24 C.F.R. § 886.112
§ 886.112 Rent adjustments. (24 CFR Part 886)
Operative Text
This section applies to adjustments of the dollar amount stated in the Contract as the Maximum Unit Rent. It does not apply to adjustments in rents payable to Owners as required by HUD in connection with its mortgage insurance and/or lending functions. (a) Funding of adjustments. Housing Assistance Payments will be made in increased amounts commensurate with Contract Rent adjustments up to the maximum annual amount of housing assistance payments specified in the Contract pursuant to § 886.108(b). (b) Annual adjustments. The contract rents may be adjusted annually, or more frequently, at HUD's option, either (1) on the basis of a written request for a rent increase submitted by the owner and properly supported by substantiating evidence, or (2) by applying, on each anniversary date of the contract, the applicable Automatic Annual Adjustment Factor most recently published by HUD in the Federal Register in accordance with 24 CFR part 888, subpart B. Published Automatic Annual Adjustment Factors will be reduced appropriately by HUD where utilities are paid directly by Families. If HUD requires that the owner submit a written request, HUD, within a reasonable time, shall approve a rental schedule that is necessary to compensate for any increase in taxes (other than income taxes) and operating and maintenance costs over which owners have no effective control, or shall deny the increase stating the reasons therefor. Increases in taxes and maintenance and operating costs shall be measured against levels of such expenses in comparable assisted and unassisted housing in the area to ensure that adjustments in the Contract Rents shall not result in material differences between the rents charged for assisted and comparable unassisted units. 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., assessment, 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 the subpart, 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. (e) Incorporation of rent adjustments. Any adjustment in Maximum Unit Rents shall be incorporated into the Contract by a dated addendum to the Contract establishing the effective date of the adjustment.
Under 24 CFR Part 886 § 886.112, the Maximum Unit Rent stated in a Section 8 housing assistance contract can be adjusted over time, but those adjustments are subject to defined limits and procedures. Adjustments may occur annually—or more often at HUD's discretion—either through an owner's written request backed by supporting evidence or by applying HUD's published Automatic Annual Adjustment Factors. A separate 'special additional adjustment' process exists for cases where extraordinary cost increases, such as sharp rises in property taxes or utility rates, are not adequately addressed by the standard annual adjustment. In all cases, adjusted rents cannot fall below the original contract rents, cannot create material differences between assisted and comparable unassisted units, and must be formally incorporated into the contract through a dated addendum.
Plain English — not legal advice.
Operators managing properties under a contract governed by 24 CFR Part 886 § 886.112 generally maintain organized financial records that can substantiate any written rent-increase request, including documentation of tax bills, utility rate changes, and operating and maintenance costs. When seeking a special additional adjustment under subsection (c), compliant operators prepare financial statements that clearly demonstrate how extraordinary cost increases exceed what the automatic annual adjustment already covers. Owners also ensure that any approved rent change is reflected in a dated addendum to the contract, as required by subsection (e), so that the effective date of the adjustment is formally established and the contract remains current.
General guidance for property managers — not legal advice for your specific situation. Consult an attorney for advice on your case.
Tenants living in units covered by 24 CFR Part 886 § 886.112 have an interest in knowing that this provision contains a built-in protection: adjusted rents cannot create material differences between what is charged for assisted units and comparable unassisted units in the area, as described in subsection (d). If a rent adjustment seems inconsistent with this standard—or if an adjustment was never incorporated into the contract through the required dated addendum under subsection (e)—tenants may have grounds to raise the issue with the local HUD field office or a tenant-rights organization familiar with Section 8 program rules. Tenants who believe an adjustment was improperly applied can also explore whether raising the issue as a defense in any related housing proceeding is appropriate, and consulting a housing counselor or legal aid organization can help clarify available options.
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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