CMS has received confirmation from both the Denver and Kansas City HUD multifamily offices that we, as a Performance-Based Contract Administrator (PBCA), must now use the most precise Annual Adjustment Factor (AAF) available through the HUD website’s lookup tool to adjust the Reserve Fund for Replacements (R4R). This means we are modifying our process and want to make sure you are aware of our new method for calculation.

Previously, under Section 2-16 of the Section 8 Renewal Guide, the Reserve for Replacement (R4R) was adjusted annually using the Regional AAF. With this new guidance from HUD, CMS is now responsible for using the HUD lookup tool to determine the specific AAF for their properties when adjusting the R4R. This change aims to provide a more accurate and location-specific adjustment, ensuring that the R4R aligns more closely with actual costs and regional conditions.

To learn more about the AAF for your property’s specific regions, use HUD’s AAF lookup tool found on the HUD User website.