The U.S. Department of Housing and Urban Development has published Annual Adjustment Factors (AAFs) for 2017. AAFs are used to adjust contract rents for units assisted in certain Section 8 housing assistance payment programs during the initial term of the HAP contract.

There are three categories of programs that use AAFs:

  1. Section 8 New Construction, Substantial Rehabilitation, and Moderate Rehabilitation programs
  2. Section 8 Loan Management and Property Disposition programs
  3. Section 8 Project-Based Certificate program, which is essentially discontinued since the PBC program merged with the Housing Choice Voucher program in February 2016

Each category uses the AAFs differently. AAFs are not used for renewal rents after expiration of the original Sec. 8 HAP contract, budget-based rents, tenant-based certificate program, or voucher program.

HUD’s published AAFs are shown in two schedules, one for adjusting the rent of units where the highest-cost utility (usually heating) is included in the contract rent (termed “Highest Utility Included” in the tables) and the other for units where the tenant pays for the highest-cost utility (“Highest Utility Excluded”). Separate AAF schedules are published for a total of about 123 areas: (a) about 119 separate metropolitan areas, including counties that are currently designated as non-metropolitan, but are part of the metropolitan area defined in the local Bureau of Labor Statistics Consumer Price Index (CPI) survey; and (b) the four Census Regions for those metropolitan and non-metropolitan areas that are not covered by the local CPI surveys.

FY-2017 Annual Adjustment Factors are available on the HUD website.

The factors are based on a formula using residential rent and utility cost changes from the most recent annual Bureau of Labor Statistics Consumer Price Index (CPI) survey. Beginning with the FY 2014 AAFs and continuing with these FY 2017 AAFs, the Puerto Rico CPI is used in place of the South Region CPI for all areas in Puerto Rico. These factors are applied at the anniversary of Housing Assistance Payment (HAP) contracts for which rents are to be adjusted using the AAF for those calendar months commencing after the effective date of this notice.