PC will temporarily suspend the use of a consumption based utility allowance in order to ensure our policy meets the spirit of the IRS.




Ohio Housing Finance Agency       57 East Main Street | Columbus, OH 43215






OHFA Suspends the Use of the 

Utility Allowance Consumption Model


In 2007, OHFA's Utility Allowance Policy was developed by a group of stakeholders including owners and managers of Housing Tax Credit (HTC) properties, tenant advocates, staff from the Public Utility Commission of Ohio and other housing advocates. The policy has been in effect since 2009 to assist owners with two main important objectives: owners who develop energy efficient properties are rewarded with lower utility costs and second, help to ensure tax credit communities are sustainable and viable by allowing additional cash flow due to savings from the utility allowance.  It is recognized documentation required from the owner, such as 12 months of resident usage data, can be burdensome and time consuming for our partners as well as internal staff during their review of consumption based utility allowance requests.   Recently, the Office of Program Compliance (PC) was audited by OHFA's Internal Audit Office (IA) regarding our current utility allowance policy. IA recommended exploring and potentially implementing a consumption-based Utility Allowance Model.  Several Housing Finance Agencies (HFA's) are using models to calculate consumption based requests. It is important to point out the audit did not find evidence of noncompliance (e.g. going over the HTC maximum rent with an approved consumption allowance). 


In light of this recommendation, PC will temporarily suspend the use of a consumption based utility allowance in order for us to explore our policy and ensure it continues to meet the spirit of the IRS and of Section 1.42-10. Exploring the use of a model or complementary approaches presents an opportunity to ensure our processes are inherently efficient and effective for the industry. 


Effective July 1, 2016, new requests for a consumption based utility allowance will not be accepted. Those seeking the OHFA approved consumption based utility allowance will need to utilize another method as outlined in the policy.


Owners who have requested a consumption based allowance prior to July 1 are exempt from this suspension.  This includes any applications for funding submitted to OHFA that have requested and meet all eligibility requirements and conditions to request consumption based utility allowance. Approved consumption-based utility allowances will not be rescinded. PC recognizes this suspension could potentially impact the ability of owners to collect higher net rents. Therefore, further guidance will be issued soon.Questions regarding this matter should be directed to Betsy Krieger, bkrieger@ohiohome.org



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Ohio Housing Finance Agency, 57 East Main Street, Columbus, OH 43215