The Section 8 Renewal Policy Guide provides guidance for renewing expiring Section 8 Project-Based contracts. These instructions apply to all Contract Administrators (CA) who are responsible for overseeing contract renewals. According to this guide, “owners are required to submit documentation to HUD or the CA at least 120 days prior to the expiration of the contract." Owners must also notify their tenants by sending them a letter no later than one year prior to their contact expiration date. Owners must provide a copy of that letter to KHC. The letter must include the information provided in Chapter 11 of the Section 8 Renewal Policy Guide, please refer to Appendix 11-1 and 11-2.
A contract can be an initial renewal, subsequent, or multi-year contract. The type of renewal determines what documentation is required to be submitted to KHC. Additionally, it determines what type of forms must be executed.
Contract Renewal and Rent Adjustment
Owner may request to renew a contract for one-year or up to a 20-year term. We encourage owners to consider the longer terms in order to preserve affordable housing well into the future. Owners should refer to HUD' Section 8 Renewal Policy Guide and Frequently Asked Questions.
The owner is required to complete the following contract renewal forms, HUD-9625 and HUD-9624, which are available on HUD' website, under Forms Resource, HUD-9, then 96001--999.
The OCAF rate changes yearly and the new rate is typically published by HUD in October through the Federal Register to reflect the new effective rate beginning February 11th of the following year.
Contract Renewals
Initial Renewals
The first renewal of a project' contract that is processed under the rules established by Multifamily Assisted Housing Reform and Affordability Act (MAHRA) is considered the initial renewal of the contract.
Subsequent Renewals
A subsequent renewal is the renewal of a contract at the end of its term under MAHRA.
Rent Adjustments
Annual adjustments to contract rents that occur during the term of a multi-year contract are called rent adjustments (may also be referred to as the Amend Rents period). These adjustments may be by application of the published OCAF or, if applicable, a budget-based request of the owner.
NOTE: Per the Section 8 Renewal Policy Guide, Chapter 2-9, paragraph B. 1a, "The law does not permit the project to receive more than one full OCAF increase within a 12-month period."
Utility Allowance Adjustments Requirements
The Department of Housing and Urban Development (HUD) published a notice effectively changing the way that utility analysis are completed by owners of Project-Based Section 8 properties beginning in 2015. The notice can be found on HUD' website at http://portal.hud.gov/hudportal/HUD?src=/program_offices/administration/hudclips/notices/hsg.
Please refer to HUD Notice 2015-04 on Methodology for Completing a Multifamily Housing Utility Analysis and (the later release on August 2016) - Frequently Asked Questions Update on Methodology for Completing Utility Analysis. Owners of multifamily housing properties that receive subsidy assistance, and for which HUD provides a utility allowance, are required to review and adjust their property' utility allowances every year, (if applicable) at the time of the annual adjustment of contract rents. Utility adjustments must be supported by the owner' analysis. Owner certifications in lieu of utility analysis are not permitted. HUD requires that property owners to establish baseline utility allowances for each of their bedroom sizes once every third year. Please refer to the notice for more information on how to perform a baseline and review the minimum samples required.
If you are preparing to process an analysis for year two or three (after the baseline) remember to use HUD' most currently published Utility Allowance Factor (UAF).
If you have any questions or concerns about this notice, please Contact Us.