Big News for Owners Needing To Perform a Utility Allowance Analysis

On June 18, 2015 and June 22, 2015, respectively, HUD issued a Memo and Notice H-2015-04 detailing new sampling methodologies Owners/Agents must use to determine baseline utility allowances for each of their bedroom sizes, once every third year.

Properties with contract anniversary dates within 180 days of publication of Notice H-2015-04 can choose to perform their upcoming annual utility analysis using either their current methodology or the methodology outlined in this Notice.   If the existing methodology is used, a baseline analysis must be performed at the next contract anniversary date, using HUD’s newly prescribed methodology.

Properties with contract anniversary dates 180 days after publication of this Notice must perform their upcoming utility analysis using the methodology outlined in the Notice.

Once a baseline analysis is performed via the new methodology, subsequent adjustments, in years two and three, can be determined using the HUD Utility Allowance Factors (UAF) to adjust the utility allowances.  

Over the course of a three-year period, this methodology should decrease the cumulative administrative burden to analyze and request adjustments to utility allowances. Owner financing options regarding the possible acquisition of software to perform the analysis and a one-time management add-on fee during the first year of implementation is also discussed in the Notice.

If your residents receive a utility allowance, these new procedures will impact your contract renewal or rent adjustment submission. If you need assistance in implementing the new methodology, gathering the data and/or performing the analysis, please contact PMCS at solutions@pmcsinc.com to learn more about our utility allowance analysis services.