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Option 2  

Option 2

This option is for owners who request a renewal of their Section 8 contract where the Rent Comparability Study (RCS) indicates that the contract rents are at or below comparable market rents, but who are not applying for Mark-Up-To-Market or the contract’s current rents exceed comparable market rents, but the project is exempt from RECAP restructuring and the Owner is willing to cut the rents to comparable market rents.

The initial renewal of the current rents under this option will be adjusted by an operating cost adjustment factor (OCAF) or by a budget-based increase at the owner's request. The initial renewal rents may not exceed the comparable market rents.

At subsequent renewal the current rents may be adjusted by an OCAF, or at the owner's request, a budget based increase, as long as the resulting rents are below the OCAF-adjusted RCS.

Refer to HUD's Section 8 Renewal Policy Handbook for more information and to determine project eligibility and complete submission requirements.

Submission Requirements:

For an Initial Renewal:

  • Contract Renewal Request Form (HUD Form 9624)
  • Renewal Worksheet for Option 2 INITIAL Renewal
  • Tenant 1 year Notification of Renewal Letter 
  • Appropriate worksheet depending on Owner's selection for rent increase:
  • 30-day notice and comment period for a budget, if applicable
  • Utility Allowance Analysis, if applicable
  • RCS, if applicable

Note: Under Option 2, the owner should use the project's current debt service when preparing the budget.

For a Subsequent Renewal:

  • Contract Renewal Request Form (HUD Form 9624)
  • Option 2 Subsequent Renewal Worksheet
  • Tenant 1 year Notification of Renewal Letter
  • Appropriate worksheet depending on Owner's selection for rent increase:
  • 30-day notice and comment period for a budget, if applicable
  • Utility Allowance Analysis, if applicable
  • RCS, if applicable
  • Comparison chart from the Option Two Initial Renewal Request that reflects the results of the study and compares them to the expiring Section 8 units in my project.


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