Our Section 8 team processes renewals and rent adjustments for all contracts in the PBCA portfolio each year. Depending on the Owner/Agent’s request and selection of available options available, these processes may also include the review and approval of proposed rents, utility analysis, and other adjustments.
Introduction
Introduction
Property contract rents are adjusted annually. The Owner/Agent may choose to utilize an Operating Cost Adjustment Factor, which is based on an adjustment factor calculated and published annually by HUD or a Budget-Based Rent Adjustment, which is based on property-specific projected operating costs.
Rent Increases
Rent Increases
Property contract rents are adjusted annually. The Owner/Agent may choose to utilize an Operating Cost Adjustment Factor (OCAF), which is based on an adjustment factor calculated and published annually by HUD or a Budget-Based Rent Adjustment, which is based on property-specific projected operating costs. Once a complete package is received from the Owner/Agent, the request is reviewed and the rent adjustment is processed.
Certain contract types require submission of a Rent Comparability Study (RCS) and are not eligible for an OCAF adjustment. This will be identified in the property’s contract.
AUTO OCAF: Approximately 150 calendar days prior to the contract anniversary date, properties eligible for an Auto OCAF rent adjustment receive a packet from the WVHDF via email that includes a letter indicating the new OCAF increased rents and a Utility Allowance Analysis Owner Certification, if applicable. The Owner/Agent should read the Auto OCAF Acceptance Letter carefully to confirm all information, including debt service, before signing. If something is not correct, note on the letter, provide supporting documentation, and return all information to the WVHDF.
BUDGET BASED (BB): The budget-based rent adjustment requirements can be found in Chapter 7 of handbook HUD 4350.1. All required forms, including a Budget Worksheet, and supporting documentation for changes must be submitted with the owner’s written request at least 120 calendar days prior to the contract anniversary date.
All owners of properties that have a utility allowance must follow HUD’s Methodology for Completing a Multifamily Housing Utility Analysis (HUD Notice H-2015-4).
Contract renewals and rent adjustment requests for properties with utilities paid by the residents must be accompanied by a utility allowance analysis. A new utility analysis is requested every third year for each bedroom size. For the two years after the baseline is established, utility allowance amounts for each bedroom size at the property can be adjusted by a state-specific Utility Allowance Factor (UAF) provided by HUD (in lieu of another baseline utility analysis). For properties with more than one utility type paid by the residents, an analysis must be submitted for each utility type (i.e. electric and gas).
When the utility analysis documentation supports a decrease to the utility allowance(s), the owner must adhere to the posting requirements set forth in 24 CFR 245.410 Notice to Tenants (see below).
Resources
Resources
Budget-Based Rent Increase Documents
These documents will assist owners/agents pursuing budget-based rent increases.
Contract renewals and rent adjustment requests for properties with utilities paid by the residents must be accompanied by a utility allowance analysis.
Properties required to submit an RCS with their contract renewal or rent increase request will need to contract with a state-certified general appraiser at least 7 months in advance.
