BROADCAST EMAIL – Regulatory Update

July 29, 2016

Today, Rural Development (RD) published Procedural Notice (PN) 488 announcing final management fees for Fiscal Year (FY) 2017. Management fees will vary from state to state because RD has based the increase on HUD’s Operating Cost Adjustment Factor (OCAF) which varies based on location in the country and is applied to each state’s current maximum fee. (Click here for the chart that provides states’ management fee adjustment for FY 2017.)

As background on this issue, CARH proposed that OCAF should be the base and that additional add-on fees should also be part of the management fee calculation. CARH, together with the National Affordable Housing Management Association (NAHMA), sent the attached letter to RD in July 2015. The letter was a follow-up to RD’s proposal back to the industry regarding additional incentives that should be included for management fees in the future. Due to the work of CARH members Kevin Flynn and Bill Shumaker, a comprehensive proposal for determining management fees, starting with the OCAF, was developed and agreed to by CARH and other affordable housing advocates. The additional add-on fees have not yet been agreed to by RD. Although management fees for both FY 2016 and 2017 have been based on OCAF, we will continue to advocate for CARH’s entire proposal. We believe that the proposal provides some certainty and consistency on fees in the future. Further we continue to recommend that a survey be conducted every five years to determine if the OCAF needed some further adjustment.

Please contact the CARH national office at carh@carh.org or 703-837-9001 should you have questions or concerns.