Income Limits and Utility Allowances Updated
Income limits for the tax credit and HOME programs were recently issued and are available on OHFA's Web site. Owners and managers should review the rent and income implementation memo issued by OHFA on April 7 before implementing the new rent and income restrictions, which became effective in early May. The memo addresses a variety of topics related to the rent and income limits.
The IRS issued Notice 2009-44 to clarify aspects of Regulation 1.42-10 relating to sub-metered utilities. The 2008 revised version of the regulation was interpreted as residents could not be charged for utilities (services such as telephone, cable or Internet service are not considered utilities under this regulation) under a sub-metering system. Notice 2009-44 explains that such charges are appropriate and can be billed to the resident through a third-party service if the unit(s) is individually metered; as long as they are reasonable and customary charges, not exceeding $5 per unit. Such charges are not considered part of the gross rent and must be the actual amount for the service provided. Properties may not bill residents for prior charges, and fees may only be assessed for service provided after May 5, 2009. The Notice does not indicate that billing methodologies such as a Ratio Utility Billing System (RUBS) are acceptable; OHFA will not accept RUBS methodologies.
This Notice is effective for utility allowances established on or after July 7, 2008. OHFA revised its utility allowance policy to reflect Notice 2009-44.