HUD HCV Guidebook § 3.1

The actual HAP can be calculated only after the family has selected a unit and the gross rent for the
unit is known. The HAP cannot exceed the maximum subsidy calculated but may be less than the
maximum subsidy if the gross rent for the unit is less than the payment standard amount. The HAP
is the lower of:
         • The payment standard for the family minus the TTP, or
         • The gross rent minus the TTP.

The PHA pays the owner HAP based on this calculation; however, if the HAP amount exceeds the rent
to owner, the PHA does not pay the owner HAP above the rent to owner amount. Instead, the PHA
pays the excess to either the utility provider or the family as a utility reimbursement payment, as
outlined in the PHA’s Administrative Plan.

Example 8 shows a sample HAP calculation when the gross rent is at or below the payment standard.
Example 9 shows a sample HAP calculation when the gross rent exceeds the payment standard.

21
     24 CFR 982.505(b)
22
     24 CFR 982.505(c)(1)

Example 8: Calculating HAP when Gross Rent is at or
                      Below Payment Standard
                      Payment standard                           $450
                      TTP                                        $210
                      Gross rent for selected unit               $425

                                           HAP is the lower of

                         Payment standard ($450) minus TTP ($210) = $240
                                                or
                            Gross rent ($425) minus TTP ($210) = $215

                                              HAP is $215

                      Example 9: Calculating HAP When Gross Rent Exceeds
                      the Payment Standard
                      Payment standard                           $450
                      TTP                                        $210
                      Gross rent for selected unit               $500

                                           HAP is the lower of

                         Payment standard ($450) minus TTP ($210) = $240
                                                or
                            Gross rent ($500) minus TTP ($210) = $290

                                              HAP is $240