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Question:
When do I need to submit a request for a change in my utility allowance?

Answer:

If your property has a Utility Allowance, then you must submit a Utility Allowance Analysis with each rent adjustment/funding request. 

New UA guidance outlined in HUD Notice 2015-04 instructs owner/agents to establish a baseline for each bedroom size once every three years. For two years after the baseline submission, utility allowances for each bedroom size and each utility type at the property will be adjusted by a state-specific increase factor called a Utility Adjustment Factor (UAF). The factors will be published annually by HUD. 

Utility Allowance Changes Outside of the Contract Rent Adjustment Schedule

Owners are required to submit documentation and a request for an increase in utility allowances when changes in utility rates result in a cumulative increase in utility allowances of 10 percent or more from the most recently approved utility allowance. When the owner requests an increase in utility allowances, the owner must submit either of the following as evidence of the rate change:

  1. Utility bills from the month prior to the utility rate change and the first month after the utility rate change; or

     

  2. Verification of the increase from the utility provider.

Note that a 10 percent or greater increase in any one utility component may not necessarily result in a corresponding 10 percent or greater increase in the utility allowance. Only when a utility rate change results in a cumulative utility allowance increase of 10 percent or more must the owner request the increase.

If required under the triennial cycle, the owner must still complete a baseline utility analysis at the next contract rent adjustment. If the owner performed a baseline utility analysis in the previous year and can use a factor-based utility analysis at the time of contract rent adjustment, the utility for which the rate was raised will not be adjusted by the UAF for that utility; however, all other utilities will be adjusted by the UAF.


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