Utility Allowance Adjustment Requirements

All owners with properties that have a utility allowance must adhere to the HUD Notice 2015-04 issued on June 22, 2015.

Multi-family Section 8 property owners must establish a baseline utility allowance for each bedroom size once every third year, which are determined by using a baseline utility analysis. For the two years after the baseline is established, the utility allowance amounts for each bedroom size and each utility at the property will be adjusted by a state-specific Utility Allowance Factor (UAF), which is provided by HUD, in lieu of another baseline utility analysis.

For properties with more than one utility type paid by the residents, an analysis must be submitted for each utility type (i.e. electric and gas).

If a property is unable to provide 12 months of data, the amounts must be calculated based on the number of units and annualized. For example, 10 months of data must be calculated as:

  1. Add the 10 months to get a total. Divide the total by 10 to get the average per month.
  2. On HUD’s spreadsheet or the property’s spreadsheet, do not place zeros in the two columns where there is no amount. The average of the 10 months must be placed in the columns where there is no amount. The spreadsheet will calculate the average for 12 months.
  3. If 10-12 months of data is not available provide an explanation.

When the utility analysis documentation supports a decrease to the utility allowance(s), the owner must adhere to the posting requirements set forth in Notice 24 CFR 245.410.

Current Utility Allowance Factor

Methodology for Completing a Multifamily Housing Utility Analysis

A utility allowance must be increased mid-year when changes in utility rates result in an increase of 10 percent or more to the utility allowance from the most recently approved utility allowance. The owner must certify the amounts and provide documentation from the direct utility providers.