Almost all PHAs use Utility Allowances. A utility allowance is a rough estimate of what the utilities will run with “conservative use”, and are added to the rent to come up with the Gross Rent, which is what gets compared to the payment standard.
A utility allowance is not the same thing as a utility reimbursement, which is an amount the housing authority would send you every month to help cover the utilities. This is what you will use to pay for utilities once you move in (note it will be less than the total utility allowance because there is almost always a requirement to contribute something toward your housing cost).
Here’s an example:
You are renting an apartment for $1500/mo. You have to pay electric and gas, but water and sewer are included in the rent. Based on that information and the number of bedrooms, your Utility Allowance is $150 (this will be calculated by the PHA based on however they do it). This means your Gross rent is actually $1650 ($1500 + $150). If the payment standard is less than that total, you would be denied. If it is more than $1650, you’d be good to go.
Let’s say you get approved in this example. Let’s say your PHA has a minimum contribution of $50. Even though you have no income, you’d be expected to come up with a way to contribute that much every month. When you move in, your PHA would send you $100/mo as a utility reimbursement payment. ($150 allowance - $50 minimum contribution).
Hope that helps make it clearer. A lot of people confuse Utility Allowance and Utility Reimbursement.
