Sample: USDA budget narrative
The narrative and utility allowance support that go with Form RD 3560-7 for a Section 515 property.
Sample with a fictional clientBudget narrative, fiscal year 2027
Summary: the budget raises basic rent by 3.2% to cover higher insurance and maintenance costs, updates utility allowances from the latest utility company data, and keeps the reserve account on its required funding schedule.
Income
| Line | 2026 budget | 2027 proposed | Change |
|---|---|---|---|
| Rental income at basic rent | $214,080 | $220,930 | 3.2% |
| Laundry and other income | $1,900 | $1,900 | — |
| Vacancy and contingency (2%) | –$4,320 | –$4,457 | 3.2% |
Expenses
| Line | 2026 budget | 2027 proposed | Change |
|---|---|---|---|
| Property insurance | $18,400 | $22,100 | 20.1% |
| Maintenance and repairs | $31,000 | $33,200 | 7.1% |
| Utilities (owner-paid) | $14,800 | $15,300 | 3.4% |
| Management fee | $22,240 | $22,240 | — |
| Real estate taxes | $9,600 | $9,800 | 2.1% |
| Reserve account deposit | $12,700 | $12,700 | — |
Insurance rose after the carrier's renewal in June 2026; the owner obtained three quotes and the budget uses the lowest. Maintenance includes the second year of the hallway flooring replacement in the capital plan.
Utility allowance analysis
Tenants pay electricity. Allowances are recalculated from 12 months of consumption data supplied by the utility company for 9 of the property's units, applied to the rate in effect on September 1, 2026.
| Unit size | Current allowance | Proposed | Change |
|---|---|---|---|
| 1 bedroom | $78 | $84 | $6 |
| 2 bedroom | $96 | $103 | $7 |
Tenant notice
Tenants receive written notice of the proposed rent and utility allowance changes and of their right to comment, posted and delivered at the time the budget is submitted, as USDA's rules require. [A real package includes the notice, ready to post.]
Attachments in a real package
- Form RD 3560-7, multi-family housing project budget
- Capital budget and reserve schedule
- Utility company consumption data and calculation
- Tenant notice and certification of posting
- Insurance quotes