1.  What is the HAP?

The HAP contract is a written agreement between the the IHA and the owner of a unit occupied by a housing choice voucher program participant. The HAP contract must be in the form prescribed by HUD.

Under the HAP contract, the IHA agrees to make housing assistance payments to the owner on behalf of a specific family leasing a specific unit. The IHA uses its payment standard schedule to calculate the monthly HAP payment to the owner.
Prior to the IHA approval of the assisted tenancy and the execution of a HAP contract, the IHA must ensure that the following program requirements have been met:

• Owner is eligible

• Unit is eligible

• Unit has been inspected by the IHA and meets HQS

• Lease includes the tenancy addendum

• Rent charged by the owner is reasonable

Upon approval of the assisted tenancy, the owner and the IHA can execute the HAP contract. 

2.  IHA's Amendment to the HAP

While the HAP contract must be in the form prescribed by HUD, HUD regulations do permit housing agencies to amend the basic HAP contract. The IHA requires all owners to agree to its HAP amendment. 

3.  Owner's Approval

Prior to executing a HAP contract and processing housing assistance payments, the PHA must determine that the owner of the assisted unit is eligible to participate in the housing choice voucher program. The term "owner" may include a principal or other interested party.

Debarment and Other Causes for Disapproval

The IHA will not approve an owner's participation in the program if:
HUD or another party informs the IHA that the owner is debarred, suspended, or subject to a limited denial of participation.

• HUD informs the IHA that the federal government has instituted an administrative or judicial action against the owner for a violation of the Fair Housing Act or other federal equal opportunity requirements and such action is pending;

• HUD informs the IHA that a court or administrative agency has determined that the owner violated the Fair Housing Act or other federal equal opportunity requirements; or

• If the IHA has determined the owner can not be approved.

 4.  Conflicts of Interest

The IHA will not execute a HAP contract when the owner of the unit is a relative of the family to be assisted, unless approving such a tenancy would provide reasonable accommodation for a disabled family member. Prohibited owner-family relationships include parent, child, grandparent, grandchild, sister, or brother of any member of the assisted family. This restriction applies at the time that the family receives assistance under the housing choice voucher program for occupancy of a particular unit. Current contracts on behalf of owners and families that are
related may continue. Any new leases or contracts for these families, however, may not be approved, except new leases or contracts signed solely as a result of the merger to the housing choice voucher program.

The IHA will not approve HAP contracts in which any of the following parties have a current interest or will have an interest for one year thereafter:

• Present or former member or officer of the IHA, except a participant commissioner;

• Employee of the IHA or any contractor, subcontractor, or agent of the IHA who formulates policy or influences program decisions;

• Public official, member of a governing body, or state or local legislator who exercises functions or responsibilities related to the programs; or

• Member of the U.S. Congress.

5.  Term of the HAP Contract

The term of the HAP contract must run concurrently with the term of the lease, including any extensions of the lease term. Occasionally, families move into units prior to HAP contract execution, and some owners require these families to sign a lease prior to moving into the unit. In these situations the PHA must request that the owner and PHA execute a new lease once the HAP contract is signed. the IHA will avoid the additional step of executing another lease by completing leasing and HAP contract preparation activities as quickly, efficiently, and accurately as possible so that the HAP and lease can be executed simultaneously.

The HAP contract and the housing assistance payments made under the HAP contract terminate automatically in each of the following situations:

• Owner or tenant terminates the lease;

• Lease expires;

• The IHA terminates the HAP contract;

• The IHA terminates assistance for the family;

• Family moves from the unit. The owner is entitled to keep the housing assistance payment for the month when the family moves out of the unit. The term of a new HAP contract for a new unit may begin in the same month in which the participant moves out of the previously assisted unit. This is not considered a duplicative subsidy.

• When 180 calendar days have elapsed since the PHA made the last housing assistance payment to the owner;

• If the family is absent from the unit for longer 30 days. The owner must reimburse the IHA for any housing assistance payment for the period after the termination; and

• Upon expiration of the annual contributions contract.

The IHA may decide to terminate the HAP contract in each of the following situations:

• Available program funding is not sufficient to support continued assistance for families in the program;

• Unit does not meet HQS size requirements due to change in family composition;

• Family breaks up;

• Unit does not meet HQS; and

• Owner breaches the HAP contract. 

6.  Payment to the Owner

The IHA will make housing assistance payments to the owner in accordance with the terms of the HAP contract, and the owner must comply with the provisions of the HAP contract in order to receive such payments. The HAP contract specifies that payments are to be made monthly, at the beginning of each month. Housing assistance payments must be made only during the lease term and while the family is residing in the unit. When a lease term begins after the first of the month, the housing assistance payment for the first month is pro-rated for a partial month.

The IHA determines the amount of housing assistance payment to the owner in accordance with HUD regulations and other requirements. The amount of housing assistance payment is subject to change during the term of the HAP contract. The IHA must notify both the owner and tenant of any changes in the housing assistance payment.

The monthly housing assistance payment by the IHA is credited toward the monthly rent to owner under the family's lease. The total of the rent paid by the tenant plus the IHA housing assistance payment may not be more than the rent to owner. The owner must immediately return any excess payment to the IHA.

The part of the rent to owner that the tenant pays may not be more than the difference between the rent to owner and the housing assistance payment. The owner may not demand or accept any rent payment from the tenant in excess of this maximum and must immediately return any excess rent payment to the tenant. The family is not responsible for payment of the portion of rent to owner covered by the housing assistance payment. Likewise, the IHA is not responsible for any
portion of the family share, including family rent to owner. Payment of the family share is the responsibility of the family.

7.  Stopping the Housing Assistance Payment

Housing assistance payments stop when the family can afford to pay the full rent to owner and any utilities for which the family is responsible. Specifically, the IHA does not make housing assistance payments when the following occurs:

• Thirty percent of the family's monthly adjusted income equals or exceeds the payment standard; or

• The family share equals or exceeds the gross rent.

Stopping the housing assistance payment in these situations does not affect the family's rights under the lease. If the family's income, size, composition, or other circumstances change during the term of the HAP contract, housing assistance payments may be resumed. It should be noted that the HAP contract remains in effect for only 180 calendar days after the IHA makes the last housing assistance payment.

8.  When a New Lease and HAP Contract are Required

13.8.19 Changes in Lease or Rent

1. The tenant and the owner shall not make any change in the tenancy addendum. However, if the tenant and the owner agree to any other changes in the lease, such changes must be in writing, and the owner must immediately give the IHA a copy of such changes. The lease, including any changes, must be in accordance with the requirements of the tenancy addendum.
2. In the following cases, tenant-based assistance shall not be continued unless the IHA has approved a new tenancy in accordance with program requirements and has executed a new HAP contract with the owner:
   1. If there are any changes in lease requirements governing tenant or owner responsibilities for utilities or appliances.
   2. If there are any changes in lease provisions governing the term of the lease.
   3. If the family moves to a new unit, even if the unit is in the same building or complex.
3. IHA approval of the tenancy, and execution of a new HAP contract, are not required for agreed changes in the lease other than as specified in paragraph b.
4. The owner must notify the IHA of any changes in the amount of the rent to owner at least sixty (60) days before any such changes go into effect, and the amount of the rent to owner following any such agreed change may not exceed the reasonable rent for the unit as most recently determined or redetermined by the IHA in accordance with HUD requirements.

11.7 CHANGES REQUIRING NEW HAP CONTRACT

The PHA must approve a new tenancy and execute a new HAP contract in the following cases:

• If the owner or family request a new lease;
• If there are any changes in the lease requirements governing tenant or owner responsibilities for utilities or appliances;
• If there are changes in lease provisions governing the term of lease; and
• If the family moves to a new unit, even if the new unit is in the same building or complex.

Changes in the lease, other than those identified above, do not necessitate the execution of a new HAP contract. The owner must notify the PHA, however, of any changes in the amount of rent to owner at least 60 days before the changes go into effect. Any such changes would be subject to rent reasonableness requirements.

Section 8. Utilities and Appliances

The lease and the HAP contract must specify what utilities and appliances are to be supplied by the owner, and what utilities and appliances are to be supplied by the tenant.

. . .
5. Provision and Payment for Utilities and Appliances

1. The lease must specify what utilities are to be provided or paid by the owner or the tenant.
2. The lease must specify what appliances are to be provided or paid by the owner or the tenant.
3. Part A of the HAP contract specifies what utilities and appliances are to be provided or paid by the owner or the tenant. The lease shall be consistent with the HAP contract.

. . .
8. Owner Certification

During the term of this contract, the owner certifies that:

1. The owner is maintaining the contract unit and premises in accordance with the HQS.
2. The contract unit is leased to the tenant. The lease includes the tenancy addendum (Part C of the HAP contract), and is in accordance with the HAP contract and program requirements. The owner has provided the lease to the PHA, including any revisions of the lease.
3. The rent to owner does not exceed rents charged by the owner for rental of comparable unassisted units in the premises.
4. Except for the rent to owner, the owner has not received and will not receive any payments or other consideration (from the family, the PHA, HUD, or any other public or private source) for rental of the contract unit during the HAP contract term.

. . .
5. Family Payment to Owner

1. The family is responsible for paying the owner any portion of the rent to owner that is not covered by the PHA housing assistance payment.
2. Each month, the PHA will make a housing assistance payment to the owner on behalf of the family in accordance with the HAP contract. The amount of the monthly housing assistance payment will be determined by the PHA in accordance with HUD requirements for a tenancy under the Section 8 voucher program.The monthly housing assistance payment shall be credited against the monthly rent to owner for the contract unit.
3. The tenant is not responsible for paying the portion of rent to owner covered by the PHA housing assistance payment under the HAP contract between the owner and the PHA. A PHA failure to pay the housing assistance payment to the owner is not a violation of the lease. The owner may not terminate the tenancy for nonpayment of the PHA housing assistance payment.
4. The owner may not charge or accept, from the family or from any other source, any payment for rent of the unit in addition to the rent to owner. Rent to owner includes all housing services, maintenance, utilities and appliances to be provided and paid by the owner in accordance with the lease.
5. The owner must immediately return any excess rent payment to the tenant.