HUD 52485 Demonstration of Financial Feasibility

Demonstration of
Financial Feasibility

U.S. Department of Housing
and Urban Development
Office of Public and Indian Housing

OMB Approval No. 2577-0157 (exp. 3/31/2020)

Public reporting burden for this collection of information is estimated to average 1 hour per response, including the time for reviewing instructions, searching
existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. HUD may not conduct or sponsor,
and an applicant is not required to respond to a collection of information unless it displays a currently valid OMB control number. This collection of information is
required for developing a public housing project pursuant to HUD regulations 24 CFR 905. The information will be used to provide HUD with sufficient
information to enable a determination that funds should or should not be reserved or a contractual commitment made. This information collection is mandated
pursuant to the U.S. Housing Act of l937. The information requested does not lend itself to confidentiality.

Part 1. Estimate of PHA and Tenant Utility Costs
Project Number:

Public Housing Agency:

Estimated Amount per Unit per Month
PHA Furnished
Tenant Purchased
Quantity
Cost
Quantity
Cost

Type of Utility or Fuel
a. Water Services. Uses:
Household
□

□

Lawn and Shrubs

Gals. $

b. Sewage Disposal.
c. Electricity.
Uses:
Lighting
and
Refrigeration
□

□
□

Domestic Hot Water
Other: (identify)
d. Gas / LP.
Uses:
Domestic
Hot
Water
□

□

Other: (identify)

e.Oil (Type No.:
Domestic Hot Water
□

334455

□
□

Cooking

□

Cooking

□

). Uses:
Cooking

□

Air Conditioning

□

Space Heater

□

Space Heater

Space Heater

223344

KWH

Gals

$

$

112233

$

KWH

Therms $

$

$

Therms $

Gals. $

Gals

$

f. Heating Labor. (Project Oper. Plant Only)

$

$

g. Other Utilities or Services. (specify)

$

$

h. Sub Total - PHA Furnished Utilities.

$

$

i. Sub Total - Tenant-Purchased Utilities.

$

$

j. Total PHA and Tenant-Purchased Utilities. (h plus i)

$

$

Part 2. Estimate of Anticipated Operating Expenses
a. Administrative Expense:
Salaries (including maintenance supervision), legal, staff training, travel,
accounting fees and other administrative expenses.

Estimated Amount per Unit per Month
$

b. Tenant Services Expense: Salaries and other expenses incurred in providing tenant services and the
cost of other tenant services activities.

$

c. Utilities Furnished by PHA: Water, electricity, gas, fuel, sewer and other utilities. Also utilities labor and
other utilities expense (from item 1h, above).

$

d. Ordinary maintenance and Operation: Labor, materials, and contract costs for all routine
maintenance including janitorial and watchman service. Exclude expense applicable to utilities.

$

e. Protective Services: Labor, material and contract costs for protective services.
f. Insurance: Fire and Extended coverage, Public Liability, Workmen's Compensation, Employers'
Liability, boiler, automobile, burglary, theft and robbery, and Fidelity Bonds, as appropriate.
g. Payment in Lieu of Taxes: (Part 3,c (below) minus Part 2,c (above) times 10 percent).
h. Other General Expenses: Terminal leave payments, employee benefit contributions, collection
losses, and other general expenses.
i.
j.

$
$
$
$

Sub-Total (a through h)

$

Provision for Nonroutine Expenses and Reserve (10 percent of i )

$

k. Estimated Monthly Operating Expenses ( i plus j )
Previous edition is obsolete

$

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form HUD-52485 (1/2014)

Part 3. Estimate of Average Monthly Contract Rent of the Proposed Project per Unit Month
a. Estimate of Average Monthly Gross Rent
b. Estimate of Tenant-Purchased Utilities ( from item 1i, above)

c. Estimate of Monthly Contract Rent (a minus b)
d. Estimate of Average Monthly Contract Rent Based on 97% Occupancy (.97 x c)

Part 4. PHA Determination The PHA determines that (mark and complete "a" or "b")
a. The project's estimated operating expenses, (item 2k) $
will not exceed the estimated operating income(item 3d) $

$

b. The project's estimated operating expenses, (item 2k) $
will exceed the estimated operating income (item 3d) $

$

(item 2k minus item 3d) and an operating subsidy of that amount will be require
ed .b y $
To be feasible, this amount cannot exceed item 5d (below).

$

Part 5. Maximum Allowable Operating Subsidy per Unit Month

$

a. The PUM allowable expense level

$

b. Plus: The PUM allowable utilities expense level (from item 1h, above, less utilities labor and
other utilities expense)

$

c. Minus: The PUM contract rental income (item 3d, above)

$

d. Maximum PFS operating subsidy (5a plus 5b minus 5c)

$

Part 6. Signature
I hereby certify that all the information stated herein, as well as any information provided in the accompaniment herewith, is true and accurate.
Warning: HUD will prosecute false claims and statements. Conviction may result in criminal and/or civil penalties. (18 U.S.C. 1001, 1010, 1012; 31 U.S.C. 3729, 3802)
Typed Name and Title of Authorized PHA Official:

Signature:

Date:

x
1. Purpose. This form shall be used to demonstrate financial feasibility
of a project submitted by a Public Housing Agency (PHA) under the
Public Housing Program pursuant to 24 CFR 905 and the Capital
Fund Guidebook.
This form is to be used or all Public Housing development
methods: conventional, turnkey or acquisition.
A project may be approved by the HUD Field Office if it is
determined that the project is financially feasible based on the PHA’s
demonstration of financial feasibility pursuant to this form. This form is
not to be used by PHAs located in Alaska, Guam, Puerto Rico or the
Virgin Islands (See Capital Fund Guidebook). A revision of this
financial feasibility test is mandatory if the PHA proposes to change
any physical element of the proposed project or its method of
management or plans to increase services, and such change would
materially increase the estimated operating costs of said project.
2. Prepared By: The form HUD-52485 is prepared by the PHA, with
assistance if necessary from the HUD Field Office.
3. Number: Original and one or more copies.
4. Distribution: A PHA shall submit the original to the applicable HUD
Field Office with the PHA Proposal for the project and shall retain a
copy for its files. A PHA may also be requested by the Field Office to

Part A, Life Cycle Cost Analysis of Utility Combinations. The PA
shall use the cost associated with the utility combination which HD
has determined is most suitable for the project. Estimates for water
and sewage disposal shall be determined separately and entered in
Part 1, Items a and b. Costs shown on HUD-51994 will be allocated
to PHA furnished or tenant purchased and the results entered into
Part 1, Items h and i.
Part 2. - Estimate of Operating Expenses. The PHA shall submit an
estimate of its average monthly operating expenses for its first year
of operation. This estimate shall be based on the actual expenses of
a project which is comparable from a physical and tenancy stand point
and is located in or about the locality of the proposed project. The
expense estimates shall be based on current
data and shall not include a projected inflation factor.
a. Administrative Expenses. Enter the PUM estimated total ad
ministrative expense for the project. Do not include an estimate for
audit fee
b. Tenant Services Expense. Enter the PUM estimated total expenince
for any tenant services programs projected for the project.
c. Utilities Furnished by PHA. Enter the PUM estimated total expenince
for utilities to be supplied by the PHA for the project.
d. Ordinary Maintenance and Operation. Enter the PUM estimated total
form HUD-52485 (1/2014)

specifically waives PILOT. In the Indian Housing Program PILOT may
only be paid on taxable land. If PILOT rate is less than ten (10)
percent of shelter rent, entry should reflect such reduced rate.
h.
Other General Expenses. Enter PUM estimated total expense
for other general expenses (e.g., terminal leave payments, collection
losses, employee benefit contribution and in the Indian Housing
Program payment for services offered by other government agencies) for the project.
Part 3. - Estimate of Average Monthly Contract Rent of the Proposed
Project. The estimate of operating income shall be the projected
income for the first fiscal year of operation (without oper-ating
subsidy) based upon 97 percent occupancy by a tenant body
selected in accordance with PHA regulations (based on Sections 3
and 6(c) (4) of the Act and 24 CFR Part 960 and in the case of the
Indian Housing Program 24 CFR 905).
a.
Estimate of Average Monthly Gross Rent. To determine the
estimate of average monthly gross rents, the PHA shall, first, deter-mine
the range of incomes of low-income families residing in rental units in
the county or jurisdiction which the project would serve. The families
shall be classified by household types (elderly/non-elderly) and by
income intervals. The percentage distribution of these incomes shall be
recorded in established income intervals. The PHA shall determine the
estimated rental income of the project by projecting occupancy which
approximates the percentage distribution of families and by applying its
current rent determination standards.
The PHA shall submit an analysis, with Form HUD-52485 that will
indicate the average monthly gross rent that would result if the PHA
selected families with a broad range of incomes representing the
distribution of incomes of the eligible population. The PHA shall take into
consideration the size of the families most likely to occupy the proposed
project if it were constructed at the proposed location. The PHA should
use whatever data is available to it to determine the income ranges in the
community This could include such sources as census data., CDBG
applications, wage surveys, etc. which should be updated to reflect
current income levels. The Field Office may have data which could be of
assistance to the PHA. If there are not a sufficient number of eligible
applicants in a particular range or ranges existing on the PHA’s waiting
list to fulfill the requirements stated above regarding the tenant body, the
PHA must submit its proposed plan to attract applicants whose incomes
will permit tenant selection resulting in the project housing tenants with a
distribution of income reflecting the distribution of incomes of the potential
population in the community. If the PHA proposes to acquire a project
occupied in whole or part by low-income families, who will be retained as
residents, the estimate of average monthly gross rent shall include the
income distribution of those families as well. Based upon the instructions,
provide a realistic estimate of the average PUM gross rent.
b. Estimate of Tenant Purchased Utilities. Insert figure calcu-lated in
Item 1i of this form.
c. Estimate of Monthly Contract Rent. Subtract tenant pur-chased
utilitties PUM (item 3b) from the Average Monthly Gross Rent ( item
3a) to determine the amount to be entered on this line.
d.
Estimate of Average Monthly Contract Rent Based Upon 97
Percent Occupancy.
Enter the product of Average Monthly
Contract Rent (Item 3c) multiplied by 97 percent (.97).
Part 4. - PHA Determination.
a. If the estimated operating expenses for the first fiscal year following
the End of the Initial Operating Period (EIOP) does not exceed the
estimated operating income (without operating subsidy) for the same
period, the project is financially feasible. In this case check block “a”
and do not complete the remainder of this form.
b. If the estimated operating expenses exceed the estimated
operating income (without operating subsidy), check block “b” and
complete remainder of this form to determine if the project will be
financially feasible within the limitations of the available Perfor-mance
Funding System (PFS) operating subsidy.
Part 5. - Maximum Allowable Operating Subsidy.
General. The PUM amount of operating subsidy which can be
Previous edition is obsolete

considered will be based upon whether the proposed project is to be
included in the Consolidated Annual Contributions Terms and Conditions
(ACC)
whether
the proposed project is to be placed in a separate
(CACC)
or
Annual Contributions Terms and Conditions (ACC).
Existing PHA/New Project - CACC. If an existing PHA is proposing a
new project, and wishes to incorporate the project into its CACC, the
maximum allowable PUM amount of operating subsidy which may be
used in the determination of the financial feasibility test shall be
based on the following:
a. The PUM Allowable Expense Level for the project shall be based
upon the current PUM Allowable Expense Level for the CACC
recomputed to incorporate the characteristics of the project on all
required PFS forms. The recomputation of the Allowable Expense
Level shall be accomplished pursuant to Section 990.105 (d) (3) of 24
CFR Part 990, Subpart A, Operating Subsidy - Performance Funding
System. The PHA’s current fiscal year PFS shall be recomputed to
incorporate the project. In the recomputation no data regarding the
project shall be in the Current Year Columns, but shall be shown in
the Requested Year Columns. For this recomputation, the estimated
date of EIOP for the proposed project shall be the last day of the
current fiscal year. For purposes of this recomputation, the project will
be considered to be one year old.
b. Plus: The PUM Allowable Utilities Expense Level (do not include
Utilities Labor and Utilities Other).
c. Minus: The PUM estimate of the average monthly contract rent
based upon 97 percent occupancy.
Existing PHA/New Project to be Placed in Separate ACC or New PHA
/ New Project. If project is to be in a separate ACC, the maximum
allowable PUM amount of operating subsidy which may be used in
the determination of the financial feasibility test should be based on
the following:
a. The PUM Allowable Expense Level for the proposed project shall
be determined to be the same as the current Allowable Expense
Level of a PHA already in management which is located in or about
the locality of the proposed project, if the proposed project and the
comparable PHA are generally alike in physical characteristics and
tenancy. Comparison should exclude a project age comparison. If the
project is not the first project of the PHA, the comparable PHA might
be the PHA itself. The usable Allowable Expenses Level would have
been developed pursuant to Section 990.105 of the PFS Regulation.
The HUD Field Office shall provide the appropriate Allowable
Expense Level upon request.
b. Plus: The PUM Allowable Utilities Expense Level (not to include
Utilities Labor and Utilities Other).
c. Minus: The PUM estimate of average monthly contract rent based
upon 97 percent occupancy.
d.
Initial Operating Subsidy Eligibility. If the proposed project is
deemed to be financially feasible, the PUM Allowable Expense Level
determined in accordance with this subparagraph will be the basis for
the PUM Allowable Expense Level to be used in the project’s first fiscal
year in management. This PUM will be adjusted by an inflation factor(s)
for the intervening years. Instructions for the computation of the first
fiscal year PUM Allowable Expense Level are contained in
Performance Funding System Handbook 7475.13.
Completion of Part 5.
a. PUM Allowable Expense Level. Enter the PUM computed using
the instructions above.
b.
PUM Allowable Utilities Expense Level. Enter the PUM cost
of PHA furnished utilities shown in Item 1h of this form less Utilities
Labor and Other Utilities Expense.
c.
PUM Contract Rental Income. Enter the PUM rental income
amount as shown in 3d above.
d. Maximum PFS Operating Subsidy. Item 5(a) plus Item 5(b) minus
Item 5(c). If this amount is equal to or greater than the deficit (Item 2k
minus Item 3d) shown in Item 4b of this form, then the proposed
project shall be determined to be financially feasible.

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form HUD-52485 (1/2014)