New HUD Notice Update on HUD Multifamily Restructuring Program

   The Department of Housing and Urban Development has made some changes in the rules and procedures governing project-based Section 8 contracts expiring in Federal Fiscal Year 1999 Appropriations Act signed in 1998.

   Most importantly, the new notice sets out changes to the tenant notification requirements. Owners are no longer required to provide 90-day notice to tenants of any rent increase, which may occur as a result of expiration, or termination of the contract. However, owners are now required to provide not less than one year written notification to tenants and HUD of expiration or termination of the contract.

   HUD has also provided a letter that that owners must use when the owner is intending to renew the Section 8 contract with HUD, and a sample letter that owners may use if they do not intend to renew the contract with HUD. If the owner plans not to renew, the letter must state the date of the contract expiration that the owner does not intend to renew the contract and, subject to appropriations, HUD will provide housing vouchers to eligible residents.

   Owners that are prepaying the FHA-insured mortgage on a project-based Section 8 property are required to provide HUD, each tenant of the property and the chief executive officer of the appropriate State or local government for the jurisdiction in which the project is located with at least 150 days, but not more than 270 days, written notice of their intent to prepay the mortgage. Owners may not increase the rent at the project for 60 days following the date of prepayment.

 Copyright and the Homeless Grapevine Issue 37, Aug.-Sept. 1999, Cleveland, Ohio