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Utility Allowance Analysis

A utility allowance analysis must be submitted yearly in connection with a project’s scheduled or requested annual contract renewal or rent adjustment.  If the owner requests a budget based adjustment, an analysis must be submitted with the budget based request.  The owner must also request approval of a revised utility allowance whenever a utility rate change would cause a cumulative increase of 10 percent or more in the most recently approved utility allowances.

The analysis must include the most recent 12 months of data for each bedroom size category that exists in the project.  We recommend a 20 percent sampling of each unit type.

The recommended utility allowance should represent the owner’s best estimate of the average monthly utility cost that an energy conscious resident will incur for the year.

You need not submit your complete analysis to LOMOD (i.e. consumption charts and past bills).  LOMOD requires only that you suggest your recommendation for a change in utility allowance or request to keep the utility allowance the same.  Keep in mind that during the management and occupancy review, the utility bills may be viewed and referenced against your recommended utility allowance.

Utility Allowance Recommendation Form

Please refer to the Code of Federal Regulations 880.610 and the HUD Handbook 4350.1 Chapter 7-24 for more information.