Operating the project under HUD's tenant eligibility and rent requirements, including a review of tenant incomes at intervals of one year, is a condition of receiving interest reduction payments

s236.recertification.annual_review_of_tenant_incomes · v1.0.0

As a condition of receiving the benefits of interest reduction payments the project owner must operate the project in accordance with such requirements with respect to tenant eligibility and rents as HUD prescribes, and HUD's procedures provide for review of tenant incomes at intervals of one year or at shorter intervals where HUD deems it desirable. The annual income review in a Section 236 project is therefore not merely an administrative practice, it is the statutory condition on which the interest subsidy rests: an owner that does not operate to HUD's tenant eligibility and rent requirements has failed the condition attached to the payments themselves, which is a different and larger exposure than a file-level finding.

Confidence

high

Effective from

1981-08-13

Consequence model

contract remedy

Last reviewed

2026-08-29