24 C.F.R. § 884.115
§ 884.115 Security and utility deposits. (24 CFR Part 884)
Operative Text
(a) An Owner may require Families to pay a security deposit in an amount equal to one month's Gross Family Contribution. If a Family vacates its unit, the Owner, subject to State and local laws, may utilize the deposit as reimbursement for any unpaid rent or other amount owed under the Lease. If the Family has provided a security deposit, and it is insufficient for such reimbursement, the Owner may claim reimbursement from HUD or the PHA, as appropriate, not to exceed an amount equal to the remainder of one month's Contract Rent. Any reimbursement under this section shall be applied first toward any unpaid rent. If a Family vacates the unit owing no rent or other amount under the Lease or if such amount is less than the amount of the security deposit, the Owner shall refund the full amount or the unused balance, as the case may be, to the Family. (b) In those jurisdictions where interest is payable by the Owner on security deposits, the refunded amount shall include the amount of interest payable. All security deposit funds shall be deposited by the Owner in a segregated bank account, and the balance of this account, at all times, shall be equal to the total amount collected from tenants then in occupancy, plus any accrued interest. The Owner shall comply with all State and local laws regarding interest payments on security deposits. (c) Families shall be expected to obtain the funds to pay security and utility deposits, if required, from their own resources and/or other private or public sources.
Under 24 CFR Part 884 § 884.115, owners participating in this HUD program may collect a security deposit capped at one month's Gross Family Contribution. When a tenancy ends, the deposit must be applied to any unpaid rent or other lease obligations first, and any unused balance must be returned to the family. In jurisdictions that require interest on security deposits, that interest must be included in the refund, and all deposit funds must be held in a dedicated, segregated bank account whose balance always reflects the total collected from current tenants.
Plain English — not legal advice.
Operators subject to 24 CFR Part 884 § 884.115 generally maintain a segregated bank account holding security deposit funds equal to the total collected from tenants currently in occupancy, plus any accrued interest. When a tenancy ends, compliant owners document any unpaid rent or lease charges, apply the deposit to those amounts in the correct order—rent first—and promptly refund any remaining balance, including required interest where state or local law mandates it. Where a family's deposit falls short of amounts owed, owners may seek additional reimbursement from HUD or the PHA up to the limit set by the provision, making accurate recordkeeping essential to supporting such a claim.
General guidance for property managers — not legal advice for your specific situation. Consult an attorney for advice on your case.
Under 24 CFR Part 884 § 884.115, families in this HUD program have a right to receive back any portion of their security deposit not used to cover legitimate unpaid rent or other lease obligations, and in interest-bearing jurisdictions, that refund must include accrued interest. Families are generally expected to cover the cost of security and utility deposits from their own resources or available public and private assistance sources. Tenants who believe a deposit was improperly withheld may consider raising the issue with their local Public Housing Authority, contacting a HUD-approved housing counseling agency, or reaching out to a tenant-rights organization familiar with Section 8 program rules.
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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