HUD provides utility allowances to properties receiving subsidy assistance where all or some utilities are paid directly by the residents. Utility allowances (UA) represent the owner’s best estimate of the average monthly utility cost of an energy-conscious resident based on an analysis. To determine the UA for the property, owners are required to perform a yearly analysis of their project’s utilities or receive the annual FY Utility Allowance Factor (UAF) increase set by HUD annually. One must be submitted with any rent adjustment type including rents remaining at current.
The HUD-published Housing Notice can be found on HUDClips under Notice 15-04. Select the link to find the Frequently Asked Questions for the Housing Notice 2015-04.
The 24 CFR 245.405(a) and 245.410 require the owner to serve a 30-day notice to the residents of a proposed decrease in the utility allowance. Select here for a sample Utility Decrease Notice.
HUD Utility Allowance Schedule
The utility allowance factor table and utility allowance schedule for the upcoming period are now accessible from the Department of Housing and Urban Development. The dataset relies on data published by the U.S. Energy Information Administration and the Bureau of Labor Statistics. Owners or agents will establish their utility allowance factor (UAF) specific to their state and apply the published UAF to their current utility allowance as part of their adjustment process. The data sets include oil, natural gas, electric, and water/sewer/trash.
Utility Allowances FAQ
What documents does an O/A need to include when submitting a utility analysis and seeking approval for a U/A?
The O/A must provide all the necessary backup information to show how they determined the updated utility allowances.
If a resident occupies an apartment for less than 12 months, what’s the protocol for the remaining months and any partial months?
Calculate the average for complete months occupied. Do not use partial months.
Is it necessary for the owner to use the HUD-provided worksheet that came with the notice?
No, owner’s can create their own worksheets as long as they provide enough documentation to HUD/CA.
What utility allowance calculators have received HFA approval?
Please see the language provided in the notice below regarding calculations. It intentionally doesn’t specify preapproved tools since the field changes frequently.
“The energy consumption model must, at a minimum, take into account specific factors including, but not limited to, unit size, building orientation, design and materials, mechanical systems, appliances, and characteristics of the building location. Second, the utility estimates must be calculated by either (1) a properly licensed engineer or (2) a qualified professional approved by HUD.”
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