RD Management Fees Announced for FY 2026
Yesterday, Rural Development (RD) sent out an Announcement entitled, “2026 Proposed Budget Requirements,” that included management fees for Fiscal Year (FY) 2026. It is expected that an official Procedural Notice will soon be published and will also provide the same information listed below on the FY 2026 management fees.
This announcement provides RD’s requirements to multifamily property owners and managers on submitting operating budgets and outlines what is required to be included for a complete budget package. The announcement also emphasizes the importance of ensuring that “all expenses in your budget projection must show a clear benefit to the residents of the property without inflating overall operating costs.”
RD announced that “the Management fee for 2026 remains unchanged from 2025 and can be found at HB 2, Chapter 3, Attachment 3.F” (see pages 56-57). Given the obstacles property owners and managers face in the daily operation of their communities and the continually rising costs of providing quality housing, CARH is disappointed that RD did not increase management fees for FY 2026. In most years, RD has raised management fees based on HUD’s Operating Cost Adjustment Factor (OCAF) adjustments, and the decision not to do so this year places an even greater strain on owners and managers working to maintain these properties.
Note, the 2nd column on the management fee list shows where management fees were increased in FY 2025 to a minimum of $80 for states that had a FY 2024 management fee of less than $80. The third column provides the OCAF adjustment percentage, and the final column provides the final FY 2025 fee rounded up to the nearest dollar (which will remain the same for FY 2026).
As CARH members are aware, following sustained advocacy by CARH dating back to 2014, RD allows add-on fees of $5.00 per unit per month Chapter 3 Section 3.8 of HB 2-3460 (page 3-16) for the list of add-on fees. 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. When RD announced the FY 2025 management fees in a Procedural Notice dated July 19, 2024, they stated that “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 to advocate for future management fee increases that reflect the evolving needs of the properties and the rising costs required to operate them effectively. Please contact the CARH National Office at carh@carh.org or 703-837-9001 should you have questions or concerns.
