On Monday, July 28, 2008, the Internal Revenue Service (IRS) released final regulations with regard to the utility allowance provision of Section 42. The final regulations are designed to allow property owners more options for accurately determining utility allowances for Housing Credit properties.
Previously property owners were able to request utility allowances from either the local Public Housing Authority (PHA) or local utility company. Under the new regulations, property owners may now also obtain utility allowances by:
- Requesting a utility estimate for each unit in a building from the state Housing Credit allocating agency. These estimates will take into account local utility rate data, property type, regional climate, and local taxes or fees. State allocating agencies may also use actual utility usage data for the building. This request will be at the owner’s expense.
- Visiting the HUD Utility Schedule Model at www.huduser.org/datasets/lihtc.html.
- Calculating allowances based on energy consumption models as determined by a qualified professional. The model must take into account unit size, building orientation, design and materials, mechanical systems, appliance type, and building location among other items.
The final regulations were published in the Federal Register on July 29, 2008 and took effect the same day.
![The Affordable Housing Tax Credit Coalition [main graphic] A group of developers, syndicators, lenders, nonprofit groups, public agencies, and others concerned with the low-income housing tax credit.](/images/feature_graphics/feature12.jpg?1223579988)
