Sec 8 Rent Increase
Section 8 AAF Rent
Increases and Special Adjustment Factors
HUD and USDA
Rural Housing Services Loans
Rental and Carrying Charge Increases
Section 8 AAF Rent
Increase (Projects with original contracts) - If your contract was effective
during the 1980s and early 1990s and have not expired, and your contract rents
are increased through the application of the Annual Adjustment Factors (AAF), I
can assist you in preparing a request for a rent increase.
If your current
Section 8 rents exceed the published Fair Market Rents (FMR), you must submit a
Rent Comparability Study
with your request for a rent increase (Certain projects are exempt from
Your request must be
submitted at least 60-days prior to the anniversary date of the contract.
If HUD or the Contract Administrator receives your request for a rent increase
after the contract anniversary date, your request will be denied.
Section 8ection 8
Contract Renewals & Annual Rent Adjustments
(Projects with renewed contracts - FY 1999 and beyond)
I prepare Section 8 annual rent adjustments and
Section 8 Contract renewals, based on the new Section 8
Contract Renewal Policy Guidance.
Depending upon the
type of project funding, Section of the Housing Act and construction, HUD Rules
differ as to the approach to granting an annual rent adjustment, or contract
renewal. Contact me and I can work with you to get the maximum increase
SPECIAL RENT INCREASES FOR AAF RENTS
There are certain
types of special rent increases that are allowed by law for
rents calculated using the Annual Adjustment Factor (AAF) method.
Types of Special Rent
The owner for property
taxes, utilities and hazard insurance may request a special adjustment. For
Property Disposition properties sold on a "cash as is" basis, certain
expenses are allowable when calculating a special adjustment.
The Consideration of Special Adjustments for Property Taxes, Insurance and
to the consideration of special adjustments the Contract Administrator should
evaluate the owners request and make sure the owner has taken the required steps
to requesting a special rent increase. Increases in these items which went into
effect prior to the last processed annual adjustment should not be considered
for a special adjustment. Only increases in those items that will be implemented
soon (e.g. within 90 days) should be processed.
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ADJUSTMENT FACTORS (OCAF)
Each year the Department of Housing and Urban
Development (HUD) develop and publish an OCAF for metropolitan areas a Notice of
Operating Cost Adjustment Factors (OCAF) for Low Income Housing Preservation and
Resident Homeownership (LIHPRHA) projects assisted with Section 8 Rental
The Factors are used in the OCAF Worksheet when an Owner/Agent requests an
annual Section 8 rent adjustment, which must be submitted to HUD/Contract
Administrator 120 days before the anniversary date of the Section 8 Contract.
Rent Increases - Rentals
Carrying Charge Increases - Cooperatives
provides procedures for processing budgeted carrying charge and rent increases
in certain HUD projects.
All project owners
whose mortgages are insured under Section 231, 232, 202 projects (who do not use
the Section 8 Annual Adjustment Factor (AAF)), 213, 236 (including
cooperatives), Rent Supplement, 221(d)(3) Market Rate and 221(d)(3) Below Market
Interest Rate (BMIR) rental and cooperative projects, 207's and 231's both
regulated and controlled by alternative rent mechanism; Section 220 and
221(d)(4)'s that are regulated; and all of the above that are not automatically
preempted by HUD and request exemption from local rent control, are required to
use the Budget Approach when requesting HUD to increase the Maximum Allowable
I have developed a
computerized version of the budgeted carrying charge/rent increase process. Our
prepared proposals have been accepted and approved by Contract Administrators
and HUD Field Offices in several states. If you provide me with the necessary
information, I will prepare complete budget proposals for rentals and
cooperatives projects. Proposals are prepared on your letterhead, and packaged
for submission to your local HUD Field Office at a reasonable cost. You only
have to sign it.
of Local Rent Control
that are subject to State or local Rent Control are preempted under HUD
regulations, when HUD determines that the delay, or decision of the local rent
control Board, or other authority regulating rents, pursuant to State or local
law jeopardizes the Department’s economic interest.
All requests for HUD
preemption of local Boards’ rent control must be processed in specific
procedural steps. I can offer guidance to walk you through the steps, and
prepare the formal request to HUD.
Project Owners Annual Rent Adjustments
I also prepare annual
rent adjustments for Owners of LIHPRHA projects. Section 8 Contracts
executed for LIHPRHA projects have special provisions they must be comply with,
in order for Contract Administrators to grant annual rent adjustments. We
are familiar with this procedure and can assist you in preparing an annual rent
If you need assistance in
preparing a Budget-based rent increase, Section 8 AAF annual adjustment or a
Special Rent Increase Adjustment request for submission to your Contract
Administrator, contact me at email@example.com.
Note: Outstanding HUD
policy says that new debt service is to be used in the OCAF Worksheet
computations and that original debt service is to be used in budget based rent
Disclaimer: There are no
guarantees that HUD will approve my prepared proposals. The services I provide
are based upon current HUD Directives and Regulations. I will prepare rent
increase proposals based on data provided by clients. All proposals are prepared
according to HUD procedures.
if a Contract Administrator or HUD requires detailed information over and above
normal requirements, a nominal fee will be charged to respond to supplemental
Testimonials from Clients
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References provided upon request
07/11/2014 07:25:47 AM