RD Management Fees Published for Fiscal Year 2027

BROADCAST EMAIL – Regulatory Update

August 31, 2026

Today, Rural Development (RD) published Procedural Notice (PN) 661 announcing management fees for Fiscal Year (FY) 2027. The updated fees are included in HB-2-3560.

As you know, last year, RD did not adjust the management fees for FY 2026. This year, as CARH requested in a letter to RD dated May 15, 2026, management fees will be increased based on HUD’s Operating Cost Adjustment Factor (OCAF) which varies based on location in the country and is applied to each state’s current maximum fee. Except for last year when RD did not increase the FY 2026 management fees and FY 2023 when they based the management fee increases on HUD’s FY 2022 Income Limits, they have used OCAF as the base since FY 2015.
To view the chart listing your state’s FY 2027 management fee adjustment, visit Chapter 3, Attachment 3-F which can be found on pages 127-128 of HB-2-3560. For convenience, Attachment 3-F can be viewed here also. The cost of managing properties continues to increase and the minimum fees that had previously been used did not reflect actual property operations. Thank you to the efforts of management committee members who advocated for higher base fees to officials in the national RD office. The third column provides the OCAF adjustment percentage, and the final column provides the final FY 2027 fee rounded up to the nearest dollar.

The PN includes allowable add-on fees of $5.00 per unit per month. CARH has advocated for add-on fees since 2014, and RD began making them available beginning with the FY 2021 budgets. See section 3.8 B.2 (page 85 of HB-2-3560) for the list of add-on fees. This list can also be found here. Of particular interest to many CARH members is the $5.00 add-on fee for properties where there are multiple subsidies (i.e., reporting requirements in addition to and separate from Low-Income Housing Tax Credits or project-based Section 8).

For those properties wanting to claim the add-on fee for management of properties in a remote location, beginning in FY 2023, RD provided a definition of “remote location” as those properties located within the USDA Economic Research Service (ERS) Level 4 Frontier & Remote (FAR) Area codes. According to the PN, “the following states/territories do not have areas that meet the Level 4 FAR definition: Connecticut, Delaware, Indiana, Massachusetts, New Jersey, Ohio, Puerto Rico, Rhode Island, South Carolina, and the Virgin Islands. Properties in Alaska or Hawaii that are authorized to take the “off-road” management fee are not eligible to claim an additional add-on fee for remote location. If the property does not suffer difficulty retaining staff, obtaining services, or if management offices are located near the Level 4 FAR property, management should refrain from claiming this add-on fee. If a property is not located in a Level 4 FAR area, and management can justify a remove location add-on fee, they may request an exception. Reasonable justification must be submitted to the MFH servicing specialist for review. Justifications could include extensive travel time, difficulty obtaining services or retaining staff, or required unique means of travel (4-wheel drive, ferry, etc.).”

CARH will continue our discussions with RD regarding any future concerns regarding management fees. We would like to thank the CARH members who participated earlier this year on the management fee subcommittee and for their input into the letter that CARH sent to the agency. Please contact the CARH National Office at carh@carh.org or 703-837-9001 should you have questions or concerns.

For other news and information affecting the affordable rural housing industry, please visit the Newsroom on CARH’s website, www.carh.org.