Annual Adjustment Factor. A mechanism used until FY 1999 to set all annual rent increases in developments with Section 8 project-based assistance. HUD surveyed a market and determined the average rent increase for a given apartment type, then converted this into a percentage (the AAF) to apply to the gross rent of Section 8 properties, based on their prior year's rents. The AAF is still used for all Section 8 developments that have not yet reached the expiration date of their initial subsidy contract. However, for developments that are now renewing on an annual basis, Section 8 project-based rents are adjusted using the Operating Cost Adjustment Factor (OCAF) or if requested by the owner, budget-based rents.