Affordable Housing Compliance Corner

Frequently Asked Questions

Find answers to frequently asked questions grouped by each program, maybe you’ll find what you need right here. If not, use the questions form above to submit a question to our team. Please wait 72 hours before submitting your question again.

What happens if I accidentally overcharge a resident on their rent?

The IRS takes overcharging of rent very seriously. In fact, once a unit is determined to be out of compliance with the rent limits, the unit ceases to be a low-income unit for the remainder of the year. This means that the potential financial repercussions for the owner could be significant.
The unit isn’t back in compliance until the first day of the next year, even if the owner has already lowered the resident’s rent and refunded them any overpayments made.

If the owner has overcharged rent on a unit meeting a State income set-aside (under 50%), the auditing agency will issue a letter of State non-compliance and will require the owner to reimburse the resident all overpaid monies. Failure to timely adjust the rent and reimburse the resident could hinder the owner’s future applications for tax credits.

How do I calculate gross rent? What if the Household receives section 8 rental assistance?

Gross rent is calculated by adding the following:

• Tenant paid rent + Utility Allowance + Mandatory Fees = Gross Rent
• The rental amount paid by section 8 is not counted in the above equation

I’m completing recertifications for residents at my property. Do I have to get third-party verification of everyone’s income?

Yes. A recertification is completed in the same manner as initial certifications.

If recertifications aren’t required after the first initial certification on a 100% income restricted property, why do I need to get residents to fill out the Annual Eligibility Certification (AEC) form?

Each household must complete the AEC (Annual Eligibility Certification) form in order to continue certifying the Student Status of each household member, as well as providing minimal compliance information needed for monitoring purposes.

What happens if I find out at recertification that one of my residents was over-income at the time they moved in to my property?

If the property manager discovers non-compliance they should contact the Allied Orion Compliance Department and let them know what they found so that they can receive instructions on how to correct the non-compliance. In most cases, non-compliance that is found and corrected prior to a state agency review does not need to be reported to the IRS as long as it is corrected prior to the date the state agency review letter is dated.

Is back-up documentation required for the AEC?

Back-up documentation is not required, unless the household is comprised of full-time students or the potential to become a full-time student household.

We manage a 4% tax credit/bond-financed property. Our property is 100% low-income restricted below 60% AMI by our tax credit agreement, but 20% of our units are also bond restricted. Do we need to recertify the bond units every year?

No. You can follow the rules outlined above for 100% income-restricted properties.

What is the Effective Date of the initial certification and when is the first recertification due?

The Effective Date of the initial certification is the same date as the commencement date of the lease. This is the date when a resident can move in to the unit. The income verifications must be dated within 120 days prior to the commencement of the lease.

Recertifications can be done up to 120 days ahead of the certification date and must be effective as of the anniversary date of the initial certification date. For example, if a household moves into a unit on April 23, 2015, their initial certification date is 4/23/15 and their recertification date is 4/23/16

An applicant has indicated on their application that they want to include a live-in aide. The issue is that the live-in aide is married with two kids. Are the live-in aide’s spouse and kids allowed to live in the unit with this applicant?

In order to treat the live-in aide as a Live-in Aide (LIA) as defined by HUD (meaning that the LIA’s income is excluded from gross income and she has no rights to the unit), the LIA’s family members cannot live in the qualified unit with her and the applicant. However, if the applicant is willing to consider the LIA a member of the household, then you can qualify the LIA and her family members. In this case, the person would not be classified as a Live-in Aide according to HUD’s definition - all their income would be counted and they would all have rights to the unit and be parties to the lease.

Can a live-in aide be a relative?

A live-in aide is a person who lives with an elderly, disabled or handicapped individual(s) and is essential to that individual’s care and well-being, not obligated to the individual’s support and would not be living in the unit except to provide the support services. A relative may be considered a live-in aide if the individual meets all of the above requirements, especially the last.

A husband and wife qualified at the time of move in. They get divorced and the wife moves out. The husband has a new roommate and their combined income now exceeds the household income limit but is still under the 140% level. Does this household still qualify?

Yes, because the household was initially qualified and the change in household composition does not constitute a new household since the husband is still residing in the unit.

A household qualified at the time of move in. Four months after moving in, the household wants to add their 22 year old son. Does this household still qualify?

Allied Orion Compliance rules state that no household changes can occur during the first six months, so that questions regarding the household’s income- qualified status can be avoided (this applies to adults, not to the birth or adoption of a child). If a household wants to add an adult member after the initial six month period this person must be screened for income and assets. They must then be approved by the Allied Orion compliance department before being added to the lease and the existing Income Certification form. During the qualification process they must also be given the Tenants Rights and Resources Guide and is required to sign the Acknowledgement of Receipt.

A property has elected two low-income set-aside levels (e.g., 80% of the units at 60% AMI and 20% of the units at 50% AMI). A resident moves in and is qualified under the 60% set- aside. However, during the year, the resident’s income declines and at the time of re-certification his income now falls below 50% of median. Can the Owner re-classify the resident to the 50% set-aside?

Yes, as long as the appropriate rent (50%) is also charged. Keep in mind that the Owner is under no obligation to do an interim review to re-determine the resident’s income, nor is the Owner obligated to re-classify the resident to a lower income set-aside at the time of recertification. The Owner may assign a lower income set-aside to a resident even if the property has met its minimum set-asides.

Can a property reassign a qualified household to a higher income set-aside at recertification?

Yes, provided that the property’s income set-aside commitments have been met AND proper written notice is given to the household of the increase.

I have a Market-Rate Unit in two of my buildings. If a previously qualified low-income household’s income in one of these buildings goes way up, when can I raise their rent to market?

If the income upon recertification exceeds the 140% then the following applies: The “Next Available Unit Rule” goes into effect. The unit must remain tax credit qualified until a market rate unit in the same building becomes available. Once the market rate unit is occupied by a qualified low income household the designation “swap” is made. You must contact the Allied Orion Compliance department for prior approval to swap designations.

What if I have a household where some or all household members do not have Social Security numbers or other approved citizenship documentation?

This household could still be eligible. The tax credit and bond programs do not require proof of citizenship or legal status. As long as the certification process confirms that a household is income-qualified, the household may reside in the property. The property may need to use alternative methods to confirm income sources for affected household members.

Can I ask applicants to provide proof of citizenship or immigration status?

Yes, but requests must be uniform (all applicants are asked the same questions) and nondiscriminatory.

Is a Social Security Number the only acceptable documentation of identity?

No, several types of documentation are acceptable such as Work Visas, picture identification and Alien Registrations.

What is a Common Area?

Common Areas are areas that are reasonably required for the property and include such things as swimming pools, other recreational facilities, community buildings and parking areas. These areas must be made available to all residents at no extra cost. If the property has a community room and one of the residents wants to use it for a meeting or similar use, the Owner is not allowed to charge the resident for using the area. The Owner is allowed to assess a reasonable charge for cleaning.

Can Owners charge fees for assistance with daily living, such as meals and medical professional assistance?

Yes, as long as these fees are entirely optional. Mandatory fees of any kind, including assisted living fees, must be clearly optional or the Owner risks loss of tax credits for those units affected. Your marketing materials and application forms must clearly explain these fees as optional. Written materials should include rules for opting in or out of service packages and staff should be trained to explain options to residents.

A resident does not own a television, but she was told by the property manager that she had to pay an additional $20.00 for cable. It was stated that this was mandatory since the majority of the residents voted in favor of having cable. Can the property manager do this?

Yes, but if the charge for cable is mandatory then it is treated as a utility and deducted from the Maximum Allowable Rent along with the other utilities. This also applies to mandatory telephone for security entrances as an additional fee.

May I charge month-to-month “fees” to residents who do not want to execute a new lease (after the initial required twelve-month term expires)?

The month-to-month lease “fee” is considered additional rent. As long as the rent + fee + utility allowance does not exceed the Maximum Allowable Rent limit, you may charge this “fee.” We recommend simply having a different published rent for long-term leases vs. month-to-month leases and avoiding calling this a “fee.”

May a property charge for parking?

It depends. Parking is generally considered part of the property’s Common Areas. If the Owner financed the parking areas with tax credits, they must be available to all residents on a non-discriminatory basis and the Owner may not charge a fee for their use. If an Owner has provided uncovered parking spaces for each unit and also has optional covered parking, or garages that were not financed with credits, it is then permissible to charge for the optional parking, if the covered parking is not included as a Common Area.

Can I charge a pet deposit and a non-refundable cleaning fee?

Yes. There is no restriction on charging a pet deposit or cleaning fees. Properties may determine a reasonable pet fee/deposit to charge residents. That fee can be non-refundable upon move-out. Any fee scale that is charged must be consistent for all residents (same amount for same size dogs, cats, etc.). If the pet is considered a service, therapy, or assistance animal, a pet fee/deposit cannot be charged.

Can I charge a month-to-month pet rent in addition to an up-front pet fee/deposit?

Yes, since having an animal is optional, such a fee would not be considered as part of the rent calculation. Again, however, you may not charge a monthly pet rent for service, therapy, or assistance animals.

May we charge extra for washers and dryers?

Assuming your question about charging for washers and dryers is about putting them in units at the resident's request and that there are other laundry facilities on site or close by (coin washers and dryers). There is no problem with charging for these washers and dryers as long as it is optional and not a requirement of leasing the unit. You may not tell a potential resident that he or she may not rent a particular unit because they don't want to pay extra for the washer/dryer and management doesn't want to move the appliances.

Other Fees
 Security Deposits must be refundable.
 Re-letting fee.
 Application/screening fees must not exceed “out of pocket expenses” to the Owner. No fee may be charged for recertifications.
 Late rent fee.

How are income/rent limits calculated for tax credit properties?

HUD annually creates 50% and 60% limits for the tax credit program. States like Texas which also have additional set-asides (30%, 40%) then calculate the limits for those set-asides based on the HUD 50% limit. Limits may go up or down from year to year based on the latest census data and other household income data HUD uses to calculate the limits.

As a result of federal legislation passed in 2008, tax credit properties which placed in service prior to 2008 are safeguarded from seeing their applicable limits go down. If limits in a particular county go down, pre-2008 properties can use higher “HERA” limits for their properties, rather than the current, lower limits.

How/when should I round a household’s income and/or assets during calculation?

No. Rounding is not permitted.

Can we use documentation provided by the applicant/resident to verify income?

Printed statements from state or federal agencies may be used to verify income as long as they are current within 120 days of the certification date and provide all of the necessary information. (Note: we will accept statements or printouts from Social Security beyond 120 days that show the set gross benefit for the current year.)

Can we accept pay stubs in lieu of an Employment Verification form?

Yes. We will accept pay stubs in lieu of an Employment Verification when documented attempts to obtain a verification has failed. Documentation of the attempts must be submitted with the pay stubs.

If an applicant anticipates Social Security Income on their application but benefits have not been awarded yet, do we still have to verify and count the income?

Please be aware that if someone states on their Application or Supplemental Rental Application form that they are applying for SS/SSI benefits within the next 12 months, you MUST attempt to verify what those future benefits might be. See below:

1. When someone indicates that they have or will be applying for SS/SSI benefits, you need to ask them when they expect to receive it and how much they expect to receive and document this in the file. If they know they will be receiving SS/SSI benefits of any kind in the near future, then you must count that income.

2. If they are of retirement age and have applied or plan on applying within the next 12 months for Social Security (SSA) benefits you must have them go onto the Social Security website at http://www.ssa.gov/retire/estimator.html and use the Benefits Estimator to estimate their benefit income.

3. If they have applied for Social Security Disability (SSI) you need to ask them if they have received anything back from SSI. If so, request a copy to see the status on their claim.
If they have not been denied, then you must assume that they will be getting the full SSI benefit as income for the next 12 months. If they have been denied, ask if they have filed an appeal. If so, request anything that they have showing the status of the appeal. If there is no conclusive documentation that they may win the appeal, then you do not need to assume any SSI benefits. If they have an attorney working on the appeal for them you should request a statement from the attorney regarding the status of the appeal and likelihood that SSI will be obtained and at what amount – count this accordingly. If they indicated that they will be applying for SSI disability benefits you do not need to count any, as this process usually takes several months or longer before benefits are awarded.

4. If the household has immigrated or refugee and applied or plans on applying for SSI, you must assume that they will be getting the full SSI benefit as income for the next 12 months.

NOTE: An applicant who is widowed or divorced may be eligible to receive the higher of their own SS benefit amount or that of their deceased or ex-spouse.
Therefore if an applicant is recently widowed or divorced their SS benefit amount may increase.

If an applicant’s wages might soon be affected by a minimum wage increase (either state or local), how do I verify the change?

If there is an imminent change to the minimum wage in the area where an applicant/resident is employed, a property manager should pay close attention to whether or not the employer has indicated an anticipated increase in the rate of pay on the Employment Verification form. If the employer says yes, then count the wage increase as of when the employer plans to implement it. If the employer indicates there will not be a change in the employee’s rate of pay, then the monitoring agency should not require that one be added to the calculation.

If an employer indicates no anticipated change, but a property manager wishes to verify whether an imminent change to minimum wage will affect an applicant/resident’s rate of pay, if the employer indicates they are not sure about a raise, or if the employer will not complete an Employment Verification form, the property manager should use the Employment Telephone Verification form to ask the employer if they are anticipating an increase in the employee’s wages due to a change in the minimum wage or for any other reason within the next 12 months.

How do you handle single parents who have dependents living in a unit with them, are recently separated and have no court order for support?

The parent must complete a non-child support statement.

Is Child support counted as income?

Child support payments must be included when determining household eligibility. If a household does not receive the court ordered child support that they are entitled to, the amount must still be included, unless two requirements are me: 1) The household certifies that the support is not being received. AND 2) The household provides documentation that reasonable efforts to collect the support have been made, including filing with courts or agencies responsible for enforcing payments.

Can I submit verification from EIV to prove a tax credit property applicant/resident’s income eligibility?

If a HUD-regulated property uses HUD approved forms to verify household and income/asset info, do they still need to complete tax credit verification forms?

Yes. Unless the HUD approved form is approved by the Allied-Orion Compliance Department. Some HUD forms do not require the same information as the state agency form.

For a household whose income I verified using HUD forms, can I just utilize the 50058 or 50059 report?

No. The state Income Certification must be utilized.

How do I tell if someone is self-employed?

If someone gets a 1099 or 1099-MISC instead of a W-2, then that person is considered self- employed. If the person is unsure how their income is categorized, contact the employer to see if they will complete a Verification of Employment form.

How is income for UBER or LYFT drivers categorized?

UBER/LYFT drivers (or anything similar) are considered self-employed.

How do I verify the income of someone who is self-employed?

The applicable household member must complete a Self-Employment Verification form and provide required supporting documentation. If they have been self-employed long enough to have filed a tax return, then this documentation should include a signed Return along with a Schedule C. If they have not been self-employed long enough for the income to show on a tax return, they should provide a Profit and Loss Statement along with any applicable back-up documentation. For example, UBER/LYFT drivers should provide a printout showing their monthly income.

So if someone is newly self-employed and just gives me a Profit and Loss Statement, I can call them qualified, right?

Not necessarily. For the protection of your owner’s credits, you should be very careful when verifying self-employment on a new business. You may wish to ask for a previous year’s tax return and/or a statement from Employment Security to confirm that the applicant’s previous wages are in line with their projections for the next 12 months (since you have no third-party verification of the projected income, just the applicant’s statement) and that they are not already employed elsewhere or are already running another business that may impact your income calculations.

Do I count all of the income from a fulltime student over 18 when calculating the households’ annual income?

If the student is employed but is not the head, co-head or spouse, and is a dependent of the Household, you count only the first $480 of their wages for the entire 12-month period. Also, count all unearned income (Social Security benefits, TANF, unemployment, etc.) for any students. Verification of fulltime student status is required.

For students who are the head, co-head or spouse, count all earned and unearned income.

Is student financial assistance considered income for purposes of qualifying a household for a tax credit unit? If so, what parts do I count?

No, unless the tax credit unit or resident is receiving some form of Section 8 rental assistance (e.g., Project-Based Section 8, or Housing Choice Voucher).

If the student receives some form of Section 8 rental assistance, you must count as income any amount of assistance that is in excess of the amounts which cover tuition and any other required fees and charges. If the student is over the age of 23 and has children or the student is living with his/her parents who are receiving Section 8, all financial assistance is excluded from annual income determinations.

For additional information about how to count a student’s financial assistance, see Chapter 5 of HUD’s Occupancy Handbook 4350.3. Also see HUD’s PIH Notice 2015-21, published in December 2015, which provides good examples of how to define “required fees and charges.”

The Work Number no longer offers free verifications to LIHTC properties. Are we allowed to use pay stubs instead of obtaining a verification from this or other companies like it that charge a fee?

The bottom line with income verification is to show us that you attempted to obtain third- party documentation. Accordingly, when verifying wages for an employee whose employer utilizes The Work Number:

1. Send the Employment Verification form to applicant’s employer.

2. If no response to Employment Verification form or the employer redirects you to The Work Number or other agency, contact the employer by phone to follow up using the Employment Telephone Verification form. At the very minimum, try to get the applicant’s job start date from the employer and confirm that employer only uses The Work Number.

3. Obtain 6 current consecutive pay stubs from applicant to show their wage activity.

4. From the pay stubs, determine the resident’s current pay rate and YTD information. If pay stubs do not give you enough info to determine the YTD wages or you do not have the job start date, you will need to obtain a printout from the employer to calculate YTD wages. Once you have both current and YTD wages, use the higher amount to determine annual gross income for the applicant.

Do I have to get pay stubs if I have a verification from The Work Number or other agency?

No, unless The Work Number or other agency information is not accurate or complete.

Do I have to include VA Aid & Attendance Benefits in household income?

According to HUD’s RHIIP Listserv Posting #284, any money received by the family that is specifically for, or in reimbursement of, the cost of medical expenses for any family member is excluded from annual income. Because of this, the owner must verify any amount provided for A&A which is used for medical expenses and exclude the verified amount. Any portion of the benefit not being used for medical expenses must be included as income.

How do I verify the circumstances of an adult household member with no income from any source?

The individual must complete the Certification of Zero Income form and provide written explanation of how they will pay their rent and living expenses.

A prospective resident does not currently have a job and has no other income. However, he or she is looking for and expect to find a job soon. How do I calculate their income?

Generally, the manager must use current circumstances to determine anticipated income. Thus, the property manager would calculate the resident’s projected annual income by annualizing the resident’s current income. If the current income is zero, then the annualized income is zero.

However, if written third-party verification confirms that changes are expected to occur
during the next twelve months, then the property manager should use that verification to determine the total anticipated income. Thus, if the prospective resident is now earning zero, but is under contract to start a job mid-year, and anticipates receiving $12,000 in income from that job during the year, then $12,000 should be included as income. If the prospective resident is receiving unemployment, calculate it for 52 weeks or until the planned start date of another job.

When would I use the Questionnaire for Applicants with Zero Income?

When further clarification is needed as to how an applicant will pay their rent and living expenses.

How do I calculate the cash value of an asset?

The cash value of an asset is the market value minus reasonable costs that would be incurred in selling or converting the asset to cash. The reasonable costs that may be deducted include: 1) penalties for early withdrawal, 2) broker/legal fees assessed to sell or convert the asset to cash,
3) settlement costs for real estate transaction, and 4) loans on the asset.

We sometimes see applicants who have their government benefits or other forms of income deposited directly onto a debit card that is just a cash card, it doesn’t connect to a checking or savings account. How do we verify the amount of money on these cards?

A print out from an ATM or similar machine which shows the card number and the balance on the card is sufficient for verification. Count the balance on the card as an asset. If money is being deposited on the card on a periodic basis (e.g., Social Security benefits, regular family cash assistance), count the periodic payments as income, and verify them based on what type of income they are.

A recent applicant had a Certificate of Deposit (worth $100,000) she divided into quarters, distributing three portions to three other people (not members of the household), and keeping one portion for herself. She did this one month prior to moving into our property. How should we value this asset?

Include the entire amount of the CD when determining the applicant’s income, but separate it into two different asset categories. The amount the applicant currently owns ($25,000) should be counted as a regular asset and the earnings calculated accordingly. The $75,000 that was given away should be counted as an asset that was disposed of for less than fair market value. It should be counted for two years from the date of disposal, so count the $75,000 at initial qualification and at the first annual recertification.

When valuing an asset, do I need to determine the resident’s original investment?

No. To determine the value of an asset, start with the current value of the asset (annuity or IRS balance) and deduct any fees and penalties for converting to cash, plus any tax penalties.

Example:

Ms. Hanson has an annuity with a current value of $68,000, earning annual interest of approximately 4.85%. If Ms. Hanson withdraws the balance, she would need to pay $7,500 in surrender fees plus $2,500 in tax penalties.

The cash asset value of her annuity for purposes of determining her total assets is $68,000 minus $10,000 = $58,000 (added to other assets to determine the imputed interest).

The income from Ms. Hanson’s annuity is $68,000 x 4.85% = $3,298.

How do I determine the cash value of a whole or universal life insurance policy?

The cash value is the surrender value of the policy. This information is available in the policy or from the insurance company.

Do I need to get a market analysis to verify the value of real estate owned by an applicant?

The goal is to obtain approximate market value and to document your reasonable attempts to get this information. Copies of real estate tax statements (including those obtained from online county property value tools); a Realtor’s record of recent comparable sales in the real estate’s vicinity, and letters from realtors can all be used to establish the value of real estate. One good indicator of value is a copy of the listing agreement if the property is currently for sale. The best indicator of actual value would be a copy of the HUD-1 Statement issued at closing, showing net proceeds to the seller.

In the event that there is a significant difference between the appraised and the market value of a property, and the applicant is close to the income limit, you might want to think about a market comparison, but it is not necessarily required. If all else fails, document the file with attempts to get information, and use a self-certification as the last option.

Does market value equal the asset’s cash value?

No. You must deduct the total amount of mortgages plus the cost of selling the real estate to determine the cash value of an asset.

What if the resident sold the real estate on a contract and receives payments on a mortgage or Deed of Trust?

The mortgage or Deed of Trust current value (amount owed to resident holding the DOT) is considered an asset. If the resident receives monthly principle and interest payments, the interest portion of those payments must also be counted as income.

What do I need to get to proof that a house is in foreclosure? Is a notice on a credit report enough?

No. Have the applicant bring in back-up to the foreclosure.

Do I subtract the amount the household lost in the foreclosure from the Adjusted Gross Income?

No, you would not subtract the amount lost in a foreclosure when figuring income. Provided the foreclosure can be documented, no adjustment to income should be made for the house- positive or negative.

A prospective resident has a vacation timeshare that she occasionally rents to the public. Do I include the rent that the resident will receive when determining the resident’s income? Is there anything else I need to know about vacation rentals or other like assets?

A vacation timeshare is considered an asset. Therefore, income includes any amount to which household members have access. If the total cash value of all the household’s assets is more than $5,000, then income includes the greater of a) the actual amount of money derived from the asset or b).06% of the market value of all the household’s assets (called the HUD imputed income amount). For example, “Sally” has an interest in a timeshare and the market value of her interest is $25,000. The .06% percent of $25,000, or the imputed income amount, is $15. Sally occasionally rents the timeshare out, and next year, Sally expects to receive $200 in rental income after paying all expenses. Because the imputed income amount is less, you must include $200 in Sally’s gross annual income estimation.

How long must I keep resident income qualification paperwork?

First Year records must be kept for six years beyond the initial compliance period. (15 years plus six years after filing first return = 22 years).

Can Social Security and Supplemental Security Income benefits statements be used as third- party verification of disability?

Yes, Social Security disability payments are adequate verification of an individual’s disability status. Receipt of veteran’s disability payments may also qualify a person as disabled, depending on the amount of information included on the third-party document. The resident must also acknowledge that they have a disability by checking “yes” on the Special Needs Certification form.

We have a property that has an Elderly Commitment for 55 and older residents. Must we allow children in our property?

It depends. Fair Housing laws allow Elderly properties to exclude children as long as all rental eligibility and marketing information clearly identifies the property as an “adult” elderly facility.
Also, if you allow a child in one unit, you must allow children in all other units.

Do all household members in an Elderly property have to be 55 or older?

No. However, you must actively market and rent each unit to Elderly households, and each unit must have at least one individual who is 55 or older.

What happens if a 55-year old and a 30-year old live together at a 55+ property and the older person leave or dies?

The 30-year old may remain in the unit. HUD allows up to 20% of the units to be under 55 for purposes of attrition (the 80% Elderly rule). If, at any time, the percentage of units with elderly residents falls below 80%, the property is no longer considered Elderly, and must be open to all age groups.

Does the 80% Elderly rule apply to 62 or older properties?

No, all residents in a 62+ property must be age 62 or older.

An eligible resident moves in and two months later he goes back to school fulltime. Is he still qualified?

It is permissible for a unit to be occupied by a fulltime student where there are other residents in the household that qualify. However, when a unit becomes occupied entirely by fulltime students (defined as individuals enrolled fulltime at an educational organization for at least five calendar months during the year), the unit becomes disqualified unless one of the following exceptions applies: The unit is occupied by at least one individual who is:

1. Enrolled in a job training program receiving assistance under the Workforce Investment Act (formerly JTPA) or other similar program funded by a state or local government agency.
2. Receiving benefits under Title IV of the Social Security Act (e.g. TANF).
3. A single parent and the single parent is not a dependent of another individual, nor are their children dependents of another individual except another parent of such children.
4. Married and eligible to file a joint return.
5. A student that was previously under the care of a state foster care program.

We have an international student who attends school fulltime but receives zero credits. Schools generally confirm student status by the number of credit hours taken, so it is possible that the college may verify their status as part time. Should we consider these students full time or part time?

International Students are almost always considered fulltime Students. This is because their Student Visa specifically requires these students to attend school fulltime to remain in the United States. Households with International Students would need to have at least one other household member who is not a fulltime student to remain a qualified household.

Do married students need to actually file a joint return to qualify as an exception?

No. It is only necessary to verify that married students are eligible to file jointly, not that they actually did

Can legally married same-sex couples qualify for the “married, filing jointly” student exception?

Yes

Is there now another exception to the fulltime student household for those persons who previously received foster care assistance?

Yes. If you have a household composed entirely of income-qualified fulltime students and one of those students was previously under the care of a state foster care program, the household remains qualified for a tax credit unit.

The manager must obtain written verification from a state foster care administrative entity that the student was previously in a foster care program.

If I have a written confirmation from an applicant’s ob-gyn that this applicant is pregnant, and she is a fulltime student, may I rely on the pregnancy verification that one other person in the household is not a fulltime student, therefore it will be a two-person household: Mom is fulltime, baby is not?

While an unborn child can be counted toward household size when determining the income limit (or determining qualification for the Large Household Commitment), it would not count as an exception to the Student Rule until the baby has been born.

Regarding a current resident that is intending to start college - how often do we need to verify the fulltime or part-time status? If she goes fulltime one quarter and then part-time the next, does that allow her to continue to live here?

Students that are “fulltime” for more than five calendar months during the calendar year are generally prohibited from tax credit housing unless they meet one of the exceptions described above. Whether a student is attending school “fulltime” is determined by the school that the student is attending. Property management would need to make an initial determination of whether a household was likely to exceed the five-month rule during the calendar year, and if so, the resident should not be allowed to move in (unless the student is part of an otherwise qualified household). It is important to inform prospective residents about the student rule and ask that they inform management immediately of any student status changes. Student status should be verified on every semester through the registrar’s office.

Units are vacant for a variety of reasons, including fires, floods, mold issues, or residents who trash units upon move-out. What exactly is considered a “casualty loss?”

Casualty losses are sudden, unexpected damages - generally due to natural causes such as hurricanes, tornados, floods and earthquakes. Damages incurred over long periods of time like dry rot, termites, mold damage, poor construction or resident-caused destruction, do not qualify as “sudden” casualty losses. However, regardless of the cause, Owners must make repairs to units with damages in a timely manner to maintain qualified basis and prevent possible loss of credits.

We have an applicant who qualified for a unit at our property. They signed a twelve month lease, took the unit keys and gave us a rent check on Monday. On Tuesday the applicant came in, turned in the keys and told us her check would bounce and that she was not going to rent the unit. Can we count this unit as initially qualified by this applicant?

As long as you have thoroughly documented the circumstances leading to this vacancy, emphasizing that all signs indicated this applicant intended to rent long-term, you may count this unit as qualified.

In a mixed-income tax credit property, can a previously qualified over-income household move to another unit and remain qualified?

Yes, as long as the household moves/transfers within the same building, they remain qualified.

These rules are particularly important during the first credit year. If a qualified household moves from one unit to another, the unit they occupy at the end of the first credit year is “qualified”.
The unit they left would revert to its previous “empty” status and need to be occupied by another income-qualified household to be considered a tax-credit-qualified unit.

What about moving households in a 100% tax credit low-income property?

Since the IRS no longer requires annual recertifications of households (in a 100% low-income property), households that were initially income-qualified may move within the same project, without restriction. Owners should ensure that they selected the multi-building project box on IRS Form 8609 (box 8b) if there is more than one building in the project.

When a household transfers within the same project does their move-in date change to the date they transferred?

No, The certification date follows the household NOT he unit. Also, the two units swap status, one household cannot qualify two units.

If a household moves from one project to another must they be certified as a new applicant?

Yes. If a household moves from one project to another this is not a transfer and requires you to certify the household under current circumstances.

Does this also apply to 100% tax credit properties that were also financed by Tax-Exempt bonds?

Yes, as long as the property is 100% low-income restricted, and all units are income-qualified at move-in.

Are the 140% rules now the same for 4% tax credit properties (i.e., tax credit property also financed with tax-exempt bonds) as they are for 9% properties?

Yes, the Next Available Unit Rule is now a Building Rule vs. a Project Rule. In other words, if the income of a household in a bond and tax-credit financed property increases above allowable levels, that household will continue to be considered “qualified” if the next available unit in the same building is rented to an income-qualified household. This provision does not apply to properties financed with bonds and other sources, but with no tax credit financing.

Can we maintain a Model Unit at our property?

Yes, but Model Units must be rotated on a regular basis and always be available to interested renters.

I’d like to use an alternate method to calculate the utility allowances at my property. Is this allowable under the tax credit program?

Yes, however there are strict guidelines regarding the methods allowed by the state monitoring agency. It is best to contact your Regional Supervisor and the Allied Orion Compliance department before proceeding so that all options may be discussed with the property owner before proceeding or before an actual recommendation is made to an owner client.
Utility allowance schedules cannot be retroactively approved.

When structuring proformas, I usually just plug in the area PHA Section 8 utility allowances. However, they tend to be high because the properties that go into those numbers tend to be older and less energy-efficient. What alternate methods are available?

Utility allowance rules are governed by the IRS and outlined in Section 1.42-10. If the property is not regulated by HUD, you may use an estimate from a local utility company or several other alternate methods as suggested by your state monitoring agency, however any utility allowance proposed must first be approved by the state monitoring agency.

I have a household with a section 8 voucher what is the utility allowance for that unit?

The correct utility allowance for a unit occupied by a household with a section 8 voucher is the utility allowance schedule from the PHA that issued the voucher.

What should I do if I find that a household was overqualified at move-in during a tax credit lease up?

If you determine that a household is found to be over the income limit at move-in on an initial lease- up certification, you should immediately email or call the Allied Orion Compliance department to inform them what was found. At that time they will advise you on how to proceed.

What if the household found to be over-income at move-in was not the one to initially qualify the unit for credit?

If this is not an initial lease-up unit and you discover noncompliance at any time prior to an annual report request, you should immediately report your findings to the Allied Orion Compliance department for further direction.

If a household member is added to an existing household, does the new household member need to be provided the Tenant Rights and Resources Guide?

If the person joining the household is considered an adult and will be signing the Income Certification, then yes, that person must be provided the Tenant Rights and Resources Guide and must sign the Acknowledgement of Receipt.

My property is a post 15 property do I still need to maintain a waitlist?

Yes. Every property must develop procedures detailing how the Development takes applications and opening, closing, and screening applicants from the waitlist.

Since the Texas Department of Housing and Community Affairs (TDHCA) now requires us to have an AFHM Plan do we need to send it to our local HUD Office or the state for approval?

No. Unless if required as part of the initial application or as otherwise required by a specific funding source.

Do tax credit properties need to meet Fair Housing Accessibility requirements?

Yes. All properties built after 1992 must be accessible to disabled persons. Ground floor units on buildings with four or more units and all units (and Common Areas) in buildings with elevators must be accessible to disabled persons.

Is something special required when an applicant or resident signs his or her name on a form with an “X” or is physically unable to sign?

We recommend that managers add a simple attestation (by the person witnessing the signature) below the resident signature block. The attestation should state something like “On (insert date) I witnessed (insert full name) make an “X”. Or, “On (insert date), (insert name) reviewed this form with me and acknowledged it to be accurate and complete. He/she is physically unable to sign the form and asked that I sign on his/her behalf.”

How is the expiration date for the regulatory agreement period calculated?

For tax credit properties, the date is calculated from the first year the Owner takes credits, which can be either the Placed-in-Service year or the following year.

When determining household size can I count an unborn child?

No. An unborn child is not included in determining household size.

What is a LI and VLI household?

Households earning between 31% and 50% of AMI are “very low-income” (VLI), and those earning at
or below 80% of AMI are “low-income” (LI).

Does HUD publish different income limits for HOME units?

Yes. These limits MUST be used on the HOME designated units.

Do HOME units us the same rents as tax credit units?

No. Maximum rents for HOME units are referred to as “HOME Rents”. There are two types – High HOME rents and Low HOME rents.

Do HOME units us the same rents as tax credit units?

No. Maximum rents for HOME units are referred to as “HOME Rents”. There are two types – High

When is a full annual income recertification due?

Every sixth (6th) year of the development’s affordability period.

What is the requirement to verify household income?

Two (2) months of source documentation at both initial and every 6th year of the affordability period.

What is required during the intervening years?

A households written certification is allowable unless there is evidence that the household statement failed to completely and accurately provide information about the household size and income or the household discloses that their income is over the 80% limit.

Can I use the Section 8 verification form at initial or during the 6th, 12th, 18th years of the affordability period?

No. The Section 8 verification form however can be used during the intervening years.

Is the income from a live-in aide counted?

No. A live-in aide is not considered a household member if documented correctly therefore income is not counted.

Am I required to verify all assets?

Yes. Assets must be included as part of the household income. A third party verification of all assets, including those for households which have less than $5,000 in total assets is required.

Am I required to do Affirmative marketing?

Yes. Affirmative marketing requirements now apply to all projects with 5 or more HOME assisted units AND to all HOME-funds.

What is the Effective Date of the initial certification and when is the first recertification due?

The Effective Date of the initial certification is the same date as the commencement date of the lease. This is the date when a resident can move in to the unit. The income verifications must be dated within 120 days prior to the commencement of the lease.

For HOME units, the recertification date is the first day of the month for residents with move in dates within that month. Example: Mary Smith moves into Greenwood Manor on 10/15/14. Her subsequent recert effective date will be 10/1 each year. Mike Jones moves into Greenwood Manor on 6/2/14. His subsequent recert effective date would be 6/1 each year. The key is to ensure that the recertification effective date occurs within 12 months of the previous recertification effective date.

How do I calculate gross rent? What if the Household receives section 8 rental assistance?

Gross rent is calculated by adding the following:

• Tenant paid rent + Utility Allowance + Rental Assistance + Mandatory Fees = Gross Rent
• The rental amount paid by section 8 is included in the above equation.

What are the Student Eligibility Rules?

To be eligible for assistance, any adult who attends an institute of higher learning (full or part-time) must be one of the following (NOTE: The focus is on adults age 18 – 23):
• A dependent of the household living with parent
• Over age 23
• A veteran
• Married
• A parent with a dependent child(ren)
• A disabled individual who was receiving assistance prior to November 30, 2005
• Be independent from parents OR 2. have parents who are income-eligible

Students: Households in HOME units at LIHTC properties will need to meet BOTH HOME and LIHTC student eligibility criteria. Neither rule is more conservative than the other, or takes precedence, so both rules must be applied.

Florida Only! - SHIP Program - What is the SHIP program?

State Housing Initiatives Partnership (SHIP) Program Overview
The State Housing Initiatives Partnership program (SHIP) provides funds to eligible local governments as an incentive to create partnerships that produce and preserve affordable homeownership and multifamily housing. The program was designed to serve very low, low and moderate income families.
SHIP funds are distributed on an entitlement basis to all 67 counties and 52 Community Development Block Grant (CDBG) entitlement cities in Florida based on population. SHIP dollars may be used to fund emergency repairs, new construction, rehabilitation, down payment and closing cost assistance, impact fees, construction and gap financing, mortgage buy-downs, short-term acquisition of property for affordable housing, matching dollars for federal housing grants and programs, homeownership counseling, and other activities as required by legislative action.

Florida Only! - What is the targeted population?

Households with area median incomes (AMI) that are categorized as very-low (at or below 50% AMI), low (at or below 80% AMI), moderate (at or below 120% AMI) and incomes up to 140% AMI

Florida Only! - Do verification forms need to be within 120 days?

Yes. Verifications are valid for 120 days from the date of receipt by management. If verifications are more than 120 days old, the management must obtain new verifications. This applies to all verifications including award letters for Social Security, Social Security Disability, Veterans Benefits, etc.

Florida Only! - What is a Very Low-Income Person or Household?

A person or household whose annual gross income does not exceed 50 percent of the area median income, as determined by HUD, with adjustments for smaller and larger families. Florida publishes these figures annually, and updated charts may be obtained from the Florida Housing Finance Corporation (FHFC).

Florida Only! - What is a Low-Income Person or Household?

A person or household whose annual (gross) income does not exceed 80 percent of the area median income, as determined by HUD, with adjustments for smaller and larger families. Florida publishes these figures annually, and updated charts may be obtained from the Florida Housing Finance Corporation (FHFC).

Florida Only! - Which household member’s income should be counted when calculating total annual income for the household?

(A) Annual income (both earned and unearned) of the head of the household, spouse or co-head and other adult members of the household, 18 years or older. Annual income of individuals under the age of 18, who have entered into a lease under state law and are acting as the head, co-head or spouse for the household. Such persons are sometimes referred to as emancipated minors (e.g., a person under the age of 18 who is married). The first $480 in earnings of a full-time student over the age of 18 who is not the head, co-head or spouse. Note: All of the full-time student's asset income is counted. Other income (any income that is not employment income, such as Social Security, SSI, AFDC benefits) of children under the age of 18 who are members of the household (dependents) as well as all adults.

(B) ALSO INCLUDE ANY UNEARNED OR DIVIDEND INCOME OF: Children who are temporarily absent due to placement in a foster home. Children who are Students who are away at school but who live with the family during school recesses. Emancipated minor(s), residing with the household as a member (and as a dependent), rather than the head, spouse or co-head. Income of temporarily absent family members who are still considered household members. Income of persons confined to a hospital or nursing home and considered a household member

Florida Only! - Is there anyone’s income I don’t count?

Any income of a live-in-aide or attendant. Any income attributable to the care of a foster child or adult. Foster adults are considered to be individuals with disabilities, unrelated to the tenant family, who are unable to live alone. Any earned income from employment of minors, age 17 or under. However, remember that unearned income attributable to the minor, such as child support, AFDC payments, and other benefits, are counted.

Florida Only! - What do I need to verify income?

Third party verification forms are required to calculate the annual gross income for the household in the next 12 months.

Florida Only! - What is Annual Gross Income?

Total income (earned, unearned, and asset income) anticipated to be received by all persons who currently reside or intend to reside in a program-assisted unit for the coming 12-month period.

Florida Only! - What is considered income?

(a) Annual income means all amounts, monetary or not, which:
(1) Go to, or on behalf of, the family head or spouse (even if temporarily absent) or to any other family member; or
(2) Are anticipated to be received from a source outside the family during the 12-month period following admission or annual reexamination effective date
(3) Annual income also means amounts derived (during the 12-month period) from assets to which any member of the family has access.
(b) Annual income includes, but is not limited to:
(1) The full amount, before any payroll deductions, of wages and salaries, overtime pay, commissions, fees, tips and bonuses, and other compensation for personal services;
(2) The net income from the operation of a business or profession. Expenditures for business expansion or amortization of capital indebtedness shall not be used as deductions in determining net income. An allowance for depreciation of assets used in a business or profession may be deducted, based on straight line depreciation, as provided in Internal Revenue Service regulations. Any withdrawal of cash or assets from the operation of a business or profession will be included in income, except to the extent the withdrawal is reimbursement of cash or assets invested in the operation by the family;
(3) Interest, dividends, and other net income of any kind from real or personal property. Expenditures for amortization of capital indebtedness shall not be used as deductions in determining net income. Any withdrawal of cash or assets from an investment will be included in income, except to the extent the withdrawal is reimbursement of cash or assets invested by the family. Where the family has net family assets in excess of $5,000, annual income shall include the greater of the actual income derived from all net family assets or a percentage of the value of such assets based on the current passbook savings rate, as determined by HUD;
(4) The full amount of periodic amounts received from Social Security, annuities, insurance policies, retirement funds, pensions, disability or death benefits, and other similar types of periodic receipts, including a lump-sum amount or prospective monthly amounts for the delayed start of a periodic amount
(5) Payments in lieu of earnings, such as unemployment and disability compensation, worker's compensation and severance pay
(6) Welfare assistance payments. (i) Welfare assistance payments made under the Temporary Assistance for Needy Families (TANF) program are included in annual income only to the extent such payments: (A) Qualify as assistance under the TANF program definition at 45 CFR 260.31; and (ii) If the welfare assistance payment includes an amount specifically designated for shelter and utilities that is subject to adjustment by the welfare assistance agency in accordance with the actual cost of shelter and utilities, the amount of welfare assistance income to be included as income shall consist of: (A) The amount of the allowance or grant exclusive of the amount specifically designated for shelter or utilities; plus (B) The maximum amount that the welfare assistance agency could in fact allow the family for shelter and utilities. If the family's welfare assistance is ratably reduced from the standard of need by applying a percentage, the amount calculated under this paragraph shall be the amount resulting from one application of the percentage.
(7) Periodic and determinable allowances, such as alimony and child support payments, and regular contributions or gifts received from organizations or from persons not residing in the dwelling;
(8) All regular pay, special pay and allowances of a member of the Armed Forces

Florida Only! - What income is excluded under the SHIP Program?

1) Income from employment of children (including foster children) under the age of 18 years;
(2) Payments received for the care of foster children or foster adults (usually persons with disabilities, unrelated to the tenant family, who are unable to live alone);
(3) Lump-sum additions to family assets, such as inheritances, insurance payments (including payments under health and accident insurance and worker's compensation), capital gains and settlement for personal or property losses
(4) Amounts received by the family that are specifically for, or in reimbursement of, the cost of medical expenses for any family member;
(5) Income of a live-in aide, as defined in Sec. 5.403;
(6) The full amount of student financial assistance paid directly to the student or to the educational institution;
(7) The special pay to a family member serving in the Armed Forces who is exposed to hostile fire;
(8) (i) Amounts received under training programs funded by HUD; (ii) Amounts received by a person with a disability that are disregarded for a limited time for purposes of Supplemental Security Income eligibility and benefits because they are set aside for use under a Plan to Attain Self-Sufficiency (PASS); (iii) Amounts received by a participant in other publicly assisted programs which are specifically for or in reimbursement of out-of-pocket expenses incurred (special equipment, clothing, transportation, child care, etc.) and which are made solely to allow participation in a specific program; (iv) Amounts received under a resident service stipend. A resident service stipend is a modest amount (not to exceed $200 per month) received by a resident for performing a service for the PHA or owner, on a part-time basis, that enhances the quality of life in the development. Such services may include, but are not limited to, fire patrol, hall monitoring, lawn maintenance, resident initiatives coordination, and serving as a member of the PHA's governing board. No resident may receive more than one such stipend during the same period of time; (v) Incremental earnings and benefits resulting to any family member from participation in qualifying State or local employment training programs (including training programs not affiliated with a local government) and training of a family member as resident management staff. Amounts excluded by this provision must be received under employment training programs with clearly defined goals and objectives, and are excluded only for the period during which the family member participates in the employment training program;
(9) Temporary, nonrecurring or sporadic income (including gifts);
(10) Reparation payments paid by a foreign government pursuant to claims filed under the laws of that government by persons who were persecuted during the Nazi era;
(11) Earnings in excess of $480 for each full-time student 18 years old or older (excluding the head of household and spouse);
(12) Adoption assistance payments in excess of $480 per adopted child;
(13) [Reserved]
(14) Deferred periodic amounts from supplemental security income and social security benefits that are received in a lump sum amount or in prospective monthly amounts.
(15) Amounts received by the family in the form of refunds or rebates under State or local law for property taxes paid on the dwelling unit;
(16) Amounts paid by a State agency to a family with a member who has a developmental disability and is living at home to offset the cost of services and equipment needed to keep the developmentally disabled family member at home; or
(17) Amounts specifically excluded by any other Federal statute from consideration as income for purposes of determining eligibility or benefits under a category of assistance programs that includes assistance under any program to which the exclusions set forth in 24 CFR 5.609(c) apply.

Florida Only! - How do I determining income from assets?

A. If the asset value is $5,000 or less, add together the amounts of actual asset income and include this with the total verified anticipated annual income for the household.
B. When assets exceed $5,000, add the greater of 1) the actual annual income to be derived from these assets, or 2) the cash value of the asset multiplied by the imputed amount.

Florida Only! - What is considered an Asset under the SHIP program?

• CASH HELD IN SAVINGS AND CHECKING ACCOUNTS, SAFE DEPOSIT BOXES, HOMES, ETC.
• REVOCABLE TRUSTS.
• EQUITY (such as property)
• STOCKS, BONDS, TREASURY BILLS, CERTIFICATES OF DEPOSIT, MONEY MARKET ACCOUNTS AND OTHER INVESTMENT ACCOUNTS
• INDIVIDUAL RETIREMENT ACCOUNTS, KEOGH ACCOUNTS, AND SIMILAR ACCOUNTS
• RETIREMENT AND PENSION FUNDS
• AT RETIREMENT, TERMINATION OF EMPLOYMENT OR WITHDRAWAL
• CASH VALUE OF LIFE INSURANCE POLICIES
• PERSONAL PROPERTY HELD AS AN INVESTMENT
• LUMP SUM RECEIPTS OR ONE-TIME RECEIPTS
• A MORTGAGE OR DEED OF TRUST HELD BY AN APPLICANT

Florida Only! - What Assets are not counted?

• Necessary personal property such as clothing, furniture, cars, wedding ring, and vehicles specially equipped for persons with disabilities;
• Interests in Indian trust land;
• Term life insurance policies (i.e., where there is no cash value);
• Equity in the cooperative unit in which the family lives;
• Assets that are part of an active business (does not include rental properties held as investment and not as a main occupation);
• Assets that are not effectively owned by the applicant (e.g., when assets are held in an individual's name but income earned accrues to someone else who is not a member of the household and this other person is responsible for income taxes incurred on income generated by the assets); and,
• Assets that are not accessible to the applicant nor provide any income to the applicant

Florida Only! - Do I include assets from minors?

Yes. All asset income is considered, including asset income of minors.

Florida Only! - Is there a limit on the value of the total assets a household can have?

The SHIP program does not set a limit on the value of assets that a household possess. As long as the income from the total assets–along with other income sources–does not exceed SHIP’s income limits.

Florida Only! - Is a LIVE-IN AIDE counted as a household member?

Aides are not counted as household members. An aide is a person who resides with one or more elderly persons, near-elderly persons, or persons with disabilities, and who is 1) determined to be essential to the care and well-being of the person; 2) is not obligated for the support of the person; and 3) would not be living in the unit except to provide the necessary supportive services. A relative may be considered to be a live-in aide, but must meet the above requirements.

Florida Only! - Is an unborn child counted as a household member?

Yes. Unborn children of pregnant women are considered household members.

What is Section 504?

Section 504 of the Rehabilitation Act of 1973 states: No otherwise qualified individual with a disability in the United States. . .shall, solely by reason of her or his disability, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any program, service or activity receiving federal financial assistance or under any program or activity conducted by any Executive agency or by the United States Postal Service. (29 U.S.C. 794). This means that Section 504 prohibits discrimination on the basis of disability in any program or activity that receives financial assistance from any federal agency, including the U.S. Department of Housing and Urban Development (HUD) as well as in programs conducted by federal agencies including HUD.

Are there regulations that explain what needs to be done in order to comply with Section 504?

Yes. HUD's regulations for Section 504 that apply to federally assisted programs may be found in the Code of Federal Regulations at 24 CFR Part 8. There are also regulations that govern Section 504 in programs conducted by HUD which may be found at 24 CFR Part 9, however, this Web site focuses on Section 504's requirements for federally assisted programs, services and activities.

Who is protected by the Law?

Persons with disabilities.

How is disability defined?

An individual with a disability is any person who has a physical or mental impairment that substantially limits one or more major life activities. The term physical or mental impairment may include, but is not limited to, conditions such as visual or hearing impairment, mobility impairment, HIV infection, mental retardation, drug addiction (except current illegal use of or addiction to drugs), or mental illness. The term major life activity may include seeing, hearing, walking, breathing, performing manual tasks, caring for one's self, learning, speaking, or working. Section 504 also protects persons who have a record of such impairment, or are regarded as having such an impairment.

Who are recipients of federal financial assistance?

The Section 504 regulations define recipient as any State or its political subdivision, any instrumentality of a state or its political subdivision, any public or private agency, institution organization, or other entity or any person to which federal financial assistance is extended for any program or activity directly or through another recipient, including any successor, assignee, or transferee of a recipient, but excluding the ultimate beneficiary of the assistance. 24 CFR 8.3. Thus, a HUD funded public housing authority, or a HUD funded non-profit developer of low income housing is a recipient of federal financial assistance and is subject to Section 504's requirements. However, a private landlord who accepts Section 8 tenant-based vouchers in payment for rent from a low-income individual is not a recipient of federal financial assistance. Similarly, a family that receives Community Development Block Grant (CDBG) or HOME funds for the rehabilitation of an owner-occupied unit is also not a recipient because it is the ultimate beneficiary of the funds.

What discriminatory practices does Section 504 prohibit?

Section 504 prohibits discrimination on the basis of disability in any program, service, or activity that receives federal financial assistance. This means, for example, that persons with disabilities may not be denied the opportunity to participate in a program, service, or activity; may not be required to accept a different kind or lesser program or service than what is provided to others, and may not be required to participate in separate programs and services, even if separate programs and services exist. In general, with respect to housing, it means that a housing provider may not deny or refuse to sell or rent to a person with a disability, and may not impose application or qualification criteria, rental fees or sales prices, and rental or sales terms or conditions that are different than those required of or provided to persons who are not disabled. Housing providers may not require persons with disabilities to live only on certain floors, or to all live in one section of the housing. Housing providers may not refuse to make repairs, and may not limit or deny someone with a disability access to recreational and other public and common use facilities, parking privileges, cleaning or janitorial services, or any services which are made available to other residents. People with disabilities may not be denied the opportunity to serve on planning or advisory boards because of their disabilities.

Does Section 504 require a housing provider to accept every person with a disability who applies for the housing?

Section 504 does not require that a person with a disability be accepted without regard to eligibility requirements or his or her ability to meet standard, nondiscriminatory tenant selection and screening criteria. Rather, Section 504 requires that a person with a disability be evaluated using the same objective criteria that are applied to persons without disabilities. Applicants, with or without a disability, may be rejected if they have a record of adversely affecting others such as disturbing neighbors, destroying property, or failing to pay their rent on time. However, under Section 504, the housing provider must make sound and reasonable judgments based on objective evidence (current conduct or a history of overt acts). Subjective fears, unsubstantiated rumors, speculation and generalized suspicion do not constitute objective information that an applicant cannot meet the terms of tenancy.

May a recipient refuse to rent to a person with a mental disability because he is uncomfortable with the individual?

No. Section 504, and related laws like the Fair Housing Act, make it unlawful for a housing provider to refuse to rent to a person simply because of a disability. Therefore, a housing provider may not refuse to rent to an otherwise eligible individual because of fears or concerns that may be based on myths or stereotypes about persons with mental disabilities.

May a landlord charge a person who uses a wheelchair a higher security deposit because of concerns about damage to the dwelling unit?

No. A wheelchair user is no more likely than anyone else to cause damage, beyond typical wear and tear, to a dwelling unit. However, if a person who uses a wheelchair does cause damage to a unit that is beyond normal wear and tear, whether the damage is related to the wheelchair or not, that individual may be required to cover such damage out of a standard security deposit that is charged to everyone.

What limits does Section 504 impose on the ability of federally assisted housing providers to require persons with disabilities to live in segregated housing, i.e., housing for elderly and/or disabled individuals.

Section 504 limits housing providers from providing, or requiring persons with disabilities to accept, housing that is different or separate, and instead, requires that housing programs be integrated and offer the same benefits as provided to persons without disabilities, with only a few limited exceptions. These exceptions are (1) when it can be demonstrated that such segregation is necessary in order to provide persons with disabilities housing that is as effective as housing that is provided to others, or (2) when authorized by a Federal statute, such as the Housing Opportunities for Persons with AIDS (HOPWA) program, or the Section 811 Supportive Housing Program for Persons With Disabilities. Even under these programs, however, there are suggested options for providing the program in an integrated setting, such as scattered site units.

What must a federally assisted housing provider consider to assure that housing is provided in the most integrated setting appropriate?

One of the basic tenets of Section 504 is that programs and services be conducted in the most integrated setting appropriate. In terms of housing, this means that the housing provided to disabled individuals is not separate or unnecessarily segregated. In other words, accessible units in a single elevator building should be located throughout the building, and not just on the first floor. In projects having multiple buildings, accessible units also should be interspersed throughout these buildings, rather than in just one or two buildings. For example, in housing serving elders and persons with disabilities, persons with mental disabilities or any other disabilities may not be segregated on any one wing, floor, or in one building.

What steps must recipients take to ensure that information about their programs and services, and their communications with applicants and program participants, are accessible?

The Section 504 regulations require recipients to take steps to ensure effective communication with applicants, beneficiaries, and members of the public (24 CFR 8.6). This may include, but is not limited to, conducting outreach in a manner that will reach persons with disabilities, such as by working with State and local organizations that serve or represent persons with disabilities, and ensuring that information about their programs is disseminated in a manner that is accessible to persons with disabilities. For example, special communication systems (e.g., TTY for persons who are hearing or speech impaired, materials on tape or in Braille) can greatly increase the effectiveness of outreach and ongoing communication.

How are recipients supposed to deal with the following fire emergency issues in a high-rise building: (1) If a HUD recipient cannot control where persons with disabilities live, during a fire, how do these tenants escape from a 14th floor unit? (2) If a HUD recipient cannot give out a list of where persons with disabilities live, how do rescue teams know where to go?

The recipient must permit the applicant to take responsibility for his/her own safety. Thus, an applicant with a disability may choose not to live above the ground floor because of possible inability to escape a fire. On the other hand, the applicant must be allowed to decide whether the opportunity to live in a 14th floor dwelling unit outweighs whatever safety concerns may exist.
Every HUD recipient should have an emergency evacuation plan for each of its buildings. In the preparation and updating of this plan, the HUD recipient should inform residents that with the resident's consent, they will provide information to the fire department which identifies residents with special needs in case of an emergency evacuation. Applicants should be given the opportunity to decide whether they want the recipient to provide this information to the fire department. The HUD recipient may share this information with the local fire and police departments provided consent is given.

What is meant by program accessibility?

Program accessibility means that a program, when viewed in its entirety, is readily accessible to and usable by persons with disabilities. It applies under Section 504 to existing housing and non-housing programs. The concept recognizes that there may be some limits to the degree to which existing housing programs can be made accessible. Thus, under the concept of program accessibility, not every single building must be accessible, or every single dwelling unit, but there must be sufficient accessibility so that persons with disabilities have an equal opportunity to participate in and benefit from the program and the same range of choices and amenities as those offered to others. However, recipients must take steps to ensure that their programs and services are readily accessible to and usable by persons with disabilities to the maximum extent feasible, which means the recipient would be required to take all steps that provide the necessary access, but which would not constitute an undue financial and administrative burden, or require a fundamental alteration in the nature of the program. Achievement of program accessibility does not exempt recipients from meeting other requirements of the Section 504 regulations, particularly the broad nondiscrimination provisions, and the requirements that dwelling units be dispersed throughout buildings and sites. Likewise, recipients whose programs involve new construction or alterations, must meet the Section 504 regulation's requirements for those activities, as well as meeting other applicable requirements in the regulations, such as for dispersion of accessible units throughout buildings and sites.

How can a recipient ensure that its existing housing or non-housing program meets the program accessibility provisions of the Section 504 regulations?

Here are some examples:
To the maximum extent feasible, distribute accessible units throughout projects and sites, and make them available in a sufficient range of sizes and amenities so as not to limit choice.
Adopt suitable means to assure that information regarding the availability of accessible units reaches eligible individuals with disabilities. Recipients must also take reasonable non-discriminatory steps to maximize use of such units by eligible individuals.
When an accessible unit becomes vacant, before offering the unit to an individual without a disability, offer the unit: first, to a current occupant of the project requiring the unit's accessibility features; and second, to an eligible qualified applicant on the waiting list requiring the accessibility features.
When an applicant or tenant requires an accessible feature or policy modification to accommodate a disability, a federally assisted housing provider must provide the feature or policy modification unless doing so would result in a fundamental alteration in the nature of its program or an undue financial and administrative burden. See 24 CFR 8.4, 8.24, and 8.33 for further requirements and guidance. Recipients must ensure that activities and meetings are conducted in accessible locations.

When a wheelchair accessible unit becomes available should it be offered to the first applicant on the waiting list, or the first person with a disability who requires the accessible features?

HUD's Section 504 regulations at 24 CFR 8.27 require recipients to take reasonable steps to assure that information on available accessible units reaches otherwise qualified individuals with disabilities who need the features of those units. The regulations provide that whenever a unit that meets the requirements of the Uniform Federal Accessibility Standards (UFAS) for a mobility-impaired person becomes available for occupancy, a recipient shall first offer the unit to a qualified individual with disabilities currently residing in a non-accessible unit in the same project or comparable projects, under common control, who requires the accessible features. If there are no such persons currently residing in the recipient's projects, the recipient shall then offer the unit to the next available qualified individual with disabilities on its waiting list, provided that the person requires the accessibility features of the unit. The recipient shall skip over non-disabled applicants on the waiting list to offer the unit to the next qualified individual who requires the unit's accessibility features. If no qualified applicant with disabilities requires the accessible features of a unit, and the recipient places a family where none of the family members have disabilities in that unit, the
recipient may include language in the lease requiring this family to agree to move to a nonaccessible unit, as soon as one becomes available that otherwise meets the family's needs.

How does Section 504 affect the operation of a non-housing facility or program operated by a recipient of federal financial assistance?

All of Section 504's nondiscrimination, program accessibility, and reasonable
accommodation requirements that apply to housing facilities and programs apply equally to the
operation of non-housing facilities or programs. (24 CFR. 8.21)

What requirements does Section 504 impose on new construction or alteration of existing non-housing facilities operated by a recipient of federal financial assistance?

New non-housing facilities constructed by recipients of federal financial assistance
must be designed and constructed to be readily accessible to and usable by persons with
disabilities. Alterations to existing facilities must, to the maximum extent feasible, be made
accessible to ensure that such facilities are readily accessible to and usable by persons with
disabilities. [24 CFR 8.21(a) and (b).] In addition, each existing non-housing program or facility
must be operated so that, when viewed in its entirety, the program or activity is readily
accessible to and usable by persons with disabilities. [24 CFR 8.21(c).] For example, a newly
constructed day-care center that is provided for use by residents of a housing project, must
meet the design and construction requirements of the UFAS. In addition, once the facility is
completed, it would, of course, have to be operated in a non-discriminatory manner.

What is a reasonable accommodation under Section 504?

A reasonable accommodation is a change, adaptation or modification to a policy,
program, service, or workplace which will allow a qualified person with a disability to
participate fully in a program, take advantage of a service, or perform a job. Reasonable
accommodations may include, for example, those which are necessary in order for the person
with a disability to use and enjoy a dwelling, including public and common use spaces. Since
persons with disabilities may have special needs due to their disabilities, in some cases, simply
treating them exactly the same as others may not ensure that they have an equal opportunity
to use and enjoy a dwelling.
In order to show that a requested accommodation may be necessary, there must be an
identifiable relationship, or nexus, between the requested accommodation and the individual's
disability. As discussed in the next question and answer, what is reasonable must be
determined on a case-by-case basis. However, experience has shown that the following
examples are often reasonable accommodations. A federally assisted housing provider has a policy of not providing assigned parking spaces. A tenant with a mobility impairment, who has difficulty walking, is provided a reasonable accommodation by being given an assigned accessible parking space in front of the entrance to his unit.
A federally assisted housing provider has a policy of requiring tenants to come to the rental office to pay their rent. A tenant with a mental disability, who is afraid to leave her unit, is provided a reasonable accommodation by being allowed to mail her rent payment.
A federally assisted housing provider has a no pets policy. A tenant, who uses a wheelchair and has difficulty picking up items off the ground, is allowed to have an assistive animal that fetches things for her as a reasonable accommodation to her disability.
An older tenant has a stroke and begins to use a wheelchair. Her apartment has steps at the entrance and she needs a ramp to enter the unit. Her federally assisted housing provider pays for the construction of a ramp as a reasonable accommodation to the tenant's disability.

How do you determine whether a request for a certain accommodation is reasonable?

Whether a particular accommodation is reasonable depends on a variety of factors and must be decided on a case-by-case basis. The determination of whether a requested accommodation is reasonable depends on the answers to two questions. First, does the request impose an undue financial and administrative burden on the housing provider? Second, would making the accommodation require a fundamental alteration in the nature of the provider's operations? If the answer to either question is yes, the requested accommodation is not reasonable. However, even where a housing provider is not obligated to provide a particular accommodation because the particular accommodation is not reasonable, the provider is still obligated to provide other requested accommodations that do qualify as reasonable.
For example:
As a result of a disability, a tenant is unable to open the dumpster provided by his housing provider for his trash. The tenant requests that the housing provider send a maintenance staff person to collect his trash from his apartment daily. Because the housing development is a small, low-budget operation and the maintenance staff are not on site daily, it is an undue financial and administrative burden for the housing provider to provide daily trash service to the tenant and the housing provider may refuse to provide the requested accommodation. However, the housing provider is obligated to provide the tenant with a requested alternative accommodation - providing either an open trash can or placing a trash can which the tenant can open in an accessible location so that the tenant can dispose of his trash.

What happens if providing a requested accommodation involves some costs on the part of the federally assisted housing provider?

Section 504 requires that in making an accommodation, a federally assisted housing provider will be required to bear costs which do not amount to an undue financial and administrative burden. In application, this means that such a housing provider may be required to spend money to provide legally required reasonable accommodations.

When and how should an individual request an accommodation?

An individual with a disability should request an accommodation as soon as it appears that the accommodation is needed. However, requests may be made at any time. For example, requests may be made when an individual is applying for housing, entering into a lease, or occupying housing. Individuals who become disabled during their tenancy may request accommodations, even if they were not disabled when they signed their leases.
Section 504 does not prescribe a uniform procedure for requesting a reasonable accommodation to be used with all housing providers. To request an accommodation, an individual need not mention Section 504 or use the phrase reasonable accommodation. In general, a tenant or prospective tenant should make clear to the housing provider that s/he is requesting that an exception, change, adjustment, or modification be made to a rule, policy, practice, service, building or dwelling unit because s/he has a disability. S/he should explain what type of accommodation is requested and explain the relationship between the requested accommodation and his or her disability. In order to facilitate the process and consideration of the request, tenants or prospective tenants may wish to check with a housing provider in advance to determine whether that housing provider has established any specific procedures regarding requests for reasonable accommodation. Although the Section 504 regulations do not require it, it is usually helpful that the request be made in writing, so there will be documentation that the request was actually made in the event of a later dispute.

Must a federally assisted housing provider adopt formal procedures for processing requests for a reasonable accommodation?

No. Section 504 does not require that a housing provider adopt any formal procedures that an applicant for housing or a tenant must follow to request a reasonable accommodation. However, having such a procedure will probably aid both the individual in making the request and the housing provider in assessing it and responding to it in a timely fashion.

Is a federally assisted housing provider obligated to provide an accommodation to a tenant or applicant if s/he has not requested it?

No. Such a housing provider is only obligated to provide an accommodation if s/he is on notice of the request. However, a person with a disability will be considered to have asked for an accommodation if s/he indicates that a change or exception to a policy, practice, or procedure or a modification would assist him or her in making more effective use of his or her housing, even if the words reasonable accommodation are not used as part of the request.

What happens if a federally assisted housing provider fails to act on a request for an accommodation?

If a housing provider delays responding to a request for an accommodation, after a reasonable amount of time, that delay may be construed as a failure to provide a reasonable accommodation. A tenant or applicant may choose to seek legal assistance or file a complaint with HUD. For further information, please see the section of this Web site that describes the complaint process

When can a federally assisted housing provider insist on an alternative to the accommodation requested by a tenant?

If the housing provider believes the requested accommodation is unreasonable, the housing provider may, but is not required to, propose a substitute accommodation. In doing so, the housing provider should give primary consideration to the accommodation requested by the tenant or applicant because the individual with a disability is most familiar with his or her disability and is in the best position to determine what type of aid or service will be effective. If the housing provider suggests an alternative accommodation, the tenant may reject it if s/he feels it does not meet his or her needs.

With respect to Section 504's requirements, what is an accessible unit?

The Section 504 regulations define an accessible dwelling unit as a unit that is located on an accessible route and can be approached, entered, and used by individuals with physical disabilities. A unit that is on an accessible route and is adaptable and otherwise in compliance with the standards set forth in 24 CFR 8.32 is accessible. In addition, the Section 504 regulations impose specific accessibility requirements for new construction and alteration of housing and non-housing facilities in HUD assisted programs. Section 8.32 of the regulations states that compliance with the appropriate technical criteria in the Uniform Federal Accessibility Standards (UFAS), or a standard that is equivalent to or stricter than the UFAS, is an acceptable means of meeting the technical accessibility requirements in Sections 8.21, 8.22, 8.23 and 8.25 of the Section 504 regulations.

What accessibility requirements must a new federally assisted housing development meet in order to be in compliance with Section 504 requirements?

For a federally assisted new construction housing project, Section 504 requires 5% of the dwelling units, or at least one unit, whichever is greater, to meet UFAS or a standard that is equivalent or stricter, as explained in the question and answer above this one, for persons with mobility disabilities. An additional 2% of the dwelling units, or at least one unit, whichever is greater, must be accessible for persons with hearing or visual disabilities.

Are there other accessibility requirements that apply to federally funded new construction?

If a new construction project has four or more dwelling units and is built for first occupancy after March 13, 1991, it is also subject to the accessibility and adaptability requirements of the FHAct, regardless of whether it receives federal financial assistance. The FHAct's accessibility requirements are not as strict as those for Section 504 and the UFAS, however, the FHAct's accessibility requirements apply to a broader number of dwelling units. Under the FHAct's new construction requirements, if the building has an elevator, all of the dwelling units must meet the FHAct's design and construction requirements; if there is no elevator, all of the ground floor dwelling units must meet the FHAct's requirements. A unit that meets the FHAct's accessibility requirements will be one that does not have as great a degree of accessibility as a UFAS-complying unit, but is one that may be easily adapted to be fully accessible without significant costs and the need to do significant structural modifications. More information on the FHAct may be obtained by going to HUD's web page for Persons with Disabilities, and specifically to the statute, the regulations implementing the Act, the Fair Housing Accessibility Guidelines, and the Supplemental Notice with Questions and Answers about the Guidelines. A Fair Housing Act Design Manual is available by calling the HUD Distribution Center at 1-800-767-7468.

If a federally financed housing project is targeted for substantial alteration, what does Section 504 require in terms of accessible units?

Under Section 504, alterations are substantial if they are undertaken to a project that has 15 or more units and the cost of the alterations is 75% or more of the replacement cost of the completed facility. [See 24 CFR 8.23(a)]. The new construction provisions of 24 CFR 8.22 apply. Section 8.22 requires that a minimum of 5% of the dwelling units, or at least one unit, whichever is greater, shall be made accessible to persons with mobility disabilities and an additional 2% of the dwelling units, or at least one unit, whichever is greater, shall be made accessible to persons with hearing or visual disabilities.

What does Section 504 require when a recipient undertakes alterations of existing housing facilities that do not qualify as substantial alterations?

If the project involves fewer than 15 units or the cost of alterations is less than 75% of the replacement cost of the completed facility and the recipient has not made 5% of its units in the development accessible to and usable by individuals with disabilities, then the requirements of 24 CFR 8.23(b) - Other Alterations apply. Under this section, alterations to dwelling units shall, to the maximum extent feasible, be made readily accessible to and usable by individuals with disabilities. If alterations to single elements or spaces of a dwelling unit, when considered together, amount to an alteration of a dwelling unit, the entire unit shall be made accessible.
Alteration of an entire unit is considered to be when at least all of the following individual elements are replaced:
• renovation of whole kitchens, or at least replacement of kitchen cabinets;
• and renovation of the bathroom, if at least bathtub or shower is replaced or added,
or a toilet and flooring is replaced; and
• replacement of entrance door jambs.
When the entire unit is not being altered, 100% of the single elements being altered must be made accessible until 5% of the units in the development are accessible. However, the Department strongly encourages a recipient to make 5% of the units in a development readily accessible to and usable by individuals with mobility impairments, since that will avoid the necessity of making every element altered accessible, which often may result in having partially accessible units which may be of little or no value for persons with mobility impairments. It is also more likely that the cost of making 5% of the units accessible up front will be less than making each and every element altered accessible. Alterations must meet the applicable sections of the UFAS which govern alterations.

When a recipient plans alterations, are there areas of a building which are not required to be made accessible under Section 504?

Mechanical rooms and other spaces that, because of their intended use, will not require accessibility to the public or beneficiaries or result in the employment or residence therein of individuals with physical disabilities are not required to be made accessible in projects undergoing either substantial or other alterations. [see 24 CFR 8.32 (6)]

What is the Federal Fair Housing Act and what types of discrimination does it prohibit against persons with disabilities?

The Federal Fair Housing Act (FHAct), 42 U.S.C. 3601-19, prohibits discrimination in housing practices on the basis of race, color, religion, sex, national origin, familial status, and disability. (FHAct uses the term handicap, however, this document uses the term disability, which has the same legal meaning.) The Act prohibits housing providers from discriminating against persons because of their disability or the disability of anyone associated with them and from treating persons with disabilities less favorably than others because of the disability. The Act also requires housing providers to make reasonable accommodations in rules, policies, practices, or services, when such accommodations may be necessary to afford such person(s) equal opportunity to use and enjoy a dwelling. In addition, the Act requires that housing providers allow tenants to make reasonable modifications to units and common spaces in a dwelling. The Act applies to the vast majority of privately and publicly owned housing including housing subsidized by the federal government or rented through the use of Section 8 voucher assistance. HUD's regulations implementing the disability discrimination prohibitions of the Act may be found at 24 CFR 100.201-205.

Is the Americans with Disabilities Act (ADA) applicable to housing, and if yes, does the ADA supersede Section 504?

In most cases, the ADA does not apply to residential housing. Title III of the ADA prohibits discrimination against persons with disabilities in commercial facilities and public accommodations. However, Title III of the ADA covers public and common use areas at housing developments when these public areas are, by their nature, open to the general public or when they are made available to the general public. For example, it covers the rental office, since, by its nature, the rental office is open to the general public. In addition, if a day care center, or a community room is made available to the general public, it would be covered by Title III. Title III applies, irrespective of whether the public and common use areas are operated by a federally assisted provider or by a private entity. However, if the community room or day care center were only open to residents of the building, Title III would not apply. Title II of the ADA covers the activities of public entities (state and local governments). Title II requires public entities to make both new and existing housing facilities accessible to persons with disabilities. Housing covered by Title II of the ADA includes, for example, public housing authorities that meet the ADA definition of public entity, and housing operated by States or units of local government, such as housing on a State university campus. The ADA, when it is applicable to a residential housing project, does not supersede Section 504, assuming Section 504 is also applicable. Instead, where both laws apply to a housing project, the project must be in compliance with both laws.

What is the Architectural Barriers Act and what does it cover?

The Architectural Barriers Act of 1968 (ABA) (42 U.S.C. 4151-4157) requires that certain buildings financed with Federal funds must be designed, constructed, or altered in accordance with standards that ensure accessibility for persons with physical disabilities. The ABA requires that covered buildings comply with the Uniform Federal Accessibility Standards (UFAS). The ABA does not cover privately-owned housing, but covers buildings or facilities financed in whole or in part with Federal funds. The ABA applies to public housing (24 CFR 40), and to buildings and facilities constructed with CDBG funds (24 CFR 570.614). In practice, buildings built to meet the requirements of Section 504 and Title II of the ADA will conform to the requirements of the ABA.

What amounts must I consider or include in the determination of a family's annual income?

When determining a family's annual income, PHAs must consider all amounts, monetary or not, including the full amount, before any payroll deductions, of wages and salaries, overtime pay, commissions, fees, tips and bonuses, compensation for personal services, and more, as defined in 24 CFR 5.609. Annual income is a family's anticipated total or gross income minus allowable exclusions (e.g., TOTAL/GROSS INCOME - EXCLUSIONS = ANNUAL INCOME).

Question: If a tenant's Supplemental Security Income (SSI) is reduced to make up for a prior overpayment, what amount should the tenant's annual income include? For example, the tenant should receive $600 per month, but due to the discovery of a prior overpayment of $300, the Social Security Administration (SSA) reduces the tenant's SSI benefits to $540 per month for 5 months. Should the PHA calculate the family's income based on the number of months the family will receive $540 in SSI payments and the number of months the family will receive $600 in SSI payments during the period covered by the reexamination.

Yes. After obtaining and documenting in the family file third-party verification of annual income and the reason for the payment reduction (24 CFR 960.259(c) and 24 CFR 982.516(a)(2)), the PHA should calculate the family's annual income using the $540 net amount for the five months, and then conduct an interim reexamination when the reduction ends because of the change in the family's income.
As defined in 24 CFR 5.609, annual income is the anticipated amount to be received from a source outside the family during the 12-month period following admission or annual reexamination. When a tenant's SSI benefits are reduced to make up for a prior overpayment, the recipient's income should include the anticipated amount the SSA will provide, not the amount that would have been provided if no error were made.
As described above, the $300 overpayment has already been included in the calculation of the family's rent, so if the PHA continues to count the $600 instead of the $540, the family will end up paying on that $300 overpayment again. In essence, the family will have had $600 counted as income when it only received $300. This position is consistent with the new Handbook 4350.3, Occupancy Requirements of Subsidies Multifamily Housing Programs (Chapter 5, p. 5-6H).

If a family's Social Security income is reduced because of an IRS garnishment, should annual income be calculated using the gross income or net income?

The PHA must use the gross amount to calculate income. Annual income, per 24 CFR 5.609, includes the full amount of periodic amounts from Social Security.

If a tenant receives a pension payment and half of the pension is garnished for an alimony payment, what amount does the PHA count towards annual income?

The PHA must use the gross amount to calculate annual income. Annual income, per 24 CFR 5.609, includes the full amount of periodic amounts from pensions.

If a tenant received an additional $500 payment for past due amounts owed in child support-the PHA verified the additional amount and the reason for such payment through third-party verification-should the $500 payment be considered in the calculation of the family's annual income?

Maybe. In this case, the PHA has verified that the additional $500 child support payment was for past due amounts (or a delayed sum) of periodic payments. In accordance with 24 CFR 5.609(b)(7), annual income includes periodic and determinable allowances, such as alimony and child support payments. Therefore, by definition, the $500 payment is considered when determining annual income. However, other factors, including the type of reexamination that is being conducted (annual or interim) and the PHA's interim reporting policies also need to be considered. This is necessary because annual income is based on amounts that are "anticipated" to be received from a source outside the family during the 12-month period following admission or the annual reexamination effective date. See scenarios below:
▪ PHAS WITH NO INTERIM REPORTING REQUIREMENTS:
• New Admission & Annual Reexamination The PHA would need to determine the likelihood of the resident receiving another similar payment(s) within the next twelve months before deciding whether or not this amount should be included in the calculation of annual income. To make this determination, the PHA would need more information from the tenant and the third party paying the child support or the agency providing the information. If the PHA determines and can appropriately verify that the tenant in all likelihood will not receive a similar payment the following year, then the amount should not be considered when calculating annual income. On the other hand, if the PHA determines that it is likely that the tenant will receive a similar payment and can appropriately verify it, the amount should be included in annual income.
▪ Interim Reexamination The tenant does not need to report the receipt of an additional child support payment, because the PHA does not require reporting of interim changes in income. In the event the tenant does report the additional payment, the PHA will not increase the tenant's income or rent.
▪ PHAS WITH INTERIM REPORTING REQUIREMENTS:
• New Admission & Annual Reexamination The PHA would need to go through the same process described above to determine "anticipated" annual income. Again, this determination would need to be based on appropriate income verification. However, in this case, the PHA would also have to determine if the family had reported all increases of income between annual reexaminations as required. If they had not, the PHA would take appropriate action (e.g., calculate and charge family retroactive rent, etc.).
▪ Interim Reexamination If the PHA is completing an interim reexamination for the family, the PHA would include the additional income in the calculation of income and rent.
▪ For additional guidance on the determination of annual income and annual/interim reexamination requirements, see chapters 10, 12, and 13 of the Public Housing Occupancy Guidebook, and chapters 5 and 12 of the Housing Choice Voucher Program Guidebook.

How is unemployment counted? Do PHAs count what the tenant receives monthly and then multiply that amount by 12, or do PHAs just count the whole amount eligible to tenants for the upcoming year?

The method that a PHA uses to determine annual income is dependent on the way in which the income data is presented and verified. If the unemployment income is presented as an annual amount, then the PHA could use that amount as the annual income. If the verification is for a period other than a full year, the PHA must convert the reported income to an annual figure in accordance with 24 CFR 5.609. Use the following for calculations:
• Multiply weekly insurance benefits by 52
• Multiply bi-weekly insurance benefits by 26
• Multiply monthly insurance benefits by 12
It is important to note when the benefits are scheduled to expire, since a recertification may be required at that time.

Is there a handbook or regulatory citation that requires PHAs to use 52 weeks as the multiplier for the number of weeks worked per year? If a person works part-time, can his or her annual income be determined by multiplying weekly income by 50, rather than 52, because of an assumed two-week unpaid vacation?

As defined in 24 CFR 5.609, annual income means all amounts, monetary or not, which are anticipated to be received from a source outside the family during the 12-month period following admission or annual reexamination. Therefore, all 'verified' hourly, weekly, bi-weekly, semi-weekly, or monthly wages, earnings, or benefits must be annualized in order to determine annual income. If an applicant or participant is paid on a weekly basis, then his or her weekly earnings must be multiplied by 52 (weeks in a year) in order to annualize the income. If it can be verified that the individual only works and gets paid for a certain number of weeks per year, that information can and should be considered when annualizing the income. However, a PHA should not be arbitrary in adopting a method for calculating income or assume circumstances that may or may not apply.

What if a tenant declares that he or she has no income, but that his or her mother (not in the family) pays all of his or her utility or furniture bill every month, and the PHA verifies with the mother that she pays an average of $80 per month in this manner and anticipates that this will continue for the next 12 months. Is the $80 per month the tenant receives from the mother counted as income for the family?

Yes. The $80 is counted as income. The definition of annual income includes "all amounts monetary or not" which go to the family, in accordance with 24 CFR 5.609(a). In addition, the regulation states that annual income includes "regular contributions or gifts received from organizations or from persons not residing in the dwelling (24 CFR 5.609(b)(7)). The mother paying the utility bill would fit under the category of a "regular contribution."

What can a PHA do if a zero-income family declines some form of assistance for which they are eligible? Can the PHA charge rent based on the amount of income the family is eligible to receive?

No. PHAs cannot require a family to receive any type of financial assistance; therefore, they cannot base the rent on amounts not received (this situation should not be confused with the inclusion of imputed welfare income in the calculation of rent).

What is imputed welfare income?

As defined in 24 CFR 5.615, imputed welfare income is the amount of annual income that is not actually received by a family (as a result of a specified welfare benefit reduction), but is included in the family's annual income for purposes of determining rent. A specified welfare benefit reduction is defined as a reduction in the welfare benefit due to fraud or non-compliance with a welfare agency requirement to participate in an economic self-sufficiency program. Before imputed welfare, income is included in a family's annual income, a PHA must have proper verification from the TANF agency.

According to 24 CFR 5.609 (b)(2), expenditures for business expansion should not be used as deductions in determining net income from a business. What is the definition of expenditures for business expansion?

The regulation, 24 CFR 5.609(b)(2), does not provide a definition of business expansion; therefore, it is up to a PHA to determine what types of activities fall under this category. To ensure consistency, a PHA's policies (24 CFR 903.7 and 24 CFR 982.54) should define or provide examples of business expansion activities.

If a tenant puts $10,000 in an IRA, and 10 years later the IRA was worth $15,000 and that tenant began withdrawing monthly amounts from the IRA, are the amounts withdrawn considered income?

The withdrawal of cash or assets from an investment that is received as periodic payments should be counted as income, unless the family can document and the PHA verifies that amounts withdrawn are reimbursement of amounts invested. When a family is making a withdrawal from an account in which it has made an investment (e.g. annuity, IRA, etc.), the withdrawals will count as income only after the amount invested has been totally paid out. This interpretation is consistent with the 24 CFR 5.609(b)(3).

If a family receives income that by definition is excluded from "annual income" (e.g. food stamps), should the PHA record that amount on the Form HUD-50058?

Yes. The family should report, and the PHA should record, all amounts of income the family receives on Form HUD-50058. In the case of food stamps, on Form HUD-50058, a PHA would list food stamps as income code "G," under column 7b, and then exclude the full amount under column 7e. For a full listing of income exclusions and how they should be recorded, see the "Income and Exclusions Chart" in the Form HUD-50058 Instruction Booklet, pages 25-32.

What requires a PHA to record amounts excluded from annual income on the Form HUD-50058?

Although there is currently no regulatory requirement for PHAs to record all income exclusions on the HUD-50058, the Form HUD-50058 instruction booklet instructs PHAs to do so.

Where can PHAs go to get answers to questions related to PIC Form-50058?

For questions related to the form itself, please refer to the Form HUD-50058 Instruction Booklet. For answers to questions related to the Form-50058 module, PHAs may call 1-800-366-6827 to talk to a live help specialist. If all lines are busy, callers may leave a voice mail with their name and number and a specialist will call you back within four (4) hours or less. Or, callers may send a message to PICHelp@hud.gov.
For training materials on PIC Form-50058, callers may go to PIH's Technical Support and Training Web page.

According to 24 CFR 5.609(c)(11), earnings in excess of $480 for each full-time student 18 years old or older (excluding head of household or spouse) are excluded from the calculation of annual income. Is there an age limit on a full-time student?

No. Per 24 CFR 5.603, a full-time student is a person who is attending school or vocational training on a full-time basis, as defined by the educational/vocational institution the family member is attending. The definition does not specify a maximum age.

What is considered temporary or sporadic income?

The regulation, 24 CFR 5.609(c)(9), does not define temporary or sporadic income. Therefore, PHAs must determine what is considered temporary or sporadic income, and define it in their policies. Generally, amounts that are neither reliable nor periodic are considered sporadic, and should be excluded from annual income.

Would a tenant residing in public housing or a Section 8 HCV assisted unit be eligible for the earned income disallowance (EID), as authorized under the 1998 Quality Housing and Work Responsibility Act (QHWRA) if he or she received the full 18-month self-sufficiency/training disregard of income prior to current law?

Yes. A tenant residing in public housing or a Section 8 HCV assisted unit would be eligible for EID under the current law, Title V, Section 508 of the 1998 QHWRA (effective October 1, 1999), even if he or she received the full 18-month self sufficiency/training disregard of income under the prior rule. The tenant, however, must meet one of the three qualifying eligibility factors outlined in 24 CFR 960.255 for public housing and 24 CFR 5.617 for the HCV program.

Are the eligibility requirements for EID the same for the HCV and the public housing program?

No. They're similar, but not the same.
For the public housing program, EID applies to a family member residing in public housing whose annual income increases as a result of employment or increased earnings. [See 24 CFR 960.255 for the full definition of "qualified family" in public housing and a full discussion of all of the criteria the family member must meet in order to be eligible for EID].
For the Section 8 HCV program, EID applies to a family receiving tenant-based assistance whose annual income increases as a result of employment or increased earnings of a family member who is a person with disabilities. [See 24 CFR 5.617 for the full definition of "qualified family" in the Section 8 HCV program and a full discussion of all of the criteria the disabled family member must meet in order to be eligible for EID]. Note the key distinction. To qualify for EID in public housing, any family member may become employed or experience increased earnings. To qualify for EID in the Section 8 HCV program, only a disabled family member may become employed or experience increased earnings.
It is important that PHAs are well versed on both the public housing requirements in 24 CFR 960.255 as well as the less common Section 8 HCV requirements in 24 CFR 5.617, both of which fully outline the qualification and disallowance provisions for the respective programs.

Does the family member whose annual income increases as a result of new employment or increased earnings during or within six months after receiving TANF have to be that same family member who receives or received TANF to qualify for EID?

Yes. Implicit in 24 CFR 960.255 and 24 CFR 5.617, the family member whose annual income increases as a result of new employment or increased earnings during or within six months after receiving TANF has to be that same family member who receives or received TANF to qualify for EID.

Does HUD consider a person/family a new admission into public housing for the first 12 months following admission, and consider a Section 8 HCV program participant a new admission for the first 12 months of residing in assisted housing? Does the length of time a family has been residing in public and assisted housing affect their eligibility for EID? What if new applicants were unemployed for at least 12 months prior to or during their admission to public housing or residency in Section 8 assisted housing?

For purposes of EID, the regulations define a qualified family as a family residing in public housing (24 CFR 960.255) or a disabled person residing in Section 8 HCV assisted housing (24 CFR 5.617) that meets one of the three qualifying factors. Therefore, individuals are not eligible for EID at the time of admission. To be eligible for EID, the qualifying event must occur after admission, or in other words, while the individual is residing in public or assisted housing. The length of time the individual has been residing in public or assisted housing (two weeks, two months, two years, etc.) is irrelevant.

The regulations (24 CFR 960.255 and 24 CFR 5.617) state that the 48-month maximum period of the EID is over the course of a lifetime. If a person qualifies for EID and the PHA begins the initial 12-month exclusion and the person moves out of public housing or an HCV assisted unit before the 48-month period ends, does the person lose or forfeit the remainder of his or her 48-month income exclusion?

No. A person in these circumstances does not automatically lose or forfeit the remaining months of their exclusion. For example, if a person moves out of public housing during the cumulative 24-month exclusion period, and then moves back into a public housing unit, under the same or another PHA's jurisdiction, within the 48-month maximum period, the person continues to qualify for EID. Under these circumstances, a PHA would be required to resume the exclusion until the two cumulative 12-month exclusion periods, or the 48-month maximum period expire (whichever comes first). It is important to note that in order for the PHA to be aware of such circumstances, they would have to be reported by the tenant. The PHA would then have to verify the information. Although this example relates to a public housing tenant, the same would be true for an HCV participant who left and then returned to the HCV program.

In a mixed family, is the member of the family who does not have eligible immigration status eligible for EID?

Although it is not specifically addressed in the EID rule, non-citizens are not eligible for EID. As specified in 24 CFR 5.500(a), Section 214 of the Housing and Community Development Act of 1980 prohibits HUD from making financial assistance available to non-citizens who do not have eligible immigration status. Allowing a family member who does not have eligible immigration status to benefit from EID would result in that individual receiving "financial assistance."

Does a family living in public housing qualify for EID in the following situation: A 17-year-old member of the family (not a full-time student) earning $12,000 per year, turns 18 years old and continues to earn $12,000 per year? Does the increase in the family's annual income due to the 17-year-old turning 18 qualify the family for EID?

No. A qualified family, as defined in 24 CFR 960.255, is a family residing in public housing, whose annual income increases due to one of the following reasons:
• Employment of a family member who was previously unemployed for one or more years prior to employment.
• Increased earnings by a family member during participation in any economic self-sufficiency or other training program.
• New employment or increased earnings of a family member during or within 6 months after receiving assistance, benefits, or services under any state program for temporary assistance (TANF, Welfare-to-Work).
In this case, the family experienced an increase in annual income due to the minor turning 18, and not for any of the reasons stated above. Therefore, the family does not qualify for EID.

Does a 17-year-old family member who has been making $1500 per year while in high school, qualify for EID if, after graduation and turning 18, he begins making $10,000?

Yes. In this case the individual would meet the requirement under 24 CFR 960.255, of someone who was previously unemployed for one or more years prior to employment. Remember, "previously unemployed" includes a person who has earned, in the twelve months previous to employment, no more than would be received for 10 hours of work per week for 50 weeks at the established minimum wage.

Has HUD developed a form for PHAs to use to determine if someone qualifies for the Earned Income Disallowance (EID)?

HUD does provide an EID worksheet as a companion piece to the EID calculator. Both the EID calculator and worksheet (MS-Excel) can be accessed at the Earned Income Disallowance (EID) Worksheet and Calculator Web Page.

Question: Has HUD developed a form to help PHAs calculate the amount excluded under EID and track the time someone qualifies for the exclusion?

While there is no tracking form available, an Excel-based calculator that can be used to collect information on EID family members is currently available. Also available are EID in-depth examples and training materials from the January and February Rental Integrity Summit trainings, held in Orlando, FL and Anaheim, CA. The EID calculator and worksheet (MS-Excel) can be accessed at the Earned Income Disallowance (EID) Worksheet and Calculator Web Page.

Is HUD going to use the HUD-50058 to track EID?

Potentially. HUD will consider this suggestion for future edits to the form.
Click here for additional FAQs on EID definitions, qualifying factors, exclusionary periods, and income of minors who turn 18.

According to 24 CFR 5.609, "Annual income also means amounts derived (during the 12-month period) from assets to which any member of the family has access." How does HUD define assets and how are family assets treated in determining a family's annual income?

In general terms, an asset is cash or non-cash items that can be converted to cash, including real property, savings, stocks, bonds, and other forms of capital investment. Note that when assets are included in the calculation of annual income, as defined in 24 CFR 5.609, it is the income earned from the asset, not the value of the asset that is counted.
If the value of net family assets is $5000 or less, the actual income from assets is included in the calculation of annual income.
If the value of net family assets is greater than $5,000, annual income includes the greater of:
• Actual income from the assets
A percentage of the value of net family assets based on the passbook savings rate, as determined by HUD
Example: The Smith family has $6,000 (average balance over six months) in a non-interest-bearing checking account. The PHA would include in the annual income an amount based on the current HUD passbook savings rate. Assuming the current Passbook savings rate is 2 percent, the calculation would be: $6,000 x .02 = $120.

Who establishes the passbook savings rate and how is it determined?

Notice 2012-29 states that the PHA may establish its own passbook rate that the PHA will apply in calculating imputed assets from income. The PHA should review its passbook rate at least annually to determine that it is within the safe harbor range as described below. The PHA must apply its policy to calculate imputed asset income consistently to all participants.
Safe harbor –PHAs may establish a passbook rate within 75 basis points (plus or minus .75 percent) of the Savings National Rate in effect at the time the PHA establishes the passbook rate. The passbook rate may not be less than 0 percent. The Savings National Rate is a simple average of rates by United States (US) depository institutions as calculated by the Federal Deposit Insurance Corporation (FDIC). The FDIC publishes this rate on a weekly basis. The PHA can access historical and current Savings National Rates at the following website: www.fdic.gov/regulations/resources/rates/.
Examples: If the published FDIC Savings National Rate at the time the PHA establishes its passbook rate is .12%. Acceptable passbook rate would fall in the range between 0% and 0.87%. If the published FDIC Savings National Rate at the time the PHA establishes its passbook rate is .92%. Acceptable passbook rate would fall in the range between 0.17% and 1.67%.

Are one-time, lump sum payments (inheritance, lottery winnings, etc.) automatically counted as assets?

No. Where the family receives some type of payment as "cash" and then retains this "cash" in some verifiable form-deposited in a checking or savings account, invested in stock or mutual fund, or used to purchase bonds or real estate as an investment-then the "cash" becomes clearly identifiable and recognizable as an "asset." This is consistent with the concept of "Net Family Assets" as outlined in 24 CFR 5.603(b).
On the other hand, if the family receives some type of cash payment and does not retain the cash in one of these forms, it is nearly impossible to see how a PHA would determine that an asset actually exists. Simply knowing, or even verifying, that the family received a lump sum cash payment of a certain amount does not automatically classify that amount as an "asset." Families receiving lump sum cash payments may use this cash to pay bills, buy items of personal property, or for other purposes that have nothing to do with holding on to the cash as an asset. Where these payments are not retained in some verifiable form, the PHA would have no basis for projecting that the cash will, in fact, be identifiable as an asset for the 12-month period following admission/reexamination effective date.

If a family member has lottery winnings of $75,000 and gives it away, is this considered disposing of an asset for less than fair market value?

Not necessarily. See the discussion above re: one-time, lump-sum payments as assets. If the lump sum amount is never classified as an asset, then it logically cannot be classified as an asset disposed of for less than fair market value.
On the other hand, a lump sum amount (such as one-time $75,000 lottery winnings) that is retained as an asset and is identifiable as an asset, can potentially qualify as an asset disposed of for less than fair market value. If the family indicates that the asset was given away with no compensation of equal value, as the question suggests, then the asset would seem to fit the definition of an asset disposed of for less than fair market value. Of course, if the family indicates that the "asset" was liquidated to pay bills, buy items of personal property, or for other purposes where fair compensation was received, the asset could not be said to have been disposed of for less than fair market value. Ultimately, as with many other aspects of income and rent, PHA policy may be necessary to identify the type of verification and documentation the PHA will need to establish that fair value was received for a verified, identifiable asset that no longer exists.

Question: If a tenant puts $10,000 in an IRA, and 10 years later the IRA was worth $15,000 and that tenant began withdrawing monthly amounts from the IRA, are the amounts withdrawn considered income?

Question: A number of financial institutions charge tenants a user's fee (e.g., debit the tenant's account) to pay for third-party verification requested by the PHA. Can a PHA pass on the cost for third-party verification to an applicant or tenant?

No. The PHA cannot pass on the cost of bank user fees to an applicant or tenant for payment of third party verification requests made by the PHA. (See the Notice PIH 2004-01, Verification Guidance for more information.)

Question: What is adjusted income and how does it differ from a family's annual income?

Adjusted income, as defined in 24 CFR 5.611, means a family's annual income minus a number of mandatory deductions.
ANNUAL INCOME - DEDUCTIONS = ADJUSTED INCOME
The mandatory deductions include amounts for:
• Dependents
• Status as an elderly or disabled family
• Unreimbursed childcare expenses
• Unreimbursed medical expenses (elderly/disabled family only)
• Unreimbursed disability assistance expenses

When calculating adjusted income, are the deductions the same for both the public housing and the Section 8 HCV programs?

Almost.
Both the public housing and the Section 8 HCV programs have the same mandatory deductions, as defined in 24 CFR 5.611 and listed under Question 37.
However, for the public housing program, PHAs may adopt additional deductions from annual income. These additional deductions (also known as "permissible" or "permissive" deductions) are discretionary on the part of a PHA. Any PHA adopting permissive deductions must do so by establishing written policy for these deductions.
Because they are "permissive," at the discretion of the PHA, the deductions may vary from PHA to PHA. The vast majority of PHAs have not elected to adopt permissive deductions for the public housing program, and use only the required mandatory deductions.

If parents have joint custody of a child-child lives with one parent for half the year and lives with the other parent the other half of the year-and both live in public housing units, how should PHAs handle the $480 dependent deduction? Can PHAs give each parent a $240 deduction or should they give each parent the $480 deduction?

The regulation, 24 CFR 5.611(a)(1), does not address this issue specifically. HUD recommends that when parents share custody of a child and both live in assisted housing, only one parent at a time claims the dependent deduction for that child. A PHA could rely on tax returns to determine which parent claimed the child for income tax purposes. This position is consistent with the 4350.3 Occupancy Requirements of Subsidized Multifamily Housing Programs Handbook, chapter 5, 5-10A(4).

Regarding medical expense deductions and the $400 disabled or elderly family deduction, the HUD Form-50058 instructions refer to the head, co-head, and spouse. The regulations refer only to the head and spouse for these mandatory deductions. Can a disabled or elderly co-head qualify a family for the $400 elderly or disabled family deduction and medical expense deductions?

Yes. As defined in 24 CFR 5.403, a disabled family may include two or more persons with disabilities living together and an elderly family may include two or more persons who are at least 62 years of age living together. An example of this would be an unmarried couple or two persons living together and listed as head and co-head on the lease agreement. Therefore, a disabled or elderly co-head may qualify a family for the $400 elderly or disabled family deduction and medical expense deductions in accordance with 24 CFR 5.611. The Form HUD-50058 instructions should be followed in this case, which is consistent with Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs (Chapter 5, p. 5-9B2). See also FAQs under "Annual Income-What Is Excluded" of this page for questions related to income exclusions and Form HUD-50058.

Are the medical expenses of an elderly/disabled family's grandchild (assuming the grandchild is a member of the assisted family) included in the calculation of the medical deduction?

Yes. If the family meets the definition of elderly or disabled under 24 CFR 5.403, all family members are entitled to having their unreimbursed medical expenses included in the calculation of the medical expense deduction, per 24 CFR 5.611.

Should a PHA count as a medical expense a medical bill that the family is not paying anything on?

No. Per 24 CFR 5.603, medical expenses are anticipated expenses, including medical insurance premiums, during the period for which annual income is computed that are not covered by insurance, or some other source. If the family is not paying anything towards its medical bill, it should not receive the deduction. Keep in mind the medical expense deduction is for unreimbursed medical expenses of any elderly family or disabled family, per 24 CFR 5.611.

If a family takes out a loan to pay medical expenses, can the PHA use the payment on the loan as a medical expense deduction?

The source of income that a family will use to pay a medical expense, such as a loan, does not impact the eligibility of the expense itself. Just like any other medical expense, a PHA would be required to determine whether or not the family qualifies as an elderly or disabled family (see 24 CFR 5.403) and has eligible medical expenses, per 24 CFR 5.611, and then calculate and verify those expenses based on the PHA's adopted policies.

What happens if a PHA calculated a medical expense deduction based on projected medical expenses, but the family then does not incur the medical expenses? Can the PHA calculate an underpayment by the family? What recourse does the PHA have to rectify this situation?

All components of annual and adjusted income, including medical expenses are, by definition, based on what is anticipated for the 12-month period following admission or annual reexamination, per 24 CFR 5.603. Therefore, it is not only possible, but likely that actual expenses will not match what was anticipated. Typically, this would not be considered an underpayment as long as at the time of the annual reexamination, the expenses were calculated based on appropriate verification. The only time this situation could be considered an underpayment by the family is if a PHA's interim reporting policy explicitly required families to report changes in medical expenses. It is unlikely that a PHA would have this type of a policy.

May a PHA disallow a deduction for childcare expense because there is an unemployed adult family member available to provide childcare?

A PHA may not disallow a deduction for childcare expense because there is an unemployed adult family member that may be available to provide childcare. A PHA may not decide who will provide childcare for a participant's child(ren), nor may the PHA decide the type of childcare available for a participant's child(ren).

How does a PHA determine reasonable costs for childcare expenses?

A PHA should have adopted policies on how they will determine reasonable childcare expenses, which should include some type of market survey to determine the rates for childcare, for comparable situations, within the local market.

Question: Since the earned income disallowance (EID) reduces the amount of annual income, how does this affect the amount of childcare expenses a family qualifies for?

If the childcare is necessary to permit employment, per 24 CFR 5.603, the amount of the childcare deduction cannot exceed the amount of employment income included in annual income. For example, if a family member earns $15,000 a year but because they qualify for EID, only $5,000 is included in the calculation of annual income, the amount of childcare expenses that can be deducted from annual income is limited to $5,000.

Under what circumstances are PHAs required to suspend the minimum rent requirement for families who are paying minimum rent?

As defined in 24 CFR 5.630, the responsible entity (i.e. PHA) must grant a family an exemption from payment of minimum rent if the family is unable to pay the minimum rent because of financial hardship, as described in the responsible entity's written policies. Financial hardship includes the following situations:
• When the family has lost eligibility for or is awaiting an eligibility determination for a Federal, State, or local assistance program
• When the family would be evicted because it is unable to pay the minimum rent
• When the income of the family has decreased because of changed circumstances, including loss of employment
• When a death has occurred in the family
• Other circumstances determined by the PHA or HUD

Do PHAs have to suspend the family's minimum rent requirement the day the family makes the request?

In accordance with 24 CFR 5.630, if a family requests a financial hardship exemption, the responsible entity must suspend the minimum rent requirement beginning the month following the family's request for a hardship exemption. The suspension must continue until the responsible entity determines whether there is a qualifying financial hardship, and whether such hardship is temporary or long-term.

What is the difference between income-based rent and flat rent in public housing?

Income-based and flat rents are both defined in 24 CFR 960.253. An income-based rent is a tenant rent that is based on the family's income and the PHA's rent policies for determination of such rent. A PHA's rent policies may specify that the PHA will use a percentage of family income or some other reasonable system. In no case, may the income-based rent exceed the total tenant payment (TTP) for the family minus any applicable utility allowance for tenant-paid utilities.
Unlike income-based rents, flat rents do not fluctuate with changes in family income. Flat rents are based on the market rent charged for comparable units in the private unassisted rental market. It is equal to the estimated rent for which the PHA could promptly lease the unit. The flat rent is designed to encourage self-sufficiency and to avoid creating disincentives for continued residency by families who are attempting to become economically self-sufficient.

Do PHAs have to give public housing families the option to pay income-based rent or flat rent?

Yes. As defined in 24 CFR 960.253, once a year the PHA must give each family the opportunity to choose between the two methods for determining the amount of tenant rent payable monthly by the family. Except for financial hardship cases, the family may not be offered this choice more than once a year.

What are the timeframes for PHAs to convert from ceiling rents to flat rents? Can PHAs retain ceiling rents?

Per 24 CFR 960.253(d), a PHA may retain ceiling rents that were authorized and established before October 1, 1999, for a period of three years from October 1, 1999. After this three-year period, a PHA must adjust such ceiling rents to the level required for flat rents under this section. It is important to note that PHAs may continue to impose a ceiling on tenant rents as an income-based rent option, but again, these rents must be at the level of flat rents.

What method is required for PHAs to determine flat rents?

HUD does not require a PHA to use a particular method. However, 24 CFR 960.253(b) requires that a PHA consider, at a minimum, the following items: location, quality, size, unit type, age of the unit, amenities, housing services, maintenance, and utilities provided by the PHA.

What are the requirements for interim reexaminations?

In accordance with 24 CFR 960.257 and 24 CFR 982.516, PHAs must adopt policies describing when interim reexaminations will be conducted and prescribing when and under what conditions the family must report a change in family income or composition. For example, a PHA's policy could:
• Require families to report all increases in income
• Require families to report only increases in excess of a certain dollar amount
• Allow families who experience an increase in income to wait to report it until their next annual reexamination.
It is important to remember that under the regulations, a family may request an interim reexamination of family income or composition because of changes since the last determination, and the PHA must make the interim changes within a reasonable time after the family's request.

How often are PHAs required to conduct reexaminations for public housing and Section 8 HCV program participants?

In accordance with 24 CFR 960.257, for public housing families who pay an income-based rent, the PHA must conduct a reexamination of family income and composition at least annually and must make appropriate adjustments in the rent after consultation with the family and upon verification of the information.
For public housing families who choose flat rents, the PHA must conduct a reexamination of family composition at least annually, and must conduct a reexamination of family income at least once every three years. A family may request an interim reexamination of family
For families receiving Section 8 HCV subsidies, in accordance with 24 CFR 982.516, the PHA must conduct a reexamination of family income and composition at least annually.

What are Fair Market Rents (FMRs) and how are they used to set payment standards in the housing choice voucher (HCV) program?

FMRs are gross rent estimates. They include the shelter rent plus the cost of all utilities, except telephone and cable. The PHA may establish the payment standard amount for a unit size at any level between 90 percent and 110 percent of the published FMR for that unit size (24 CFR 982.503(b)). PHAs may set them higher or lower with HUD approval.
For more information on FMRs and payment standard schedules, see 24 CFR 982.503.

If the payment standard increases or decreases during the housing assistance payment (HAP) contract, are PHAs required to adjust the family's rent at that time, using the higher or lower payment standard?

As defined in 24 CFR 982.505, if the payment standard amount increases during the term of the HAP contract, the increased payment standard amount shall be used to calculate the monthly HAP for the family beginning at the effective date of the family's first annual reexamination on or after the effective date of the increase in the payment standard amount.
If the amount on the payment standard schedule is decreased during the term of the HAP contract, the lower payment standard amount generally must be used to calculate the monthly HAP for the family beginning at the effective date of the family's second annual reexamination, following the effective date of the decrease in the payment standard amount. The PHA shall advise the family that the application of the lower payment standard amount will be deferred until the second annual reexamination, following the effective date of the decrease in the payment standard amount.

How often does a PHA have to update its payment standards?

A PHA must update its payment standards in accordance with its written policies. Per 24 CFR 982.54(d)(14), a PHA must have a policy for establishing and revising voucher payment standards. That said, in accordance with 24 CFR 982.503(b), the payment standards must always be within 90 to 110 percent of the currently published FMR.

How long are area exception payment standards in effect? What happens to the exception payment standards when new FMRs are issued?

An area exception payment standard remains in effect until it is exceeded by the basic range for setting payment standards - 110 percent of the current FMR. At that point, the exception payment standard is no longer needed.

When does a family receive the utility allowance for the range and refrigerator?

A family is only given this allowance if the lease indicates that it is the tenant's responsibility to provide the range and/or refrigerator, in accordance with 24 CFR 982.517(a). The allowance is intended to cover the family's cost in supplying the appliances, not the energy used to operate them.

If an owner provides a range and refrigerator but the family wants to use their own, do they get the utility allowance for these appliances?

No. The allowance is only given if the owner does not provide the appliances. The lease should be used to determine what the owner provides.

Can a family be defined as a mixed family if the only family member with citizenship is a minor child?

Yes. The regulation, 24 CFR 5.504, requires only that one member of the family is eligible. HUD's Office of General Counsel has issued an opinion clarifying the issue as follows: The head of household or spouse does not have to be a citizen or eligible immigrant in order for a family to receive housing assistance. At least one member of a family must be eligible, which could be a child. Housing assistance must be prorated so only eligible family members are subsidized. Family members who do not have eligible immigration status can be the head of household for purposes of income eligibility, determination of rent, and entering into a lease, even though their occupancy is not being subsidized.

If a person is a "non-contending" family member, does the PHA consider them to have eligible or ineligible immigration status?

The PHA should consider the person to have ineligible immigration status. Per 24 CFR 5.508(a), a person's eligibility status is contingent upon that person submitting a written declaration to the responsible entity, by which that person declares whether he or she is a U.S. citizen or a non-citizen with eligible status. By not submitting the signed declaration, effectively not contending citizenship or eligible immigration status, the person cannot establish eligibility for assistance or continued assistance under Section 214-covered programs.

If the only family member who has eligible citizenship or immigration status passes away or vacates the unit, what does the PHA have to do with the remaining ineligible members?

If there are no remaining family members with eligible immigration status residing in the unit, the family is no longer eligible to receive assistance and must be terminated from the program. (See also 24 CFR 5.518 for types of assistance available for mixed and other families.)

Does the Section 214 Form (declaration of citizenship) have to be signed annually or only once?

The citizenship status of each member of an applicant or tenant family needs to only be declared once. Per 24 CFR 5.508(g)(5), the family is required to submit evidence of eligible status only one time during continuously assisted occupancy under any Section 214 covered program.

What should a PHA do if its hardware or software is not compatible with the new automated verification INS SAVE system?

PHAs that are unable to access the INS SAVE system to verify a person's immigration status will be required to manually verify citizenship by submitting Form G-845S, as described in 24 CFR 5.512(d). The instructions for this process are contained in the INS SAVE Program User’s Manual. To order a copy, contact your local INS Office.

Should a PHA evict a family that provided false citizenship documentation, or just recalculate the rent as a mixed family?

As long as the family has at least one eligible member, it is up to the PHA to determine whether or not to terminate a family under these circumstances. A PHA certainly has the right to terminate assistance when a family knowingly provides false documentation, in accordance with 24 CFR 966.4(l)(2)(ii)(C) and 24 CFR 982.552(c). At a minimum, the PHA would have to charge the family retroactive rent for the time period that the PHA provided full assistance to the family.

How often does HUD expect the PHA to re-determine the public housing maximum rent for purposes of prorating rent for a mixed family?

Although the regulation (24 CFR 5.520) does not specifically address this issue, HUD recommends that the PHA re-determine the public housing maximum rent at least annually for purposes of prorating rent for a mixed family. It is reasonable to expect the PHA to re-determine the maximum rent on an annual basis since it is based on the value of the 95th percentile of the total tenant payment (TTP) for each tenant within the PHA, which changes on an on-going basis because of move-ins, move-outs, changes in tenant income, etc.

When an owner runs a promotion, offering one free month of rent to attract new tenants, what does a PHA do when a Section 8 HCV participant moves into one of these units and receives one free month of rent? The PHA is making a HAP payment to the owner, but the tenant does not have to pay anything to the owner for that month, which causes an overpayment in the HAP.

The easiest way for a PHA to handle this situation is to have the owner prorate the one free month of rent over a 12-month period. This would lower the monthly contract rent, causing no overpayment. For example, if the one free month of rent amounts to $600, the owner would recalculate the monthly contract rent for a 12-month period, factoring in the $600 in free rent. Thus, the monthly contract rent would become $550 rather than $600.

What is the difference between statutory and regulatory waivers?

HUD cannot waive statutory requirements or regulatory requirements that are based on statutory requirements, with one exception-the Moving to Work Demonstration Program (MTW). Under MTW, HUD has the legislative authority to waive provisions of the U.S. Housing Act of 1937 for participating PHAs.
Regulatory waivers of program requirements that are not explicitly stated in a statute, may only be granted by the Assistant Secretary for Public and Indian Housing (PIH) (or his designee), on a case-by-case basis, for good cause.

What are the restrictions in Section 327(a) of the Act?

No section 8 assistance shall be provided to any individual who:
•
Is enrolled as a student at an institution of higher education;
•
Is under the age of 24;
•
Is not a veteran of the United States military;
•
Is unmarried;
•
Does not have a dependent child;
•
Is not a person with disabilities, as such term is defined in section 3(b)(3)(E) of the United States Housing Act of 1937 (42 U.S.C.1437a(b)(3)(E)) and was not receiving assistance under such section 8 as of November 30, 2005; and
•
Is not otherwise individually eligible, or has parents who, individually or jointly, are not eligible on the basis of income to receive section 8 assistance.

What are the restrictions in Section 327(b) of the Act?

Financial assistance, in excess of amounts received for tuition, that an individual receives under the Higher Education Act of 1965, from private sources, or from an institution of higher education is considered income for that individual, except for persons over the age of 23 with dependent

Does the new law apply to both a part-time and a full-time student enrolled at an institution of higher education?

Yes. The new law applies to a student who is enrolled either full-time or part-time at an institution of higher education. The new law does not exempt a part-time student.

Does the new law apply to a student who is a person with disabilities?

Students with disabilities who were receiving section 8 assistance as of November 30, 2005, are exempt from the restrictions for providing section 8 assistance to college students as provided in Public Law 109-249.
Students with disabilities who are applying for, or who started receiving, section 8 assistance after November 30, 2005, are not exempt from the restrictions of the new law.

If a student is living with his or her parents who are already living in assisted housing and receiving section 8 assistance, must the student meet the eligibility requirements of 5.612(f)?

No. The new law does not apply to students residing with their parents in a section 8 assisted unit or who reside with parents who are applying to receive section 8 assistance.

Would any financial assistance received by a student living with his or her parents in assisted housing and receiving section 8 assistance be included in annual income?

No. Since the new law does not apply to students residing with their parents in a section 8 assisted unit or who reside with parents who are applying to receive section 8 assistance, any financial assistance in excess of tuition would not be included in annual income. The financial assistance would continue to be excluded from annual income under 5.609(c)(6).

If a student is under the age of 24, not a veteran, unmarried, and has no dependent children, must both the student and the student’s parents meet the income eligibility requirements in order for the student to be eligible?

If an individual is enrolled as a student at an institution of higher education, is under the age of 24, not a veteran, not married, is not a person with disabilities who was receiving section 8 assistance on November 30, 2005, and does not have a dependent child, in order to be eligible for section 8 assistance, the student must be individually eligible to receive section 8 assistance and the student’s parents (the parents individually or jointly) must be income eligible to receive section 8 assistance unless the student can demonstrate his or her independence from parents in accordance with the guidance in the Supplementary Guidance Notice published in the April 10, 2006 Federal Register (71 FR 18146).
As previously stated, the new law does not apply to students residing with their parents in a section 8 assisted unit or who reside with parents who are applying to receive section 8 assistance.

What happens if the parents refuse to declare or certify to their income?

In order for the student to be eligible for section 8 assistance, his or her parents must also be eligible for section 8 assistance, therefore, if the parents refuse to provide a declaration and certification of their income, the student is not eligible unless the student can demonstrate his or her independence from parents in accordance with the guidance published in the Supplementary Guidance Notice published in the April 10, 2006 Federal Register (71 FR 18146).

When determining the parent’s eligibility under the new law do the parents have to meet all of HUD’s program eligibility requirements in order for the student to be eligible?

No. Since Section 327 is focused on income eligibility of a higher education student, the Department interprets the section’s reference to the eligibility of the parents to also refer to income eligibility.
However, parents who are applying to live in the assisted unit with the student and receive section 8 assistance would have to meet all of the program eligibility requirements addressed in HUD Handbook 4350.3 REV-1, Occupancy Requirements of Subsidized Multifamily Housing Programs.

What income limit is used for determining the parents’ income eligibility under section 5.612(f)?

In determining the parents’ income eligibility to receive section 8 assistance, the owner should use the applicable low income limit for the parents’ family size for the locality where the parents reside. For example, if the parents live in New York City, the low-income limit for the family size for New York City should be used for determining the parents’ eligibility for section 8 assistance.
If a student’s parents live outside of the United States in areas where income limits have not been established for the section 8 program, the owner should use the applicable low income limit for the parents’ family size for the same locality used in determining the student’s eligibility.
(See paragraph 3-6.E.4 of Handbook 4350.3 REV-1, Occupancy Requirements of Subsidized Multifamily Housing Programs, for guidance on determining family size for income limits and paragraph 3-6.F for applying the income limit to determine eligibility for assistance. Income limits for the section 8 program are posted at www.huduser.org.)

In order to determine the eligibility of parents for section 8 assistance, how will owners and managers obtain and verify income information on the parents?

In order to determine the eligibility of parents, the owner may accept a signed declaration and certification of income from the parents, which includes a penalty of perjury clause.
If for some reason the owner determines that the parents’ declaration and certification of income or their eligibility is questionable, the owner may request and review supporting documentation.
Supporting documentation includes, but is not limited to: Internal Revenue Service (IRS) tax returns, consecutive and original pay stubs, bank statements, pension benefit statements, Temporary Assistance to Needy Families (TANF) or Social Security Administration award letters or other official and authentic documents from a federal, State or local agency.

How can a student demonstrate his or her independence from parents?

To determine a student’s independence from his or her parents, the owner should use program practices and criteria already in place. These practices and criteria include, but are not limited to, consideration of all of the following:
1. The individual must be of legal contract age under state law.
2. The individual must have established a household separate from parents or legal guardians for at least one year prior to application for occupancy, or the individual must meet the U.S. Department of Education’s definition of an independent student.
3. The individual must not be claimed as a dependent by parents or legal guardians pursuant to IRS regulations.
4. The individual must obtain a certification of the amount of financial assistance that will be provided by parents, signed by the individual providing the support. This certification is required even if no assistance will be provided.

How will owners verify a student’s independence from his or her parents in order to determine that the student’s parents’ income is not relevant for determining the student’s eligibility?

Owners will need to verify a student’s independence from his or her parents by taking into consideration all of the following:
1. Reviewing and verifying previous address information to determine evidence of a separate household, or verifying the student meet’s the U.S. Department of Education’s definition of “independent student”; and
2. Reviewing prior year income tax returns to verify if a parent or guardian has claimed the student as a dependent (except if the student meets the Department of Education’s definition of “independent student”); and
3. Verifying income provided by a parent by requiring a written certification from the individual providing the support. Certification is also required if the parent(s) is providing no support to the student. Financial assistance that is provided by persons not living in the unit is part of annual income.
If the owner establishes additional criteria for determining the student’s independence from parents, verification would also need to be obtained in accordance with the owner’s policies.

How will owners know whether to determine the income of the parents individually or jointly?

Owners may adopt and implement the following criteria for determining whether to obtain the declaration and certification of income from parents, individually or jointly:
If the student’s parents are married and living with each other, obtain the declaration and certification of income from each parent.
If the student’s parent is widowed or single, obtain the declaration and certification of income from that parent.
If the student’s parents are divorced or separated, obtain the declaration and certification of income from each parent.
If the student has been living with one of his or her parents and has not had contact with or does not know where to contact his or her other parent, obtain from the student a certification addressing the circumstances and that they have not received any financial assistance, directly or indirectly, from the absent parent. The certification must include a penalty of perjury clause. The owner must also obtain the declaration and certification of income from the parent with whom the student has been living or has contact with.

What is the definition of an institution of higher education under section 102 of the Higher Education Act of 1965?

The definition used for an institution of higher education under 20 U.S.C.1001 and 1002 of the Higher Education Act of 1965 is quite lengthy. See Appendix A of the Supplementary Guidance Notice published in the April 10, 2006 Federal Register (71 FR 18146) for the definition.

What is the definition for “dependent child” and “dependent children” for the purposes of the new law?

“Dependent” in the context of the new eligibility restrictions, means a dependent child of an enrolled student who meets the criteria in 5.612. Dependent child is defined in HUD’s income eligibility regulations at 24 CFR 5.603 as a member of the family (except foster children and foster adults) other than the family head or spouse, who is under 18 years of age, or a person with a disability, or a full-time student.

What is included as “financial assistance”? Does it include scholarships as well as Federal, State and local grants and loans?

Financial assistance includes any assistance in excess of tuition (e.g., athletic and academic scholarships) that a student receives:
(1)
Under the Higher Education Act
of 1965. This includes Pell Grants, Federal Supplement Educational Opportunity Grants, Academic Achievement Incentive Scholarships, State Assistance under the Leveraging Educational Assistance Partnership Program, the Robert G. Byrd Honors Scholarship Program, and Federal Work Study programs.
(2)
Assistance from private sources.
Non-governmental sources of assistance, including assistance that may be provided to a student from a parent(s), guardian or other family member, whether residing within the family in the section 8 assisted unit or not, and from other persons not residing in the unit.
(3) From an institution of higher education requires reference to a particular institution and the institution’s listing of financial assistance.
HUD has interpreted the term “financial assistance” to not include loan proceeds for the purpose of determining income. Therefore, Perkins loans, Stafford loans and Plus loans under the Higher Education Act of 1965 are not considered as financial assistance under 5.609(b)(9).

What is the definition for Independent Student used by the Department of Education for Title IV aid purposes?

To qualify as an independent student for Title IV aid, a student must meet one or more of the following criteria:
a. Be at least 24 years old by December 31 of the award year for which aid is sought;
b. Be an orphan or a ward of the court through the age of 18.
c. Be a veteran of the U.S. Armed
Forces;
d. Have legal dependents other than a spouse (for example,
dependent children or parent);
e. Be a graduate or professional student; or,
f. Be married.

How should “parents” be defined? What if a student lives with a grandparent, aunt, guardian, etc., do they have to meet the qualifications also?

For purposes of this new law, and consistent with long-standing HUD policy regarding eligibility for the section 8 programs, parents means the biological or adoptive parents, or guardians (e.g., grandparents, aunt/uncle, godparents, etc.), or such definition as may be adopted by the owner through appropriate amendment to its admissions policies.

ow is student to be defined in the new law?

Student means all students enrolled either full-time or part-time at an institution of higher education. The new law does not exempt part-time students.

What is included in “tuition”? Does it include other fees charged by the educational institution?

Tuition shall have the meaning given this term by the institution of higher education in which the student is enrolled.

What is the definition of a veteran?

The definition of veteran is left to the discretion of the owner. However, since the use of the Department of Veterans Affairs as codified at 38 U.S.C. 101(2) is widespread in other federal programs affecting veterans, owners may find it useful to adopt this definition. The term “veteran” codified at 38 U.S.C. 101(2) means a person who served in the active military, naval, or air service, and who was discharged or released therefrom under conditions other than dishonorable.”

Does the new law apply to any program other than section 8?

No. The new law only applies to a student applying to receive or who is currently receiving section 8 assistance.

Is a student who is currently residing in assisted housing and receiving Section 8 assistance grandfathered in under these new requirements?

No. A student currently residing in assisted housing and receiving section 8 assistance will not be grandfathered in but at recertification must be eligible under the requirements in sections 5.609(b)(9) and 5.612 in order to continue being assisted under the section 8 program. As stated in the Final Rule published in the December 30, 2005 Federal Register (70 FR 77742), the Department is strongly encouraging owners and management agents to conduct a recertification on students currently receiving section 8 assistance as soon as is practicable and not wait until the time of annual recertification to implement the requirements for current residents.
As previously stated, the new law does not apply to students residing with their parents in a section 8 assisted unit or who reside with parents who are applying to receive section 8 assistance.
A student with disabilities, as defined in section 3(b)(3)(E) of the United States Housing Act (42 U.S.C. 1437(a)(b)(3)(E)), who was receiving section 8 assistance on November 30, 2005, is also exempt from the student restrictions.

Do the requirements in paragraphs 3-16 and 3-33 on student eligibility and verification currently in Handbook 4350.3 REV-1 still apply?

Paragraphs 3-16 and 3-33 on student eligibility and verification no longer apply to a student applying for or receiving section 8 assistance. Owners should follow the guidance in the Supplementary Guidance Notice published in the April 10, 2006 Federal Register (71 FR 18146) for determining eligibility of a student to receive section 8 assistance.
However, Paragraphs 3-16 and 3-33 continue to apply for a student applying for or living in assisted housing that are under multifamily housing programs other than the section 8 program.
Handbook 4350.3 REV-1, Occupancy Requirements of Subsidized Multifamily Housing Programs, will be updated to include all of the student eligibility requirements in a future change to the handbook.

When is the latest permissible time that existing section 8 participants can be recertified?

Since the Final Rule published in the December 30, 2005 Federal Register (70 FR 77742), became effective on January 30, 2006, over one year ago, all tenants should have now been recertified based on the new student requirements.

What if a student has a dependent child who does not live in the unit with the student, is the student eligible under the new law without having to take into consideration his or her parents’ income or having to demonstrate his or her independence from parents?

No. In order to be eligible under the new law, the dependent child should live in the unit with the student. If the student shares custody of the child, the child must live in the unit 50% or more of the time, which is the same guidance used for determining the unit size for the family (see Paragraph 3-23 E.6.(6) of Handbook 4350.3 REV-1, Occupancy Requirements of Subsidized Multifamily Housing Programs).

If the student is pregnant does she qualify as having a dependent child under this new law?

No. The unborn child is only taken into consideration for purposes of establishing the student’s income eligibility and applicable unit size (see paragraphs 3-6.E and 3-23.E of Handbook 4350.3 REV-1, Occupancy Requirements for Subsidized Multifamily Housing Programs.)

If the student is married but not living with his or her spouse, is the student eligible under the new law without having to take into consideration his or her parents income or having to demonstrate his or her independence from parents.

No. In order to qualify as being married under this new law, the spouse should be living in the unit with the student. In instances where the student is not living with his or her spouse, the income of the student’s parents would be taken into consideration unless the student can demonstrate his or her independence from parents.

Is a student only required to meet the eligibility requirements under the new law at the time of move-in or at the time of the first certification implementing the new law or will he or she have to meet the requirement at the time of each annual recertification?

Owners must ensure at each annual recertification that a student remains eligible to receive section 8 assistance under the restrictions of the new law as stated in the Supplementary Guidance Notice published in the April 10, 2006 Federal Register (72 FR18146).

Is a student required to meet the eligibility requirements at the time of an interim recertification?

If a household reports a change in household composition or income between their regularly scheduled certifications, the owner must process an interim recertification, verifying any circumstances that have changed since the last time the household was certified as addressed in Paragraph 7-11 of Handbook 4350.3 REV-1, Occupancy Requirements of Subsidized Multifamily Housing Programs.
Therefore, if one of the changes reported is that a household member is enrolled as a student at an institution of higher education, the owner will need to determine the student’s eligibility under the new law. The exceptions to this are:
􀂃
when the student is living in a subsidized unit with his or her parents who are receiving section 8 assistance, or
􀂃
the student is a person with disabilities who was receiving section 8 assistance on November 30, 2005.
A student who was determined eligible at the time of the last certification for a household, does not have to be determined eligible again when processing the interim recertification.

Will owners be required to obtain and verify income information on the parents at every annual recertification to determine if the student continues to be eligible?

Yes. Owners must ensure at each annual recertification that a student remains eligible to receive section 8 assistance under the restrictions of the new law as published in the Supplementary Guidance Notice in the April 10, 2006 Federal Register (71 FR 18146). Therefore, the owner will be required to obtain an income declaration and certification from the parents and determine their income eligibility at the time of each of the student’s annual recertification in order to determine if the student continues to be eligible to receive section 8 assistance unless the student demonstrates his/her independence from parents.

If a student’s parents are not living together, and when the owner assesses their income eligibility it is determined one parent is eligible and one parent is ineligible, how should the eligibility of the student be determined?

In this instance, the student would not be eligible to receive section 8 assistance. In order for the student to be eligible to receive section 8 assistance, both parents must also be eligible to receive section 8 assistance.

Does living in a dormitory count when determining the one-year period the individual must have established a household separate from parents or legal guardians?

No. The owner may not take into consideration the time that the individual lived in a dormitory when determining the one-year requirement.

If in a household made up of several individuals, one individual is determined to be an ineligible student, how will the assistance for this household be determined? Will the assistance be prorated like it is for the non-citizen rule?

Assistance will not be prorated.
If this is an applicant household, the household will be prohibited from participating in the section 8 program.
If this is an existing household receiving section 8 assistance, the assistance will be terminated in accordance with the guidance in Chapter 8, Section 1 of Handbook 4350.3 REV-1, Occupancy Requirements of Subsidized Multifamily Housing Programs.

If an individual decides to enroll in a class at the community college, such as a pottery class, that is not taken for the purpose of obtaining a degree, certificate, or other recognized educational credential, is he or she considered a part-time student under the new law?

No. If the person is not enrolled in the class because it is required for the purpose of obtaining a degree, certificate, or other program leading to a recognized educational credential, they would not be covered by the student restrictions of the new law.

How do we handle a situation where an individual is not a student at the time they move into the project but who later enrolls at an institution of higher education?

An individual’s eligibility to receive section 8 assistance is based on their status at the time they move into the property. An individual who is not enrolled at an institution of higher education at the time of move-in but who later enrolls must meet the student eligibility restrictions under the new law the first time he or she is recertified after becoming enrolled as a student. The latest the student restrictions would be applied in this instance would be at the next scheduled annual recertification.

Is the income received by a student under the federal Work Study program included in the financial assistance in excess of tuition calculation for annual income?

Yes. Income received under the Work Study program is considered financial assistance under the Higher Education Act of 1965 and should be considered when determining the amount of financial assistance in excess of tuition that will be included in annual income.

Is the financial assistance in excess of income included in annual income for all students or only for students affected by the restrictions of Section 327(a) of the Act?

The amount of financial assistance in excess of tuition is included in annual income for all students applying for or receiving section 8 assistance, except for students who are living with their parents who are applying for or receiving section 8 assistance or if the student is over the age of 23 with dependent children.

Can an owner evict an ineligible student or require the student to move?

No. An owner cannot evict or require an ineligible student to move from a unit as long as the student is in compliance with the terms of the lease. Although the student is allowed to remain in the unit, the student will no longer be eligible to receive section 8 assistance.

A household applying for section 8 assistance is made up of: • one person who is not a student, is head of household and has a dependent child, and • one student who is eligible, and • one student who does not meet the eligibility requirements of section 5.612 Would this household be eligible to move-in and receive Section 8 assistance?

No. The applicant household would not be eligible to move-in and receive section 8 assistance because the household contains an ineligible student. If the ineligible student decides not to be a part of the applicant household, the head of household who is not a student with a dependent child, and the eligible student would be eligible to move into an appropriate size unit and receive section 8 assistance, as long as they are eligible for the property where they are applying.

A household is currently receiving Section 8 assistance. The household family is made up of: • one student who is 22 years old, is head of household, and has a dependent child • another student who does not meet the eligibility requirements of section 5.612. Is this household eligible to continue receiving Section 8 assistance?

No. In order for the household to be eligible for section 8 assistance, each individual student must meet the student eligibility requirements in section 5.612.
In this example, the 22-year old student is eligible because he or she has a dependent child. However, since it has been determined that the other student is ineligible under section 5.612, the household is not eligible to receive section 8 assistance, and the assistance must be terminated in accordance with the guidance in Chapter 8, Section 1 of Handbook 4350.3 REV-1, Occupancy Requirements of Subsidized Multifamily Housing Programs. The household’s rent will be increased to the applicable rent for the unit (contract, basic, market), as long as the ineligible student remains in the unit.
If the ineligible student moves out of the unit, the remaining household members may again be eligible for section 8 assistance, if available. If the household composition no longer qualifies the household for the unit size, the household may be required to move to an appropriate size unit when one is available, or, with the approval of the owner, the household may move in another eligible person as a member of the household and remain in their same unit. The owner cannot evict or require the ineligible student to move, as long as the student is in compliance with the terms of the lease.

A current household is made up of: • two full-time students, and • one part-time student Must each student meet the eligibility requirements in section 5.612?

Yes, each student must meet the eligibility requirements in section 5.612 in order for the household to receive section 8 assistance. If any of the students do not meet the eligibility requirements, the section 8 assistance must be terminated in accordance with the guidance in Chapter 8, Section 1 of Handbook 4350.3 REV-1, Occupancy Requirements of Subsidized Multifamily Housing Programs, and the rent will be increased to the applicable rent for the unit (contract, basic, market), as long as there is an ineligible student living in the unit.
If the ineligible student(s) moves, the remaining household members may again be eligible for section 8 assistance, if available. If the family composition does not require the number of bedrooms in the unit, the remaining family members would be required to move to an appropriate size unit when one was available, unless the owner approves another eligible person to move in as a member of the household. The owner cannot evict or require the ineligible student to move, as long as the student is in compliance with the terms of the lease.

If an applicant household contains an ineligible student, can the household move in and pay the market rent?

If an applicant family has a family member who is an ineligible student, the family would be ineligible for section 8 assistance and would not be eligible to move in and pay market rent without HUD approval. (See Paragraph 3-8 of HUD Handbook 4350.3 REV-1, Occupancy Requirements of Subsidized Multifamily Housing Programs, for admitting ineligible applicants.)

In a partially assisted section 236 project, if a current household is not eligible for section 8 assistance because it has a household member who is not eligible under section 5.612 can the household be recertified under the section 236 program?

Yes. In a partially assisted Section 236 project, if the household is found to be ineligible for section 8 assistance because it has a household member who is a student who is not eligible under section 5.612, the household should be recertified using the section 236 rent formula. However, the student must meet the student eligibility requirements currently in paragraphs 3-16 and 3-33 of Handbook 4350.3 REV-1 Change 1, Occupancy Requirements for Subsidized Multifamily Housing Programs.
The requirements of the new law to include all financial assistance in excess of tuition do not apply to the section 236 program. Therefore, the financial assistance would continue to be excluded from annual income under 24 CFR 5.609(c)(6).

Will the owner now be required to verify whether or not a school qualifies as an institution of higher education?

Yes. The owner will need to ensure that the school meets the Department of Education’s definition for an “institution of higher education as defined under section 102 of the Higher Education Act of 1965 (20 U.S.C. 1002). See Appendix A of the Supplementary Guidance Notice published in the April 10, 2006 Federal Register (71 FR 18146).
It should not be necessary for the owner to verify this for each student individually. Once the owner has determined that the school does or does not meet the definition, he or she can use the same supporting documentation for each tenant attending that particular school.

Will new HUD-50059 eligibility codes be issued to designate whether or not a household member is an eligible student?

Yes. New HUD-50059 eligibility codes will be added in a future release to TRACS.

Will new HUD-50059 codes be issued to designate a household where assistance has been terminated because a household member is an ineligible student? If not, what code should be used?

Yes. New HUD-50059 eligibility codes will be added in the future. Until such time as a new code is established in TRACS, owners should use the current code “TI = Equals/Exceeds Gross Rent” when terminating the assistance of households where a member of the household is an ineligible student.

Should owners continue using the Special Status Code “S” on the HUD-50059 to designate full-time student status?

Yes. The Special Status Code “S” should continue to be used for full-time students over the age of 18 who live in assisted housing with their parents who are receiving section 8 assistance.

Will HUD be providing any resident notification procedures for owners or management agents to use when implementing sections 5.609(b)(9) or 5.612 to inform current residents of the potential loss of subsidy?

No. HUD will not be providing owners or management agents with resident notification procedures.

Is there any process for students to appeal the owner’s or management agent’s decision under these regulations?

Owners are required to provide applicants the opportunity to meet with them to discuss any rejection for admittance. Tenants are to be provided the same opportunity when notified that their assistance is being terminated. See paragraphs 4-9 and 8-6 of Handbook 4350.3 REV-1, Occupancy Requirements for Subsidized Multifamily Housing Programs, the HUD Model Lease for Subsidized Programs and the Model Lease for Section 202/8.

How does 5.609(b)(9) affect the Federally mandated exclusion of “Amounts of scholarships funded under title IV of the Higher Education Act of 1965,” including awards under federal work-study programs or under the Bureau of Indian Affairs student assistance programs (20 U.S.C. 1087uu)?

The Federally mandated exclusion under 24 CFR 5.609(c)(17) does not apply to individuals applying for or receiving section 8 assistance. The Federally mandated exclusion continues to be in effect for other Multifamily Housing programs.

Is HUD going to be adding language to the model leases to cover these requirements?

No. The HUD model leases will not be revised to include the student eligibility requirements.

Should the owner revise the project’s Tenant Selection Plan to include the requirements of the Final Rule?

Yes, owners should immediately update their Tenant Selection Plans to include the student eligibility and income requirements.
Owners should notify applicants on their waiting list and current residents of the new student eligibility requirements.

What types of discrimination against persons with disabilities does the Act prohibit?

The Act prohibits housing providers from discriminating against
applicants or residents because of their disability or the disability of anyone
associated with them and from treating persons with disabilities less favorably
than other because of their disability. The Act also makes it unlawful for any
person to refuse “to make reasonable accommodations in rules, policies,
practices, or services, when such accommodations may be necessary to afford
... person(s) [with disabilities] equal opportunity to use and enjoy a dwelling.
The Act also prohibits housing providers from refusing residency to persons
with disabilities, or placing conditions on their residency, because those persons
may require reasonable accommodations. In addition, in certain circumstances,
the Act requires that housing providers allow residents to make reasonable
structural modifications to units and public/common areas in a dwelling when
those modifications may be necessary for a person with a disability to have full
enjoyment of a dwelling. With certain limited exceptions, the Act applies to
privately and publicly owned housing, including housing subsidized by the
federal government or rented through the use of Section 8 voucher assistance.

Who must comply with the Fair Housing Act’s reasonable accommodation requirements?

Any person or entity engaging in prohibited conduct – i.e., refusing to
make reasonable accommodations in rules, policies, practices, or services,
when such accommodations may be necessary to afford a person with a
disability an equal opportunity to use and enjoy a dwelling – may be held liable
unless they fall within an exception to the Act’s coverage.

Who qualifies as a person with a disability under the Act?

The Act defines a person with a disability to include (1) individuals
with a physical or mental impairment that substantially limits one or more
major life activities; (2) individuals who are regarded as having such an
impairment; and (3) individuals with a record of such an impairment.

Does the Act protect juvenile offenders, sex offenders, persons who illegally use controlled substances, and persons with disabilities who pose a significant danger to others?

No, juvenile offenders and sex offenders, by virtue of that status, are
not persons with disabilities protected by the Act. Similarly, while the Act does
protect persons who are recovering from substance abuse, it does not protect
persons who are currently engaging in the current illegal use of controlled
substances. Additionally, the Act does not protect an individual with a disability
whose tenancy would constitute a "direct threat" to the health or safety of
other individuals or result in substantial physical damage to the property of
others unless the threat can be eliminated or significantly reduced by
reasonable accommodation.

How can a housing provider determine if an individual poses a direct threat?

The Act does not allow for exclusion of individuals based upon fear,
speculation, or stereotype about a particular disability or persons with
disabilities in general. A determination that an individual poses a direct threat
must rely on an individualized assessment that is based on reliable objective
evidence (e.g., current conduct, or a recent history of overt acts). The
assessment must consider: (1) the nature, duration, and severity of the risk of
injury; (2) the probability that injury will actually occur; and (3) whether there
are any reasonable accommodations that will eliminate the direct threat.
Consequently, in evaluating a recent history of overt acts, a provider must take
into account whether the individual has received intervening treatment or
medication that has eliminated the direct threat (i.e., a significant risk of
substantial harm). In such a situation, the provider may request that the
individual document how the circumstances have changed so that he no longer
poses a direct threat. A provider may also obtain satisfactory assurances that
the individual will not pose a direct threat during the tenancy. The housing
provider must have reliable, objective evidence that a person with a disability
poses a direct threat before excluding him from housing on that basis.
• Example 1: A housing provider requires all persons applying to rent an
apartment to complete an application that includes information on the
applicant’s current place of residence. On her application to rent an
apartment, a woman notes that she currently resides in Cambridge
House. The manager of the apartment complex knows that Cambridge
House is a group home for women receiving treatment for alcoholism.
Based solely on that information and his personal belief that alcoholics
are likely to cause disturbances and damage property, the manager
rejects the applicant. The rejection is unlawful because it is based on a
generalized stereotype related to a disability rather than an individualized
assessment of any threat to other persons or the property of others based
on reliable, objective evidence about the applicant’s recent past conduct.
12
The housing provider may not treat this applicant differently than other
applicants based on his subjective perceptions of the potential problems
posed by her alcoholism by requiring additional documents, imposing
different lease terms, or requiring a higher security deposit. However, the
manager could have checked this applicant’s references to the same
extent and in the same manner as he would have checked any other
applicant’s references. If such a reference check revealed objective
evidence showing that this applicant had posed a direct threat to persons
or property in the recent past and the direct threat had not been
eliminated, the manager could then have rejected the applicant based on
direct threat.
• Example 2: James X, a tenant at the Shady Oaks apartment complex, is
arrested for threatening his neighbor while brandishing a baseball bat.
The Shady Oaks’ lease agreement contains a term prohibiting tenants
from threatening violence against other residents. Shady Oaks’ rental
manager investigates the incident and learns that James X threatened the
other resident with physical violence and had to be physically restrained
by other neighbors to keep him from acting on his threat. Following Shady
Oaks’ standard practice of strictly enforcing its “no threats” policy, the
Shady Oaks rental manager issues James X a 30-day notice to quit, which
is the first step in the eviction process. James X's attorney contacts Shady
Oaks' rental manager and explains that James X has a psychiatric
disability that causes him to be physically violent when he stops taking his
prescribed medication. Suggesting that his client will not pose a direct
threat to others if proper safeguards are taken, the attorney requests that
the rental manager grant James X an exception to the “no threats” policy
as a reasonable accommodation based on James X’s disability. The Shady
Oaks rental manager need only grant the reasonable accommodation if
James X’s attorney can provide satisfactory assurance that James X will
receive appropriate counseling and periodic medication monitoring so
that he will no longer pose a direct threat during his tenancy. After
consulting with James X, the attorney responds that James X is unwilling
to receive counseling or submit to any type of periodic monitoring to
ensure that he takes his prescribed medication. The rental manager may
go forward with the eviction proceeding, since James X continues to pose
a direct threat to the health or safety of other residents.

What is a "reasonable accommodation" for purposes of the Act?

A “reasonable accommodation” is a change, exception, or adjustment
to a rule, policy, practice, or service that may be necessary for a person with a
disability to have an equal opportunity to use and enjoy a dwelling, including
public and common use spaces. Since rules, policies, practices, and services may
have a different effect on persons with disabilities than on other persons,
13
treating persons with disabilities exactly the same as others will sometimes
deny them an equal opportunity to use and enjoy a dwelling. The Act makes it
unlawful to refuse to make reasonable accommodations to rules, policies,
practices, or services when such accommodations may be necessary to afford
persons with disabilities an equal opportunity to use and enjoy a dwelling. To
show that a requested accommodation may be necessary, there must be an
identifiable relationship, or nexus, between the requested accommodation and
the individual’s disability.

Are there any instances when a provider can deny a request for a reasonable accommodation without violating the Act?

Yes. A housing provider can deny a request for a reasonable
accommodation if the request was not made by or on behalf of a person with a
disability or if there is no disability-related need for the accommodation. In
addition, a request for a reasonable accommodation may be denied if providing
the accommodation is not reasonable – i.e., if it would impose an undue
financial and administrative burden on the housing provider or it would
fundamentally alter the nature of the provider's operations. The determination
of undue financial and administrative burden must be made on a case-by-case
basis involving various factors, such as the cost of the requested
accommodation, the financial resources of the provider, the benefits that the
accommodation would provide to the requester, and the availability of
alternative accommodations that would effectively meet the requester's
disability-related needs. When a housing provider refuses a requested
accommodation because it is not reasonable, the provider should discuss with
the requester whether there is an alternative accommodation that would
effectively address the requester's disability-related needs without a
fundamental alteration to the provider's operations and without imposing an
undue financial and administrative burden. If an alternative accommodation
would effectively meet the requester's disability-related needs and is
reasonable, the provider must grant it. An interactive process in which the
housing provider and the requester discuss the requester's disability-related
need for the requested accommodation and possible alternative
accommodations is helpful to all concerned because it often results in an
effective accommodation for the requester that does not pose an undue
financial and administrative burden for the provider.

When and how should an individual request an accommodation?

Under the Act, a resident or an applicant for housing makes a
reasonable accommodation request whenever she makes clear to the housing
provider that she is requesting an exception, change, or adjustment to a rule,
policy, practice, or service because of her disability. She should explain what
type of accommodation she is requesting and, if the need for the
accommodation is not readily apparent or not known to the provider, explain
14
the relationship between the requested accommodation and her disability. The
Fair Housing Act does not require that a request be made in a particular
manner or at a particular time. A person with a disability need not personally
make the reasonable accommodation request; the request can be made by a
family member or someone else who is acting on her behalf. An individual
making a reasonable accommodation request does not need to mention the Act
or use the words "reasonable accommodation." However, the requester must
make the request in a manner that a reasonable person would understand to
be a request for an exception, change, or adjustment to a rule, policy, practice,
or service because of a disability.

What is Section 504?

Section 504 of the Rehabilitation Act of 1973 states: No otherwise
qualified individual with a disability in the United States . .shall, solely by reason
of her or his disability, be excluded from participation in, be denied the benefits
of, or be subjected to discrimination under any program, service or activity
receiving federal financial assistance or under any program or activity conducted
by any Executive agency or by the United States Postal Service. (29 U.S.C. 794).
This means that Section 504 prohibits discrimination on the basis of disability in
any program or activity that receives financial assistance from any federal
agency, including the U.S. Department of Housing and Urban Development (HUD)
as well as in programs conducted by federal agencies including HUD.

Who is protected by the Law?

Persons with disabilities.

Are there regulations that explain what needs to be done in order to comply with Section 504?

Yes. HUD's regulations for Section 504 that apply to federally assisted
programs may be found in the Code of Federal Regulations at 24 CFR Part 8. There
are also regulations that govern Section 504 in programs conducted by HUD which
may be found at 24 CFR Part 9, however, this Web site focuses on Section 504's
requirements for federally assisted programs, services and activities.

Does Section 504 require a housing provider to accept every person with a disability who applies for the housing program?

Section 504 does not require that a person with a disability be accepted
without regard to eligibility requirements or his or her ability to meet standard,
nondiscriminatory tenant selection and screening criteria. Rather, Section 504
requires that a person with a disability be evaluated using the same objective
criteria that are applied to persons without disabilities. Applicants, with or
without a disability, may be rejected if they have a record of adversely affecting
others such as disturbing neighbors, destroying property, or failing to pay their
rent on time. However, under Section 504, the housing provider must make sound
and reasonable judgments based on objective evidence (current conduct or a
history of overt acts). Subjective fears, unsubstantiated rumors, speculation and
Section: Helpful Websites & Frequently Asked Questions Distribution Date: July 1, 2016
Revision Date:
Sub-Section: F.A.Q. – Regarding Section 504 Section Number: 2007.00

generalized suspicion do not constitute objective information that an applicant
cannot meet the terms of tenancy.

What is EIV?

HUD developed the EIV (Enterprise Income Verification) system as a tool
to meet the objective of assuring that the "right benefits go to the right persons."
The EIV system is a federal database that provides quick, easy access to resident
income information. The intent of the EIV system is to streamline and simplify the
income verification process at the time of recertification, by providing an
independent source that systematically and uniformly maintains income
information.

My password doesn’t work. What do I do?

Call the Real Estate Assessment Center (REAC) at 1-88-245-4860 for
assistance.

What EIV documents must be maintained in each tenant file?

a) For Move-ins- A copy of the EIV Existing Tenant Search Report(s) that
were utilized as part of the property’s screening process, for each
household member, including dependents, prior to admitting the
applicant household for residency.
b) For all Recertifications (annual and interim)- A copy of the EIV
Summary, Income, and Income Discrepancy Reports printed and
reviewed during the recertification process that supports the form
HUD-50059 that was transmitted.

How many times during the year do users have to complete the Security Awareness Training?

The Security Awareness Training must be completed at initial access to
the system and annually thereafter.

Can external auditors view files if they have EIV information in the tenant file?

Yes Independent Auditors (IAs) hired by the Owner/Agent to perform a
financial audit of a project are authorized to view EIV reports for determining the
Owner/Agent’s compliance with verifying income and calculating rent, however
they must sign the non-disclosure oath(Rules of Behavior).

Can SS or SSI benefits, employment, and wage information obtain from EIV be used for tenants residing in Low Income Housing Tax Credit (LIHTC)?

No. Since the Internal Revenue Service (IRS) is not a party to the
Computer Matching Agreement (CMA) that HUD has with SSA and HHS,
Owner/Agent cannot use any information obtained from EIV, as this would be a
violation of the CMA.

What is the purpose of the EIV Multiple Subsidy Report?

The purpose of this report is to reduce the number of individuals
receiving duplicate rental housing assistance within HUD’s rental housing
assistance programs.

What is the purpose of the EIV Identity Verification Report?

The purpose of this report is to reduce the number of overdue annual
recertifications and the number of identity failures resulting from incorrect
tenant personal identifiers, including surname, date of birth and invalid social
security numbers.

What is the purpose of the EIV deceased Report?

To identify tenants that have passed where owners may have continued
to receive improper HAP payments. Also, will help property staff follow-up with
families to ensure the correct household composition is reported on the HUD-
50059.

What is the purpose of the EIV New Hires report and how often must the report be completed?

This report will identify tenants who have started new jobs within the
last six months. This report must be completed on a quarterly basis.

What is the No Income Report and how often must the report be completed?

This report will identify tenants who passed the identity match against
SSA’s records but no employment or income information was received from the
match against either the SSA or NDNH records. This report must be completed on
a quarterly basis.

What is the purpose of the Income Discrepancy Report?

This report is a tool to alert property staff that there may be a
discrepancy in the income reported by the tenant during the period of income
shown on the report.
The report identifies households where there is a difference of $2,400 or more
annually in the wages, unemployment compensation and/or Social Security
benefit income reported NDNH and SSA and the wages, unemployment
compensation and/or Social Security benefit income reported in TRACS (from the
form HUD-50059 in effect at the time of the computer match) for the period of income (POI) used for the discrepancy analysis. Property staff must investigate
all discrepancies identified on the report to determine whether or not the
discrepancy is valid. Property staff must print the Income Discrepancy Report at
the same time they print the Income Report, at annual and interim
recertification.

What reports must be kept in the property EIV Master Binder? Answer:

The New Hires Report, Identity Verification Reports, Multiple Subsidy
Reports and the Deceased Tenant Reports must be retained in the EIV Master
Binder along with documentation supporting discrepancies have been resolved.

How long must the property retain EIV reports?

The Income, Summary and Income Discrepancy Reports and supporting
documentation must be retained in the tenant file for the term of the tenancy
plus three (3) years. Results of the Existing Tenant Search must be retained with
the application if the applicant is not admitted for three (3) years and if applicant
is admitted, the application and search results must be retained for the term of
tenancy plus three (3) years. For the master files for the New Hires Report,
Identity Verification Reports, Multiple Subsidy Report and Deceased Tenants
Report must be retained for three (3) years.

When calculating Social Security income, should property staff use the gross amount including the cents even though the applicant/tenant does not receive the cents?

When calculating Social Security income, use the gross amount show on
the third-party verification, including cents.

What is an acceptable way to calculate child support when the amount received varies?

An average of the monthly amounts paid during the timeframe
provided should be calculated (using at least 3 months or more if available) and
then annualized. HUD recommends the tenant be interviewed every 90 days or so
to determine if circumstances may have changed and an interim recertification
completed if applicable.

What type documentations are acceptable to verify child support?

According to HUD you must count child support amounts awarded by
the court unless the applicant/tenant certifies that payments are not being made
and that he or she has taken all reasonable legal actions to collect amounts due,
including filing with the appropriate courts or agencies responsible for enforcing
payment. You may accept printouts from the court or agency responsible for
enforcing payments or other evidence indicating the frequency and amount of
support payments actually received.

If a tenant has resided in the property for 10 years, and you discover the tenant disposed of assets of $10, 000 for less than the fair market value (gave it away to family) 4 years ago, would you begin to count it at this time for 2 years or would you go back 4 years and make corrections to prior HUD 50059s?

Assets that were disposed for less than fair market value (when fair
market value amount is more than $1,000 over the amount received) must be
counted for a period of 2 years from the date the asset was disposed of. Since in
the situation, described here, the 2-year period had already passed before it was
discovered, the proper procedure would be to make retroactive corrections to the effected HUD 50059’s. The tenant may then be required to make a repayment of any difference to the rent.

If someone sells their settlement or winnings to a company agreeing to take a lump sum rather than take payments over time, is the total amount counted as income since they made the choice to not take monthly payments? (E.g., a lottery winning of $10,000 payable in monthly increments of $1,000, tenant makes choice to "sell" their winnings to a company that gives them $8,000 in one lump sum and then the company gets a total payment from the lottery distribution of $10,000.)

Had the resident taken monthly payments of their lottery winnings, their
winnings would have been counted as income instead of an asset. Now that the
resident has sold the right to the monthly payment for a lump sum payment, it
becomes an asset valued at the amount received ($8000). Remember a lump sum
payment is counted as an asset only as long as the tenant possesses it. If the
tenant uses the funds for something that is not an asset (pays for a new car,
education, etc.), you do not count the funds (only the amount placed into an
account or kept as cash).

Are third party verifications for every issue mandatory?

A direct third party written request is the preferred method for
verification purposes whenever possible. The only exceptions are verifications of
age, family membership, Social Security number, etc. If third party verification is
not possible, the owner/agent should document the file as to why it was not
available (see paragraph 5-18 E on documenting files). Management should then
follow the next preferred verification methods (review of documents and then
tenant self-certification-see paragraph 3-26B).

What if verification was dated 09-18-2015, but received the verification and date stamped on 12-31-2015, and tenant’s move-in date of 02-07-2016, is the verification considered current

Yes, the verification would be considered current. (See paragraph 5-
16B.1. Verifications are valid 120-days from the date of receipt by the owner.)

What is RAD?

RAD is a vital opportunity to avert the pending affordable housing crisis due to the federal government’s inability to adequately fund public housing across the United States. The Rental Assistance Demonstration (RAD) is a voluntary program of the Department of Housing and Urban Development (HUD). RAD seeks to preserve public housing by providing Public Housing Agencies (PHAs) with access to more stable funding to make needed improvements to aging properties.

Why is RAD needed?

Public housing units across the country need more than $26 billion in repairs. HUD refers to these repair costs as capital needs, and over the past several years, Congress has not provided enough funding for Public Housing Agencies to keep their properties in good condition. As a result, Public Housing Agencies have had to make tough decisions between things like repairing roofs and plumbing—or worse, demolishing public housing resources. RAD provides Public Housing Agencies a new way to rehabilitate or repair units without depending on additional money from Congress.

How does a RAD conversion work?

Public Housing Agencies manage properties using one of two types of HUD funding sources: Section 8 project-based vouchers (PBV) or Section 8 project-based rental assistance (PBRA). RAD allows public housing agencies the chance to engage in 15- or 20- year PBV and PBRA contracts, fixing subsidy rates. This shift will make it easier for Public Housing Agencies to use low income housing tax credits (LIHTCs) and secure other forms of financing. These private sources of additional money will enable Public Housing Agencies to make improvements essential to preserving public housing. Public Housing Agencies must submit applications to convert some or all of their public housing assistance to these long-term PBV or PBRA contracts through RAD.

Is RAD an expansion of public housing?

No. It is a one-for-one replacement of deteriorating public housing units.

How will RAD affect residents and their rent?

As with public housing, residents will continue to pay no more than 30% of adjusted gross income for rent. However, there will be no flat rents under RAD, so residents with high enough income who are currently paying flat rents may see an increase in rent that will be phased in over time, if necessary. Residents will not lose housing assistance and will not be re-screened when their apartment goes through a RAD conversion.

What is Relocation?

Relocation is the process of temporarily moving from your current housing unit to a temporary housing unit during construction and moving back to the property where you currently live when construction is complete.

What protections and guarantees do I have during the relocation process?

HUD provides protection to tenants under the RAD Program regulations which require compliance with a federal law called the Uniform Relocation Act (URA).

Will I have to move during construction?

Some properties will not require any repairs or construction. In other cases, the repairs can be completed while you stay in your home. However, some apartments and buildings will require more work. In these cases, you will be relocated and protected by RAD relocation rules.

Do I have to sign another lease?

All properties that have converted under RAD must use form HUD 90105-A Model Lease for Subsidized Programs with an initial lease term of one year.

What required Addendums and Attachments must be included with the HUD Model Lease?

The following addendums or attachments must be included with the HUD Model Lease: Form HUD-50059, Form HUD-50059-A, House Rules, Lead Based Paint Disclosure, Pet Requirements (if applicable), Violence Against Women Addendum, Move-in Inspection, Live-in Aide (if applicable).

Can the PHA convert owner paid utilities to tenant paid utilities?

Subject to HUD approval, owners of properties converting under RAD can convert utilities from owner paid to tenant paid. If conversion to tenant paid utilities is occurring at the RAD conversion date then multifamily contracts rents are determined by decreasing the PIH rent by the approved utility allowance. If conversion to tenant paid utilities occurs after the RAD conversion date, the utility conversion must be effective at the property’s contract anniversary date. Chapter 12, Section 5 of HUD Handbook 4350.1 describes the procedural requirements for these conversions.

Will RAD affect my Housing Assistance?

You will not lose your housing assistance because of RAD. Even though owners of RAD property can use private money to make repairs, owners still receive money from HUD and must follow HUD’s PBV and PBRA rules.

Will I still have to recertify annually after conversion to RAD?

Yes. Under RAD, annual recertification will be required.

Will there be ADA accessible units?

Yes. Any alterations of converted projects must meet the accessibility requirements of Section 504 of the Rehabilitation Act of 1973 and any other design and construction standards including Fair Housing Act where applicable.

What is the difference between Project Based Vouchers (PBV) and Project Based Rental Assistance (PBRA)?

A Project Based Voucher (PBV) is component of a Public Housing Authority’s Housing Choice Voucher program, wherein a housing authority can attach voucher assistance to specific housing units through a HAP contract with an owner.
Project-Based Rental Assistance (PBRA) is rental assistance provided by HUD to owners according to the terms of a HAP contract for the provision of housing to eligible tenants. The PBRA program is administered by HUD’s Office of Housing.

If a resident is required to temporarily relocate, will the resident get to move back to the same unit?

No. Residents temporarily relocated who remain in good standing have the right to return to the development however that right does not include the right to be returned to the same unit.

If I have to relocate temporarily, will my rent increase?

If you are required to relocate temporarily, the rental payment that you are responsible for should not increase.

Do I still have to do community service?

Once the RAD conversion is finalized, you will not be required to do community service. However, the process could take two years. Until advised otherwise, community service is required.

If you currently have an extra bedroom as a reasonable accommodation, will you still qualify to have the extra bedroom under RAD?

Yes. As long as you are eligible for the extra bedroom as a reasonable accommodation, you will still qualify under RAD.

Affordable Housing Compliance Corner

2020 COLA Increase

TDHCA – Lease Requirements

TDHCA – Written Policies and Procedures

VAWA – Violence Against Women Reauthorization Act

TDHCA – Written Policies and Procedures

TDHCA – Lease Requirements updated on 10/01/2017

2020 COLA Increase

VAWA – Violence Against Women Reauthorization Act

HOMEfiles – Volume 13

TDHCA – Written Policies and Procedures

TDHCA – Lease Requirements updated on 10/01/2017

Final Ruling for Utilities Allowances

2020 COLA Increase

VAWA – Violence Against Women Reauthorization Act

HOMEfiles – Volume 13

TDHCA – Written Policies and Procedures

TDHCA – Lease Requirements updated on 10/01/2017

Final Ruling for Utilities Allowances

2020 COLA Increase

SS and SSI Cost of Living Adjustment

2018 HUD Income Limits

FAST ACT Interim Final Rule Effective March 12, 2018

Administrative Guidance for Effective and Mandated Use of the Enterprise Income Verification (EIV) System

Guidance on Verification of Excluded Income

Instituting Smoke-Free Public Housing

2020 COLA Increase

SS and SSI Cost of Living Adjustment

2018 HUD Income Limits

FAST ACT Interim Final Rule Effective March 12, 2018

Resident Rights & Responsibilities

EIV – For the System User Manual Multifamily Programs

EIV – External User Adminstration

VAWA – Final Rule

VAWA – Additional Guidance for Multifamily

VAWA – Emergency Transfer Plan

VAWA – Notice of Occupancy Rights under the Violence Against Women Act

2020 COLA Increase

RAD Quick Reference Guide

Rental Assistance Demonstration – Final Implementation, Revision 3

REAC – The Meadows and Tranquil Terrace

HOME Audit – Sierra Meadows

UPCS – Post Oak East

File Audit – Park at North Vista

File Audit – Park at Humble

TDHCA – UPCS – Park at Fort Bend

TDHCA – UPCS Lincoln

TDHCA – UPCS Inspection – Havenwood

File Audit – Gardenview 2017

File Audit – Collingham Park 2017

REAC Lincoln Park

REAC – Historic Oaks of Allen Parkway Village

REAC – Cuney Homes/Ewing

REAC – Allen Parkway Village

REAC Cottage Creek

REAC – Oxford Place

Affordable Housing Compliance Questions

Frequently Asked Questions