All rental charges collected above the basic rental charge must be accumulated, safeguarded and periodically paid to HUD, computed unit by unit

s236.subsidy_calculation.excess_rental_charges_accumulated_and_remitted · v1.0.0

The project owner must, as required by HUD, accumulate, safeguard and periodically pay to the Secretary or such other entity as the Secretary determines, on such terms and conditions as the Secretary deems appropriate, all rental charges collected ON A UNIT-BY-UNIT BASIS in excess of the basic rental charges. Unless HUD directs otherwise those excess charges are credited to a reserve used to make additional assistance payments. The unit-by-unit measure is the operative one and is the provision most often got wrong: excess income is not a project-level surplus computed after expenses, it is the arithmetic difference on each individual unit between what the household actually paid and that unit's basic rental charge, summed across units. A project can owe excess income to HUD in a year in which it operated at a loss.

Confidence

high

Effective from

1996-09-26

Consequence model

contract remedy

Last reviewed

2026-08-29