Notice H-2012-14: Use of “New Regulation” Section 8 HAP ContractsResidual Receipts to Offset Project-Based Section 8 HAP

Summary:  When owner distributions of surplus cash are limited or prohibited and when HUD determines that project funds are more than the amount needed for project operations, reserve requirements, and any permitted distributions, the excess income is typically required under the applicable new regulation and/or the Section 8 Housing Assistance Payments (HAP) contract to which the project is subject to be deposited into an interest-bearing account, often called the Residual Receipts account, to be used for project purposes. 

This account (or accounts in cases where these monies are deposited in multiple accounts), however titled or designated, is referred to throughout HUD’s Notice as the “Residual Receipts” account. The contents of this account, however titled or designated, are referred to throughout HUD’s Notice as “Residual Receipts.” The new regulation and/or the various HAP contract forms used for new regulation projects explicitly permit HUD to use Residual Receipts to reduce housing assistance payments. (See 24 CFR §§ 880.205(e), 881.205(e), and 883.306(e)).

HUD’s Notice sets forth the policy and procedures for the Department’s use of new regulation Residual Receipts to offset HAP for projects subject to a new regulation Project-Based Section 8 HAP contract and outlines the obligations and duties of owners and the responsibilities of HUD Field staff in processing and monitoring the use of this project resource.

Publication Issuance Date:  August 3, 2012

View the notice here.