24 C.F.R. § 888.204
§ 888.204 Revision to the automatic annual adjustment factors. (24 CFR Part 888)
Operative Text
If the application of the Annual Adjustment Factors results in rents that are substantially lower than rents charged for comparable units not receiving assistance under the U.S. Housing Act of 1937, in the area for which the factor was published or a portion thereof, and it is shown to HUD that the costs of operating comparable rental housing have increased at a substantially greater rate than the Adjustment Factors, the HUD Field Office will consider establishing separate or revised Automatic Annual Adjustment Factors for that particular area. Any request for revision of the factors must be accompanied by an identification of the area, its boundaries and evidence that the area constitutes the largest contiguous area in which substantially the same rent levels prevail. The HUD Field Office will publish appropriate notice of the establishment of any such revised Automatic Annual Adjustment Factors. These factors will remain in effect until superseded by the subsequent publication of Automatic Annual Adjustment Factors pursuant to § 888.202.
Section 888.204 establishes a correction mechanism for the Automatic Annual Adjustment Factors (AAAFs) used to set rents in HUD-assisted housing. When applying the standard AAAFs produces rents that fall substantially below those of comparable unassisted units in a given area, and when evidence shows that local operating costs have risen much faster than the published factors reflect, HUD's Field Office is authorized to establish separate or revised AAAFs for that specific geographic area. Any revised factors must be publicly noticed by the HUD Field Office and remain in effect until they are superseded by a subsequent AAAF publication under § 888.202.
Plain English — not legal advice.
Property owners and managers operating under HUD-assisted contracts governed by 24 CFR Part 888 § 888.204 should be aware that a formal process exists to request revised Automatic Annual Adjustment Factors when standard factors produce rents substantially below local market comparables. A compliant operator pursuing such a revision typically documents the specific geographic area and its boundaries, gathers evidence that the area represents the largest contiguous zone with substantially uniform rent levels, and demonstrates that local operating costs have increased at a substantially greater rate than the published factors. Operators generally monitor HUD Field Office notices for the publication of any revised factors that may affect their properties.
General guidance for property managers — not legal advice for your specific situation. Consult an attorney for advice on your case.
Under 24 CFR Part 888 § 888.204, tenants living in HUD-assisted housing should understand that the rent adjustment factors applied to their units can be revised upward if a landlord or local authority successfully demonstrates to the HUD Field Office that standard factors have fallen significantly behind local market and cost conditions. If revised Automatic Annual Adjustment Factors are established for a particular area, the HUD Field Office is required to publish notice of those changes, giving tenants an opportunity to become aware of adjustments that may affect their rent. Tenants who have questions about whether revised factors apply to their unit or how a rent increase was calculated may benefit from contacting their local HUD Field Office directly or reaching out to a tenant-rights organization familiar with federally assisted housing programs.
General guidance for tenants — not legal advice for your specific situation. Consult a tenant-rights organization or attorney for advice on your case.
Generated September 4, 2026 — auto-generated, not yet human-reviewed. See /transparency for methodology.
Effective Timeline
References Out
No outbound references recorded yet for this provision.
References In
No inbound references recorded yet for this provision.