24 CFR Part 983: Project-Based Voucher (PBV) Program

The Project-Based Voucher program under 24 CFR Part 983 lets a Public Housing Agency attach Section 8 rental assistance to specific units instead of letting the subsidy travel with the tenant. The result is affordable housing that stays affordable in the same building for years or decades, no matter who moves in or out. Part 983 sets the ground rules: how many units a PHA can commit, which properties qualify, how long contracts last, how rent is calculated, and what rights families keep once they move in.

How Many Units a PHA Can Project-Base

A PHA cannot convert its whole voucher allocation. No more than 20 percent of a PHA’s authorized voucher units may be committed to PBV projects at any given time, counting every unit that has been selected, is under an agreement, or is covered by an active HAP contract.¹

An additional 10 percent is available when the extra units serve narrow populations: people experiencing homelessness, households that include a veteran, supportive housing for elderly or disabled residents, housing in areas where tenant-based vouchers are hard to use, and units reserved for eligible youth under the Family Unification Program.²

There is a second, separate cap at the building level. A PHA generally cannot project-base more than the greater of 25 units or 25 percent of the dwelling units in a single project. Where tenant-based vouchers are difficult to use, that limit rises to the greater of 25 units or 40 percent of the project.³

Some units don’t count toward the per-project cap at all. Units exclusively serving elderly families, units reserved for eligible youth, and units tied to voluntary supportive services are exempt. For the supportive-services exception, the services must be reasonably available to every assisted family in the project within 120 days of a request, and no family can be required to participate as a condition of living there.³

Which Properties Qualify

Part 983 lists housing types that cannot receive PBV assistance at all: nursing homes, facilities providing continuous psychiatric or medical care, penal or reformatory institutions, college dormitories, manufactured homes, cooperative housing units, transitional housing, and units occupied by the property owner.⁴

Layering is also prohibited. Public housing units, units already receiving any other form of Section 8 assistance, and units covered by other federal, state, or local rent or operating-cost subsidies are ineligible. Section 202 housing for non-elderly persons with disabilities and Section 811 project-based assistance are included in that ban.⁵

Site Selection and Inspections

Before selecting a proposal, the PHA confirms the property meets eligibility rules, the per-project cap, and site selection standards.⁶ A PHA cannot place PBV housing at a site unless the project is consistent with deconcentrating poverty and expanding housing and economic opportunities. The PHA looks at whether the census tract is undergoing revitalization, whether market-rate development is happening nearby, whether the poverty rate has been declining, and whether the neighborhood offers real opportunities for education and economic advancement. The site must also comply with Title VI, the Fair Housing Act, the Americans with Disabilities Act, and Section 504 of the Rehabilitation Act.⁷

Every unit must meet Housing Quality Standards before the HAP contract can be signed. For existing housing, the PHA inspects all proposed units before the selection date. For new construction and rehabilitation, the PHA inspects each unit before contract execution, and each must fully comply with HQS at that point.⁸

A PHA can adopt the “non-life-threatening deficiency option,” which allows contract execution with minor deficiencies still present, so long as the owner corrects them within 30 days. Miss that deadline and the PHA withholds housing assistance payments until the repairs are verified. Life-threatening deficiencies have to be fixed within 24 hours. If problems remain past 180 days from the contract’s effective date, the PHA must terminate the contract or remove the unit.⁸

The HAP Contract: Term, Extensions, and Ending It

The Housing Assistance Payments contract binds the PHA and the owner. The PHA pays the owner for contract units leased and occupied by eligible families.⁹

An initial term runs from one to 20 years per unit. Before it expires, the parties may agree to one or more extensions of up to 20 years each, but the total remaining term including extensions can never exceed 40 years. The PHA must determine that any extension is appropriate to continue providing affordable housing or to expand housing opportunities.¹⁰

Either party can end the contract in specified circumstances. The PHA may terminate for insufficient funding or owner breach. The owner may terminate if the rent is reduced below the initial contract rent, with at least 90 days’ written notice. The PHA and owner can also agree to terminate at any point before the term ends.¹¹

Whatever the reason, the owner must notify the PHA and all assisted tenants at least one year before termination. An owner who fails to give that notice must let tenants remain for the full notice period with no rent increase and no eviction. Unless the termination is for insufficient funding, the PHA must issue each affected family a tenant-based voucher at least 60 days before the contract ends, which the family can use to stay in the same building or move.¹¹

How Tenants Get Selected

Eligible families include both current voucher holders and families who have applied for the voucher program.¹² The PHA can maintain a single centralized PBV list covering multiple projects, use the same list for both tenant-based and project-based assistance, or create separate lists for individual buildings. In that last case, the PHA may allow the owner to maintain the list.¹³

PHAs may set admissions preferences for particular projects, such as families who qualify for voluntary services offered on-site or elderly families for a senior-designated property. Families needing accessibility features for a disability must be selected first for units with those features.¹³

The owner handles final screening after the PHA refers a family. Owners may consider rental history, care of previous units, treatment of neighbors, drug-related or violent criminal activity, and general compliance with prior lease terms.¹⁴ Screening must be consistent across applicants, and federal fair housing law still applies.

The Family’s Right To Move After One Year

After one year of PBV assistance, a family may terminate the lease by giving advance written notice to the owner, with a copy to the PHA. The PHA must then offer the family continued tenant-based rental assistance.¹⁵

The order of steps matters. Contact the PHA before giving the owner notice, because you need to request a voucher first. If no voucher is immediately available, the PHA must give your family priority for the next one that opens. A family that leaves before completing one year of PBV assistance forfeits the right to continued tenant-based assistance entirely.¹⁵

When Owners Can Evict

The general eviction rules for the Housing Choice Voucher program apply, with one critical difference: an owner cannot terminate a PBV tenancy for a “business or economic reason” or because the owner wants to use the unit for a different purpose. That justification, available in tenant-based voucher situations, is specifically excluded from the PBV program.¹⁶

Owners may terminate a tenancy for drug or alcohol abuse under federal regulations, and Violence Against Women Act protections apply to PBV tenants. Termination is also permitted when the owner needs to carry out development activity or substantial improvements to units under the HAP contract.¹⁶

How Rent Is Set

The rent the PHA pays the owner is capped at the lowest of three figures: 110 percent of the applicable Fair Market Rent for the unit’s bedroom size minus any utility allowance, the reasonable rent as determined by the PHA, or the rent the owner actually requests.¹⁷ If the tenant pays utilities directly, those costs come out through the utility allowance before the payment is calculated.

Reasonable rent isn’t a guess. The PHA compares the unit to at least three comparable unassisted units in the private market, weighing location, quality, size, unit type, age, amenities, and maintenance. The analysis must be documented, and whoever performs it cannot have a financial interest in the property. The determination is based on the unit’s current condition, not what it might look like after planned improvements.¹⁸

Rent increases take effect at the annual anniversary of the HAP contract, either by owner request or automatic adjustment using an Operating Cost Adjustment Factor published annually by HUD. The new rent must still satisfy the cap. Rent can also drop: the PHA must redetermine when there is a 10 percent decrease in the published Fair Market Rent, and if the adjusted rent falls below the initial contract rent, the owner may terminate the HAP contract with 90 days’ notice.¹⁹

What the Tenant Pays

The family living in a PBV unit pays a portion of the rent directly to the owner. Under HUD rules that apply across the Housing Choice Voucher program, the standard tenant contribution is generally 30 percent of the family’s adjusted monthly income. The PHA calculates the total tenant payment, subtracts any utility allowance for tenant-paid utilities, and the remainder is what the family owes the owner each month. The PHA pays the difference through the housing assistance payment.

Holding Owners Accountable

If the owner breaches the HAP contract, the PHA may exercise any rights or remedies available, up to and including termination.¹¹ For inspection failures, the PHA withholds payments until deficiencies are corrected and verified.⁸

Consequences reach past a single contract. A PHA must refuse to approve an assisted tenancy if the owner has been debarred or suspended under federal procurement rules. The PHA also has discretion to deny future participation to owners with a history of HAP contract violations, fraud in connection with federal housing programs, drug-related or violent criminal activity, or repeated failures to maintain units to housing quality standards. When HUD directs, the PHA must also block owners facing active fair housing complaints or prior discrimination findings.²⁰