The U.S. Department of Housing and Urban Development released answers to frequently asked questions about a recent notice that outlines a new methodology for completing a multifamily housing utility allowance. It answers the following questions:

Implementation Period

  • What is the effective date of this notice?

Baseline Analysis

  • What documentation will an O/A be required to submit with a utility analysis and request for approval of a U/A?
  • We have some residents whose utility accounts are in a relative’s name and the utility company will not provide the information based on the resident’s signature. What do we do then?
  • If an apartment is only occupied by a resident for 10 months, how do we handle the other 2 months and any partial months?
  • When a resident vacates an apartment and another resident moves in, the utility company will only release the information for the current resident. Even if the apartment was vacant for only a few days, we may not have 10 months of usage for the new resident. How do we handle that?
  • Can an O/A combine methods of data collection (some bills from residents, some information from the utility provider)?
  • Some CAs/HUD offices require that estimated amounts for certain appliance usage be removed from the total utility bill. For example, owner/agents may be required to remove costs to run AC or to use washer/dryers installed in the units. Is this a HUD requirement or are individual agencies allowed to implement such requirements?
  • Please clarify the rounding to the nearest whole dollar – in some cases there have been differences due to rounding.

Sample Size

  • If the owner is unable to obtain the minimal sample size despite best efforts, will the analysis be accepted based on available data?
  • For smaller properties, especially senior properties, that may have to use 100% sampling, certain circumstances will skew the resulting U/A up or down, e.g. residents spending weeks or months in a hospital, residents spending (colder) months with relatives, residents with medical conditions who need their apartments to be exceptionally warm, cold, or where they use medical equipment that uses a lot of energy. In most cases, the resident has not requested a reasonable accommodation to increase the U/A.
  • If the property has 20 or fewer apartments and information is not available for at least 10 months in any number of units, does the sample size get reduced? For example: Property has 15 units so all the units must be included in the sample. However, 2 units are vacant and 2 units have only been occupied by the current resident for 5 or 6 months.
  • Can you clarify the instruction on excluding units with less than 12 months of occupancy? The instructions indicate that a unit must be excluded if it has been vacant for 2 or more months, but then indicate that a unit with only 10 months of occupancy may be included.
  • Can you elaborate on sample sizes when the property has multiple floor plans for same bedroom size?
  • Can you use the usage amount for residents paying a flat rate, especially if most residents are paying a flat rate?
  • Is the UA Analysis for all units at the property or just Section 8 units?
  • Is the flat utility rate exclusion meant apply to any unit receiving any kind of subsidy or just units that receive a flat utility rate? We have a variety of low income assistance programs that are not rate-based but result in lower utility bill amounts and would skew the average.

HUD’s Utility Analysis ExcelWorksheet

  • Must an owner use the HUD-provided worksheet that was attached to the notice?
  • With the worksheet protected – how can we change to accommodate the same unit type i.e. 3 BR & 3 BR TH?
  • The HUD worksheet calculates averages based on the values entered. If you only have 10 months of data and enter 0 in the other two months, the average will calculate on all months that have data. Is this correct?

Release Forms

  • The utility company requests we use their form for the release of information; is this okay?

Mid-year U/A adjustments

  • When a change in utility rates results in a 10% or more increase in the U/A, how do you compute the new allowance? Do you simply apply the % increase to the existing U/A?
  • What would be the historical time period to use for the new analysis?

Utility Assistance As Income

  • Some tenants receive assistance under the Department of Health and Human Services Low-Income Home Energy Assistance Program (LIHEAP). According to Handbook 4350.3 Exhibit 5-1 Income Inclusions and Exclusions, this form of assistance is listed under Income Exclusions (e). The notice states that tenants must report this type of assistance as income and that it must be counted as income. Is it included or excluded?

The Factor-Based Utility Allowance Analysis

  • Can you provide the link to the website referenced in the Notice regarding the factorbased increases and the UAF?
  • What is the timing of the issuance of the Utility Allowance Factor (UAF)?
  • In the years in which you perform a factor-based analysis, do you take the previous utility allowance before rounding or after rounding and then apply the factor.
  • For the two years after a baseline utility analysis is completed, the Utility Allowance Factor (UAF) can be used. According to the Notice, the O/A “should compare the adjusted utility analysis to their paid utilities over the previous twelve months. If the results indicate a “significant disparity” between the two, the OA should complete a baseline analysis.” Please clarify what constitutes a “significant disparity,” and whether the paid utilities analysis documentation needs to be provided to the CA/HUD in order to use the UAF. Please also clarify the “paid utilities” – does this represent the common area utilities paid by the property?
  • Does the U/A have to be changed for all baseline transactions, even one dollar?

Utility Allowance Decreases – Phase In

  • Are O/As required to phase-in a UA decrease?

Miscellaneous

  • Does the data used in the analysis for each unit have to be from the same time period for each unit?
  • I have 3 contracts on one property – is analysis by contract or property?
  • I completed a utility analysis for a 2015 contract renewal that was due prior to June 22, 2015. If this baseline analysis complied with the requirements described in the Notice, do I have to complete a new baseline for 2016?
  • May an owner offer residents monthly incentives to provide copies of their utility bills every month? For example, $1.00 or $2.00 per month per resident as “Additional Costs to Rent” in the budget.
  • Which utility allowance calculators are HFA approved?