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HAP Contracts
Housing Assistance Payments contracts are agreements between a public housing agency and the owner of a property to define the number of units eligible for Section 8 rental subsidies.
What are HAP Contracts?
Housing Assistance Payments contracts, often referred to as HAP contracts, are agreements between a public housing agency (PHA) and the owner of a property to define the number of units eligible for Section 8 rental subsidies.
Based on the agreement, the Department of Housing and Urban Development provides rental subsidies to the owner of a property to cover the difference between the approved or contract rent and residents’ contributions. Renter contributions are typically capped at 30% of a household’s adjusted income.
In exchange for this subsidization, property owners are required to lease those units to Section 8-eligible families or individuals, maintaining them to all relevant sanitation and safety standards. The contract also includes reporting requirements and the prohibition of any discrimination in the operation of the properties and resident selection.
Am I Eligible?
In order to enter into a HAP contract, owners must be approved by the relevant public housing agency. The PHA will determine if the owner has previously been suspended from participation and will request information from HUD to identify any administrative or legal actions related to housing, such as violations of the Fair Housing Act or other similar legislation.
When Does a HAP Contract Expire?
HAP contracts typically run concurrently with a related lease agreement. If a lease is extended, so too is the HAP contract. Similarly, if either the owner or renter terminates the agreement, the HAP contract also ceases.
While there are other potential ways HAP contracts can be terminated ahead of schedule, most are related to either a halting of assistance from the public housing agency or a violation of the agreement by the property owner.
Transferring Ownership
If the owner of a property with a HAP contract decides to sell the asset, information must be submitted to the public housing agency in advance of the sale, and the PHA must agree to the assignment of the contract. A PHA will usually require that the buyer of the property provide forms for tax purposes if the HAP contract will continue.