There are two main ways to utilize this exemption.

@Shelby Ek Do you need to activate the utilities in order to qualify for the loan you are getting?

If you made housing free the same bleeding hearts would be complaining about utilities.

BUT, get a solid quote on utilities.

In Chicago you request a CHA Burden sheet and that gross number minus utility allowance will be what you get in addition to making sure bedroom size is adequate.  

all materials, all labor costs to others, Not you, utilities, interest payments, permits, licenses, auto/truck expenses, tools needed are all deductable. 

Quote from @Fernando Martin-Gullans: Hey y’all, I’m a retail investor with 2 SFH rentals worth a combined ~$650k looking to utilize some of my stored equity to buy more out-of-state properties, but I’m not quite sure how best to proceed given that my interest rates are incredibly low (leaning me away from refinancing) and neither property is owner-occupied (which I believe prevents me from using a HELOC).

Would you be willing to describe a bit more about how you determined your utility caps? 

This property is gonna cash flow over $1000 a month after we're all said and done with utilities mortgage and more.

In many places there are some utilities provided by the municipality.