The U.S. Department of Housing and Urban Development (HUD) has officially released the 2026 Operating Cost Adjustment Factors (OCAF), a critical update used to adjust Section 8 contract rents for eligible properties nationwide.
According to HUD’s published notice (OCAF 2026-02201), the 2026 OCAF release applies to contract anniversaries on or after February 11, 2026, and includes specific conditions that owners and contract administrators must follow during the rent adjustment process.
Understanding how these new factors apply, and ensuring systems and documentation are updated accordingly, is essential for maintaining compliance and accurate rent calculations.
What Are Operating Cost Adjustment Factors (OCAF)?
Operating Cost Adjustment Factors are published annually by HUD to reflect changes in operating expenses for Section 8 housing assistance contracts. These factors help ensure that contract rents keep pace with real-world cost increases while maintaining program integrity.
OCAFs are calculated using weighted cost components, including:
- Utilities
- Wages and labor costs
- Property taxes
- Insurance
- Other operating and maintenance expenses
HUD applies both state-level and national data to determine the final OCAF percentages, ensuring rent adjustments reflect current market and operational realities.
Key Details from the 2026 OCAF Release
HUD’s 2026 OCAF notice outlines several important points for Section 8 stakeholders:
- Effective Date: The new OCAF factors apply to contract anniversaries on or after February 11, 2026
- Eligibility: Adjustments must follow HUD’s established methodology and eligibility criteria
- Documentation: Owners and contract administrators are responsible for ensuring calculations and supporting documentation meet HUD requirements
Failure to apply the correct OCAF values or effective dates can result in compliance issues or delayed approvals.
What the 2026 OCAF Release Means for Owners and Administrators
- Updated Rent Adjustments
Properties with qualifying anniversaries must use the newly published 2026 OCAF factors when calculating contract rent adjustments.
- Review and Validation
Owners and contract administrators should review the updated factors carefully and confirm:
- Correct OCAF percentages are applied
- Effective dates align with contract anniversaries
- Supporting documentation is complete and accurate
- Ongoing Monitoring
HUD guidance may evolve, and clarifications can be issued after the initial release. Staying informed is key to avoiding downstream issues.
Recommended Next Steps
To prepare for the 2026 OCAF implementation, HUD stakeholders should:
- Review the official HUD OCAF notice in full
- Update internal policies, procedures, and system tables
- Validate OCAF calculation workflows
- Train staff on any changes impacting annual rent adjustments
Early preparation helps ensure a smooth and compliant adjustment process.
How HDS Supports the 2026 OCAF Release
HDS Section 8X fully supports the 2026 OCAF release through its built-in OCAF Configuration and automated OCAF Worksheet.
Key system features include:
- Storage of OCAF percentages by effective date
- Automatic application of correct HUD factors
- Consistent and compliant rent adjustments across portfolios
- Reduced manual effort and calculation errors
By automating OCAF management, HDS helps agencies and administrators implement annual updates with confidence and consistency.
Final Thoughts
The release of the 2026 OCAF marks an important milestone for Section 8 contract administration. With proper planning, updated systems, and a clear understanding of HUD requirements, owners and administrators can implement rent adjustments smoothly and remain fully compliant.