OCAF stands for Operating Cost Adjustment Factor. It's a percentage used by HUD to adjust rents for Section 8 contracts based on changes in operating costs. OCAFs are published annually for each state and used in the renewal of expiring Section 8 contracts.

OCAF factors are updated annually by HUD. New factors are typically published in the Federal Register in late autumn and become effective on February 11th of the following year.

OCAF factors vary by state because they're based on regional differences in operating costs. Factors that influence each state's OCAF include local changes in wages, property taxes, insurance costs, and utilities. States with higher inflation in these costs will have higher OCAF factors.

OCAF calculations are primarily used for Section 8 contract renewals under various HUD programs, including Option 1, Option 2, and Option 4 contract renewals. Whether you can use OCAF depends on your property's specific program and contract type. Some properties might qualify for budget-based rent increases instead of or in addition to OCAF adjustments.

The OCAF calculation formula separates the portion of rent attributable to debt service from the portion attributable to operating expenses. This is because debt service typically remains constant over time (unless refinanced), while operating expenses are subject to inflation. The OCAF factor is only applied to the operating expense portion of the rent.

The Increase Factor is the final multiplier used to adjust current contract rents to determine new contract rents. It's calculated by dividing the Adjusted Contract Rent Potential by the Annual Expiring Section 8 Contract Rent Potential. This factor represents the overall percentage increase that will be applied to the current contract rents.

Yes, for an accurate calculation, you should enter the annual rent potential for both non-expiring Section 8 contracts and non-Section 8 units. These values are used to determine the expiring Section 8 portion of the total project rent potential, which affects how the debt service is allocated in the calculation.

Yes, our calculator allows you to export your results as either a PDF or Excel file. This feature lets you save your calculations for record-keeping, sharing with colleagues, or submission to HUD.

You should perform separate OCAF calculations for each expiring contract. Our calculator is designed to handle one expiring contract at a time. For contracts expiring at different times, you would include the non-expiring contracts in the "Total Annual Rent Potential For Non-Expiring Section 8 Contracts" field.

Yes, our calculator is regularly updated with the latest OCAF factors as soon as they are published by HUD. The current factors in our calculator are for 2025, effective as of February 11, 2025.

You should enter the total annual debt service for your property, including principal and interest payments on all mortgages and loans. This amount is used to separate the debt service component from the operating expense component of your rents.