Date: June 28, 2018 To: Management Agents From: Michael Witt,

Director, Asset Management Division Re: 2019 Utility Policy and Budget Considerations Attached is the 2019 Utility Sampling policy. The policy has been updated to closer reflect the updated Agency Estimate of Utility Allowances for Low Income Housing Tax Credit (LIHTC) projects sampling method. Included with this update are: • 2019 Maximum Fees, • Submission Timelines, • Updated Utility Sampling Template, • Management Agreements for 2019, • Utility Allowance Sampling Changes, • Identity of Interest Disclosure, and, • Contact Information 2019 Maximum Fees The maximum fees for the 2019 calendar year are: • Management Fee $ 527 • Premium Management Fee $ 81 • Audit Fee (for Sec 236 and 8 developments) $ 12,563 Submission Timelines 2019 utility submissions are due by Monday, October 1st, 2018 with the development budgets and will be considered late for premium management fee evaluations if received after the 1st. Updated Utility Sampling Template Attached with this policy is an updated template for the utility sampling process, which includes the utility allowance sampling worksheets and the Identity of Interest worksheets. These are being separately from the budget template to assist with beginning the utility sampling and budgeting processes. Changes were made to assist in standardizing the entry of utility information and reduce the amount of data entry required per tab. Management Agreements (2019) Each development that has not signed the June 2017 version of the Management Agreement will need to submit an updated Management Agreement and Fee Addendum to the Management Agreement with the 2019 budget submission. These forms are available at https://www.michigan.gov/mshda/0,4641,7-141-5555_8002_47708-177124--,00.html.

Utility Allowance Sampling Changes The utility sampling process for MSHDA-financed properties uses the Agency Estimate of Utility Allowances for non-Section 8 properties. This requires the following validations in the tenant utility expense data: • Utility company name/information must appear on each page of an expense

summary, • The same tenants should be used for all utility type (Electric and Gas) sampling, • Expense details must clearly identify unit number, tenant name, and all fees and

taxes included in the total monthly bill. If fees cannot be determined, then one monthly bill directly from the utility company needs to be collect from each tenant to identify each tenant’s breakdown of monthly fees.

Section 8 and Section 236 developments can no longer apply the utility decrease phase-in period; all developments have phased in from the initial year’s change. Identity of Interest Disclosure The identity of interest disclosure form is included with the Utility Template to assist with completing the disclosure process. Contact Information Utility Templates – Paul Bursley at BursleyP@michigan.gov or

Ryan Armstrong at ArmstrongR2@michigan.gov Utility policy – the development’s assigned Asset Manager

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451 UTILITY SAMPLING POLICY

Contents UTILITY ALLOWANCES OVERVIEW ................................................................................ 1 UTILITY REVIEW PROCESS TIMELINE (NON-SECTION 8 PROGRAMS) ................... 2 UTILITY REVIEW PROCESS TIMELINE (SECTION 8 PROGRAMS) ............................. 2 UTILITY SUBMISSION REQUIREMENTS (“The Utility Package”) .................................. 3 UTILITY SAMPLING PROCESS ........................................................................................... 4

SAMPLE SIZES, EXCLUSIONS, & ADDITIONAL PARAMETERS .............................. 5 SECTION 8 & SECTION 236 DEVELOPMENTS ONLY ................................................. 6

UTILITY ALLOWANCE (UA) CALCULATIONS ............................................................... 7 MSHDA PROGRAMS UA CALCULATION ..................................................................... 7 SECTION 8 & SECTION 236 UA CALCULATION ......................................................... 7

MID-YEAR UTILITY CHANGES (SEC 8 & SEC 236 DEVELOPMENTS ONLY) ........... 8 UTILITY SAMPLING FORM INSTRUCTIONS ................................................................... 8 MSHDA REVIEW.................................................................................................................. 10 GOVERNING REGULATIONS ............................................................................................ 11 IDENTITY OF INTEREST (IOI) WORKSHEET INSTRUCTIONS ................................... 11 FORMS AND ATTACHMENTS........................................................................................... 13

UTILITY ALLOWANCES OVERVIEW An annual review of utility expenses paid by tenants helps provide a reasonable estimate to development tenants for the potential costs of monthly utilities. This estimate of tenant-paid utility expenses is known as a Utility Allowance. This process is typically performed at the same time as the annual analysis of rents to determine if a rent increase/decrease will occur for the upcoming year. Utility Allowance information (calculations or approved amounts) must be submitted with the development’s annual budget submission for all MSHDA programs. To prepare for the annual sampling requests, an “Authorization to Release Utility Data” should be included with each tenants initial lease signing and each lease renewal. See Attachment 1 for a sample Authorization to Release Utility Data form. The procedures for utility sampling vary slightly for two categories of MSHDA-financed developments. These categories are as follows: • Section 8 Programs – Developments with a Section 8 HAP contract, including Section 8

Preservation Pass-through developments, and paid-off Section 8 developments Section 236 decoupled developments in extended use are included in the Section 8

rules for the Utility Allowance Calculation section. • Non-Section 8 Programs – All other MSHDA-financed programs fall into this category,

such as 80/20, 70/30, HOME, Preservation, Section 1602/TCAP, Taxable Bond, Tax Exempt, etc. Section 236 decoupled developments in extended use are included in Non-Section 8

for the Process Timeline rules, since there is no HAP anniversary date for these developments.

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UTILITY REVIEW PROCESS TIMELINE (NON-SECTION 8 PROGRAMS) For non-Section 8 programs, the following timing applies when completing the utility sampling and tenant notification process: At Move-in and Annual Renewal – Obtain Authorization to Release Utility Costs and information forms from each household in the project and retain a copy in each household’s file. Aug 1st – Begin collecting utility sampling data. Oct 1st – Utility packages are due to MSHDA with the budget package submission. • For utility increases or decreases in the proposed utility allowances, management

must notify all tenants in the building. A sample Utility Change Notice (MSHDA Mgmt. 451A1) is provided on the “UA Chg Notice” tab of the Utility Template workbook. A utility change notice is required for LIHTC developments even if the rent will not change. Notify the tenants according to the Treasury Regulation Section 1.42-10.

January 1st – Implement the utility allowance changes. When the utility change is submitted and able to be approved timely, the approved utility allowances and rent schedules become effective as of January 1st provided tenants have received 30-day notice of any rent increase.

UTILITY REVIEW PROCESS TIMELINE (SECTION 8 PROGRAMS) For Section 8 programs, the following timing applies when completing the utility sampling and tenant notifications process: 150 Days Prior to the HAP Anniversary Date - Begin collecting utility sampling data. 90 Days Prior to the HAP Anniversary Date – Developments should notify tenants of a pending utility change. • Utility allowance increases – Notification to tenants of a utility allowance increase should

be provided as a courtesy. • Utility allowance decreases – Management must notify tenants of any decrease in the

utility allowance. The Sec8 Utility-Rent Schedule Template provides a Utility Allowance Decrease Notice (MSHDA Mgmt. 451A2) form for completion and release to the development’s tenants. Tenants must be notified 90 days prior to any utility decrease effective date. The following rules apply to the utility decrease process: Notify the tenants according to the Code of Federal Regulations (CFR) 245.15. Post

the Utility Allowance Decrease Notice (MSHDA Mgmt. 451A2) in three conspicuous places and send to all non-market rate tenants. Do not include MSHDA moderate units on the notices to tenants.

Tenants must receive at least a 30-day comment period, which begins when the Utility Allowance Decrease Notice is posted, regarding any planned utility allowance decrease requests.

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60 days prior to the HAP Anniversary Date - Utility packages are due to MSHDA. Utility submissions for Section 8 developments are sent to Kristin Lautner or Kyle Shaffer, not to the development’s assigned Asset Manager. HAP anniversary date – Implement the utility allowance changes. When the utility allowance decrease is submitted and able to be approved timely, the approved utility allowances become effective on the HAP Anniversary date.

UTILITY SUBMISSION REQUIREMENTS (“The Utility Package”) Utility packages are due as identified in the Process Timeline sections above. Below is a list of the required forms and data that must be submitted to request a utility allowance change. The following information must be included with each development’s utility allowance submission: 1. Excel Utility Template Workbook – Provide an electronic copy of the Excel template

that includes the Summary and various utility allowance data tabs. • For all non-Section 8 developments – Provide the Utility Template workbook. • For all Section 8 developments – Provide the Section 8 Utility-Rent Schedule

Template workbook. 2. Owner’s Utility Allowance Certification - Provide a signed copy (pdf or hard copy).

• For MSHDA programs – Use the Owner’s Utility Allowance Certification (MSHDA Mgmt. 451C1 form) to certify the proper procedures were completed.

• For Section 236 Decoupled Developments in Extended Use Period – Use the Owner’s Utility Allowance Certification form (MSHDA Mgmt. 451C1) to certify the proper procedures were completed. Note: The Owner’s Certification must be dated 30 days after the Posting Notice date to signify the allowed tenant comment period was observed.

• For Section 8 Developments – Use the Owner’s Utility Allowance Certification

(Section 8) form (MSHDA Mgmt. 451C2) to certify the proper procedures were completed. Note: The Owner’s Certification must be dated 30 days after the Posting Notice date to signify the allowed tenant comment period was observed.

3. Copies of Tenant Utility Expense Information – Provide an electronic copy (pdf file) of

all the tenant expense details used in the sampling calculations. Copies must include:

a. The utility company name/information on each page; b. The unit type, unit number and tenant name or address, and; c. All fees and taxes, so that the total monthly bill for each unit is easily determined, if

the total is not listed on the page. This may require at least one actual monthly bill each tenant receives directly from the utility company.

d. Verification that the utility rate in effect for the last billing of the sampling was in effect within 60 days of the posting notice. Only required if the last billing cycle of the sampling does not end within 60 days of the posting notice date.

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Note: The State of Michigan’s network has a limit of 25 megabytes on the size of files e-mailed to the state. If backup documentation exceeds this limit the file will need to be zipped or broken into separate e-mails for submission.

Independent utility sampling contractor’s sampling data may be submitted, if the

development contracts out the utility sampling process. 4. Utility Allowance Change Notice – For all developments. Provide a copy of Utility

Allowance Change Notice (MSHDA Mgmt. 451A1) to tenants posted at least 90 days prior to the change effective date, if applicable. • Developments that perform Rural Development (RD) posting may submit the RD

posting in lieu of the MSHDA posting form. • If the utilities do not change, no posting is required.

5. Utility Allowance Decrease Notice – For Section 8 developments only. Provide a copy

of the Utility Allowance Decrease Notice (MSHDA Mgmt. 451A2) to tenants posted at least 90 days prior to the decrease effective date, if applicable.

6. Tenant Comments – For Section 8 and Section 236 developments only. If applicable,

provide a copy of the written tenant comments regarding a pending utility allowance decrease (or rent increase) and the Owner’s or Management Agent’s evaluation of the comments from the 30-day comment period.

7. Verification of Rural Development (RD) Utility rates – For all developments with RD

funded units. Developments with RD funding use RD rental rates and utilities. Submit verification of RD’s approved rental rates and utilities for the RD units.

UTILITY SAMPLING PROCESS Utility samples must be collected prior to the tenant utility allowance change notice posting date with the 12-month sampling-period ending no more than 60 calendar days (for non-Section 8 developments) or 90 calendar days (for Section 8 developments) from the notice date. If the sampling period does not end within the period designated above, verify the utility rates in effect within the designated days of the notification are the same as the rates identified in the last month of the tenant expenses being sampled. For example, if a development posts a utility allowance update on September 20th, then the utility bills sampled must include at least the current year’s July utility bills (for LIHTC) or June utility bills (for Section 8) to be a valid sampling. Otherwise, the agent must request confirmation from the utility company that the rate at the end of the sampling period was still in effect within the designated days of the posted utility allowance change notice to tenants. When sampling: • Only restricted or subsidized units are included in the sampling (MSHDA-financed

properties). • HUD has disallowed the use of employee units and non-subsidized units as part of the

sampled units in determining the utility allowance (Section 8 properties). Refer to

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Frequently Asked Questions on the HUD Notice H 2015-14, Question #15 for further clarification.

• Authorization to Release Utility Costs and Information – Utility companies require the submission of a tenant signed release authorization prior to releasing utility data. The Utility workbook includes a recommended utility release authorization for developments with LIHTC units.

• The same tenants must be sampled for all tenant paid utilities. For example, if John Smith was included in the gas sampling, then he must be part of the electric sampling data.

• All units sampled within a specified utility type must cover the same data range as the other sampled units for that utility type.

• All units must include 10 full months (full billing cycles) of utility expense. • Developments with similar building types may calculate one average for each unit type

found in all the buildings. Unit types are based on the number of bedrooms; the number of bathrooms in a unit does not change the unit type.

• Developments with different building types (townhouses versus multi-story buildings) or with different heating sources (gas versus electric) must calculate separate averages for each building type and each utility source.

• Project-Based Voucher units may be used when selecting units for sampling utilities if the PBV unit overlaps with a LIHTC unit.

• If greater than 20 units, request a sampling of units from the utility company that is larger than required. This allows a buffer between the collected samples and the required sample size in case some samples do not meet the sampling requirements, such as those listed in unit exclusions.

• Consumers Energy encourages owners/Agents to get connected to its landlord portal to gather utility information. Further information can be obtained by contacting Janice Baird at Janice.baird@cmsenergy.com.

• Consumers Energy posts its electric and gas rate averages at the following link: https://www.consumersenergy.com/Content.aspx?id=4945

SAMPLE SIZES, EXCLUSIONS, & ADDITIONAL PARAMETERS The Utility and IOI Template workbook includes worksheets for entering utility bill information, along with a Summary worksheet and a Utility Allowance Certification form. The following utility sampling requirements must be met for each unit type (1 bedroom, 2 bedroom, etc.) based on the number of units of that unit type: • The minimum sample size is identified in the following chart based on the number of

restricted or subsidized units in each unit type being sampled:

Number of Restricted/Subsidized Units Minimum Sample 1-20 All

21-61 20 62-71 21 72-83 22 84-99 23

100-120 24 121-149 25 150-191 26 192-259 27

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Number of Restricted/Subsidized Units Minimum Sample 260-388 28

389+ 29 • Units should be excluded from the sample size if the unit: Has been vacant for more than 2 full months (full billing cycles). For example, if the

billing cycle is the 4th of each month and tenant A moves out on February 28th and Tenant B does not move in until April 6th, three full billing cycles have been effected by the vacancy and the unit must be excluded. If the sample size is 20 units or less, include all the units sampled (even if less than 10 full months of occupancy) on the utility data entry (Electric, Gas, Water/Sewer) tabs for reference;

Is receiving an increased utility allowance as a reasonable accommodation; Is receiving a flat utility rate as part of a low-income rate assistance utility program.

• Additional sampling suggestions/recommendations to follow if the sample size is

greater than 20 units: Units sampled must provide a fair representation of the property. Different units/tenants should be chosen annually whenever possible for the

sampling in order to gain an accurate representation of the whole property over time. If a specific unit type is located in eight different buildings, sample units are required

from each of the eight buildings rather than only a few of the buildings. The number of household members should be considered and the sampling must not

contain a disproportionate number of smaller member versus larger member households.

Request a greater sampling of units from the utility company than the required amount. This provides a buffer between the collected samples and the required sample size in case some samples do not meet the sampling requirements, such as the units to be excluded.

SECTION 8 & SECTION 236 DEVELOPMENTS ONLY Section 8 developments use the Sec8 Utility-Rent Schedule Template for completing the utility allowance submission. Section 236 developments use the Utility and IOI Template for submission. These templates are separate from the Budget workbook and can be found on the MSHDA website. In addition to the utility sampling calculations described above, Section 8 and Section 236 developments have the option to use a Factor Based Utility Analysis for up to two years after establishing a baseline utility sampling analysis. The HUD factors for 2018 are: Michigan Rates Natural Gas Electricity Water/Sewer/Trash 2018 Factor 0.927 1.061 1.032

The utility allowance amounts for each bedroom size and each utility type at the development can be adjusted with the specified factor in the table above. After completing this adjustment, the Owner/Agent should compare this adjusted utility analysis to the previous 12-months paid utilities. If there is a significant disparity between the two amounts, then a new utility sampling analysis (Baseline) must be completed.

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UTILITY ALLOWANCE (UA) CALCULATIONS Below are the individual program calculation requirements: MSHDA PROGRAMS UA CALCULATION This includes all properties with tax credit allocations and MSHDA-financing. The worksheet adds up each tenant’s ten to twelve full months of bills and generates a straight monthly average of the amounts entered into the template. • If the utility allowance analysis results in a change by any amount, the utility allowances

must be revised and the tenants must be given a 90-day advance written notice of the utility changes. Failure to provide at least a 90-day notice of utility allowance change may result in a non-compliance finding. The Asset Manager will notify the Agent/Owner of the accepted utility allowances in the budget approval letter.

Notice to Tenants – Follow the Treasury Regulation Section 1.42-10 and CFR

245.15 for proper posting and delivery requirements. The development may use the completed MSHDA Mgmt. 451A1 form identifying the proposed utility allowance change at the property to inform the tenants of the changes requested. This notice to the tenants must occur 30 days prior to submission.

SECTION 8 & SECTION 236 UA CALCULATION Developments included in this process: • Section 8 Preservation Pass-through developments; • Section 8 paid-off developments; • Section 236 decoupled development in their extended use period. A straight average of the sampled units will be calculated by the utility analysis template. • If the utility allowances resulting from the sampling increase by any amount, the utility

allowances must be revised. For Section 8 developments – Kristin Lautner or Kyle Shaffer will notify the

Agent/Owner of the approved utility allowances in the rent schedule approval letter. For Section 236 developments - The Asset Manager will notify the Agent/Owner of

the approved utility allowances in the budget approval letter.

• If the utility allowance sampling results in a decrease by any amount, the utility allowances must be revised and the tenants must be given a 90-day advance written notice and at least a 30-day period to comment on the utility decrease. For Section 8 developments – The notice must occur 30 days prior to the utility

change submission date. This may generate an increase in the tenant portion of the rent. Any increase in the tenant rent requires a 30 day comment period related to the proposed rent change.

• Notice to Tenants – Follow the CFR 245.15 for proper posting and delivery

requirements. For Section 8 developments – The development may use the completed MSHDA

Mgmt. 451A2 form identifying the proposed utility allowance decrease at the property

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to inform the tenants of the changes requested. This notice to the tenants must occur 30 days prior to submission.

For Section 236 developments – The development may use the completed MSHDA Mgmt. 451A1 form identifying the proposed utility allowance change at the property to inform the tenants of the proposed changes requested. This notice to the tenants must occur prior to October 1st.

MID-YEAR UTILITY CHANGES (SEC 8 & SEC 236 DEVELOPMENTS ONLY) During the year, if the utility rate increases and results in a cumulative increase in the utility allowances by 10 percent or more from the most recently approved utility allowance, the Agent/Owner must request an increase in the utility allowance rates. The Agent/Owner must submit the following evidence of the rate change: • Utility bills from the month prior to the utility rate change and the first month after the

utility rate change, or; • Verification of the increase from the utility provider.

UTILITY SAMPLING FORM INSTRUCTIONS Summary Tab – Enter the following fields:

Development Name: Select the development name from the drop down list. Contact MSHDA Asset Manager if the development doesn’t appear on the list.

Checkboxes: Use Factor: Check box if development is Section 8 or Section 236 and plans to use

the factor based utility calculations. Include Water & Sewer: Check the box if development must sample water/sewer

utility as part of tenant paid utilities. Use New Ecology: Check the box if development has hired a contractor to perform

the utility sampling analysis. U/A Contact Name: Enter the name of the person who can answer questions about the

utility allowance calculation submission at your company. E-mail: Enter the above contact’s e-mail address. Phone/Ext: Enter the above contact’s phone number and extension. U/A Submission Date: Enter the submission date of the utility allowance submission

package. Proposed U/A Effective Date: Enter the anticipated effective date of the utility change. Name of Electric Co: Identify what utility company supplies electricity to the

development tenants. Name of Gas Co: Identify what utility company supplies gas to the development

tenants. Sample Begin Mo/Yr: Identify the starting month of the sampling for each of the utility

types. Number of Units: Identify the unit mix breakdown for the development under both the

electric and gas tables. Non-Section 8 developments – The total number of units entered for all the unit types

must equal the total number of units at the development regardless of the number of units actually restricted.

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Section 8 developments – The total number of units for all the unit types must equal the total number of subsidized units at the development.

Note: The numbers of units entered are used to generate the sampling size and set the minimum amount of billing samples required in order for the utility sampling tabs to generate an average dollar/unit/month amount.

Other: Enter the description of the other units being entered. Exclusions: Identify the number of units that must be excluded from the unit total,

because the units do not meet the sampling exclusion requirements listed in the subsection above.

Adj. Units: [Automatically calculates] number of units less exclusions. This number is used to calculate the sample size from HUD’s sampling chart and algorithm.

Samp Size: [Automatically calculates] total number of units to be sampled based on the adjusted number of units amount.

Actual Samp: [Automatically calculates] total number of units entered into the specified utility tab (Electric, Gas, Water/Sewer) for the specified unit type (bedroom size and family/elderly type).

Avg./ unit/ month: [Automatically calculates] the average monthly utility allowance amount for each bedroom size based on the utility sampling data entered in the Electric-Family, Electric-Elderly, Gas-Family, Gas- Elderly tabs.

Current U/A: Enter the amount of the current utility allowance amounts for each bedroom size.

Adjustment Amt. / %: [Automatically calculates] the amount of change and percentage of change automatically calculates based on the type of sampling method used.

Calculated U/A: [Automatically calculates] the total of the utility sampling averages calculated by the utilities sampling analysis for each unit type.

Factored U/A: [Automatically calculates] the total of the factor based utility allowances calculated by the utility factoring for each unit type.

New Ecology: If applicable, enter the amount of the independent contractor’s (such as New Ecology) calculated utility allowances for each bedroom size from the contractor’s sampling analysis.

Proposed U/A: [Automatically calculates] the proposed utility allowance generated based on the selected utility allowance analysis method; designated by the checkboxes near the top of the Summary tab.

Comments: Provide an explanation of the unit breakdown information that does not align with the rent schedule and any other necessary utility information.

Electric-Family, Electric-Elderly, Gas-Family, Gas-Elderly Tabs - Under each of the unit types identified on the Summary tab, Number of units fields, enter a complete 12 months (or at least 10 full months if the 12 months was not available) of billing data for at least the required number of units identified in the “Sample Size” Column of the Summary tab. The sampling tabs will accept more than the sample size units designated, if more than the required number of units were sampled. Enter the following fields for each sample unit:

Unit # or Address: Identify the sample tenant’s unit location (unit number or address). This field carries over from the Electric-Family and Electric-Elderly tabs.

Section 8 developments – This field may be changed for the various utility types. Current Tenant Name: Identify the sample tenant’s or tenants’ name(s). This field

carries over from the Electric-Family and Electric-Elderly tabs. Section 8 developments – This field may be changed for the various utility types. Sep-17 to Aug-18: Identify the billing amount for each of the sample period designated

months sampled. Entering the data into the proper columns month helps improve

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accuracy and normalize the data for review and approval. At least 10 full months of data must be entered to generate an average monthly amount for each unit/tenant. Section 8 developments – The columns have been labeled with a month (Jan to Dec) designation to help normalized the entered data. Enter the sampled data into the relative month of the utility bill sampled.

Along the top of each utility sampling tab is a summary of the totals and averages generated from the utility samples entered into each column.

UA Owner Cert Tab – The required “Owner Utility Allowance Certification” automatically generates based on the sampling provided in the summary tab. Complete the name and title of the development’s authorized signatory. *Print, sign, and scan the form or electronically sign for the pdf submission to MSHDA.

MSHDA REVIEW MSHDA will review the entire submission for compliance with regulations and instructions. Please make sure the backup documentation is complete and legible to help expedite the approval process. The information requested may include, but is not limited to the clarification of: • Data for larger units calculating the same or lower average utility costs as a smaller unit. • The difference appears extraordinary between the current UA and the proposed UA for a

specific unit type in relation to the project’s other unit type changes to UA. • Any other anomalies in the UA data or changes to the unit types’ utility allowances. Non-Section 8 Developments – MSHDA may request more information during the 90 days prior to the effective date. Owners/agents will receive a response from MSHDA regarding the acceptance of the utility analysis with the budget approval letter. If questions arise between submission and the notification of acceptance, contact the assigned MSHDA Asset Manager. Section 8 Developments – MSHDA may request more information prior to the effective date. • AAF Rent Adjustments: Owners/Agents will receive a response from MSHDA regarding

acceptance of the utility analysis within 30 to 60 days of the submission date. If questions arise between submission and the notification of acceptance, contact Kristin Lautner.

• OCAF or budget-based rent adjustments: Owners/Agents will receive a response from MSHDA regarding acceptance of the utility analysis within 90 to 120 days of the submission date. If questions arise between submission and the notification of acceptance, contact Kyle Shaffer.

Non-receipt of an approval notice is not considered approval by MSHDA. Disclaimer All allowances provided under this option are based upon information submitted by the property owner. Therefore, the owner assumes full responsibility and accepts the consequences if the information is later determined to be inaccurate.

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GOVERNING REGULATIONS The specific regulations governing utility allowance adjustments are identified below: • Section 8: CFR* 880.610; CFR 245.10; CFR 245.405(a); CFR 245.410; CFR 245.415;

and CFR 245.425 • Section 236: CFR 245.10; CFR 245.310; CFR 245.330; CFR 405(a); CFR 245.410;

CFR 245.415; CFR 245.425; and 245.435 (non-insured projects). • MSHDA Programs (LIHTC): http://edocket.access.gpo.gov/2008/pdf/E8-17268.pdf - IRS

Regulations Section 42 updated July 29, 2008, as amended and further updated. • Treasury Regulations Section 1.42-10. • HUD Notice H-2015-04 Methodology for Completing a Multifamily Housing Utility

Analysis and subsequent FAQs. * CFR means Code of Federal Regulations

IDENTITY OF INTEREST (IOI) WORKSHEET INSTRUCTIONS Included with the Utility Template is the Identity of Interest (IOI) worksheets. Developments can use these worksheets to begin completing the certification of no identity of interest relationships or identity of interest disclosures for the development. IOI tab – Answer the question, “Does an Identity of Interest relationship exist at the above development?” • If ‘No’, the tab refreshes to display the Identity of Interest Certification (MSHDA Mgmt.

450C). Complete the signature block fields, then print and sign the form. • If ‘Yes’, the tab refreshes to request the number of identity of interest vendors and a list

of the vendor names. Enter each identity of interest vendor name in order to create a separate identity of interest disclosure.

IOI-1 through IOI-10 tabs – Depending on the number of identity of interest vendors entered on the IofI tab, the template will create the necessary number of IofI-[#] tabs to generate individual identity of interest vendor approval request forms. For each request form complete the following fields: Federal ID# - Enter the federal employer identification number in this field. Contact Name – Enter the vendor’s primary contact person. Street Address – Enter the street number, name, suite, etc where the vendor’s main office is

located. City – Enter the city where the vendor’s main office is located. State – Enter the state where the vendor’s main office is located. Zip – Enter the zip code where the vendor’s main office is located. Owner’s Name (printed) – Enter each owner’s name Type of Ownership – Enter the ownership interest each person has in the company. E.g.

sole proprietor, general partner, limited partner, etc. List of Current Officers Names – Enter the names of the current company officers.

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Titles – These are pre-entered, but may be changed if the officers have different titles. Identity of Interest Individuals Name – List the name of each individual that has an identity of

interest relationship with the development’s Ownership or Management Company. Identity of Interest Relationships – Describe how the individual has an identity of interest

relationship. Description of Goods\Services Provided – Enter a detailed description of the goods and

services planned to be provided by the company to the development. Contract Effective Date – Enter the date, which the contract is intended to start. Contract End Date – Enter the anticipated date the contract will expire. Contracts can last

up to a maximum of four years before requiring renewal of the IOI form. MIE Line Item – Enter a list of the Monthly Income and Expense (MIE) line items where the

contracted goods and services will be expensed. # Units/ # of Occurrences – Enter the anticipated number of times the product or service will

be used, if applicable. Cost per unit/ occurrence – Enter the individual cost for each use of the product or service, if

applicable. Total Cost by Unit/ Occurrence – This field calculates the number of units/occurrence

multiplied by the cost per unit/occurrence for each MIE line item. Set Cost of Contract – Enter the total contract amount for the specified MIE line item, if the

per cost or per occurrence breakdown of the expense is not applicable. Total Cost – This field sums the Total Cost by Unit/Occurrence amount with the Set Cost of

Contract amount. Total Contract Amount – This field sums the total cost of all the MIE line items broke down in

the above grid. If the vendor is used on an “as needed” basis, then bids do not need to be submitted with

the IOI Certification form, but will need to be submitted when the vendor performs work and/or services for the development.

Bookkeepers and Accountants – Names – Enter the name of each bookkeeper and accountant that works for the vendor. Address – Enter the primary work address where the bookkeeper or accountant works. Attachments – Include the following documents with each IOI vendor submission: 1. A copy of vendor’s organizational document; 2. A copy of the vendor’s contract for good or services for the development; 3. Three bids for the contracted goods or services to be rendered by the IOI vendor. Certification of No Cost – If the identity of interest vendor provides its services at no cost to

the development, have the vendor representative sign this section as certification. This allows the Identity of Interest Disclosure to be submitted without bids.

Review the certification of the identity of interest rules and complete the signature block

fields, then print and sign the form.

Rev 6/18 451 - Utility Sampling Policy Page 13 of 13

FORMS AND ATTACHMENTS 451A1 – Utility Allowance Change Notice 451A2 – Utility Allowance Decrease Notice 451B1 – Utility Allowance Calculation Summary – Non-Section 8 451B2 – Utility Allowance Calculation Summary – Section 8 451C1 – Owner’s Utility Allowance Certification 451C2 – Owner’s Utility Allowance Certification (Section 8) 451D – Tenant Utility Calculation Worksheet 451E – Timeline Visual Summary 451F – Authorization to Release Utility Data Example Attachments Utility Template (Non-Section 8 Developments) Excel Workbook Sec8 Utility-Rent Schedule Template Excel Workbook 450B – Identity of Interest Disclosure 450C – Identity of Interest Certification

Date of Notice:

Effective Date:

FamilyElderlyFamilyElderlyFamilyElderlyFamilyElderlyFamilyElderlyFamilyElderlyFamilyElderly

FEFE

$10

Other

Other

$81

$83

$85

$87

$89

$91

$93

$90

3BRow$95

2BRow

$10

Condo

4BRTH $97 $10

$94 $10$10$10$96

$102 BR Apt

3 BR TH

4 BR TH

$86 $10

$88 $10$10

$10

$10

$10

$92

2 BR TH

3 BR Apt

Utility Allowance Change Notice

10/1/2018

1/1/2019

Property Name: ACROSS THE PARK APTS.MSHDA Number: 3197

$10

$10

$10

Studio

Management plans has requested approval of a utility allowance change from the Michigan State Housing Development Authority (MSHDA). The proposed changes identified below are based on our most recent sampling of resident utility bills:

Bedrooms Current Utility Allowance

$84

Proposed Utility Allowance$80 $11

1 BR Apt $82 $10

MSHDA Mgmt. 451A1 (6/18)

Date of Notice:

Effective Date:

FamEld

FamEld

FamEld

FamEld

FamEld

FamEld

FamEld

HUD Project Number: #N/A

(For Section 8 Developments)

(Tenant Notification and Rights on back.)

$0

Other

Other

$81

$83

$85

$87

$89

$91

$93

$90

2BR TH$95$94 $106

$46$69$96

1BR TH

$96

$97 $65

$232 BR Apt

3 BR TH

4 BR TH

$86 $29

$88 $38$30

$37

$39

$97

$92

2 BR TH

3 BR Apt

Utility Allowance Decrease Notice

10/31/2018

9/15/2018

Property Name: 0

MSHDA Number: #N/A

$0

$22

$25

Studio

Management plans to request approval of a decrease to the utility allowance from the Michigan State Housing Development Authority (MSHDA). The proposed utility allowance decreases identified below are based on our most recent sampling of resident utility bills:

Bedrooms Current Utility Allowance

$84

Proposed Utility Allowance$80 $7

1 BR Apt $82 $16

MSHDA Mgmt. 451A2 (6/18)

For 30 days after the Utility Allowance Decrease Notice posting date, a copy of the materials submitted to MSHDA in support of the utility allowance decrease request will be available during normal business hours at:

MSHDA or the Department of Housing and Urban Development (HUD) may approve, adjust, or disapprove the proposed utility allowance decrease upon reviewing the request and comments. When MSHDA advises management in writing of the decision on the request, the residents will be notified, If the request is approved, any allowanbe change will become effective in accordance with the terms of existing leases and only after the residents receive at least a 30-day notice of the approved utility allowance decrease.

Residents of the above named development, or if the resident's wish, legal or other representatives acting for an individual resident or group of resident may inspect or duplicate the supporting materials.

During the 30-day period after the notice posting date, residents of the development may submit written comments on the proposed utility allowance decrease to management at:

Resident representatives may assist tenants in preparing those comments. If, at MSHDA's request or otherwise, material changes occur during the comment period in the materials available for inspection and duplication, management will notify the residents of the change(s), and the residents will have the greater of a 15-day period from the date of the additional notice or the remainder of the original 30-day comment period to inspect and copy the materials as changed and to submitcomments on the proposed utility allowance decrease. These comments will be transmitted to MSHDA, along with management's evaluation of the comments and the request for the utility allowance decrease. Residents and resident representatives may also send a copy of their comments directly to MSHDA at the following address:

Michigan State Housing Development Authority

735 E. Michigan Ave.Attention: Kristin Lautner/Kyle Shaffer

Lansing, MI 48912

Tenant Notification and Rights

MSHDA Mgmt. 451A2 (6/18)

1Development Name: MSHDA #: Budget Year:Development City: Year, Last Bldg PIS: Family:County: Elderly:Program: Total Units:

Management Co.:Use Factor?

E-mail: Include Water & Sewer? NoPhone: Ext.: Use New Ecology?

U/A Submission Date: Proposed U/A Effective Date:Name of Electric Co.: Name of Gas Co.:

FAMILY ELDERLY Sample Begin Mo/Yr:

4 4 4 4 6 5 5 5 65 5 5 6 5 5 5 5 65 5 5 6 5 5 5 5 65 5 5 6 5 5 5 5 65 5 5 6 5 5 5 5 65 5 5 6 5 5 5 5 65 5 5 6 5 5 5 5 6

Other 2BRow 5 5 5 6 5 Other Condo 5 5 5 6Other 3BRow 5 5 5 6 5 Other 4BRTH 5 5 5 6

44 44 44 52 45 45 45 54

FAMILY ELDERLY Sample Begin Mo/Yr:

4 4 4 6 5 5 1 4 4 65 5 5 6 5 5 1 4 4 65 5 5 6 5 5 1 4 4 65 5 5 6 5 5 1 4 4 65 5 5 6 5 5 1 4 4 65 5 5 6 5 5 1 4 4 65 5 5 6 5 5 1 4 4 6

Other 2BRow 5 5 5 6 5 Other Condo 5 1 4 4 6Other 3BRow 5 5 5 6 5 Other 4BRTH 5 1 4 4 6

44 44 44 54 45 9 36 36 54

2 BR Apts2 BR TH3 BR Apts3 BR TH

5

3 BR TH

Adj Units

Samp Size

555555

3 BR Apts

3 BR Apts

4 BR TH

4 BR TH

4 BR TH

2 BR Apts

Avg/ unit/ month

55

2 BR TH

2 BR TH

#N/A#N/A#N/A

B. Sampling for each BR size

10/1/2018

2019#N/A

1/1/2019

#N/A#N/A

1 BR Apts

555555555

Samp Size

Actual Sampl

Studios

Studios

1 BR Apts2 BR Apts

3 BR TH

1 BR Apts

Exclu-sions

Adj Units

Samp Size

Actual Sampl

Avg/ unit/ month Unit type

GAS UTILITIES

B. Sampling for each BR size

Studios

Adj Units

# of Units

Exclu-sions

#N/ASampling

Unit typeExclu-sions

Adj Units

Actual Samp

Avg/ unit/ month

ELECTRIC UTILITIES

September-17August-17A. Sampling for each BR size

Avg/ unit/ month

Samp SizeUnit type

# of Units

Exclu-sions

MSHDA UTILITY ALLOWANCE SUMMARY

Studios

Sample Begin Mo/Yr: August-17 September-17A. Sampling for each BR size

Unit type# of

Units

U/A Contact Name:

Actual Samp

Sample Begin Mo/Yr:

# of Units

N/A

#N/A

1 BR Apts2 BR Apts2 BR TH3 BR Apts3 BR TH4 BR TH

MSHDA Mgmt. 451B1 (06/18)

City:

Amt. %F -69 -627%E -71 -710%F -72 -720%E -73 -730%F -74 -740%E -75 -750%F -76 -760%E -77 -770%F -78 -780%E -79 -790%F -80 -800%E -81 -810%F -82 -820%E -83 -830%F -84 -840%E -85 -850%F -86 -860%E -87 -870%

Comments:

1010

101010

$11$10

$10

1010

$10$10

101010

1110

Development Name: #N/A

ADJUSTMENT

2 BR TH

3 BR Apt

$10

PROPOSED U/A

3 BR TH

$10$10$10$10

101010

$10

$10$10$10$10$10$10

$92$93$94

$88$89$90$91 10

10

CALCULATED U/A

FACTORED U/A New Ecology

10

$10$96

Based upon the U/A information provided on this form, the following adjustments have been made to the utility allowances:

Budget Year: 2019

UTILITY ALLOWANCE OWNER CERTIFICATION

4 BR TH

Other

Other

2BRowCondo3BRow4BRTH

UNIT TYPE$80$81$82$83$84$85

Studio

1 BR Apt

2 BR Apt

$86$87

CURRENT U/A

$97

$95

MSHDA Mgmt. 451B1 (06/18)

1Development Name: MSHDA #: Budget Year:Development City: Year, Last Bldg PIS: Family:County: Elderly:Program: Total Units:

Management Co.:Use Factor?

E-mail: Include Water & Sewer? NoPhone: Ext.: Use New Ecology?

U/A Submission Date: Proposed U/A Effective Date:Name of Electric Co.: Name of Gas Co.:

ELECTRIC GAS

62 41 62 21 20 62 21 62 21 2125 6 19 19 20 8 25 6 19 19 20

5 5 5 22 11 5 5 5 2042 42 20 28 13 42 42 20 20

6 5 1 1 22 17 6 6 6 206 6 6 22 21 6 6 6 205 5 5 25 26 5 5 5 20

Other 1BR TH 10 10 10 25 28 Other 1BR TH 10 10 10 20Other 2BR TH 9 9 9 25 31 Other 2BR TH 9 9 9 20

170 52 159 96 209 170 27 164 101 181

ELECTRIC GAS

62 40 62 21 20 62 62 21 1062 42 20 20 19 62 62 21 10

5 5 5 19 14 5 5 5 227 7 7 19 16 7 7 7 139 5 4 4 19 18 9 9 9 13

11 11 11 19 23 11 11 11 1313 13 13 32 24 13 13 13 13

Other 1 15 15 15 19 27 Other 1 15 15 15 26Other 2 14 14 14 24 43 Other 2 14 14 14 26

198 87 151 110 190 198 198 116 146

2 BR Apts2 BR TH3 BR Apts3 BR TH

8

# of Units

Exclu-sions

91214151922

2934

Studios1 BR Apts

Sample Begin Mo/Yr:

38

2019#N/A

9/15/2018

#N/A#N/A

N/A

#N/A

#N/A#N/A#N/A

12

10/31/2018

162125

4 BR TH

Unit type# of

UnitsExclu-sions

Adj Units

Samp Size

Avg/ unit/ month

4 BR TH

2 BR Apts2 BR TH3 BR Apts3 BR TH

2 BR TH 2 BR TH3 BR Apts 3 BR Apts

2 BR Apts

4 BR TH 4 BR TH

1 BR Apts2 BR Apts

3 BR TH 3 BR TH

Studios

Exclu-sions

Adj Units

Samp Size

Actual Sampl

Avg/ unit/ month Unit type

ELDERLY UNITS

B. Sampling for each BR sizeAdj

UnitsAvg/ unit/

monthSamp Size

Actual Sampl

Unit typeExclu-sions

Adj Units

Actual Samp

1 BR Apts

FAMILY UNITS

January-17January-17A. Sampling for each BR size

Avg/ unit/ month

Samp Size

7

B. Sampling for each BR size

81 BR Apts

SECTION 8 UTILITY ALLOWANCE SUMMARY

Studios

U/A Contact Name:

Studios

#N/ASampling

Sample Begin Mo/Yr: May-17 Sample Begin Mo/Yr: April-17A. Sampling for each BR size

Unit type# of

Units

Actual Samp

Sample Begin Mo/Yr:

# of Units

MSHDA Mgmt. 451B2 (06/18)

City:

Amt. %F -73 -1043%EF -66 -413%EF -61 -265%E -63 -286%F -57 -197%E -62 -248%F -50 -132%E -59 -197%F 7 7%E -54 -146%F 4 4%E -54 -138%F 12 11%E -49 -107%F -27 -39%E -32 -49%

Comments:

Development Name: #N/A Budget Year: 2019

UTILITY ALLOWANCE OWNER CERTIFICATION

2 BR TH

$23$22$29

$7

$16

PROPOSED U/A - Sec 8/236

$25

CALCULATED U/A

$65

$38$30$97$37$96$39

$106$46$69

3097

$86$87$88$89$90$91

$96$97 65

3796391064669

7

16

2322292538

Other

1BR TH1

2BR TH2

$92$93$94$95

$82

3 BR Apt

3 BR TH

4 BR TH

Other

Based upon the U/A information provided on this form, the following adjustments have been made to the utility allowances:

Studio

1 BR Apt

2 BR Apt

FACTORED U/A New Ecology

ADJUSTMENT

$83$84$85

UNIT TYPECURRENT

U/A$80$81

MSHDA Mgmt. 451B2 (06/18)

PROPOSED UA EFFECTIVE DATE:

MSHDA #:City:

FEFEFEFEFEFEFEFEFE

MSHDA APPROVAL:

Rent Adjustment Analyst

Collected and analyzed electric and/or gas billing and consumption data based on MSHDA sampling methodology in accordance with MSHDA's UA policy and IRS regulations.Retained the utility billing and consumption data at the development.Notified affected residents 90 days prior to any change in the utility allowance.All units included in the average are separately metered and billed to the resident for each individual utility source.

Other

Other

OWNER'S UTILITY ALLOWANCE CERTIFICATION

County:

Development Name:

January 1, 2019

#N/A#N/A

Signature

Name

Acting on behalf of the development owner, I certify that the development's management agent has taken the following actions:

#N/A

Based on the sampling, the utility allowances below are effective as of the proposed effective date above:

1 BR

2 BR Apt

2 BR TH

3 BR Apt

$11$80Studio

UNIT TYPE

$81 $10

CURRENT U/A PROPOSED U/A

3 BR TH

$82$83$84$85$86

$10

$10$10$10

$10

4BRTH

$92$93$94$95Condo

3BRow

4 BR TH

2BRow

Date

$10$10

Title

$96$97

$10$10$10

Date

$10$10

$10

$87$88$89$90$91

$10

$10$10

MSHDA Mgmt. 451C1 (06/18)

PROPOSED UA EFFECTIVE DATE:

MSHDA #:City: County:

FEFEFEFEFEFEFEFEFE

MSHDA APPROVAL:

Rent Adjustment Analyst

Other

Other

OWNER'S MSHDA UTILITY CERTIFICATION (SECTION 8)

Retained the gas and/or electric billing and consumption data at the development.

HUD Project No.:

Development Name:

September 15, 2018

#N/A#N/A

Signature

Name

Acting on behalf of the development owner, I certify that the development's management agent has taken the following actions:

#N/A#N/A

Based on the sampling, the utility allowances below are effective as of the proposed effective date above:

Followed the instructions in the HUD Notice H-2015-14 (Methodology for Completing a Multifamily Housing Utility Analysis) to generate the proposed utility allowances.

1 BR

2 BR Apt

2 BR TH

3 BR Apt

$7$80Studio

UNIT TYPE

$81

CURRENT U/A PROPOSED U/A

3 BR TH

4 BR TH

1BR TH

$82$83$84$85$86

$96$39

$106

$25$38$30

$22$29

$46

2

$92$93$94$951

2BR TH

$87$88$89$90$91

Agree to notify affected residents 30 days prior to any rent increase when the proposed utility allowance amounts below indicates utility allowances have decreased from the current utility allowances.

Date

Date

$69$65

Title

$96$97

$97$37

$16

$23

MSHDA Mgmt. 451C2 (06/18)

Tenant Utility Calculation Worksheet

0Total for Mth 1

Total for Mth 2

Total for Mth 3

Total for Mth 4

Total for Mth 5

Total for Mth 6

Total for Mth 7

Total for Mth 8

Total for Mth 9

Total for Mth 10

Total for Mth 11

Total for Mth 12

Total Units Reported

Average billed

Electric - Family STUDIO Only $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00

Unit # or Address Current Tenant Name Jan-00 Jan-00 Mar-00 Apr-00 May-00 Jun-00 Jul-00 Aug-00 Sep-00 Oct-00 Nov-00 Dec-00Total mths

reportedAverage

billed

MSHDA Mgmt. 451D (6/18) Page 1 of 36

Tenant Utility Calculation Worksheet

0Total for Mth 1

Total for Mth 2

Total for Mth 3

Total for Mth 4

Total for Mth 5

Total for Mth 6

Total for Mth 7

Total for Mth 8

Total for Mth 9

Total for Mth 10

Total for Mth 11

Total for Mth 12

Total Units Reported

Average billed

Electric - Family STUDIO Only $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00

Unit # or Address Current Tenant Name Jan-00 Jan-00 Mar-00 Apr-00 May-00 Jun-00 Jul-00 Aug-00 Sep-00 Oct-00 Nov-00 Dec-00Total mths

reportedAverage

billed

Sum $0.00

MSHDA Mgmt. 451D (6/18) Page 2 of 36

MSHDA Mgmt. 451E (6/18)

Timeline Visual Summary 150 Days 90 Days 60 Days 30 Days 0 Days Contact Utility Utility Change Submit Tenant Rent Change Utility and Company Notice Date* Comments Notice Date Rent Change Effective Non-Section 8 Sec 8 Only Date Utility Package Utility Package Due to MSHDA Due to MSHDA *Tenant Notification date 150 Days – Contact the utility company for tenant utility expenses and tenants for one monthly utility statement. 90 Days – Tenant Notification Date

Non-Section 8 Developments – This date is always October 1st and the application for utility change due to MSHDA.

Section 8 Developments – The tenant comment period begins. 60 Days – Section 8 developments only. Last day to submit tenants’ written comments and the Management review of the tenant comments. Also, utility packages are due to MSHDA. 30 Days – Last day to send Rent Change Notification to tenants. Rent increases require a minimum of 30 days’ notice. 0 Days – Utility Allowance implementation date and Rent Change date. Non-Section 8 developments – January 1st. Section 8 developments – HAP anniversary date.

MSHDA Number: #N/A

Authorization to Release Utility Costs and Information

Name:

Address:

Unit #:

City/State/Zip:

Release Utility Information to the following Company:

Property Name: 0

Printed Name:

Attention: Resident Manager

Address:

City/State/Zip:

Authorization:I, the above named resident of a Michigan State Housing Development Authority Financed development, give my permission to release utility consumption and billing data during my residence to the property's management company listed above. This information is required annually in order to compile the utility allowance required by the Internal Revenue Code Section 42 (pursuant to Treasury Regulation 1.42-10) and/or other funding sources for this property.

I understand that my utility consumption and costs must be reviewed annually in order to update the utility allowance at the property listed below. By signing this document, I understand that this permission will remain in effect during my occupancy at the address listed above, unless and until this authorization is revoked by me in writing.

Signature:

MSHDA Mgmt. 451F (6/18)