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Accounting

Alabama Relationship Managers

Turman, Jesse
Special Claims Specialist

888-466-5572 ext.2799

Bishop, Christine
Resident Complaint Specialist (All States)

888-466-5572 ext. 2757

Callahan, Vernell
Contract Administration Coordinator

888-466-5572 ext. 2739

Witherspoon, Natoya
Relationship Manager

888-466-5572 ext. 2741

Connecticut Relationship Managers

Turman, Jesse
Special Claims Specialist

888-466-5572 ext.2799

Gerundo, Tom
Contract Administration Coordinator

860-881-1879

Gerena, Alfred
Relationship Manager

860-881-1890

Mississippi Relationship Managers

Turman, Jesse
Special Claims Specialist

888-466-5572 ext.2799

Greathree, Nate
Contract Administration Coordinator

601-421-9196

Wade, Charlie
Relationship Manager

601-506-9769

Virginia Relationship Managers

Turman, Jesse
Special Claims Specialist

888-466-5572 ext.2799

Shearer, Tim
Contract Administration Coordinator

804-787-4785

Wyand, Tim
Relationship Manager

804-787-3696

Administration

Odom, Ronnie
Housing Consultant

888-466-5572 ext. 2743

Churnock, Matthew
Planning & Development Coordinator

888-466-5572 ext. 2776

Clay, Beth
Executive Assistant

888-466-5572 ext.2722

Hall, Ebony
Marketing Coordinator

888-466-5572 ext.2797

Strong, Eric
Chief Executive Officer

888-466-5572 ext. 2722

Barrocas, Simmy
Internal Auditor

888-466-5572 ext. 2724

Cameron, LaShunda
Deputy Chief Operating Officer

888-466-5572 ext. 2730

McCarroll, Lisa
Director of Contract Administration

888-466-5572 ext. 2723

McLaughlin, Rob
Deputy Director of Contract Administration

888-466-5572 ext. 2738

Reynolds, Julie
Chief Operating Officer

888-466-5572 ext. 2721

Thurman, Rhonda
Administrative Assistant

888-466-5572 ext. 2757

Contract Management

Browning, Felicia
Contract Management Specialist

888-466-5572 ext. 2763

Mickel, Nitira
Funding Specialist

888-466-5572 ext. 2764

Rooks, Demetra
Contract Management Specialist

888-466-5572 ext. 2765

Sheffield, Cynthia
Contract Management Specialist

888-466-5572 ext. 2759

Smith, Venita
Document Specialist

888-466-5572 ext. 2753

Wells, Tristese
Contract Management Specialist

888-466-5572 ext. 2762

Mitchell, Darron
Lead Contract Management Specialist

888-466-5572 ext. 2760

Finance Department

Cantrell, Tammy
Finance Acct.

888-466-5572 ext. 2734

Human Resources Department

Marcus, Dale
Human Resources Director

888-466-5572 ext. 2725

IT Specialists

Herrington, BJ
IT Manager

888-466-5572 ect. 2724

Williams, Greg
IT

888-466-5572 ext.2798

Williams, Javarious
Digital Imaging Clerk

888-466-5572 ext. 2737

Quality Assurance Department

Riley, Steven
QC - Vouchers

888-466-5572 ext. 2780

Armstrong, Antoinette
QC - Contract Management Specialist

888-466-5572 ext. 2731

Bell, Elizabeth D
QC - Vouchers

888-466-5572 ext. 2754

Corbin, Anggie
QC - Contract Management Specialist

888-466-5572 ext. 2789

Tucker, Debora
QC - Vouchers

888-466-5572 ext. 2729

Trainers

Walker, Alicia
Contract Management & Voucher Specialist Trainer

888-466-5572 ext. 2758

Bell, Vickie
Corporate Training and Education Specialist

888-466-5572 ext. 2728

Alabama
1827 1st Avenue North, Ste 100 Birmingham, AL 35203
T: 888-466-5572
F: 888-723-8932

Connecticut
100 Pearl Street, 14th Floor Hartford, CT 06103
T: 888-466-5572
F: 888-723-8932

Mississippi
232 Market Street, Flowood, MS 39232
T: 888-466-5572
F: 888-723-8932

Virginia
6802 Paragon Place, Suite 410 Richmond, VA 23230-6916
T: 888-466-5572
F: 888-723-8932

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Renewals

Our Contract Management Specialist will take care of all of your Renewal and Amend Rents needs. Here you will find forms to help make your process a lot easier.

The Navigate Contract Management Specialist (CMS) Department was created to process all contract renewals and rent adjustments. To avoid delays in subsidy payments, contract renewal paperwork is due 120 days before contract expiration. For MAHRA multi-year HAP Contracts, properties are entitled to an annual rent increase on their anniversary effective date. Your Navigate CMS will send a reminder letter 190 and 150 days before contract/funding expiration. At 140 days before contract/funding expiration, your CMS will begin to contact you weekly to remind you of the paperwork due. If you are renewing your contract, please begin to prepare your renewal paperwork including a Utility Analysis (UA), if applicable, once these notices are received. For rent adjustments, if the property is eligible to receive the auto-OCAF, your CMS will send you an auto-OCAF letter to review, accept and return the auto-OCAF letter along with a UA submission, if applicable. If you are not eligible for an auto-OCAF, you will receive a 150 reminder letter and weekly emails requesting a rent increase submission package. For pre-MAHRA properties still in the original HAP contract, you can submit a rent adjustment request to Navigate in accordance with your HAP contract or use agreement. The renewals section of our website contains everything needed to submit a contract renewal or rent adjustment request. If you have additional questions, please contact your Contract Management Specialist.

Our Resource Center contains guidebooks, manuals, forms, calculation worksheets, and Navigate presentations to assist you in completing a renewal or rent adjustment request.

This page is designed to provide additional help in filling out some of the HUD Forms and worksheets for rent adjustment calculations. We have added comments and helpful tips on each form listed, based on some of the most common errors that we see during paperwork submission.

One year before contract expiration, Owners must notify the tenants of their intentions to renew or not to renew the Section 8 HAP Contract. Your Contract Management Specialist (CMS) will send a reminder letter to you 13 months before contract expiration. The One Year Tenant Notification Letter should be signed and on letterhead. Please click on the sample letters below for additional information:

If you intend to renew the Section 8 HAP Contract, you will need to submit the contract renewal request form 120 days before contract expiration. Please see the Section 8 Renewal Policy Guide and our Contract Renewal Page for Option information:

If you choose to renew under Option One, Mark Up To Market, you need to complete the Initial Eligibility Worksheet:

Depending on the rent adjustment method allowed with the option selected, and the requirements of the 24 CFR, you may have to submit a Notice to Tenants. If you are processing a utility allowance analysis and determine that the UA will decrease, a Notice to Tenants is required to notify the tenants of the UA decrease. Click here for Notice to the Tenant requirements. Click on the sample notices below for more information:

Click on the forms below for instructions on filling out HUD rent adjustment worksheets. Check your HAP Contract, Plan of Action, or Use agreement to see the rent adjustment method available for your property.

If a budget-based rent increase (BBRI) is submitted and it is determined that the Reserve for Replacement deposits need to be increased for the budgeted year, you must submit a request form for increasing the monthly deposits:

1. Did your project previously go through the Portfolio Reengineering Demonstration Program, or participate in long-term use agreements with HUD under the Preservation Program (LIPHRA and ELIPHRA)?

Yes
No

Eligible for Option 5

You may be eligible for Option 5: Request Renewal of Portfolio Reengineering Demonstration or Preservation Contract (LIPHRA and ELIPHRA).

2. Is your property an Exception Project? An Exception Project is defined as one of the following:

  • 202/8 or 515/8
  • Has State or Local Government Financing
  • Not subject to a HUD-Held or HUD-insured mortgage

Yes
No

Eligible for Option 4

You may be eligible for Option 4: Request renewal of the Section 8 contract for projects exempted from OAHP.

Please refer to the Section 8 Renewal Policy Guide for detailed information on contract renewals.

No matter what renewal option you select, if it is determined that contract rents exceed comparable market rents and the project is eligible for OAHP, it will be forwarded to OAHP for processing.

3. Does your current Section 8 Contract annual rent potential exceed the comparable market rents from your Rent Comparability Study (RCS)?

Yes
No

Eligible for Option 3

You may be eligible for Option 3: Request Referral to Recap.

This option is for projects that currently have contract rents that exceed comparable market rents and the project is not identified as an "exception project". If the project is eligible, and you select this option, you will be able to request either:

  • Option 3A (Lite) - Reduction in Section 8 contract rents to the RCS rents without restructuring the mortgage.
  • Option 3A (Full) - Restructure the mortgage and reduce the Section 8 contract rents to the RCS rents.

Please refer to the Section 8 Renewal Policy Guide for detailed information on contract renewals.

No matter what renewal option you select, if it is determined that contract rents exceed comparable market rents and the project is eligible for Recap, it will be forwarded to Recap for processing.

4. Are your current contract rents at or above 100% of Fair Market Rents (FMR)? But less than comparable market rents on your Rent Comparability Study (RCS)?

Yes
No

Eligible for Option 1 or 2

Option 1: Request renewal under Mark-Up-To-Market

Please refer to the Section 8 Renewal Policy Guide for detailed information on contract renewals.

Option 2: Request renewal of other contracts with current rents at or below comparable market rents

Please refer to the Section 8 Renewal Policy Guide for detailed information on contract renewals.

No matter what renewal option you select, if it is determined that contract rents exceed comparable market rents and the project is eligible for OAHP, it will be forwarded to OAHP for processing.

Eligible for Option 2

You may be eligible for the following option:

Option 2: Request renewal of other contracts with current rents at or below comparable market rents

Please refer to the Section 8 Renewal Policy Guide for detailed information on contract renewals.

Please refer to the Section 8 Renewal Policy Guide in the Resource Center for detailed information on contract renewals.

 Renewal Options

There are six renewal options to choose from. Click on each option to find out more information.

How can I determine Option eligibility?

Still need help? Contact the Contract Management Specialist Department.

Option 1 – Mark-Up-To-Market

General Eligibility Criteria for Options 1A & 1B:

  1. Aggregate current rent levels under the expiring or terminating contract must be less than comparable market rents.
  2. Management’s most recent Management and Occupancy Review (MOR) rating is “Satisfactory” or above
  3. A physical inspection score, from the Real Estate Assessment Center (REAC), of 60 or above with no uncorrected Exigent Health and Safety (EH&S) violations.
  4. All Financial Assistance Subsystem (FASS) findings need to be closed or under HUD-approved corrective action plan.
  5. The project owner must be:
    1. A profit-motivated entity (including a limited distribution entity)
    2. A housing authority occupying the status of a “public body corporate and politic” under the state legislation under which it was created
    3. A limited partnership with one or more nonprofit general partners or a sole general partner that is wholly owned and controlled by one of more nonprofit entities
    4. A limited liability company with one or more nonprofit managers or nonprofit managing members or a sole manager or managing member that is wholly owned or controlled by one or more nonprofit entities where the managing general partner is wholly owned and controlled by a nonprofit entity

Option One-A, Entitlement Mark-Up-To-Market Eligibility:

  1. The owner’s Rent comparability Study (RCS) must demonstrate that the comparable market rents are at or above 100% of the FMR potential. Use the FMR figures calculated for the fiscal year in which the project is entering MUTM to demonstrate eligibility. (Excel Worksheet used to determine this criteria can be found on the Internet at http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/mfh/mfhsec8
  2. The project does not have a low-and moderate-income use restriction that cannot be eliminated by unilateral action by the Owner. (i.e., the existence of Flexible Subsidy assistance, Low-Income Housing Tax Credits, *or Recap’s Green Retrofit Program. If the project is subject to any use restriction at the time of the renewal request, the AE/CA must determine whether it is the type of use restriction that makes a project ineligible for Option One-A.)
  3. The project is not subject to a contract for moderate rehabilitation assistance under section 8(e)(2) of the United States Housing Act of 1937, as in effect before October 1, 1991.
  4. The project is not one for which a public housing agency provided voucher assistance to one or more of the tenants after the Owner has provided notice of termination of the contract covering the tenant’s unit.

Option 1-B: Discretionary Authority Eligibility:

To be eligible under this option, the property must meet at least one of the following requirements:

  1. Vulnerable Population: The tenants of the property are a particularly vulnerable population, demonstrated by a high percentage (at least 50%) of the units rented to elderly, disabled, or large families (large family is defined as a family of five or more persons); The 50% can be inclusive of all categories or the individual referenced populations
  2. Vacancy Rates: The property is located in a low-vacancy market area (or in a rural area with no comparable rental housing) where there is a lack of affordable housing and where Housing Choice vouchers would be difficult to use.
  3. Community support: The project is a high priority for the local community as demonstrated by a contribution of State and/or local funds to the project. *Evidence of community support* may be in the form of tax credits, tax abatements, capital improvement funds, etc *that have been provided to the project within the last five years.

Option 1-A & Option 1-B Renewal Submission Requirements:

  • Contract Renewal Request Form (HUD Form 9624)
  • Rent Comparability Study (RCS)
  • Initial Eligibility Worksheet(s)
  • If the project has a utility allowance: Utility analysis must be submitted based on Notice 2015-04

Rent Adjustments for Option 1 Contracts

*Only OCAF Rent Adjustments are allowed during the term of the contract*

  • Signed Auto OCAF letter
  • Verification of Annual Project Debt Service (ex. monthly mortgage statement, Promissory note) Debt Service = Principal + Interest + MIP – IRP Subsidy (if applicable)
  • If the project has a utility allowance: Utility analysis must be submitted based on Notice 2015-04
  • *For projects with a contract term that exceeds five years, follow the instructions in the Renewal Guide Section 2-17.C.4. concerning fifth year adjustments.*

Option 2 – Contract Renewals for Other Projects with Current Rents At or Below Comparable Market Rents

Eligibility

Option Two is for Owners who request a renewal of their Section 8 contract where the RCS indicates that the contract’s aggregate current rents are at or below comparable market rents, or the contract’s aggregate current rents exceed comparable market rents, but the project is exempt from MTM restructuring and the owner is willing to cut the rents to comparable market rents prior to renewal of the contract.

Renewal Submission Requirements

  • Contract Renewal Request Form (HUD Form 9624)
  • Rent Comparability Study (RCS)
  • OCAF Worksheet or Budget Based Rent Adjustment Request (See Rent Adjustment Section)
  • Verification of Annual Project Debt Service (ex. monthly mortgage statement, Promissory note) Debt Service = Principal + Interest + MIP – IRP Subsidy (if applicable)
  • If the project has a utility allowance: Utility analysis must be submitted based on Notice 2015-04

Rent Adjustments for Multi-year Contracts Submission Requirements

*For contracts over 5 years, a new RCS should be submitted every 5th year from the contract effective date for the 6th, 11th, and 16th year adjustments. The rents will be adjusted up or down, based on the RCS rents.*

An OCAF rent increase request:

  • Signed Auto OCAF letter
  • Verification of Annual Project Debt Service (ex. monthly mortgage statement, Promissory note) Debt Service = Principal + Interest + MIP – IRP Subsidy (if applicable)
  • If the project has a utility allowance: Utility analysis must be submitted based on Notice 2015-04

OR

A budget-based rent increase request (in accordance with the requirement of HUD Handbook 4350.1, Chapter 7)

  • A cover letter that:
    1. summarizes the reasons why a rent increase is needed
    2. gives the date the increase will be effective
    3. describes the project’s physical condition and any improvements that have been budgeted
  • Budget Worksheet – HUD-92547-A – Schedule of Charges and Project Information (must be signed)
  • Statement & documentation explaining basis for any increases in expense line items if increase 5% or more and $500 or greater (comparing proposed budget to current year actuals and the previous years audited figures)
  • Executed copy of Owner’s Certification Regarding Purchase Practices and Reasonableness of Expenses (Appendix 3)
  • A signed request for increase in Replacement for Reserve Deposit (if requested)
  • If the project has a utility allowance: Utility analysis must be submitted based on Notice 2015-04
  • Notice to Tenants (if applicable) in accordance with 24 CFR 245.310 & Owner’s Certification As to Compliance with Tenant Comment Procedures

 

Option 3 – Referral to the Office of Recapitalization (Recap)

  • Option 3A (Lite: Renewal without restructuring, with rents marked down to comparable)
  • Option 3b (Full: Renewal with mortgage restructuring, with rents marked down to comparable)

Eligibility

FHA insured projects with above market rents that are not identified as an “exception project” in Chapter Six, must be referred to Recap.

  • “Exception Projects” are projects that are not an “eligible multifamily housing project” under Section 512(2) of MAHRA, or are exempt from debt-restructuring under Section 514(h) of MAHRA and, therefore, should NOT be sent to Recap for renewal.
  • A project owner who is suspended or debarred is ineligible for a full debt restructuring (“Full”). However, even if the project is ineligible for a Full, the project may remain eligible as a project that is financially viable without a debt restructuring after the rents are reduced to comparable market rents (“Lite”). This kind of project should be referred to Recap for a rent determination. Eligibility for a Lite will be determined on a case by case basis by Recap after a review of the project’s underwriting, which will include the results of the RCS and an analysis of the project’s expenses. If the project is determined to be ineligible for a Lite and the owner or project has been rejected, Recap will return the HAP Contract to the AE. If the HAP Contract is renewed even though the project is ineligible for a Lite, the AE must renew the HAP Contract using a Watch List Contract at Recap-determined comparable Market Rents. The project should be designated, monitored and entered into the Integrated Real Estate Management System (IREMS) as a project subject to a Watch List Contract, and defined in IREMS as a project with a loan that failed M2M restructuring and is therefore operating under a Watch List Contract.
  • Section 202 Projects Refinanced for a Second time: Projects financed under Section 202 Elderly and Disabled Housing Direct Loan Program (Section 202) are eligible for restructuring if the project has been refinanced at least two times if the second refinance using a loan insured under the National Housing Act. All other projects refinanced under Section 202 are ineligible for restructuring under Mark-to-Market.

Submission Requirements

  • Contract Renewal Request Form (HUD Form 9624)
  • If the project has a utility allowance: Utility analysis must be submitted based on Notice 2015-04

Rent Adjustments for Full M2M Multi-year Contracts Submission Requirements

  • Signed Auto OCAF letter
  • Verification of Annual Project Debt Service (ex. monthly mortgage statement, Promissory note) Debt Service = Principal + Interest + MIP – IRP Subsidy (if applicable)
  • If the project has a utility allowance: Utility analysis must be submitted based on Notice 2015-04

 

Option 4 – Renewal of Projects Exempted from or not Eligible for Debt-Restructuring

Eligibility

  1. State or Local Government Financing. Projects for which the primary financing or mortgage insurance was provided by a unit of State government or a unit of general local government (or an agency or instrumentality of either) and is insured under the National Housing Act and the implementation of a Mark-to-Market Restructuring Plan would conflict with applicable law or agreements governing such financing. Note: State and local government financed projects that are not insured under the National Housing Act are not subject to Recap review. (To confirm the exemption, a determination must be made by Recap as to whether or not implementation of a Mark-to-Market Restructuring Plan is in conflict with applicable law, or agreements governing such financing. In these cases, the contract and supporting documentation of the potential conflict must be referred to Recap for review. The owner (or lender) must submit an opinion of counsel in a form acceptable to HUD, along with copies of the relevant financing documents or applicable local or State legal authority. Section 202/8 and 515/8 Projects.)
  2. Section 202/8 and Section 515/8 Projects. Projects currently financed under Section 202 of the Housing Act of 1959 or Section 515 of the Housing Act of 1949. However, these projects can be eligible for restructuring if refinanced with FHA mortgage insurance. Section 202 and 811 Capital Advance projects are not eligible because they do not have Section 8 contracts.
  3. Refinanced Section 202 project. The project was refinanced pursuant to Section 811 of the American Home Ownership and Economic Opportunity Act of 2000.
  4. SRO Mod Rehab. Projects that have an expiring contract under Section 8 of the United States Housing Act of 1937 pursuant to Section 441 of the Stewart B. McKinney Homeless Assistance Act.
  5. Section 512 of MAHRA. Projects that do not qualify as eligible multifamily housing projects pursuant to Section 512(2) of MAHRA include:
    1. A project that is not subject to a HUD-held or insured mortgage; or,
    2. A project that has FHA mortgage insurance or is HUD-held with rents at or below comparable market rents.

Option 4 Renewal Submission Requirements

*The Lesser of Test is required for all Option 4 Renewals. For the lesser of test, we calculate the OCAF adjusted rents and the budget adjusted rents, and renew the contract rents at the lesser of the two. Note: Project rents may be reduced.*

  • Contract Renewal Request Form (HUD Form 9624)
  • OCAF Worksheet (HUD Form 9624)
  • Budget Worksheet (HUD Form 92547-A) & items required for a budget request
  • If the project has a utility allowance: Utility analysis must be submitted based on Notice 2015-04

Rent Adjustments for Multi-year Contracts Submission Requirements

An OCAF rent increase request:

  • Signed Auto OCAF letter
  • Verification of Annual Project Debt Service (ex. monthly mortgage statement, Promissory note) Debt Service = Principal + Interest + MIP – IRP Subsidy (if applicable)
  • If the project has a utility allowance: Utility analysis must be submitted based on Notice 2015-04

OR

A budget-based rent increase request: (in accordance with the requirement of HUD Handbook 4350.1, Chapter 7)

  • A cover letter that:
    1. summarizes the reasons why a rent increase is needed
    2. gives the date the increase will be effective
    3. describes the project’s physical condition and any improvements that have been budgeted
  • Budget Worksheet – HUD-92547-A – Schedule of Charges and Project Information (must be signed)
  • Statement & documentation explaining basis for any increases in expense line items if increase 5% or more and $500 or greater (comparing proposed budget to Current year actuals and the previous years Audited figures)
  • Executed copy of Owner’s Certification Regarding Purchase Practices and Reasonableness of Expenses (Appendix 3)
  • A signed request for increase in Replacement for Reserve Deposit (if requested)
  • Rent Comparability Study – The owner must submit or have submitted within the preceding 5 years a RCS prepared following the instructions found in Chapter Nine of the Section 8 Renewal Guide.
  • If the project has a utility allowance: Utility analysis must be submitted based on Notice 2015-04
  • Notice to Tenants (if applicable) in accordance with 24 CFR 245.310 & Owner’s Certification As to Compliance with Tenant Comment Procedures

Option 5 – Renewal of Portfolio Reengineering Demonstration or Preservation Projects

Eligibility

Preservation Projects – Primarily consist of Section 236 and 221d3 BMIR projects whose Owners entered into long-term use agreements with HUD under the Preservation Program. Rent adjustment methods are determined by the approved Plan of Action (POA).

Portfolio Reengineering Demonstration Project – HUD is no longer doing initial renewals under the Portfolio Reengineering Demonstration Program.

Submission Requirements

  • Contract Renewal Request Form (HUD Form 9624)
  • Rent adjustment request package per POA or Use Agreement (See Rent Adjustments)
  • If the project has a utility allowance: Utility analysis must be submitted based on Notice 2015-04

Option 6 – Opt-Outs

In order to be eligible to opt out of the Section 8 HAP Contract:

  1. The owner must provide a one-year notification to the tenants and the AE/CA of the intent to opt-out of the Section 8 project-based contract (See Appendix 11-1 of the Renewal Guide.)
  2. The property must not have any restrictions stated in the Section 8 HAP contract or Use Agreement that prohibit the owner from opting-out. For example, Portfolio Reengineering Demonstration projects are required to accept Section 8 contracts offered by the Department, and as such, they may not opt-out if HUD offers to renew.
  3. A copy of the One Year Tenant Notice must be issued to the residents and Navigate one year prior to the contract expiration date.
  4. Contract Renewal Request Form (HUD From 9624) must be submitted by 150 days prior to the expiration date of the contract.

Submission Requirements

  • Contract Renewal Request Form (HUD Form 9624)
  • One Year Notice must be:
    1. Submitted to Navigate and residents one year prior to contract expiration
    2. On company letterhead
    3. HUD and Navigate contact information at the bottom of the notice
    4. Signed and Dated

Rent Adjustment Types.

Your HAP Contract will determine the rent adjustment method you should use. If your contract is expiring, please go to our Contract Renewal Options page to determine your renewal option for the upcoming year.

OCAF Rent Adjustments

  • The OCAF (Operating Cost Adjustment Factor) is a factor that is established by HUD, and is applied to the existing contract rent (less the portion of the rent that is paid for debt service).
  • OCAF Values are determined by HUD annually and are published in the Federal Register. The OCAFs are usually published in February of each year. Properties with contracts expiring after February 11th are subject to the new OCAF values.
  • The Auto OCAF was created to streamline the rent increase process. The Auto OCAF will automate the process of an OCAF rent increase for Section 8 contracts in Amend Rent years. Owners/Agents will no longer need to calculate and supply the OCAF worksheet as part of the Amend Rents package.

Submission Requirements for OCAF Rent Increases:

  • OCAF Worksheet or Signed Auto OCAF letter (sent to Owner/Agent via email, 150 days before funding expiration)
  • Utility Allowance Analysis (if applicable)
  • Verification of Annual Project Debt Service (ex. monthly mortgage statement, Promissory note) Debt Service = Principal + Interest + MIP – IRP Subsidy (if applicable)

Need to know how to fill out an OCAF Worksheet? Click here.

Options that allow an OCAF/Auto OCAF to be submitted:

  • Option 1 – During amend rents only years, eligible for auto OCAF (unless a new RCS is needed)
  • Option 2 – During contract renewals years & eligible for auto OCAF in amend rents only years (unless a new RCS is needed)
  • Option 3 – During amend rents only years, eligible for auto OCAF
  • Option 4 – During contract renewals (accompanied by a budget per the lesser of test) & eligible for auto OCAF in amend rents only years
  • Option 5 – During contract renewals (if applicable – see POA or Use Agreement)   *(Option 5A, Demos with restructured loans only, Eligible for Auto OCAF for Life of Use Agreement)(Options 5B are not eligible for an auto-OCAF)

 Budget Based Rent Adjustments

  • The budget based rent adjustment is a great way for properties to increase their rent levels to support property expenses. A budget-based rent increase (BBRI) request should be prepared in accordance with the requirements of HUD Handbook 4350.1, Chapter 7. (Visit Our Resource Center)

Submission Requirements for Budget Based Rent Increases:

Options that allow a BBRI to be submitted:

  • Option 2 – During contract renewals & amend rents only years
  • Option 4 – During contract renewals (accompanied by an OCAF worksheet per the lesser of test) & amend rents only years (accompanied by a RCS)
  • Option 5 – During contract renewals & amend rents only years (if applicable – see POA or Use Agreement)

AAF Rent Adjustments

  • AAFs (Annual Adjustment Factors) are developed by HUD on the basis of Consumer Price Index (CPI) data on changes in residential rent and utility costs, and data from Random Digit Dialing (RDD) rent-change surveys of the HUD regions.
  • HUD publishes the AAFs annually in the Federal Register
  • The AAFs are shown in two schedules:
    • Highest Cost Utility Included (Highest-cost utility is included in contract rent)
    • Highest Utility Excluded (Tenant pays for the highest-cost utility)
  • An AAF rent increase is effective for contracts commencing on the later of:
    • The annual contract anniversary date for which the adjustment is requested, or
    • The first contract month beginning at least two months after the owner has submitted all required materials to the CA (but no later than two months before the next annual contract anniversary date).

Submission Requirements for AAF Rent Increases:

  • AAF Forms —(See Notice 2002-10)
    • Appendix 1 if Pre-Adjustment gross rent exceeds the existing Fair Market Rent
      Or
    • —Appendix 2 if Pre-Adjustment gross rent does not exceed the existing Fair Market Rents (also for all LMSA & PD section 8 contract types)
  • Owner’s Certification Form – Appendix 3
  • Unit Turnover Report – Appendix 4
  • AAF RCS Adjustment Worksheet – Appendix 5 (if pre-Adjustment gross rent exceeds the existing Fair Market Rent)
  • Rent Comparability Study (RCS) – (if Applicable)
  • Utility Allowance Analysis (if Applicable)

Utility Allowance Adjustments

Update To Utility Allowance Regulations

HUD provides utility allowances to properties receiving subsidy assistance where all or some utilities are paid directly by the residents. Utility allowances (UA) represent the owner’s best estimate of the average monthly utility cost of an energy-conscious resident based on an analysis. To determine the UA for the property, owners are required to perform a yearly analysis of their project’s utilities.

Housing Notice 2015-04, entitled “Methodology for Completing a Multifamily Housing Utility Analysis”, was issued on June 22, 2015. Please select and read the below memorandum for a summary of the important changes outlined in the Notice. Owner/agents must perform their upcoming utility analysis using the methodology outlined in the Notice for properties with contract anniversary dates that fall after 180 days of publication of this Notice, December 19, 2015.

The published Housing Notice can be found on HUDClips under Notice 15-04 <http://portal.hud.gov/hudportal/HUD?src=/program_offices/administration/hudclips/notices/hsg> .  The FY UAFs table can be found on DATA SETS http://www.huduser.org/portal/datasets/muaf.html. The recently published updated Frequently Asked Questions for the Housing Notice 2015-04 can be found here: http://portal.hud.gov/hudportal/documents/huddoc?id=UtilityAnalysis.pdf

The 24 CFR 245.405(a) and 245.410 requires the owner to serve a 30 day notice to the residents of a proposed decrease in the utility allowance.

*Remember that the OCAF factors are published around November for properties with contracts and funding expiration dates on or after February 11th of each year.*

Effective June 20, 2011, owners are required to adjust their property’s Utility Allowance every year, at the time of the annual or special adjustments of contract rents.

  • This applies to operating cost adjustment factor (OCAF), annual adjustment factor (AAF), and budget based adjustments.
  • The UA adjustment may result in an increase, decrease, or no change from the current UA and must be supported by an analysis.
  • The annual rent adjustment will be withheld if the owner does not submit the utility analysis with the rent adjustment submission.
  • HUD will not allow certifications, indicating no change in the current utility allowance.
  • The 24 CFR 245.405(a) and 245.410 requires the owner to serve a 30 day notice to the tenants of a proposed decrease in the utility allowance.

Contract Renewal Questions

My Contract is coming up for Renewal. What do I do? How do I know which option to Choose?

Your first step should be to look at the Section 8 Renewal Policy Guide . We have an Option Eligibility page with submission requirements.

Your Contract Renewal Paperwork should be submitted 120 days prior to your contract expiration. Your CMS will process the renewal and rent adjustment, if applicable, by first confirming your eligibility, and then determining the completeness of your submission. If necessary, the CMS will contact you for more information.

What do I need to send in? Do you have a checklist for complete package requirements?

Visit our Option Eligibility page for this information.

How long can the contract term be?

Generally, contract terms shall be for one year to five years, subject to appropriations. The contract can be up to 20 years with HUD approval (contract not to exceed the remaining life of the mortgage).

  • If an Owner chooses a contract term of more than one year, the contract will be funded for one year with the balance of the years selected by the Owner being subject to annual appropriations.
  • The effective date of the new contract is the day following the expiration date of the previous contract.

I have submitted my renewal/rent adjustment request package to Navigate. What is the next step?

Your Contract Management Specialist will contact you if any additional information is needed to complete your request. Once approved, you will receive an approval letter with your renewed rents.

  • For rent adjustments, you will receive the new rent schedules and Revised Exhibit A documents for signature with the approval letter. We will await funding from HUD and once funding and the signed documents have been received, we will forward the fully executed documents for your records.
  • For contract renewals, you will receive the approval letter only, and once funding is received, we will forward the contracts and rent schedules to you for signature. Once the signed documents have been returned to Navigate, we will sign them and send the HAP contracts to HUD to be fully executed. Once the fully executed contracts have been received from HUD, we will forward your fully executed contract and rent schedule for your records.

Why is the CMS asking me about SAMs registration?

Per the Section 8 Renewal Policy Guide, the Owner’s certification regarding suspension or debarment on the renewal worksheet (HUD-9624) must be verified by using the System for Award Management (SAM). To ensure that your Entity has
been registered or updated in SAM, go to https://www.sam.gov/portal/public/SAM/#1. If you elect to opt out of public display, you will have to provide the CMS with a current printout to show that there are no active exclusion records.

Why am I being asked to verify Mortgager Entities on page 2 of the rent schedule?

We need verification of the names and titles listed on page 2 of the previous approved rent schedule for the Principals Comprising Mortgagor Entity section. The CMS will ask the O/A to confirm if any changes should be made from the previous approved rent schedules. Please ensure the Active Partners Performances System (APPS) has been updated with changes in the organization of the participant entity. for Quick Tips on the APPS system, click here:  http://portal.hud.gov/hudportal/documents/huddoc?id=appsquicktips.pdf

What can be submitted to show that I am authorized to sign paperwork, Rent Schedules, and HAP Contracts?

The Owner or someone authorized to sign for the Owner/Entity should sign rent adjustment/renewal paperwork, Rent Schedules, and HAP Contracts. To verify signature authorization, we ask for a legal document in which someone has signed as the Owner/Entity. This can include Articles of Incorporation, Partnership Agreement, Management Certification, HAP Assignment, etc. For 202 properties with Board Members that may frequently change, documentation of the submission of the 2530 to HUD can be submitted as verification. The titles and members must be verified annually, so the CMS will ask if the board members are still active. Navigate has a Signature Authorization Form to allow the authorized person that signs for the Owner/Entity to authorize other individuals to sign paperwork, Rent Schedules, and HAP Contracts.

Rent Comparability Study (RCS)

Depends on which renewal options you are eligible for and the age of the current RCS ( RCS has a term of 5 yrs).

  • Options 1A, 1B, 2, 3A, and 3B require an RCS.
  • Options 4 and 5 may require an RCS. You should be able to find out in your plan of action for Option 5b, Preservation properties, that require an AAF adjustment.
  • Also, in certain cases a Pre-MAHRA property may have to submit an RCS when completing an AAF.

Where can I find a list of HUD approved appraisers?

Click on the following link for a list of approved appraisers: HUD Approved Appraisers

Why is my CMS asking for a new RCS when I submitted a RCS 2 years ago? My RCS should be valid for the next 3 years?

Some multi-year contracts stipulate that at the end of each 5-year period, rents for the project are to be adjusted to comparable rents. Such fifth year adjustments may result in a negative (decrease) or positive (increase) of contract rents for one or more unit sizes. To ensure contract rents are adjusted to comparables at the expiration of each 5-year period, the Owner must submit an RCS. Any Option 1 or Option 2 contract renewal request over 5 years MUST submit a new RCS, even if the previous RCS is less than 5 years old. This includes early termination/renewal requests. If the project has an existing RCS that is not at the end of its 5-Year life cycle, the Owner is required to obtain a new RCS for use in adjusting rents to comparables. This will align the RCS and the 5-year period for the project for future fifth year adjustments. Project funds may be used to obtain this new RCS.

Rent Adjustments

What are my options for a rent adjustment?

You need to look at your HAP contract or Plan of Action to determine this.
Rent Adjustment methods available are:

Do you have a checklist for complete package requirements?

Yes. We have checklist for each rent adjustment method. Click on the links below to find out more about each method and the submission requirements:

Where can I find the forms I need to submit?

Visit our Resource Center for everything needed to process your rent adjustment or contract renewal.

What is the currently published OCAF?

Here is the link to the current OCAF factor: OCAF Factors

What do I include for the debt service? And what do I need to send for backup?

The debt service is calculated by

Principal + Interest + MIP – IRP
(This needs to be an annual amount, if monthly, multiply times 12)

You can submit a current monthly statement or an Amortization schedule for backup.

I renewed my contract last year for five years but my CMS mailed me a reminder letter requesting that I submit a request for a rent adjustment. Why?

Even though your contract was renewed for five years, funding is obligated on an annual basis. Years two through five of the contract term are considered Amend Rents years. You need to submit your Amend Rents request at least 120 days before the anniversary date of your contract to ensure funds are obligated for the next year of your contract.

What if I disagree with the proposed rent adjustment amount?

Your Contract Management Specialist will notify you of any changes made to your calculations on the approval letter. If you disagree with the budget approved rents on the rent schedule Navigate sends to you for signature, see Section 11, Chapter 7 of the 4350.1, Procedures for Appealing Budgeted Rent Increase Adjustments.

I do not want an increase in my rents, can I send a letter requesting the rents to remain at current?

Properties eligible for the Auto OCAF may have the option to elect a zero budget-based rent adjustment in lieu of the OCAF adjustment. Electing this option will result in renewed funding at current rents and the OCAF adjustment may not be recouped retroactively in the future. Electing this option does not mean that a budget worksheet needs to be submitted.

I have submitted my renewal/rent adjustment request package to Navigate. What is the next step?

Your Contract Management Specialist will contact you if any additional information is needed to complete your request. Once approved, you will receive an approval letter with your renewed rents.

  • For rent adjustments, you will receive the new rent schedules and Revised Exhibit A documents for signature with the approval letter. We will await funding from HUD and once funding and the signed documents have been received, we will forward the fully executed documents for your records.
  • For contract renewals, you will receive the approval letter only, and once funding is received, we will forward the contracts and rent schedules to you for signature. Once the signed documents have been returned to Navigate, we will sign them and send the HAP contracts to HUD to be fully executed. Once the fully executed contracts have been received from HUD, we will forward your fully executed contract and rent schedule for your records.

Utility Allowances

I received notification I need to submit a Utility Allowance request every year. Why?

Owners of multifamily housing properties that receive subsidy assistance, and for which HUD provides a utility allowance, are required to adjust their properties’ utility allowances every year at the time of the annual and special adjustments of contract rents. Multifamily property owners must establish baseline utility allowances for each of their bedroom sizes once every third year, which are determined by using the baseline utility analysis outlined in Notice H-2015-04. For the two years after the baseline is established, O/As have the option to perform a factor-based utility analysis, as described in Notice H-2015-04.

What if I have not requested changes to my utility allowance, do I still need to do a utility analysis and provide a recommendation?

Yes, with each request for a rent adjustment, the property owner is required to complete an analysis of the current Utility Allowance. Even if the analysis results in the UA remaining at current, you must submit your analysis to be reviewed.

Budgets

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 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.)

Where can I find the budget worksheet?

What do I need to submit with my budget worksheet?

We have a checklist available for your reference.