HUD Procurement Handbook 7460.8 REV-3 is the first comprehensive rewrite of PHA procurement guidance since 2007, and it re-anchors public housing authority purchasing to 2 CFR Part 200 rather than the retired 24 CFR 85.36 framework. The most visible change is the Simplified Acquisition Threshold, which now sits at $350,000, with the micro-purchase threshold aligned to the Federal Acquisition Regulation at $15,000. To stay audit-ready, PHAs should update written procurement policies to cite 2 CFR 200.317 through 200.327, reset dollar thresholds, extend procurement requirements to Central Office Cost Center and Housing Choice Voucher administrative fee spending, and tighten documentation because single-audit testing will follow the new rules.
Industry coverage in late March 2026 reported that HUD had recently notified PHA executive directors of the revised handbook, which practitioners believe first appeared on HUD’s website in February 2026. The handbook itself does not state a calendar effective date, but HUD’s transmittal indicates the guidance is effective upon publication and applied prospectively rather than retroactively. Because HUD did not attach a formal transition period, authorities that wait to update their policies risk carrying stale thresholds and outdated regulatory citations into their next audit. The sections below break down the substantive changes and the concrete steps a PHA should take now.
Why REV-3 Matters After Nearly Two Decades
The prior edition, 7460.8 REV-2, was written when 24 CFR Part 85 governed grants to state and local governments. That framework was superseded when the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, codified at 2 CFR Part 200, took effect for most awards beginning December 26, 2014. For years PHAs operated under a handbook whose regulatory backbone no longer matched the rules examiners actually test against.
REV-3 closes that gap. The HUD PHA Procurement Handbook 7460.8 REV-3 now points to 2 CFR 200.317 through 200.327 as the controlling procurement standards, which means PHA procurement policies, procedures, and internal controls all need to reference the current citations. This is not a cosmetic relabeling. The procurement methods, thresholds, cost and price analysis expectations, and conflict-of-interest provisions in Part 200 differ in detail from the old Part 85 language, and auditors evaluate compliance against the standard in force during the period under review.
The revision also clarifies scope. The handbook applies to all PHA procurement actions that use federal financial assistance as defined in 2 CFR 200.1, regardless of agency size. Smaller authorities that assumed some latitude should treat the same core requirements as applicable to them.
The New Thresholds and What They Trigger
The headline number is the Simplified Acquisition Threshold at $350,000. This figure did not originate with HUD. The FAR maximum SAT rose from $250,000 to $350,000 effective October 1, 2025, and that increase flows automatically into procurements governed by 2 CFR Part 200. REV-3 simply adopts the current federal figure for PHAs.
The micro-purchase threshold follows the same logic. The general FAR micro-purchase threshold increased to $15,000 effective October 1, 2025, and REV-3 aligns the PHA micro-purchase ceiling with the FAR. Note a carve-out that PHAs frequently miss: procurements of construction and maintenance subject to the Davis-Bacon and Related Acts are governed by a separate $2,000 statutory threshold. Contracts over $2,000 for the construction, alteration, or repair of public works trigger prevailing-wage and wage-determination requirements, which limits how those purchases can be treated regardless of the general micro-purchase ceiling. Confirm the specific figure that applies to each category before relying on it.
These thresholds determine which procurement method is required under 2 CFR 200.320. Purchases at or below the micro-purchase threshold may be awarded without soliciting competitive quotations, provided the PHA considers the price reasonable and distributes micro-purchases equitably among qualified suppliers. Purchases above the micro-purchase threshold but at or below the SAT use small purchase or simplified acquisition procedures, which require price or rate quotations from an adequate number of qualified sources. Purchases above the SAT require sealed bids or competitive proposals with the full formal process. Setting the wrong threshold in a written policy is one of the most common procurement findings, so this is the first item to correct.
For context on how procurement failures translate into audit exposure, review our overview of HUD and affordable housing audit services.
Expanded Scope: COCC and Housing Choice Voucher Fees
Two of the most consequential changes in REV-3 have nothing to do with thresholds. First, the handbook applies procurement requirements to income generated by the Central Office Cost Center, including fee-based revenue. Under the asset-management model, many authorities treated COCC funds as effectively unrestricted and outside federal procurement rules. REV-3 signals that fee income the COCC earns from federal programs carries procurement obligations, which changes how central-office contracting must be documented.
Second, the handbook applies 2 CFR Part 200 procurement requirements to Section 8 Housing Choice Voucher program administrative fees. These fees had been treated as exempt because Section 8 sat outside 24 CFR Part 85 before December 26, 2014. Extending procurement rules to HCV administrative fee spending means purchases funded from that source now need the same competition, documentation, and cost-reasonableness support as other federally funded procurements.
The practical effect is that spending streams a PHA may have historically excluded from its procurement policy now fall inside it. Authorities should map every funding source touched by COCC and HCV fee revenue and confirm that contracting from those sources runs through the standard procurement process.
REV-3 is also understood to impose a mandatory five-year limit on contract terms. Practitioner analyses have flagged this cap but have not clarified whether it counts option periods toward the five years, so authorities should treat any multi-year agreement approaching that length conservatively. Contracts that stretch beyond five years should be identified now and planned for recompetition, since a contract term exceeding the cap is an easy finding for an auditor to document.
Single-Audit and Procurement-Testing Implications
Procurement is a standard compliance requirement tested under the Uniform Guidance single audit, and REV-3 raises the stakes. When an auditor selects procurement transactions for testing, they evaluate them against the standards in effect during the audit period. For fiscal periods after the handbook’s publication, that means the 2 CFR 200.317 to 200.327 standards, the new thresholds, and the expanded scope covering COCC and HCV fee spending.
Auditors will look for a written procurement policy that reflects the current regulatory framework, correct method selection at each dollar tier, documented cost or price analysis, sole-source justifications where competition was limited, conflict-of-interest disclosures, and complete procurement files. A policy that still cites 24 CFR 85.36 or carries the old $250,000 SAT and $10,000 micro-purchase figures creates a documentation weakness even where the underlying purchase was reasonable. Aligning the policy to REV-3 removes that avoidable exposure.
Threshold changes also interact with major-program determination. Larger procurement activity can affect how programs are sized and risk-assessed in the single audit. For how program sizing works under the Uniform Guidance, see our explainer on determining Type A programs for PHAs. Because HUD periodically updates the companion audit guidance PHAs are examined against, also review the latest HUD Consolidated Audit Guide changes so your compliance calendar reflects both the procurement handbook and the audit guide.
A Practical Update Checklist for PHAs
Start by revising the written procurement policy. Replace 24 CFR 85.36 references with 2 CFR 200.317 through 200.327, reset the SAT to $350,000, reset the general micro-purchase threshold to $15,000, and preserve the lower Davis-Bacon micro-purchase figure where it applies. Route the revised policy through your board for formal adoption so the effective date is documented.
Next, extend the policy’s scope to COCC fee income and Housing Choice Voucher administrative fees, and identify any spending from those sources that has bypassed procurement procedures. Then inventory active contracts against the five-year term limit and build a recompetition schedule for any that exceed it. Finally, refresh staff training and procurement file templates so that method selection, cost and price analysis, and required justifications are captured consistently. Documentation discipline is what carries a PHA cleanly through single-audit procurement testing.
Frequently Asked Questions
What is the Simplified Acquisition Threshold under HUD Procurement Handbook 7460.8 REV-3?
The Simplified Acquisition Threshold is $350,000. This matches the FAR maximum SAT that took effect October 1, 2025, which flows through 2 CFR Part 200 to PHA procurement. Purchases above the SAT require sealed bids or competitive proposals.
What is the micro-purchase threshold in REV-3?
The general micro-purchase threshold is aligned with the FAR at $15,000, effective for the same October 1, 2025 federal adjustment. Construction and maintenance subject to the Davis-Bacon and Related Acts have a separate $2,000 statutory trigger: contracts over $2,000 must carry prevailing-wage requirements, which effectively constrains how those purchases can be handled. Confirm the figure for each category before applying it.
When did HUD Procurement Handbook 7460.8 REV-3 take effect?
The handbook does not carry a stated calendar effective date. It is understood to have first appeared on HUD’s website in February 2026, with executive directors notified shortly afterward, and HUD’s transmittal indicates it is effective upon publication and applied prospectively, not retroactively. HUD did not publish a formal transition period, so PHAs should update policies promptly.
Does REV-3 apply to Central Office Cost Center and Housing Choice Voucher fees?
Yes. REV-3 extends procurement requirements to income generated by the Central Office Cost Center, including fee-based revenue, and applies 2 CFR Part 200 procurement requirements to Housing Choice Voucher administrative fees. Spending from these sources now runs through the standard procurement process.
How does REV-3 affect our single audit?
Auditors test procurement against the standards in effect during the audit period. For periods after publication, that means the 2 CFR 200.317 to 200.327 standards, the $350,000 SAT, the $15,000 micro-purchase threshold, and the expanded scope. A policy citing the old rules or thresholds is an avoidable finding.
What is the first thing a PHA should update?
Revise the written procurement policy to cite 2 CFR 200.317 through 200.327 and reset the thresholds, then adopt it formally through the board. From there, extend scope to COCC and HCV fees, inventory contracts against the five-year term limit, and refresh file documentation.
