  5.       Before admitting any ineligible applicants, the owner must take the
                           following steps:

                           a.      Admit all available eligible applicants, unless there is good cause
                                   for denying assistance.

b.       Take all reasonable steps to attract eligible families, including
                                   using marketing activities most likely to attract eligible applicants
                                   and marketing outside the community or immediate area.

                          c.       Place in the file of any ineligible tenant who is admitted, a written
                                   certification indicating that the requirements in subparagraphs a
                                   and b above have been completed.

         D.       Admission of Police Officers or Security Personnel in Section 8 Properties

                  1.      For the purpose of deterring crime in and around the property, owners
                          may lease a Section 8 unit to a police officer or security personnel who is
                          over the income limits. Security personnel is defined as a qualified
                          security professional with adequate training and experience to provide
                          security services for project residents.

                  2.      To be eligible, the police officer or security personnel must be employed
                          full-time (at least 35 hours per week) by a governmental unit or private
                          employer and be compensated by their employer for providing policing or
                          security services.

                  3.      Owners must submit a written plan to their HUD Field Office or Contract
                          Administrator for authorization to lease to over-income police or security
                          personnel. The plan must include:

                          a.       A description of the existing social and physical conditions of the
                                   property and its surrounding area, and the benefits police or
                                   security would bring to the community and property;

                          b.       The number of units in the property;

                          c.       A detailed assessment of the criminal activities and how the safety
                                   of the tenants and security of the project is affected;

                          d.       The qualifications of the police or security personnel and length of
                                   residency;

                          e.       A description of how the owner proposes to check the background
                                   and qualifications of any security personnel who will reside in the
                                   project;

                          f.       Disclosure of any family relationship between the police officer or
                                   security personnel and the owner. The owner includes all
                                   principals or other interested parties;

                          g.       A description of the proposed rent, the current contract rent to the
                                   unit, the owner’s annual maintenance cost for the unit and the
                                   amount of any other compensation by the owner to the resident

police or security personnel. See paragraph 5-27 for guidance on
                                   establishing rent; and

                          h.       Owner or authorized agent signature.

                  4.      Police officers and other security personnel that reside in subsidized units
                          are subject to the same screening criteria as other applicants.

                  5.      The owner may use the applicable model lease with an added provision
                          that states that the right of occupancy is dependent on continued
                          employment as a police officer or security personnel. (See paragraph 6-
                          12 C for more information)

                  6.      HUD or the Contract Administrator should notify the owners of approval or
                          rejection within 30 days of submission. Unless there are extenuating
                          circumstances, the local HUD Office should approve no more than 1% (or
                          one unit if the property is less than 100 units) of the assisted units on the
                          property for leasing to police or security personnel.