CARH’S BROADCAST E-MAIL – Regulatory Update
December 19, 2024
On December 11, the Department of Housing & Urban Development published a Federal Register Notice that establishes operating cost adjustment factors (OCAFs) for project-based assistance contracts issued under Section 8 of the United States Housing Act of 1937 and renewed under the Multifamily Assisted Housing Reform and Affordability Act of 1997 (MAHRA) for eligible multifamily housing projects having an anniversary date on or after February 11, 2025. OCAFs are annual factors used to adjust Section 8 rents renewed under Section 515 or Section 524 of MAHRA.
According to the Notice, since 2023, HUD had used industry data for Direct Property and Casualty Insurers-Commercial Multiple Peril Insurance series from the Bureau of Labor Statistics, Producer Price Index (PPI) to calculate the inflation factor for the insurance component. Beginning with the 2025 OCAFs, “HUD instead will use the year-to-year change in actual cost data from audited financial statements, as it better captures the significant rise in property insurance costs that multifamily properties have faced in recent years. Specifically, HUD will use actual State-level data, except for States that have fewer than 100 multifamily properties with submitted audited financial statements in 2022 and 2023.”
Today, HUD released a Press Release entitled, HUD Announces Adjustments to Help Properties Address Rising Expenses and Insurance Costs, ins support of the adjusted OCAFs.
Please contact the CARH national office at carh@carh.org or 703-837-9001 should you have questions or concerns. For other news and information affecting the affordable rural housing industry, please visit the Newsroom on CARH’s website, www.carh.org.