24 C.F.R. § 882.414
§ 882.414 Security and utility deposits. (24 CFR Part 882)
Operative Text
(a) If at the time of the initial execution of the Lease the Owner wishes to collect a security deposit, the maximum amount shall be the greater of one month's Total Tenant Payment or $50. However, this amount shall not exceed the maximum amount allowable under State or local law. For units leased in place, security deposits collected prior to the execution of a Contract which are in excess of this maximum amount do not have to be refunded until the Family vacates the unit subject to the lease terms. The Family is expected to pay security deposits and utility deposits from its resources and/or other public or private sources. (b) If a Family vacates the unit, the Owner, subject to State and local law, may use the security deposit as reimbursement for any unpaid Tenant Rent or other amount which the Family owes under the Lease. If a Family vacates the unit owing no rent or other amount under the Lease consistent with State or local law or if such amount is less than the amount of the security deposit, the Owner shall refund the full amount or the unused balance to the Family. (c) In those jurisdictions where interest is payable by the Owner on security deposits, the refunded amount shall include the amount of interest payable. The Owner shall comply with all State and local laws regarding interest payments on security deposits. (d) If the security deposit is insufficient to reimburse the Owner for the unpaid Tenant Rent or other amounts which the Family owes under the Lease, or if the Owner did not collect a security deposit, the Owner may claim reimbursement from the PHA for an amount not to exceed the lesser of: (1) The amount owed the Owner, or (2) Two month's Contract Rent; minus, in either case, the greater of the security deposit actually collected or the amount of security deposit the Owner could have collected under the program (pursuant to paragraph (a) of this section). Any reimbursement under this section must be applied first toward any unpaid Tenant Rent due under the Lease and then to any other amounts owed. No reimbursement may be claimed for unpaid rent for the period after the Family vacates.
Section 882.414 governs security and utility deposits in the Section 8 Moderate Rehabilitation program. At lease signing, an owner's security deposit is capped at the greater of one month's Total Tenant Payment or $50, but never more than what state or local law permits. If a family leaves owing money, the owner may apply the deposit to unpaid rent or other lease obligations; any unused balance must be returned, with interest where state or local law requires it. When a deposit falls short of covering what is owed, the owner may seek additional reimbursement from the Public Housing Authority (PHA), subject to a ceiling tied to two months' Contract Rent and offset by the deposit collected or collectible.
Plain English — not legal advice.
Under § 882.414, compliant operators set the initial security deposit at the greater of one month's Total Tenant Payment or $50, while also checking that the amount does not exceed any applicable state or local cap. When a family vacates, operators document any unpaid Tenant Rent or other lease charges before applying the deposit, and promptly refund any remaining balance—including accrued interest in jurisdictions that require it. Where the deposit is insufficient to cover verified amounts owed, § 882.414(d) outlines a process for submitting a reimbursement claim to the PHA, capped at the lesser of the amount owed or two months' Contract Rent, reduced by the deposit that was collected or could have been collected.
General guidance for property managers — not legal advice for your specific situation. Consult an attorney for advice on your case.
Section 882.414 establishes that families are generally responsible for paying their own security and utility deposits, but it also sets a ceiling on how large a security deposit an owner may collect at the start of a lease. When a family moves out, the rule requires the owner to return the full deposit—or the unused portion, plus any legally required interest—if no amounts are owed under the lease. Tenants who believe a deposit was improperly withheld or exceeded the limits described in § 882.414 may find it useful to review their state and local tenant-protection laws, contact their local PHA, or reach out to a tenant-rights organization for general information on available remedies.
General guidance for tenants — not legal advice for your specific situation. Consult a tenant-rights organization or attorney for advice on your case.
Generated September 4, 2026 — auto-generated, not yet human-reviewed. See /transparency for methodology.
Effective Timeline
References Out
No outbound references recorded yet for this provision.
References In
No inbound references recorded yet for this provision.