The HUD Annual Adjustment Factors and Rent Increases

At project-based Section 8 properties — where the subsidy is attached to the unit rather than the tenant — rent increases are governed by HUD Annual Adjustment Factors (AAFs). Understanding AAFs is important for both tenants at these properties and owners managing Section 8 project-based contracts.

What AAFs Are

Annual Adjustment Factors are multipliers published by HUD that reflect changes in operating costs in different geographic areas. They are derived from the Consumer Price Index for housing costs. Owners of project-based properties can apply to HUD to increase their rents by the applicable AAF each year.

Budget-Based Rent Increases

In addition to AAFs, property owners can request budget-based rent increases when they can demonstrate that their actual operating costs exceed what the AAF adjustment covers. This process requires detailed financial documentation and HUD approval.