How to File HUD Special Claims: The Complete Guide for Property Owners and Managers
Losing money from vacancy loss, unpaid rent, or tenant damages in HUD-assisted housing can take a serious toll on a property’s finances. Fortunately, the U.S. Department of Housing and Urban Development (HUD) allows owners to recover some of those losses through the HUD Special Claims process.
In this complete guide, we will cover what HUD special claims are, who is eligible, the documents required, deadlines, and tips to get your claims approved.
What Are HUD Special Claims?
HUD special claims are reimbursements available to owners of eligible HUD-assisted properties when they lose income because of:
Vacancy loss (when a unit sits empty between tenants)
Unpaid rent
Tenant damages beyond normal wear and tear
While filing special claims is optional, failing to do so means leaving money on the table and, in some cases, may violate the property’s Management Agreement.
Who Can File HUD Special Claims?
Special claims are available for several HUD program types, including:
Section 8
Section 202/8
Section 202 PAC
Section 202 PRAC
Section 811 PRAC
For unpaid rent, damages, or other charges, the tenant must have either:
Been receiving rental assistance at move-out, or
Lost rental assistance before move-out due to program violations such as:
Not providing household or income information
Refusing to provide Social Security numbers or sign HUD-50059 forms
Not establishing eligible immigration status
Refusing to transfer to the correct unit size within 30 days
HUD Vacancy Loss Claims: Required Documentation
Vacancy loss claims help owners recover rental income lost when units are unoccupied between tenants. To be reimbursed, HUD requires very specific documentation. Property owners and agents must provide:
HUD-50059 form for the new move-in to confirm the unit was reoccupied
HUD-50059 form for the prior tenant (certification at move-in) to verify contract rent and subsidy
Proof of security deposit collection and proper return or application
Waitlist documentation showing eligible applicants were contacted in order, with pass-over reasons recorded
Marketing records such as ads, flyers, or outreach if the waitlist was exhausted
Vacancy loss calculation worksheet showing contract rent, dates of vacancy, and total claim amount
Reconditioning log demonstrating the unit was prepared for re-rental and when it became available for occupancy
TRACS/EIV reports confirming the accuracy of tenant move-in and move-out dates
All HUD vacancy loss claims must be submitted within 180 calendar days of the unit being ready for occupancy. Missing this deadline means the reimbursement is permanently denied.
HUD Unpaid Rent and Other Charges Claims
To qualify for unpaid rent claims, property owners must show:
Proper security deposit collection. If the tenant did not provide the full deposit, the claim may be reduced.
Collection efforts, including:
A certified letter demanding payment
Referral to a collection agency if no payment is received
Compliance with state and local laws regarding security deposit deductions
Allowable charges such as unreturned keys, late fees (if permitted), and unpaid damages billed at move-out
Non-allowable charges such as legal fees, collection agency fees, utilities, or photo costs
Required documentation includes:
Signed HUD-50059 form
Proof of deposit collection
Certified demand letter and proof of mailing
Collection agency records
HUD Tenant Damage Claims
Tenant damage claims have additional requirements.
Proof of negligence or abuse by the tenant. Damages must be beyond normal wear and tear.
Extraordinary repairs only. Routine maintenance does not qualify.
No double reimbursement. Costs cannot be claimed if covered by insurance or reserve accounts.
Tenant notification. Owners must provide an itemized list of damages or the claim will be denied.
Required documentation includes:
Move-in and move-out inspection reports
Security deposit disposition notice
Repair invoices, receipts, or certifications
Claim Amount Limits
HUD limits the total reimbursement amount. For unpaid rent and damages, claims are capped at the monthly contract rent at move-out, minus the security deposit plus any earned interest.
This ensures fairness and prevents over-claiming.
HUD Special Claims Timeline
All HUD Special Claims must be submitted within 180 days of the unit becoming available for occupancy. This strict deadline applies to:
Vacancy loss claims
Unpaid rent claims
Damages claims
If you miss the 180-day deadline, the claim will automatically be denied.
Best Practices for Getting Claims Approved
Keep detailed and organized records from move-in to move-out
Always mail final account statements via certified mail and keep the green card receipt
Document collection attempts for unpaid rent
Use clear photos, invoices, and signed inspection reports for damages
File early and avoid waiting until the last week of the 180-day window
Conclusion
HUD Special Claims are a powerful tool for property owners and managers to recover financial losses from vacancy, damages, and unpaid rent. While the process may feel complex, understanding the rules and preparing strong documentation makes approval much more likely.
By filing consistently and on time, you protect your property’s bottom line and ensure long-term stability. For the latest rules and details, always review the HUD Special Claims Processing Guide (HSG-06-01) and updates from your Contract Administrator.
Frequently Asked Questions
What are HUD Special Claims?
They are reimbursements HUD provides to eligible properties for vacancy loss, unpaid rent, and tenant damages.
Who can file HUD Special Claims?
Owners or agents of Section 8, Section 202, and Section 811 properties.
How long do I have to file a claim?
Claims must be submitted within 180 calendar days of the unit becoming available for occupancy.
What documentation is required for vacancy loss claims?
HUD-50059 forms (new tenant and prior tenant certification), proof of security deposit collection and return, waitlist and marketing records, vacancy loss calculation worksheet, reconditioning log, and TRACS/EIV reports.
Why are my claims being denied?
Most denials happen because of missing documentation (Waitlists), improper tenant notices, or late submissions beyond 180 days.
