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Rent Supplements-Rental Housing For Lower Income Families

Program Descriptions

Program Number



Rent Supplements-Rental Housing For Lower Income Families


Federal Agency




Housing and Urban Development Act of 1965, Public Law 89-117, 12 U.S.C. 1701(s).






To make good quality rental housing available to low income families at a cost they can afford.


Types of Assistance

Direct Payments for Specified Use.


Uses and Use Restrictions

HUD makes payments to owners of approved HUD-insured and non-insured multifamily rental housing projects to supplement the partial rental payments of eligible tenants. Rental projects were required to be part of an approved workable program for community improvement or be approved by local government officials. Assistance covers the difference between the tenant's payment and the basic market rental, but may not exceed 70 percent of the market rental. The tenant's payment is between 25 and 30 percent of monthly adjusted income or 30 percent of market rental, whichever is greater. This program is inactive. No new projects are being approved; however, tenants may apply for admission to existing projects.


Eligibility Requirements

Applicant Eligibility

Eligible sponsors included nonprofit, cooperative, builder-seller, investorsponsor, and limited-distribution mortgagors.

Beneficiary Eligibility

Families incomes must be within the income limits prescribed for admission to Section 8 housing in order to qualify for benefits under this program. Families may continue in occupancy if 30 percent of monthly income exceeds the market rent.


Applications for new projects are no longer being accepted. This program is excluded from coverage under OMB Circular No. A-87.


Application and Award Process

Preapplication Coordination

Applications for new projects are no longer being accepted. The sponsor arranged a preapplication conference with the local HUD Multifamily Hub or Program Center to determine the need for rent supplement assistance to the project before a formal application is submitted. Applications for new projects and unit increases for existing projects are no longer being accepted. All existing FHA-insured projects are being converted to the Section 8 Housing Assistance Payments program. This program is excluded from coverage under OMB Circular No. A-102. This program is excluded from coverage under E.O. 12372. No applications for new projects are being accepted.

Application Procedure

No applications for new projects are being accepted. This program is excluded from coverage under OMB Circular No. A-110.

Award Procedure




Range of Approval/Disapproval Time

Not applicable.





Assistance Considerations

Formula and Matching Requirements

HUD makes monthly payments to project owners to make up the difference between the partial rentals paid by assisted tenants and the market rentals.

Length and Time Phasing of Assistance

Assisted tenants must pay between 25 and 30 percent of their adjusted monthly income (after certain deductions) or 30 percent of the market rent, whichever is greater. This program has maintenance of effort (MOE) requirements, see funding agency for further details. Statistical factors used for fund allocation do not apply for this program. The statistical factor used for eligibility is 80 percent of the median family income by HUD field office region, the source calculated by HUD from P-25, Census; 1990 Census; County Business Patterns; P-60, Census; and the Annual Housing Survey.


Post Assistance Requirements


The rent supplement contract is limited to the term of the mortgage or 40 years from the date of the first payment made under the contract, whichever is less. Individual family's assistance ceases when 30 percent of income is equal to or exceeds the market rent.


Any change of the mortgagor during the period of mortgage insurance must be approved by HUD. Defaults in meeting the mortgage terms must be reported. All mortgagors of HUD-insured projects are required to submit an annual financial statement to HUD.


The Department of Housing and Urban Development reserves the right to audit the accounts of either the mortgagee or mortgagor to determine their compliance and conformance with HUD regulations and standards.


Financial Information

Account Identification

Mortgagees are required to maintain records in accordance with acceptable mortgage practices of lending institutions and the HUD regulations. All tenants who benefit from supplements must have their incomes recertified annually.



Range and Average of Financial Assistance

(Outlays) FY 07 not separately identifiable; FY 08 est not separately identifiable; and FY 09 est not separately identifiable.


Program Accomplishments



Regulations, Guidelines and Literature

No new commitments for additional projects will be made under this program. Fact Sheet: Rent Supplements, no charge; 24 CFR 215; HUD Handbook 4350.3.


Information Contacts

Regional or Local Office

Contact the appropriate HUD Field Office listed in Appendix IV.

Headquarters Office

For Management Information, Director, Office of Multifamily Asset Management, Department of Housing and Urban Development, Washington, DC 20410. Telephone: (202) 708-3730.

Web Site Address


Related Programs

14.103, Interest Reduction Payments-Rental And Cooperative Housing For Lower Income Families
14.134, Mortgage Insurance-Rental Housing
14.138, Mortgage Insurance-Rental Housing For The Elderly
14.139, Mortgage Insurance-Rental Housing In Urban Renewal Areas


Examples of Funded Projects

Not applicable.


Criteria for Selecting Proposals

Not applicable.


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