Where tenants pay their own metered utilities HUD may set the rental below 30 percent of adjusted income, but in no case below 25 percent

s236.tenant_payment.separate_utility_metering_twenty_five_percent_floor · v1.0.0

With respect to projects HUD determines have separate utility metering paid by tenants for some or all dwelling units, HUD may permit the basic rental charge and the fair market rental charge to be determined on the basis of operating the project WITHOUT the cost of the utility services used by those units, and may permit rental for those units to be charged at an amount less than 30 percent of a tenant's adjusted income to the extent HUD determines that reduction represents a proportionate decrease for the utility charges the tenant will pay. The floor is absolute: in no case shall the rental be lower than 25 percent of a tenant's adjusted income. This is the Section 236 analogue of a utility allowance, and it behaves differently from one -- it is a reduction in the rent percentage rather than a dollar deduction from total tenant payment, and it bottoms out at a percentage rather than at zero.

Confidence

high

Effective from

1996-09-26

Consequence model

agency finding with cure

Last reviewed

2026-08-29