New RAD Guidance: One-Time OCAF Waiver is now available to Public Housing
Yes, some RAD project owners can now request rent increases.
Background
On January 16, 2025, RAD Supplemental Notice 4C announced that HUD would accept waiver requests to increase rents through an Alternative Operating Cost Factor (Alternative OCF).
On Tuesday, September 30th, HUD’s Office of Recapitalization began accepting requests via the RAD Resource Desk (RRD) for a one-time rent adjustment in cases where can Owners demonstrate “good cause need”. This new guidance could be a lifeline for some former public housing projects where low rents threaten their financial health and are causing significant hardship.
Who’s Eligible?
RAD project owners now have a path for receiving the higher rents through the waiver. The waiver is limited to a one-time rent adjustment. Details remain outstanding regarding the full extent of the requirements Recap plans to impose for these applications and how high the allowed adjustments will be for these properties.
To be eligible, properties must have already converted through RAD Component I and must show that they faced “extraordinary circumstances.”
Courtesy of HUD 9/25/2025 RAD Office Hours Webinar
Key Notes from Recap Staff:
Early RAD converters with impending Section 8 HAP contract renewal dates will be prioritized.
HUD has made it abundantly clear that there is no intention of bringing contracts “up to market”
The good cause determination is a benchmark of a property’s Operating Expenses relative to HUD’s own alternative administrative data set
Should the owner find the alternative operating cost adjustment factor to be insufficient, the owner can decline the adjustment and provide additional information and request an in-depth, project-specific analysis to determine sufficient Alternative OCF.
This underwriting process is expected to take at least six months and has a risk of resulting in a rent that is lower than the Alternative OCF originally provided to the owner.
The instructions for submitting the request are below. Interested in a full copy of the Office of Recap’s slideshow, or more insights on how this impacts your project? Reach out to us here.
Courtesy of HUD 9/25/2025 RAD Office Hours Webinar