|Missouri Housing Development Commission|
Program Compliance Accounting
> Utility Allowances
MHDC is responsible for collecting utility allowance information for projects involved in the MHDC Fund Balance, Low Income Housing Tax Credit, and HOME programs. A utility allowance is an estimated adjustment for utilities that is not included in the tenant’s rent. The adjustment is used to keep proposed rents within gross rent guidelines of the applicable program. It is also used to adjust gross rents to compare with area net rents.
New Utility Allowance Procedures
Utilities paid by low income tenants must be counted as part of the unit’s gross rent. Accordingly, the rent collected from tenants must be reduced by the amount of a utility allowance, set by a utility allowance schedule as set forth in Treasury Reg Section 1.42-10 and IRS Notices 89-6 and 2009-44. Section 1.42-10 states that if any time during the building’s compliance or extended use period the applicable utility allowance for a unit changes, the new utility allowance must be used to compute gross rents of rent-restricted units due 90 days after the change. Pease refer to Notice #09-002 Utility Allowance Calculation Methodology and Reporting Requirements for further information.
IRS Notice 2009-44 establishes 6 sources for which utility allowances may be obtained:
In response to the reporting requirements described above, MHDC will require all affordable properties with 13 units or more to submit utility allowance information quarterly through MHDC’s Asset Management Reporting System (AMRS) located at amrs.mhdc.com. Properties with 12 units or less will be required to manually submit the utility allowance information quarterly to the MHDC’s Compliance Reporting Team at 4625 Lindell Blvd., St. Louis, MO 63108. Submissions in both electronic and paper format must be received by the last day of each quarter – 3/31, 6/30, 9/30, and 12/31.