HUD HCV Guidebook § 9

Before approving the assisted tenancy and executing the HAP contract, the PHA must58 ensure that the
following program requirements have been met:
     •    The unit is eligible;
     •    The unit has been inspected by the PHA and meets HQS;
     •    The lease includes the tenancy addendum;
     •    The rent charged by owner is reasonable; and
     •    At the time a family initially receives tenant-based assistance for occupancy of a dwelling unit, and
          where the gross rent of the unit exceeds the applicable payment standard for the family, the family
          share does not exceed 40 percent of the family's monthly adjusted income. This cap is referred to as
          the maximum initial rent burden.
The following actions must be completed before the beginning of the lease term:
     •    The PHA must59 inspect the unit and determine that the unit meets HQS (see Section 9.3 of this
          chapter);
     •    The owner and the tenant must60 have executed the lease, including the HUD-prescribed tenancy
          addendum and, for most units constructed prior to January 1, 1978, the lead-based paint disclosure
          information as required in 24 CFR §§ 35.88 and 35.92(b) (see Section 10.2 of this chapter); and
     •    The PHA must approve leasing of the unit in accordance with program requirements.

Eligible Housing
The tenancy cannot61 be approved if the chosen unit is one of the following:
     •    Public or Indian Housing unit;
     •    Unit receiving project-based assistance under Section 8 of the 1937 Act (42 U.S.C. 1437f);
     •    Nursing homes, board and care homes, or facilities providing continual psychiatric, medical, or nursing
          services;
     •    College or other school dormitories;

57
   Form HUD-52517, line 12a
58
   24 CFR 982.305(a)
59
   24 CFR 982.305(b)
60
   24 CFR 982.305(b)(1)(ii)
61
   24 CFR 982.352(a)

•    Units on the grounds of penal, reformatory, medical, mental, and similar public or private institutions;
      •    Unit occupied by its owner or by a person with any interest in the unit; or
      •    Unit owned by the parent, child, grandparent, grandchild, sister, or brother of any member of the
           family, unless the PHA determines that approving the unit would provide reasonable accommodation
           for a family member who is a person with disabilities.62
However, assistance may be provided to a family residing in shared housing, a cooperative or to an owner of a
manufactured home leasing a manufactured home space. Please refer to the Special Housing Types chapter.
Units owned or substantially controlled by the PHA administering the ACC for the Housing Choice Voucher may
be leased under the HCV program only if the following conditions are satisfied:
      •    The unit is not ineligible housing, as described above; and
      •    The PHA informs the family, both orally and in writing, that the family has the right to select any eligible
           unit available for lease, and the family selects the PHA-owned unit freely, without PHA pressure or
           steering.
The Housing Choice Voucher issued to the family will state the unit size (i.e., the number of bedrooms for
which the family qualifies according to the PHA’s subsidy standards). Regardless of the number of bedrooms
stated on the Housing Choice Voucher issued to the family, the family may rent an otherwise acceptable unit
that is smaller than the size indicated on the family’s HCV, as long as the unit meets HQS space standards
(i.e. no more than two persons per living/sleeping room) (see Section 9.3 of this chapter). Also, the PHA may
grant an exception to its subsidy standards if the PHA determines that the exception is justified by the age,
sex, health, disability, or relationship of family members or other personal circumstances.

Prohibition Against Other Housing Subsidy
A family may not receive the benefit of tenant-based assistance while receiving the benefit of any of the
following forms of other housing subsidy, for the same unit or for a different unit:
      •    Public or Indian Housing assistance;
      •    Other Section 8 assistance (including other tenant-based assistance);
      •    Assistance under former Section 23 of the United States Housing Act of 1937 (before amendment by
           the Housing and Community Development Act of 1974);
      •    Section 101 rent supplements;
      •    Section 236 rental assistance payments;
      •    Tenant-based assistance under the HOME program;
      •    Rental assistance payments under Section 521 of the Housing Act of 1949 (a program of the Rural
           Development Administration);
      •    Any local or State rent subsidy;
      •    Section 202 supportive housing for the elderly;
      •    Section 811 supportive housing for persons with disabilities;
      •    Section 202 projects for non-elderly persons with disabilities (Section 162 assistance); or
      •    Any other duplicative Federal, State, or local housing subsidy, as determined by HUD.

62
     24 CFR 982.306(d)

For this purpose, “housing subsidy” does not include the housing component of a welfare payment, a social
security payment received by the family, or a rent reduction because of a tax credit.

Unit Meets Housing Quality Standards (HQS)
To ensure that all residents live in safe, habitable dwellings, the items and components located inside the
building, outside the building, and within the units must be functionally adequate, operable, and free of health
and safety hazards.63 This determination is made using HUD’s HQS and/or equivalent State or local
standards approved by HUD. HQS is the minimum quality standards developed by HUD in accordance with 24
CFR 5.703 for the HCV program, including any variations approved by HUD for the PHA under 24 CFR
5.705(a)(3).The PHA must notify the family and owner of its determination as to whether the unit meets
HQS64.
For PHAs with 1,250 or fewer budgeted (available) Housing Choice Voucher units, the notice to the family and
owner must65 be made within 15 calendar days after the family and owner submit the request for tenancy
approval. The 15-day clock is suspended during any period when the unit is not available for inspection.
For PHAs with more than 1,250 budgeted Housing Choice Voucher units, the notice to family and owner
must66 be made within a reasonable time after the family and owner submit the request for tenancy approval.
However, to the extent practicable, such inspection and determination must be completed within 15 days
after the family and owner submit the request. The 15-day clock is suspended during any period the unit is not
available for inspection67 (see Section 9.3 of this chapter).
For units constructed prior to January 1, 1978, where a child under age 6 will be residing,68 the PHA must
have an inspector (whether on staff or contracted) trained in visual assessment for deteriorated paint
surfaces in accordance with procedures established by HUD69 conduct a visual assessment of all painted
surfaces in order to identify any deteriorated paint and inform the owner of the results.70 If any deteriorated
paint surfaces are identified, the owner must stabilize each such surface before the family occupies the unit71
and provide a notice to occupants describing the results of the paint stabilization’s clearance examination
within 15 days after that examination.72 The owner must incorporate ongoing lead-based paint maintenance
activities into regular building operations unless a lead-based paint inspection or a lead hazard reduction
clearance report indicates that no lead-based paint is present in the dwelling units, common areas, and on

63
   24 CFR 5.703(a)
64
   In accordance with PIH Notice 2024-26, the compliance date in which PHAs must implement NSPIRE standards
is October 1, 2025
65
   24 CFR 982.305(a)
66
   24 CFR 982.305(b)
67
   Notice PIH 2017-20 HOTMA HQS Implementation Guidance issued on October 27, 2017
68
   Exemptions exist for a residential property that a certified lead-based paint inspection found not to have lead-
based paint, or from which all lead-based paint has been identified and removed, and clearance has been
achieved.
69
   24 CFR 35.1215(a)(1); online training (taking about 1 hour) is available at
https://apps.hud.gov/offices/lead/training/visualassessment/h00101.htm; certified lead-based paint risk
assessors can also perform the visual assessment (40 CFR 745.227(d)(4)(ii)).
70
   24 CFR 35.1215(a)(1)
71
   24 CFR 35.1215(b)
72
   24 CFR 35.125(b)

exterior surfaces73. If a child under age 6 residing in an HCV unit is found to have an elevated blood lead
level, the PHA and the owner shall respond as described in 24 CFR 35.1225.74

Rent Reasonableness
Prior to tenancy approval, the PHA must75 make a rent reasonableness determination by comparing the rent
being charged by the owner to rents for other comparable unassisted units (see the Rent Reasonableness
chapter).
If the proposed rent is determined to be too high and does not meet the rent reasonableness limitation, the
PHA may wish to engage in negotiations with the owner and attempt to reduce the rent to owner or to include
some or all of the utilities in the contract rent. It is often in the PHA’s interest to make its best effort to
approve the tenancy and execute a lease and HAP contract. Starting the search over increases time and
money spent on the leasing process and may increase frustration for all parties.

Maximum Initial Rent Burden
At initial occupancy of a unit (new admissions and unit transfers), if the gross rent of the unit exceeds the
applicable payment standard for the family, the PHA must76 ensure that the family share does not exceed 40
percent of the family’s monthly adjusted income. This cap is referred to as the maximum initial rent burden.
If the total family share exceeds 40 percent of the family’s monthly adjusted income, the PHA cannot approve
the tenancy. If the family requests the PHA’s assistance in negotiating the rent, the PHA must77 assist the
family. In cases where an owner may have to reduce the rent to owner by a small amount, the owner may
prefer this rent reduction to having a unit that could remain vacant for any period of time.

Maximum Initial Rent Burden Example
                                                   Adjusted Income   $700

                                             40% Adjusted Income     $280

                                            Total Tenant Payment     $210

                                                        Gross Rent   $1,050

                                                  Payment Standard   $950

                                      Amount Gross Rent exceeds
                                                                     $100
                                  Payment Standard ($1,050-$950)

73
   24 CFR 35.1320, 24 CFR 35.1355(a)
74
   24 CFR 35.1225
75
   24 CFR 982.305(a)(4)
76
   24 CFR 982.305(a)(5) and 42 USC 1437f(o)(3))
77
   24 CFR 982.506

Family Share ($210 + $100)    $310

                                 The total tenant payment is calculated as described in
                                 the Calculating Rent and Housing Assistance Payments
                                 chapter. Since $310 exceeds 40 percent of adjusted
                                 monthly income ($280), the PHA cannot approve the
                                 tenancy, and family cannot rent the unit.

PHA Disapproval of Owner
Under certain circumstances, the PHA may disapprove a tenancy due to factors related to the owner. See the
HAP Contracts chapter for an in-depth discussion of when HUD mandates the PHA not to approve the assisted
tenancy due to the owner’s history.

Tenant Screening
Tenant screening and selection are the responsibility of the owner. At or before tenancy approval by the PHA,
the PHA must78 inform the owner of this responsibility. Although tenant screening and selection remain the
function of the owner, PHAs may opt to screen for family behavior or suitability for tenancy. The PHA must79
conduct any such screening of applicants in accordance with policies stated in its administrative plan.
PHAs are required to give the owner the following information:
     •    Current and prior address of the prospective HCV tenant, as recorded by the PHA; and
     •    Name and address, if known to the PHA, of the prospective HCV tenant’s current and prior landlord.
The PHA may offer the owner other information in the PHA possession about the family, including information
about the tenancy history of family members, or about drug trafficking by family members. If the PHA adopts a
policy of offering owners other information the PHA has about a family related to past tenancy and drug
trafficking history, this policy must80 be included in the PHA’s administrative plan and in the information
packet that the family receives at the briefing. The PHA must81 provide the same types of information to all
families and to all owners. In cases involving a survivor of domestic violence, dating violence, sexual assault,
or stalking, 24 CFR part 5, subpart L (Protection for Victims of Domestic Violence, Dating Violence, Sexual
Assault, or Stalking) applies.
The PHA may inform owners that they may consider a family’s background with respect to such factors as:
          •   Payment of rent and utilities;
          •   Care of unit and premises;
          •   Respect for the rights of other residents to the peaceful enjoyment of their housing;
          •   Drug-related criminal activity or other criminal activity that threatens the health, safety, or property
              of others; and
          •   Compliance with other essential conditions of tenancy.

78
   24 CFR 982.307(a)(2)
79
   24 CFR 982.307(a)(1)
80
   24 CFR 982.307(b)
81
   24 CFR 982.307(b)(3)