24 C.F.R. § 884.109
§ 884.109 Rent adjustments. (24 CFR Part 884)
Operative Text
(a) Funding of adjustments. Housing assistance payments will be made in increased amounts commensurate with Contract Rent adjustments under this paragraph, up to the maximum amount authorized under the Contract. (See §§ 884.104 and 884.105). (b) Automatic annual adjustments. (1) Automatic Annual Adjustment Factors will be determined by HUD at least annually; interim revisions may be made as market conditions warrant. Such Factors and the basis for their determination will be published in the Federal Register. These published Factors will be reduced appropriately by HUD where utilities are paid directly by Families. (2) On each anniversary date of the Contract, the Contract Rents shall be adjusted by applying the applicable Automatic Annual Adjustment Factor most recently published by HUD. Contract Rents may be adjusted upward or downward, as may be appropriate; however, in no case shall the adjusted rents be less than the Contract Rents on the effective date of the Contract. (c) Special additional adjustments. Special additional adjustments shall be granted, when approved by HUD, to reflect increases in the actual and necessary expenses of owning and maintaining the Contract Units which have resulted from substantial general increases in real property taxes, utility rates, or similar costs (i.e., assessments, and utilities not covered by regulated rates), but only if and to the extent that the Owner clearly demonstrates that such general increases have caused increases in the Owner's operating costs which are not adequately compensated for by automatic annual adjustments. The Owner shall submit to HUD financial statements which clearly support the increase. (d) Overall limitation. Notwithstanding any other provisions of this part, adjustments as provided in this section shall not result in material differences between the rents charged for assisted and comparable unassisted units, as determined by HUD: Provided, however, That this limitation shall not be construed to prohibit differences in rents between assisted and comparable unassisted units to the extent that such differences may have existed with respect to the initial Contract Rents.
Under 24 CFR Part 884 § 884.109, contract rents in HUD-assisted housing programs are subject to structured adjustment mechanisms rather than being fixed permanently. HUD publishes Automatic Annual Adjustment Factors at least once a year, and these factors are applied on each contract anniversary to move rents up or down — though never below the original contract rent. Beyond automatic adjustments, owners may seek special additional increases when documented cost spikes from taxes, utility rates, or similar expenses outpace what the annual adjustment covers. A broader guardrail applies throughout: no adjustment can create a material gap between rents charged for assisted units and comparable unassisted units, beyond any difference that already existed at the contract's start.
Plain English — not legal advice.
Property owners operating under 24 CFR Part 884 § 884.109 generally track the HUD-published Automatic Annual Adjustment Factors in the Federal Register and apply the most recently published factor on each contract anniversary date. When extraordinary cost increases — such as sharp rises in real property taxes or utility rates — are not adequately offset by the automatic adjustment, compliant operators document those costs thoroughly and submit supporting financial statements to HUD when seeking a special additional adjustment. Throughout this process, operators are mindful that the overall limitation in § 884.109(d) caps adjustments at the point where assisted-unit rents would materially diverge from rents for comparable unassisted units, except to the extent such a difference existed in the original contract rents.
General guidance for property managers — not legal advice for your specific situation. Consult an attorney for advice on your case.
Tenants living in housing covered by 24 CFR Part 884 § 884.109 have an interest in understanding that any rent increases applied to their unit must follow HUD's published adjustment framework and cannot drop below the original contract rent or create material disparities compared to similar unassisted units. If a rent change appears inconsistent with the adjustment process described in § 884.109 — for example, exceeding what the applicable Automatic Annual Adjustment Factor would support — tenants can raise that concern with their local HUD field office or a tenant-rights organization familiar with Section 8 project-based programs. Keeping copies of rent notices and any communications about adjustments can be useful when exploring whether a change aligns with the requirements of § 884.109.
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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