HUD Handbook 4350.3: Occupancy Requirements of Subsidized Multifamily Housing Programs
F. Assigning a Smaller Unit Than Required
HUD Handbook 4350.3 REV-1 — Occupancy Requirements of Subsidized Multifamily Housing Programs · 2026 edition · updated 2026-10-05 · United States
An owner may assign a family to a smaller unit size than suggested by the owners’ occupancy policies if the family requests the smaller unit and if all of the following apply:
The family is eligible for the smaller unit based upon the number of family members, and occupancy of the smaller unit will not cause serious overcrowding;
Assigning a smaller unit results in a lower rent payment for the occupant in a Section 236 or BMIR property; and
The assignment will not conflict with local codes.
- G.
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