Option 4: Request Renewal for Projects Exempted From OAHP

Eligibility

Option four is for owners whose properties are considered exception properties. Specifically, the following projects are identified by the statute as "exception properties":

1. Project(s) with primary financing or mortgage insurance that were provided by a unit of state or local government and not insured under the National Housing Act.
2. Projects financed under section 202 of the Housing Act of 1959 or section 515 of the housing act of 1949 (includes 202/8, 515/8: does not include 202 and 811 Capitol Advance projects, which do not have section 8 contracts)
3. Projects that have an expiring contract 1937 Act pursuant to section 441 or the Stewart B. McKinney Homeless Assistance Act (SRO Mod Rehab)
4. Projects that do not qualify as projects pursuant to 512 of MAHRA. Such as:
   1. A project that is not subject to a HUD-held or insured mortgage
   2. A project that has FHA mortgage insurance or is HUD-held with rents at or below comparable market rate.

The main benefit is that you do not have to submit a Rent Comparability Study (RCS) as you do with Options 1 and 2. However, unlike Options 1 and 2, under Option 4 the property is subject to the Lesser Of Test.

The Lesser Of test means that the owner submits both an OCAF Adjustment request and a Budget-Based Adjustment request. SHCC will process both adjustments and approve the lesser of the two.

If the contract is renewed for more than one year, annual rent increases during the term of the contract can be either OCAF or Budget-Based, as determined by the owner.

Submission Requirements

• Contract Renewal Request Form (HUD Form 9624)
• OCAF Worksheet (HUD Form 9265) and Budget-based Rent Adjustment request

HUD Guidance

Chapter Six of the Section 8 Renewal Policy has complete guidance regarding Option 4.