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Department of Housing and Urban Development News Briefs - January 2024

The U.S. Department of Housing and Urban Development (HUD) published a notice in the Nov. 30, 2023, Federal Register establishing operating cost adjustment factors (OCAFs) for eligible multifamily housing properties with an anniversary date on or after Feb. 11, 2024. The national OCAF is 5.3% and the state rates vary from 4.3% in South Dakota to 7.1% in Connecticut. The nationwide rate is less than the 6.1% OCAF increase in 2023. OCAFs are calculated as the sum of component cost changes for nine components and are used to adjust Section 8 rents renewed under Section 515 or Section 524 of the Multifamily Assisted Housing Reform and Affordability Act of 1997.

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HUD issued a notice and mortgagee letter Dec. 4, 2023, to announce the elimination of the 10% assurance of completion requirement for escrow for certain Section 223(f)-insured loans that include new equity for low-income housing tax credits (LIHTCs). The change is to further incentivize borrowers and lenders to use HUD’s 223(f) financing authority to promote affordable housing. The change was effective Dec. 4, 2023.

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HUD in December 2023 announced the availability of free energy and water benchmarking services. The cost-free services were due to come online late last month for those that operate multifamily properties using project-based rental assistance programs. The services aim to help operators and managers identify energy and water usage potential for possible future upgrades and renovations.

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Free no-cost, over-the-counter COVID-19 tests were made available in December 2023 to all properties that receive assistance through HUD’s Office of Multifamily Housing. Property staff can register with the U.S. Department of Health and Human Services (HHS) for weekly shipments of tests. Those interested can register for the tests via HHS’ Health Partner Ordering Portal.

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The Salvation Army received $11 million in HUD funding through a Section 223(f) loan to rehabilitate the 150 senior apartment Booth Residences in Cincinnati. JLL Capital Markets arranged the financing. The site, built in 1981, received LIHTCs in 2006. The eight-story site will receive accessibility upgrades in addition to apartment and building improvements.

Journal Category:

Department of Housing and Urban Development

Authors:

Novogradac

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