24 C.F.R. § 891.440
§ 891.440 Adjustment of utility allowances. (24 CFR Part 891)
Operative Text
This section shall apply to projects funded under the Section 202 Program, to independent living complexes funded under Section 811 Program, and to projects financed with loans under subpart E of this part. The Owner (or Borrower, as applicable) must submit an analysis of any utility allowances applicable. Such data as changes in utility rates and other facts affecting utility consumption must be provided as part of this analysis to permit appropriate adjustments in the utility allowances for assisted units. In addition, when utility rate changes would result in a cumulative increase of 10 percent or more in the most recently approved utility allowances, the Owner (or Borrower) must advise HUD and request approval of new utility allowances. Whenever a utility allowance for an assisted unit is adjusted, the Owner (or Borrower) will promptly notify affected households (or families, as applicable) and make a corresponding adjustment of the tenant rent and the amount of the project rental assistance payment (or housing or project assistance payment, as applicable).
Under 24 CFR Part 891 § 891.440, housing project owners participating in certain Section 202 and Section 811 programs must periodically analyze utility allowances for assisted units, factoring in changes in utility rates and consumption data. When cumulative utility rate increases reach 10 percent or more above the most recently approved allowances, the owner must notify HUD and seek approval for revised figures. Any approved adjustment to a utility allowance automatically triggers a corresponding change to the tenant's rent and the project rental assistance payment, keeping the financial relationship between these figures in balance.
Plain English — not legal advice.
Operators of projects covered by 24 CFR Part 891 § 891.440 generally maintain ongoing records of utility rate changes and consumption patterns so that required analyses can be submitted to HUD in a timely manner. When cumulative rate increases hit the 10-percent threshold relative to the last approved allowances, compliant operators promptly advise HUD and request approval of updated utility allowances before implementing changes. Once HUD approves new allowances, operators notify all affected households in writing and make the corresponding adjustments to tenant rent and assistance payment amounts without delay.
General guidance for property managers — not legal advice for your specific situation. Consult an attorney for advice on your case.
Under 24 CFR Part 891 § 891.440, residents of covered Section 202 and Section 811 assisted units have a right to be promptly notified whenever their utility allowance is adjusted, and any such adjustment must be reflected in a corresponding change to their tenant rent and assistance payment. If you believe your project owner has failed to properly analyze utility allowances, seek HUD approval when required, or notify you of changes, you may consider raising this as a concern with your local HUD field office or a tenant-rights organization familiar with federally assisted housing. Consulting a housing counselor or legal aid organization can help you understand what remedies or complaint processes may be available under this provision.
General guidance for tenants — not legal advice for your specific situation. Consult a tenant-rights organization or attorney for advice on your case.
Generated September 4, 2026 — auto-generated, not yet human-reviewed. See /transparency for methodology.
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