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OHFA Guidance on the 2013 Final HOME Rule and Utility Allowance Requirement

 

 

OHFA has received numerous inquiries regarding the 2013 Final HOME Rule and Utility Allowance requirement. This message provides additional guidance on this issue. The 2013 Final HOME Rule requires funding grantors known as Participating Jurisdictions (PJs) to determine an individual utility allowance for each HOME rental project by using the HUD Utility Schedule Model, utility company estimate, or energy consumption model. PHA estimates or other estimates that are not project specific are no longer acceptable. The effective date for implementation of this new Rule was August 23, 2013 and would be applicable to all rental projects to which HOME funds were committed on or after August 23, 2013. Unfortunately, when the HOME Rule was published in 2013, the HUD Utility Schedule Model contained errors that caused inconsistent results. Therefore, it was not possible for PJs to comply with the regulatory utility allowance requirement while the model was producing inaccurate utility allowances. In February 2014, HUD issued additional technical guidance through the HOME Investment Partnership Program FAQs. In this publication, HUD made a technical correction which delayed the effective date for the UA requirement until January 24, 2015 and that it was only applicable to projects a PJ funds on or after January 24, 2015. Due to this guidance from HUD, OHFA published a constant contact message on February 23, 2015 indicating the UA requirement applies only to projects receiving HOME funds on or after January 24, 2015. In May, 2016, HUD then issued additional information on the effective date of the utility allowance requirement.

After receiving guidance from our local HUD office and in light of the May 2016 HUD publication, OHFA will require owners of projects that received an allocation of  HOME funds on or after August 23, 2013 to request a utility allowance from OHFA’s Office of Program Compliance. Owners of these projects will no longer be able to use the Public Housing Authority (PHA) allowance for the HOME units in the project.  Effective January 1, 2017, owners of these projects are required to submit a utility allowance request for the HOME unit(s) by using the HUD Utility Model, utility company estimate, or energy consumption (engineer) model.  Projects that have a utility allowance mandated by another Federal Program (e.g. HUD Section 8, Rural Development) may use the utility allowance as determined by the housing contract.  Due to the HOME program not allowing the PHA utility allowance to be utilized, a household with a Housing Choice Voucher would not be able to meet the HOME utility allowance criteria.  If selecting such a unit is the only option at the property, the owner must contact OHFA for further guidance.  

The procedures for requesting utility allowances are described in OHFA’s Utility Allowance Policy.  OHFA will work with the owners of these projects regarding the implementation of the utility allowance requirement. It is important to note the 2013 Final HOME Rule utility allowance requirement currently impacts only 13 OHFA Home funded projects. This document lists the projects to which the utility allowance requirement is applicable. Owners of projects that received OHFA HOME funds prior to August 23, 2013 are not impacted by the new utility allowance requirement and may continue to use any utility method described in OHFA’s Utility Allowance Policy to include PHA estimates. 

 

Questions about this message may be directed to Betsy Krieger by email at bkrieger@ohiohome.org.    

Guidance issued and effective July 27, 2016