11-2. HOUSING CONVERSION ACTIONS

• A. Opt-outs. This term refers to a conversion action where an owner chooses to opt-out of the project-based Section 8 program by not renewing an expiring Section 8 project-based HAP contract.

  1. To opt-out of the project-based Section 8 program, an owner must satisfy all notification requirements, including the provision of notice of the proposed HAP contract termination to the tenants and the contract administrator at least one year before termination, and submit the request and certification to the local HUD Office/Contract Administrator (CA) not less than 120 days before the expiration of the contract.

  2. HUD is committed to protecting families living in assisted units, regardless of the actions a project owner may take. To protect families living in assisted units, section 524(d) of MAHRA requires HUD, subject to appropriations, to make enhanced vouchers available to low-income families who, on the date of expiration of the HAP contract, are living in an assisted unit.

  3. Owners should refer to HUD Handbook 1378 for guidance regarding HUD real estate acquisition and relocation policy and procedures. Specifically, Chapter 3 contains guidance on planning for and providing appropriate access to relocation assistance and housing for persons with disabilities.

Chapter Eleven – Published March 2023

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• B. HUD enforcement actions. In these cases, (or in conjunction with a HUD Property Disposition (PD) action), HUD is either terminating the project-based Section 8 HAP contract or not offering the owner the option to renew an expiring contract due to an owner’s failure to comply with the terms of the HAP contract or other HUD requirements.

HUD enforcement actions may result from material adverse financial or managerial actions or omissions as described in Section 13-1. B. of this Guide, which lead to either owner default under a FHA-insured mortgage (monetary or technical) or a documented material violation of one or more of the obligations under the project’s Regulatory Agreement. Regular housing choice vouchers will normally be provided in these circumstances to assist eligible families affected by the enforcement action because property condition or other issues will not allow tenants to remain in the project.