How to Figure Utility Allowances for Section 8

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Not all utilities, such as Cable TV, are included in the calculation.
Not all utilities, such as Cable TV, are included in the calculation. (Image: Dockside Housing 1 image by Peter Jarvis from Fotolia.com)

Section 8 is a federal housing assistance program for individuals and families who meet income and asset guidelines. Typically those individuals and families whose income is less than 50 percent of those in their county will qualify. Within this program is an allowance for utilities essential for basic living. This does not include services such as cable or satellite TV or telephone service. Determining the amount of the utility allowance for a rental property requires the help of the U.S. Department of Housing and Urban Development (HUD).

Add up the average monthly cost of essential utilities. These are the only utilities that can be figured into the allowance. They include electricity, gas or oil heat, water, garbage collection, and sewer services. If there is a utility cost that won’t be paid by the renter, don’t include this utility in the calculations.

Determine whether any possible tenants are disabled and will need special assistance services, or whether a specific utility is needed for assistance devices, as this can also be factored into the utility allowance.

Contact HUD with the information on hand. Once they have this information, they may send an evaluator to the property to determine how energy-efficient the house is or to determine the extended needs of a disabled renter. If the house has already been deemed energy-efficient by HUD, the only evaluation needed would be the needs of any disabled renter.

Tips & Warnings

  • To ensure that you are getting the most value out of your utility allowance, ensure that the Section 8 home you are renting is energy-efficient. Utility allowances are based on houses of similar size that HUD has deemed energy-efficient.
  • Many section 8 renters are unaware how and where to report issues with their property. To help them maintain a better standard of living, as well as keeping the value of your property up, contact the renters and ensure that they know to come to you rather than HUD when there are issues with the home. This will also ensure that the renters are able to get their home back in working order as soon as possible.

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