Wednesday, November 29, 2023

HUD FY 2024 Oregon OCAF DROPS TO 4.9%%, Still 4th Highest in 26 Years.

HUD has published the FY 2024 operating cost adjustment factors (OCAF) HERE

The PDF file includes an explanation of the sources used to calculate OCAF as well as state and US OCAF's. The effective date is for contracts with a contract anniversary on or after February 11, 2024

HUD uses the OCAF to adjust annual subsidized rents in project based section 8 developments, and also for many public housing developments whose public housing operating subsidy has been converted to the Rental Assistance Program (RAD). 

The FY 2024 OCAF for Oregon is 4.9%, the fourth highest in 1he last 26 years (the 2009 Oregon OCAF was the highest at 7.1%).  The Oregon 2023 OCAF was higher at 5.6%.   

The US OCAF was 5.3%, higher than the 5.1% projected by HUD in its fiscal year 2024 congressional budget justification, but still LOWER than the 2023 US OCAF of 6.1%. I count only 7 states with a 2024 OCAF higher than their FY 2023 OCAF.  

Since OCAF is NOT applied to debt service, over time rent increases using OCAF can total less than rent increases using HUD FMRs.(This can change if budget based or rent comparability studies are used). Generally HUD rent increases increase subsidy needs, NOT the tenant share of rent

More to come in an upcoming post. 

Originally created and posted on the Oregon Housing Blog

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