HUD Posts 2021 Operating Cost Adjustment Factors

Regulation | December 01, 2020 | by Juliana Bilowich

HUD has published Fiscal Year 2021 Operating Cost Adjustment Factors and Utility Allowance Factors, effective February 11, 2021.

On November 27, HUD published new Operating Cost Adjustment Factors (OCAFs) for Fiscal year 2021. The new OCAFs are effective 2/11/21.

Operating Cost Adjustment Factors are used for adjusting or establishing rents for projects assisted with Section 8 Housing Assistance Payments. The national average OCAF is 2.5% for 2021, compared to 2.2% for 2020.

HUD OCAFs include nine weighted component cost changes (calculated at the state level) for: wages, employee benefits, property taxes, insurance, supplies and equipment, fuel oil, electricity, natural gas, and water / sewer / trash using publicly available indices. The sum of the nine cost component percentage weights equals 100% of operating costs for purposes of OCAF calculations, according to the Notice (Docket No. FR–6236–N–01).

The FY 2021 Multifamily Utility Allowance Factors, used to adjust baseline utility allowances prepared in accordance with Housing Notice 2015-04, are also now available.