Section 8 Contract Administration Contract Renewals / Rent Adjustments 

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THDA Owner's Certification Regarding Utility Changes form

Section 8 Renewal Policy Guidebook

Most Section 8 contracts between owners of multifamily housing and HUD were 20 year contracts initiated in the 1980’s. These contracts are now expiring, though many of them have mortgages which extend past the original HAP contract expiration date. As agent for the Department of Housing & Urban Development, THDA processes and executes Housing Assistance Payment contract renewals in order to preserve Affordable Housing in the State of Tennessee. These renewals may, or may not, include rental adjustments by the budget-based method or the Operating Cost Adjustment Factor (OCAF).

If a HAP contract has been renewed after 1997 (after MAHRA) and has chosen a multi-year contract, the owner / agent must annually request a funding reservation for the next 12 months of the multi-year contract. These requests for funding may, or may not, include rental adjustments.

For properties which have not yet undergone renewal of the original HAP contract, owner / agents may request rental adjustments and utility allowance adjustments on an annual basis. Eligibility for specific types of rental adjustments are determined by the Regulatory Agreement and include Annual Adjustment Factor (AAF) adjustments, budget-based adjustments and special rental increases.


Early termination of a current multi-year contract with a 20 year contract renewal request
What owners should submit to THDA.


Auto OCAF Rent Adjustment has been implemented!

On March 1, 2012, HUD began using the Automatic (Auto) OCAF Rent Increase process for multi-year contracts that have been renewed under the Multifamily Assisted Housing Reform and Affordability Act (MAHRA) and are eligible to receive an Operating Cost Adjustment Factor (OCAF) rent increase.

The Auto OCAF eliminates the requirement for owners to prepare OCAF worksheets for submission to the PBCA for rent adjustments.

• The Contract Renewal submission requirements have not changed, and owners must still send in the completed Contract Renewal forms 120 days prior to contract expiration.
• Certain contract types that require contract rents be adjusted by a Rent Comparability Study are not eligible to receive an automatic OCAF. These properties will not be a part of the automated process. Instead, owners must send in the forms and supporting documentation a minimum of 120 days prior to the expiration date.
  Approximately 150 days prior to the contract anniversary date, properties eligible for an Auto OCAF rent adjustment will receive an Auto OCAF packet that includes a letter indicating the new OCAF increased rents, a new Exhibit A, and an owner certification for the accuracy of the property’s annual mortgage payment (Principle, Interest, Mortgage Insurance Payment (MIP) and non-Section 8 unit rent potential.

For properties with a utility allowance, you are still required to complete a Utility Allowance request annually at the time of the annual rent adjustment.

• The THDA “Owner’s Certification Regarding Utility Changes” form can be found by clicking here THDA's Owners Certification Regarding Utility Changes form.
• Utility Allowance adjustments will be based on the direct Utility Provider’s documentation submitted by the owner and an analysis of the rate changes.
• The utility provider documentation should state any changes or no changes to the Resident Energy Charge/Rate.
  • Customer charges and fuel cost adjustment changes are not used to adjust utility allowances.
• When the utility provider documentation supports a decrease to the allowances for any of the unit types at the property, the owner must adhere to posting requirements set forth in 24 CFR 245.410. The property’s rent increase will be held until the utility allowance request and all supporting documents are received.

For questions relating to contract renewals, multi-year funding renewals, or utility allowance adjustments please contact Calvin Winston, Contract Operations Manager for Contract Renewals and Rent Adjustments.