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 requires 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.
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