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Frequently Asked Questions

How do I know which Option to choose?

The Contract Options Q & A Guide can help you narrow down your options, and then you can find more detail about the Options in the Section 8 Renewal Policy from HUD (pdf).

What is the currently published OCAF?

OCAF stands for Operating Cost Adjustment Factor. OCAFs are used in your OCAF Adjustment Worksheets and the Renewal Worksheet for Option 2 and Option 4. On October 13, HUD published the 2016 OCAF. Texas is 1.028. Arkansas is 1.024.

What is included in Debt Service for the purposes of the OCAF Worksheet?

The debt service is made up of the property's annual payment to Principal, Interest and the Mortgage Insurance Premium (if applicable) for the property's current loan. If your property's original loan is a 236 loan or has been decoupled, be sure to subtract the Interest Reduction Payment from the total debt service.

If I am still in a 20 or 30 year contract (pre-MAHRA), how are my rents adjusted? What if the annual adjustment is not enough?

Each HAP contract dictates the terms of the annual adjustments. Your options will be the Annual Adjustment Factor (AAF) or a Budget-Based adjustment. If the AAF is not enough (often it is only 1% or 2%), you have the option to request a Special adjustment. This adjustment covers increases in utilities, taxes and insurance. Guidance for requesting a Special adjustment is found in HUD Handbook 4350.1, Chapter 34, Section 3.

Please note that pre-MAHRA contracts are now eligible to request an early termination of their contract and renewal under MAHRA if the owner agrees to the following:

  • Renew the Section 8 contract for 20 years under Options One, Two, Three or Four and
  • A Preservation Agreement for a term equal to the length of term remaining on the original HAP contract
  • Sign the HUD-93184 "Rider to Original Section 8 Housing Assistance Payments Contract"
  • I know my contract allows Budget-Based adjustments. What do I need to submit to SHCC?

    Guidance for submitting a budget-based request can be found in HUD Handbook 4350.1, Chapter 7. We have put together a checklist to assist you in compiling the information.

    HUD Handbook 4350.1 Chapter 7 says I need to explain all increases over 5% when I submit a Budget Based rent increase request. Does that apply to increases from last fiscal year's audited figures to the proposed amounts or from the this year's actuals to the proposed amounts?

    It applies to both. You should explain why the increase occurred (e.g. higher rates, new staff, etc.) and provide any back up documentation that you have (e.g. letters from utility companies, insurance providers, salary schedules, etc.)

    Contact your Financial Analyst.