HUD recently released new guidance regarding tenant protections for households when owners use both HUD-assistance (eg. Project-Based Section 8, Section 236, Section 202) and Low-Income Housing Tax Credits (LIHTC) financing. The clarifying guidance states that owners may only terminate tenancy in limited circumstances, which does not include failure to meeting LIHTC requirements, including LIHTC-specific income and eligibility rules. The notice states that lease agreements detail grounds for termination and specifies that owners must follow HUD and/or state/local procedures.
The restriction also covers any proposed termination for criminal activity, which generally is limited to specified activity during the term of the lease or when an owner discovers there was fraud in the application process. Owners are permitted to conduct criminal background checks on existing tenants at recertification for lease enforcement or eviction, if permitted by house rules.
In cases where an assisted household becomes over-income and is no longer eligible to receive HUD subsidy, or the owner determines that the tenant now has the ability to pay the full contract rent or market rent, the owner can terminate the assistance to the tenant.
Click here to read the full Notice.
