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The Section 8 New Construction/Substantial Rehabilitation Program

The Section 8 New Construction/Substantial Rehabilitation Program provides direct rental subsidies to building owners who house low-income tenants in newly built or recently rehabilitated units. The building owner/developer, when entering into a Housing Assistance Payments contract with HUD under this program, specify the number of units which will be provided to Section 8 tenants. For the duration of the contract, the number of units is not to fluctuate. Additionally, owners must maintain a decent and safe place for tenants and practice non-discriminatory processes (as specified by HUD) during the rental process. Tenants living in units financed under this program must be low income. Their monthly rental payments are determined as the greatest of the following three options: 80% of the family's monthly adjusted income (after expenses), 10% of the family's monthly gross income, or an adjusted portion of welfare received. HUD covers the difference under their contract with the owner

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