The Acting Director for the HUD Office of Asset Management and Portfolio Oversight recently provided guidance for participants in HUD Multifamily Housing Programs regarding how to handle the benefits of community solar programs that are now being offered by a growing number of states. The purpose of these programs is to benefit multifamily residents by offering access to affordable renewable energy. Community solar arrays have multiple subscribers who receive a credit on their utility bill due to the energy generated by the solar project. These credits can be applied to both owner-paid (i.e., common area costs) and tenant-paid utility bills. In cases where buildings are master-metered and residents do not receive a utility bill, the owner receives the full credit.
Solar providers and owners are working to determine how owners can distribute the financial benefits of community or rooftop solar to residents who reside in master metered buildings. HUD has surveyed states that are in the process of implementing different benefit delivery models as part of their community solar offerings, including direct cash payments, and providing additional building amenities like a security guard or shuttle bus. HUD is now providing guidance on which benefits should be considered income to the household for the purpose of determining rent or eligibility. The guidance applies to all project-based Section 8 properties, as well as (1) Section 202; and (2) Section 811. Since projects utilizing the Low-Income Housing Tax Credit (LIHTC) are required to follow HUD Section 8 rules in the determination of income, this guidance also applies to LIHTC properties. Following is a description of the types of benefits that may be offered and whether those benefits should be included as income:
- Job Training & Workforce Development: This is generally a combination of social services, community supports, job training, and/or education that positions a person for workplace success. Benefits in this category are not income.
- Additional Support Staff: Hiring additional staff to serve residents or building needs. Examples include resident services staff, building security guards, leasing specialists, maintenance staff, etc. This is not annual income. Additional staff being hired to support the residents is not included as income.
- Facility Upgrades: Improvements to the building and/or its grounds. Examples include energy efficiency upgrades, playgrounds, community gardens, renovation, bike racks, etc. This is not annual income.
- Free or Reduced Cost High-Speed Internet Service: Free Wi-Fi is an amenity and is not considered income. Discounted Wi-Fi services are also not considered income.
- Financial Literacy Programs & Services: Such services may include access to free training, classes, or resources related to budgeting, managing, and paying off debts, and understanding credit and investment products. This is not income.
- Wellness Programs & Services: Such services are often provided to residents as a preventive measure to help avoid illness and improve general health. This is not income.
- Shuttle Services: Free shuttle services for residents may include small buses or vans. This is not income.
- Community Events & Support for Resident Associations: Hosting events for residents or providing financial support for resident associations. This is not income.
- Increased Operating or Replacement Reserves for the Property: This is not income.
- Resilience Centers: These are spaces that provide critical services during power outages or extreme weather events. Examples include community heating or cooling centers. This is not income.
- Non-monetary donations: These are donations such as food, clothing, or toiletries. HUD cannot provide specific guidance as to whether this benefit would be counted as income. A number of factors have to be considered, including the frequency of non-monetary donations. If donations (other than food) are provided on a regular, recurring basis, the value of those donations should be determined and counted as annual income.
- Gift Cards or Cash Payments: Gift cards are provided to families, including gift cards for gas, groceries, and department stores. Generally, gift cards and cash payments to a family will be counted as income unless a specific HUD income exclusion applies. E.g., if a family receives one gift card, it should be excluded as a temporary, nonrecurring, or sporadic gift. Or, if a family receives one lump sum cash payment, it would be excluded as a lump sum addition to family assets.
This guidance does not add or remove any current type of income that must be counted. It is being provided for guidance purposes only.