Contract Processing

The Contracts Department supports owner/agents through the Section 8 contract renewal and rent adjustment process, ensuring compliance with HUD requirements and helping maintain long-term affordability.

This includes processing contract renewals, reviewing rent increase requests, and ensuring all required documentation is complete to avoid delays or interruptions in Housing Assistance Payments (HAP).

Contract Renewal

Key Responsibilities

• Review and process contract renewals and rent adjustments
• Provide guidance on Section 8 Renewal Guidebook requirements
• Evaluate Rent Comparability Studies (RCS) and alternative methods
• Review utility allowance analyses
• Ensure complete and compliant owner submissions
• Support owners in maintaining continuous HAP payments

LOMOD works closely with owners to ensure contracts remain current and properties remain financially sustainable.

Contract Renewal with Rent Comparability Study

A property pursuing a contract renewal selects an option requiring a Rent Comparability Study (RCS).

• Owner engages a Certified General Appraiser
• RCS is prepared in accordance with Chapter 9 of the Section 8 Renewal Guidebook requirements
• LOMOD reviews submission for completeness and compliance
• If rents exceed thresholds, HUD may order a third-party RCS

A complete and accurate submission helps avoid delays and ensures rents reflect current market conditions.

Who is this for?

• Owners with expiring Section 8 HAP contracts
• Properties requesting rent adjustments
• Owners submitting:
  • Rent Comparability Studies (RCS)
  • Budget-based rent increases
  • Utility Allowance Analyses

If you are unsure which option applies, LOMOD can assist in determining the appropriate path.

How to Get Started (Process Overview)

1. Identify your renewal or rent adjustment option under the Section 8 Renewal Guidebook
2. Determine if an RCS or alternative method is required
3. Prepare required documentation, including:

• Owner cover letter and checklist
• RCS (if applicable)
• Utility allowance analysis
• Debt service documentation
• Tenant notifications

4. Review submission for completeness prior to sending
5. Submit to LOMOD for review and processing

Incomplete submissions are one of the most common causes of delays.

Common Submission Gaps (Avoid Delays)

• Missing Debt Service Verification
• Missing Tenant Notification (1-year notice)
• Incomplete Utility Allowance Analysis
• Missing Signature Authority documentation
• Incomplete RCS or budget documentation
• Missing supporting invoices or line-item justifications

Ensuring all required documents are included upfront helps streamline processing and prevent delays.

Utility Allowance Requirements

Owners must submit a baseline utility allowance analysis and follow-up adjustments in accordance with HUD guidance.

• Must include 12 months of data per unit type
• Should reflect average utility cost for energy-conscious residents
• Supporting documentation should be maintained for review

Utility allowances are a key component of accurate rent calculations.

Rent Adjustments

Key Responsibilities

LOMOD assists Owner/Agents throughout the rent adjustment process by:

• Reviewing OCAF and other applicable rent calculations
• Reviewing Rent Comparability Studies (RCS), when required
• Reviewing Utility Allowance documentation
• Verifying debt service information
• Reviewing tenant notification requirements
• Coordinating Quality Control review
• Issuing applicable decision documentation and rent schedules
• Processing documents through final execution

Our goal is to support accurate and timely processing while ensuring compliance with applicable HUD requirements.

Who is this for?

This process applies to owner/agents of Section 8 properties requiring a rent adjustment, including properties undergoing:

• Auto-OCAF adjustments
• Non-Auto OCAF adjustments
• Rent Comparability Study (RCS) adjustments
• Option 5 adjustments (AAF)
• RAD
• Budget-based adjustments, when applicable
• Utility Allowance adjustments

Requirements may vary depending on the property’s HAP contract, renewal option, and applicable HUD guidance.

How to Get Started (Process Overview)

1. LOMOD Notification
LOMOD notifies the owner/agent when the property is approaching its applicable rent adjustment period.

For Auto-OCAF properties, a “My Event” is generated approximately 150 days before the funding expiration date.

2. Prepare Required Documentation
Depending on the adjustment method, the owner/agents may be required to provide:

• UEI information corresponding with the appropriate ownership entity
• Debt Service Verification
• Utility Allowance documentation, when applicable
• Tenant notifications and Owner Certification, when required
• Non-Section 8 rent information, when applicable
• Manager or employee unit information, when applicable
• Rent Comparability Study (RCS), when required
• Additional supporting documentation applicable to the adjustment method

3. Submit the Package to LOMOD
The owner/agents should review the submission for completeness before providing the required documents to LOMOD.

Complete and accurate submissions help prevent unnecessary processing delays.

What Happens After Submission?

Initial Review
A LOMOD Contract Specialist reviews the submission to determine eligibility, confirm the appropriate rent adjustment method, and verify that all required documentation has been provided.

Received Complete
Once all required documentation has been received and the package is determined complete, the transaction advances to Quality Control (QC).

Quality Control Review
QC reviews the transaction for accuracy, verifies applicable calculations and supporting documentation, and confirms compliance with applicable HUD requirements.

Decision Letter & Rent Schedule
Following completion of the review, LOMOD issues the applicable decision documentation and rent schedule.

When applicable, the owner/agent may submit an appeal within the timeframe provided in the decision letter.

Final Execution
Required documents are submitted for signature and returned to LOMOD for final processing and execution.

Implementing the New Gross Rents
Owner/agents should not begin billing the adjusted rents until the applicable rent schedule has been fully executed and authorization to implement the new rents has been received.

New gross rents must be implemented within 90 days of the effective date.

Owner/agents should ensure applicable billing and tenant rent information is updated timely to reflect the approved rents.

Common Submission Gaps – Avoid Delays

Some common issues that may delay rent adjustment processing include:

• UEI information that does not correspond with the appropriate ownership entity
• Missing or incomplete Debt Service Verification
• Missing or incomplete Utility Allowance documentation
• Missing required tenant notifications
• Missing Owner Certification
• Missing Non-Section 8 rent information
• Missing manager or employee unit information
• Incomplete RCS documentation, when applicable
• Missing supporting documentation required for the applicable adjustment method

Submitting all required documentation upfront helps LOMOD process the adjustment efficiently.

Utility Allowance Requirements

When a Utility Allowance analysis is required, the owner/agent must submit the applicable documentation in accordance with HUD requirements.

Utility Allowances are an important component of the gross rent calculation and should be reviewed as part of the applicable rent adjustment process.