HCCP Utility Allowances and Rent Calculations 3

Question 1

An owner provides a range and refrigerator in all LIHTC units. How do owner-supplied appliances affect the Section 42 gross rent calculation?

Accepted Answer

The gross rent calculation is unchanged; maximum rent limits apply regardless of appliances

Answer

Owner-provided appliances such as a range and refrigerator do not alter the gross rent calculation; Section 42 maximum gross rent limits apply regardless of which appliances the owner supplies.

Question 2

A LIHTC property owner switches from using the local PHA schedule to an energy consumption model for utility allowances. What procedural requirement applies?

Accepted Answer

The change must be documented and the new allowances implemented within 90 days

Answer

A change in utility allowance methodology must be documented, and the resulting utility allowances must be implemented within the standard 90-day window.

Question 3

A LIHTC owner uses a Ratio Utility Billing System (RUBS) to allocate building utility charges to tenants. How does this affect utility allowance requirements?

Accepted Answer

The full applicable utility allowance must be included in the gross rent calculation since tenants bear utility costs

Answer

When tenants pay utility costs indirectly through RUBS or submetering, they are considered tenant-paid utilities, and the full applicable utility allowance must be included in the gross rent calculation.

Question 4

After major energy efficiency renovations that significantly reduce tenant utility consumption, when and how should the utility allowance be adjusted?

Accepted Answer

The utility allowance should be updated to reflect reduced costs at the next annual review

Answer

When energy improvements lower utility costs, the utility allowance should be revised at the next annual review to reflect current consumption, potentially allowing the owner to charge higher contract rents up to the gross rent maximum.

Question 5

A LIHTC property that also receives USDA Rural Development financing wants to establish its utility allowance. Which source is available to this property that is not available to standard LIHTC properties?

Accepted Answer

The RD utility schedule may be used in addition to other approved methods

Answer

Properties with Rural Development financing may use the RD utility schedule as an additional IRS-approved utility allowance source under Treasury Regulation 1.42-10, alongside other approved methods.

(HCCP) Housing Credit Certified Professional Practice Test

(HCCP) Housing Credit Certified Professional Practice Test

HCCP Utility Allowances and Rent Calculations 3