Congress established the max housing allowance back in 2002. It is the LOWER of your actual expenses or the fair rental value of your residence, furnished, and utilities. Of course, only distributions from a IRS qualified church plan, such as our retirement plan, are eligible for this treatment. Income from other sources/investments is not. A common question is whether the amount used for a down payment can be excluded. The simple answer is yes, but only to the extent it falls within the fair rental value amount so effectively the answer is NO.
Please also refer to the annual 1099R memo and worksheet that goes to all ministers with distributions from their UUA retirement account. The UUA Board designates that up to 100% of such distributions can be applied to your housing allowance UP TO THE FEDERAL LIMIT described above.