Option 5: Renewal of Portfolio Reengineering Demonstration or Preservation Contracts

Eligibility for Option 5 is limited to two types of properties:

1. Preservation Projects
   Owners who entered into a long term use agreement with HUD as part of the Preservation Program must renew under Option 5. The rent adjustment method is determined by the Plan of Action that was approved by HUD as part of the Preservation process. These contracts can be renewed for up to the lesser of 20 years or the remaining term of the use agreement.
2. Demonstration Projects:
   HUD is no longer doing initial renewals under the Portfolio Reengineering Demonstration Program.

Demonstration Projects

Subsequent Renewal

• Contract Renewal Request Form (HUD Form 9624). Owner may renew with a minimum of term of one year and a maximum term not to exceed the lesser of 20 years or the remaining life of the project’s Demo Use Agreement.

Rent Adjustments with Multi-year Contracts

• Annual rent adjustments can be either OCAF Rent Adjustments or Budget-Based, as determined by the owner. Every 5th year (from the contract anniversary date), an RCS is required to adjust the rents to comparables.

Preservation Projects

Subsequent Renewals

• Contract Renewal Request Form (HUD Form 9624). A multiyear contract cannot exceed the lesser of 20 years or the remaining term of the Recorded Use Agreement.
• Rent Adjustment request as determined by the approved Plan of Action and the recorded Preservation Use Agreement.

Rent Adjustments

• Annual rent adjustments can be either OCAF Rent Adjustments or Budget-Based, as determined by the approved Plan of Action and the recorded Preservation Use Agreement.

HUD Guidance

Chapter Seven of the Section 8 Renewal Policy has complete guidance regarding Option 5.