The owner must submit a utility allowance analysis with each contract rent adjustment and must request new allowances when a rate change would cumulatively raise them by 10 percent or more

pbra.utility_allowance.annual_analysis_and_ten_percent_rate_trigger · v1.0.0

In connection with annual and special adjustments of contract rents the owner must submit an analysis of the project's utility allowances, providing such data as changes in utility rates and other facts affecting utility consumption so that appropriate adjustments can be made. Separately, and without waiting for the contract anniversary, when approval of a utility rate change would result in a cumulative increase of 10 percent or more in the most recently approved utility allowances, the owner must advise the contract administrator and request approval of new allowances. Whenever a utility allowance for a unit is adjusted the owner must promptly notify the affected families and make a corresponding adjustment of the tenant rent and of the housing assistance payment for the unit. HUD Handbook 4350.3 supplies the two effective dates the regulation leaves unstated. A utility allowance change arrived at through the ANNUAL analysis submitted with the rent adjustment takes effect on the same date as the rent change. A change arrived at through a MID-YEAR analysis triggered by a rate increase of 10 percent or more takes effect on the first day of the first month following approval by HUD or the Contract Administrator. A utility allowance change, with or without a rent change, is a gross rent change and runs through the gross rent change procedure.

Confidence

high

Effective from

1985-09-27

Consequence model

agency finding with cure

Last reviewed

2026-09-02