HUD Creates Process to Update OCAFs for RAD

By: Tushar Gurjal, Senior Policy Manager

September 16, 2025 — On September 15, HUD sent an email titled “Relief for RAD Projects Facing Extraordinary Costs” that provides an overview of the submission and review process to have owners receive an operating cost adjustment factor (OCAF) adjustment for their Rental Assistance Demonstration (RAD) developments. In the past, NAHRO has requested that HUD create a process by which individual entities can submit documentation to recalculate their OCAFs and is pleased that HUD has implemented this suggestion. The process to request an OCAF adjustment begins on September 30, 2025.

To request an OCAF adjustment for a property, a request must be submitted through the RAD Resource Desk. The email details the process by which a request should be made. Those requests related to RAD Project-Based Vouchers (PBVs) require an additional form stating that the contract administrator is aware that the owner is requesting an alternative OCAF from the PHA. This adjustment will be subject to the availability of funding.

If a property has been found to have “an extraordinary circumstance justifying an exception” HUD will offer an alternative OCAF based on available administrative data. An owner may decline the alternative OCAF and opt to “ . . . provide detailed information for the Office of Recapitalization to complete an in-depth project-specific analysis, which will take at least six months complete.”

The new rent as changed by the alternative OCAF will set the new baseline that will be adjusted throughout the term of the current HAP contract.

The email provides information about joining an Office of Recapitalization Office Hours session on this issue on September 25 at 2 pm ET.

NAHRO’s letter requesting the ability to recalculate OCAFs can be found here.

HUD’s announcement email can be read here.