24 C.F.R. § 886.315
§ 886.315 Security and utility deposits. (24 CFR Part 886)
Operative Text
(a) Amount of deposits. 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 Gross Family Contribution 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 is expected to pay security deposits and utility deposits from its resources and/or other public or private sources. (b) When a Family vacates. If a Family vacates the unit, the Owner, subject to State and local law, may use the security deposit as reimbursement for any unpaid Family Contribution 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) Interest payable on deposits. 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) Insufficient deposits. If the security deposit is insufficient to reimburse the Owner for the unpaid Family Contribution 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 HUD for an amount not to exceed the lesser of: (1) The amount owed the Owner, (2) two months' 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 Family Contribution due under the Lease and then to any other amounts owed. No reimbursement shall be claimed for unpaid rent for the period after the family vacates.
Under 24 CFR Part 886 § 886.315, security deposits collected at the start of a lease under this HUD program are capped at the greater of one month's Gross Family Contribution or $50, and may never exceed whatever ceiling state or local law sets. When a family moves out, the owner may apply the deposit toward unpaid rent or other lease obligations, but must return any unused balance—including applicable interest where state or local law requires it. If the deposit falls short of covering what the family owes, the owner may seek reimbursement from HUD, subject to a ceiling tied to two months' Contract Rent and offset by the deposit amount collected or collectible.
Plain English — not legal advice.
Operators subject to 24 CFR Part 886 § 886.315 generally set security deposits no higher than the greater of one month's Gross Family Contribution or $50, while also checking that the amount does not exceed any applicable state or local cap. Upon a family's move-out, compliant owners document any unpaid Family Contribution or other lease-related charges before applying the deposit, and promptly refund any remaining balance—along with any interest required by local law. When a deposit is insufficient to cover legitimate charges, owners familiar with § 886.315 maintain records of the shortfall and understand that a HUD reimbursement claim is available up to the lesser of the amount owed or two months' Contract Rent, minus the deposit collected or collectible, with no reimbursement available for rent accruing after the family vacates.
General guidance for property managers — not legal advice for your specific situation. Consult an attorney for advice on your case.
Under 24 CFR Part 886 § 886.315, families in this HUD program have a right to have their security deposit capped at a federally defined maximum and to receive a refund of any unused deposit balance—plus interest where local law requires—after moving out. If a tenant believes a deposit was improperly withheld or exceeded the allowable amount, general enforcement paths include raising the violation in any legal proceeding related to the deposit, contacting the local HUD field office, or reaching out to a tenant-rights organization familiar with Section 8 and project-based assistance programs. Reviewing applicable state and local security deposit laws alongside § 886.315 can help a tenant understand the full scope of protections that may apply.
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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