News Archive

Rural Development to Increase Management Fees in 2015

BROADCAST EMAIL –
Regulatory Update

August 12, 2014

On August 11, 2014, the national Rural Development (RD) office informed CARH and other industry groups that they will allow an increase in the management fee limits for 2015.  While not official until a Procedural Notice (PN) is issued by RD, state offices were informed that they should notify borrowers to include the increase in the budgets currently being prepared for 2015.  Management fees will vary from state to state because RD intends to use HUD’s Operating Cost Adjustment Factor (OCAF) which varies based on location in the country.  (Click here for a chart that provides states’ fee adjustment.)  The adjustment is being made to 2011 fees, the last time that the agency allowed for an increase.

As CARH members know from a myriad of emails to members, the most recent sent April 23rd (click here to see the broadcast email that includes previous emails and supporting material, including the April 11th cover letter, Management Fee Worksheet and Management Fee Analysis that was presented to RD), CARH has been advocating an increase in fees and has met with various national RD office staff to lay out justification for the increase.  The proposal submitted by CARH and developed by CARH’s past presidents, Bill Shumaker and Kevin Flynn, with input from CARH’s management committee and supported by other industry groups, supports the use of an OCAF adjustment for the base fee rather than a survey that the agency has been using for the last several years.  CARH’s proposal also included Base Fee Boosts, as well as Add-on Fees.  In addition, CARH suggested that a survey be conducted every five years to determine if the OCAF needed some further adjustment.  These points were not included in RD’s initial notification, but RD has informed CARH that the agency is working on further policy revisions that would include many of the elements developed by CARH and the industry, which will be outlined in the next several weeks.

CARH appreciates RD taking this important first step in working through important management fee issues.  CARH will continue to work with RD and to advocate for CARH’s entire proposal as outlined above.

Please contact the CARH national office at carh@carh.org or 703-837-9001 should you have questions or concerns.

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