Southwest Housing Compliance Corporation

Frequently Asked Questions

Here are frequently asked questions to SHCC about Renewal & Adjustments.

If all else fails, give us a call at (512)474-5332 and ask to speak to the Financial Analyst for your region.

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.

What is the currently published OCAF?

OCAF stands for Operating Cost Adjustment Factor. Each year, HUD publishes the OCAF for the year. They will be applicable in your OCAF Adjustment Worksheets and the Renewal Worksheet for Option 2 and Option 4.

TEXAS ARKANSAS
2008 (effective 2/11/08) - 1.051 2008 (effective 2/11/08) - 1.068
2007 - 1.058 2007 - 1.041
2006 - 1.041 2006 - 1.036
2005 - 1.045 2005 - 1.029
2004 - 1.032 2004 - 1.037
2003 - 1.035  
2002 - 1.047  
2001 - 1.0279  

 

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 for the property's original HUD-insured loan. If your property's original loan has been restructured by OAHP (formerly OMHAR) or has been paid off as part of an IRP Decoupling, you may use the information from the new 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, 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.

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 for utility companies, insurance providers, salary schedules, etc.)