24 C.F.R. § 983.304
§ 983.304 Other subsidy: effect on rent to owner. (24 CFR Part 983)
Operative Text
(a) General. In addition to the rent limits established in accordance with § 983.301 and 24 CFR 982.302, the following restrictions apply to certain units. (b) HOME. For units assisted under the HOME program, rents may not exceed rent limits as required by the HOME program (24 CFR 92.252). (c) Subsidized projects. (1) This paragraph (c) applies to any contract units in any of the following types of federally subsidized project: (i) An insured or non-insured Section 236 project; (ii) A formerly insured or non-insured Section 236 project that continues to receive Interest Reduction Payment following a decoupling action; (iii) A Section 221(d)(3) below market interest rate (BMIR) project; (iv) A Section 515 project of the Rural Housing Service; (v) Any other type of federally subsidized project specified by HUD. (2) The rent to owner may not exceed the subsidized rent (basic rent) as determined in accordance with requirements for the applicable federal program listed in paragraph (c)(1) of this section. (d) Combining subsidy. Rent to owner may not exceed any limitation required to comply with HUD subsidy layering requirements. See § 983.55. (e) Other subsidy: rent reduction. To comply with HUD subsidy layering requirements, at the direction of HUD or its designee, a PHA shall reduce the rent to owner because of other governmental subsidies, including tax credits or tax exemptions, grants, or other subsidized financing. (f) Prohibition of other subsidy. For provisions that prohibit PBV assistance to units in certain types of subsidized housing, see § 983.54.
Section 983.304 establishes that when a Project-Based Voucher (PBV) unit also benefits from other federal or governmental subsidies—such as HOME program funding, Section 236 or Section 221(d)(3) financing, Rural Housing Service Section 515 support, tax credits, tax exemptions, grants, or other subsidized financing—the rent paid to the property owner cannot exceed the limits set by those overlapping programs. The rule prevents a property owner from collecting rent that, when combined with multiple subsidy streams, would exceed what any single applicable program permits. HUD's subsidy layering requirements serve as the overarching ceiling, and a Public Housing Authority (PHA) may be directed to reduce the rent to owner accordingly.
Plain English — not legal advice.
Operators of PBV-assisted units that also carry other governmental subsidies should be aware that § 983.304 caps the rent to owner at the lowest applicable limit across all relevant programs—not just the PBV rent reasonableness standard. For properties in HOME-assisted, Section 236, Section 221(d)(3) BMIR, or Section 515 programs, compliant operators document how each program's rent ceiling applies and ensure that the rent charged does not exceed the most restrictive of those ceilings. When HUD or its designee determines that tax credits, tax exemptions, grants, or other subsidized financing are present, operators generally expect that the PHA may be required to reduce the contract rent in accordance with subsidy layering rules referenced in § 983.304(e).
General guidance for property managers — not legal advice for your specific situation. Consult an attorney for advice on your case.
Tenants living in PBV-assisted units that are part of federally subsidized projects—such as HOME, Section 236, Section 221(d)(3), or Section 515 properties—have a right under § 983.304 to have their unit's rent to owner capped at the limits required by all applicable programs, which can affect how their share of rent is calculated. If a tenant believes the rent to owner exceeds what § 983.304 permits given the property's subsidy profile, they may raise this concern with the administering PHA, contact HUD directly, or reach out to a local tenant-rights organization for general information. Reviewing the housing assistance payment contract and any available subsidy layering analysis documents can help clarify which rent limits apply to a specific property.
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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