Conquering LIHTC Utility Allowances

What makes LIHTC housing truly affordable?

It isn’t just the income limits that make Low-Income Housing Tax Credit (LIHTC) housing affordable, as income restrictions simply ensure that LIHTC housing is made available only to those that truly need affordable housing based on annual household income. The component that makes LIHTC housing truly affordable is the rent restrictions. Under the LIHTC program, owners must charge a gross rent that is at or below the maximum rent limit applicable to the LIHTC unit.

Gross rent in a standard LIHTC-only setting includes the following:

• Tenant paid rent
• Non-optional Fees
• Utility Allowances

Understanding Utility Allowance Requirements

An estimate of any utilities required to be paid directly by the tenant must be included when calculating gross rent. This estimate is referred to as the Utility Allowance; however, the method of determining the applicable utility allowance for a project will depend on several factors.

The Importance of Accurate Utility Allowances

Failing to use the correct utility allowance can cause the maximum rent for low-income units to be exceeded. in such situations, the owner must exclude these non-compliant units when claiming credits for the taxable year. In this 75-minute session, Amanda Lee will delve deep into the utility allowance requirements applicable under the LIHTC program.

Topics Include:

• Utility Allowance Basics
• Gross Rent Requirements
• Overview of the Different UA Options
• Deadlines and Notices
• HUD & RD Regulated Buildings
• Utilizing Public Housing Authority Utility Allowance Schedule
• When Use of PHA UA is required
• Accessing PHA UA Schedule & Checking for Updates
• When the use of PHA UA is prohibited
• Utilizing Utility Company Estimate or Agency Estimate
• Utilizing the HUD Utility Schedule Model or Utilizing the Energy Consumption Model
• Submetering Requirements & Renewable Energy Sources
• Updating Utility Allowances & Record Retention

Learn to Conquer Compliance

By fully understanding the requirements relating to utility allowances, housing professionals are better equipped to protect the owner’s credits, and more importantly, ensure that the rent being charged to tenants is truly affordable.

All attendees will receive:

• A certificate of attendance
• A content-rich PDF manual
• Interactive live webinar training where you can ask questions and participate in knowledge checks and polls