A rent increase from an owner advance for capital improvements phases in over at least three years if it is 30 percent or more, and is capped at 10 percent a year between 10 and 30 percent

s236.rent_limit.capital_improvement_rent_increase_phase_in · v1.0.0

To induce owner advances for capital improvements benefiting a Section 236 project, HUD may include in the basic and fair market rental charges an amount permitting a return of those advances with interest out of project income on terms HUD determines. Any resulting increase in tenant rent contributions must be to a level not exceeding the lower of 30 percent of the tenant's adjusted income or the published existing fair market rent for comparable housing established under section 8; must be phased in equally over a period of not less than three years if the increase is 30 percent or more; and must be limited to not more than 10 percent per year if the increase is more than 10 percent but less than 30 percent. Assistance under section 8 is to be provided, to the extent available under appropriations Acts, if necessary to mitigate any adverse effects on income-eligible tenants.

Confidence

high

Effective from

1990-11-28

Consequence model

agency finding with cure

Last reviewed

2026-08-29