The Department of Housing and Urban Development (HUD) published a proposed rule [Docket No. FR 6122-P-01] that would revise the Mark-to-Market program regulations to clarify that all annual rent adjustments for projects subject to a restructuring plan are by application of an operating cost adjustment factor (OCAF) established by HUD. The current regulations contain a provision authorizing HUD to approve a request for a budget-based rent adjustment in lieu of an OCAF. However, this provision is both contrary to the governing statutory framework and inconsistent with Mark-to-Market renewal contracts, which allow only OCAF rent adjustments. The proposed rule would conform the regulations to the governing statutory provision, the terms of Mark-to-Market renewal contracts, and the programmatic practice of adjusting rents annually only by OCAF.
NAHMA strongly recommends members to provide comments to us on the impact of these anticipated program regulations, by September 04, 2020. NAHMA would like to provide comments on this proposed rule, based on member concerns.
The Rent Adjustments in the Mark-to-Market Program proposed rule is attached and can be found here.