An owner may retain excess charges only if HUD authorises it, and retention for non-project use additionally requires a good-condition finding and may carry a five-year affordability extension

s236.subsidy_calculation.retention_of_excess_charges_requires_hud_authorization · v1.0.0

Notwithstanding the remittance requirement, a project owner may retain some or all of the excess charges for project use if authorised by HUD. Retained excess charges must be used for the project on terms and conditions HUD establishes, unless HUD permits the owner to retain funds for NON-project use, which HUD may do only after determining that the project is well-maintained housing in good condition and that the owner has not engaged in material adverse financial or managerial actions or omissions as described in section 516 of the Multifamily Assisted Housing Reform and Affordability Act of 1997. In connection with retention for non-project use HUD may require the owner to enter a binding commitment, applicable to any subsequent owner, to continue operating the project under all its low-income affordability restrictions for not less than the term of the existing restrictions plus an additional five years. HUD must not withhold approval of retention because unpaid excess charges exist where the unpaid amount is being remitted under a workout agreement, unless the owner is in violation of that agreement.

Confidence

high

Effective from

1996-09-26

Consequence model

contract remedy

Last reviewed

2026-08-29