---With the Fed raising interest rates again recently, deal frequency in the Multifamily Affordable Housing sector has slowed to a crawl. While loan assumptions have gained some appeal, the majority of investors cannot afford the higher equity required. One recourse you may have if you are a buyer in the market, or a seller for that matter, is the utility allowance. If you are considering buying or selling a Multifamily Affordable Housing Asset this year or if you are experiencing challenges getting financing with lenders, consider an audit of the current utility allowances in place at the subject property. We just performed one for a client and you can see below, once these new allowances take effect the additional net operating income in the form of marginally increased rents will be appreciable. This will serve to increase cap rates which will of course affect the value of the asset come the time of sale. This particular building was challenging in that it is not submetered, rather it employs a ratio billing or “RUBS” system whereby ownership pays the utilities and then residents reimburse them based on a square footage allocation with a common area deduction. The audit required a forensic analysis of the utility bills over the course of 12 previous months, and as you can see the benefit is significant.

WASHINGTON, Oct 7 (Reuters) - The U.S. Treasury moved to preserve and expand the supply of affordable housing on Friday by finalizing a new tax credit income rule that may qualify more housing projects and extending deadlines for when they must be placed in service. The finalized income-averaging rule for the Low-Income Housing Tax Credit now allows a broader mix of income levels among residents of qualifying projects, by using an average, rather than fixed limits for all units. The rule clarifies a 2018 law passed by Congress to allow developers more flexibility in qualifying for the credits. Previously, projects qualifying for the tax credit, which can offset up to 70% of an affordable housing project's costs, needed to make at least 20% of the units available to residents earning 50% of the local area's median income (AMI) or 40% of the units at 60% of AMI. A Treasury official said the new regulation allows for at least 40% of a project's units to meet an average of 60% of AMI - allowing more higher-income tenants to mix with lower-income residents.

On this particular property, we will have saved the owner an additional $10,321 in Net Operating Income over the course of the upcoming year.

On this particular property, we will have saved the owner an additional $42,034 in Net Operating Income over the course of the upcoming year.