PART 402—SECTION 8 PROJECT-BASED CONTRACT RENEWAL UNDER SECTION 524 OF MAHRA Authority: 42 U.S.C. 1437(c)(8), 1437f note, and 3535(d). Source: 63 FR 48953, Sept. 11, 1998, unless otherwise noted. § 402.1 What is the purpose of part 402? This part sets out the terms and conditions under which HUD will renew project-based assistance contracts under the authority provided in section 524 of MAHRA. [71 FR 2121, Jan. 12, 2006] § 402.2 Definitions. (a) Terms defined in part 401. (b) Terms defined in MAHRA. (c) Other defined terms. Comparable market rents Large family OCAF Portfolio Reengineering demonstration authority Project-based assistance Project eligible for exception rents SRO contract SRO project [71 FR 2121, Jan. 12, 2006] § 402.3 Contract provisions. The renewal HAP contract shall be construed and administered in accordance with all statutory requirements, and with all HUD regulations and other requirements, including changes in HUD regulations and other requirements during the term of the renewal HAP contract, unless the contract provides otherwise. [71 FR 2121, Jan. 12, 2006] § 402.4 Contract renewals under section 524(a)(1) of MAHRA. (a) Initial renewal. (2) Procedure for projects eligible for Restructuring Plan. (ii) If HUD or the PAE determines that renewal under this section would be sufficient, HUD will not require a Restructuring Plan. (iii) If HUD or the PAE determines that renewal under this section would not be sufficient, HUD or the PAE may require a Restructuring Plan before the owner's request for contract renewal will be given further consideration. If the owner does not cooperate in the development of an acceptable Restructuring Plan, HUD will pursue whatever administrative actions it considers necessary. (b) [Reserved] [65 FR 15498, Mar. 22, 2000, as amended at 71 FR 2121, Jan. 12, 2006] § 402.5 Contract renewals under section 524(b) or (e) of MAHRA. (a) Renewal of projects eligible for exception rents at owner's request. (b) Rent levels for projects eligible for exception rents. (1) Existing rents adjusted by an OCAF; (2) A budget-based rent determined in accordance with instructions issued by HUD, subject to a determination by HUD that such a rent level is appropriate; or (3) In the case of a contract under the Section 8 moderate rehabilitation program (other than an SRO contract), the lesser of existing rents adjusted by an OCAF, fair market rents (less any amounts for tenant-purchased utilities), or comparable market rents, as provided in section 524(b)(3) of MAHRA. (c) Rent adjustments. (2) Rent adjustments for projects assisted under the Section 8 moderate rehabilitation program, other than projects assisted under the moderate rehabilitation single-room occupancy program, shall be determined in accordance with section 524(b)(3) of MAHRA. (d) Preservation projects and demonstration projects. (2) Notwithstanding any other provision of this part except § 402.7, upon expiration of a Section 8 contract entered into pursuant to a Portfolio Reengineering demonstration authority for which HUD made a determination that debt restructuring is inappropriate, and the owner of the project executed a Portfolio Reengineering Demonstration Program Use Agreement, the Secretary will provide the owner, at the request of the owner, with benefits comparable to those provided under the contract that is expiring. This paragraph (d)(2) applies only to the extent amounts are made available in appropriations acts. [71 FR 2122, Jan. 12, 2006] § 402.6 What actions must an owner take to request section 8 contract renewal under this part? (a) In general. (b) Subsequent renewals. [71 FR 2122, Jan. 12, 2006] § 402.7 Refusal to consider an owner's request for a Section 8 contract renewal because of actions or omissions of owner or affiliate. (a) Determination of eligibility. (1) The owner or an affiliate is debarred or suspended under part 2 CFR part 2424; (2) HUD determines that the owner or an affiliate has engaged in material adverse financial or managerial actions or omissions as described in section 516 of MAHRA, including any outstanding violations of civil rights laws, or has failed to certify to compliance with the nondiscrimination requirements of 24 CFR 5.105(a), in connection with any project of the owner or an affiliate; or (3) The project does not meet the physical condition standards in 24 CFR 5.703 of this title, unless HUD determines that the project will meet the standards within a reasonable time after renewal. (b) Dispute and appeal. [71 FR 2122, Jan. 12, 2006, as amended at 72 FR 73496, Dec. 27, 2007] § 402.8 Tenant protections if a contract is not renewed. (a) Notice of termination. (b) If an owner does not give timely notice. (c) If an owner opts out or fails to renew. [71 FR 2122, Jan. 12, 2006] § 402.9 Waivers and delegations of waiver authority. All waivers of provisions of this part, and delegations of the authority to waive provisions of this part, are governed by § 5.110 of this title. [71 FR 2123, Jan. 12, 2006]