On February 9, 2015, HUD published a Notice in the Federal Register listing the Section 8 Housing Assistance Payments Program Annual Adjustment Factors (AAF) for fiscal year 2015. The adjustments may be made on the anniversary of assistance contracts. These adjustments are for project-based assistance only. A separate Federal Register notice will be published at a later date that will identify the inflation factors that will be used to adjust tenant-based rental assistance (e.g., vouchers).
There are three categories of Section 8 programs that use the AAFs:
Category 1. Section 8 New Construction, Substantial Rehabilitation, and Moderate Rehabilitation Programs;
Category 2. Section 8 Loan Management (LM) and Property Disposition (PD) programs; and
Category 3. Section 8 Project-Based Certificate (PBC) program.
AAFs are used to adjust contract rents for properties in these programs during the initial (i.e., pre-renewal) term of the HAP contract and for all units in the PBC program.
Because of statutory and structural distinctions among various Section 8 programs, there are separate rent adjustment procedures for the three program categories. Owners with projects in these three categories should refer to the Federal Register Notice and HUD Notices H 2002-10 (Section 8 New Construction and Substantial Rehabilitation, Loan Management, and Property Disposition) and PIH 97-57 (Moderate Rehabilitation and Project-Based Certificates) for details.
AAFs are not used for renewal rents, budget-based rents, tenant-based certificate program or the voucher program.
AAF Tables 1 and 2 are posted on the HUD User Web site at http://www.huduser.org/portal/datasets/aaf.html. There are two columns in each AAF table. The first column is used to adjust contract rent for rental units where the highest cost utility is included in the contract rent, i.e., where the owner pays for the highest cost utility. The second column is used where the highest cost utility is not included in the contract rent, i.e., where the tenant pays for the highest cost utility.
For the Category 1 projects, Table 1 is used for units occupied by a new family since the last annual contract anniversary. Table 2 is used for a unit occupied by the same family as at the time of the last annual contract anniversary.
For Category 2 projects, Table 1 is used for units occupied by a new family since the last annual contract anniversary. Table 2 is used for a unit occupied by the same family as at the time of the last annual contract anniversary.
For Category 3 projects, Table 2 is always used and is applied prior to determining rent reasonableness.
To make certain that they are using the correct AAFs, users should refer to the area definitions table of the website noted above. This table lists CPI areas in alphabetical order by state, and the associated Census region is shown next to each state name. In the six New England states, the listings are for counties or parts of counties as defined by towns or cities. The remaining counties use the CPI for the Census Region and are not separately listed in the Area Definitions Table.