HUD Handbook 4350.3 § 6-16
Security Deposits for Tenants Transferring to Another Unit (HUD Occupancy Handbook 4350.3 REV-1 CHG-4)
Operative Text
A. When a tenant transfers to a new unit, an owner may:
1. Transfer the security deposit; or
2. Charge a new deposit and refund the deposit for the old unit.
B. If the deposit for the old unit is refunded, the owner must:
1. Follow the requirements listed in paragraph 6-18 regarding the refunding
and use of the security deposit; and
2. Establish a security deposit for the new unit based on the requirements
listed in paragraph 6-15 regarding the collection of a security deposit.
*Figure 6-7*: Amount of Security Deposit to Collect from Tenant
Program Amount to Collect
Section 8 New Construction with AHAP One month’s total tenant payment
executed before November 5, 1979
Section 8 Substantial Rehabilitation with One month’s total tenant payment
AHAP executed before February 20, 1980
Section 8 State Agency with AHAP executed One month’s total tenant payment
before February 29, 1980
Section 8 New Construction with AHAP The greater of:
executed on or after November 5, 1979 [24 1) One month’s total tenant payment, or
CFR 880.608] 2) $50
Section 8 Substantial Rehabilitation with The greater of:
AHAP executed on or after February 20, 1) One month’s total tenant payment, or
1980 [24 CFR 881.601] 2) $50
Section 8 State Agency with AHAP executed The greater of:
on or after February 29, 1980 [24 CFR 1) One month’s total tenant payment, or
883.701] 2) $50
RHS 515 with Section 8 [24 CFR 884.115] Equal to one month’s total tenant payment
Section 8 LMSA with HUD-insured or HUD- An amount up to, but no greater than, one month’s
held mortgages [24 CFR 886.116] total tenant payment
Section 8 provided with the sale of a HUD- The greater of:
owned property (Property Disposition) [24 1) One month’s total tenant payment, or
CFR 886.315] 2) $50
Section 202/8 or Section 202 PAC [24 CFR The greater of:
891.435] 1) One month’s total tenant payment, or
2) $50
Section 202 PRAC [24 CFR 891.435] The greater of:
1) One month’s total tenant payment, or
2) $50
Section 811 PRAC [24 CFR 891.435] The greater of:
1) One month’s total tenant payment, or
2) $50
Section 236 One month’s tenant rent
Section 236 with RAP The greater of:
1) One month’s total tenant payment, or
2) $50
Section 221(d)(3) BMIR One month’s tenant rent
Rent Supplement The greater of:
1) One month’s total tenant payment, or
2) $50HUD Handbook 4350.3 REV-1 CHG-4 § 6-16 governs what happens to a security deposit when a tenant moves from one unit to another within the same HUD-assisted property. The owner has two options: transfer the existing deposit to the new unit, or charge a fresh deposit for the new unit and refund the deposit from the old one. If a refund is issued, the owner must follow the refunding procedures in § 6-18 and set the new deposit according to the program-specific amounts outlined in § 6-15 and Figure 6-7, which vary by subsidy program and range from one month's tenant rent to the greater of one month's total tenant payment or $50.
Plain English — not legal advice.
Under HUD Handbook 4350.3 REV-1 CHG-4 § 6-16, operators of HUD-assisted properties generally document which of the two permitted transfer options they are applying when a resident moves between units. When the deposit is transferred, operators update their accounting records to reflect the new unit assignment. When a new deposit is collected and the old one refunded, compliant operators apply the refund procedures from § 6-18 and calculate the new deposit amount using the program-specific schedule in Figure 6-7, ensuring the amount aligns with the applicable subsidy program's requirements.
General guidance for property managers — not legal advice for your specific situation. Consult an attorney for advice on your case.
HUD Handbook 4350.3 REV-1 CHG-4 § 6-16 gives tenants in HUD-assisted housing a clear framework for what should happen to their security deposit during an intra-property unit transfer. If an owner chooses to refund the old deposit rather than transfer it, the refund must follow the procedures in § 6-18, and any new deposit must be calculated according to the program-specific limits in Figure 6-7—meaning an owner cannot charge an arbitrary amount. Tenants who believe their deposit was not handled in accordance with § 6-16 may raise the issue with their property's management, file a complaint with the U.S. Department of Housing and Urban Development, or reach out to a local tenant-rights organization for general guidance on available options.
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.
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