24 C.F.R. § 891.815
§ 891.815 Mixed-finance developer's fee. (24 CFR Part 891)
Operative Text
(a) Mixed-finance developer's fee. A mixed-finance developer may include, on an up-front or deferral basis, or a combination of both, a fee to cover reasonable profit and overhead costs. (b) Mixed-finance developer's fee cap. No mixed-finance developer's fee may be a greater percentage of the total project replacement costs than the percentage allowed by the state housing finance agency or other tax credit allocating agency in the state in which the mixed-finance development is sited. In no event may the mixed-finance developer's fee exceed 15 percent of the total project replacement cost. (c) Sources of mixed-finance developer's fee. The mixed-finance developer's fee may be paid from project income or project sources of funding other than Section 202 or 811 capital advances, project rental assistance, or tenant rents.
Under § 891.815, a mixed-finance developer working on an affordable housing project is permitted to collect a fee that covers reasonable profit and overhead, structured as an upfront payment, a deferred payment, or some combination of the two. The fee is subject to a hard ceiling: it cannot exceed 15 percent of total project replacement costs, and it must also stay within whatever lower cap the relevant state housing finance or tax credit allocating agency imposes. Additionally, the rule restricts which funding streams can be used to pay that fee, excluding Section 202 or 811 capital advances, project rental assistance, and tenant rents as permissible sources.
Plain English — not legal advice.
Operators and developers structuring a mixed-finance deal under § 891.815 generally confirm the applicable state housing finance or tax credit agency's developer fee percentage limit before finalizing their project budget, since that state-level cap may be more restrictive than the federal 15 percent ceiling. Compliant projects document that the developer's fee is drawn only from eligible sources—such as project income or other non-restricted project funding—rather than from Section 202 or 811 capital advances, rental assistance, or tenant rents. Keeping clear records of how the fee is structured (upfront, deferred, or blended) and how it is funded helps demonstrate compliance during HUD review.
General guidance for property managers — not legal advice for your specific situation. Consult an attorney for advice on your case.
For residents living in a mixed-finance development, § 891.815 is relevant because it explicitly prohibits the developer's fee from being paid out of tenant rents or project rental assistance, which are protections built into the federal framework for these properties. If tenants have concerns that fees or charges may be improperly structured in a way that affects their rents or assistance, they can raise the issue with the local HUD field office or a tenant-rights organization familiar with Section 202 or 811 programs. Tenants may also note this provision when participating in any formal complaint or administrative process related to how project funds are being managed.
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 10, 2026 — auto-generated, not yet human-reviewed. See /transparency for methodology.
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