HUD recently published a Notice in the Federal Register establishing operating cost adjustment factors (OCAFs) for Section 8 Housing Assistance Payment (HAP) contract renewals. OCAFs are the primary method by which renewal rents are established or adjusted. Contract rents are adjusted by applying the OCAF to that portion of the rent attributable to operating expenses exclusive of debt service. OCAFs are calculated as the sum of weighted average cost changes for wages, employee benefits, property taxes, insurance, supplies and equipment, fuel oil, electricity, natural gas, and water/sewer/trash using publicly available indices. This notice is applicable to any eligible multifamily housing projects having an anniversary date on or after February 11, 2014.

Click here to read the Federal Register Notice.