24 C.F.R. § 882.512
§ 882.512 Reduction of number of units covered by contract. (24 CFR Part 882)
Operative Text
(a) Limitation on leasing to ineligible Families. Owners must lease all assisted units under Contract to Eligible Families. Leasing of vacant, assisted units to ineligible tenants is a violation of the Contract and grounds for all available legal remedies, including suspension or debarment from HUD programs and reduction of the number of units under the Contract, as set forth in paragraph (b) of this section. Once the PHA has determined that a violation exists, the PHA must notify HUD of its determination and the suggested remedies. At the direction of HUD, the PHA must take the appropriate action. (b) Reduction for failure to lease to Eligible Families. If, at any time beginning six months after the effective date of the Contract, the Owner fails for a period of six continuous months to have at least 90 percent of the assisted units leased or available for leasing by Eligible Families (because families initially eligible have become ineligible), the PHA may, on at least 30 days' notice, reduce the number of units covered by the Contract. The PHA may reduce the number of units to the number of units actually leased or available for leasing by Eligible Families plus 10 percent (rounded up). If the Owner has only one unit under Contract and if one year has elapsed since the date of the last housing assistance payment, the Contract may be terminated with the consent of the Owner. (c) Restoration. The PHA will agree to an amendment of the Contract, to provide for subsequent restoration of any reduction made pursuant to paragraph (b) if: (1) The PHA determines that the restoration is justified by demand, (2) The Owner otherwise has a record of compliance with obligations under the Contract, and (3) Contract authority is available.
Under 24 CFR Part 882 § 882.512, assisted housing units covered by a Section 8 Moderate Rehabilitation contract must be occupied by or made available to eligible families. If an owner leases a vacant assisted unit to an ineligible tenant, that act constitutes a contract violation and can trigger serious consequences, including suspension or debarment from HUD programs. Starting six months after the contract's effective date, if fewer than 90 percent of assisted units are leased or available to eligible families for six consecutive months, the administering Public Housing Authority (PHA) may reduce the number of units covered by the contract—with at least 30 days' notice—and may later restore those units if demand, compliance history, and available contract authority support doing so.
Plain English — not legal advice.
Operators subject to 24 CFR Part 882 § 882.512 generally maintain records demonstrating that every assisted unit is occupied by or actively marketed to eligible families, since leasing even a single vacant assisted unit to an ineligible household can be treated as a contract violation. Compliant operators monitor occupancy rates on an ongoing basis to ensure that at least 90 percent of assisted units remain leased or available to eligible families, thereby avoiding the six-month threshold that triggers the PHA's authority to reduce contracted units. Owners who experience a reduction under § 882.512(b) may pursue restoration of those units by demonstrating sufficient demand, a satisfactory compliance record, and the availability of contract authority.
General guidance for property managers — not legal advice for your specific situation. Consult an attorney for advice on your case.
Under 24 CFR Part 882 § 882.512, tenants living in Section 8 Moderate Rehabilitation units have an interest in knowing that their unit is supposed to be covered by a valid contract with eligible occupants, since improper leasing practices by an owner can jeopardize the contract itself and the housing assistance attached to it. If a tenant believes an owner is violating occupancy or eligibility requirements under § 882.512, they may raise the issue with the administering PHA, which has the authority to investigate, notify HUD, and pursue remedies including contract reduction. Tenant-rights organizations and HUD's local field offices can be resources for understanding how these protections apply and what complaint or reporting processes are available.
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.
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