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Special Annual Adjustment Factor (AAF)


Special AAF Rent Adjustments are adjustments given to projects whose rent adjustment type is the AAF.  The special rent adjustment is only for increases in property taxes, insurance and utilities.


Special AAF Rent Adjustments are only available to projects that have not renewed their Section 8 contract under the Section 8 Renewal Policy.  If your Section 8 contract has been renewed under these guidelines then you should submit a budget based  rent adjustment.


Prior to submitting this request, owners must meet the following requirements to be considered for the special increase:


A. Property Taxes: The owner is required to take into consideration the reason for the new increase in property assessment and take all reasonable actions under local law to appeal the increased property assessment. The requirements of the owner prior to requesting a special rent increase for property taxes should include the following:

1.   The owner should apply for all tax reductions available to the specific type of project. The owner should consider consulting a tax professional to review and appeal the tax assessment


2.   As a part of the rent increase submission, the owner should certify that:

  • Taxes have been reviewed and, where appropriate, appealed

  • If the appeal results in a tax refund, the owner will return the refund to the project in the manner specified by HUD

  • If the appeal results in a lower assessment, the owner will reduce the rents at the project commensurate with the reduced assessment.


B. Insurance: The owner must be able to certify that the amount of increased insurance is the best rate obtainable by the project. This can involve obtaining bids on comparable policy rates, disclosing identity of interest relationships and other disclosures that may be required by HUD.


C. Utilities: Prior to considering the special request the Loan Management staff should determine if the owner has analyzed rates and requested rates, which are the most advantageous to the project. Loan Management Staff should also ensure that the owner is in compliance with HUD's Energy Conservation requirements as developed in Chapter 12 of HUD Handbook 4350.1. It should be determined that the owner is taking all reasonable actions to ensure that the energy consumption levels and rates are as low as possible. This may include an independent review of past billings and rates to assure that past overcharging did not occur and a refund is due to the project.



HUD Handbook 4350.1, Chapter 34

HUD Handbook 4350.1, Chapter 7, Section 7-24



Cover letter Requesting Special AAF with certification regarding Insurance and Utilities

Tax Review and Appeal Certification

HUD Form 9833-b

Utility Allowance Analysis  (if applicable)

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