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Annual and Special Adjustments

The SRO program provides for annual adjustments to the base rent to account for inflation over the 10 years of the HAP Contract. Annual adjustments should provide the owner with a sufficient rent to operate and maintain the property during the HAP Contract.

Additionally, HUD may approve special adjustments to reflect the increases in the actual and necessary expenses of owning and maintaining a unit which have resulted from substantial general increases in real property taxes, utility rates, and assessments and utilities not covered by regulated rates. A special adjustment may also be approved by HUD when HUD determines that a project is located in a community where drug-related criminal activity is generally prevalent, and the project's operating, maintenance and capital repair expenses have substantially increased primarily as a result of the prevalence of such drug-related activity.

The availability of annual and special adjustments means that the actual amount provided by HUD to the PHA may exceed the original rental assistance reservation amount. Section 8 amendment money makes up any difference between the original fund reservation and the actual amount of assistance provided by HUD.