HUD Handbook 4350.3 § 5-25

Calculating the Tenant Contribution for Section 8, PAC, PRAC, RAP, and (HUD Occupancy Handbook 4350.3 REV-1 CHG-4)

HUD guidance — not codified law
In Force
Verified 11/9/2026 · Next check 11/16/2026
effective 9/24/2026FederalSection 8 HCV

Operative Text

HUD Handbook 4350.3 § 5-25
Rent Supplement Properties

        A.       Total Tenant Payment (TTP)

                The Total Tenant Payment (TTP) is the amount a tenant is expected to contribute
                for rent and utilities. TTP for Section 8, PAC, PRAC, RAP, and Rent Supplement
                properties is based on the family’s income. The formulas for calculating TTP are
                shown in Figure 5-6. Exhibit 5-8 also shows the formulas for calculating tenant
                contributions for all assisted-housing programs.

B.       Unit Rent

                 1.       The contract rent (basic rent in the Section 236 program) represents the
                          amount of rent an owner is entitled to collect to operate and maintain the
                          property. It is HUD-approved. For Section 202 and 811 PRACS, the
                          contract rent is the operating rent *(gross rent)* minus the utility
                          allowance.

                 2.       Projects in which the tenant pays all or some utilities have HUD-approved
                          utility allowances that reflect an estimated average amount tenants will
                          pay for utilities assuming normal consumption.

        C.       Timeframe for Calculating Rent

                Owners calculate rent at three points in time.

                 1.       Owners must calculate rent prior to occupancy by an applicant.

                 2.       Owners must calculate rent as part of an annual recertification. Refer to
                          Chapter 7, Section 1 for information on annual recertification of income.

                 3.       When assistance is provided through Section 8, PAC, PRAC, RAP, or
                          Rent Supplement, owners must recalculate rent if a tenant reports a
                          change in income, allowances, or family composition. Refer to Chapter 7,
                          Section 2 for information on interim recertifications of income.

Figure 5-6: Total Tenant Payment Formulas

Section 8, PAC, PRAC, and RAP

                TTP is the greater of the following:
                  30% of monthly adjusted income;
                  10% of monthly gross income;
                  Welfare rent (welfare recipients in as-paid localities only); or
                  The $25 minimum rent (Section 8 only).
                Section 8, RAP, and PAC programs may admit an applicant only if the TTP is less
                 than the gross rent.
                In PRAC properties, the TTP may exceed the PRAC operating rent.

                                            Rent Supplement

                TTP is the greater of the following:
                  30% of monthly adjusted income; or
                  30% of gross rent.
                At move-in or initial certification, the amount of Rent Supplement assistance may be
                 no less than 10% of the gross rent or the tenant is not eligible.
Source: Legislative text reproduced verbatim
Plain English

HUD Handbook 4350.3 REV-1 CHG-4 § 5-25 establishes how the Total Tenant Payment (TTP) is calculated for households living in Section 8, PAC, PRAC, RAP, and Rent Supplement properties. The TTP represents the portion of rent and utilities a household is expected to pay, and it is derived from the family's income using specific formulas — generally the greater of 30% of monthly adjusted income, 10% of monthly gross income, or other program-specific benchmarks. Owners are required to calculate or recalculate rent at three distinct points: before a new tenant moves in, during annual recertification, and whenever a tenant reports a change in income, allowances, or family composition.

Written by anthropic/claude-sonnet-4.6 · Reviewed on September 25, 2026

Plain English — not legal advice.

For Property Managers

Under HUD Handbook 4350.3 REV-1 CHG-4 § 5-25, compliant operators calculate the TTP for each household at move-in, at every annual recertification, and upon any reported interim change in income, allowances, or family composition. Operators apply the applicable formula from Figure 5-6 — which differs depending on whether the property is Section 8/PAC/RAP, PRAC, or Rent Supplement — and ensure that contract rents and utility allowances used in those calculations carry HUD approval. For Section 8, RAP, and PAC properties, operators also confirm that an applicant's TTP falls below the gross rent before admitting them.

General guidance for property managers — not legal advice for your specific situation. Consult an attorney for advice on your case.

For Tenants

Section 5-25 of HUD Handbook 4350.3 REV-1 CHG-4 means that the share of rent and utilities you are expected to pay in a Section 8, PAC, PRAC, RAP, or Rent Supplement property is tied to your household's income and must be recalculated whenever your income, allowances, or family composition changes — not just at annual recertification. If you believe your tenant contribution has not been recalculated after you reported a qualifying change, you may raise that concern with your property manager, contact the U.S. Department of Housing and Urban Development, or reach out to a local tenant-rights organization for guidance on next steps. Keeping documentation of any reported changes in income or family composition can be useful when navigating questions about how your contribution was calculated under this provision.

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 25, 2026 — auto-generated, not yet human-reviewed. See /transparency for methodology.

Effective Timeline

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Related Rules

§ 888.113
§ 888.113 Fair market rents for existing housing: Methodology.
§ 888.115
§ 888.115 Fair market rents for existing housing: Manner of publication.
§ 0770-01-05-.05
CONFLICT OF INTEREST.

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