HUD Compliance and Energy Efficiency with Utility Allowance Modeling

March 20, 2015 Written by  Comments Print
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If you're a Public Housing Authority, a private developer participating in the Low Income Housing Tax Credit (LIHTC) Program, or Section 8 Housing Choice Voucher Program manager or owner, you know how important it is to ensure that you comply with all HUD utility allowance requirements. Here at greeNEWit, we can help walk you through HUD compliance with respect to utility allowances, as well as recommend energy efficiency improvements that can reduce the energy usage of your buildings and save you money. Learn more about our Utility Allowance Modeling service below.

HUD Compliance

What is a utility allowance?

Utility allowances stem from the way Section 8 residents pay for their housing. HUD says that Section 8 residents can't pay more than 30% of their adjusted income for housing. This includes utility costs.

If residents pay their own utilities, the housing owner must create a utility allowance. This is a figure that is deducted from the resident's rent payment to the owner in order to cover utilities.

How is a utility allowance created?

To create a utility allowance, the building owner must conduct an analysis of the energy usage of the housing unit, in order to determine how much energy the residents use. This is then used to calculate how much they would be expected to pay for energy. This figure is the utility allowance. The allowance must be submitted to and approved by HUD.

When do housing owners need to do an analysis or adjustment of utility allowances?

Section 8 housing owners need to do an analysis or adjustment of their utility allowances in the following situations:

  • When requesting an increase of rent payments from HUD.

  • (Adjustment) When an analysis indicates that utility rate changes would result in a 10% increase.

  • “Every year at the time of annual and special adjustments of contract rents for both OCAF and budget-based adjustments,” according to the NLIHC.

Utility Allowance Modeling

Our service provides you with a detailed analysis of the utility costs for your residents, which ensures you will maintain HUD compliance. But as an energy efficiency consultant, we take this analysis a step further and use it to develop a comprehensive energy retrofit plan. This plan prioritizes modernization, weatherization, and energy efficiency investments that will reduce the energy usage of your properties and save you money on energy costs. When you choose Utility Allowance Modeling from greeNEWit, you're not only ensuring HUD compliance, you're also taking the first step in a process that will reduce your energy usage and save you money on energy bills. Call today at 866.996.7630 or visit us at our website to learn more.

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