Loading...
HomeMy WebLinkAbout2024/01/09 - ADMIN - Agenda Packets - Housing Authority - RegularMISSION STATEMENT The Housing Authority develops, integrates, and operates housing and housing assistance policies and programs to ensure the availability of safe, affordable, and desirable housing options that meet the diverse, lifecycle housing needs of all the residents of St. Louis Park. AGENDA Housing Authority, St. Louis Park, Minnesota Wednesday, October 9, 2024 5 p.m. Westwood Room, third floor 1.Roll Call 2.Approval of Minutes for August 2024 3.Hearings: a.Housing Authority (HA) Five-Year Agency Plan and Annual Plan, Resolution No. 761 b.Housing Authority 2023- 2027 Capital Fund Five Year Action Plan, Resolution No. 762 4.Presentation a.None 5.Unfinished Business a.None 6.New Business a.Amendments to the Admissions and Continued Occupancy Plan (ACOP), Resolution No. 763 b.Amendments to the Administrative Plan for the Housing Choice Voucher Program, Resolution No. 764 c.Approval of Housing Choice Voucher Payment Standards, Resolution No. 765 d.Statutory commission discussion with council 7.Communications from Executive Director a.Claims Lists: September b.Financials: c.Communications: 8.Other: Next meeting November 13, 2024 9.Adjournment Auxiliary Aides for those with disabilities are available upon request. To make arrangements please call the Housing Authority office at 952-924-2579 (TDD 952-924-2668) at least 96 hours in advance of meeting. 1 2 MINUTES St. Louis Park Housing Authority St Louis Park, MN Wednesday, September 11, 2024 5 p.m. MEMBERS PRESENT: Commissioner Catherine Courtney, Commissioner Paul Beck (5:10 pm), Reynold Burrowes, Commissioner Thom Miller, Commissioner Richard Webb STAFF PRESENT: Marney Olson, Nicole Randall, Angela Nelson and Karen Barton GUESTS: Andrew Perry - Trellis Management Naomi Meldrom - Missions Dan Walsh - Trellis Co. Katie Daniels - Missions 1. Call to Order – The meeting was called to order at 5:00 p.m. 2. Approval of Minutes – Minutes for the August 14, 2024 board meeting were reviewed. Motion to approve was made by Commissioner Webb and seconded by Commissioner Burrowes. Motion passed 4-0. 3. Hearings – None. 4. Presentation – None. 5. Unfinished Business – None 6. New Business - Second amendment to Trellis housing assistance payment (HAP) contract, Resolution No. 760. Staff recommends approval of Res. 760 amending the HAP contract with Trellis Co. for a term of 20 years (October 1, 2025 – September 30, 2045). Trellis Co. purchased Perspectives properties at Louisiana Courts on September 10, 2024. The Housing Authority’s current contract with Trellis for 22 project based vouchers expires September 30, 2025. If the contract is not extended, current voucher holders must receive 12-month notice. Ms. Olson stated that Trellis will continue the affordability requirements of the property and the supportive services. The 20-year extension will assist with the funding of property improvements. Mr. Walsh confirmed that a 20-year extension is required to set up the comprehensive funding needed to preserve physical assets in addition to maintaining the affordability and supportive services. 3 Responding to Commissioner Courtney, Ms. Olson confirmed that the Housing Authority has the funding to meet these project based vouchers now and for the future. Responding to commissioner Burrowes, Mr. Walsh explained that Trellis Co. owns Trellis Management, which has around 183 employees. Mr. Perry stated that there was a targeted campaign across their portfolio for reviews from residents and they received 32 responses about 4-5 months ago. They also request comments at lease renewal time and with maintenance requests. Residents can choose to provide feedback publicly or privately. Cornerstone Creek is unique because it serves individuals with intellectual disabilities. It is staffed by 24-hour front desk security person versus a full-time management person. Perspectives will have a different structure and will have a 1 FTE property manager on site. Ms. Olson stated the Trellis property has 56 units of which 22 are project based vouchers with the Housing Authority. The remaining 34 units are required to be at 50% or less AMI. Affordability is based on declarations on the property. Mr. Walsh said part of the proposed $7 million construction project would include a community room and childcare space. Ms. Daniels stated all staff will be trained by their domestic violence staff. Ms. Olson stated that twice a month the St. Louis Park police department meets with PPL and Perspectives and they intend to continue meeting with PPL and Trellis. Motion to approve was made by Commissioner Courtney and seconded by Commissioner Beck. Motion passed 4-0. Commission Burrowes abstained. 7. Communications a. Claims Lists: August 2024 8. Other 9. Adjournment Commissioner Beck moved to adjourn the meeting and Commissioner Burrowes seconded. The motion passed 5-0. The meeting was adjourned at 5:46 p.m. Respectfully submitted, ________________________ Reynold Burrowes, Secretary 4 HOUSING AUTHORITY OF ST. LOUIS PARK Agenda Item #3a St. Louis Park, Minnesota Meeting Date: October 9, 2024 TITLE: Housing Authority (HA) Five-Year Agency Plan and Annual Plan – Public Hearing and Resolution No. 761 RECOMMENDED ACTION: Chair to open public hearing, take testimony, and then close the hearing. Motion to adopt Resolution 761 approving the 2025 – 2029 Five-Year PHA Plan, 2025 Annual PHA Plan and Certification of Compliance with PHA Plan and Related Regulations. POLICY CONSIDERATION: The current Five-Year Agency Plan expires December 31, 2024. The HA is required to update and approve a new Five-Year Agency Plan for January 1, 2025 through December 31, 2029 and a 2025 Annual Plan. SUMMARY: As an administrator of the Public Housing and Housing Choice Voucher programs, the St. Louis Park Housing Authority (HA) is required to prepare a Five-Year Agency Plan for 2025 – 2029 and a 2025 Annual Plan. The drafted 2025 – 2029 Five-Year Agency Plan and 2025 Annual Plan outline goals and objectives for the housing authority. HUD requires a 45-day public comment period and public hearing for the drafted PHA Plan. The public comment period was published in the Sun Sailor August 22, 2024 and posted on the city’s website. A Resident Advisory Committee meeting was held September 25, 2024 at Hamilton House for program participant comments. There were no specific comments on the 5-Year PHA plan or 2025 Annual Plan, but a summary of the RAC meeting is attached to this report. The Housing Authority has previously been a Small Public Housing Authority and considered “qualified” and exempt from HUD’s requirement to submit an Annual Agency Plan. To qualify as a Small HA, the sum of public housing dwelling units and the number of rental assistance vouchers administered under the Housing Choice Voucher Program (HCV) must be 550 or fewer. In addition, a HA cannot be designated as a “troubled” HA and cannot have a failing score under the Section 8 Management Assessment Program (SEMAP) during the prior 12 months. The St. Louis Park HA has added 83 new vouchers since the last Five-year Plan and now exceeds the 550 threshold to be considered “qualified” agency. The HA now has an allocation of 407 voucher and 159 public housing units for a combined total of 565 units which requires the HA to submit an Annual PHA Plan and Certification of Compliance with PHA Plan and Related Regulations, HUD form 50077-CRT-SM. NEXT STEPS: HUD requires PHAs to submit the Five-Year and Annual PHA Plans 75 days prior to the fiscal year end, which is October 18, 2024, following Board approval. 5 Supporting Documents: • 5-Year PHA Plan 2025 – 2029, HUD form 50075-5YR • 2025 Streamlined Annual PHA Plan – HUD form 50075-SM-Annual Plan • Certification of Compliance with PHA Plan and Related Regulations, HUD form 50077-CRT-SM • Resident Advisory Committee meeting summary • Resolution 761 Prepared by: Marney Olson, Housing Supervisor 6 7 8 9 10 11 12 Status: Created Certifications of Compliance with PHA Plan and Related Regulations (Small PHAs) U.S. Department of Housing and Urban Development Office of Public and Indian Housing OMB No. 2577-0226 Expires 03/31/2024 PHA Certifications of Compliance with PHA Plan, Civil Rights, and Related Laws and Regulations including PHA Plan Elements that Have Changed Acting on behalf of the Board of Commissioners of the Public Housing Agency (PHA) listed below, as its Chairperson or other authorized PHA official if there is no Board of Commissioners, I approve the submission of the X 5-Year and/or X Annual PHA Plan, hereinafter referred to as "the Plan", of which this document is a part, and make the following certification and agreements with the Department of Housing and Urban Development (HUD) for the PHA fiscal year beginning 01/2025 in which the PHA receives assistance under 42 U.S.C. 1437f and/or 1437g in connection with the submission of the Plan and implementation thereof: 1. The Plan is consistent with the applicable comprehensive housing affordability strategy (or any plan incorporating such strategy) for the jurisdiction in which the PHA is located (24 CFR § 91.2). 2. The Plan contains a certification by the appropriate State or local officials that the Plan is consistent with the applicable Consolidated Plan, which includes a certification that requires the preparation of an Analysis of Impediments to Fair Housing Choice (AI) or Assessment of Fair Housing (AFH) as applicable, for the PHA's jurisdiction and a description of the manner in which the PHA Plan is consistent with the applicable Consolidated Plan (24 CFR §§ 91.2, 91.225, 91.325, and 91.425). 3. The PHA has established a Resident Advisory Board or Boards, the membership of which represents the residents assisted by the PHA, consulted with this Board or Boards in developing the Plan, and considered the recommendations of the Board or Boards (24 CFR § 903.13). The PHA has included in the Plan submission a copy of the recommendations made by the Resident Advisory Board or Boards and a description of the manner in which the Plan addresses these recommendations. 4. The PHA certifies that the following policies, programs, and plan components have been revised since submission of its last Annual PHA Plan (check all policies, programs, and components that have been changed): 903.7a Housing Needs 903.7b Deconcentration and Other Policies Governing Eligibility, Selection, Occupancy, and Admissions Policies 903.7c Financial Resources X 903.7d Rent Determination Policies 903.7h Demolition and Disposition 903.7k Homeownership Programs 903.7r Additional Information X A. Progress in meeting 5-year mission and goals B. Criteria for substantial deviation and significant amendments C. Other information requested by HUD 1. Resident Advisory Board consultation process 2. Membership of Resident Advisory Board 3. Resident membership on PHA governing board 9/30/24, 4:38 PM HUD-50077-CRT-SM https://hudapps.hud.gov/ords/ofpih/r/opfund/f_7520163981160186160/form-hud-50077-crt-sm?session=6030880032756 1/4 13 The PHA provides assurance as part of this certification that: (i) The Resident Advisory Board had an opportunity to review and comment on the changes to the policies and programs before implementation by the PHA; (ii) The changes were duly approved by the PHA Board of Directors (or similar governing body); and (iii) The revised policies and programs are available for review and inspection, at the principal office of the PHA during normal business hours. 5. The PHA made the proposed Plan and all information relevant to the public hearing available for public inspection at least 45 days before the hearing, published a notice that a hearing would be held and conducted a hearing to discuss the Plan and invited public comment. 6. The PHA certifies that it will carry out the public housing program of the agency in conformity with title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d-2000d—4), the Fair Housing Act (42 U.S.C. 3601-19), Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794), title II of the Americans with Disabilities Act (42 U.S.C. 12101 et seq.), and other applicable civil rights requirements and that it will affirmatively further fair housing in the administration of the program. In addition, if it administers a Housing Choice Voucher Program, the PHA certifies that it will administer the program in conformity with the Fair Housing Act, title VI of the Civil Rights Act of 1964, Section 504 of the Rehabilitation Act of 1973, title II of the Americans with Disabilities Act, and other applicable civil rights requirements, and that it will affirmatively further fair housing in the administration of the program. 7. The PHA will affirmatively further fair housing, which means that it will take meaningful actions to further the goals identified in the Assessment of Fair Housing (AFH) conducted in accordance with the requirements of 24 CFR § 5.150 through 5.180, that it will take no action that is materially inconsistent with its obligation to affirmatively further fair housing, and that it will address fair housing issues and contributing factors in its programs, in accordance with 24 CFR § 903.7(o)(3). The PHA will fulfill the requirements at 24 CFR § 903.7(o) and 24 CFR § 903.15(d). Until such time as the PHA is required to submit an AFH, the PHA will fulfill the requirements at 24 CFR § 903.7(o) promulgated prior to August 17, 2015, which means that it examines its programs or proposed programs; identifies any impediments to fair housing choice within those programs; addresses those impediments in a reasonable fashion in view of the resources available; works with local jurisdictions to implement any of the jurisdiction’s initiatives to affirmatively further fair housing that require the PHA’s involvement; and maintains records reflecting these analyses and actions. 8. For a PHA Plan that includes a policy for site-based waiting lists: The PHA regularly submits required data to HUD's 50058 PIC/IMS Module in an accurate, complete and timely manner (as specified in PIH Notice 2010-25); The system of site-based waiting lists provides for full disclosure to each applicant in the selection of the development in which to reside, including basic information about available sites; and an estimate of the period of time the applicant would likely have to wait to be admitted to units of different sizes and types at each site; Adoption of site-based waiting lists would not violate any court order or settlement agreement or be inconsistent with a pending complaint brought by HUD; The PHA shall take reasonable measures to assure that such waiting list is consistent with affirmatively furthering fair housing; and The PHA provides for review of its site-based waiting list policy to determine if it is consistent with civil rights laws and certifications, as specified in 24 CFR 903.7(c)(1). 9. The PHA will comply with the prohibitions against discrimination on the basis of age pursuant to the Age Discrimination Act of 1975. 10. In accordance with 24 CFR § 5.105(a)(2), HUD’s Equal Access Rule, the PHA will not make a determination of eligibility for housing based on sexual orientation, gender identify, or marital status and will make no inquiries concerning the gender identification or sexual orientation of an applicant for or occupant of HUD-assisted housing. 9/30/24, 4:38 PM HUD-50077-CRT-SM https://hudapps.hud.gov/ords/ofpih/r/opfund/f_7520163981160186160/form-hud-50077-crt-sm?session=6030880032756 2/4 14 11. The PHA will comply with the Architectural Barriers Act of 1968 and 24 CFR Part 41, Policies and Procedures for the Enforcement of Standards and Requirements for Accessibility by the Physically Handicapped. 12. The PHA will comply with the requirements of Section 3 of the Housing and Urban Development Act of 1968, Employment Opportunities for Low-or Very-Low Income Persons, and with its implementing regulation at 24 CFR Part 135. 13. The PHA will comply with acquisition and relocation requirements of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 and implementing regulations at 49 CFR Part 24 as applicable. 14. The PHA will take appropriate affirmative action to award contracts to minority and women's business enterprises under 24 CFR 5.105(a). 15. The PHA will provide the responsible entity or HUD any documentation that the responsible entity or HUD needs to carry out its review under the National Environmental Policy Act and other related authorities in accordance with 24 CFR Part 58 or Part 50, respectively. 16. With respect to public housing the PHA will comply with Davis-Bacon or HUD determined wage rate requirements under Section 12 of the United States Housing Act of 1937 and the Contract Work Hours and Safety Standards Act. 17. The PHA will keep records in accordance with 24 CFR 85.20 and facilitate an effective audit to determine compliance with program requirements. 18. The PHA will comply with the Lead-Based Paint Poisoning Prevention Act, the Residential Lead-Based Paint Hazard Reduction Act of 1992, and 24 CFR Part 35. 19. The PHA will comply with the policies, guidelines, and requirements of 2 CFR Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Financial Assistance, including but not limited to submitting the assurances required under 24 CFR §§ 1.5, 3.115, 8.50, and 107.25 by submitting an SF-424, including the required assurances in SF-424B or D, as applicable. 20. The PHA will undertake only activities and programs covered by the Plan in a manner consistent with its Plan and will utilize covered grant funds only for activities that are approvable under the regulations and included in its Plan. 21. All attachments to the Plan have been and will continue to be available at all times and all locations that the PHA Plan is available for public inspection. All required supporting documents have been made available for public inspection along with the Plan and additional requirements at the primary business office of the PHA and at all other times and locations identified by the PHA in its PHA Plan and will continue to be made available at least at the primary business office of the PHA. 22. The PHA certifies that it is in compliance with applicable Federal statutory and regulatory requirements, including the Declaration of Trust(s). HOUSING AUTHORITY OF ST LOUIS PARK, MINNESOTA MN144 PHA Name PHA Number/HA Code X 5-Year PHA Plan for Fiscal Years 2025-2029 X Annual PHA Plan for Fiscal Year 2025 I hereby certify that all the information stated herein, as well as any information provided in the accompaniment herewith, is true and accurate. Warning: HUD will prosecute false claims and statements. Conviction may result in criminal and/or civil penalties. (18 U.S.C. 1001, 1010, 1012; 31 U.S.C. 3729, 3802). Name of Executive Director:MS Karen Barton Name of Board Chairman:Thom Miller Signature Date Signature Date The United States Department of Housing and Urban Development is authorized to solicit the information requested in this form by virtue of Title 12, U.S. Code, Section 1701 et seq., and regulations promulgated thereunder at Title 12, Code of Federal Regulations. Responses to the collection of information are required to obtain a benefit or to retain a benefit. The information requested does not lend itself to confidentiality. This information is collected to ensure compliance with PHA Plan, Civil Rights, and related laws and regulations including PHA plan elements that have changed. 9/30/24, 4:38 PM HUD-50077-CRT-SM https://hudapps.hud.gov/ords/ofpih/r/opfund/f_7520163981160186160/form-hud-50077-crt-sm?session=6030880032756 3/4 15 Public reporting burden for this information collection is estimated to average 0.16 hours per year per response, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. HUD may not collect this information, and respondents are not required to complete this form, unless it displays a currently valid OMB Control Number. Form identification: MN144-HOUSING AUTHORITY OF ST LOUIS PARK, MINNESOTA form HUD-50077-CRT-SM (Form ID - 29) printed by Marney Olson in HUD Secure Systems/Public Housing Portal at 09/30/2024 05:38PM EST 9/30/24, 4:38 PM HUD-50077-CRT-SM https://hudapps.hud.gov/ords/ofpih/r/opfund/f_7520163981160186160/form-hud-50077-crt-sm?session=6030880032756 4/4 16 September 25, 2024 Resident Advisory Committee meeting Staff present: Marney Olson, Tanya Warren, Oi Mattison and ROSS Coordinator 16 residents in attendance Agenda Items: 1. Capital Funds Plan (CFP). Reviewed upcoming capital improvements in the 2024 – 2028 CFP. The following resident comments were received: • Resident asked about the generator and what it is supposed to run when the building is without power. Staff held a resident meeting two weeks prior to the RAC meeting to review all projects happening at Hamilton House and also addressed the generator. The generator contractor came out to Hamilton House and tested to ensure that one elevator will run on generator power. Staff are currently researching options for the entry door key fob system. • One resident asked about lighting in the back of the parking lot. Staff will review this request. 2. 2025 – 2029 Five-Year PHA Plan and 2025 Annual Plan Staff reviewed the 5-Year and Annual PHA plan with residents including the goals and objectives and progress report. There were no comments on the 5-Year or Annual Plan. 3. ACOP – HOTMA changes to the ACOP are required to be adopted by January 1, 2025 and that was the original implementation date set by HUD. HUD notified HA’s in September that HOTMA has been delayed; however, the HA is still required to adopt the changes by January 1, 2025. Staff reviewed the major changes to HOTMA and informed residents that the HA will provide more specific detail to tenants when we know when HOTMA will be implemented. Staff also reviewed additional updates to the ACOP that are not HOTMA related. 4. Other comments: • Residents had questions about the new software system and the ability to pay rent online. Staff responded that the Yardi online rent payment is now available and that residents should contact their property manager or ROSS coordinator if they have any questions or issues with online rent payment or completing recertifications through the portal. Residents were very glad to hear they could begin paying rent online again. • One resident had questions about the city’s homeownership programs. Staff shared information about the Down Payment Assistance and First-Generation Programs. 17 • There were a lot of questions about the HCV program and when the waiting list will open. Staff addressed the questions and will post notices in the building when the HCV list opens. • One resident asked about pest infestation. Staff said that each issue is handled promptly. If residents notice any pests, they should contact the property manager immediately • One resident asked if the over asset limit included 401K and was told no, retirement plans are excluded. • Residents had questions about the road work on Cedar Lake Rd and Louisiana Ave and the timing on when it will impact Hamilton House residents. Staff will reach out to the engineering department for an update. 18 Resolution No. 761    Approval of the St. Louis Park Housing Authority Five‐Year Agency Plan 2025 – 2029, 2025 Annual  Plan, and Certifications of Compliance with PHA Plan and Related Regulations     WHEREAS, the U.S Department of Housing and Urban Development requires that public  housing agencies with the Housing Choice Voucher and/or Public Housing programs submit a Five‐Year  and Annual PHA Plan which includes Certification of Compliance with PHA Plan and Related  Regulations, and    WHEREAS, The St. Louis Park Housing Authority scheduled a public hearing for the purpose of  receiving comments on the Five‐Year and Annual Plan, and     WHEREAS, a public notice was published in the Sun Sailor and posted on the city’s website, and    WHEREAS, HA staff held a resident advisory committee meeting September 25, 2024 and  solicited feedback from program participants, and    WHEREAS, a public hearing for the purpose of receiving comments from citizens and residents  was conducted at the HA Board meeting on October 9, 2025, and    WHEREAS, the Annual Plan requires the Certifications of Compliance with PHA Plan and Related  Regulations be submitted to HUD as an attachment, and    WHEREAS, the 2025 – 2029 Five Year PHA Plan and 2025 Annual PHA Plan were reviewed and  discussed with the HA Board.     NOW THEREFORE BE IT RESOLVED  by the St. Louis Park Housing Authority Board of Commissioners  that the 2025 – 2029 Five‐Year PHA Plan, 2025 Annual Plan and Certifications of Compliance with PHA  Plan and Related Regulations are adopted for submission to the U.S. Department of Housing and Urban  Development.     Adopted by the Authority on October 9, 2024          ______________________________________         Thom Miller, Chair  Attest:            _______________________________________             Reynold Burrowes, Secretary    _______________________________  Karen Barton, Executive Director  19 20 HOUSING AUTHORITY OF ST. LOUIS PARK Agenda Item #3b St. Louis Park, Minnesota Meeting Date: October 9, 2024 TITLE: Housing Authority 2024-2028 Capital Fund Five Year Action Plan Resolution No. 762 RECOMMENDED ACTION: Staff recommends the board open the public hearing, accept comments, and then close the public hearing. Motion to adopt Resolution No. 762 approving revisions to the Capital Fund Five Year Action Plan. POLICY CONSIDERATION: Does the board approve the Housing Authority’s revised Capital Fund Five Year Action Plan? SUMMARY: The Housing Authority (HA) is required to hold a public hearing and pass a resolution approving the HA’s 5-Year CFP Action Plan. The HA published a public hearing notice that the HA has updated the Capital Fund Five Year Action Plan and held a Resident Advisory Committee meeting for resident comments. The HA uses a five-year CFP rolling plan and updates the five-year plan annually. Because of changes in HUD funding and identifying new projects through the annual inspections process the HA has used a rolling plan which is updated annually. HUD is encouraging HAs consider a fixed plan and the HA is including funds for a capital needs assessment in the updated CFP to help guide future CFPs. Our HUD rep previously required specific addresses and projects for the CFP; however, new direction indicates that having work items such as roofing, windows, siding, flooring etc. without a specific address would be approved. Staff will explore if a fixed plan will work for the HA for future years. As part of the CFP process, the HA must submit a written statement to HUD defining the criteria the HA will use for determining a significant amendment or modification to the CFP 5-Year Action Plan. The HA can establish criteria and HUD requires certain criteria. HUD provided feedback on the HA’s significant amendment statement in 2023. HA significant amendment statement: The St. Louis Park Housing Authority considers the following changes to the Capital Fund Program 5 Year Action Plan to require a public process before adopting the changes and these items are “significant amendments or modifications” to the Capital Fund 5 Year Action Plan: • Changes to or addition of a project or work items that result in construction activity which limits use of common areas for more than 7 days. • Addition of projects that interrupt utility services such as water, sewer, electricity, heating, and elevator service for more than 24 consecutive hours. • Addition of projects that are loud and disruptive for more than 7 days. 21 • Addition of projects that may have possible exposure to harmful substances such as lead, asbestos, chemical fumes or other noxious odors. • Any addition to the Capital Fund Program of a project that requires a sealed bid per the HA’s procurement policy. In addition to the criteria established by the HA, a proposed demolition, disposition, homeownership, CFP proposal, development or mixed finance proposal is considered by HUD to be significant amendments to the CFP 5-year Action Plan. Attached is the 2024-2028 Capital Fund Program Five Year Action Plan for capital improvements at Hamilton House and the scattered site units. Staff will review the plan and answer any questions at the board meeting. The Resident Advisory Committee September 25, 2024. Staff reviewed the CFP plan with residents. The following questions/comments were received regarding the CFP: • Resident asked about the generator and what it is supposed to run when the building is without power. Staff held a resident meeting two weeks prior to the RAC meeting to review all projects happening at Hamilton House and also addressed the generator. The generator contractor came out to Hamilton House and tested to ensure that one elevator will run on generator power. Staff are currently researching options for the entry door key fob system. • One resident asked about lighting in the back of the parking lot. Staff will review this request. Supporting Documents: 2024 – 2028 Capital Fund Program – Five Year Action Plan Resolution No. 762 Prepared by: Marney Olson, Assistant Housing Supervisor Reviewed by: Oi Mattison, Public Housing Manager 22 RESOLUTION NO. 762 RESOLUTION APPROVING THE 2024 - 2028 CAPITAL FUND PROGRAM FIVE YEAR ACTION PLAN WHEREAS, HUD requires PHAs to have on file a copy of a board resolution approving the Housing Authority’s Five Year CFP Action Plan; and WHEREAS, the HA held a public hearing to accept comments on the Five Year Action Plan; and WHEREAS, HA staff evaluate the capital improvement needs of the public housing properties in order to ensure our properties are safe and well maintained; and WHEREAS, the Housing Authority will submit the 2024 - 2028 Capital Fund Program Five Year Action Plan to HUD; NOW THEREFORE BE IT RESOLVED, that the 2024 - 2028 Capital Fund Program Five Year Action Plan is hereby approved. Adopted by the Housing Authority October 9, 2024 Thom Miller, Chair Reynold Burrows, Secretary ATTEST: Karen Barton, Executive Director 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 HOUSING AUTHORITY OF ST. LOUIS PARK                    Agenda Item #6a  St. Louis Park, Minnesota  Meeting Date: October 9, 2024    TITLE:  Approve Amendments to the Housing Authority Admissions and Continued Occupancy  Policy (ACOP) for the Public Housing Program Resolution No. 763  RECOMMENDED ACTION:  Staff recommends that the Housing Authority Board approve  Resolution No. 763 amending the ACOP.    POLICY CONSIDERATIONS:  Does the Housing Authority Board agree with the proposed  amendments to the ACOP?     SUMMARY:  The Housing Authority, as the administrator of the federal public housing program,  is required to adopt and maintain an Admissions and Continued Occupancy Policy (ACOP)  outlining policies and processes related to the administration of the Public Housing program.  Periodically the plan needs to be updated as the U.S. Department of Housing and Urban  Development (HUD) adopts new or revised regulations and as the HA determines a need to  revise its policies.     On July 29, 2016, the Housing Opportunities Through Modernization Act (HOTMA) was signed  into law. HUD published the HOTMA final rule February 14, 2023 and the effective date was  January 1, 2024; however, the system changes required by HOTMA are not currently available.  The over‐income portion of HOTMA is one exception and became effective March 16, 2023 and  ACOP changes were adopted by the HA in April 2023.     HUD required HAs to set a compliance date no later than January 1, 2025 and adopt HOTMA  changes to the ACOP by this date. HUD sent a notice September 18, 2024 that HAs will not be  required to be compliant with HOTMA Section 102 and 104 income and asset provisions by  January 1, 2025, except for the Earned Income Disregard (EID) provisions. Although the  implementation of the HOTMA Section 102 and 104 Final Rule remains in effect, these income  and asset provisions of the final rule require access to new HOTMA‐compliance HUD‐50058  forms in the Housing Information Portal (HIP), the not‐yet‐released replacement for IMPS/PIC.  HIP will not be ready by January 1, 2025. HUD plans to issue additional guidance about HOTMA  soon. Changes in chapters 4, 5, 10, 12 and 13 will become effective January 1, 2025. HOTMA  related policies in chapters 1, 3, 6, 7, 8, 9 and 16 will be implemented once HUD issues further  guidance and all program participants will be informed of the implementation date.     Attachments:  Resolution No. 763 Amendment to ACOP    Admissions and Continuing Occupancy Policy changes    Prepared by:   Marney Olson, housing supervisor  Reviewed by: Oi Mattison, public housing manager  41 HOUSING AUTHORITY OF ST. LOUIS PARK  Resolution No. 763     Amendment to the Admissions and Continued Occupancy Policy (ACOP)    WHEREAS, HUD requires housing authorities administering the Public Housing Program  to have an Admissions and Continued Occupancy Policy (ACOP) for the effective administration  and operation of its Public Housing program, and    WHEREAS, the St. Louis Park Housing Authority has updated the ACOP to reflect changes  to HUD Regulations and Requirements, and     WHEREAS, the Housing Authority has updated the ACOP to reflect changes to HA policy  as deemed appropriate, and    WHEREAS, the St. Louis Park Housing Authority will implement changes to chapters 4, 5,  10, 12 and 13 with a January 1, 2025 effective date, and    WHEREAS, HOTMA related policies in chapters 1, 3, 6, 7, 8, 9 and 16 will implemented  once HUD issues further guidance and all program participants will be informed of the  implementation date.    THEREFORE, BE IT RESOLVED, by the Housing Authority of St. Louis Park, that the  updated ACOP is hereby adopted.      Adopted by the Authority October 9, 2024           _____________________________       Thom Miller, Chair            ______________________________  Reynold Burrows, Secretary   Attest:       _______________________________  Karen Barton, Executive Director      42 ADMISSIONS AND CONTINUED OCCUPANCY POLICY FOR THE PUBLIC HOUSING PROGRAM May 1, 2005 Revision Date February 1, 2006 June 1, 2015 October 1, 2006 March 1, 2016 June 1, 2007 July 1, 2017 September 1, 2008 July 1, 2018 September 1, 2009 July 1, 2019 August 1, 2010 November 18, 2020 June 1, 2011 May 1, August 11, November 10, 2021 June 1, 2012 September 1, 2022 June 1, 2013 March 1, 2023 July 1, 2014 October 9, 2024 Approved by the St. Louis Park HA Board of Commissioners: April 12, 2023-October 9, 2024 43 © Copyright 2013 2023 Nan McKay & Associates ACOP 6/1/1311/1/23 Unlimited copies may be made for internal use Page 1-4 1-I.D. THE HA’S COMMITMENT TO ETHICS AND SERVICE As a public service agency, the HA is committed to providing excellent service to all public housing applicants, residents, and the public. In order to provide superior service, the HA resolves to:  Administer applicable federal and state laws and regulations to achieve high ratings in compliance measurement indicators while maintaining efficiency in program operation to ensure fair and consistent treatment of clients served.  Provide housing that is safe, habitable, functionally adequate, operable, and free of health and safety hazards – in compliance with the National Standards for the Physical Inspection of Real Estate: Inspection Standards (NSPIRE)decent, safe, and sanitary housing in good repair – in compliance with program uniform physical condition standards – for very low- and low- income families.  Achieve a healthy mix of incomes in its public housing developments by attracting and retaining higher income families and by working toward deconcentration of poverty goals.  Encourage self-sufficiency of participant families and assist in the expansion of family opportunities which address educational, socio-economic, recreational and other human services needs.  Promote fair housing and the opportunity for very low- and low-income families of all races, ethnicities, national origins, religions, ethnic backgrounds, and with all types of disabilities, to participate in the public housing program and its services.  Create positive public awareness and expand the level of family and community support in accomplishing the HA’s mission.  Attain and maintain a high level of standards and professionalism in day-to-day management of all program components.  Administer an efficient, high-performing agency through continuous improvement of the HA’s support systems and commitment to our employees and their development. The HA will make every effort to keep residents informed of program rules and regulations, and to advise participants of how the program rules affect them. 44 © Copyright 2013 2023 Nan McKay & Associates ACOP 6/1/1311/1/23 Unlimited copies may be made for internal use Page 1-5 PART II: THE PUBLIC HOUSING PROGRAM 1-II.A. OVERVIEW AND HISTORY OF THE PROGRAM The intent of this section is to provide the public and staff an overview of the history and operation of public housing. The United States Housing Act of 1937 (the “Act”) is responsible for the birth of federal housing program initiatives, known as public housing. The Act was intended to provide financial assistance to states and cities for public works projects, slum clearance and the development of affordable housing for low-income residents. There have been many changes to the program since its inception in 1937. The Housing Act of 1965 established the availability of federal assistance, administered through local public agencies, to provide rehabilitation grants for home repairs and rehabilitation. This act also created the federal Department of Housing and Urban Development (HUD). The Housing Act of 1969 created an operating subsidy for the public housing program for the first time. Until that time, public housing was a self-sustaining program. In 1998, the Quality Housing and Work Responsibility Act (QHWRA) – also known as the Public Housing Reform Act or Housing Act of 1998 – was signed into law. Its purpose was to provide more private sector management guidelines to the public housing program and provide residents with greater choices. It also allowed HAs more remedies to replace or revitalize severely distressed public housing developments. Highlights of the Reform Act include: the establishment of flat rents; the requirement for HAs to develop five-year and annual plans; income targeting, a requirement that 40% of all new admissions in public housing during any given fiscal year be reserved for extremely low-income families; and resident self-sufficiency incentives. On July 29, 2016, the Housing Opportunity Through Modernization Act of 2016 (HOTMA) was signed into law. HOTMA made numerous changes to statutes governing HUD programs, including sections of the United States Housing Act of 1937. Title I of HOTMA contains 14 different sections that impact the public housing and Section 8 programs. The Final Rule implementing broad changes to income and assets in Sections 102 and 104 of HOTMA, and for PHAs that administer the public housing program over-income provisions in Section 103, was officially published in the Federal Register on February 14, 2023. On September 29, 2023, HUD issued notice PIH 2023-27, which provided guidance to PHAs on the implementation of the program changes described in the Final Rule. 45 © Copyright 2013 2023 Nan McKay & Associates ACOP 6/1/1311/1/23 Unlimited copies may be made for internal use Page 1-6 1-II.B. PUBLIC HOUSING PROGRAM BASICS HUD writes and publishes regulations in order to implement public housing laws enacted by Congress. HUD contracts with the HA to administer programs in accordance with HUD regulations and provides an operating subsidy to the HA. The HA must create written policies that are consistent with HUD regulations. Among these policies is the HA’s Admissions and Continued Occupancy Policy (ACOP). The ACOP must be approved by the board of commissioners of the PHA. The job of the HA pursuant to HUD regulations is to provide decent, safe, and sanitary housing, in good repair safe, habitable dwelling units, to low-income families at an affordable rent. The HA screens applicants for public housing and, if they are determined to be eligible for the program, the HA makes an offer of a housing unit. If the applicant accepts the offer, the HA and the applicant will enter into a written lease agreement. At this point, the applicant becomes a tenant in the public housing program. In the context of the public housing program, a tenant is defined as the adult person(s) (other than a live-in aide who (1) executed the lease with the HA as lessee of the dwelling unit, or, if no such person now resides in the unit, (2) who resides in the unit, and who is the remaining head of household of the tenant family residing in the dwelling unit. [24 CFR 966.53]. The Public Housing Occupancy Guidebook refers to tenants as “residents.” The terms “tenant” and “resident” are used interchangeably in this policy. Additionally, this policy uses the term “family” or “families” for residents or applicants, depending on context. Since the HA owns the public housing development, the HA is the landlord. The HA must comply with all of the legal and management responsibilities of a landlord in addition to administering the program in accordance with HUD regulations and HA policy. 1-II.C. PUBLIC HOUSING PARTNERSHIPS To administer the public housing program, the HA must enter into an Annual Contributions Contract (ACC) with HUD. The HA also enters into a contractual relationship with the tenant through the public housing lease. These contracts define and describe the roles and responsibilities of each party. In addition to the ACC, the HA and family must also comply with federal regulations and other HUD publications and directives. For the program to work and be successful, all parties involved – HUD, the PHA, and the tenant – play an important role. The chart on the following page illustrates key aspects of these relationships. 46 © Copyright 2013 2023 Nan McKay & Associates ACOP 6/1/1311/1/23 Unlimited copies may be made for internal use Page 1-7 The Public Housing Relationships 47 © Copyright 2013 2023 Nan McKay & Associates ACOP 6/1/1311/1/23 Unlimited copies may be made for internal use Page 1-8 What does HUD do? Federal law is the source of HUD responsibilities. HUD has the following major responsibilities:  Develop regulations, requirements, handbooks, notices and other guidance to implement housing legislation passed by Congress  Allocate operating subsidies to HAs  Allocate capital funding to HAs  Provide technical assistance to HAs on interpreting and applying program requirements  Monitor HA compliance with program requirements and HA performance in program administration. What does the HA do? The HA’s responsibilities originate in federal regulations and the ACC. The HA owns and manages public housing developments, administers the program under contract with HUD and has the following major responsibilities:  Ensure compliance with all non-discrimination, equal opportunity, and fair housing laws, and ensure that the program is accessible to persons with disabilities  Establish local policies and procedures for operating the program  Review Accept applications from interested applicant families to determine whether applicants are eligible for the program  Maintain waiting list and select families for admission  Maintain housing units by making any necessary repairs in a timely manner Screen families who apply for tenancy, to determine if they will be good renters  Make unit offers Offer units to families (minimize vacancies without overcrowding)  Maintain properties to the standard of decent, safe, sanitary, and in good repairsafe, habitable dwelling units (including assuring compliance with uniform physical conditions standardsNational Standards for the Physical Inspection of Real Estate (NSPIRE))  Make sure the HA has adequate financial resources to maintain its housing stock  Ensure that families continue to qualify under the programPerform regular reexaminations of family income and composition in accordance with HUD requirements  Collect rent due from the assisted family and comply with and enforce provisions of the lease  Ensure that families comply with program rules  Provide families with prompt and professional service  Comply with all fair housing and equal opportunity requirements, HUD regulations and requirements, the Annual Contributions ContractACC , HUD-approved applications for funding, the HA’s ACOP, and other applicable federal, state and local laws. 48 © Copyright 2013 2023 Nan McKay & Associates ACOP 6/1/1311/1/23 Unlimited copies may be made for internal use Page 1-9 What does the tenant do? The tenant’s responsibilities are articulated in the public housing lease. The tenant has the following broad responsibilities:  Comply with the terms of the lease and HA house rules, as applicable  Provide the HA with complete and accurate information, determined by the HA to be necessary for administration of the program  Cooperate in attending all appointments scheduled by the HA  Allow the HA to inspect the unit at reasonable times and after reasonable notice  Take responsibility for care of the housing unit, including any violations of uniform physical condition standardsNSPIRE caused by the family  Not engage in drug-related or violent criminal activity  Notify the HA before moving or termination of the lease  Use the assisted unit only for residence and as the sole residence of the family. Not sublet the unit or assign the lease  Promptly notify the HA of any changes in family composition  Not commit fraud, bribery, or any other corrupt or criminal act in connection with any housing programs  Take care of the housing unit and report maintenance problems to the HA promptly If all parties fulfill their obligations in a professional and timely manner, the program responsibilities will be fulfilled in an effective manner. 49 © Copyright 2013 2023 Nan McKay & Associates ACOP 6/1/1311/1/23 Unlimited copies may be made for internal use Page 1-10 1-II.D. APPLICABLE REGULATIONS Applicable regulations include:  24 CFR Part 5: General Program Requirements  24 CFR Part 8: Nondiscrimination  24 CFR Part 35: Lead-Based Paint  24 CFR Part 902: Public Housing Assessment System  24 CFR Part 903: Public Housing Agency Plans  24 CFR Part 945: Designated Housing  24 CFR Part 960: Admission and Occupancy Policies  24 CFR Part 965: HA-Owned or Leased Projects – General Provisions  24 CFR Part 966: Lease and Grievance Procedures 50 © Copyright 2013 2023 Nan McKay & Associates ACOP 6/1/1311/1/23 Unlimited copies may be made for internal use Page 1-11 PART III: THE ADMISSIONS AND CONTINUED OCCUPANCY POLICIES 1-III.A. OVERVIEW AND PURPOSE OF THE POLICY The ACOP is the HA’s written statement of policies used to carry out the housing program in accordance with federal law and regulations, and HUD requirements. The ACOP is required by HUD, and it must be available for public review [CFR 24 Part 903]. The ACOP also contains policies that support the objectives contained in the HA’s Agency Plan. All issues related to public housing not addressed in this ACOP are governed by federal regulations, HUD handbooks and guidebooks, notices and applicable state and local laws. The policies in this ACOP have been designed to ensure compliance with the consolidated ACC and all HUD-approved applications for program funding. The HA is responsible for complying with all changes in HUD regulations pertaining to public housing. If such changes conflict with this plan, HUD regulations will have precedence. 1-III.B. CONTENTS OF THE POLICY Unlike the housing choice voucher program, HUD regulations for public housing do not contain a list of what must be included in the ACOP. However, individual regulations contain requirements of inclusion in the HA’s written policy. At a minimum, the ACOP plan should cover HA policies on these subjects:  The organization of the waiting list and how families are selected and offered available units, including any HA admission preferences, procedures for removing applicant names from the waiting list, and procedures for closing and reopening the HA waiting list (Chapters 4 and 5)  Transfer policies and the circumstances under which a transfer would take precedence over an admission (Chapter 12)  Standards for determining eligibility, suitability for tenancy, and the size and type of the unit needed (Chapters 3 and 5)  Procedures for verifying the information the family has provided (Chapter 7)  The method for achieving deconcentration of poverty and income-mixing of public housing developments (Chapter 4)  Grievance procedures (Chapter 14)  Policies concerning payment by a family to the HA of amounts the family owes the HA (Chapter 15 and 16)  Interim redeterminations of family income and composition (Chapter 9)  Policies regarding community service requirements; (Chapter 11)  Polices and rules about safety and ownership of pets in public housing (Chapter 10). 51 © Copyright 2013 2023 Nan McKay & Associates ACOP 6/1/1311/1/23 Unlimited copies may be made for internal use Page 1-12 New Approach to Policy DevelopmentMandatory vs. Discretionary Policy HUD has developed an approach to monitoring HAs that emphasizes the importance of consistency in operation and decision-making. The ACOP supports that goal by clearly setting forth the HA’s operating policies. A primary focus of HUD’s Rental Integrity Monitoring (RIM) program has been consistency in how PHAs conduct their business and in how HUD monitors HA activities. Referring to and following the ACOP is essential to maintaining consistency in applying HA policy. HUD makes a distinction between mandatory policies and non-mandatory policies:  Mandatory policies: those driven by legislation, regulations, current handbooks, current PIH notices, and legal opinions from the Office of General Counsel  Optional, non-binding guidance: includes guidebooks, FAQs, PIH notices that have expired, and recommendations from individual HUD staff. HUD expects HAs to develop policies and procedures that are consistent with mandatory policies and to make clear the optional policies the HA has adopted. The ACOP is comprised of mandatory policies and optional HA policy. HUD’s new direction emphasizes the need for a clearly written and comprehensive ACOP to guide staff in the clear and consistent application of policy. HUD suggestions, recommendations, written issuances, and guidance are consistent with mandatory federal policy. Therefore, using HUD guidance in the preparation of HA policy, even though it is not mandatory, provides a HA with a “safe harbor.” If a HA adopts its own optionalan alternative policy, it must make its own determination that such policy is consistent with legislation, regulations, and other mandatory requirements. There may be very good reasons for adopting a policy or procedure that is different than that suggested by HUD, but HAs should carefully think through those decisions and be able to articulate how their policy is consistent with federal laws, regulations and mandatory policy. 1-III.C. UPDATING AND REVISING THE POLICY The HA will revise this ACOP as needed to comply with changes in HUD regulations. The original policy and any changes must be approved by the board of commissioners of the HA, the pertinent sections included in the Agency Plan, and a copy provided to HUD. HA Policy The HA will review and update the ACOP as needed to reflect changes in regulations, HA operations, or when needed to ensure staff consistency in operation. 52 © Copyright 2023 by Nan McKay & Associates ACOP 3/1/2311/1/23 Unlimited copies may be made for internal use. Page 3-1 Chapter 3 ELIGIBILITY INTRODUCTION The HA is responsible for ensuring that every individual and family admitted to the public housing program meets all program eligibility requirements. This includes any individual approved to join the family after the family has been admitted to the program. The family must provide any information needed by the HA to confirm eligibility and determine the level of the family’s assistance. To be eligible for the public housing program:  The applicant family must:  Qualify as a family as defined by HUD and the HA.  Have income at or below HUD-specified income limits.  Qualify on the basis of citizenship or the eligible immigrant status of family members.  Provide social security number information for household members as required.  Consent to the HA’s collection and use of family information as provided for in HA- provided consent forms.  Not currently be receiving a duplicative subsidy.  Meet net asset and property ownership restriction requirements.  The HA must determine that the current or past behavior of household members does not include activities that are prohibited by HUD or the HA. This chapter contains three parts: Part I: Definitions of Family and Household Members. This part contains HUD and HA definitions of family and household members and explains initial and ongoing eligibility issues related to these members. Part II: Basic Eligibility Criteria. This part discusses income eligibility, and rules regarding citizenship, social security numbers, and family consent. Part III: Denial of Admission. This part covers factors related to an applicant’s past or current conduct (e.g. criminal activity) that can cause the HA to deny admission as well as the asset limitation for public housing. 53 © Copyright 2023 by Nan McKay & Associates ACOP 3/1/2311/1/23 Unlimited copies may be made for internal use. Page 3-3 PART I: DEFINITIONS OF FAMILY AND HOUSEHOLD MEMBERS 3-I.A. OVERVIEW Some eligibility criteria and program rules vary depending upon the composition of the family requesting assistance. In addition, some requirements apply to the family as a whole and others apply to individual persons who will live in the public housing unit. This part provides information that is needed to correctly identify family and household members, and to explains HUD's eligibility rules. 3-I.B. FAMILY AND HOUSEHOLD [24 CFR 5.105(a)(2), 24 CFR 5.403, FR Notice 02/03/12, and Notice PIH 2014-20, Notice PIH 2023-27, and FR Notice 2/14/23] The terms family and household have different meanings in the public housing program. Family To be eligible for admission, an applicant must qualify as a family. Family as defined by HUD, includes but is not limited to the following, regardless actual or perceived sexual orientation, gender identity, or marital status, a single person, who may be an elderly person, displaced person, disabled person, near-elderly person, or any other single person; an otherwise eligible youth who has attained at least 18 years of age and not more than 24 years of age and who has left foster care, or will leave foster care within 90 days, in accordance with a transition plan described in section 475(5)(H) of the Social Security Act (42 U.S.C. 675(5)(H), and is homeless or is at risk of becoming homeless at age 16 or older; or a group of persons residing together. Such group includes, but is not limited to a family with or without children (a child who is temporarily away from the home because of placement in foster care is considered a member of the family), an elderly family, a near-elderly family, a disabled family, a displaced family, andor the remaining member of a tenant family. The HA has the discretion to determine if any other group of persons qualifies as a family. Gender Identity means actual or perceived gender characteristics. Sexual orientation means homosexuality, heterosexuality, or bisexuality. HA Policy A family also includes two or more individuals who are not related by blood, marriage, adoption, or other operation of law, but who either can demonstrate that they have lived together previously or certify that each individual’s income and other resources will be available to meet the needs of the family. Each family must identify the individuals to be included in the family at the time of application, and must update this information if the family’s composition changes. A Household consisting exclusively of one or more full-time college students does not qualify as a family unless each individual in the household satisfies the following conditions: (1) The individual either must have established a household separate from his/hers/ parents or legal guardians for at least one year prior to application for admission or must meet the U.S. Department of Education’s definition of independent student. (2) The individual must not be claimed as a dependent by his/her parents or legal guardian pursuant to Internal Revenue Services (IRS) regulations. 54 © Copyright 2023 by Nan McKay & Associates ACOP 3/1/2311/1/23 Unlimited copies may be made for internal use. Page 3-7 3-I.F. DEPENDENTS AND MINORS [24 CFR 5.603] A minor is a member of the family, other than the head of family or spouse, who is under 18 years of age. A dependent is a family member who is under 18 years of age or a person of any age who is a person with a disability or a full-time student, except that the following persons can never be dependents: the head of household, spouse, cohead, foster children/adults and live-in aides . Identifying each dependent in the family is important because each dependent qualifies the family for a deduction from annual income as described in Chapter 6. Joint Custody of Dependents HA Policy Dependents that are subject to a joint custody arrangement will be considered a member of the family, if they live with the applicant or resident family 50 percent or more of the time. When more than one applicant or assisted family (regardless of program) are claiming the same dependents as family members, the family with primary custody at the time of the initial examination or reexamination will be able to claim the dependents. If there is a dispute about which family should claim them, the HA will make the determination based on available documents such as court orders, an IRS income tax return showing which family has claimed the child for income tax purposes, school records, or other credible documentation. 3-I.G. FULL-TIME STUDENT [24 CFR 5.603] A full-time student (FTS) is a person who is attending school or vocational training on a full-time basis. The time commitment or subject load that is needed to determine if attendance is full-time is defined by the educational institution. Identifying each FTS is important because (1) each family member that is an FTS, other than the head, spouse, or cohead, qualifies the family for a dependent deduction and (2) the income of such an FTS is treated differently from the income of other family members. 55 © Copyright 2023 by Nan McKay & Associates ACOP 3/1/2311/1/23 Unlimited copies may be made for internal use. Page 3-10 3-I.K. FOSTER CHILDREN AND FOSTER ADULTS [24 CFR 5.603] A fFoster adults is a member of the household who is 18 years of age or older and meets the definition of a foster adult under state law. In general, a foster adult is a person who is 18 years of age or older, is unable to live independently due to a debilitating physical or mental condition, and is placed with the family by an authorized placement agency or by judgement, decree, or other order of any court of competent jurisdiction.are usually persons with disabilities, unrelated to the tenant family, who are unable to live alone [24 CFR 5.609(c)(2)]. The termA foster child is a member of the household who meets the definition of a foster child under state law. In general, a foster child is placed with the family by an authorized placement agency (e.g., public child welfare agency) or by judgment, decree, or other order of any court of competent jurisdiction. not specifically defined by the regulations. Foster children and foster adults that are living with an applicant or resident family are considered household members but not family members. The income of foster children/adults is not counted in family annual income and foster children/adults do not qualify for a dependent deduction [24 CFR 5.603 and HUD-50058 IB, pp. 13-14]. HA Policy A foster child or foster adult may be allowed to reside in the unit if their presence would not overcrowd the unit. A foster child is a child that is in the legal guardianship or custody of a state, county, or private adoption or foster care agency, yet is cared for by foster parents in their own homes, under some kind of short-term or long-term foster care arrangement with the custodial agency. Children that are temporarily absent from the home as a result of placement in foster care are discussed in Section 3-I.L. 56 © Copyright 2023 by Nan McKay & Associates ACOP 3/1/2311/1/23 Unlimited copies may be made for internal use. Page 3-14 PART II: BASIC ELIGIBILITY CRITERIA 3-II.A. INCOME ELIGIBILITY AND TARGETING Income Limits HUD is required by law to establish income limits that determine the income eligibility of applicants for HUD’s assisted housing programs, including the public housing program. The income limits are published annually and are based on HUD estimates of the median incomes for families of different sizes in a particular area or county. Types of Low-Income Families [24 CFR 5.603(b)] Low-income family. A family whose annual income does not exceed 80 percent of the median income for the area, adjusted for family size. Very low-income family. A family whose annual income does not exceed 50 percent of the median income for the area, adjusted for family size. Extremely low-income family. A family whose annual income does not exceed the federal poverty level or 30 percent of the median income for the area, whichever number is higher. Area median income is determined by HUD, with adjustments for smaller and larger families. HUD may establish income ceilings higher or lower than 30, 50, or 80 percent of the median income for an area if HUD finds that such variations are necessary because of unusually high or low family incomes. HUD also publishes over-income limits annually, but these are not used at admission. Over- income limits will be discussed in Chapter 13. Using Income Limits for Eligibility [24 CFR 960.201 and Notice PIH 2023-27] Income limits are used to determine eligibility at admission. Eligibility is established by comparing a family's annual income with HUD’s published income limits. To be income eligible, a family must be a low-income family. Income and net family assets of household members are excluded when determining income eligibility; however, household members are considered for purposes of unit size and subsidy standards. 57 © Copyright 2023 by Nan McKay & Associates ACOP 3/1/2311/1/23 Unlimited copies may be made for internal use. Page 3-19 3-II.D. FAMILY CONSENT TO RELEASE OF INFORMATION [24 CFR 5.230] HUD requires each adult family member, and the head of household, spouse, or cohead, regardless of age, to sign form HUD-9886, Authorization for the Release of Information Privacy Act Notice, the form HUD-52675, Debts Owed to Public Housing Agencies and Terminations, and other consent forms as needed to collect information relevant to the family’s eligibility and level of assistance. Chapter 7 provides detailed information concerning the consent forms and verification requirements. The consent form remains effective until the family is denied assistance, assistance is terminated or the family provides written notification to revoke consent. The HA must deny admission to the program if any member of the applicant family fails to sign and submit consent forms which allow the HA to obtain information that the HA has determined is necessary in administration of the public housing program [24 CFR 960.259(a) and (b) and 24 CFR 5.232(a)]. However, this does not apply if the applicant or participant, or any member of their family, revokes their consent with respect to the ability of the HA to access financial records from financial institutions, unless the HA establishes a policy that revocation of consent to access financial records will result in denial or termination of assistance or admission [24 CFR 5.232(c)]. HA Policy The HA has established a policy that the family’s revocation of consent to allow the HA the HA to access records from financial institutions will result in denial of admission. 58 © Copyright 2023 by Nan McKay & Associates ACOP 3/1/2311/1/23 Unlimited copies may be made for internal use. Page 3-20 3-II.E. EIV SYSTEM SEARCHES [Notice PIH 2018-18; EIV FAQs; EIV System Training 9/30/20; and Notice PIH 2023-27] Existing Tenant Search Prior to admission to the program, the PHA must search for all household members using the EIV Existing Tenant Search module. The PHA must review the reports for any SSA matches involving another HA or a multifamily entity and follow up on any issues identified. The HA must provide the family with a copy of the Existing Tenant Search results if requested. At no time may any family member receive duplicative assistance. If the tenant is a new admission to the HA, and a match is identified at a multifamily property, the HA must report the program admission date to the multifamily property and document the notification in the tenant file. The family must provide documentation of move-out from the assisted unit, as applicable. HA Policy The HA will contact the other HA or owner identified in the report to confirm that the family has moved out of the unit and obtain documentation of current tenancy status, including a form HUD-50058 or 50059, as applicable, showing an end of participation. The HA will only approve assistance contingent upon the move-out from the currently occupied assisted unit. Debts Owed to HAs and Terminations All adult household members must sign the form HUD-52675, Debts Owed to Public Housing and Terminations. Prior to admission to the program, the PHA must search for each adult family member in the Debts Owed to HAs and Terminations module. If a current or former tenant disputes the information in the module, the tenant should contact the HA directly in writing to dispute the information and provide any documentation that supports the dispute. If the HA determines that the disputed information is incorrect, the HA will update or delete the record from EIV. Former tenants may dispute debt and termination information for a period of up to three years from the end of participation date in the program. HA Policy The HA will require each adult household member to sign the form HUD-52675 once at the eligibility determination. Any new members added to the household after admission will be required to sign the form HUD-52675 prior to being added to the household. The HA will search the Debts Owed to HAs and Terminations module as part of the eligibility determination for new households and as part of the screening process for any household members added after the household is admitted to the program. If any information on debts or terminations is returned by the search, the HA will determine if this information warrants a denial in accordance with the policies in Part III of this chapter. 59 © Copyright 2023 by Nan McKay & Associates ACOP 3/1/2311/1/23 Unlimited copies may be made for internal use. Page 3-22 PART III: DENIAL OF ADMISSION 3-III.A. OVERVIEW A family that does not meet the eligibility criteria discussed in Parts I and II, must be denied admission. In addition, HUD requires or permits the HA to deny admission based on certain types of current or past behaviors of family members as discussed in this part. The HA’s authority in this area is limited by the Violence against Women Act (VAWA), which prohibits the denial of admission to an otherwise qualified applicant on the basis or as a direct result of the fact that the applicant is or has been the victim of domestic violence, dating violence, sexual assault, stalking, or human trafficking [see 24 CFR 5.2005(b)]. While the regulations state that the PHA must prohibit admission for certain types of criminal activity and give the PHA the option to deny for other types of previous criminal history, more recent HUD rules and OGC guidance must also be taken into consideration when determining whether a particular individual’s criminal history merits denial of admission. When considering any denial of admission, PHAs may not use arrest records as the basis for the denial. Further, HUD does not require the adoption of “One Strike” policies and reminds PHAs of their obligation to safeguard the due process rights of applicants and tenants [Notice PIH 2015-19]. HUD’s Office of General Counsel issued a memo on April 4, 2016, regarding the application of Fair Housing Act standards to the use of criminal records. This memo states that a PHA violates the Fair Housing Act when their policy or practice has an unjustified discriminatory effect, even when the PHA had no intention to discriminate. Where a policy or practice that restricts admission based on criminal history has a disparate impact on a particular race, national origin, or other protected class, that policy or practice is in violation of the Fair Housing Act if it is not necessary to serve a substantial, legitimate, nondiscriminatory interest of the PHA, or if that interest could be served by another practice that has a less discriminatory effect [OGC Memo 4/4/16]. HUD codified this stance on disparate impact and discriminatory effects in a final rule dated March 31, 2023. In doing so, HUD also standardized its long-practiced three-step approach to assessing burdens of proof. PHAs who impose blanket prohibitions on any person with any conviction record, no matter when the conviction occurred, what the underlying conduct entailed, or what the convicted person has done since then will be unable to show that such policy or practice is necessary to achieve a substantial, legitimate, nondiscriminatory interest. Even a PHA with a more tailored policy or practice that excludes individuals with only certain types of convictions must still prove that its policy is necessary. To do this, the PHA must show that its policy accurately distinguishes between criminal conduct that indicates a demonstrable risk to resident safety and property and criminal conduct that does not. 60 © Copyright 2023 by Nan McKay & Associates ACOP 3/1/2311/1/23 Unlimited copies may be made for internal use. Page 3-23 This part covers the following topics:  Required denial of admission  The asset limitation in public housing  Other permitted reasons for denial of admission  Screening  Criteria for deciding to deny admission  Prohibition against denial of admission to victims of domestic violence, dating violence, sexual assault, stalking, or human trafficking  Notice of eligibility or denial 3-III.B. REQUIRED DENIAL OF ADMISSION [24 CFR 960.204] HAs are required to establish standards that prohibit admission of an applicant to the public housing program if they have engaged in certain criminal activity or if the HA has reasonable cause to believe that a household member’s current use or pattern of use of illegal drugs, or current abuse or pattern of abuse of alcohol may threaten the health, safety, or right to peaceful enjoyment of the premises by other residents. Where the statute requires that the HA prohibit admission for a prescribed period of time after some disqualifying behavior or event, the HA may choose to continue that prohibition for a longer period of time [24 CFR 960.203(c)(3)(ii)]. 61 © Copyright 2023 by Nan McKay & Associates ACOP 3/1/2311/1/23 Unlimited copies may be made for internal use. Page 3-25 3-III.C. RESTRICTION ON ASSISTANCE BASED ON ASSETS [24 CFR 5.618] There are two circumstances under which a family is ineligible for the program based on asset ownership. First, assistance may not be provided to any family if the family’s net assets exceed $100,000 (adjusted annually by HUD). Second, the family has real property that is suitable for occupancy by the family as a residence and the family has:  A present ownership interest in the real property;  A legal right to reside in the real property; and  The effective legal authority to sell (based on state or local laws of the jurisdiction where the property is located) the real property. However, the real property restriction does not apply in the following circumstances:  Any property for which the family is receiving assistance for a manufactured home under 24 CFR 982.620 or under the HCV Homeownership program; or  Any property that is jointly owned by a member of the family and at least one non-household member who does not live with the family, if the non-household member resides at the jointly owned property;  Any family that is offering the property for sale; or  Any person who is a victim of domestic violence, dating violence, sexual assault, or stalking. - When a family asks for an exception because a family member is a victim of domestic violence, dating violence, sexual assault, or stalking, the HA must comply with all the confidentiality requirements under VAWA. The HA must accept a self-certification from the family member, and the restrictions on requesting documentation under VAWA apply. A property is considered suitable for occupancy unless the family demonstrates that it:  Does not meet the disability-related needs for all members of the family (e.g. physical accessibility requirements, disability-related need for additional bedrooms, proximity to accessible transportation, etc.);  Is not sufficient for the size of the family; HA Policy The HA defines not sufficient for the size of the family as being overcrowded based on the HA’s occupancy standards in Chapter 5.  Is geographically located so as to be a hardship for the family (e.g., the distance or commuting time between the property and the family’s place of work or school would be a hardship to the family, as determined by the HA or owner); 62 © Copyright 2023 by Nan McKay & Associates ACOP 3/1/2311/1/23 Unlimited copies may be made for internal use. Page 3-26  Is not safe to reside in because of the physical condition of the property (e.g., property’s physical condition poses a risk to the family’s health and safety and the condition of the property cannot be easily remedied); or  Is not a property that a family may reside in under the State or local laws of the jurisdiction where the property is located. 3-III.D. OTHER PERMITTED REASONS FOR DENIAL OF ADMISSION HUD permits, but does not require the HA to deny admission for the reasons discussed in this section. Criminal Activity [24 CFR 960.203(c)] The HA is responsible for screening family behavior and suitability for tenancy. In doing so, the HA may consider an applicant’s history of criminal activity involving crimes of physical violence to persons or property and other criminal acts which would adversely affect the health, safety, or welfare of other tenants. HA Policy If any household member is currently engaged in, or has engaged in any of the following criminal activities, within the past three years, the family will be denied admission. Drug-related criminal activity, defined by HUD as the illegal manufacture, sale, distribution, or use of a drug, or the possession of a drug with intent to manufacture, sell, distribute or use the drug [24 CFR 5.100]. Violent criminal activity, defined by HUD as any criminal activity that has as one of its elements the use, attempted use, or threatened use of physical force substantial enough to cause, or be reasonably likely to cause, serious bodily injury or property damage [24 CFR 5.100]. Criminal activity that may threaten the health, safety, or welfare of other tenants [24 CFR 960.203(c)(3)]. Criminal activity that may threaten the health or safety of neighbors, HA staff, contractors, subcontractors, or agents. Criminal sexual conduct, including but not limited to sexual assault, incest, open and gross lewdness, or child abuse. Evidence of such criminal activity includes, but is not limited to: Any record of convictions, arrests, or evictions for suspected drug-related or violent criminal activity of household members within the past three years. A record or records of arrest will not be used as the sole basis for the denial or proof that the applicant engaged in disqualifying criminal activity. In making its decision to deny assistance, the HA will consider the factors discussed in Sections 3-III.E F and 3-III.FG. Upon consideration of such factors, the HA may, on a case-by-case basis, decide not to deny assistance. 63 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 113/1/2023 Unlimited copies may be made for internal use. Page 4-3 PART I: THE APPLICATION PROCESS 4-I.A. OVERVIEW This part describes the policies that guide the HA’s efforts to distribute and accept applications, and to make preliminary determinations of applicant family eligibility that affect placement of the family on the waiting list. This part also describes the HA’s obligation to ensure the accessibility of the application process. 4-I.B. APPLYING FOR ASSISTANCE Any family that wishes to reside in public housing must apply for admission to the program [24 CFR 1.4(b)(2)(ii), 24 CFR 960.202(a)(2)(iv), and PH Occ GB, p. 68]. HUD permits the HA to determine the format and content of its applications, as well how such applications will be made available to interested families and how applications will be accepted by the HA. However, the HA must include Form HUD-92006, Supplement to Application for Federally Assisted Housing, as part of the HA’s application [Notice PIH 2009-36]. HA Policy Depending upon the length of time between the date of application and the availability of housing, the HA may uses a one- or two-step application process. A one-step process will be used when it is expected that a family will be selected from the waiting list within 60 days of the date of application. At application, the family must provide all of the information necessary to establish family eligibility and the amount of rent the family will pay. A two-step process will be used when it is expected that a family will not be selected from the waiting list for at least 60 days from the date of application. Under the two-step application process, the HA initially will require families to provide only the information needed to make an initial assessment of the family’s eligibility, and to determine the family’s placement on the waiting list. The family will be required to provide all of the information necessary to establish family eligibility. Applicants may obtain application forms by whatever means provided by the HA at the time the waiting list opens. Instructions for applying will be part of the advertisement of the opening of the waiting list. 64 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 113/1/2023 Unlimited copies may be made for internal use. Page 4-9 4-II.C. OPENING AND CLOSING THE WAITING LIST Closing the Waiting List The HA is permitted to close the waiting list, in whole or in part, if it has an adequate pool of families to fully lease units in all of its developments. The HA may close the waiting list completely, or restrict intake by preference, type of project, or by size and type of dwelling unit. [PH Occ GB, p. 31]. HA Policy The HA will may close the waiting list when the estimated waiting period for housing applicants on the list reaches 18 - 24 months for the most current applicants. Where the HA has particular preferences or other criteria that require a specific category of family, the HA may elect to continue to accept applications from these applicants while closing the waiting list to others. Reopening the Waiting List If the waiting list has been closed, it may be reopened at any time. The HA should publish a notice announcing the opening of the waiting list in local newspapers of general circulation, minority media, and other suitable media outlets. Such notice must comply with HUD fair housing requirements. HA Policy The HA will announce the reopening of the waiting list at least 10 business days prior to the date applications will first be accepted. If the list is only being reopened for certain categories of families, this information will be contained in the notice. The notice will specify where, when, and how applications are to be received. The notice will inform applicants of the date, time, method, and place applications can be obtained and submitted, how blank applications may be obtained, and all methods by which applications will be accepted, a point of contact who can answer questions, any limitations on who may apply, and any other information the applicant may need to successfully submit the application. The HA will describe its prioritization system or whether it uses a lottery and will clearly state that this system will be used to place applicants on the waiting list. To ensure that public notices broadly reach potential applicants in all communities throughout the housing market area, the HA will distribute public notices to local community-based organizations, such as social service agencies and religious institutions; distribute the notice online through the HA’s website or social media platforms and other online platforms for local housing news; and make use of any local newspapers of general circulation, minority media, and other suitable means. The HA will give public notice by publishing the relevant information using the following media outlets: Sun Sailor Housing Link City of St. Louis Park Website Notices to Community Organization 65 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 113/1/2023 Unlimited copies may be made for internal use. Page 4-12 4-II.F. UPDATING THE WAITING LIST HUD requires the HA to establish policies that describe the circumstances under which applicants will be removed from the waiting list [24 CFR 960.202(a)(2)(iv)]. Purging the Waiting List The decision to remove an applicant family that includes a person with disabilities from the waiting list is subject to reasonable accommodation. If the applicant did not respond to the HA’s request for information or updates because of the family member’s disability, the HA must, upon the family’s request, reinstate the applicant family to their former position on the waiting list as a reasonable accommodation [24 CFR 8.4(a), 24 CFR 100.204(a), and PH Occ GB, p. 39 and 40]. See Chapter 2 for further information regarding reasonable accommodations. HA Policy The waiting list will be updated as needed to ensure that all applicant information is current and timely. To update the waiting list, the HA will send an update request via first class mail , email or via the online portal to each family on the waiting list to determine whether the family continues to be interested in, and to qualify for, the program. This update request will be sent to the last address that the HA has on record for the family. The update request will provide a deadline by which the family must respond and will state that failure to respond will result in the applicant’s name being removed from the waiting list. The family’s response must be in writing and may be updated directly in the online portal or delivered in person, by mail, by email, or by fax. Responses should be postmarked or received by the HA not later than 15 business days from the date of the HA letter. If the family fails to respond within 15 business days, the family will be removed from the waiting list without further notice. If the notice is returned by the post office with no forwarding address and the applicant does not respond, the applicant will be removed from the waiting list without further notice. If the notice is returned by the post office with a forwarding address, the notice will be re- sent to the address indicated. The family will have 15 business days to respond from the date the letter was re-sent. If the family fails to respond within this time frame, the family will be removed from the waiting list without further notice. When a family is removed from the waiting list during the update process for failure to respond, no informal hearing will be offered. Such failures to act on the part of the applicant prevent the HA from making an eligibility determination; therefore no informal hearing is required. If a family is removed from the waiting list for failure to respond, the HA may reinstate the family if the lack of response was due to HA error or circumstances beyond the family’s control, as a result of a family member’s disability, or as a direct result of status as a victim of domestic violence, dating violence, sexual assault, or stalking, including an adverse factor resulting from such abuse. The HA may also reinstate the family if they 66 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 113/1/2023 Unlimited copies may be made for internal use. Page 4-13 contact the HA within one year of removal from the waiting list. If it has been more than one year the family will need to reapply when the waiting list is open. 67 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 113/1/2023 Unlimited copies may be made for internal use. Page 4-22 HA Policy For developments outside the EIR the HA will take the following actions to provide for deconcentration of poverty and income mixing: The St. Louis Park Housing Authority public housing stock consists of a 110 -1 bedroom unit apartment complex with 108 1-bedroom and 2 2-bedroom apartments, 37 single family homes scattered in neighborhoods throughout the community and 12 -2 bedroom apartment units scattered throughout 11 multiple buildings in an 128 unit apartment complex. The City of St. Louis Park does not contain any census track areas that meet HUD’s definition of concentrated poverty. The incomes of residents residing immediately adjacent to the public housing properties is not restricted and provides an adequate income mix. Order of Selection [24 CFR 960.206(e)] The HA system of preferences may select families either according to the date and time of application or by a random selection process. HA Policy Families will be selected from the waiting list based on preference. Among applicants with the same preference, families will be selected based on the date and time randomly applied to all applications from a particular opening of the waiting list. When selecting applicants from the waiting list the HA will match the characteristics of the available unit (unit size, accessibility features, unit type) to the applicants on the waiting lists. The HA will offer the unit to the highest ranking applicant who qualifies for that unit size or type, or that requires the accessibility features. By matching unit and family characteristics, it is possible that families who are lower on the waiting list may receive an offer of housing ahead of families with an earlier date and time of application or higher preference status. Factors such as deconcentration or income mixing and income targeting will also be considered in accordance with HUD requirements and HA policy. 4-III.C. NOTIFICATION OF SELECTION When the family has been selected from the waiting list, the HA must notify the family [24 CFR 960.208]. HA Policy The HA will notify the family by first class mail, email or via the online portal when it is selected from the waiting list. The notice will inform the family of the following: Instructions on how to access and complete the screening process 68 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 113/1/2023 Unlimited copies may be made for internal use. Page 4-23 Documents and information required to complete the screening process Date, time, and location of the scheduled application interview, including any procedures for rescheduling the interview Who is required to attend the interview Documents that must be provided at the interview to document the legal identity of household members, including information about what constitutes acceptable documentation Documents that must be provided at the interview to document eligibility for a preference, if applicable Other documents and information that should be brought to the interviewis required If a notification letter is returned to the HA with no forwarding address, the family will be removed from the waiting list without further notice. Such failure to act on the part of the applicant prevents the HA from making an eligibility determination; therefore no informal hearing will be offered. 4-III.D. THE APPLICATION INTERVIEW HUD recommends that the HA obtain the information and documentation needed to make an eligibility determination through a private interview. Being invited to attend an interview does not constitute admission to the program. Assistance cannot be provided to the family until all SSN documentation requirements are met. However, if the HA determines that an applicant family is otherwise eligible to participate in the program, the family may retain its place on the waiting list for a period of time determined by the HA [Notice PIH 2018-24]. Reasonable accommodation must be made for persons with disabilities who are unable to attend an interview due to their disability [24 CFR 8.4(a) and 24 CFR 100.204(a)]. HA Policy Families selected from the waiting list are required to participate in an eligibility interview. The head of household and the spouse/cohead will be strongly encouraged to attend the interview together. However, either the head of household or the spouse/cohead may attend the interview on behalf of the family. Verification of information pertaining to adult members of the household not present at the interview will not begin until signed release forms are returned to the HA. The interview will be conducted only if the head of household or spouse/cohead provides appropriate documentation of legal identity (Chapter 7 provides a discussion of proper documentation of legal identity). If the family representative does not provide the required documentation, the appointment may be rescheduled when the proper documents have been obtained. 69 © Copyright 2023 by Nan McKay & Associates ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 5-6 5-II.C. TIME LIMIT FOR UNIT OFFER ACCEPTANCE OR REFUSAL HA Policy Applicants must accept or refuse a unit offer within 3 53 business days of the date of the unit offer. Offers made by telephone will be confirmed by letter. 5-II.D. REFUSALS OF UNIT OFFERS Good Cause for Unit Refusal A family may decline an offer for housing. Such a refusal must not adversely affect the family's position on or placement on the public housing waiting list [24 CFR 945.303(d)]. HA Policy Applicants may refuse to accept a unit offer for “good cause.” Good cause includes situations in which an applicant is willing to move but is unable to do so at the time of the unit offer, or the applicant demonstrates that acceptance of the offer would cause undue hardship not related to considerations of the applicant’s race, color, national origin, etc. [PH Occ GB, p. 104]. Examples of good cause for refusal of a unit offer include, but are not limited to, the following: The family demonstrates to the HA’s satisfaction that accepting the unit offer will require an adult household member to quit a job or drop out of an educational institution or job training program. The family demonstrates to the HA’s satisfaction that accepting the offer will place a family member’s life, health, or safety in jeopardy. The family should offer specific and compelling documentation such as restraining orders; other court orders; risk assessments related to witness protection from a law enforcement agency; or documentation of domestic violence, dating violence, sexual assault, stalking, or human trafficking in accordance with section 16-VII.D of this ACOP. Reasons offered must be specific to the family. Refusals due to location alone do not qualify for this good cause exemption. A health professional verifies temporary hospitalization or recovery from illness of the principal household member, other household members (as listed on final application) or live-in aide necessary to the care of the principal household member. 70 © Copyright 2023 by Nan McKay & Associates ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 5-7 The unit is inappropriate for the applicant’s disabilities, or the family does not need the accessible features in the unit offered and does not want to be subject to a 30-day notice to move. The applicant is unable to negotiate a move-out date with current landlord within 60 days of vacant unit offer. In the case of a unit refusal for good cause the applicant will not be removed from the waiting list as described later in this section. The applicant will remain at the top of the waiting list until the family receives an offer for which they do not have good cause to refuse. The HA will require documentation of good cause for unit refusals. Unit Refusal without Good Cause HA Policy When an applicant rejects the final unit offer without good cause, the HA will remove the applicant’s name from the waiting list and send notice to the family of such removal. The notice will inform the family of their right to request an informal hearing and the process for doing so (see Chapter 14). The applicant may reapply for assistance if the waiting list is open. If the waiting list is not open, the applicant must wait to reapply until the HA opens the waiting list. 71 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-1 Chapter 6 INCOME AND RENT DETERMINATIONS [24 CFR Part 5, Subparts E and F; 24 CFR 960, Subpart C] INTRODUCTION A family’s annual income is used to determine their income eligibility for the public housing program and is also used to calculate the amount of the family’s rent payment. The HA will use the policies and methods described in this chapter to ensure that only income-eligible families receive assistance and that no family pays more or less rent than is required under the regulations. This chapter describes HUD regulations and HA policies related to these topics in three parts as follows: Part I: Annual Income. HUD regulations specify the sources of income to include and which are excluded from the family’s annual income. to arrive at a family’s annual income. These requirements and HA policies for calculating annual income are found in Part I. Part II: Assets. HUD regulations specify the types of assets which are excluded from a family’s annual income. These requirements and PHA policies for calculating income from assets are found in Part II. Part III: Adjusted Income. Once annual income has been established HUD regulations require the HA to subtract from annual income any of five mandatory deductions for which a family qualifies and allow the PHA to adopt additional permissive deductions . These requirements and HA policies for calculating adjusted income are found in Part II I. Part IVII: Calculating Rent. This part describes the statutory formula for calculating total tenant payment (TTP), the use of utility allowances, and the methodology for determining family rent payment. Also included here are flat rents and the family’s choice in of rents. 72 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-2 73 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-3 PART I: ANNUAL INCOME 6-I.A. OVERVIEW [24 CFR 5.609] The general regulatory definition of annual income shown below is from 24 CFR 5.609. 5.609 Annual 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; and (3) Which are not specifically excluded in paragraph [5.609(c)]. (4) Annual income also means amounts derived (during the 12-month period) from assets to which any member of the family has access. Annual income includes:  All amounts, not specifically excluded in 24 CFR 5.609(b);  All amounts received from all sources by each member of the family who is 18 years of age or older or is the head of household or spouse;  Unearned income by or on behalf of each dependent who is under 18 years of age; and  Imputed returns of an asset based on the current passbook savings rate, as determined by HUD, when the value of net family assets exceeds $50,000 (which amount HUD will adjust annually) and the actual returns from a given asset cannot be calculated. In addition to this general definition, the regulations at 24 CFR 5.609(b) provide a comprehensive listing of all sources of income that are excluded from annual income. Note, unlike in previous versions of the regulations, the current regulations governing annual income do not list sources of income that are to be included. Instead, HUD relies on the definition of excluded income under 24 CFR 5.609(b) to provide the scope of what is included. To that end, generally, all income is included unless it is specifically excluded by regulation. Annual income includes “all amounts received,” not the amount that a family may be legally entitled to receive but did not receive. For example, a family’s child support or alimony income must be based on payments received, not the amounts to which the family is entitled by court or agency orders [Notice PIH 2023-27]. Annual income also includes all actual anticipated income from assets (provided the income is not otherwise excluded) even if the asset itself is excluded from net family assets [Notice PIH 2023-27]. 24 CFR 5.603(b)(1) describes HUD regulations establish policies for treating specific types of income and assets. The full texts of those portions of the regulations are provided in exhibits at the end of this chapter as follows:  Annual Income Inclusions Full Definition (Exhibit 6-1) 74 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-4  Annual Income Exclusions (Exhibit 6-2)  Treatment of Family Assets (Exhibit 6-23)  Earned Income Disallowance (Exhibit 6-4)  The Effect of Welfare Benefit Reduction (Exhibit 6-35) Sections 6-I.B and 6-I.C discuss general requirements and methods for calculating annual income. The rest of this section describes how each source of income is treated for the purposes of determining annual income. HUD regulations present income inclusions and exclusions separately [24 CFR 5.609(b) and 24 CFR 5.609(c)]. In this ACOP, however, the discussions of income inclusions and exclusions are integrated by topic (e.g., all policies affecting earned income are discussed together in section 6-I.D). Verification requirements for annual income are discussed in Chapter 7. 75 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-5 6-I.B. HOUSEHOLD COMPOSITION AND INCOME Overview Income received by all family members must be counted unless specifically excluded by the regulations. It is the responsibility of the head of household to report changes in family composition in accordance with HUD regulations and PHA policies in Chapter 9 . The rules on which sources of income are counted vary somewhat by family member. The chart below summarizes how family composition affects income determinations. Summary of Income Included and Excluded by Person Live-in aides Income from all sources (both earned and unearned) is excluded [24 CFR 5.609(bc)(85)]. Foster child or foster adult Income from all sources (both earned and unearned) is excluded [24 CFR 5.609(ba)(81)]. Head, spouse, or cohead Other adult family members All sources of income not specifically excluded by the regulations are included [24 CFR 5.609(a)]. Children under 18 years of ageMinors Employment Earned income of children under 18 years of age is excluded [24 CFR 5.609(bc)(31)]. All other sources of unearned income, except those specifically excluded by the regulations, are included. Full-time students 18 years of age or older (not head, spouse, or cohead) Employment Earned income above $480/yearin excess of the dependent deduction is excluded [24 CFR 5.609(cb)(1114)]. All other sources of unearned income, except those specifically excluded by the regulations, are included. 76 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-6 Temporarily Absent Family Members The current regulations governing annual income do not specifically address temporarily absent family members. The regulations also do not define “temporarily” or “permanently” absent or specify a timeframe associated with a temporary versus a permanent absence. The income of family members approved to live in the unit will be counted, even if the family member is temporarily absent from the unit [HCV GB, p. 5-18]. HA Policy Unless specifically excluded by the regulations, the income of all family members approved to live in the unit will be counted, even if the family member is temporarily absent from the unit. Generally an individual who is or is expected to be absent from the assisted unit for 120 consecutive days or less is considered temporarily absent and continues to be considered a family member. Generally an individual who is or is expected to be absent from the assisted unit for more than 120 consecutive days is considered permanently absent and no longer a family member. Exceptions to this general policy are discussed below. Absent Students HA Policy When someone who has been considered a family member attends school away from home, the person will continue to be considered a family member unless information becomes available to the HA indicating that the student has established a separate household, or the family declares that the student has established a separate household. Absences Due to Placement in Foster Care Children temporarily absent from the home as a result of placement in foster care (as confirmed by the state child welfare agency) are considered members of the family [24 CFR 5.403]. HA Policy If a child has been placed in foster care, the HA will verify with the appropriate agency whether and when the child is expected to be returned to the home. Unless the agency confirms that the child has been permanently removed from the home, the child will continue to be counted as a family member.Absent Head, Spouse, or Cohead HA Policy An employed head, spouse, or cohead absent from the unit more than 120 consecutive days due to employment will continue to be considered a family member . 77 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-7 Individuals Family Members Confined for Medical Reasons If a family member is confined to a nursing home or hospital on a permanent basis, PHAs may determine that that person is no longer a member of the assisted household, and the income of that person is not counted [New PH OCC GB, Income Determinations, p. 12]. HA Policy The HA will request verification from a responsible medical professional and will use this determination. If the responsible medical professional cannot provide a determination, the person generally will be considered temporarily absent. The family may present evidence that the family member is confined on a permanent basis and request that the person not be considered a family member. When an individual who has been counted as a family member is determined permanently absent, the family is eligible for the medical expense deduction only if the remaining head, spouse, or cohead qualifies as an elderly person or a person with disabilities.An individual confined to a nursing home or hospital for 120 days is not considered a family member. If there is a question about the status of a family member, the HA will request verification from a responsible medical professional and will use this determination. If the responsible medical professional cannot provide a determination, the person generally will be considered temporarily absent. The family may present evidence that the family member is confined on a permanent basis and request that the person not be considered a family member. Joint Custody of Children HA Policy Dependents that are subject to a joint custody arrangement will be considered a member of the family, if they live with the applicant or resident family 50 percent or more of the time. When more than one applicant or assisted family (regardless of program) are claiming the same dependents as family members, the family with primary custody at the time of the initial examination or reexamination will be able to claim the dependents. If there is a dispute about which family should claim them, the HA will make the determination based on available documents such as court orders, or IRS income tax return showing which family has claimed the child for income tax purposes, school records, or other credible documentation. 78 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-8 Caretakers for a Child HA Policy The approval of a caretaker is at the HA’s discretion and subject to the HA’s screening criteria. If neither a parent nor a designated guardian remains in a household, the HA will take the following actions. If a responsible agency has determined that another adult is to be brought into the unit to care for a child for an indefinite period, the designated caretaker will not be considered a family member until a determination of custody or legal guardianship is made. If a caretaker has assumed responsibility for a child without the involvement of a responsible agency or formal assignment of custody or legal guardianship, the caretaker will be treated as a visitor for 90 days. After the 90 days has elapsed, the caretaker will be considered a family member unless information is provided that would confirm that the caretaker’s role is temporary. In such cases the HA will extend the caretaker’s status as an eligible visitor. At any time that custody or guardianship legally has been awarded to a caretaker, the lease will be transferred to the caretaker, as head of household. During any period that a caretaker is considered a visitor, the income of the caretaker is not counted in annual income and the caretaker does not qualify the family for any deductions from income. 79 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-9 6-I.C. ANTICIPATING CALCULATING ANNUAL INCOME The methodology used for calculating income differs depending on whether income is being calculated at initial occupancy, interim reexamination, or at annual reexamination. However, income from assets is always anticipated regardless of certification type. Anticipating Annual Income [24 CFR 5.609(c)(1)] At initial occupancy and for an interim reexamination of family income, the PHA is required to use anticipated income (current income) for the upcoming 12-month period following the new admission or interim reexamination effective date. The HA is required to count all income “anticipated to be received from a source outside the family during the 12-month period following admission or annual reexamination effective date” [24 CFR 5.609(a)(2)]. Policies related to anticipating annual income are provided below verifying income are found in Chapter 7.. Basis of Annual Income Projection The HA generally will use current circumstances to determine anticipated income for the coming 12-month period. HUD authorizes the HA to use other than current circumstances to anticipate income when:  An imminent change in circumstances is expected [HCV GB, p. 5-17]  It is not feasible to anticipate a level of income over a 12-month period (e.g., seasonal or cyclic income) [24 CFR 5.609(d)]  The HA believes that past income is the best available indicator of expected future income [24 CFR 5.609(d)] HAs are required to use HUD’s Enterprise Income Verification (EIV) system in its entirety as a third party source to verify employment and income information, and to reduce administrative subsidy payment errors in accordance with HUD administrative guidance [24 CFR 5.233(a)(2)]. HUD allows HAs to use tenant-provided documents to project income once EIV data has been received in such cases where the family does not dispute the EIV employer data and where the HA does not determine it is necessary to obtain additional third-party data. HA Policy When EIV is obtained and the family does not dispute the EIV employer data, the HA will use current tenant-provided documents to project annual income. When the tenant- provided documents are pay stubs, the HA will make every effort to obtain current and consecutive pay stubs dated within the last 30 days. The HA will obtain written and/or oral third-party verification in accordance with the verification requirements and policy in Chapter 7 in the following cases: If EIV or other UIV data is not available, If the family disputes the accuracy of the EIV employer data, and/or If the HA determines additional information is needed. 80 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-10 In such cases, the HA will review and analyze current data to anticipate annual income. In all cases, the family file will be documented with a clear record of the reason for the decision, and a clear audit trail will be left as to how the HA annualized projected income. When the HA cannot readily anticipate income based upon current circumstances (e.g., in the case of temporary, sporadic, or variable employment, seasonal employment, unstable working hours, or suspected fraud), the HA will review and analyze historical data for patterns of employment, paid benefits, and receipt of other income and use the results of this analysis to establish annual income. Any time current circumstances are not used to project annual income, a clear rationale for the decision will be documented in the file. In all such cases the family may present information and documentation to the HA to show why the historic pattern does not represent the family’s anticipated income. In all cases, the family file will be documented with a clear record of the reason for the decision, and a clear audit trail will be left as to how the HA annualized projected income. Known Changes in Income If the HA verifies an upcoming increase or decrease in income, annual income will be calculated projected by applying each income amount to the appropriate part of the 12- month period. Example: An employer reports that a full-time employee who has been receiving $8/hour will begin to receive $8.25/hour in the eighth week after the effective date of the new admission or interim reexamination. In such a case the HA would calculate annual income as follows: ($8/hour × 40 hours × 7 weeks) + ($8.25 × 40 hours × 45 weeks). The family may present information that demonstrates that implementing a change before its effective date would create a hardship for the family. In such cases the HA will calculate annual income using current circumstances and then , should the change in income require the PHA to conduct an interim reexamination, conduct an interim reexamination in accordance with PHA policy in Chapter 9. require an interim reexamination when the change actually occurs. This requirement will be imposed even if the HA’s policy on reexaminations does not require interim reexaminations for other types of changes. When tenant-provided third-party documents are used to anticipate annual income, they will be dated within the last 60 days of the reexamination interview date. Projecting Income In HUD’s EIV webcast of January 2008, HUD made clear that HAs are not to use EIV quarterly wages to project annual income. 81 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-11 Calculating Annual Income at Annual Reexamination [24 CFR.609(c)(2); Notice PIH 2023-27] At annual reexamination, PHAs must first determine the family’s income for the previous 12- month period and use this amount as the family income for annual reexaminations; however, adjustments to reflect current income must be made. Any change of income since the family’s last annual reexamination, including those that did not meet the threshold to process an interim reexamination of family income in accordance with PHA policies in Chapter 9 and HUD regulations, must be considered. If, however, there have been no changes to income, then the amount of income calculated for the previous 12-month period is the amount that will be used to determine the family’s rent. Income from assets is always anticipated, irrespective of the income examination type. Policies related to conducting annual reexaminations are located in Chapter 9. 82 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-12 6-I.D. EARNED INCOME Types of Earned Income Included in Annual Income Wages and Related Compensation [24 CFR 5.609(b)(1)(a); Notice PIH 2023-27] The earned income of each member of the family who is 18 years of age or older, or who is the head of household or spouse/cohead regardless of age, is included in annual income. Income received as a day laborer or seasonal worker is also included in annual income, even if the source, date, or amount of the income varies [24 CFR 5.609 (b)(24)]. Earned income means income or earnings from wages, tips, salaries, other employee compensation, and net income from self-employment. Earned income does not include any pension or annuity, transfer payments (meaning payments made or income received in which no goods or services are being paid for, such as welfare, social security, and governmental subsidies for certain benefits), or any cash or in-kind benefits [24 CFR 5.100]. A day laborer is defined as an individual hired and paid one day at a time without an agreement that the individual will be hired or work again in the future [24 CFR 5.603(b)]. A seasonal worker is defined as an individual who is hired into a short-term position( e.g., for which the customary employment period for the position is six months or fewer) and the employment begins about the same time each year (such as summer or winter). Typically, the individual is hired to address seasonal demands that arise for the particular employer or industry [24 CFR 5.603(b)]. Some examples of seasonal work include employment limited to holidays or agricultural seasons. Seasonal work may include but is not limited to employment as a lifeguard, ballpark vendor, or snowplow driver [Notice PIH 2023-27]. The full amount, before any payroll deductions, of wages and salaries, overtime pay, commissions, fees, tips and bonuses, and other compensation for personal services is included in annual income. HA Policy The HA will include in annual income the full amount, before any payroll deductions, of wages and salaries, overtime pay, commissions, fees, tips and bonuses, and other compensation. For persons who regularly receive bonuses or commissions, the HA will verify and then average amounts received for the two years preceding admission or reexamination. If only a one-year history is available, the HA will use the prior year amounts. In either case the family may provide, and the HA will consider, a credible justification for not using this history to anticipate future bonuses or commissions. If a new employee has not yet received any bonuses or commissions, the HA will count only the amount estimated by the employer. The file will be documented appropriately. Some Types of Military Pay All regular pay, special pay and allowances of a member of the Armed Forces are counted [24 CFR 5.609(b)(8)] except for the special pay to a family member serving in the Armed Forces who is exposed to hostile fire [24 CFR 5.609(bc)(117)]. Types of Earned Income Not Counted in Annual Income 83 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-13 Temporary, Nonrecurring, or Sporadic Income [24 CFR 5.609(c)(9)] This type of income (including gifts) is not included in annual income. HA Policy Sporadic income is income that is not received periodically and cannot be reliably predicted. For example, the income of an individual who works occasionally as a handyman would be considered sporadic if future work could not be anticipated and no historic, stable pattern of income existed. Children’s Earnings of a Minor [24 CFR 5.609(cb)(13)] A minor is a member of the family, other than the head of household or spouse, who is under 18 years of age. Employment income earned by children (including foster children) under the age of 18 yearsminors is not included in annual income. (See Eligibility chapter for a definition of foster children.) All other sources of unearned income, except those specifically excluded by the regulations, are included. Certain Earned Income of Full-Time Students [24 CFR 5.609(b)(14)] Earnings in excess of $480 for each full-time student 18 years old or older (except for the head, spouse, or cohead) are not counted [24 CFR 5.609(c)(11)]. To be considered “full-time,” a student must be considered “full-time” by an educational institution with a degree or certificate program [HCV GB, p. 5-29]. The earned income of a dependent full-time student in excess of the amount of the dependent deduction is excluded from annual income. All sources of unearned income, except those specifically excluded by the regulations, are included. A family member other than the head of household or spouse/cohead is considered a full-time student if they are attending school or vocational training on a full-time basis [24 CFR 5.603(b)]. Full-time status is defined by the educational or vocational institution the student is attending [New PH OCC GB, Lease Requirements, p. 5]. HA Policy Students who are registered but do not complete the term as a “full-time” student according to their educational institution are ineligible for the “full-time” student status. Income of a Live-in Aide Income earned by a live-in aide, as defined in [24 CFR 5.403], is not included in annual income [24 CFR 5.609(c)(5)]. (See Eligibility chapter for a full discussion of live-in aides.) Income Earned under Certain Federal Programs [24 CFR 5.609(c)(17)] Income from some federal programs is specifically excluded from consideration as income, including:  Payments to volunteers under the Domestic Volunteer Services Act of 1973 (42 U.S.C. 5044(g), 5058)  Awards under the federal work-study program (20 U.S.C. 1087 uu) 84 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-14  Payments received from programs funded under Title V of the Older Americans Act of 1985 (42 U.S.C. 3056(f))  Allowances, earnings, and payments to AmeriCorps participants under the National and Community Service Act of 1990 (42 U.S.C. 12637(d))  Allowances, earnings, and payments to participants in programs funded under the Workforce Investment Act of 1998 (29 U.S.C. 2931) Resident Service Stipend [24 CFR 5.600(c)(8)(iv)] Amounts received under a resident service stipend are not included in annual income. A resident service stipend is a modest amount (not to exceed $200 per individual per month) received by a resident for performing a service for the HA, 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 HA’s governing board. No resident may receive more than one such stipend during the same period of time. 85 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-15 State and Local Employment Training Programs Incremental earnings and benefits to any family member resulting 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 are excluded from annual income. 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 training program [24 CFR 5.609(c)(8)(v)]. HA Policy The HA defines training program as “a learning process with goals and objectives, generally having a variety of components, and taking place in a series of sessions over a period of time. It is designed to lead to a higher level of proficiency, and it enhances the individual’s ability to obtain employment. It may have performance standards to measure proficiency. Training may include, but is not limited to: (1) classroom training in a specific occupational skill, (2) on-the-job training with wages subsidized by the program, or (3) basic education” [expired Notice PIH 98-2, p. 3]. The HA defines incremental earnings and benefits as the difference between (1) the total amount of welfare assistance and earnings of a family member prior to enrollment in a training program and (2) the total amount of welfare assistance and earnings of the family member after enrollment in the program [expired Notice PIH 98-2, pp. 3–4]. In calculating the incremental difference, the HA will use as the pre-enrollment income the total annualized amount of the family member’s welfare assistance and earnings reported on the family’s most recently completed HUD-50058. End of participation in a training program must be reported in accordance with the HA's interim reporting requirements (see Chapter 11). 86 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-16 HUD-Funded Training Programs Amounts received under training programs funded in whole or in part by HUD [24 CFR 5.609(c)(8)(i)] are excluded from annual income. Eligible sources of funding for the training include operating subsidy, Section 8 administrative fees, and modernization, Community Development Block Grant (CDBG), HOME program, and other grant funds received from HUD. HA Policy To qualify as a training program, the program must meet the definition of training program provided above for state and local employment training programs. Earned Income Tax Credit. Earned income tax credit (EITC) refund payments received on or after January 1, 1991 (26 U.S.C. 32(j)), are excluded from annual income [24 CFR 5.609(c)(17)]. Although many families receive the EITC annually when they file taxes, an EITC can also be received throughout the year. The prorated share of the annual EITC is included in the employee’s payroll check. Earned Income Disallowance. The earned income disallowance is discussed in section 6-I.E below. 87 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-17 6-I.E. EARNED INCOME DISALLOWANCE [24 CFR 960.255; Streamlining Final Rule (SFR) Federal Register 3/8/16; Notice PIH 2023-27] HOTMA removed the statutory authority for the EID. The EID is available only to families that are eligible for and participating on the program as of December 31, 2023, or before; no new families may be added on or after January 1, 2024. If a family is receiving the EID prior to or on the effective date of December 31, 2023, they are entitled to the full amount of the benefit for a full 24-month period. The policies below are applicable only to such families. No family will still be receiving the EID after December 31, 2025. The EID will sunset on January 1, 2026, and the PHA policies below will no longer be applicable as of that date or when the last qualifying family exhausts their exclusion period, whichever is sooner. The earned income disallowance (EID) encourages people to enter the work force by not including the full value of increases in earned income for a period of time. The full text of 24 CFR 960.255 is included as Exhibit 6-4 at the end of this chapter. Eligibility criteria and limitations on the disallowance are summarized below. Eligibility This disallowance applies only to individuals in families already participating in the public housing program (not at initial examination). To qualify, the family must experience an increase in annual income that is the result of one of the following events:  Employment of a family member who was previously unemployed for one or more years prior to employment. Previously unemployed includes a person who annually has earned not more than the minimum wage applicable to the community multiplied by 500 hours. The applicable minimum wage is the federal minimum wage unless there is a higher state or local minimum wage.  Increased earnings by a family member whose earnings increase during participation in an economic self-sufficiency or job-training program. A self-sufficiency program includes a program designed to encourage, assist, train, or facilitate the economic independence of HUD-assisted families or to provide work to such families [24 CFR 5.603(b)].  New employment or increased earnings by a family member who has received benefits or services under Temporary Assistance for Needy Families (TANF) or any other state program funded under Part A of Title IV of the Social Security Act within the past six months. If the benefits are received in the form of monthly maintenance, there is no minimum amount. If the benefits or services are received in a form other than monthly maintenance, such as one- time payments, wage subsidies, or transportation assistance, the total amount received over the six-month period must be at least $500. 88 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-18 Calculation of the Disallowance Calculation of the earned income disallowance for an eligible member of a qualified family begins with a comparison of the member’s current income with their “baseline income.” The family member’s baseline income is their income immediately prior to qualifying for the EID. The family member’s baseline income remains constant throughout the period that they are participating in the EID. Calculation Method Initial 12-Month Exclusion During the initial exclusion period of 12 consecutive months, the full amount (100 percent) of any increase in income attributable to new employment or increased earnings is excluded. HA Policy The initial EID exclusion period will begin on the first of the month following the date an eligible member of a qualified family is first employed or first experiences an increase in earnings. Second 12-Month Exclusion During the second exclusion period of 12 consecutive months, the HA must exclude at least 50 percent of any increase in income attributable to employment or increased earnings. HA Policy During the second 12-month exclusion period, the PHA will exclude 50 percent of any increase in income attributable to new employment or increased earnings. Lifetime Limitation The EID has a two-year (24-month) lifetime maximum. The two-year eligibility period begins at the same time that the initial exclusion period begins and ends 24 months later. During the 24- month period, an individual remains eligible for EID even if they receive assistance from a different housing agency, move between public housing and Section 8 assistance, or have breaks in assistance. The EID will sunset on January 1, 2026. In no circumstances will a family member’s exclusion period continue past January 1, 2026. Individual Savings Accounts [24 CFR 960.255(d)] The PHA may, but is not required to, establish a policy to offer a qualified family paying income-based rent an ISA instead of being given the EID. HA Policy The HA chooses not to establish a system of individual savings accounts (ISAs) for families who qualify for the EID. The following rules pertaining to ISAs do not apply to this public housing program. A qualified family paying income-based rent may choose an ISA instead of being given the EID. The HA must advise the family that the ISA option is available. Families who choose the ISA 89 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-19 will pay the higher rent and the HA will deposit the difference between the higher rent and the EID rent in the savings account. Amounts deposited to ISAs may only be withdrawn for the following reasons:  Because the family is purchasing a home  To pay education costs of family members  Because the family is moving out of public or assisted housing  To pay any other expenses the HA authorizes to promote economic self-sufficiency The HA is required to maintain ISAs in interest bearing accounts, for which the family is credited with interest earned. The HA may not charge the family a fee for maintaining the account. At least once each year the HA must provide the family with a statement of the balance in their account, including any interest earned, if required by state law. HA Policy When applicable, the HA will provide the family with a statement of the balance in their account, including any interest earned, annually and upon request when the family makes withdrawals from the account. If the family moves out of public housing, the HA must return the balance in the family’s ISA, less any amounts the family owes the HA. 90 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-20 6-I.F. BUSINESS AND SELF-EMPLOYMENT INCOME [24 CFR 5.609(b)(28); Notice PIH 2023-27] Annual income includes “the net income from the operation of a business or profession. Net income is gross income minus business expenses that allows the business to operate. Gross income is all income amounts received into the business, prior to the deduction of business expenses. Expenditures for business expansion or amortization of capital indebtedness shall may 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” [24 CFR 5.609(b)(2)]. HA Policy To determine business expenses that may be deducted from gross income, the PHA will use current applicable Internal Revenue Service (IRS) rules for determining allowable business expenses [see IRS Publication 535], unless a topic is addressed by HUD regulations or guidance as described herein. Independent Contractors Income received as an independent contractor is included in annual income, even if the source, date, or amount of the income varies [24 CFR 2.609 (b)(24)]. An independent contractor is defined as an individual who qualifies as an independent contractor instead of an employee in accordance with the Internal Revenue Code Federal income tax requirements and whose earnings are consequently subject to the Self-Employment Tax. In general, an individual is an independent contractor if the payer has the right to control or direct only the result of the work and not what will be done and how it will be done [24 CFR 5.603(b)]. Business Expenses Net income is “gross income less business expense” [HCV GB, p. 5-19]. HA Policy To determine business expenses that may be deducted from gross income, the HA will use current applicable Internal Revenue Service (IRS) rules for determining allowable business expenses [see IRS Publication 535], unless a topic is addressed by HUD regulations or guidance as described below. Business Expansion HUD regulations do not permit the HA to deduct from gross income expenses for business expansion. HA Policy Business expansion is defined as any capital expenditures made to add new business activities, to expand current facilities, or to operate the business in additional locations. For example, purchase of a street sweeper by a construction business for the purpose of 91 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-21 adding street cleaning to the services offered by the business would be considered a business expansion. Similarly, the purchase of a property by a hair care business to open at a second location would be considered a business expansion. 92 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-22 Capital Indebtedness HUD regulations do not permit the HA to deduct from gross income the amortization of capital indebtedness. HA Policy Capital indebtedness is defined as the principal portion of the payment on a capital asset such as land, buildings, and machinery. This means the HA will allow as a business expense interest, but not principal, paid on capital indebtedness. Negative Business Income If the net income from a business is negative, no business income will be included in annual income; a negative amount will not be used to offset other family income. Withdrawal of Cash or Assets from a Business HUD regulations require the HA to include in annual income the withdrawal of cash or assets from the operation of a business or profession unless the withdrawal reimburses a family member for cash or assets invested in the business by the family. HA Policy Acceptable investments in a business include cash loans and contributions of assets or equipment. For example, if a member of a tenant family provided an up-front loan of $2,000 to help a business get started, the HA will not count as income any withdrawals from the business up to the amount of this loan until the loan has been repaid. Investments do not include the value of labor contributed to the business without compensation. Co-owned Businesses HA Policy If a business is co-owned with someone outside the family, the family must document the share of the business it owns. If the family’s share of the income is lower than its share of ownership, the family must document the reasons for the difference. Assets Owned by a Business Entity If a business entity (e.g., limited liability company or limited partnership) owns the asset, then the family’s asset is their ownership stake in the business, not some portion of the business’s assets. However, if the family holds the assets in their own name (e.g., they own one-third of a restaurant) rather than in the name of a business entity, then the percentage value of the asset owned by the family is what is counted toward net family assets (e.g., one-third of the value of the restaurant) [Notice PIH 2023-27]. 93 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-23 6-I.G. STUDENT FINANCIAL ASSISTANCE [24 CFR 5.609(b)(9)] The regulations distinguish between two categories of student financial assistance paid to both full-time and part-time students. Types of Assistance Any assistance to students under section 479B of the Higher Education Act of 1965 (Tile IV of the HEA) must be excluded from the family’s annual income [24 CFR 5.609(b)(9)(i)]. Examples of assistance under title IV of the HEA include:  Federal Pell Grants;  Teach Grants;  Federal Work Study Programs;  Federal Perkins Loans;  Income earned in employment and training programs under section 134 of the Workforce Innovation and Opportunity Act (WIOA); or  Bureau of Indian Affairs/Education student assistance programs - The Higher Education Tribal Grant - The Tribally Controlled Colleges or Universities Grant Program Any other grant-in-aid, scholarship, or other assistance amounts an individual receives for the actual covered costs charged by the institute of higher education not otherwise excluded by the Federally mandated income exclusions are excluded [24 CFR 5.609(b)(9)(ii)]. Actual covered costs are defined as the actual costs of:  Tuition, books, and supplies; - Including supplies and equipment to support students with learning disabilities or other disabilities  Room and board; and  Other fees required and charged to a student by the education institution. 94 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-24 For a student who is not the head of household or spouse/cohead, actual covered costs also include the reasonable and actual costs of housing while attending the institution of higher education and not residing in an assisted unit. Further, to qualify, other student financial assistance must be expressly:  For tuition, book, supplies, room and board, or other fees required and charged to the student by the education institution;  To assist a student with the costs of higher education; or  To assist a student who is not the head of household or spouse with the reasonable and actual costs of housing while attending the educational institution and not residing in an assisted unit. The student financial assistance may be paid directly to the student or to the educational institution on the student’s behalf. However, any student financial assistance paid to the student must be verified by the PHA. The financial assistance must be a grant or scholarship received from:  The Federal government;  A state, tribal, or local government;  A private foundation registered as a nonprofit;  A business entity (such as corporation, general partnership, limited liability company, limited partnership, joint venture, business trust, public benefit corporation, or nonprofit entity); or  An institution of higher education. Student financial assistance, does not include:  Financial support provided to the student in the form of a fee for services performed (e.g., a work study or teaching fellowship that is not excluded under section 479B of the Higher Education Act HEA);  Gifts, including gifts from family or friends; or  Any amount of the scholarship or grant that, either by itself or in combination with assistance excluded under the HEA, exceeds the actual covered costs of the student. Calculating Income from Student Financial Assistance [HOTMA Student Financial Assistance Resource Sheet; Notice PIH 2023-27] The formula for calculating the amount of other student financial assistance that is excluded from income always begins with deducting the assistance received under 479B of the HEA from the total actual covered costs, because the 479B assistance is intended to pay the student’s actual covered costs. When a student receives assistance from both Title IV of the HEA and from other sources, the assistance received under Title IV of the HEA must be applied to the student’s actual covered costs first and then other student financial assistance is applied to any remaining actual covered costs. Once actual costs are covered, any remaining student financial assistance is considered income. 95 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-25 PHA Policy If a student only receives financial assistance under Title IV of the HEA and does not receive any other student financial assistance, the PHA will exclude the full amount of the assistance received under Title IV from the family’s annual income. The PHA will not calculate actual covered costs in this case. If the student does not receive any assistance under Title IV of the HEA but does receive assistance from another source, the PHA will first calculate the actual covered costs to the student in accordance with 24 CFR 5.609(b)(ii). The PHA will then subtract the total amount of the student’s financial assistance from the student’s actual covered costs. The PHA will include any amount of financial assistance in excess of the student’s actual covered costs in the family’s annual income. Example 1  Actual covered costs: $20,000  Other student financial assistance: $25,000  Excluded income: $20,000 ($25,000 in financial assistance - $20,000 in actual covered costs)  Included income: $5,000 When a student receives assistance from both Title IV of the HEA and from other sources, the PHA will first calculate the actual covered costs to the student in accordance with 24 CFR 5.609(b)(ii). The assistance received under Title IV of the HEA will be applied to the student’s actual covered costs first and then the other student financial assistance will be applied to any remaining actual covered costs. If the amount of assistance excluded under Title IV of the HEA equals or exceeds the actual covered costs, none of the assistance included under other student financial assistance” would be excluded from income. Example 2  Actual covered costs: $25,000  Title IV HEA assistance: $26,000  Title IV HEA assistance covers the students entire actual covered costs.  Other Student Financial Assistance: $5,000  Excluded income: The entire Title IV HEA assistance of $26,000  Included income: All other financial assistance of $5,000 96 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-26 If the amount of assistance excluded under Title IV of the HEA is less than the actual covered costs, the PHA will exclude the amount of other student financial assistance up to the amount of the remaining actual covered costs. Example 3  Actual covered costs: $22,000  Title IV HEA assistance: $15,000  The remaining amount not covered by Title IV HEA assistance is $7,000 ($22,000 in actual covered costs - $15,000 in Title IV HEA assistance).  Other Student Financial Assistance: $5,000  $7,000 in remaining actual covered costs - $5,000 in other financial assistance  Excluded income: $15,000 entire amount of the Title IV HEA Assistance + $5,000 in other financial assistance  Included income: $0 Example 4  Actual covered costs: $18,000  Title IV HEA Assistance: $15,000  The remaining amount not covered by Title IV HEA assistance is $3,000 ($18,000 in actual covered costs - $15,000 in Title IV HEA Assistance)  Other student Financial Assistance: $5,000  When other student financial assistance is applied, financial assistance exceeds actual covered costs by $2,000 ($3,000 in actual covered costs - $5,000 in other financial assistance).  Included income: $2,000 (the amount by which the financial aid exceeds the student's actual covered costs). 97 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-27 6-I.G. ASSETS [24 CFR 5.609(b)(3) and 24 CFR 5.603(b)] Overview There is no asset limitation for participation in the public housing program. However, HUD requires that the HA include in annual income the anticipated “interest, dividends, and other net income of any kind from real or personal property” [24 CFR 5.609(b)(3)]. This section discusses how the income from various types of assets is determined. For most types of assets, the HA must determine the value of the asset in order to compute income from the asset. Therefore, for each asset type, this section discusses:  How the value of the asset will be determined  How income from the asset will be calculated Exhibit 6-1 provides the regulatory requirements for calculating income from assets [24 CFR 5.609(b)(3)], and Exhibit 6-3 provides the regulatory definition of net family assets. This section begins with a discussion of general policies related to assets and then provides HUD rules and HA policies related to each type of asset. Optional policies for family self-certification of assets are found in Chapter 7 General Policies Income from Assets The HA generally will use current circumstances to determine both the value of an asset and the anticipated income from the asset. As is true for all sources of income, HUD authorizes the HA to use other than current circumstances to anticipate income when (1) an imminent change in circumstances is expected (2) it is not feasible to anticipate a level of income over 12 months or (3) the HA believes that past income is the best indicator of anticipated income. For example, if a family member owns real property that typically receives rental income but the property is currently vacant, the HA can take into consideration past rental income along with the prospects of obtaining a new tenant. HA Policy Any time current circumstances are not used to determine asset income, a clear rationale for the decision will be documented in the file. In such cases the family may present information and documentation to the HA to show why the asset income determination does not represent the family’s anticipated asset income. 98 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-28 Valuing Assets The calculation of asset income sometimes requires the HA to make a distinction between an asset’s market value and its cash value.  The market value of an asset is its worth in the market (e.g., the amount a buyer would pay for real estate or the total value of an investment account).  The cash value of an asset is its market value less all reasonable amounts that would be incurred when converting the asset to cash. HA Policy Reasonable costs that would be incurred when disposing of an asset include, but are not limited to, penalties for premature withdrawal, broker and legal fees, and settlement costs incurred in real estate transactions [HCV GB, p. 5-28 and PH Occ GB, p. 121]. Lump-Sum Receipts Payments that are received in a single lump sum, such as inheritances, capital gains, lottery winnings, insurance settlements, and proceeds from the sale of property, are generally considered assets, not income. However, such lump-sum receipts are counted as assets only if they are retained by a family in a form recognizable as an asset (e.g., deposited in a savings or checking account) [RHIIP FAQs]. (For a discussion of lump-sum payments that represent the delayed start of a periodic payment, most of which are counted as income, see sections 6-I.H and 6-I.I.) Imputing Income from Assets [24 CFR 5.609(b)(3), Notice PIH 2012-29 ] When net family assets are $5,000 or less, the HA will include in annual income the actual income anticipated to be derived from the assets. When the family has net family assets in excess of $5,000, the HA will include in annual income the greater of (1) the actual income derived from the assets or (2) the imputed income. Imputed income from assets is calculated by multiplying the total cash value of all family assets by an average passbook savings rate as determined by the HA.  Note: The HUD field office no longer provides an interest rate for imputed asset income. The “safe harbor” is now for the HA to establish a passbook rate within 0.75 percent of a national average.  The HA must review its passbook rate annually to ensure that it remains within 0.75 percent of the national average. HA Policy The HA will initially set the imputed asset passbook rate at the national rate established by the Federal Despot Insurance Corporation (FDIC). 99 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-29 The HA will review the passbook rate annually. The rate will not be adjusted unless the current HA rate is no longer within 0.75 percent of the national rate. If it is no longer within 0.75 percent of the national rate, the passbook rate will be set at the current national rate. The effective date of changes to the passbook rate will be determined at the time of review. Determining Actual Anticipated Income from Assets It may or may not be necessary for the HA to use the value of an asset to compute the actual anticipated income from the asset. When the value is required to compute the anticipated income from an asset, the market value of the asset is used. For example, if the asset is a property for which a family receives rental income, the anticipated income is determined by annualizing the actual monthly rental amount received for the property; it is not based on the property’s market value. However, if the asset is a savings account, the anticipated income is determined by multiplying the market value of the account by the interest rate on the account. Withdrawal of Cash or Liquidation of Investments Any withdrawal of cash or assets from an investment will be included in income except to the extent that the withdrawal reimburses amounts invested by the family. For example, when a family member retires, the amount received by the family from a retirement investment plan is not counted as income until the family has received payments equal to the amount the family member deposited into the retirement investment plan. Jointly Owned Assets The regulation at 24 CFR 5.609(a)(4) specifies that annual income includes “amounts derived (during the 12-month period) from assets to which any member of the family has access.” HA Policy If an asset is owned by more than one person and any family member has unrestricted access to the asset, the HA will count the full value of the asset. A family member has unrestricted access to an asset when they can legally dispose of the asset without the consent of any of the other owners. If an asset is owned by more than one person, including a family member, but the family member does not have unrestricted access to the asset, the HA will prorate the asset according to the percentage of ownership. If no percentage is specified or provided for by state or local law, the HA will prorate the asset evenly among all owners. 100 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-30 Assets Disposed Of for Less than Fair Market Value [24 CFR 5.603(b)] HUD regulations require the HA to count as a current asset any business or family asset that was disposed of for less than fair market value during the two years prior to the effective date of the examination/reexamination, except as noted below. Minimum Threshold The HA may set a threshold below which assets disposed of for less than fair market value will not be counted [HCV GB, p. 5-27]. HA Policy The HA will not include the value of assets disposed of for less than fair market value unless the cumulative fair market value of all assets disposed of during the past two years exceeds the gross amount received for the assets by more than $1,000. When the two-year period expires, the income assigned to the disposed asset(s) also expires. If the two-year period ends between annual recertifications, the family may request an interim recertification to eliminate consideration of the asset(s). Assets placed by the family in nonrevocable trusts are considered assets disposed of for less than fair market value except when the assets placed in trust were received through settlements or judgments. Separation or Divorce The regulation also specifies that assets are not considered disposed of for less than fair market value if they are disposed of as part of a separation or divorce settlement and the applicant or tenant receives important consideration not measurable in dollar terms. HA Policy All assets disposed of as part of a separation or divorce settlement will be considered assets for which important consideration not measurable in monetary terms has been received. In order to qualify for this exemption, a family member must be subject to a formal separation or divorce settlement agreement established through arbitration, mediation, or court order. Foreclosure or Bankruptcy Assets are not considered disposed of for less than fair market value when the disposition is the result of a foreclosure or bankruptcy sale. Family Declaration HA Policy 101 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-31 Families must sign a declaration form at initial certification and each annual recertification identifying all assets that have been disposed of for less than fair market value or declaring that no assets have been disposed of for less than fair market value. The HA may verify the value of the assets disposed of if other information available to the HA does not appear to agree with the information reported by the family. 102 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-32 Types of Assets Checking and Savings Accounts For regular checking accounts and savings accounts, cash value has the same meaning as market value. If a checking account does not bear interest, the anticipated income from the account is zero. HA Policy In determining the value of a checking account, the HA will use the current balance. In determining the value of a savings account, the HA will use the current balance. In determining the anticipated income from an interest-bearing checking or savings account, the HA will multiply the value of the account by the current rate of interest paid on the account. Investment Accounts Such as Stocks, Bonds, Saving Certificates, and Money Market Funds Interest or dividends earned by investment accounts are counted as actual income from assets even when the earnings are reinvested. The cash value of such an asset is determined by deducting from the market value any broker fees, penalties for early withdrawal, or other costs of converting the asset to cash. HA Policy In determining the market value of an investment account, the HA will use the value of the account on the most recent investment report. How anticipated income from an investment account will be calculated depends on whether the rate of return is known. For assets that are held in an investment account with a known rate of return (e.g., savings certificates), asset income will be calculated based on that known rate (market value multiplied by rate of earnings). When the anticipated rate of return is not known (e.g., stocks), the HA will calculate asset income based on the earnings for the most recent reporting period. 103 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-33 Equity in Real Property or Other Capital Investments Equity (cash value) in a property or other capital asset is the estimated current market value of the asset less the unpaid balance on all loans secured by the asset and reasonable costs (such as broker fees) that would be incurred in selling the asset [HCV GB, p. 5-25 and PH, p. 121]. HA Policy In determining the equity, the HA will determine market value by the most current property tax statement. The HA will first use the payoff amount for the loan (mortgage) as the unpaid balance to calculate equity. If the payoff amount is not available, the HA will use the basic loan balance information to deduct from the market value in the equity calculation. Equity in real property and other capital investments is considered in the calculation of asset income except for the following types of assets:  Equity accounts in HUD homeownership programs [24 CFR 5.603(b)]  Equity in real property when a family member’s main occupation is real estate [HCV GB, p. 5-25]. This real estate is considered a business asset, and income related to this asset will be calculated as described in section 6-I.F.  Interests in Indian Trust lands [24 CFR 5.603(b)]  Real property and capital assets that are part of an active business or farming operation [HCV GB, p. 5-25] The HA must also deduct from the equity the reasonable costs for converting the asset to cash. Using the formula for calculating equity specified above, the net cash value of real property is the market value of the loan (mortgage) minus the expenses to convert to cash [Notice PIH 2012-3]. HA Policy For the purposes of calculating expenses to convert to cash for real property, the HA will use ten percent of the market value of the home. A family may have real property as an asset in two ways: (1) owning the property itself and (2) holding a mortgage or deed of trust on the property. In the case of a property owned by a family member, the anticipated asset income generally will be in the form of rent or other payment for the use of the property. If the property generates no income, actual anticipated income from the asset will be zero. 104 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-34 In the case of a mortgage or deed of trust held by a family member, the outstanding balance (unpaid principal) is the cash value of the asset. The interest portion only of payments made to the family in accordance with the terms of the mortgage or deed of trust is counted as anticipated asset income. HA Policy In the case of capital investments owned jointly with others not living in a family’s unit, a prorated share of the property’s cash value will be counted as an asset unless the HA determines that the family receives no income from the property and is unable to sell or otherwise convert the asset to cash. Trusts A trust is a legal arrangement generally regulated by state law in which one party (the creator or grantor) transfers property to a second party (the trustee) who holds the property for the benefit of one or more third parties (the beneficiaries). Revocable Trusts If any member of a family has the right to withdraw the funds in a trust, the value of the trust is considered an asset [HCV GB, p. 5-25]. Any income earned as a result of investment of trust funds is counted as actual asset income, whether the income is paid to the family or deposited in the trust. Nonrevocable Trusts In cases where a trust is not revocable by, or under the control of, any member of a family, the value of the trust fund is not considered an asset. However, any income distributed to the family from such a trust is counted as a periodic payment or a lump-sum receipt, as appropriate [24 CFR 5.603(b)]. (Periodic payments are covered in section 6-I.H. Lump-sum receipts are discussed earlier in this section.) Retirement Accounts Company Retirement/Pension Accounts In order to correctly include or exclude as an asset any amount held in a company retirement or pension account by an employed person, the HA must know whether the money is accessible before retirement [HCV GB, p. 5-26]. While a family member is employed, only the amount the family member can withdraw without retiring or terminating employment is counted as an asset [HCV GB, p. 5-26]. After a family member retires or terminates employment, any amount distributed to the family member is counted as a periodic payment or a lump-sum receipt, as appropriate [HCV GB, p. 5- 26], except to the extent that it represents funds invested in the account by the family member. 105 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-35 (For more on periodic payments, see section 6-I.H.) The balance in the account is counted as an asset only if it remains accessible to the family member. IRA, Keogh, and Similar Retirement Savings Accounts IRA, Keogh, and similar retirement savings accounts are counted as assets even though early withdrawal would result in a penalty [HCV GB, p. 5-25]. 106 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-36 Personal Property Personal property held as an investment, such as gems, jewelry, coin collections, antique cars, etc., is considered an asset [HCV GB, p. 5-25]. HA Policy In determining the value of personal property held as an investment, the HA will use the family’s estimate of the value. The HA may obtain an appraisal if there is reason to believe that the family’s estimated value is off by $50 or more. The family must cooperate with the appraiser but cannot be charged any costs related to the appraisal. Generally, personal property held as an investment generates no income until it is disposed of. If regular income is generated (e.g., income from renting the personal property), the amount that is expected to be earned in the coming year is counted as actual income from the asset. Necessary items of personal property are not considered assets [24 CFR 5.603(b)]. HA Policy Necessary personal property consists of only those items not held as an investment. It may include clothing, furniture, household furnishings, jewelry, and vehicles, including those specially equipped for persons with disabilities. Life Insurance The cash value of a life insurance policy available to a family member before death, such as a whole life or universal life policy, is included in the calculation of the value of the family’s assets [HCV GB 5-25]. The cash value is the surrender value. If such a policy earns dividends or interest that the family could elect to receive, the anticipated amount of dividends or interest is counted as income from the asset whether or not the family actually receives it. 107 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-37 6-I.H. PERIODIC PAYMENTS [Notice PIH 2023-27] Periodic payments are forms of income received on a regular basis. HUD regulations specify periodic payments that are and are not included in annual income. Regulations do not specify which types of periodic payments are included in annual income. Income that has a discrete end date and will not be repeated beyond the coming year is excluded from a family’s annual income because it is nonrecurring income. However, this does not include unemployment income and other types of periodic payments that are received at regular intervals (such as weekly, monthly, or yearly) for a period of greater than one year that can be extended. For example, a family receives income from a guaranteed income program in their city that has a discrete beginning and end date. While the guaranteed income will be repeated in the coming year, it will end before the family’s next annual reexamination. This income is fully excluded from annual income. Insurance payments and settlements for personal or property losses, including but not limited to payments under health insurance, motor vehicle insurance, and workers’ compensation, are excluded from annual income. However, periodic payments paid at regular intervals (such as weekly, monthly, or yearly) for a period of greater than one year that are received in lieu of wages for workers’ compensation are included in annual income. Payments received in lieu of wages for worker’s compensation are excluded, even if paid in periodic payments, if the income will last for a period of less than one year. Periodic Payments Included in Annual Income  Periodic payments from sources such as social security, unemployment and welfare assistance, annuities, insurance policies, retirement funds, and pensions. However, periodic payments from retirement accounts, annuities, and similar forms of investments are counted only after they exceed the amount contributed by the family [24 CFR 5.609(b)(4) and (b)(3)].  Disability or death benefits and lottery receipts paid periodically, rather than in a single lump sum [24 CFR 5.609(b)(4) and HCV, p. 5-14] Lump-Sum Payments for the Delayed Start of a Periodic Payment [24 CFR 5.609(b)(16)] Deferred periodic amounts from Supplemental Security Income (SSI) and Social Security benefits that are received in a lump sum amount or in prospective monthly amounts, or any deferred Department of Veterans Affairs (VA) disability benefits that are received in a lump sum amount or in prospective monthly amounts are excluded from annual income. Most lump sums received as a result of delays in processing periodic payments, such as unemployment or welfare assistance, are counted as income. However, lump-sum receipts for the delayed start of periodic social security or supplemental security income (SSI) payments are not counted as income. Additionally, any deferred disability benefits that are received in a lump sum or in prospective monthly amounts from the Department of Veterans Affairs are to be excluded from annual income [24 CRF 5.609(c)(14)]. HA Policy The PHA will include in annual income lump sums received as a result of delays in processing periodic payments (other than those specifically excluded by the regulation), such as unemployment or welfare assistance. 108 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-38 When a delayed-start payment is received that is to be included and the family and reportsed during the period in which the HA is processing an annual reexamination, the HA will adjust the tenant family’s rent retroactively for the period the payment was intended to cover. The family may pay in full any amount due or request to enter into a repayment agreement with the HA. If the delayed-start payment is received outside of the time the PHA is processing an annual reexamination, then the PHA will consider whether the amount meets the threshold to conduct an interim reexamination. If so, the PHA will conduct an interim in accordance with PHA policies in Chapter 9. If not, the PHA will consider the amount when processing the family’s next annual recertification. Retirement Accounts [24 CFR 5.609(b)(26); Notice PIH 2023-27] Income received from any account under a retirement plan recognized as such by the IRS, including individual retirement arrangements (IRAs), employer retirement plans, and retirement plans for self-employed individuals is not considered actual income from assets. However, any distribution of periodic payments from such accounts is included in annual income at the time they are received by the family. An asset moved to a retirement account held by a member of the family is not considered to be an asset disposed of for less than fair market value. Treatment of Overpayment Deductions from Social Security Benefits [Notice PIH 2023-27] The PHA is required to use the gross benefit amount to calculate annual income from Social Security benefits. Annually in October, the Social Security Administration (SSA) announces the cost-of-living adjustment (COLA) by which federal Social Security and SSI benefits are adjusted to reflect the increase, if any, in the cost of living. The federal COLA does not apply to state-paid disability benefits. Effective the day after the SSA has announced the COLA, PHAs are required to factor in the COLA when determining Social Security and SSI annual income for all annual reexaminations and interim reexaminations of family income that have not yet been completed and will be effective January 1 or later of the upcoming year [Notice PIH 2023-27]. When a family member’s benefits are garnished, levied, or withheld to pay restitution, child support, tax debt, student loan debt, or other debts, the PHA must use the gross amount of the income, prior to the reduction, to determine a family’s annual income. PHA Policy Annual income includes “all amounts received,” not the amount that a family may be legally entitled to receive but which they do not receive. The HA must make a special calculation of annual income wWhen the Social Security Administration (SSA) overpays an individual, resulting in a withholding or deduction from their benefit amount until the overpayment is paid in full. The amount and duration of the withholding will vary depending on the amount of the overpayment and the percent of the benefit rate withheld. Regardless of the amount withheld or the length of the withholding period , the HA must use the reduced benefit amount after deducting only the amount of the overpayment withholding from the gross benefit amount [Notice PIH 2018-24]. 109 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-39 Applying SSA COLA to Current Annual and Interim Reexaminations Effective the day after SSA has announced the COLA, HAs are required to factor in the COLA when determining Social Security and SSI annual income for all annual reexaminations and interim reexaminations of family income that have not yet been completed and will be effective January 1st or later of the upcoming year [Notice PIH 2018-24]. Alimony and Child Support Annual income includes “all amounts received,” not the amount that a family may be legally entitled to receive but which they do not receive. For example, a family’s child-support or alimony income must be based on payments received, not the amounts to which the family is entitled by court or agency orders [Notice PIH 2023-27]. PHA Policy The PHA will count all regular payments of alimony or child support awarded as part of a divorce or separation agreement. The PHA will count court-awarded amounts for alimony and child support unless the family certifies and the PHA verifies that the payments are not being made. In order to verify that payments are not being made, the PHA will review child support payments over the last three months. If payments are being made regularly, the PHA will use the amount received during the last 12 months (excluding any lump sums received). If payments have been made for a period less than 12 months, the PHA will average all payments that have been made. At new admission or interim recertification, if any lump sum payments were made in the past 12 months, the PHA will determine the likelihood of the family receiving another similar payment within the next 12 months before deciding whether or not this amount will be included in the calculation of annual income. If the PHA determines and can appropriately verify that the family in all likelihood will not receive a similar payment, then the amount will not be considered when projecting annual income. If the PHA determines that it is likely that the family will receive a similar payment and can appropriately verify it, the amount will be included when projecting annual income. If no payments have been made in the past three months and there are no lump sums, the PHA will not include alimony or child support in annual income 110 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-40 Periodic Payments Excluded from Annual Income  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) [24 CFR 5.609(c)(2)]. Kinship care payments are considered equivalent to foster care payments and are also excluded from annual income [Notice PIH 2012-1]. HA Policy The HA will exclude payments for the care of foster children and foster adults only if the care is provided through an official arrangement with a local welfare agency [HCV GB, p. 5-18].  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 [24 CFR 5.609(c)(16)]  Amounts received under the Low-Income Home Energy Assistance Program (42 U.S.C. 1626(c)) [24 CFR 5.609(c)(17)]  Amounts received under the Child Care and Development Block Grant Act of 1990 (42 U.S.C. 9858q) [24 CFR 5.609(c)(17)]  Earned Income Tax Credit (EITC) refund payments (26 U.S.C. 32(j)) [24 CFR 5.609(c)(17)]. Note: EITC may be paid periodically if the family elects to receive the amount due as part of payroll payments from an employer.  Lump sums received as a result of delays in processing Social Security and SSI payments (see section 6-I.H.) [24 CFR 5.609(c)(14)]. Lump sums or prospective monthly amounts received as deferred disability benefits from the Department of Veterans Affairs (VA) [24 CFR 5.609(c)(14)]. 6-I.I. NONRECURRING INCOME [24 CFR 5.609(b)(24) and Notice PIH 2023-27] Nonrecurring income, which is income that will not be repeated beyond the coming year (e.g., 12 months following the effective date of the certification) based on information provided by the family, is excluded from annual income. The PHA may accept a self-certification from the family stating that the income will not be repeated in the coming year. See Chapter 7 for PHA policies related to verification of nonrecurring income. Income received as an independent contractor, day laborer, or seasonal worker is not excluded from income as nonrecurring income, even if the source, date, or amount of the income varies. Income that has a discrete end date and will not be repeated beyond the coming year during the family’s upcoming annual reexamination period will be excluded from a family’s annual income as nonrecurring income. This exclusion does not include unemployment income and other types of periodic payments that are received at regular intervals (such as weekly, monthly, or yearly) for a period of greater than one year that can be extended. Income amounts excluded under this category may include, but are not limited to:  Nonrecurring payments made to the family or to a third party on behalf of the family to assist with utilities; 111 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-41  Payments for eviction prevention;  Security deposits to secure housing;  Payments for participation in research studies (depending on the duration); and  General one-time payments received by or on behalf of the family. Nonrecurring income that is excluded under the regulations includes:  Payments from the U.S. Census Bureau for employment (relating to decennial census or the American Community Survey) lasting no longer than 180 days and not culminating in permanent employment [24 CFR 5.609(b)(24)(i)].  Direct federal or state payments intended for economic stimulus or recovery [24 CFR 5.609(b)(24)(ii)].  Amounts directly received by the family as a result of state refundable tax credits or state or federal tax refunds at the time they are received [24 CFR 5.609(b)(24)(iii) and (iv)].  Gifts for holidays, birthdays, or other significant life events or milestones (e.g., wedding gifts, baby showers, anniversaries) [24 CFR 5.609(b)(24)(v)].  Non-monetary, in-kind donations, such as food, clothing, or toiletries, received from a food bank or similar organization [24 CFR 5.609(b)(24)(vi)]. When calculating annual income, PHAs are prohibited from assigning monetary value to non-monetary in-kind donations received by the family [Notice PIH 2023-27]. Non-recurring, non-monetary in-kind donations from friends and family are excluded as non-recurring income.  Lump-sum additions to net family assets, including but not limited to lottery or other contest winnings [24 CFR 5.609(b)(24)(vii)]. 112 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-42 6-I.I. PAYMENTS IN LIEU OF EARNINGS Payments in lieu of earnings, such as unemployment and disability compensation, worker’s compensation, and severance pay, are counted as income [24 CFR 5.609(b)(5)] if they are received either in the form of periodic payments or in the form of a lump-sum amount or prospective monthly amounts for the delayed start of a periodic payment. If they are received in a one-time lump sum (as a settlement, for instance), they are treated as lump-sum receipts [24 CFR 5.609(c)(3)]. (See also the discussion of periodic payments in section 6-I.H and the discussion of lump-sum receipts in section 6-I.G.) 113 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-43 6-I.J. WELFARE ASSISTANCE Overview Welfare assistance is counted in annual income. Welfare assistance includes Temporary Assistance for Needy Families (TANF) and any payments to individuals or families based on need that are made under programs funded separately or jointly by federal, state, or local governments [24 CFR 5.603(b)]. Sanctions Resulting in the Reduction of Welfare Benefits [24 CFR 5.615] The HA must make a special calculation of annual income when the welfare agency imposes certain sanctions on certain families. The full text of the regulation at 24 CFR 5.615 is provided as Exhibit 6-35. The requirements are summarized below. This rule applies only if a family was a public housing resident at the time the sanction was imposed. Covered Families The families covered by 24 CFR 5.615 are those “who receive welfare assistance or other public assistance benefits (‘welfare benefits’) from a State or other public agency (’welfare agency’) under a program for which Federal, State or local law requires that a member of the family must participate in an economic self-sufficiency program as a condition for such assistance” [24 CFR 5.615(b)] Imputed Income When a welfare agency imposes a sanction that reduces a family’s welfare income because the family commits fraud or fails to comply with the agency’s economic self-sufficiency program or work activities requirement, the HA must include in annual income “imputed” welfare income. The HA must request that the welfare agency provide the reason for the reduction of benefits and the amount of the reduction of benefits. The imputed welfare income is the amount that the benefits were reduced as a result of the sanction. This requirement does not apply to reductions in welfare benefits: (1) at the expiration of the lifetime or other time limit on the payment of welfare benefits, (2) if a family member is unable to find employment even though the family member has complied with the welfare agency economic self-sufficiency or work activities requirements, or (3) because a family member has not complied with other welfare agency requirements [24 CFR 5.615(b)(2)]. For special procedures related to grievance hearings based upon the HA’s denial of a family’s request to lower rent when the family experiences a welfare benefit reduction, see Chapter 14, Grievances and Appeals. Offsets The amount of the imputed welfare income is offset by the amount of additional income the family begins to receive after the sanction is imposed. When the additional income equals or exceeds the imputed welfare income, the imputed income is reduced to zero [24 CFR 5.615(c)(4)]. 114 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-44 6-I.K. PERIODIC AND DETERMINABLE ALLOWANCES [24 CFR 5.609(b)(7)] Annual income includes periodic and determinable allowances, such as alimony and child support payments, and regular contributions or gifts received from organizations or from persons not residing with a tenant family. Alimony and Child Support The HA must count alimony or child support amounts awarded as part of a divorce or separation agreement. HA Policy The HA will count court-awarded amounts for alimony and child support unless the HA verifies that (1) the payments are not being made and (2) the family has made reasonable efforts to collect amounts due, including filing with courts or agencies responsible for enforcing payments [HCV GB, pp. 5-23 and 5-47]. Families who do not have court-awarded alimony and child support awards are not required to seek a court award and are not required to take independent legal action to obtain collection. Regular Contributions or Gifts The HA must count as income regular monetary and nonmonetary contributions or gifts from persons not residing with a tenant family [24 CFR 5.609(b)(7)]. Temporary, nonrecurring, or sporadic income and gifts are not counted [24 CFR 5.609(c)(9)]. HA Policy Examples of regular contributions include: (1) regular payment of a family’s bills (e.g., utilities, telephone, rent, credit cards, and car payments), (2) cash or other liquid assets provided to any family member on a regular basis, and (3) “in-kind” contributions such as groceries and clothing provided to a family on a regular basis. Nonmonetary contributions will be valued at the cost of purchasing the items, as determined by the HA. For contributions that may vary from month to month (e.g., utility payments), the HA will include an average amount based upon past history. 6-I.K. STATE PAYMENTS TO ALLOW INDIVIDUALS WITH DISABILITIES TO LIVE AT HOME [24 CFR 5.609(b)(19)] Payments made by or authorized by a state Medicaid agency (including through a managed care entity) or other state or federal agency to an assisted family to enable a member of the assisted family who has a disability to reside in the family’s assisted unit are excluded. Authorized payments may include payments to a member of the assisted family through state Medicaid-managed care systems, other state agencies, federal agencies or other authorized entities. 115 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-45 The payments must be received for caregiving services a family member provides to enable another member of the assisted family who has a disability to reside in the family’s assisted unit. Payments to a family member for caregiving services for someone who is not a member of the assisted family (such as for a relative that resides elsewhere) are not excluded from income. Furthermore, if the agency is making payments for caregiving services to the family member for an assisted family member and for a person outside of the assisted family, only the payments attributable to the caregiving services for the caregiver’s assisted family member would be excluded from income. 6-I.L. CIVIL RIGHTS SETTLEMENTS [24 CFR 5.609(b)(25); FR Notice 2/14/23] Regardless of how the settlement or judgment is structured, civil rights settlements or judgments, including settlements or judgments for back pay, are excluded from annual income. This may include amounts received because of litigation or other actions, such as conciliation agreements, voluntary compliance agreements, consent orders, other forms of settlement agreements, or administrative or judicial orders under the Fair Housing Act, Title VI of the Civil Rights Act, Section 504 of the Rehabilitation Act (Section 504), the Americans with Disabilities Act, or any other civil rights or fair housing statute or requirement. While these civil rights settlement or judgment amounts are excluded from income, the settlement or judgment amounts will generally be counted toward the family’s net family assets (e.g., if the funds are deposited into the family’s savings account or a revocable trust under the control of the family or some other asset that is not excluded from the definition of net family assets). Income generated on the settlement or judgment amount after it has become a net family asset is not excluded from income. For example, if the family received a settlement or back pay and deposited the money in an interest-bearing savings account, the interest from that account would be income at the time the interest is received. Furthermore, if a civil rights settlement or judgment increases the family’s net family assets such that they exceed $50,000 (as annually adjusted by an inflationary factor), then income will be imputed on the net family assets pursuant to 24 CFR 5.609(a)(2). If the imputed income, which HUD considers unearned income, increases the family’s annual adjusted income by 10 percent or more, then an interim reexamination of income will be required unless the addition to the family’s net family assets occurs within the last three months of the family’s income certification period and the PHA or owner chooses not to conduct the examination. 116 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-46 6-I.ML. ADDITIONAL EXCLUSIONS FROM ANNUAL INCOME [24 CFR 5.609(b)] Other exclusions contained in 24 CFR 5.609(cb) and updated by FR Notice 5/20/14 that have not been discussed earlier in this chapter include the following:  Payments received for the care of foster children or foster adults or state or tribal kinship or guardianship care payments [24 CFR 5.609(b)(4)].  Insurance payments and settlements for personal or property losses, including but not limited to payments through health insurance, motor vehicle insurance, and workers’ compensation [24 CFR 5.609(b)(5)] However, periodic payments paid at regular intervals (such as weekly, monthly, or yearly) for a period of greater than one year that are received in lieu of wages for workers’ compensation are included in annual income [Notice PIH 2023-27].  Amounts received by the family that are specifically for, or in reimbursement of, the cost of health and medical care expenses for any family member [24 CFR 5.609(b)(6)].  Any amounts recovered in any civil action or settlement based on a claim of malpractice, negligence, or other breach of duty owed to a family member arising out of law, that resulted in a member of the family becoming disabled [24 CFR 5.609(b)(7)].  Income and distributions from any Coverdell education savings account under Section 530 of the Internal Revenue Code of 1986 or any qualified tuition program under Section 529 of such Code [24 CFR 5.609(b)(10)].  Income earned by government contributions to, and distributions from, “baby bond” accounts created, authorized, or funded by federal, state, or local government [24 CFR 5.609(b)(10)].  The special pay to a family member serving in the Armed Forces who is exposed to hostile fire [24 CFR 5.609(b)(11)].  Payments related to aid and attendance under 38 U.S.C. 1521 to veterans in need of regular aid and attendance [24 CFR 5.609(b)(17)]. This income exclusion applies only to veterans in need of regular aid and attendance and not to other beneficiaries of the payments, such as a surviving spouse [Notice PIH 2023-27].  Loan proceeds (the net amount disbursed by a lender to or on behalf of a borrower, under the terms of a loan agreement) received by the family or a third party (e.g., proceeds received by the family from a private loan to enable attendance at an educational institution or to finance the purchase of a car) [24 CFR 5.609(b)(20)]. The loan borrower or co-borrower must be a member of the family for this income exclusion to be applicable [Notice PIH 2023-27]. 117 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-47  Payments received by tribal members as a result of claims relating to the mismanagement of assets held in trust by the United States, to the extent such payments are also excluded from gross income under the Internal Revenue Code or other federal law [24 CFR 5.609(b)(21)]. Generally, payments received by tribal members in excess of the first $2,000 of per capita shares are included in a family’s annual income for purposes of determining eligibility. However, as explained in Notice PIH 2023-27, payments made under the Cobell Settlement, and certain per capita payments under the recent Tribal Trust Settlements, must be excluded from annual income in HUD programs that adopt the definitions of annual income in 24 CFR 5.609, the Census Long Form, and the IRS Form 1040, including the programs affected by Notice PIH 2023-27.  Replacement housing “gap” payments made in accordance with 49 CFR Part 24 that offset increased out of pocket costs of displaced persons that move from one federally subsidized housing unit to another federally subsidized housing unit. Such replacement housing “gap” payments are not excluded from annual income if the increased cost of rent and utilities is subsequently reduced or eliminated, and the displaced person retains or continues to receive the replacement housing “gap” payments [24 CFR 5.609(b)(23)].  Income earned on amounts placed in a family’s Family Self-Sufficiency account [24 CFR 5.609(b)(27)].  Reimbursement of medical expenses [24 CFR 5.609(c)(4)]  The full amount of student financial assistance paid directly to the student or to the educational institution [24 CFR 5.609(c)(6)]. HA Policy Regular financial support from parents or guardians to students for food, clothing personal items, and entertainment is not considered student financial assistance and is included in annual income.  Amounts received by participants in other publicly assisted programs which are specifically for or in reimbursement of out-of-pocket expenses incurred (e.g., special equipment, clothing, transportation, child care, etc.) and which are made solely to allow participation in a specific program [24 CFR 5.609(c)(812)(iii)]  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) [(24 CFR 5.609(c)(8)(ii)]  Amounts received under a resident service stipend not to exceed $200 per month. A resident service stipend is a modest amount 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 [24 CFR 5.600(b)(12)(iii)]. Incremental earnings and benefits to any family member resulting from participation in qualifying training program funded by HUD or in qualifying federal, state, tribal, or local employment training programs (including training programs not affiliated with a local government) and training of a family member as resident management staff are excluded from annual income. 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 training 118 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-48 program unless those amounts are excluded under 24 CFR 5.609(b)(9)(i) [24 CFR 5.609(b)(12)(iv)].  PHA Policy  The PHA defines training program as “a learning process with goals and objectives, generally having a variety of components, and taking place in a series of sessions over a period of time. It is designed to lead to a higher level of proficiency, and it enhances the individual’s ability to obtain employment. It may have performance standards to measure proficiency. Training may include but is not limited to: (1) classroom training in a specific occupational skill, (2) on-the-job training with wages subsidized by the program, or (3) basic education” [expired Notice PIH 98-2, p. 3].  The PHA defines incremental earnings and benefits as the difference between (1) the total amount of welfare assistance and earnings of a family member prior to enrollment in a training program and (2) the total amount of welfare assistance and earnings of the family member after enrollment in the program [expired Notice PIH 98-2, pp. 3–4].  In calculating the incremental difference, the PHA will use as the pre-enrollment income the total annualized amount of the family member’s welfare assistance and earnings reported on the family’s most recently completed HUD-50058.  End of participation in a training program must be reported in accordance with the PHA’s interim reporting requirements (see Chapter 11).  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 [24 CFR 5.609(cb)(1013)]  Adoption assistance payments for a child in excess of $480the amount of the dependent deduction per adopted child [24 CFR 5.609(cb)(1215)]  Refunds or rebates on property taxes paid on the dwelling unit [24 CFR 5.609(cb)(1520)]  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 [24 CFR 5.609(c)(16)]  Amounts that HUD is required by federal statute to exclude 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(b) apply. HUD will publish a notice in the Federal Register to identify the benefits that qualify for this exclusion. Updates will be published when necessary [24 CFR 5.609(b)(22)].  Amounts specifically excluded by any other federal statute [24 CFR 5.609(c)(17), FR Notice 5/20/14]. HUD publishes an updated list of these exclusions periodically. The most recent list of exclusions was published in the Federal Register on May 20, 204. It includes: (a) The value of the allotment provided to an eligible household under the Food Stamp Act of 1977 (7 U.S.C. 2017 (b)) 119 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-49 (b) Benefits under Section 1780 of the School Lunch Act and Child Nutrition Act of 1966, including WIC (c) Payments to volunteers under the Domestic Volunteer Services Act of 1973 (42 U.S.C. 5044(g), 5058) (d) Payments received under the Alaska Native Claims Settlement Act (43 U.S.C. 1626(c)) (e) Income derived from certain submarginal land of the United States that is held in trust for certain Indian tribes (25 U.S.C. 459e) (f) Payments or allowances made under the Department of Health and Human Services’ Low-Income Home Energy Assistance Program (42 U.S.C. 8624(f)) 120 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-50 (g) Payments received under programs funded in whole or in part under the Workforce Investment Act of 1998 (29 U.S.C. 2931) (h) Deferred disability benefits from the Department of Veterans Affairs, whether received as a lump sum or in monthly prospective amounts (i) Income derived from the disposition of funds to the Grand River Band of Ottawa Indians (Pub. L. 94-540, 90 Stat. 2503-04) (j) Payments, funds, or distributions authorized, established, or directed by the Seneca National Settlement Act of 1990 (25 U.S.C. 1774f(b)) (k) A lump sum or periodic payment received by an individual Indian pursuant to the Class Action Settlement Agreement in the United States District Court case entitled Elouise Cobell et al. v. Ken Salazar et al, for a period of one year from the time of receipt of that payment as provided in the Claims Resolution Act of 2010. (l) The first $2,000 of per capita shares received from judgment funds awarded by the Indian Claims Commission or the U. S. Claims Court, the interests of individual Indians in trust or restricted lands, including the first $2,000 per year of income received by individual Indians from funds derived from interests held in such trust or restricted lands (25 U.S.C. 1407-1408) (m) Benefits under the Indian Veterans Housing Opportunity Act of 2010 (only applies to Native American housing programs) (n) Payments received from programs funded under Title V of the Older Americans Act of 1985 (42 U.S.C. 3056(f)) (o) Payments received on or after January 1, 1989, from the Agent Orange Settlement Fund or any other fund established pursuant to the settlement in In Re Agent Orange product liability litigation, M.D.L. No. 381 (E.D.N.Y.) (p) Payments received under38 U.S.C. 1833© to children of Vietnam veterans born with spinal bifida, children of women Vietnam veterans born with certain birth defects, and children of certain Korean service veterans born with spinal bifida. (q) Payments received under the Maine Indian Claims Settlement Act of 1980 (25 U.S.C. 1721) (r) The value of any child care provided or arranged (or any amount received as payment for such care or reimbursement for costs incurred for such care) under the Child Care and Development Block Grant Act of 1990 (42 U.S.C. 9858q) (s) Earned income tax credit (EITC) refund payments received on or after January 1, 1991 (26 U.S.C. 32(j)) (t) Payments by the Indian Claims Commission to the Confederated Tribes and Bands of Yakima Indian Nation or the Apache Tribe of Mescalero Reservation (Pub. L. 95-433) 121 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-51 (u) 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). For Section 8 programs, the exception found in § 237 of Public Law 109–249 applies and requires that the amount of financial assistance in excess of tuition shall be considered income in accordance with the provisions codified at 24 CFR 5.609(b)(9), except for those persons with disabilities as defined by 42 U.S.C. 1437a(b)(3)(E) (Pub. L. 109–249) (v) Allowances, earnings and payments to AmeriCorps participants under the National and Community Service Act of 1990 (42 U.S.C. 12637(d)) (w) Any amount of crime victim compensation (under the Victims of Crime Act) received through crime victim assistance (or payment or reimbursement of the cost of such assistance) as determined under the Victims of Crime Act because of the commission of a crime against the applicant under the Victims of Crime Act (42 U.S.C. 10602) (x) Any amounts in an “individual development account” as provided by the Assets for Independence Act, as amended in 2002. (y) Payments made from the proceeds of Indian tribal rust cases as described in Notice PIH 2013-30, “Exclusion from Income of Payments under Recent Tribal Trust Settlements” (25 U.S.C. 117b(a)) (z) Major disaster and emergency assistance received under the Robert T. Stafford Disaster Relief and Emergency Assistance Act and comparable disaster assistance provided by states, local governments, and disaster assistance organizations (aa) Distributions from an ABLE account, and actual or imputed interest on the ABLE account balance 122 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-52 123 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-53 PART II: ASSETS 6-II.A. OVERVIEW Annual income includes all actual anticipated income from assets (unless otherwise excluded by the regulations) even if the asset itself is excluded from net family assets [Notice PIH 2023-27]. The regulation at 24 CFR 5.603(b)(3) provides a list of items that are excluded from the calculation of net family assets. Note, unlike previous versions of the regulations, the current regulations do not list types of assets that are included in annual income. Instead, HUD relies on the definition of items excluded from assets to provide the scope of what is included. Exhibit 6-2 provides the regulatory definition of net family assets. Optional policies for family self-certification of assets are found in Chapter 7. Policies related to the asset limitation may be found in Chapter 3. Income from assets is always anticipated, irrespective of the income examination type. PHA Policy The PHA generally will use current circumstances to determine both the value of an asset and the anticipated income from the asset. The PHA will use other than current circumstances to anticipate income when (1) an imminent change in circumstances is expected, (2) it is not feasible to anticipate a level of income over 12 months, or (3) the PHA believes that past income is the best indicator of anticipated income. For example, if a family member owns real property that typically receives rental income, but the property is currently vacant, the PHA can take into consideration past rental income along with the prospects of obtaining a new tenant. Any time current circumstances are not used to determine asset income, a clear rationale for the decision will be documented in the file. In such cases, the family may present information and documentation to the PHA to show why the asset income determination does not represent the family’s anticipated asset income. 124 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-54 6-II.B. ASSETS DISPOSED OF FOR LESS THAN FAIR MARKET VALUE [24 CFR 5.603(b)(2)] PHAs must include the value of any business or family assets disposed of by an applicant or participant for less than fair market value (including a disposition in trust, but not in a foreclosure or bankruptcy sale) during the two years preceding the date of application or reexamination, as applicable, in excess of the consideration received for the asset. An asset moved to a retirement account held by a member of the family is not considered to be an asset disposed of for less than fair market value. [Notice PIH 2023-27]. Minimum Threshold HUD does not specify a minimum threshold for counting assets disposed of for less than fair market value. A PHA may establish a policy to ignore small amounts such as charitable contributions [New PH OCC GB, Income Determinations, p. 24]. PHA Policy The PHA will not include the value of assets disposed of for less than fair market value unless the cumulative fair market value of all assets disposed of during the past two years exceeds the gross amount received for the assets by more than $1,000. Separation or Divorce The regulation also specifies that assets are not considered disposed of for less than fair market value if they are disposed of as part of a separation or divorce settlement and the applicant or tenant receives important consideration not measurable in dollar terms. PHA Policy All assets disposed of as part of a separation or divorce settlement will be considered assets for which important consideration not measurable in monetary terms has been received. In order to qualify for this exemption, a family member must be subject to a formal separation or divorce settlement agreement established through arbitration, mediation, or court order. Foreclosure or Bankruptcy Assets are not considered disposed of for less than fair market value when the disposition is the result of a foreclosure or bankruptcy sale. Negative equity in real property or other investments does not prohibit the owner from selling the property or other investments, so negative equity alone would not justify excluding the property or other investments from family assets. Asset Owned by a Business Entity If a business entity (e.g., limited liability company or limited partnership) owns the asset, then the family’s asset is their ownership stake in the business, not some portion of the business’s assets. However, if the family holds the assets in their own name (e.g., they own one third of a restaurant) rather than in the name of a business entity, then the percentage value of the asset owned by the family is what is counted toward net family assets (e.g., one-third of the value of the restaurant) [Notice PIH 2023-27]. 125 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-55 Family Declaration PHA Policy Families must sign a declaration form at initial certification and each annual recertification identifying all assets that have been disposed of for less than fair market value or declaring that no assets have been disposed of for less than fair market value. The PHA may verify the value of the assets disposed of if other information available to the PHA does not appear to agree with the information reported by the family. 126 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-56 6-II.C. ASSET INCLUSIONS AND EXCLUSIONS Checking and Savings Accounts [Notice PIH 2023-27] HUD considers bank accounts as non-necessary items of personal property. Whether or not non- necessary personal property is counted toward net family assets depends on the combined value of all of the family’s assets.  When the combined value of net family assets is greater than $50,000, as adjusted by inflation, checking and/or savings accounts would be counted toward net family assets.  When the combined value of all non-necessary personal property does not exceed $50,000, as adjusted by inflation, all non-necessary personal property is excluded from net family assets. In this case, the value of the family’s checking and/or savings accounts would not be considered when calculating net family assets. However, actual income from checking and savings accounts is always included in a family’s annual income, regardless of the total value of net family assets or whether the asset itself is included or excluded from net family assets, unless that income is specifically excluded. ABLE Accounts [24 CFR 5.609(b)(10); Notice PIH 2019-09] An Achieving a Better Life Experience (ABLE) account is a type of tax-advantaged savings account that an eligible individual can use to pay for qualified disability expenses. Section 103 of the ABLE Act mandates that an individual’s ABLE account (specifically, its account balance, contributions to the account, and distributions from the account) is excluded when determining the designated beneficiary’s eligibility and continued occupancy under certain federal means- tested programs. The PHA must exclude the entire value of the individual’s ABLE account from the household’s assets. Distributions from the ABLE account are also not considered income. However, all wage income received, regardless of which account the money is paid to, is included as income. 127 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-57 Investment Accounts Such as Stocks, Bonds, Saving Certificates, and Money Market Funds [24 CFR 5.603(b)(1)] HUD considers financial investments such as stocks and bonds non-necessary items of personal property. Whether non-necessary personal property is counted toward net family assets depends on the combined value of all of the family’s assets.  When the combined value of net family assets is greater than $50,000, as adjusted by inflation, financial investments such as stocks and bonds are considered part of net family assets. In this case, the value of the family’s financial investments such as stocks and bonds would be counted toward net family assets.  When the combined value of all non-necessary personal property does not exceed $50,000, as adjusted by inflation, all non-necessary personal property is excluded from net family assets. In this case, the value of the family’s financial investments such as stocks and bonds would not be considered when calculating net family assets. However, actual income from financial accounts is always included in a family’s annual income, regardless of the total value of net family assets or whether the asset itself is included or excluded from net family assets, unless that income is specifically excluded. When a stock issues dividends in some years but not others (e.g., due to market performance), the dividend is counted as the actual return when it is issued, but when no dividend is issued, the actual return is $0. When the stock never issues dividends, the actual return is $0. PHA Policy The PHA will include interest or dividends earned by investment accounts as actual income from assets even when the earnings are reinvested. The cash value of such an asset is determined by deducting from the market value any broker fees, penalties for early withdrawal, or other costs of converting the asset to cash. In determining the market value of an investment account, the PHA will use the value of the account on the most recent investment report. 128 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-58 Necessary and Non-Necessary Personal Property [24 CFR 5.603(b)(3)(i)] All assets are categorized as either real property (e.g., land, a home) or personal property. Personal property includes tangible items, like boats, as well as intangible items, like bank accounts. The value of necessary items of personal property is excluded from the calculation of net family assets. Necessary items of personal property include a car used for commuting or medical devices. HUD defines necessary personal property as items essential to the family for the maintenance, use, and occupancy of the premises as a home; or they are necessary for employment, education, or health and wellness. Necessary personal property includes more than merely items that are indispensable to the bare existence of the family. It may include personal effects (such as items that are ordinarily worn or utilized by the individual), items that are convenient or useful to a reasonable existence, and items that support and facilitate daily life within the family’s home. Necessary personal property also includes items that assist a household member with a disability, including any items related to disability-related needs, or that may be required for a reasonable accommodation for a person with a disability. Necessary personal property does not include bank accounts, other financial investments, or luxury items. Items of personal property that do not qualify as necessary personal property are classified as non-necessary personal property. The combined value of all non-necessary items of personal property is only included in annual income when the combined total value exceeds $50,000 (adjusted annually). When the combined value of all non-necessary personal property does not exceed $50,000, as adjusted by inflation, all non-necessary personal property is excluded from net family assets. While not an exhaustive list, the following table from Notice PIH 2023-27 provides examples of necessary and non-necessary personal property. 129 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-59 Necessary Personal Property Non-Necessary Personal Property Car(s)/vehicle(s) that a family relies on for transportation for personal or business use (e.g., bike, motorcycle, skateboard, scooter) Furniture, carpets, linens, kitchenware Common appliances Common electronics (e.g., radio, television, DVD player, gaming system) Clothing Personal effects that are not luxury items (e.g., toys, books) Wedding and engagement rings Jewelry used in religious/cultural celebrations and ceremonies Religious and cultural items Medical equipment and supplies Health care–related supplies Musical instruments used by the family Personal computers, phones, tablets, and related equipment Professional tools of trade of the family, for example professional books Educational materials and equipment used by the family, including equipment to accommodate persons with disabilities Equipment used for exercising (e.g., treadmill, stationary bike, kayak, paddleboard, ski equipment) Recreational car/vehicle not needed for day-to- day transportation for personal or business use (campers, motorhomes, traveling trailers, all- terrain vehicles (ATVs)) Bank accounts or other financial investments (e.g., checking account, savings account, stocks/bonds) Recreational boat/watercraft Expensive jewelry without religious or cultural value, or which does not hold family significance Collectibles (e.g., coins/stamps) Equipment/machinery that is not used to generate income for a business Items such as gems/precious metals, antique cars, artwork, etc. PHA Policy In determining the value of non-necessary personal property, the PHA will use the family’s estimate of the value. The PHA may obtain an appraisal if there is reason to believe that the family’s estimated value is off by $50 or more. The family must cooperate with the appraiser but cannot be charged any costs related to the appraisal. 130 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-60 Lump-Sum Additions to Net Family Assets [24 CFR 5.609(b)(24(viii); Notice PIH 2023-27] The regulations exclude income from lump-sum additions to family assets, including lottery or other contest winnings as a type of nonrecurring income. In addition, lump sums from insurance payments, settlements for personal or property losses, and recoveries from civil actions or settlements based on claims of malpractice, negligence, or other breach of duty owed to a family member arising out of law that resulted in a member of the family becoming a family member with a disability are excluded from income. Further, deferred periodic amounts from Supplemental Security Income (SSI) and Social Security benefits that are received in a lump sum amount or in prospective monthly amounts, or any deferred Department of Veterans Affairs disability benefits that are received in a lump sum amount or in prospective monthly amounts are also excluded from income. However, these amounts may count toward net family assets. The PHA must consider any actual or imputed returns from assets as income at the next applicable income examination. In the case where the lump sum addition to assets would lead to imputed income, which is unearned income, that increases the family’s annual adjusted income by 10 percent or more, then the addition of the lump sum to the family’s assets will trigger an immediate interim reexamination of income in accordance with Chapter 9. This reexamination of income must take place as soon as the lump sum is added to the family’s net family assets unless the addition takes place in the last three months of family’s income certification period and the PHA chooses not to conduct the examination. For a discussion of lump-sum payments that represent the delayed start of a periodic payment, most of which are counted as income, see sections 6-I.H and 6-I.I. PHA Policy Any lump-sum receipts are only counted as assets if they are retained by a family in a form recognizable as an asset. [RHIIP FAQs]. For example, if the family receives a $1,000 lump sum for lottery winnings, and the family immediately spends the entire amount, the lump sum will not be counted toward net family assets. 131 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-61 Jointly Owned Assets [Notice PIH 2023-27] For assets owned jointly by the family and one or more individuals outside of the assisted family, the PHA must include the total value of the asset in the calculation of net family assets, unless:  The asset is otherwise excluded;  The family can demonstrate that the asset is inaccessible to them; or  The family cannot dispose of any portion of the asset without the consent of another owner who refuses to comply. If the family demonstrates that they can only access a portion of an asset, then only that portion’s value is included in the calculation of net family assets for the family. Any income from a jointly owned asset must be included in annual income, unless:  The income is specifically excluded;  The family demonstrates that they do not have access to the income from that asset; or  The family only has access to a portion of the income from that asset. PHA Policy If the family demonstrates that they can only access a portion of the income from an asset, then only that portion’s value is included in the calculation of income from assets. If an individual is a beneficiary who is entitled to access the account’s funds only upon the death of the account’s owner, and may not otherwise withdraw funds from an account, then the account is not an asset to the assisted family, and the family should provide proper documentation demonstrating that they are only a beneficiary on the account. 132 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-62 Trusts [24 CFR 5.609(b)(2) and 5.603(b)(4)] A trust is a legal arrangement generally regulated by state law in which one party (the creator or grantor) transfers property to a second party (the trustee) who holds the property for the benefit of one or more third parties (the beneficiaries). The following types of trust distributions are excluded from annual income:  Distributions of the principal or corpus of the trust; and  Distributions of income from the trust when the distributions are used to pay the costs of health and medical care expenses for a minor. The basis for determining how to treat trusts relies on information about who has access to either the principal in the account or the income from the account. There are two types of trusts, revocable and irrevocable. When the creator sets up an irrevocable trust, the creator has no access to the funds in the account. Irrevocable trusts not under the control of any member of the family or household are not assets. Typically, special needs trusts are considered irrevocable. The value of the trust is not included in net family assets, so long as the fund continues to be held in a trust that is not revocable by, or under the control of, any member of the family or household [24 CFR 5.603(b)(4)]. Where an irrevocable trust is excluded from net family assets, the PHA must not consider actual income earned by the trust (e.g., interest earned, rental income if property is held in the trust) for so long as the income from the trust is not distributed. If the value of the trust is not considered part of the family’s net assets, then distributions from the trust are treated as follows:  All distributions from the trust’s principal are excluded from income.  Distributions of income earned by the trust (i.e., interest, dividends, realized gains, or other earnings on the trust’s principal), are included as income unless the distribution is used to pay for the health and medical expenses for a minor. A revocable trust is a trust that the creator of the trust may amend or end (revoke). When there is a revocable trust, the creator has access to the funds in the trust account. The value of revocable trusts that are not under the control of the family are excluded from net family assets. This happens when a member of the assisted family is the beneficiary of a revocable trust, but the grantor is not a member of the assisted family. In this case the beneficiary does not “own” the revocable trust, and the value of the trust is excluded from net family assets. For the revocable trust to be considered excluded from net family assets, no family or household member may be the account’s trustee. If this is the case, then distributions from the trust are treated as follows:  All distributions from the trust’s principal are excluded from income.  Distributions of income earned by the trust (i.e., interest, dividends, realized gains, or other earnings on the trust’s principal), are included as income unless the distribution is used to pay for the health and medical expenses for a minor. 133 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-63 Revocable trusts under the control of the family or household (e.g., the grantor is a member of the assisted family or household) are considered assets and must be included in net family assets. If the value of the trust is considered part of the family’s net assets, then distributions from the trust are not considered income to the family. The PHA must count all actual returns (e.g., interest earned) from the trust as income or, if the trust has no actual returns (e.g., if the trust is comprised of farmland that is not in use) and the total value of the combined net family assets exceeds $50,000 (as that amount is updated for inflation), as imputed returns, as applicable. Life Insurance [FR Notice 2/14/23 and Notice PIH 2023-27] Net family assets do not include the value of term life insurance, which has no cash value to the individual before death. The cash value of a life insurance policy available to a family member before death, such as a whole life or universal life policy, is included in the calculation of the value of the family’s assets. The cash value is the surrender value. While the cash value of an insurance policy is considered an asset, the face value of any policy is not. If such a policy earns dividends or interest that the family could elect to receive, the amount of dividends or interest is counted as income from the asset whether or not the family actually receives it. Tax Refunds [24 CFR 5.603(b)(3)(xi) and Notice PIH 2023-27] All amounts received by a family in the form of federal tax refunds or refundable tax credits are excluded from a family’s net family assets for a period of 12 months after receipt by the family. At the time of an annual or interim reexamination of income, if the federal tax refund was received during the 12 months preceding the effective date of the reexamination, then the amount of the refund that was received by the family is subtracted from the total value of the account in which the federal tax refund or refundable tax credits were deposited. When the subtraction results in a negative number, then the balance of the asset is considered $0. If the tax refund or refundable tax credit is deposited into another excluded asset, such as a retirement account or a Coverdell Education Savings Account, then the deposit will have no effect on the balance of the asset (i.e., there is no need for the PHA to subtract the amount of the deposit from the value of the excluded asset). 134 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-64 Asset Exclusions [24 CFR 5.603(b)] The following are excluded from the calculations of net family assets:  The value of any account under a retirement plan recognized as such by the IRS, including individual retirement arrangements (IRAs), employer retirement plans, and retirement plans for self-employed individuals [24 CFR 5.603(b)(3)(iii)].  The value of real property that the family does not have the effective legal authority to sell in the jurisdiction in which the property is located [24 CFR 5.603(b)(3)(iv)]. - Real property as used in this part has the same meaning as that provided under the law of the state in which the property is located [24 CFR 5.100]. - Examples of this include but are not limited to co-ownership situations (including situations where one owner is a victim of domestic violence), where one party cannot unilaterally sell the real property; property that is tied up in litigation; and inherited property in dispute [Notice PIH 2023-27].  Any amounts recovered in any civil action or settlement based on a claim of malpractice, negligence, or other breach of duty owed to a family member arising out of law, that resulted in a family member being a person with a disability [24 CFR 5.603(b)(3)(v)];  The value of any Coverdell education savings account under section 530 of the Internal Revenue Code of 1986 [24 CFR 5.603(b)(3)(vi)];  The value of any qualified tuition program under Section 529 of such Code [24 CFR 5.603(b)(3)(vi)];  The value of any “baby bond” account created, authorized, or funded by federal, state, or local government [24 CFR 5.603(b)(3)(vi)];  Interests in Indian trust land [24 CFR 5.603(b)(3)(vii)];  Equity in a manufactured home where the family receives assistance under 24 CFR part 982 [24 CFR 5.603(b)(3)(viii)];  Equity in property under the Homeownership Option for which a family receives assistance under 24 CFR part 982 [24 CFR 5.603(b)(3)(ix)];  Family Self-Sufficiency accounts [24 CFR 5.603(b)(3)(x)];  Federal tax refunds or refundable tax credits for a period of 12 months after receipt by the family [24 CFR 5.603(b)(3)(xi)].  The full amount of assets held in an irrevocable trust [Notice PIH 2023-27]; and  The full amount of assets held in a revocable trust where a member of the family is the beneficiary, but the grantor/owner and trustee of the trust is not a member of the participant family or household [Notice PIH 2023-27]. 135 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-65 6-II.D. DETERMINING INCOME FROM ASSETS In some cases, amounts that are excluded from net family assets may be included as annual income when disbursements are made to a family from an asset. In other cases, amounts are excluded from annual income as a lump-sum addition to net family assets, but those funds are then considered a net family asset if held in an account or other investment that is considered part of net family assets [Notice PIH 2023-27]. Net Family Assets Net family assets are defined as the net cash value of all assets owned by the family, after deducting reasonable costs that would be incurred in disposing real property, savings, stocks, bonds, and other forms of capital investment. PHA Policy Reasonable costs that would be incurred when disposing of an asset include, but are not limited to, penalties for premature withdrawal, broker and legal fees, and settlement costs incurred in real estate transactions such as settlement costs and transfer taxes [New PH OCC GB, Income Determinations, p. 24]. The calculation of asset income sometimes requires the PHA to make a distinction between an asset’s market value and its cash value.  The market value of an asset is its worth in the market (e.g., the amount a buyer would pay for real estate or the total value of an investment account).  The cash value of an asset is its market value less all reasonable amounts that would be incurred when converting the asset to cash. The cash value of real property or other assets with negative equity would be considered $0 for the purposes of calculating net family assets. Negative equity in real property or other investments does not prohibit the family from selling the property or other investments, so negative equity alone would not justify excluding the property or other investments from family assets [Notice PIH 2023-27]. 136 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-66 Actual Income from Assets Income from assets must be included on the Form HUD-50058 regardless of the amount of income. Actual income from assets is always included in a family’s annual income, regardless of the total value of net family assets or whether the asset itself is included or excluded from net family assets, unless that income is specifically excluded by 24 CFR 5.609(b). Income or returns from assets are generally considered to be interest, dividend payments, and other actual income earned on the asset, and not the increase in market value of the asset. The increase in market value is relevant to the cash value of the asset for the purpose of determining total net family assets and imputing income. The PHA may determine the net assets of a family based on a self-certification by the family that the net family assets do not exceed $50,000 (adjusted annually by HUD), without taking additional steps to verify the accuracy of the declaration [24 CFR 5.618(b)]. Policies related to verification of assets are found in Chapter 7 of this policy. The PHA may not calculate or include any imputed income from assets when net family assets total $50,000 or less [24 CFR 5.609(b)(1)]. The actual income from assets must be included on the Form HUD-50058. Imputed Income from Assets When net family assets exceed $50,000 (adjusted annually by HUD), the PHA may not rely on self-certification. If actual returns can be calculated, the PHA must include actual income from the asset on the Form HUD-50058 (for example, a savings account or CD where the rate of return is known). If actual returns cannot be calculated, the PHA must calculate imputed returns using the HUD-determined passbook rate (for example, real property or a non-necessary item of personal property such as a recreational boat). If the PHA can compute actual income from some but not all assets, the PHA must compute actual returns where possible and use the HUD-determined passbook rate for assets where actual income cannot be calculated [24 CFR 5.609(a)(2)]. An asset with an actual return of $0 (such as a non-interest-bearing checking account), is not the same as an asset for which an actual return cannot be computed (such as non-necessary personal property). If the asset is a financial asset and there is no income generated (for example, a bank account with a zero percent interest rate or a stock that does not issue cash dividends), then the asset generates zero actual asset income, and imputed income is not calculated. When a stock issues dividends in some years but not others (e.g., due to market performance), the dividend is counted as the actual return when it is issued, and when no dividend is issued, the actual return is $0. When the stock never issues dividends, the actual return is consistently $0. 137 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-67 PART III: ADJUSTED INCOME 6-III.A. INTRODUCTION Overview HUD regulations require HAs to deduct from annual income any of five mandatory deductions for which a family qualifies and allow the PHA to deduct other permissive deductions in accordance with PHA policy. The resulting amount is the family’s adjusted income. Mandatory deductions are found in 24 CFR 5.611. 5.611(a) Adjusted income means annual income (as determined under § 5.609) of the members of the family residing or intending to reside in the dwelling unit, after making the following deductions:Mandatory deductions. In determining adjusted income, the responsible entity (HA) must deduct the following amounts from annual income: (a) Mandatory deductions (1) $480 for each dependent (adjusted annually by HUD, rounded to the next lowest multiple of $25); (2) $400 525 for any elderly family or disabled family (adjusted annually by HUD, rounded to the next lowest multiple of $25); (3) The sum of the following, to the extent the sum exceeds three ten percent of annual income: (i) Unreimbursed health and medical care expenses of any elderly family or disabled family; (ii) Unreimbursed reasonable attendant care and auxiliary apparatus expenses for each member of the family who is a person with disabilities, to the extent necessary to enable any member of the family (including the member who is a person with disabilities) to be employed. This deduction may not exceed the earned income received by family members who are 18 years of age or older and who are able to work because of such attendant care or auxiliary apparatus ; and (4) Any reasonable child care expenses necessary to enable a member of the family to be employed or to further their education. This part covers policies related to these mandatory deductions. Verification requirements related to these deductions are found in Chapter 7, Verifications. Anticipating Expenses HA Policy Generally, the HA will use current circumstances to anticipate expenses. When possible, for costs that are expected to fluctuate during the year (e.g., child care during school and nonschool periods and cyclical medical expenses), the HA will estimate costs based on historic data and known future costs. If a family has an accumulated debt for medical or disability assistance expenses, the HA will include as an eligible expense the portion of the debt that the family expects to pay during the period for which the income determination is being made. However, amounts previously deducted will not be allowed even if the amounts were not paid as expected in 138 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-68 a preceding period. The HA may require the family to provide documentation of payments made in the preceding year. When calculating health and medical care expenses, the PHA will include those expenses anticipated to be incurred during the 12 months following the certification date reexam which are not covered by an outside source, such as insurance. The allowance is not intended to give a family an allowance equal to last year’s expenses, but to anticipate regular ongoing and anticipated expenses during the coming year. Since these expenses are anticipated, the PH Occupancy Guidebook states “it is 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 the appropriate verification” [New PH OCC GB, Income Determinations, p. 30]. For annual reexaminations, the PHA will use information for the previous 12-month period. 139 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-69 6-III.B. DEPENDENT DEDUCTION An allowance of $480 is deducted from annual income for each dependent (which amount will be adjusted by HUD annually in accordance with the Consumer Price Index for Urban Wage Earners and Clerical Workers, rounded to the next lowest multiple of $25) [24 CFR 5.611(a)(1)]. Dependent is defined as any family member other than the head, spouse, or cohead who is under the age of 18 or who is 18 or older and is a person with disabilities or a full-time student. Foster children, foster adults, and live-in aides are never considered dependents [24 CFR 5.603(b)]. 6-II.C. ELDERLY OR DISABLED FAMILY DEDUCTION A single deduction of $400 525 is taken for any elderly or disabled family (which amount will be adjusted by HUD annually in accordance with the Consumer Price Index for Urban Wage Earners and Clerical Workers, rounded to the next lowest multiple of $25) [24 CFR 5.611(a)(2)]. An elderly family is a family whose head, spouse, cohead, or sole member is 62 years of age or older, and a disabled family is a family whose head, spouse, cohead, or sole member is a person with disabilities [24 CFR 5.403]. 140 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-70 6-III.D. HEALTH AND MEDICAL CARE EXPENSES DEDUCTION [24 CFR 5.611(a)(3)(i)] Unreimbursed health and medical care expenses may be deducted to the extent that, in combination with any disability assistance expenses, they exceed three ten percent of annual income. Thise medical expense deduction is permitted only for families in which the head, spouse, or cohead is at least 62 or is a person with disabilities. If a family is eligible for a medical expense deduction, the medical expenses of all family members are counted [VG, p. 28]. Definition of Medical Expenses HUD regulations define health and medical care expenses at 24 CFR 5.603(b) to mean “any costs incurred in the diagnosis, cure, mitigation, treatment, or prevention of disease or payments for treatments affecting any structure or function of the body. Health and medical care expenses include medical insurance premiums and long-term care premiums that are paid or anticipated during the period for which annual income is computed.” Medical insurance premiums continue to be eligible health and medical care expenses. Health and medical care expenses may be deducted from annual income only if they are eligible and not otherwise reimbursed and may only be deducted for elderly or disabled families. Although HUD revised the definition of health and medical care expenses to reflect the Internal Revenue Service (IRS) general definition of medical expenses, HUD is not permitting PHAs to specifically align their policies with IRS Publication 502 for determining which expenses are included in HUD’s mandatory deduction for health and medical care expenses. PHAs must review each expense to determine whether it is eligible in accordance with HUD’s definition of health and medical care expenses.medical expenses, including medical insurance premiums, that are anticipated during the period for which annual income is computed, and that are not covered by insurance.” HA Policy The most current IRS Publication 502, Medical and Dental Expenses, will be used as a reference to determine the costs that qualify as medical expenses. The HA will also allow nonprescription medicines if recommended by a doctor. Summary of Allowable Medical Expenses from IRS Publication 502 Services of medical professionals Surgery and medical procedures that are necessary, legal, noncosmetic Services of medical facilities Hospitalization, long-term care, and in- home nursing services Prescription medicines and insulinImprovements to housing directly Psychiatric treatment Ambulance services and some costs of transportation related to medical expenses The cost and care of necessary equipment related to a medical condition (e.g., eyeglasses/lenses, hearing aids, crutches, and artificial teeth) 141 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-71 related to medical needs (e.g., ramps for a wheel chair, handrails) Substance abuse treatment programs Cost and continuing care of necessary service animals Medical insurance premiums or the cost of a health maintenance organization (HMO) Note: This chart provides a summary of eligible medical expenses only. Detailed information is provided in IRS Publication 502. Medical expenses are considered only to the extent they are not reimbursed by insurance or some other source. 142 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-72 Families That Qualify for Both Medical and Disability Assistance Expenses HA Policy This policy applies only to families in which the head, spouse, or cohead is 62 or older or is a person with disabilities. When expenses anticipated by a family could be defined as either a health and medical care or disability assistance expenses, the HA will consider them health and medical care expenses unless it is clear that the expenses are incurred exclusively to enable a person with disabilities to work. 143 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-73 6-II.E. DISABILITY ASSISTANCE EXPENSES DEDUCTION [24 CFR 5.603(b) and 24 CFR 5.611(a)(3)(ii)] Unreimbursed rReasonable expenses for attendant care and auxiliary apparatus for each member of the family who is a person with disabilities a disabled family member may be deducted if they: (1) are necessary to enable a family member 18 years or older to work, (2) are not paid to a family member or reimbursed by an outside source, (3) in combination with any medical expenses, exceed three ten percent of annual income, and (4) do not exceed the earned income received by the family member who is enabled to work. Earned Income Limit on the Disability Assistance Expense Deduction A family can qualify for the disability assistance expense deduction only if at least one family member (who may be the person with disabilities) is enabled to work [24 CFR 5.603(b)]. The disability expense deduction is capped by the amount of “earned income received by family members who are 18 years of age or older and who are able to work” because of the expense [24 CFR 5.611(a)(3)(ii)]. The earned income used for this purpose is the amount verified before any earned income disallowances or income exclusions are applied. HA Policy The family must identify the family members enabled to work as a result of the disability assistance expenses. In evaluating the family’s request, the HA will consider factors such as how the work schedule of the relevant family members relates to the hours of care provided, the time required for transportation, the relationship of the family members to the person with disabilities, and any special needs of the person with disabilities that might determine which family members are enabled to work. When the HA determines that the disability assistance expenses enable more than one family member to work, the disability assistance expenses will be capped by the sum of the family members’ incomes [New PH OCC GB, Income Determination, p. 28]. [PH Occ GB, p. 124]. 144 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-74 Eligible Disability Expenses Examples of auxiliary apparatus are provided in the PH Occupancy Guidebook as follows: “Auxiliary apparatus: Including wheelchairs, walkers, scooters, reading devices for persons with visual disabilities, equipment added to cars and vans to permit their use by the family member with a disability, or service animals” [PH Occ GB, p. 124], but only if these items are directly related to permitting the disabled person or other family member to work [HCV GB, p. 5-30]. HUD advises HAs to further define and describe auxiliary apparatus [VG, p. 30]. Eligible Auxiliary Apparatus [Notice PIH 2023-27] Auxiliary apparatus items may include expenses for wheelchairs, ramps, adaptations to vehicles, guide dogs, assistance animals, or special equipment to enable a person who is blind or has low vision to read or type, or special equipment to assist a person who is deaf or hard of hearing. HA Policy Expenses incurred for maintaining or repairing an auxiliary apparatus are eligible. In the case of an apparatus that is specially adapted to accommodate a person with disabilities (e.g., a vehicle or computer), the cost to maintain the special adaptations (but not maintenance of the apparatus itself) is an eligible expense. The cost of service animals trained to give assistance to persons with disabilities, including the cost of acquiring the animal, veterinary care, food, grooming, and other continuing costs of care, will be included. Eligible Attendant Care [Notice PIH 2023-27] Examples of attendant care expenses can include teaching a person with disabilities how to perform day-to-day tasks independently like cleaning, bathing, doing laundry, and cooking. Attendant care can be 24-hour care, or care during sporadic periods throughout the day. The family determines the type of attendant care that is appropriate for the person with disabilities. HA Policy Attendant care includes, but is not limited to, reasonable costs for home medical care, nursing services, in-home or center-based care services, interpreters for persons with hearing impairments, and readers for persons with visual disabilities. Attendant care expenses will be included for the period that the person enabled to work is employed plus reasonable transportation time. The cost of general housekeeping and personal services is not an eligible attendant care expense. However, if the person enabled to work is the person with disabilities, personal services necessary to enable the person with disabilities to work are eligible. If the care attendant also provides other services to the family, the HA will prorate the cost and allow only that portion of the expenses attributable to attendant care that enables a family member to work. For example, if the care provider also cares for a child who is not the person with disabilities, the cost of care must be prorated. Unless otherwise specified by the care provider, the calculation will be based upon the number of hours spent in each activity and/or the number of persons under care. 145 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-75 Payments to Family Members No disability expenses may be deducted for payments to a member of a tenant family [23 CFR 5.603(b)]. However, expenses paid to a relative who is not a member of the tenant family may be deducted if they are not reimbursed by an outside source. Necessary and Reasonable Expenses The family determines the type of care or auxiliary apparatus to be provided and must describe how the expenses enable a family member to work. The family must certify that the disability assistance expenses are necessary and are not paid or reimbursed by any other source. HA Policy The HA determines the reasonableness of the expenses based on typical costs of care or apparatus in the locality. To establish typical costs, the HA will collect information from organizations that provide services and support to persons with disabilities. A family may present, and the HA will consider, the family’s justification for costs that exceed typical costs in the area. Families That Qualify for Both Health and Medical and Disability Assistance Expenses HA Policy This policy applies only to families in which the head, spouse, or cohead is 62 or older or is a person with disabilities. When expenses anticipated by a family could be defined as either health and medical care or disability assistance expenses, the HA will consider them health and medical care expenses unless it is clear that the expenses are incurred exclusively to enable a person with disabilities to work. 146 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-76 6-III.F. CHILD CARE EXPENSE DEDUCTION HUD defines child care expenses at 24 CFR 5.603(b) as “amounts anticipated to be paid by the family for the care of children under 13 years of age (including foster children) during the period for which annual income is computed, but only where such care is necessary to enable a family member to actively seek employment, be gainfully employed, or to further their education and only to the extent such amounts are not reimbursed. The amount deducted shall reflect reasonable charges for child care. In the case of child care necessary to permit employment, the amount deducted shall not exceed the amount of employment income that is included in annual income.” Child care expenses do not include child support payments made to another on behalf of a minor who is not living in an assisted family’s household [VG, p. 26]. However, child care expenses for foster children that are living in the assisted family’s household are included when determining the family’s child care expenses. Qualifying for the Deduction Determining Who Is Enabled to Pursue an Eligible Activity HA Policy The family must identify the family member(s) enabled to pursue an eligible activity. The term eligible activity in this section means any of the activities that may make the family eligible for a child care deduction (seeking work, pursuing an education, or being gainfully employed). In evaluating the family’s request, the HA will consider factors such as how the schedule for the claimed activity relates to the hours of care provided, the time required for transportation, the relationship of the family member(s) to the child, and any special needs of the child that might help determine which family member is enabled to pursue an eligible activity. Seeking Work HA Policy If the child care expense being claimed is to enable a family member to seek employment, the family must provide evidence of the family member’s efforts to obtain employment at each reexamination. The deduction may be reduced or denied if the family member’s job search efforts are not commensurate with the child care expense being allowed by the HA. 147 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-77 Furthering Education HA Policy If the child care expense being claimed is to enable a family member to further their education, the member must be enrolled in school (academic or vocational) or participating in a formal training program. The family member is not required to be a full-time student, but the time spent in educational activities must be commensurate with the child care claimed. Being Gainfully Employed HA Policy If the child care expense being claimed is to enable a family member to be gainfully employed, the family must provide evidence of the family member’s employment during the time that child care is being provided. Gainful employment is any legal work activity (full- or part-time) for which a family member is compensated. 148 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-78 Earned Income Limit on Child Care Expense Deduction When a family member looks for work or furthers their education, there is no cap on the amount that may be deducted for child care – although the care must still be necessary and reasonable. However, when child care enables a family member to work, the deduction is capped by “the amount of employment income that is included in annual income” [24 CFR 5.603(b)]. The earned income used for this purpose is the amount of earned income verified after any earned income disallowances or income exclusions are applied. When the person who is enabled to work is a person who receives the earned income disallowance (EID) or a full-time student whose earned income above $480 is excluded, child care costs related to enabling a family member to work may not exceed the portion of the person’s earned income that actually is included in annual income. For example, if a family member who qualifies for the EID makes $15,000 but because of the EID only $5,000 is included in annual income, child care expenses are limited to $5,000. The HA must not limit the deduction to the least expensive type of child care. If the care allows the family to pursue more than one eligible activity, including work, the cap is calculated in proportion to the amount of time spent working [HCV GB, p. 5-30]. HA Policy When the child care expense being claimed is to enable a family member to work, only one family member’s income will be considered for a given period of time. When more than one family member works during a given period, the HA generally will limit allowable child care expenses to the earned income of the lowest-paid member. The family may provide information that supports a request to designate another family member as the person enabled to work. 149 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-79 Eligible Child Care Expenses The type of care to be provided is determined by the tenant family. The HA may not refuse to give a family the child care expense deduction because there is an adult family member in the household that may be available to provide child care [VG, p. 26]. Allowable Child Care Activities HA Policy For school-age children, costs attributable to public or private school activities during standard school hours are not considered. Expenses incurred for supervised activities after school or during school holidays (e.g., summer day camp, after-school sports league) are allowable forms of child care. The costs of general housekeeping and personal services are not eligible. Likewise, child care expenses paid to a family member who lives in the family’s unit are not eligible; however, payments for child care to relatives who do not live in the unit are eligible. If a child care provider also renders other services to a family or child care is used to enable a family member to conduct activities that are not eligible for consideration, the HA will prorate the costs and allow only that portion of the expenses that is attributable to child care for eligible activities. For example, if the care provider also cares for a child with disabilities who is 13 or older, the cost of care will be prorated. Unless otherwise specified by the child care provider, the calculation will be based upon the number of hours spent in each activity and/or the number of persons under care. Necessary and Reasonable Costs Child care expenses will be considered necessary if: (1) a family adequately explains how the care enables a family member to work, actively seek employment, or further their education, and (2) the family certifies, and the child care provider verifies, that the expenses are not paid or reimbursed by any other source. HA Policy Child care expenses will be considered for the time required for the eligible activity plus reasonable transportation time. For child care that enables a family member to go to school, the time allowed may include not more than one study hour for each hour spent in class. To establish the reasonableness of child care costs, the HA will use the schedule of child care costs from a qualified local entity that either subsidizes child care costs or licenses child care providers. Families may present, and the HA will consider, justification for costs that exceed typical costs in the area. 150 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-80 6-III.G. HARDSHIP EXEMPTIONS [24 CFR 5.611(c), (d), and (e)] Health and Medical Care and Disability Assistance Expenses [24 CFR 5.611(c); Notice PIH 2023-27] The regulations provide for two types of hardship exemption categories for families that qualify for unreimbursed health and medical care expenses and/or disability assistance expenses. A family will benefit from this hardship exemption only if the family has eligible expenses that can be deducted in excess of five percent of annual income. In order to claim unreimbursed health and medical care expenses, the family must have a head, cohead, or spouse that is elderly or a person with a disability. In order to claim unreimbursed reasonable attendant care and auxiliary apparatus expenses, the family must include a person with a disability, and the expenses must enable any member of the family (including the member who is a person with a disability) to be employed. Families may be eligible for relief under one of two categories; phased-in relief or general relief, as defined below. Phased-In Relief The first category is applicable to all families who received a deduction for unreimbursed health and medical care and/or reasonable attendant care or auxiliary apparatus expenses based on their most recent income review. The family must receive phased-in relief if they are determined to be eligible. These families will begin receiving a 24-month phased-in relief at their next annual or interim reexamination, whichever occurs first. For these families, the threshold amount is phased-in as follows:  The family is eligible for a deduction totaling the sum of expenses that exceeds 5 percent of annual income for the first 12 months.  At the conclusion of 12 months, the family is eligible for a deduction totaling the sum of their expenses that exceed 7.5 percent of annual income for another 12 months.  At the conclusion of 24 months, the standard threshold amount of 10 percent would be used, unless the family qualifies for relief under the general hardship relief category. - When an eligible family’s phased-in relief begins at an interim reexamination, the PHA will need to process another transaction one year later to move the family along to the next phase. The transaction can be either an interim reexamination if triggered, or a non- interim reexamination transaction. Prior to the end of the 24-month period, the family may request a hardship exemption under the second category as described below. If the family is found eligible under the second category, the hardship exemption under the first category ends, and the family’s hardship is administered in accordance with the requirements listed below. Once a family requests general relief, the family may no longer receive phased-in relief. 151 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-81 PHAs must track the 24-month phase-period for each eligible family, even if a family’s expenses go below the appropriate phase-in percentage, during the first or second 12-month phase-in period. The phase-in must continue for families who move to another public housing unit at the same PHA. When the family is treated as a new admission under a different property/program (e.g., the family moves from public housing to the HCV program), unless the PHA has a written policy to continue the phased-in relief upon admission, the family’s expense deduction will be calculated using the 10-percent threshold unless request for general relief is approved by the PHA. PHA Policy The PHA will not continue the phased-in relief for families who move from the HCV program to public housing. These families will be treated as new admissions and the sum of expenses that exceeds 10 percent of annual income will be used to calculate their adjusted income. General Relief The second category is for families that can demonstrate:  Their health and medical and/or disability assistance expenses increased (other than the transition to the higher threshold); or  The family’s financial hardship is a result of a change in circumstances (as defined in PHA policy) that would not otherwise trigger an interim reexamination. The family may request a hardship exemption under the second category regardless of whether the family previously received the health and medical and/or disability assistance deductions or are currently or were previously receiving relief under the phased-in relief category above. HUD requires that PHAs develop policies defining what constitutes a hardship for purposes of this exemption. 152 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-82 The PHA must obtain third-party verification of the hardship or must document in the file the reason third-party verification was not available. PHAs must attempt to obtain third-party verification prior to the end of the 90-day hardship exemption period. PHA Policy To qualify for a hardship exemption, a family must submit a request in writing. The request must show that the family’s health and medical and/or disability assistance expenses have increased (other than the transition to the higher threshold) or that the family’s financial hardship is a result of a change in circumstances. The PHA defines a change in circumstances as a decrease in income or increase in other expenses that has resulted in the family’s financial hardship but does not, on its own, trigger an interim reexam in accordance with PHA policies. Examples of circumstances constituting a financial hardship may include the following situations: The family is awaiting an eligibility determination for a federal, state, or local assistance program, such as a determination for unemployment compensation or disability benefits; The family’s income decreased because of a loss of employment, death of a family member, or due to a natural or federal/state declared disaster; or Other circumstances as determined by the PHA. The family must provide third-party verification of the hardship with the request. If third- party verification is not available, the PHA will document the file with the reason and will attempt to obtain third-party verification prior to the end of the 90-day hardship exemption period. The PHA must promptly notify the family in writing of the change in the determination of adjusted income and the family’s rent resulting from hardship exemptions. The notice must inform the family of when the hardship exemption will begin and expire [24 CFR 5.611(e)(2)]. PHA Policy The PHA will make a determination of whether the family qualifies within 30 calendar days and will notify the family in writing of the result within 10 business days of the determination. If the PHA denies the hardship exemption request, the PHA notice will also state that if the family does not agree with the PHA determination, the family may request a hearing. If the family qualifies for an exemption, the PHA will include the date the hardship exemption will begin and the date it will expire as well as information on how to request a 90-day extension based on family circumstances. If the family qualifies, the family will receive a deduction for the sum of eligible expenses that exceed five percent of annual income. 153 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-83 The family’s hardship relief ends when the circumstances that made the family eligible for the relief are no longer applicable or after 90 days, whichever is earlier. However, the PHA may, at its discretion, extend the relief for one or more additional 90-day periods while the family’s hardship condition continues. PHAs are not limited to a maximum number of 90-day extensions. PHAs must establish written policies regarding the types of circumstances that will allow a family to qualify for a financial hardship and when such deductions may be eligible for additional 90-day extensions. PHAs must develop policies requiring families to report if the circumstances that made the family eligible for the hardship exemption are no longer applicable. PHA Policy The family may request an extension either orally or in writing prior to the end of the hardship exemption period. The PHA will extend relief for an additional 90-days if the family demonstrates to the PHA’s satisfaction that the family continues to qualify for the hardship exemption based on circumstances described above. The PHA will require updated verification based on the family’s current circumstances. Additional extension may be granted on a case-by-case basis provided the family continues to request extensions prior to the end of each hardship exemption period. Families must report if the circumstances that made the family eligible for the hardship exemption are no longer applicable. At any time, the PHA may terminate the hardship exemption if the PHA determines that the family no longer qualifies for the exemption. 154 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-84 Child Care Expense Hardship Exemption [24 CFR 5.611(d) and Notice PIH 2023-27] A family whose eligibility for the child care expense deduction is ending may request a financial hardship exemption to continue receiving the deduction. If the family demonstrates to the PHA’s satisfaction that the family is unable to pay their rent because of the loss of the child care expense deduction, and that the child care expense is still necessary even though the family member is not working, looking for work, or seeking to further their education, the PHA must recalculate the family’s adjusted income and continue the child care deduction. The PHA must develop a policy to define what constitutes a hardship, which includes the family’s inability to pay rent. The PHA must obtain third-party verification of the hardship or must document in the file the reason third-party verification was not available. PHAs must attempt to obtain third-party verification prior to the end of the 90-day hardship exemption period. PHA Policy For a family to qualify, they must demonstrate that their inability to pay rent would be as a result of the loss of this deduction. The PHA defines this hardship as a potential decrease in income or increase in other expenses that would result from the loss of the child care expense and such loss would impact the family’s ability to pay their rent. Some factors to consider when determining if the family is unable to pay rent may include determining that the rent, utility payment, and applicable expenses (child care expenses or health and medical expenses) are more than 40 percent of the family’s adjusted income, or verifying whether the family has experienced unanticipated expenses, such as large medical bills, that have affected their ability to pay their rent. The family must also demonstrate that the child care expense is still necessary even though the family member is no longer employed or furthering their education. The PHA will consider qualification under this criterion on a case-by case basis (for example, if the family member who was employed has left their job in order to provide uncompensated care to an elderly friend or family member who is severely ill and lives across town). The family must provide third-party verification of the hardship with the request. If third- party verification is not available, the PHA will document the file with the reason and will attempt to obtain third-party verification prior to the end of the 90-day hardship exemption period. The PHA must promptly notify the family in writing of the change in the determination of adjusted income and the family’s rent resulting from hardship exemptions. If the PHA denies the request, the notice must specifically state the reason for the denial. PHAs must provide families 30 days’ notice of any increase in rent. 155 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-85 If the PHA approves the request, the notice must inform the family of when the hardship exemption will begin and expire [24 CFR 5.611(e)(2)]. The notice must also state the requirement for the family to report to the PHA if the circumstances that made the family eligible for relief are no longer applicable and that the family’s adjusted income and tenant rent will be recalculated upon expiration of the hardship exemption [Notice PIH 2023-27]. PHA Policy The PHA will make a determination of whether the family qualifies within 30 calendar days and will notify the family in writing of the result within 10 business days of the determination. If the PHA denies the hardship exemption request, the PHA notice will also state that if the family does not agree with the PHA determination, the family may request a grievance hearing. If the family qualifies for an exemption, the PHA will include all required information listed above as well as information on how to request a 90-day extension based on family circumstances. If the family qualifies, the hardship exemption and the resulting alternative adjusted income calculation must remain in place for a period of up to 90 days. The PHA may, at its discretion, extend the hardship exemptions for additional 90-day periods based on family circumstances and as stated in PHA policies. PHAs are not limited to a maximum number of 90-day extensions. . PHAs must develop policies requiring families to report if the circumstances that made the family eligible for the hardship exemption are no longer applicable. PHAs must promptly notify families in writing if they are denied either an initial hardship exemption or an additional 90-day extension of the exemption. If the PHA denies the request, the notice must specifically state the reason for the denial. PHAs must notify the family if the hardship exemption is no longer necessary and the hardship exemption will be terminated because the circumstances that made the family eligible for the exemption are no longer applicable. The notice must state the termination date and provide 30 days’ notice of rent increase, if applicable. PHA Policy The family may request an extension either orally or in writing prior to the end of the hardship exemption period. The PHA will extend relief for an additional 90-days if the family demonstrates to the PHA’s satisfaction that the family continues to qualify for the hardship exemption. The PHA will require updated verification based on the family’s current circumstances. Additional extensions may be granted on a case-by-case basis provided the family continues to request extensions prior to the end of each hardship exemption period. Families must report if the circumstances that made the family eligible for the hardship exemption are no longer applicable. At any time, the PHA may terminate the hardship exemption if the PHA determines that the family no longer qualifies for the exemption. 156 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-86 6-III.HG. PERMISSIVE DEDUCTIONS [24 CFR 5.611(b)(1)(i)] The PHA may adopt additional permissive deductions from annual incoe if they establish a policy in the ACOP. Permissive deductions are additional, optional deductions that may be applied to annual income. As with mandatory deductions, permissive deductions must be based on need or family circumstance and deductions must be designed to encourage self-sufficiency or other economic purpose. If the HA offers permissive deductions, they must be granted to all families that qualify for them and should complement existing income exclusions and deductions [PH Occ GB, p. 128]. Permissive deductions may be used to incentive or encourage self- sufficiency and economic mobility. If the PHA chooses to adopt permissive deductions, the PHA is not eligible for an increase in Capital Fund and Operating Fund formula grants based on the application of those deductions. The PHA must establish a written policy for such deductions. The Form HUD-50058 Instruction Booklet states that the maximum allowable amount for total permissive deductions is less than $90,000 per year. HA Policy The HA has opted not to use permissive deductions. 157 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-87 PART IIIIV: CALCULATING RENT 6-IIIIV.A. OVERVIEW OF INCOME-BASED RENT CALCULATIONS The first step in calculating income-based rent is to determine each family’s total tenant payment (TTP). Then, if the family is occupying a unit that has tenant-paid utilities, the utility allowance is subtracted from the TTP. The result of this calculation, if a positive number, is the tenant rent. If the TTP is less than the utility allowance, the result of this calculation is a negative number, and is called the utility reimbursement, which may be paid to the family or directly to the utility company by the HA. TTP Formula [24 CFR 5.628] HUD regulations specify the formula for calculating the total tenant payment (TTP) for a tenant family. TTP is the highest of the following amounts, rounded to the nearest dollar:  30 percent of the family’s monthly adjusted income (adjusted income is defined in Part II)  10 percent of the family’s monthly gross income (annual income, as defined in Part I, divided by 12)  The welfare rent (in as-paid states only)  A minimum rent of $50 that is established by the HA  The alternative non-public housing rent, as determined in accordance with 24 CFR 960.102 The HA has authority to suspend and exempt families from minimum rent when a financial hardship exists, as defined in section 6-III.B. Welfare Rent [24 CFR 5.628] HA Policy Welfare rent does not apply in this locality. Minimum Rent [24 CFR 5.630] HA Policy The minimum rent for this locality is $50. 158 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-88 Optional Changes to Income-Based Rents [24 CFR 960.253(c)(2) and PH Occ GB, pp. 131-134] HAs have been given very broad flexibility to establish their own, unique rent calculation systems as long as the rent produced is not higher than that calculated using the TTP and mandatory deductions. At the discretion of the HA, rent policies may structure a system that uses combinations of permissive deductions, escrow accounts, income-based rents, and the required flat and minimum rents. The HA’s minimum rent and rent choice policies still apply to affected families. Utility allowances are applied to HA designed income-based rents in the same manner as they are applied to the regulatory income-based rents. The choices are limited only by the requirement that the method used not produce a TTP or tenant rent greater than the TTP or tenant rent produced under the regulatory formula. HA Policy The HA chooses not to adopt optional changes to income-based rents. Ceiling Rents [24 CFR 960.253 (c)(2) and (d)] Ceiling rents are used to cap income-based rents. They are part of the income-based formula. If the calculated TTP exceeds the ceiling rent for the unit, the ceiling rent is used to calculate tenant rent (ceiling rent/TTP minus utility allowance). Increases in income do not affect the family since the rent is capped. The use of ceiling rents fosters upward mobility and income mixing. Because of the mandatory use of flat rents, the primary function of ceiling rents now is to assist families who cannot switch back to flat rent between annual reexaminations and would otherwise be paying an income-based tenant rent that is higher than the flat rent. Ceiling rents must be set to the level required for flat rents (which will require the addition of the utility allowance to the flat rent for properties with tenant-paid utilities) [PH Occ GB, p. 135]. HA Policy The HA chooses not to use ceiling rents. 159 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-89 Utility Reimbursement [24 CFR 960.253(c)(4)] Utility reimbursement occurs when any applicable utility allowance for tenant-paid utilities exceeds the TTP. HUD permits the HA to pay the reimbursement to the family or directly to the utility provider. HA Policy The HA will make utility reimbursements directly to the utility provider. The PHA may make all utility reimbursement payments to qualifying families on a monthly basis or may make quarterly payments when the monthly reimbursement amount is $15.00 or less. Reimbursements must be made once per calendar-year quarter, either prospectively or retroactively, and must be prorated if the family leaves the program in advance of its next quarterly reimbursement. The PHA must also adopt hardship policies for families for whom receiving quarterly reimbursement would create a financial hardship. The PHA must issue reimbursements that exceed $15.00 per month on a monthly basis. PHA Policy The PHA will issue all utility reimbursements monthly. 160 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-90 6-IIIIV.B. FINANCIAL HARDSHIPS AFFECTING MINIMUM RENT [24 CFR 5.630] Overview If the HA establishes a minimum rent greater than zero, the HA must grant an exemption from the minimum rent if a family is unable to pay the minimum rent because of financial hardship. The financial hardship exemption applies only to families required to pay the minimum rent. If a family’s TTP is higher than the minimum rent, the family is not eligible for a hardship exemption. If the HA determines that a hardship exists, the TTP is the highest of the remaining components of the family’s calculated TTP. HUD-Defined Financial Hardship Financial hardship includes the following situations: (1) The family has lost eligibility for or is awaiting an eligibility determination for a federal, state, or local assistance program. This includes a family member who is a noncitizen lawfully admitted for permanent residence under the Immigration and Nationality Act who would be entitled to public benefits but for Title IV of the Personal Responsibility and Work Opportunity Act of 1996. HA Policy A hardship will be considered to exist only if the loss of eligibility has an impact on the family’s ability to pay the minimum rent. For a family waiting for a determination of eligibility, the hardship period will end as of the first of the month following (1) implementation of assistance, if approved, or (2) the decision to deny assistance. A family whose request for assistance is denied may request a hardship exemption based upon one of the other allowable hardship circumstances. (2) The family would be evicted because it is unable to pay the minimum rent. HA Policy For a family to qualify under this provision, the cause of the potential eviction must be the family’s failure to pay rent or tenant-paid utilities. (3) Family income has decreased because of changed family circumstances, including the loss of employment. 161 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-91 (4) A death has occurred in the family. HA Policy In order to qualify under this provision, a family must describe how the death has created a financial hardship (e.g., because of funeral-related expenses or the loss of the family member’s income). (5) The family has experienced other circumstances determined by the HA. HA Policy The HA has not established any additional hardship criteria. 162 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-92 Implementation of Hardship Exemption Determination of Hardship When a family requests a financial hardship exemption, the HA must suspend the minimum rent requirement beginning the first of the month following the family’s request. The HA then determines whether the financial hardship exists and whether the hardship is temporary or long-term. HA Policy The HA defines temporary hardship as a hardship expected to last 90 days or less. Long term hardship is defined as a hardship expected to last more than 90 days. The HA may not evict the family for nonpayment of minimum rent during the 90-day period beginning the month following the family’s request for a hardship exemption. When the minimum rent is suspended, the TTP reverts to the highest of the remaining components of the calculated TTP. The example below demonstrates the effect of the minimum rent exemption. Example: Impact of Minimum Rent Exemption Assume the HA has established a minimum rent of $35. TTP – No Hardship TTP – With Hardship $0 $15 N/A $50 30% of monthly adjusted income 10% of monthly gross income Welfare rent Minimum rent $0 $15 N/A $50 30% of monthly adjusted income 10% of monthly gross income Welfare rent Minimum rent Minimum rent applies. TTP = $50 Hardship exemption granted. TTP = $15 HA Policy To qualify for a hardship exemption, a family must submit a request for a hardship exemption in writing. The request must explain the nature of the hardship and how the hardship has affected the family’s ability to pay the minimum rent. The HA will make the determination of hardship within 30 calendar days. 163 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-93 No Financial Hardship If the HA determines there is no financial hardship, the HA will reinstate the minimum rent and require the family to repay the amounts suspended. For procedures pertaining to grievance hearing requests based upon the HA’s denial of a hardship exemption, see Chapter 14, Grievances and Appeals. HA Policy The HA will require the family to repay the suspended amount within 30 calendar days of the HA’s notice that a hardship exemption has not been granted. Temporary Hardship If the HA determines that a qualifying financial hardship is temporary, the HA must suspend the minimum rent for the 90-day period beginning the first of the month following the date of the family’s request for a hardship exemption. At the end of the 90-day suspension period, the family must resume payment of the minimum rent and must repay the HA the amounts suspended. HUD requires the HA to offer a reasonable repayment agreement, on terms and conditions established by the HA. The HA also may determine that circumstances have changed and the hardship is now a long-term hardship. For procedures pertaining to grievance hearing requests based upon the HA’s denial of a hardship exemption, see Chapter 14, Grievances and Appeals. HA Policy The HA will enter into a repayment agreement in accordance with the HA's repayment agreement policy (see Chapter 16). 164 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-94 Long-Term Hardship If the HA determines that the financial hardship is long-term, the HA must exempt the family from the minimum rent requirement for so long as the hardship continues. The exemption will apply from the first of the month following the family’s request until the end of the qualifying hardship. When the financial hardship has been determined to be long-term, the family is not required to repay the minimum rent. HA Policy The hardship period ends when any of the following circumstances apply: (1) At an interim or annual reexamination, the family’s calculated TTP is greater than the minimum rent. (2) For hardship conditions based on loss of income, the hardship condition will continue to be recognized until new sources of income are received that are at least equal to the amount lost. For example, if a hardship is approved because a family no longer receives a $60/month child support payment, the hardship will continue to exist until the family receives at least $60/month in income from another source or once again begins to receive the child support. (3) For hardship conditions based upon hardship-related expenses, the minimum rent exemption will continue to be recognized until the cumulative amount exempted is equal to the expense incurred. 165 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-95 6-IIIIV.C. UTILITY ALLOWANCES [24 CFR 965, Subpart E] Overview Utility allowances are provided to families paying income-based rents when the cost of utilities is not included in the rent. When determining a family’s income-based rent, the HA must use the utility allowance applicable to the type of dwelling unit leased by the family. For policies on establishing and updating utility allowances, see Chapter 16. Reasonable Accommodation and Individual Relief On request from a family, HAs must approve a utility allowance that is higher than the applicable amount for the dwelling unit if a higher utility allowance is needed as a reasonable accommodation to make the program accessible to and usable by the family with a disability [24- CFR 8 and 100. PH Occ GB, p. 172]. Likewise, residents with disabilities may not be charged for the use of certain resident-supplied appliances if there is a verified need for special equipment because of the disability [PH Occ GB, p. 172]. See Chapter 2 for policies related to reasonable accommodations. Further, the PHA may grant requests for relief from charges in excess of the utility allowance on reasonable grounds, such as special needs of the elderly, ill, or residents with disabilities, or special factors not within control of the resident, as the PHA deems appropriate. The family must request the higher allowance and provide the PHA with an explanation about the additional allowance required. PHAs should develop criteria for granting individual relief, notify residents about the availability of individual relief, and notify participants about the availability of individual relief programs (sometimes referred to as “Medical Baseline discounts”) offered by the local utility company [Utility Allowance GB, p. 19; 24 CFR 965.508]. 166 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-96 HA Policy The family must request the higher allowance and provide the HA with information about the amount of additional allowance required. The HA will consider the following criteria as valid reasons for granting individual relief: The family’s consumption was mistakenly portrayed as excessive due to defects in the meter or errors in the meter reading. The excessive consumption is caused by a characteristic of the unit or owner- supplied equipment that is beyond the family’s control, such as a particularly inefficient refrigerator or inadequate insulation. The allowance should be adjusted to reflect the higher consumption needs associated with the unit until the situation is remedied. The resident should be granted individual relief until the allowance is adjusted. The excessive consumption is due to special needs of the family that are beyond their control, such as the need for specialized equipment in the case of a family member who is ill, elderly, or who has a disability. In determining the amount of the reasonable accommodation or individual relief, the HA will allow a reasonable measure of additional usage as necessary. To arrive at the amount of additional utility cost of specific equipment, the family may provide information from the manufacturer of the equipment, or the family or HA may conduct an internet search for an estimate of usage or additional monthly cost. Information on reasonable accommodation and individual relief for charges in excess of the utility allowance will be provided to all residents at move-in and with any notice of proposed allowances, schedule surcharges, and revisions. The HA will also provide information on utility relief programs or medical discounts (sometimes referred to as “Medical Baseline discounts”) that may be available through local utility providers. The family must request the higher allowance and provide the HA with information about the amount of additional allowance required. At its discretion, the HA may reevaluate the need for the increased utility allowance as a reasonable accommodation at any regular reexamination. If the excessive consumption is caused by a characteristic of the unit or HA-supplied equipment that is beyond the family’s control, such as a particularly inefficient refrigerator or inadequate insulation, the individual relief to the resident will cease when the situation is remedied. 167 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-97 Utility Allowance Revisions [24 CFR 965.507] The HA must review at least annually the basis on which utility allowances have been established and, if reasonably required in order to continue adherence to standards described in 24 CFR 965.505, must establish revised allowances. The HA must revise the utility allowance schedule if there is a rate change that by itself or together with prior rate changes not adjusted for, results in a change of 10 percent or more from the rate on which such allowances were based. Adjustments to resident payments as a result of such changes must be retroactive to the first day of the month following the month in which the last rate change taken into account in such revision became effective. Such rate changes are not subject to the 60-day notice [24 CFR 965.507(b)]. The tenant rent calculations must reflect any changes in the HA’s utility allowance schedule [24 CFR 960.253(c)(3)]. HA Policy Between annual reviews of utility allowances, the HA will only revise its utility allowances due to a rate change, when required to by the regulation. 168 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-98 6-IIIIV.D. PRORATED RENT FOR MIXED FAMILIES [24 CFR 5.520] HUD regulations prohibit assistance to ineligible family members. A mixed family is one that includes at least one U.S. citizen or eligible immigrant and any number of ineligible family members. Except for non-public housing over income families, the HA must prorate the assistance provided to a mixed family. The HA will first determine TTP as if all family members were eligible and then prorate the rent based upon the number of family members that actually are eligible. To do this, the HA must: (1) Subtract the TTP from the flat rent applicable to the unit. The result is the maximum subsidy for which the family could qualify if all members were eligible. (2) Divide the family maximum subsidy by the number of persons in the family to determine the maximum subsidy per each family member who is eligible (member maximum subsidy). (3) Multiply the member maximum subsidy by the number of eligible family members. (4) Subtract the subsidy calculated in the last step from the flat rent. This is the prorated TTP. (5) Subtract the utility allowance for the unit from the prorated TTP. This is the prorated rent for the mixed family. HA Policy Revised public housing flat rents will be applied to a mixed family’s rent calculation at the first annual reexamination after the revision is adopted. (6) When the mixed family’s TTP is greater than the applicable flat rent, use the TTP as the prorated TTP. The prorated TTP minus the utility allowance is the prorated rent for the mixed family. 169 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-99 6-IIIIV.E. FLAT RENTS AND FAMILY CHOICE IN RENTS [24 CFR 960.253] Flat Rents [24 CFR 960.253(b)] 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. Changes in family income, expenses, or composition will not affect the flat rent amount because it is outside the income-based formula. Policies related to the reexamination of families paying flat rent are contained in Chapter 9, and policies related to the establishment and review of flat rents are contained in Chapter 16. Family Choice in Rents [24 CFR 960.253(a) and (e)] With the exception of non-public housing over income families, once each year, the HA must offer families the choice between a flat rent and an income-based rent. The family may not be offered this choice more than once a year. The HA must document that flat rents were offered to families under the methods used to determine flat rents for the HA. HA Policy The annual HA offer to a family of the choice between flat and income-based rent will be conducted upon admission and upon each subsequent annual reexamination. The HA will require families to submit their choice of flat or income-based rent in writing and will maintain such requests in the tenant file as part of the admission or annual reexamination process. The HA must provide sufficient information for families to make an informed choice. This information must include the HA’s policy on switching from flat rent to income-based rent due to financial hardship and the dollar amount of the rent under each option. However, if the family chose the flat rent for the previous year the HA is required to provide an income-based rent amount only in the year that a reexamination of income is conducted or if the family specifically requests it and submits updated income information. 170 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-100 Switching from Flat Rent to Income-Based Rent Due to Hardship [24 CFR 960.253(f)] A family can opt to switch from flat rent to income-based rent at any time if they are unable to pay the flat rent due to financial hardship. If the HA determines that a financial hardship exists, the HA must immediately allow the family to switch from flat rent to the income-based rent. HA Policy Upon determination by the HA that a financial hardship exists, the HA will allow a family to switch from flat rent to income-based rent effective the first of the month following the family’s request. Reasons for financial hardship include:  The family has experienced a decrease in income because of changed circumstances, including loss or reduction of employment, death in the family, or reduction in or loss of earnings or other assistance  The family has experienced an increase in expenses, because of changed circumstances, for medical costs, child care, transportation, education, or similar items  Such other situations determined by the HA to be appropriate HA Policy The HA considers payment of flat rent to be a financial hardship whenever the switch to income-based rent would be lower than the flat rent [PH Occ GB, p. 137]. Flat Rents and Earned Income Disallowance [A&O FAQs] Because the EID is a function of income-based rents, a family paying flat rent cannot qualify for the EID even if a family member experiences an event that would qualify the family for the EID. If the family later chooses to pay income-based rent, they would only qualify for the EID if a new qualifying event occurred. Under the EID original calculation method, a family currently paying flat rent that previously qualified for the EID while paying income-based rent and is currently within their exclusion period would have the exclusion period continue while paying flat rent as long as the employment that is the subject of the exclusion continues. A family paying flat rent could therefore see a family member’s exclusion period expire while the family is paying flat rent. Under the EID revised calculation method, a family currently paying flat rent that previously qualified for the EID while paying income-based rent and is currently within their exclusion period would have the exclusion period continue while paying flat rent regardless whether the employment that is the subject of the exclusion continues. A family paying flat rent could therefore see a family member’s exclusion period expire while the family is paying flat rent. 171 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-101 EXHIBIT 6-1: ANNUAL INCOME INCLUSIONS 24 CFR 5.609 (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; and (3) Which are not specifically excluded in paragraph (c) of this section. (4) 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. An allowance for depreciation is permitted only as authorized in paragraph (b)(2) of this section. 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 (except as provided in paragraph (c)(14) of this section); (5) Payments in lieu of earnings, such as unemployment and disability compensation, worker's compensation and severance pay (except as provided in paragraph (c)(3) of this section); (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 260.311; and (B) Are not otherwise excluded under paragraph (c) of this section. 1 Text of 45 CFR 260.31 follows (next page). 172 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-102 (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 (except as provided in paragraph (c)(7) of this section) (9) For section 8 programs only and as provided in 24 CFR 5.612, any financial assistance, in excess of amounts received for tuition, that an individual receives under the Higher Education Act of 1965 (20 U.S.C. 1001 et seq.), from private sources, or from an institution of higher education (as defined under the Higher Education Act of 1965 (20 U.S.C. 1002)), shall be considered income to that individual, except that financial assistance described in this paragraph is not considered annual income for persons over the age of 23 with dependent children. For purposes of this paragraph, “financial assistance” does not include loan proceeds for the purpose of determining income. HHS DEFINITION OF "ASSISTANCE" 45 CFR: GENERAL TEMPORARY ASSISTANCE FOR NEEDY FAMILIES 260.31 What does the term “assistance” mean? (a)(1) The term “assistance” includes cash, payments, vouchers, and other forms of benefits designed to meet a family’s ongoing basic needs (i.e., for food, clothing, shelter, utilities, household goods, personal care items, and general incidental expenses). (2) It includes such benefits even when they are: (i) Provided in the form of payments by a TANF agency, or other agency on its behalf, to individual recipients; and (ii) Conditioned on participation in work experience or community service (or any other work activity under 261.30 of this chapter). (3) Except where excluded under paragraph (b) of this section, it also includes supportive services such as transportation and child care provided to families who are not employed. (b) [The definition of “assistance”] excludes: (1) Nonrecurrent, short-term benefits that: (i) Are designed to deal with a specific crisis situation or episode of need; (ii) Are not intended to meet recurrent or ongoing needs; and (iii) Will not extend beyond four months. (2) Work subsidies (i.e., payments to employers or third parties to help cover the costs of employee wages, benefits, supervision, and training); (3) Supportive services such as child care and transportation provided to families who are employed; (4) Refundable earned income tax credits; (5) Contributions to, and distributions from, Individual Development Accounts; (6) Services such as counseling, case management, peer support, child care information and referral, transitional services, job retention, job advancement, and other employment-related services that do not provide basic income support; and (7) Transportation benefits provided under a Job Access or Reverse Commute project, pursuant to section 404(k) of [the Social Security] Act, to an individual who is not otherwise receiving assistance 173 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-103 EXHIBIT 6-21: ANNUAL INCOME EXCLUSIONSFULL DEFINITION 24 CFR 5.609 (a) Annual income includes, with respect to the family: (1) All amounts, not specifically excluded in paragraph (b) of this section, received from all sources by each member of the family who is 18 years of age or older or is the head of household or spouse of the head of household, plus unearned income by or on behalf of each dependent who is under 18 years of age, and (2) When the value of net family assets exceeds $50,000 (which amount HUD will adjust annually in accordance with the Consumer Price Index for Urban Wage Earners and Clerical Workers) and the actual returns from a given asset cannot be calculated, imputed returns on the asset based on the current passbook savings rate, as determined by HUD. (b)Annual income does not include the following: (1) Any imputed return on an asset when net family assets total $50,000 or less (which amount HUD will adjust annually in accordance with the Consumer Price Index for Urban Wage Earners and Clerical Workers) and no actual income from the net family assets can be determined. (2) The following types of trust distributions: (i) For an irrevocable trust or a revocable trust outside the control of the family or household excluded from the definition of net family assets under § 5.603(b): (A) Distributions of the principal or corpus of the trust; and (B) Distributions of income from the trust when the distributions are used to pay the costs of health and medical care expenses for a minor. (ii) For a revocable trust under the control of the family or household, any distributions from the trust; except that any actual income earned by the trust, regardless of whether it is distributed, shall be considered income to the family at the time it is received by the trust. (3) Earned income of children under the 18 years of age. (4) Payments received for the care of foster children or foster adults, or State or Tribal kinship or guardianship care payments. (5) Insurance payments and settlements for personal or property losses, including but not limited to payments through health insurance, motor vehicle insurance, and workers’ compensation. (6) Amounts received by the family that are specifically for, or in reimbursement of, the cost of health and medical care expenses for any family member. (7) Any amounts recovered in any civil action or settlement based on a claim of malpractice, negligence, or other breach of duty owed to a family member arising out of law, that resulted in a member of the family becoming disabled. (8) Income of a live-in aide, foster child, or foster adult as defined in §§ 5.403 and 5.603, respectively. (9) (i) Any assistance that section 479B of the Higher Education Act of 1965, as amended (20 U.S.C. 1087uu), requires be excluded from a family’s income; and 174 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-104 (ii) Student financial assistance for tuition, books, and supplies (including supplies and equipment to support students with learning disabilities or other disabilities), room and board, and other fees required and charged to a student by an institution of higher education (as defined under Section 102 of the Higher Education Act of 1965 (20 U.S.C. 1002)) and, for a student who is not the head of household or spouse, the reasonable and actual costs of housing while attending the institution of higher education and not residing in an assisted unit. (A) Student financial assistance, for purposes of this paragraph (9)(ii), means a grant or scholarship received from— ( 1) The Federal government; (2) A State, Tribe, or local government; (3) A private foundation registered as a nonprofit under 26 U.S.C. 501(c)(3); (4) A business entity (such as corporation, general partnership, limited liability company, limited partnership, joint venture, business trust, public benefit corporation, or nonprofit entity); or (5) An institution of higher education. (B) Student financial assistance, for purposes of this paragraph (9)(ii), does not include— (1) Any assistance that is excluded pursuant to paragraph (b)(9)(i) of this section; (2) Financial support provided to the student in the form of a fee for services performed (e.g., a work study or teaching fellowship that is not excluded pursuant to paragraph (b)(9)(i) of this section); ( 3) Gifts, including gifts from family or friends; or (4) Any amount of the scholarship or grant that, either by itself or in combination with assistance excluded under this paragraph or paragraph (b)(9)(i), exceeds the actual covered costs of the student. The actual covered costs of the student are the actual costs of tuition, books and supplies (including supplies and equipment to support students with learning disabilities or other disabilities), room and board, or other fees required and charged to a student by the education institution, and, for a student who is not the head of household or spouse, the reasonable and actual costs of housing while attending the institution of higher education and not residing in an assisted unit. This calculation is described further in paragraph (b)(9)(ii)€ of this section. (C) Student financial assistance, for purposes of this paragraph (b)(9)(ii) must be: (1) Expressly for tuition, books, room and board, or other fees required and charged to a student by the education institution; (2) Expressly to assist a student with the costs of higher education; or (3) Expressly to assist a student who is not the head of household or spouse with the reasonable and actual costs of housing while attending the education institution and not residing in an assisted unit. (D) Student financial assistance, for purposes of this paragraph (b)(9)(ii), may be paid directly to the student or to the educational institution on the student’s behalf. Student financial assistance paid to the student must be verified by the responsible entity as student financial assistance consistent with this paragraph (b)(9)(ii). (E) When the student is also receiving assistance excluded under paragraph (b)(9)(i) of this section, the amount of student financial assistance under this paragraph (b)(9)(ii) is determined as follows: 175 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-105 (1) If the amount of assistance excluded under paragraph (b)(9)(i) of this section is equal to or exceeds the actual covered costs under paragraph (b)(9)(ii)(B)(4) of this section, none of the assistance described in this paragraph (b)(9)(ii) of this section is considered student financial assistance excluded from income under this paragraph (b)(9)(ii)(E). (2) If the amount of assistance excluded under paragraph (b)(9)(i) of this section is less than the actual covered costs under paragraph (b)(9)(ii)(B)(4) of this section, the amount of assistance described in paragraph (b)(9)(ii) of this section that is considered student financial assistance excluded under this paragraph is the lower of: (i) the total amount of student financial assistance received under this paragraph (b)(9)(ii) of this section, or (ii) the amount by which the actual covered costs under paragraph (b)(9)(ii)(B)(4) of this section exceeds the assistance excluded under paragraph (b)(9)(i) of this section. (10) Income and distributions from any Coverdell education savings account under section 530 of the Internal Revenue Code of 1986 or any qualified tuition program under section 529 of such Code; and income earned by government contributions to, and distributions from, “baby bond” accounts created, authorized, or funded by Federal, State, or local government. (11) The special pay to a family member serving in the Armed Forces who is exposed to hostile fire. (12) (i) 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); (ii) Amounts received by a participant in other publicly assisted programs which are specifically for or in reimbursement of out-of- pocket expenses incurred (e.g., special equipment, clothing, transportation, child care, etc.) and which are made solely to allow participation in a specific program; (iii) Amounts received under a resident service stipend not to exceed $200 per month. A resident service stipend is a modest amount 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. (iv) Incremental earnings and benefits resulting to any family member from participation in training programs funded by HUD or in qualifying Federal, State, Tribal, 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 unless those amounts are excluded under paragraph (b)(9)(i) of this section. (13) 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. (14) Earned income of dependent fulltime students in excess of the amount of the deduction for a dependent in § 5.611. (15) Adoption assistance payments for a child in excess of the amount of the deduction for a dependent in § 5.611. 176 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-106 (16) Deferred periodic amounts from Supplemental Security Income and Social Security benefits that are received in a lump sum amount or in prospective monthly amounts, or any deferred Department of Veterans Affairs disability benefits that are received in a lump sum amount or in prospective monthly amounts. (17) Payments related to aid and attendance under 38 U.S.C. 1521 to veterans in need of regular aid and attendance. (18) 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. (19) Payments made by or authorized by a State Medicaid agency (including through a managed care entity) or other State or Federal agency to a family to enable a family member who has a disability to reside in the family’s assisted unit. Authorized payments may include payments to a member of the assisted family through the State Medicaid agency (including through a managed care entity) or other State or Federal agency for caregiving services the family member provides to enable a family member who has a disability to reside in the family’s assisted unit. (20) Loan proceeds (the net amount disbursed by a lender to or on behalf of a borrower, under the terms of a loan agreement) received by the family or a third party (e.g., proceeds received by the family from a private loan to enable attendance at an educational institution or to finance the purchase of a car). (21) Payments received by Tribal members as a result of claims relating to the mismanagement of assets held in trust by the United States, to the extent such payments are also excluded from gross income under the Internal Revenue Code or other Federal law. (22) Amounts that HUD is required by Federal statute to exclude 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 paragraph (b) of this section apply. HUD will publish a notice in the Federal Register to identify the benefits that qualify for this exclusion. Updates will be published when necessary. (23) Replacement housing “gap” payments made in accordance with 49 CFR part 24 that offset increased out of pocket costs of displaced persons that move from one federally subsidized housing unit to another Federally subsidized housing unit. Such replacement housing “gap” payments are not excluded from annual income if the increased cost of rent and utilities is subsequently reduced or eliminated, and the displaced person retains or continues to receive the replacement housing “gap” payments. (24) Nonrecurring income, which is income that will not be repeated in the coming year based on information provided by the family. Income received as an independent contractor, day laborer, or seasonal worker is not excluded from income under this paragraph, even if the source, date, or amount of the income varies. Nonrecurring income includes: (i) Payments from the U.S. Census Bureau for employment (relating to decennial census or the American Community Survey) lasting no longer than 180 days and not culminating in permanent employment. (ii) Direct Federal or State payments intended for economic stimulus or recovery. (iii) Amounts directly received by the family as a result of State refundable tax credits or State tax refunds at the time they are received. 177 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-107 (iv) Amounts directly received by the family as a result of Federal refundable tax credits and Federal tax refunds at the time they are received. (v) Gifts for holidays, birthdays, or other significant life events or milestones (e.g., wedding gifts, baby showers, anniversaries). (vi) Non-monetary, in-kind donations, such as food, clothing, or toiletries, received from a food bank or similar organization. (vii) Lump-sum additions to net family assets, including but not limited to lottery or other contest winnings. (25) Civil rights settlements or judgments, including settlements or judgments for back pay. (26) Income received from any account under a retirement plan recognized as such by the Internal Revenue Service, including individual retirement arrangements (IRAs), employer retirement plans, and retirement plans for self- employed individuals; except that any distribution of periodic payments from such accounts shall be income at the time they are received by the family. (27) Income earned on amounts placed in a family’s Family Self Sufficiency Account. (28) Gross income a family member receives through self-employment or operation of a business; except that the following shall be considered income to a family member: (i) 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; and (ii) 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. (c) Annual income does not include the following: (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 (except as provided in paragraph (b)(5) of this section); (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) Subject to paragraph (b)(9) of this section, 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; 178 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-108 (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 HA 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 HA'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, or any deferred Department of Veterans Affairs disability benefits that are received in a lump sum amount or 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. A notice will be published in the Federal Register and distributed to HAs and housing owners identifying the benefits that qualify for this exclusion. Updates will be published and distributed when necessary. [See the following chart for a list of benefits that qualify for this exclusion.] 179 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-109 EXHIBIT 6-23: TREATMENT OF FAMILY ASSETS 24 CFR 5.603(b) Net Family Assets (1) Net family assets is the net cash value of all assets owned by the family, after deducting reasonable costs that would be incurred in disposing real property, savings, stocks, bonds, and other forms of capital investment. (2) In determining net family assets, PHAs or owners, as applicable, must include the value of any business or family assets disposed of by an applicant or tenant for less than fair market value (including a disposition in trust, but not in a foreclosure or bankruptcy sale) during the two years preceding the date of application for the program or reexamination, as applicable, in excess of the consideration received therefor. In the case of a disposition as part of a separation or divorce settlement, the disposition will not be considered to be for less than fair market value if the applicant or tenant receives consideration not measurable in dollar terms. Negative equity in real property or other investments does not prohibit the owner from selling the property or other investments, so negative equity alone would not justify excluding the property or other investments from family assets. (3) Excluded from the calculation of net family assets are: (i) The value of necessary items of personal property; (ii) The combined value of all nonnecessary items of personal property if the combined total value does not exceed $50,000 (which amount will be adjusted by HUD in accordance with the Consumer Price Index for Urban Wage Earners and Clerical Workers); (iii) The value of any account under a retirement plan recognized as such by the Internal Revenue Service, including individual retirement arrangements (IRAs), employer retirement plans, and retirement plans for self-employed individuals; (iv) The value of real property that the family does not have the effective legal authority to sell in the jurisdiction in which the property is located; (v) Any amounts recovered in any civil action or settlement based on a claim of malpractice, negligence, or other breach of duty owed to a family member arising out of law, that resulted in a family member being a person with a disability; (vi) The value of any Coverdell education savings account under section 530 of the Internal Revenue Code of 1986, the value of any qualified tuition program under section 529 of such Code, the value of any Achieving a Better Life Experience (ABLE) account authorized under Section 529A of such Code, and the value of any “baby bond” account created, authorized, or funded by Federal, State, or local government. (vii) Interests in Indian trust land; (viii) Equity in a manufactured home where the family receives assistance under 24 CFR part 982; (ix) Equity in property under the Homeownership Option for which a family receives assistance under 24 CFR part 982; (x) Family Self-Sufficiency Accounts; and (xi) Federal tax refunds or refundable tax credits for a period of 12 months after receipt by the family. (4) In cases where a trust fund has been established and the trust is not revocable by, or under the control of, any member of the family or household, the trust fund is not a family asset and the value of the trust is not included in the calculation of net family assets, so long as the fund continues to be held in a trust that is not revocable by, or under the control of, any member of the family or household. (1) Net cash value after deducting reasonable costs that would be incurred in disposing of real property, savings, stocks, bonds, and other forms of capital investment, excluding interests in Indian trust land and excluding equity accounts in HUD homeownership programs. The value of necessary items of personal property such as furniture and automobiles shall be excluded. 180 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-110 (2) In cases where a trust fund has been established and the trust is not revocable by, or under the control of, any member of the family or household, the value of the trust fund will not be considered an asset so long as the fund continues to be held in trust. Any income distributed from the trust fund shall be counted when determining annual income under Sec. 5.609. (3) In determining net family assets, HAs or owners, as applicable, shall include the value of any business or family assets disposed of by an applicant or tenant for less than fair market value (including a disposition in trust, but not in a foreclosure or bankruptcy sale) during the two years preceding the date of application for the program or reexamination, as applicable, in excess of the consideration received therefor. In the case of a disposition as part of a separation or divorce settlement, the disposition will not be considered to be for less than fair market value if the applicant or tenant receives important consideration not measurable in dollar terms. (4) For purposes of determining annual income under Sec. 5.609, the term "net family assets'' does not include the value of a home currently being purchased with assistance under part 982, subpart M of this title. This exclusion is limited to the first 10 years after the purchase date of the home. 181 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-111 This page intentionally left blank 182 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-112 EXHIBIT 6-4: EARNED INCOME DISALLOWANCE 24 CFR 960.255 Self-sufficiency incentive–Disallowance of increase in annual income. (a) Definitions. The following definitions apply for purposes of this section. Baseline income. The annual income immediately prior to implementation of the disallowance described in paragraph (c)(1) of this section of a person who is a member of a qualified family. Disallowance. Exclusion from annual income. 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. Qualified family. A family residing in public housing: (i) Whose annual income increases as a result of employment of a family member who was unemployed for one or more years previous to employment; (ii) Whose annual income increases as a result of increased earnings by a family member during participation in any economic self-sufficiency or other job training program; or (iii) Whose annual income increases, as a result of new employment or increased earnings of a family member, during or within six months after receiving assistance, benefits or services under any state program for temporary assistance for needy families funded under Part A of Title IV of the Social Security Act, as determined by the HA in consultation with the local agencies administering temporary assistance for needy families (TANF) and Welfare-to-Work (WTW) programs. The TANF program is not limited to monthly income maintenance, but also includes such benefits and services as one-time payments, wage subsidies and transportation assistance—provided that the total amount over a six-month period is at least $500. (b) Disallowance of increase in annual income. (1) Initial twelve month exclusion. During the 12- month period beginning on the date on which a member of a qualified family is first employed or the family first experiences an increase in annual income attributable to employment, the PHA must exclude from the annual income (as defined in § 5.609 of this title) of a qualified family any increase in the income of the family member as a result of employment over the baseline income of that family member. (2) Phase-in of rent increase. Upon the expiration of the 12-month period defined in paragraph (b)(1) of this section and for the subsequent 12-month period, the PHA must exclude from the annual income of a qualified family at least 50 percent of any increase in income of such family member as a result of employment over the family member’s baseline income.. (3) Maximum 2-year disallowance. The disallowance of increased income of an individual family member as provided in paragraph (b)(1) or (b)(2) of this section is limited to a lifetime 24-month period. It applies for a maximum of 12 months for disallowance under paragraph (b)(1) of this section and a maximum of 12 months for disallowance under paragraph (b)(2) of this section, during the 24-month period starting from the initial exclusion under paragraph (b)(1) of this section. (4) Effect of changes on currently participating families. Families eligible for and participating in the disallowance of earned income under this section prior to May 9, 2016 will continue to be governed by this section in effect as it existed immediately prior to that date. (c) Inapplicability to admission. The disallowance of increases in income as a result of employment under this section does not apply for purposes of admission to the program (including the determination of income eligibility and income targeting). 183 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-113 (d) Individual Savings Accounts. As an alternative to the disallowance of increases in income as a result of employment described in paragraph (b) of this section, a HA may choose to provide for individual savings accounts for public housing residents who pay an income-based rent, in accordance with a written policy, which must include the following provisions: (1) The HA must advise the family that the savings account option is available; (2) At the option of the family, the HA must deposit in the savings account the total amount that would have been included in tenant rent payable to the HA as a result of increased income that is disallowed in accordance with paragraph (b) of this section; (3) Amounts deposited in a savings account may be withdrawn only for the purpose of: (i) Purchasing a home; (ii) Paying education costs of family members; (iii) Moving out of public or assisted housing; or (iv) Paying any other expense authorized by the HA for the purpose of promoting the economic self-sufficiency of residents of public housing; (4) The HA must maintain the account in an interest bearing investment and must credit the family with the net interest income, and the HA may not charge a fee for maintaining the account; (5) At least annually the HA must provide the family with a report on the status of the account; and (6) If the family moves out of public housing, the HA shall pay the tenant any balance in the account, minus any amounts owed to the HA 184 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-114 EXHIBIT 6-35: THE EFFECT OF WELFARE BENEFIT REDUCTION 24 CFR 5.615 Public housing program and Section 8 tenant-based assistance program: How welfare benefit reduction affects family income. (a) Applicability. This section applies to covered families who reside in public housing (part 960 of this title) or receive Section 8 tenant-based assistance (part 982 of this title). (b) Definitions. The following definitions apply for purposes of this section: Covered families. Families who receive welfare assistance or other public assistance benefits ("welfare benefits'') from a State or other public agency ("welfare agency'') under a program for which Federal, State, or local law requires that a member of the family must participate in an economic self-sufficiency program as a condition for such assistance. Economic self-sufficiency program. See definition at Sec. 5.603. Imputed welfare income. The amount of annual income not actually received by a family, as a result of a specified welfare benefit reduction, that is nonetheless included in the family's annual income for purposes of determining rent. Specified welfare benefit reduction. (1) A reduction of welfare benefits by the welfare agency, in whole or in part, for a family member, as determined by the welfare agency, because of fraud by a family member in connection with the welfare program; or because of welfare agency sanction against a family member for noncompliance with a welfare agency requirement to participate in an economic self-sufficiency program. (2) "Specified welfare benefit reduction'' does not include a reduction or termination of welfare benefits by the welfare agency: (i) at expiration of a lifetime or other time limit on the payment of welfare benefits; (ii) because a family member is not able to obtain employment, even though the family member has complied with welfare agency economic self- sufficiency or work activities requirements; or (iii) because a family member has not complied with other welfare agency requirements. (c) Imputed welfare income. (1) A family's annual income includes the amount of imputed welfare income (because of a specified welfare benefits reduction, as specified in notice to the HA by the welfare agency), plus the total amount of other annual income as determined in accordance with Sec. 5.609. (2) At the request of the HA, the welfare agency will inform the HA in writing of the amount and term of any specified welfare benefit reduction for a family member, and the reason for such reduction, and will also inform the HA of any subsequent changes in the term or amount of such specified welfare benefit reduction. The HA will use this information to determine the amount of imputed welfare income for a family. (3) A family's annual income includes imputed welfare income in family annual income, as determined at the HA's interim or regular reexamination of family income and composition, during the term of the welfare benefits reduction (as specified in information provided to the HA by the welfare agency). 185 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 6-115 (4) The amount of the imputed welfare income is offset by the amount of additional income a family receives that commences after the time the sanction was imposed. When such additional income from other sources is at least equal to the imputed (5) The HA may not include imputed welfare income in annual income if the family was not an assisted resident at the time of sanction. (d) Review of HA decision. (1) Public housing. If a public housing tenant claims that the HA has not correctly calculated the amount of imputed welfare income in accordance with HUD requirements, and if the HA denies the family's request to modify such amount, the HA shall give the tenant written notice of such denial, with a brief explanation of the basis for the HA determination of the amount of imputed welfare income. The HA notice shall also state that if the tenant does not agree with the HA determination, the tenant may request a grievance hearing in accordance with part 966, subpart B of this title to review the HA determination. The tenant is not required to pay an escrow deposit pursuant to Sec. 966.55(e) for the portion of tenant rent attributable to the imputed welfare income in order to obtain a grievance hearing on the HA determination. (2) Section 8 participant. A participant in the Section 8 tenant-based assistance program may request an informal hearing, in accordance with Sec. 982.555 of this title, to review the HA determination of the amount of imputed welfare income that must be included in the family's annual income in accordance with this section. If the family claims that such amount is not correctly calculated in accordance with HUD requirements, and if the HA denies the family's request to modify such amount, the HA shall give the family written notice of such denial, with a brief explanation of the basis for the HA determination of the amount of imputed welfare income. Such notice shall also state that if the family does not agree with the HA determination, the family may request an informal hearing on the determination under the HA hearing procedure. (e) HA relation with welfare agency. (1) The HA must ask welfare agencies to inform the HA of any specified welfare benefits reduction for a family member, the reason for such reduction, the term of any such reduction, and any subsequent welfare agency determination affecting the amount or term of a specified welfare benefits reduction. If the welfare agency determines a specified welfare benefits reduction for a family member, and gives the HA written notice of such reduction, the family's annual incomes shall include the imputed welfare income because of the specified welfare benefits reduction. (2) The HA is responsible for determining the amount of imputed welfare income that is included in the family's annual income as a result of a specified welfare benefits reduction as determined by the welfare agency, and specified in the notice by the welfare agency to the HA. However, the HA is not responsible for determining whether a reduction of welfare benefits by the welfare agency was correctly determined by the welfare agency in accordance with welfare program requirements and procedures, nor for providing the opportunity for review or hearing on such welfare agency determinations. (3) Such welfare agency determinations are the responsibility of the welfare agency, and the family may seek appeal of such determinations through the welfare agency's normal due process procedures. The HA shall be entitled to rely on the welfare agency notice to the HA of the welfare agency's determination of a specified welfare benefits reduction. 186 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 11/1/23 Unlimited copies may be made for internal use. Page 7-1 Chapter 7 This entire chapter has been updated VERIFICATION [24 CFR 960.259, 24 CFR 5.230, Notice PIH 2023-27] INTRODUCTION The PHA must verify all information that is used to establish the family’s eligibility and level of assistance and is required to obtain written authorization from the family in order to collect the information. Applicants and program participants must cooperate with the verification process as a condition of receiving assistance. The PHA must not pass on the cost of verification to the family. The PHA must follow the verification guidance provided by HUD in Notice PIH 2023-27 and any subsequent guidance issued by HUD. This chapter summarizes those requirements and provides supplementary PHA policies. Part I describes the general verification process. Part II provides more detailed requirements related to family information. Part III provides information on income and assets, and Part IV covers mandatory deductions. Verification policies, rules and procedures will be modified as needed to accommodate persons with disabilities. All information obtained through the verification process will be handled in accordance with the records management policies established by the PHA. PART I: GENERAL VERIFICATION REQUIREMENTS 7-I.A. FAMILY CONSENT TO RELEASE OF INFORMATION [24 CFR 960.259; 24 CFR 5.230; and Notice PIH 2023-27] Consent Forms The family must supply any information that the PHA or HUD determines is necessary to the administration of the program and must consent to PHA verification of that information [24 CFR 960.259(a)(1)]. All adult family members must sign consent forms as needed to collect information relevant to the family’s eligibility and level of assistance. While PHAs must use form HUD-9886, this form does not release all the information necessary to the administration of the program. The PHA must also develop its own release forms to cover all other necessary information. 187 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 11/1/23 Unlimited copies may be made for internal use. Page 7-2 Form HUD-9886 [24 CFR 5.230(b)(1), (b)(2), (c)(4), and (c)(5); Notice PIH 2023-27] All adult applicants and tenants must sign form HUD-9886, Authorization for Release of Information. All adult family members (and the head and spouse/cohead regardless of age) are required to sign the Form HUD-9886 at admission. Participants, prior to January 1, 2024, signed and submitted Form HUD-9886 at each annual reexamination. HOTMA eliminated this requirement and instead required that the Form HUD-9886 be signed only once. On or after January 1, 2024 (regardless of the PHA’s HOTMA compliance date), current program participants must sign and submit a new Form HUD-9886 at their next interim or annual reexamination. This form will only be signed once. Another Form HUD-9886 will not be submitted to the PHA except under the following circumstances:  When any person 18 years or older becomes a member of the family;  When a current member of the family turns 18; or  As required by HUD or the PHA in administrative instructions. The PHA has the discretion to establish policies around when family members must sign consent forms when they turn 18. PHAs must establish these policies stating when family members will be required to sign consent forms at intervals other than at reexamination. PHA Policy All adult family members are required to sign the Form HUD-9886 at annual recertification. The purpose of form HUD-9886 is to facilitate automated data collection and computer matching from specific sources and provides the family's consent only for the specific purposes listed on the form. HUD and the PHA may collect information from State Wage Information Collection Agencies (SWICAs) and current and former employers of adult family members. Only HUD is authorized to collect information directly from the Internal Revenue Service (IRS) and the Social Security Administration (SSA). The PHA may obtain any financial record from any financial institution, as the terms financial record and financial institution are defined in the Right to Financial Privacy Act (12 U.S.C. 3401), whenever the PHA determines the record is needed to determine an applicant’s or participant’s eligibility for assistance or level of benefits [24 CFR 5.230(c)(4)]. The executed form will remain effective until the family is denied assistance, assistance is terminated, or the family provides written notification to the PHA to revoke consent. 188 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 11/1/23 Unlimited copies may be made for internal use. Page 7-3 Penalties for Failing to Consent [24 CFR 5.232] If any family member who is required to sign a consent form fails to do so, the PHA must deny admission to applicants and terminate the lease of tenants [24 CFR 5.232(a)]. The family may request a hearing in accordance with the PHA's grievance procedures. However, this does not apply if the applicant, participant, or any member of their family, revokes their consent with respect to the ability of the PHA to access financial records from financial institutions, unless the PHA establishes a policy that revocation of consent to access financial records will result in denial or termination of assistance or admission [24 CFR 5.232(c)]. PHAs may not process interim or annual reexaminations of income without the family’s executed consent forms. PHA Policy The PHA has established a policy that revocation of consent to access financial records will result in denial of admission or termination of assistance in accordance with PHA policy. In order for a family to revoke their consent, the family must provide written notice to the PHA. Within 10 business days of the date the family provides written notice, the PHA will send the family a notice acknowledging receipt of the request and explaining that revocation of consent will result in denial or termination of assistance, as applicable. At the same time, the PHA will notify the local HUD office. 189 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 11/1/23 Unlimited copies may be made for internal use. Page 7-4 7-I.B. USE OF OTHER PROGRAMS’ INCOME DETERMINATIONS [24 CFR 5.609(c)(3) and Notice PIH 2023-27] PHAs may, but are not required to, determine a family’s annual income, including income from assets, prior to the application of any deductions, based on income determinations made within the previous 12-month period, using income determinations from means-tested federal public assistance programs. PHAs are not required to accept or use determinations of income from other federal means-tested forms of assistance. If the PHA adopts a policy to accept this type of verification, the PHA must establish in policy when they will accept Safe Harbor income determinations and from which programs. PHAs must also create policies that outline the course of action when families present multiple verifications from the same or different acceptable Safe Harbor programs. Means-tested federal public assistance programs include:  Temporary Assistance for Needy Families (TANF) (42 U.S.C. 601, et seq.);  Medicaid (42 U.S.C. 1396 et seq.);  Supplemental Nutrition Assistance Program (SNAP) (42 U.S.C. 2011 et seq.);  Earned Income Tax Credit (EITC) (26 U.S.C. 32);  Low-Income Housing Credit (LIHTC) program (26 U.S.C. 42);  Special Supplemental Nutrition Program for Woman, Infants, and Children (WIC) (42 U.S.C. 1786);  Supplemental Security Income (SSI) (42 U.S.C. 1381 et seq.);  Other programs administered by the HUD Secretary;  Other means-tested forms of federal public assistance for which HUD has established a memorandum of understanding; and  Other federal benefit determinations made in other forms of means-tested federal public assistance that the Secretary determines to have comparable reliability and announces through the Federal Register. 190 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 11/1/23 Unlimited copies may be made for internal use. Page 7-5 If the PHA elects to use the annual income determination from one of the above-listed forms of means-tested federal public assistance, then they must obtain the income information by means of a third-party verification. The third-party verification must state the family size, must be for the entire family, and must state the amount of the family’s annual income. The annual income need not be broken down by family member or income type. Annual income includes income earned from assets, therefore when using Safe Harbor to verify a family’s income, PHAs will neither further inquire about a family’s net family assets, nor about the income earned from those assets, except with respect to whether or not the family owns assets that exceed the asset limitation in 24 CFR 5.618. The Safe Harbor documentation will be considered acceptable if any of the following dates fall into the 12-month period prior to the receipt of the documentation by the PHA:  Income determination effective date;  Program administrator’s signature date;  Family’s signature date;  Report effective date; or  Other report-specific dates that verify the income determination date. The only information that PHAs are permitted to use to determine income under this method is the total income determination made by the federal means-tested program administrator. Other federal programs may provide additional information about income inclusions and exclusions in their award letters; however, these determinations and any other information must not be considered by the PHA. PHAs are not permitted to mix and match Safe Harbor income determinations and other income verifications. If the PHA is unable to obtain Safe Harbor documentation or if the family disputes the other program’s income determination, the PHA must calculate the family’s annual income using traditional methods as outlined in Notice PIH 2023-27 and this chapter. If the PHA uses a Safe Harbor determination to determine the family’s income, the family is obligated to report changes in income that meet the PHA’s reporting requirement and occur after the effective date of the transaction. 191 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 11/1/23 Unlimited copies may be made for internal use. Page 7-6 The amounts of unreimbursed reasonable attendant care expenses and child-care expenses deducted from a family’s annual income, except for when a family is approved for a child-care expense hardship exemption, must still be capped by the amount earned by any family member who is enabled to work as a result of the expense. PHAs are therefore required to obtain third- party verification of the applicable employment income and cap the respective expense deductions accordingly. PHA Policy The Housing Authority will not accept other programs’ Safe Harbor determinations of income. 192 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 11/1/23 Unlimited copies may be made for internal use. Page 7-7 7-I.C. STREAMLINED INCOME DETERMINATIONS [24 CFR 960.257(c); Notice PIH 2023-27] HUD permits PHAs to streamline the income determination process for family members with fixed sources of income. While third-party verification of all income sources must be obtained during the intake process and every three years thereafter, in the intervening years, the PHA may determine income from fixed sources by applying a verified cost of living adjustment (COLA) or other inflationary adjustment factor. Streamlining policies are optional. The PHA may, however, obtain third-party verification of all income, regardless of the source. Further, upon request of the family, the PHA must perform third-party verification of all income sources. Fixed sources of income include Social Security and SSI benefits, pensions, annuities, disability or death benefits, and other sources of income subject to a COLA or rate of interest. The determination of fixed income may be streamlined even if the family also receives income from other non-fixed sources. Two streamlining options are available, depending upon the percentage of the family’s income that is received from fixed sources. When 90 percent or more of a family’s unadjusted income is from fixed sources, the PHA may apply the inflationary adjustment factor to the family’s fixed-income sources, provided that the family certifies both that 90 percent or more of their unadjusted income is fixed and that their sources of fixed income have not changed from the previous year. Sources of non-fixed income are not required to be adjusted and must not be adjusted by a COLA, but PHAs may choose to adjust sources of non-fixed income based on third-party verification. PHAs have the discretion to either adjust the non-fixed income or carry over the calculation of non-fixed income from the first year to years two and three. 193 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 11/1/23 Unlimited copies may be made for internal use. Page 7-8 When less than 90 percent of a family’s unadjusted income consists of fixed income, PHAs may apply a COLA to each of the family’s sources of fixed income. PHAs must determine all other income using standard verification requirements as outlined in Notice PIH 2023-27. PHA Policy The PHA chooses not to streamline the annual reexamination process for fixed-income sources. The PHA will obtain third-party verification, where applicable, of all sources of income annually in accordance with PHA polices in the chapter and HUD regulations. 194 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 11/1/23 Unlimited copies may be made for internal use. Page 7-9 7-I.D. VERIFICATION HIERARCHY [Notice PIH 2023-27] When the PHA does not use a streamlined determination of income or an income determination from a means-tested federal assistance program, HUD requires the PHA to obtain third-party verification of:  Reported family annual income;  The value of net family assets when the net value exceeds $50,000 (as adjusted annually);  Expenses related to deductions from annual income; and  Other factors that affect the determination of adjusted income. HUD mandates the use of the EIV system and offers administrative guidance on the use of other methods to verify family information and specifies the circumstances in which each method will be used. In general, HUD requires the PHA to use the most reliable form of verification that is available and to document the reasons when the PHA uses a lesser form of verification. HUD developed a hierarchy that described verification documentation from most acceptable to least acceptable. The PHA must demonstrate efforts to obtain third party verification prior to accepting self-certification except instances when self-certification is explicitly allowed. In order of priority, the hierarchy is:  Highest: Level 6: Up-front Income Verification (UIV) using HUD’s Enterprise Income Verification (EIV) system  Highest: Level 5: Up-front Income Verification (UIV) using a non-EIV system  High: Level 4: - Written third-party verification from the source, also known as “tenant-provided verification” - Or EIV plus self-certification  Medium: Level 3: Written third-party verification form  Medium: Level 2: Oral third-party verification  Low: Level 1: Self-certification (not third-party verification) Each of the verification methods is discussed in subsequent sections below. File Documentation The PHA must document in the file how the figures used in income and rent calculations were determined. All verification attempts, information obtained, and decisions reached during the verification process will be recorded in the family’s file in sufficient detail to demonstrate that the PHA has followed all of the verification policies set forth in this ACOP. The record should be sufficient to enable a staff member or HUD reviewer to understand the process followed and conclusions reached. 195 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 11/1/23 Unlimited copies may be made for internal use. Page 7-10 7-I.E. LEVEL 5 AND 6 VERIFICATION: UP-FRONT INCOME VERIFICATION (UIV) Up-front income verification (UIV) refers to the PHA’s use of the verification tools available from independent sources that maintain computerized information about earnings and benefits for a number of individuals. PHAs may use UIV sources before or during a family reexamination. UIV will be used to the extent that these systems are available to the PHA. There may be legitimate differences between the information provided by the family and UIV- generated information. If the family disputes the accuracy of UIV data, no adverse action can be taken until the PHA has independently verified the UIV information and the family has been granted the opportunity to contest any adverse findings through the PHA's informal review/hearing processes. Upfront Income Verification Using HUD’s Enterprise Income Verification (EIV) System PHAs must use HUD’s EIV system in its entirety as a third-party source to verify tenant employment and income information during annual and streamlined reexaminations of family composition and income in accordance with 24 CFR 5.236 and Notice PIH 2023-27. HUD’s EIV system contains data showing earned income, unemployment benefits, social security benefits, and SSI benefits for participant families. The income validation tool (IVT) in EIV provides projections of discrepant income for wages, unemployment compensation, and SSA benefits pursuant to HUD’s data sharing agreements with other departments. The following policies apply to the use of HUD’s EIV system. EIV Income and IVT Reports PHAs are required to obtain an EIV Income and IVT report for each family any time the PHA conducts an annual reexamination. However, PHAs are not required to use the EIV Income and IVT reports:  At annual reexamination if the PHA used Safe Harbor verification from another means-test federal assistance program to determine the family’s income; or  During any interim reexaminations. The EIV Income and IVT Reports are also not available for program applicants at admission. When required to use the EIV Income Report, in order for the report to be considered current, the PHA must pull the report within 120 days of the effective date of the annual reexamination. 196 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 11/1/23 Unlimited copies may be made for internal use. Page 7-11 The EIV Income Report may be used to verify and calculate income at annual reexamination if the family self-certifies that the amount is accurate and representative of current income. The family must be provided with the information in EIV. PHA Policy The HA will obtain EIV Income and IVT reports for all annual reexaminations for all families on a monthly basis. Reports will be generated as part of the regular reexamination process. The PHA will ensure that all EIV Income Reports are pulled within 120 days of the effective date of the annual reexamination. Income and IVT reports will only be used for interim reexaminations as necessary. For example, EIV may be used to verify that families claiming zero income are not receiving income from any sources listed in EIV. Income and IVT reports will be retained in resident files with the applicable annual documents or interim reexamination documents (if applicable) for the duration of tenancy. When the PHA determines through EIV reports and third-party verification that a family has concealed or under-reported income, corrective action will be taken pursuant to the policies in Chapter 15, Program Integrity. New Hires Report [Notice PIH 2023-27] The New Hires Report identifies participant families who have new employment within the last six months. The report is updated monthly. PHAs must review this information at annual reexamination except when the PHA uses Safe Harbor verification from another means-tested federal assistance program to determine the family’s income. PHAs that do not require families to undergo interim reexaminations for earned income increases after an interim decrease are not required to review this report between a family’s annual reexamination. If the PHA requires an interim for increases in earned income after an interim decrease, then the PHA must review the report quarterly after the family’s interim decrease. PHA Policy In accordance with PHA policies in Chapter 9, the PHA processes an interim reexamination for families who have increases in earned income when there was a previous decrease. The PHA will review the report quarterly. 197 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 11/1/23 Unlimited copies may be made for internal use. Page 7-12 No Income Reported by HHS or SSA Report This report is a tool for PHAs to identify participants who passed the SSA identity test, but no income information was reported by either HHS or SSA records. This scenario does not mean that they tenant does not have any income. PHAs obtain written, third-party verification of any income reported by the tenant. The PHA must identify in its policies and procedures when this report will be pulled [Notice PIH 2023-27]. PHA Policy The PHA will generate the No Income Reported by HHS or SSA Report quarterly and will retain the report. The PHA will re-verify the status of tenants identified on the report quarterly. Based on the information provided by the family and in EIV, the PHA may require that family members provide verifications or sign release forms in order to obtain additional verification. When the PHA determines through this report and third-party verification that a family has concealed or under-reported income, corrective action will be taken pursuant to the policies in Chapter 15, Program Integrity. EIV Identity Verification Report The EIV system verifies resident identities against Social Security Administration (SSA) records. These records are compared to HUD data for a match on social security number, name, and date of birth. PHAs are required to use EIV’s Identity Verification Report on a monthly basis to improve the availability of income information in EIV [Notice PIH 2023-27]. When identity verification for a resident fails, a message will be displayed within the EIV system and no income information will be displayed. PHA Policy The PHA will identify residents whose identity verification has failed by reviewing EIV’s Identity Verification Report on a monthly basis. The PHA will attempt to resolve discrepancies by obtaining appropriate documentation from the tenant. When the PHA determines that discrepancies exist as a result of PHA errors, such as spelling errors or incorrect birth dates, it will correct the errors promptly. 198 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 11/1/23 Unlimited copies may be made for internal use. Page 7-13 Deceased Tenants Reports [Notice PIH 2012-4 and Notice PIH 2023-27] The Deceased Tenant Report identifies residents that have been reported by the SSA as deceased. The PHA is required to review the report at least quarterly. PHA Policy The PHA will review the Deceased Tenants Report on a monthly basis. When the Deceased Tenants Report identifies an individual as being deceased, PHAs must immediately send a letter to the head of household or emergency contact person (if the head of household is deceased and there is no other adult household member) to confirm the death of the listed household member. The PHA must conduct a home visit to determine if anyone is residing in the unit. PHAs are required to list the move-out date for the family as of the date on which the family or designee of the deceased tenant’s estate returned the keys and signed a vacate notice; the date the public housing lease was terminated; or the date the PHA legally regained possession of the unit, whichever occurs first. When the only remaining household member is the live-in aide, the live-in aide is not entitled or eligible for continued occupancy. The PHA may not designate the live-in aide as the new head of household or change the relation code on the Form HUD-50058. Other EIV Reports [Notice PIH 2023-27] The PHA is required to review the Multiple Subsidy Report at least quarterly and the Failed EIV Pre-Screening and Failed Verification (Failed SSA Identity Test) reports at least monthly. Upfront Income Verification Using Non-HUD Systems HUD encourages PHAs to utilize other upfront verification sources such as the Work Number and web-based state benefits systems. PHA Policy The PHA will inform all applicants and residents of its use of the following UIV resources: HUD’s EIV system 199 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 11/1/23 Unlimited copies may be made for internal use. Page 7-14 7-I.F. LEVEL 4 VERIFICATION [Notice PIH 2023-27] HUD identifies two types of Level 4 verification: written-third party verification from the source and EIV + self-certification. EIV + Self-Certification EIV may be used as written third-party verification and may be used to calculate income if the family agrees with the information in EIV and self-certifies that the amount is accurate and representative of current income. This practice is known as EIV + self-certification. When calculating income using this method, the PHA may use its discretion to determine which method of calculation is reasonable: the last four quarters combined or an average of any number of quarters. The family must be provided with the information from EIV. PHA Policy At annual reexamination, if there are no reported changes to an income source, the PHA will use EIV + self-certification as verification of employment income, provided the family agrees with the amounts listed in EIV. The PHA will use an average of the last two quarters of income listed in EIV to determine income from employment. The PHA will provide the family with the information in EIV. The family will be required to sign a self-certification stating that the amount listed in EIV is accurate and representative of current income. If the family disagrees with the amount in EIV, the amount is not reflective of current income, or if less than two quarters are available in EIV, the PHA will use written third-party verification from the source as outlined below. The PHA will not use this method of verification at new admission since EIV is not available for applicant families or at interim reexamination since the income information in EIV is not current. Written Third-Party Verification from the Source Written, third-party verification from the source is also known as “tenant-provided verification.” In order to qualify as written-third party verification from the source, the documents must be original or authentic and (generally) dated within 120 days of the date received by the PHA. For fixed-income sources, a statement dated within the appropriate benefit year is acceptable documentation. Documents may be supplied by the family or received from a third-party source. Examples of acceptable tenant-provided documents include, but are not limited to pay stubs, payroll summary reports, employer notice or letters of hire and termination, SSA benefit verification letters, bank statements, child support payment stubs, welfare benefit letters and/or printouts, and unemployment monetary benefit notices. Income tax returns with corresponding official tax forms and schedules attached and including third-party receipt of transmission for income tax return filed (i.e., tax preparer’s transmittal receipt, summary of transmittal from online source, etc.) are an acceptable form of written, third-party verification. 200 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 11/1/23 Unlimited copies may be made for internal use. Page 7-15 The PHA is required to obtain, at minimum, two current and consecutive pay stubs when calculating income using third-party verification from the source. For new income sources or when two pay stubs are not available, the PHA should determine income based on the information from a traditional written, third-party verification form or the best available information. When the family disputes EIV-reported employment income, the PHA uses written third-party verification. When verification of assets is required, PHAs are required to obtain a minimum of one statement that reflects the current balance of banking/financial accounts. PHA Policy In general, the PHA will use third-party verification from the source in the following circumstances: At annual reexamination when EIV + self-certification is not used; For all new admissions; and For all interim reexaminations. The PHA will not use this method if the PHA is able to use an income determination from a means-tested federal assistance program or if the PHA uses EIV + self- certification as outlined above. In general, third-party documents provided by the family or the source must be dated within 120 days of the date received by the PHA. However, for fixed-income sources, a statement dated within the appropriate benefit year is acceptable documentation. The PHA may reject documentation provided by the family if the document is not an original, if the document appears to be forged, or if the document is altered, mutilated, or illegible. If the PHA determines that third-party documents provided by the family are not acceptable, the PHA will explain the reason to the family and request additional documentation from the family or will use a lower form of verification such as a written third-party verification form. When verification of assets held by a banking or financial institution is required, the PHA will obtain one statement that reflects the current balance of the account. When pay stubs are used, the PHA will require the family to provide the two most current, consecutive pay stubs. At the PHA’s discretion, if additional paystubs are needed due to the family’s circumstances (e.g., sporadic income, fluctuating schedule, etc.), the PHA may request additional paystubs or a payroll record. 201 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 11/1/23 Unlimited copies may be made for internal use. Page 7-16 7-I.G. LEVEL 3 VERIFICATION: WRITTEN, THIRD-PARTY FORM [Notice PIH 2023-27] This type of verification is a form developed by the PHA and used uniformly for all families when needed to collect information from a third-party source. This is known as “traditional third- party verification.” PHAs send a PHA-developed form directly to the third-party source by mail, fax, or email and the source completes the form by hand (in writing or typeset). The PHA may use this method when higher forms are unavailable or are rejected by the PHA or when the family is unable to provide acceptable verification. The PHA may skip this level of verification and may instead substitute oral third-party verification before moving to self- certification. PHA Policy Typically, the PHA will attempt to send written third-party verification forms to the verification source whenever higher forms of verification are unavailable. However, on a case-by-case basis, the PHA may choose to obtain oral third-party verification without first attempting, and in lieu of, a written-third party verification form. 202 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 11/1/23 Unlimited copies may be made for internal use. Page 7-17 7-I.H. LEVEL 2: ORAL THIRD-PARTY VERIFICATION [Notice PIH 2023-27] For third-party oral verification, PHAs contact sources, identified by UIV techniques or by the family, by telephone or in person. Third-party oral verification may be used when requests for written third-party verification forms have not been returned within a reasonable time—e.g., 10 business days. PHAs must document in the file the date and time of the telephone call or visit, the name of the person contacted, the telephone number, as well as the information confirmed. The PHA may skip this level of verification if they attempted written third-party verification via a form and the source did not respond and move directly to self-certification. PHA Policy In general, the PHA will attempt to obtain written third-party verification via a form from the verification source. If written third-party verification forms are not returned within 10 business days, the PHA will accept self-certification from the family without attempting to obtain oral third-party verification. However, if the PHA chooses to obtain oral third-party verification, the PHA will document in the file the date and time of the telephone call or visit, the name of the person contacted and the telephone number, as well as the information confirmed. When Third-Party Verification is Not Required [Notice PIH 2023-27] Third-party verification may not be available in all situations. HUD has acknowledged that it may not be cost-effective or reasonable to obtain third-party verification of income, assets, or expenses when these items would have a minimal impact on the family’s total tenant payment. PHA Policy If the family cannot provide original documents, the PHA will pay the service charge required to obtain third-party verification, unless it is not cost effective in which case a self-certification will be acceptable as the only means of verification. The cost of verification will not be passed on to the family. The cost of postage and envelopes to obtain third-party verification of income, assets, and expenses is not an unreasonable cost [VG, p. 18]. Primary Documents Third-party verification is not required when legal documents are the primary source, such as a birth certificate or other legal documentation of birth. 203 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 11/1/23 Unlimited copies may be made for internal use. Page 7-18 7-I.I. LEVEL 1: NON-THIRD-PARTY VERIFICATION TECHNIQUE: SELF- CERTIFICATION [Notice PIH 2023-27] Non-third-party verification consists of a signed statement of reported income and/or expenses. This verification method should be used as a last resort when the PHA has not been successful in obtaining information via all other required verification techniques. Self-certification, however, is an acceptable form of verification when:  A source of income is fully excluded;  Net family assets total $50,000 or less and the PHA has adopted a policy to accept self- certification;  The family declares that they do not have any present ownership in any real property;  A family states that they have non-recurring income that will not be repeated in the coming year; and/or  The PHA has adopted a policy to implement streamlined annual recertifications for fixed sources of income. When the PHA was required to obtain third-party verification but instead relies on self- certification, the family’s file must be documented to explain why third-party verification was not available. HUD does not require that a self-certification be notarized; however, HUD recommends including language on any self-certification to ensure the certifier understands the consequences of knowingly providing false information. PHA Policy When information cannot be verified by a third party or by review of documents, family members will be required to submit self-certifications attesting to the accuracy of the information they have provided to the PHA. The PHA may require a family to certify that a family member does not receive a particular type of income or benefit. The self-certification must be made in a format acceptable to the PHA and must be signed by the family member whose information or status is being verified. All self-certifications will include the following language: “I/We, the undersigned, certify under penalty of perjury that the information provided here is true and correct, to the best of my knowledge and recollection. WARNING: Anyone who knowingly submits a false claim or knowingly makes a false statement is subject to criminal and/or civil penalties, including confinement for up to five years, fines, and civil and administrative penalties (18 U.S.C. 287, 1001, 1010, 1012; 31 U.S.C. 3279, 3802).” 204 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 11/1/23 Unlimited copies may be made for internal use. Page 7-19 205 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 11/1/23 Unlimited copies may be made for internal use. Page 7-20 PART II: VERIFYING FAMILY INFORMATION 7-II.A. VERIFICATION OF LEGAL IDENTITY PHA Policy The PHA will require families to furnish verification of legal identity for each household member. Verification of Legal Identity for Adults Verification of Legal Identity for Children Certificate of birth, naturalization papers Church issued baptismal certificate Current, valid driver’s license or Department of Motor Vehicle identification card U.S. military discharge (DD 214) Current U.S. passport Current government employer identification card with picture Certificate of birth Adoption papers Custody agreement Health and Human Services ID Certified school records Student ID If a document submitted by a family is illegible for any reason or otherwise questionable, more than one of these documents may be required. If none of these documents can be provided and at the PHA’s discretion, a third party who knows the person may attest to the person’s identity. The certification must be provided in a format acceptable to the PHA and be signed by the family member whose information or status is being verified. Legal identity will be verified for all applicants at the time of eligibility determination and in cases where the PHA has reason to doubt the identity of a person representing themselves to be a tenant or a member of a tenant family. 206 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 11/1/23 Unlimited copies may be made for internal use. Page 7-21 7-II.B. SOCIAL SECURITY NUMBERS [24 CFR 5.216 and Notice PIH 2023-27] The family must provide documentation of a valid Social Security number (SSN) for each member of the household, with the exception of individuals who do not contend eligible immigration status. Exemptions also include, existing residents who were at least 62 years of age as of January 31, 2010, and had not previously disclosed an SSN. The PHA must accept the following documentation as acceptable evidence of the social security number:  An original SSN card issued by the Social Security Administration (SSA)  An original SSA-issued document, which contains the name and SSN of the individual  An original document issued by a federal, state, or local government agency, which contains the name and SSN of the individual While PHAs must attempt to gather third-party verification of SSNs prior to admission as listed above, PHAs also have the option of accepting a self-certification and a third-party document (such as a bank statement, utility or cell phone bill, or benefit letter) with the applicant’s name printed on it to satisfy the SSN disclosure requirement if the PHA has exhausted all other attempts to obtain the required documentation. If verifying an individual’s SSN using this method, the PHA must document why the other SSN documentation was not available. If the tenant’s SSN becomes verified in EIV, then no further verification is required. If the tenant’s SSN fails the SSA identity match, then the PHA must obtain a valid SSN card issued by the SSA or an original document issued by a federal or state government agency that contains the name of the individual and the SSN of the individual, along with other identifying information of the individual. The tenant’s assistance must be terminated if they fail to provide the required documentation. PHA Policy The PHA will verify an individual’s SSN in the situations described above using the method described above as a last resort when no other forms of verification of the individual’s SSN are available. The PHA may only reject documentation of an SSN provided by an applicant or resident if the document is not an original document, if the original document has been altered, mutilated, is illegible, or if the document appears to be forged. PHA Policy The PHA will explain to the applicant or resident the reasons the document is not acceptable and request that the individual obtain and submit acceptable documentation of the SSN to the PHA within 90 days. 207 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 11/1/23 Unlimited copies may be made for internal use. Page 7-22 If an applicant family includes a child under 6 years of age who joined the household within the 6 months prior to the date of program admission, an otherwise eligible family may be admitted and must provide documentation of the child’s SSN within 90 days. A 90-day extension will be granted if the PHA determines that the resident’s failure to comply was due to unforeseen circumstances and was outside of the resident’s control. PHA Policy The PHA will grant one additional 90-day extension if needed for reasons beyond the applicant’s control, such as delayed processing of the SSN application by the SSA, natural disaster, fire, death in the family, or other emergency. When a resident requests to add a new household member who is at least 6 years of age, or who is under the age of 6 and has an SSN, the resident must provide the complete and accurate SSN assigned to each new member at the time of reexamination or recertification, in addition to the documentation required to verify it. The PHA may not add the new household member until such documentation is provided. When a resident requests to add a new household member who is under the age of 6 and has not been assigned an SSN, the resident must provide the SSN assigned to each new child and the required documentation within 90 calendar days of the child being added to the household. A 90- day extension will be granted if the PHA determines that the resident’s failure to comply was due to unforeseen circumstances and was outside of the resident’s control. During the period the PHA is awaiting documentation of the SSN, the child will be counted as part of the assisted household. PHA Policy The PHA will grant one additional 90-day extension if needed for reasons beyond the resident’s control such as delayed processing of the SSN application by the SSA, natural disaster, fire, death in the family, or other emergency. Social security numbers must be verified only once during continuously assisted occupancy. PHA Policy The PHA will verify each disclosed SSN by: Obtaining documentation from applicants and residents that is acceptable as evidence of social security numbers Making a copy of the original documentation submitted, returning it to the individual, and retaining a copy in the file folder Once the individual’s verification status is classified as “verified,” the PHA may, at its discretion, remove and destroy copies of documentation accepted as evidence of social security numbers. The retention of the EIV Summary Report or Income Report is adequate documentation of an individual’s SSN. PHA Policy Once an individual’s status is classified as “verified” in HUD’s EIV system, the PHA will not remove and destroy copies of documentation accepted as evidence of social security numbers. 208 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 11/1/23 Unlimited copies may be made for internal use. Page 7-23 7-II.C. DOCUMENTATION OF AGE A birth certificate or other official record of birth is the preferred form of age verification for all family members. For elderly family members an original document that provides evidence of the receipt of social security retirement benefits is acceptable. PHA Policy If an official record of birth or evidence of social security retirement benefits cannot be provided, the PHA will require the family to submit other documents that support the reported age of the family member (e.g., school records, driver's license if birth year is recorded) and to provide a self-certification. Age must be verified only once during continuously assisted occupancy. 209 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 11/1/23 Unlimited copies may be made for internal use. Page 7-24 7-II.D. FAMILY RELATIONSHIPS Applicants and tenants are required to identify the relationship of each household member to the head of household. Definitions of the primary household relationships are provided in the Eligibility chapter. PHA Policy Family relationships are verified only to the extent necessary to determine a family’s eligibility and level of assistance. Certification by the head of household normally is sufficient verification of family relationships. Marriage PHA Policy Certification by the head of household is normally sufficient verification. If the PHA has reasonable doubts about a marital relationship, the PHA will require the family to document the marriage with a marriage certificate or other documentation to verify that the couple is married. In the case of a common law marriage, the couple must demonstrate that they hold themselves to be married (e.g., by telling the community they are married, calling each other husband and wife, using the same last name, filing joint income tax returns). Separation or Divorce PHA Policy Certification by the head of household is normally sufficient verification. If the PHA has reasonable doubts about a divorce or separation, the PHA will require the family to provide documentation of the divorce or separation with a certified copy of a divorce decree, signed by a court officer; a copy of a court-ordered maintenance or other court record; or other documentation that shows a couple is divorced or separated. If no court document is available, documentation from a community-based agency will be accepted. Absence of Adult Member PHA Policy If an adult member who was formerly a member of the household is reported to be permanently absent, the family must provide evidence to support that the person is no longer a member of the family (e.g., documentation of another address at which the person resides such as a lease or utility bill), if the PHA so requests. Foster Children and Foster Adults PHA Policy Third-party verification from the state or local government agency responsible for the placement of the individual with the family is required. 210 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 11/1/23 Unlimited copies may be made for internal use. Page 7-25 7-II.E. VERIFICATION OF STUDENT STATUS PHA Policy The PHA requires families to provide information about the student status of all students who are 18 years of age or older. This information will be verified only if: The family claims full-time student status for an adult other than the head, spouse, or cohead, or The family claims a child care deduction to enable a family member to further their education. 7-II.F. DOCUMENTATION OF DISABILITY The PHA must verify the existence of a disability in order to allow certain income disallowances and deductions from income. The PHA is not permitted to inquire about the nature or extent of a person’s disability [24 CFR 100.202(c)]. The PHA may not inquire about a person’s diagnosis or details of treatment for a disability or medical condition. If the PHA receives a verification document that provides such information, the PHA will not place this information in the tenant file. Under no circumstances will the PHA request a resident’s medical record(s). For more information on health care privacy laws, see the Department of Health and Human Services’ Web site at www.os.dhhs.gov. The PHA may make the following inquiries, provided it makes them of all applicants, whether or not they are persons with disabilities [VG, p. 24]:  Inquiry into an applicant’s ability to meet the requirements of ownership or tenancy  Inquiry to determine whether an applicant is qualified for a dwelling available only to persons with disabilities or to persons with a particular type of disability  Inquiry to determine whether an applicant for a dwelling is qualified for a priority available to persons with disabilities or to persons with a particular type of disability  Inquiry about whether an applicant for a dwelling is a current illegal abuser or addict of a controlled substance  Inquiry about whether an applicant has been convicted of the illegal manufacture or distribution of a controlled substance 211 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 11/1/23 Unlimited copies may be made for internal use. Page 7-26 Family Members Receiving SSA Disability Benefits Verification of receipt of disability benefits from the Social Security Administration (SSA) is sufficient for verification of disability for the purpose of qualification for waiting list preferences or certain income disallowances and deductions [VG, p. 23]. PHA Policy For family members claiming disability who receive disability payments from the SSA, the PHA will attempt to obtain information about disability benefits through HUD’s Enterprise Income Verification (EIV) system. If documentation is not available through HUD’s EIV system, the PHA will request a current (dated within the last 60 days) SSA benefit verification letter from each family member claiming disability status. If a family member is unable to provide the document, the PHA will ask the family to obtain a benefit verification letter either by calling SSA at 1-800-772-1213 or by requesting one from www.ssa.gov. Once the family receives the benefit verification letter, they will be required to provide the letter to the PHA. Family Members Not Receiving SSA Disability Benefits Receipt of veteran’s disability benefits, worker’s compensation, or other non-SSA benefits based on the individual’s claimed disability are not sufficient verification that the individual meets HUD’s definition of disability in 24 CFR 5.403, necessary to qualify for waiting list preferences or certain income disallowances and deductions. PHA Policy For family members claiming disability who do not receive SSI or other disability payments from the SSA, a knowledgeable professional must provide third-party verification that the family member meets the HUD definition of disability. See the Eligibility chapter for the HUD definition of disability. The knowledgeable professional will verify whether the family member does or does not meet the HUD definition. 212 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 11/1/23 Unlimited copies may be made for internal use. Page 7-27 7-II.G. CITIZENSHIP OR ELIGIBLE IMMIGRATION STATUS [24 CFR 5.508] Overview Housing assistance is not available to persons who are not citizens, nationals, or eligible immigrants. Prorated assistance is provided for "mixed families" containing both eligible and ineligible persons. See the Eligibility chapter for detailed discussion of eligibility requirements. This chapter (7) discusses HUD and PHA verification requirements related to citizenship status. The family must provide a certification that identifies each family member as a U.S. citizen, a U.S. national, an eligible noncitizen or an ineligible noncitizen and submit the documents discussed below for each family member. Once eligibility to receive assistance has been verified for an individual it need not be collected or verified again during continuously-assisted occupancy [24 CFR 5.508(g)(5)] U.S. Citizens and Nationals HUD requires a declaration for each family member who claims to be a U.S. citizen or national. The declaration must be signed personally by any family member 18 or older and by a guardian for minors. The PHA may request verification of the declaration by requiring presentation of a birth certificate, United States passport or other appropriate documentation. PHA Policy Family members who claim U.S. citizenship or national status will not be required to provide additional documentation unless the PHA receives information indicating that an individual’s declaration may not be accurate. 213 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 11/1/23 Unlimited copies may be made for internal use. Page 7-28 Eligible Immigrants Documents Required All family members claiming eligible immigration status must declare their status in the same manner as U.S. citizens and nationals. The documentation required for eligible noncitizens varies depending upon factors such as the date the person entered the U.S., the conditions under which eligible immigration status has been granted, age, and the date on which the family began receiving HUD-funded assistance. Exhibit 7-1 at the end of this chapter summarizes documents family members must provide. PHA Verification [HCV GB, pp 5-3 and 5-7] For family members age 62 or older who claim to be eligible immigrants, proof of age is required in the manner described in 7-II.C. of this ACOP. No further verification of eligible immigration status is required. For family members under the age of 62 who claim to be eligible immigrants, the PHA must verify immigration status with the U.S. Citizenship and Immigration Services (USCIS). The PHA will follow all USCIS protocols for verification of eligible immigration status. 7-II.H. VERIFICATION OF PREFERENCE STATUS The PHA must verify any preferences claimed by an applicant that determined their placement on the waiting list. PHA Policy The PHA offers a preference for working families, described in Section 4-III.B. The PHA may verify that the family qualifies for the working family preference based on the family’s submission of the working member’s most recent paycheck stub indicating that the working member works at least 20 hours per week. The paycheck stub must have been issued to the working member within the last thirty days. The PHA may also seek third party verification from the employer of the head, spouse, cohead or sole member of a family requesting a preference as a working family. The PHA also offers a preference for victims of domestic violence, dating violence, sexual assault, stalking, or human trafficking as described in Section 4-III.B. To verify that applicants qualify for the preference, the PHA will follow documentation requirements outlined in Section 16-VII.D. 214 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 11/1/23 Unlimited copies may be made for internal use. Page 7-29 215 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 11/1/23 Unlimited copies may be made for internal use. Page 7-30 PART III: VERIFYING INCOME AND ASSETS Chapter 6 of this ACOP describes in detail the types of income that are included and excluded and how assets and income from assets are handled. Any income reported by the family must be verified. This part provides PHA policies that supplement the general verification procedures specified in Part I of this chapter. PHA Policy The following policies do not apply when the PHA uses a safe harbor income determination from a means-tested federal assistance program. 7-III.A. EARNED INCOME Tips PHA Policy Unless tip income is included in a family member’s W-2 by the employer or in UIV verification sources, persons who work in industries where tips are standard will be required to sign a certified estimate of tips received for the prior year or tips anticipated to be received in the coming year. Wages PHA Policy When the PHA requires third-party verification of wages, for wages other than tips, the family must provide originals of the two most current, consecutive pay stubs. 216 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 11/1/23 Unlimited copies may be made for internal use. Page 7-31 7-III.B. BUSINESS AND SELF EMPLOYMENT INCOME The PHA must obtain written, third-party verification when the income type is not available in EIV. This includes income from self-employment. PHA Policy Business owners and self-employed persons will be required to provide: Income tax returns with corresponding official tax forms and schedules attached and including third-party receipt of transmission for income tax return filed (i.e., tax preparer’s transmittal receipt, summary of transmittal from online source, etc.). If accelerated depreciation was used on the tax return or financial statement, an accountant's calculation of depreciation expense, computed using straight-line depreciation rules. For self-employed individuals who claim they do not have to file tax returns, the PHA will obtain a completed copy of IRS Form 4506-T to verify that no return has been filed. For those employed in “gig employment” (i.e., those in formal agreements with on- demand companies such as Uber, Lyft, or DoorDash), the PHA will provide a format for the individual to declare their income and expenses. The PHA will also review the printed statement of monthly income from the applicable app for all hours worked and pay received as well as Schedule C of the individual’s tax return and the corresponding IRS Form 1099 or 1099k. The PHA will provide a format for any person who is unable to provide such a statement to record income and expenses for the coming year. The business owner/self-employed person will be required to submit the information requested and to certify to its accuracy at all future reexaminations. At any reexamination the PHA may request documents that support submitted financial statements such as manifests, appointment books, cash books, or bank statements. If a family member has been self-employed less than three (3) months, the PHA will accept the family member's certified estimate of income and schedule an interim reexamination in three (3) months. If the family member has been self-employed for three (3) to twelve (12) months, the PHA will require the family to provide documentation of income and expenses for this period and use that information to project income. 217 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 11/1/23 Unlimited copies may be made for internal use. Page 7-32 7-III.C. PERIODIC PAYMENTS AND PAYMENTS IN LIEU OF EARNINGS For policies governing streamlined income determinations for fixed sources of income, please see Chapter 9. Social Security/SSI Benefits Verification requirements for Social Security (SS) and Supplemental Security Income (SSI) benefits differ for applicants and participants. For applicants, since EIV does not contain SS or SSI benefit information, the PHA must ask applicants to provide a copy of their current SS and/or SSI benefit letter (dated within the last 120 calendar days) for each family member that receives SS and/or SSI benefits. If the family is unable to provide the document or documents, the PHA should help the applicant request a benefit verification letter from SSA’s website at www.ssa.gov or ask the family to request one by calling SSA at 1-800-772-1213. The PHA must obtain the original benefit letter from the applicant, make a photocopy of the document for the file, and return the original to the family. For participants, the PHA must obtain information through the HUD EIV system and confirm with the participants that the current listed benefit amount is correct.  If the participant agrees with the amount reported in EIV, the PHA must use the EIV- reported gross benefit amount to calculate annual income from Social Security. PHAs are required to use the EIV-reported SS and SSI benefit amounts when calculating income unless the tenant disputes the EIV-reported amount. For example, an SSA benefit letter may list the monthly benefit amount as $450.80 and EIV displays the amount as $450.00. The PHA must use the EIV-reported amount unless the participant disputes the amount.  If the participant disputes the EIV-reported benefit amount, or if benefit information is not available in EIV, the PHA must request a current SSA benefit verification letter (dated within the last 120 calendar days) from each family member that receives SS and/or SSI benefits. If the family is unable to provide the document or documents, the PHA should help the participant request a benefit verification letter from SSA’s website at www.ssa.gov or ask the family to request one by calling SSA at 1-800-772-1213. The PHA must obtain the original benefit letter from the participant, make a photocopy of the document for the file, and return the original to the family.  Photocopies of social security checks or bank statements are not acceptable forms of verification for SS/SSI benefits. 218 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 11/1/23 Unlimited copies may be made for internal use. Page 7-33 7-III.D. ALIMONY OR CHILD SUPPORT [Notice PIH 2023-27] Annual income includes “all amounts received,” not the amount that a family may be legally entitled to receive but which they do not receive. For example, a family’s child support or alimony income must be based on payments received, not the amounts to which the family is entitled by court or agency orders. A copy of a court order or other written payment agreement alone may not be sufficient verification of amounts received by a family. PHA Policy The methods the PHA will use to verify alimony and child support payments differ depending on whether the family declares that it receives regular payments. If the family declares that it receives regular payments, verification will be obtained in the following order of priority: Copies of the receipts and/or payment stubs for the 12 months prior to PHA request Third-party verification form from the state or local child support enforcement agency Third-party verification form from the person paying the support Family's self-certification of amount received Note: Families are not required to undertake independent enforcement action. 7-III.E. NONRECURRING INCOME [Notice PIH 2023-27] Income that will not be repeated beyond the coming year (i.e., the 12 months following the effective date of the certification), based on information provided by the family, is considered nonrecurring income and is excluded from annual income. PHAs may accept a self-certification from the family stating that the income will not be repeated in the coming year. PHA Policy The PHA will accept self-certification from the family stating that income will not be repeated in the coming year. However, the PHA may choose, on a case-by-case basis, to require third-party verification that income sources will not be repeated in the coming year. 219 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 11/1/23 Unlimited copies may be made for internal use. Page 7-34 7-III.F. ASSETS AND INCOME FROM ASSETS Net Family Assets [24 CFR 5.603] At admission and reexam, for families with net assets totaling $50,000 or less (adjusted annually), the PHA may, but is not required to, accept the family’s self-certification that the family’s assets do not exceed $50,000 without taking any additional steps to verify the accuracy of the declaration. The declaration must include the amount of income the family expects to receive from assets which must be included in the family’s income. This includes declaring income from checking and savings accounts which, although excluded from the calculation of net family assets (because the combined value of non-necessary personal property does not exceed $50,000), may generate asset income. PHAs must clarify during the self-certification process which assets are included/excluded from net family assets. For PHAs that choose to accept self-certification, the PHA is required to obtain third-party verification of all assets, regardless of the amount, at least once every three years. PHAs who choose not to accept self-certifications of assets must verify all families’ assets on an annual basis. When net family assets have a total value over $50,000, the PHA may not rely on the family’s self-certification. Third-party verification of assets is required when net family assets exceed $50,000, adjusted annually by HUD. When verification of assets is required, PHAs are required to obtain a minimum of one statement that reflects the current balance of banking/financial accounts. PHA Policy For families with net assets totaling $50,000 or less, the PHA will accept the family’s self-certification of the value of family assets and anticipated asset income. The family’s declaration must show each asset and the amount of income expected from that asset. All family members 18 years of age and older must sign the family’s declaration. The PHA reserves the right to require additional verification in situations where the accuracy of the declaration is in question. Any income the family expects to receive from assets will be included in the family’s annual income. The family will be required to provide third-party verification of net family assets every three years. When verification is required, in determining the value of checking or savings accounts, the PHA will use the current balance. In determining the anticipated income from an interest-bearing checking or savings account when verification is required and the rate of return is known, the PHA will multiply the current balance of the account by the current rate of interest paid on the account. If a checking account does not bear interest, the anticipated income from the account is zero. 220 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 11/1/23 Unlimited copies may be made for internal use. Page 7-35 Self-Certification of Real Property Ownership [24 CFR 5.618(b)(2)] The PHA must determine whether a family has present ownership in real property that is suitable for occupancy for purposes of determining whether the family is compliant with the asset limitation described in Chapters 3 and 13. At admission and reexam, the PHA may accept a self- certification from the family that the family does not have any present ownership in any real property that is suitable for occupancy. If the family declares they have present ownership in real property, the PHA must obtain third-party verification. PHA Policy Both at admission and reexam, the PHA will accept self-certification from the family that the family does not have any present ownership in any real property. The certification will state that the family does not have any present ownership interest in any real property and must be signed by all family members 18 years of age and older. The PHA reserves the right to require additional verification in situations where the accuracy of the declaration is in question. If the family declares they have a present ownership in real property, the PHA will obtain third-party verification of the following factors: whether the family has the legal right to reside in the property; whether the family has effective legal authority to sell the property; and whether the property is suitable for occupancy by the family as a residence. However, in cases where a family member is a victim of domestic violence, dating violence, sexual assault, or stalking, the PHA will comply with confidentiality requirements under 24 CFR 5.2007 and will accept a self-certification. 221 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 11/1/23 Unlimited copies may be made for internal use. Page 7-36 7-III.G. ASSETS DISPOSED OF FOR LESS THAN FAIR MARKET VALUE The family must certify whether any assets have been disposed of for less than fair market value in the preceding two years. HUD permits PHAs to accept a self-certification from a family as verification of assets disposed of for less than fair market value [HCV GB, p. 5-28]. The PHA needs to verify only those certifications that warrant documentation [HCV GB, p. 5-28]. PHA Policy The PHA will accept a self-certification from a family as verification of assets disposed of for less than fair market value. The PHA will verify the value of assets disposed of only if: The PHA does not already have a reasonable estimation of its value from previously collected information, or The amount reported by the family in the certification appears obviously in error. Example 1: An elderly resident reported a $10,000 certificate of deposit at the last annual reexamination and the PHA verified this amount. Now the person reports that she has given this $10,000 to her son. The PHA has a reasonable estimate of the value of the asset; therefore, reverification of the value of the asset is not necessary. Example 2: A family member has disposed of its 1/4 share of real property located in a desirable area and has valued her share at approximately $5,000. Based upon market conditions, this declaration does not seem realistic. Therefore, the PHA will verify the value of this asset. 7-III.H. NET INCOME FROM RENTAL PROPERTY PHA Policy The family must provide: A current executed lease for the property that shows the rental amount or certification from the current tenant A self-certification from the family members engaged in the rental of property providing an estimate of expenses for the coming year and the most recent IRS Form 1040 with Schedule E (Rental Income). If schedule E was not prepared, the PHA will require the family members involved in the rental of property to provide a self-certification of income and expenses for the previous year and may request documentation to support the statement including: tax statements, insurance invoices, bills for reasonable maintenance and utilities, and bank statements or amortization schedules showing monthly interest expense. 222 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 11/1/23 Unlimited copies may be made for internal use. Page 7-37 7-III.I. FEDERAL TAX REFUNDS OR REFUNDABLE TAX CREDITS [Notice PIH 2023-27] PHAs are not required to verify the amount of the family’s federal tax refund or refundable tax credit(s) if the family’s net assets are equal to or below $50,000 (adjusted annually for inflation), even in years when full verification of assets is required or if the PHA does not accept self- certification of assets. PHAs must verify the amount of the family’s federal tax refund or refundable tax credits if the family’s net assets are greater than $50,000. 7-III.J. RETIREMENT ACCOUNTS PHA Policy The PHA will accept an original document from the entity holding the account dated no earlier than 12 months before that reflects any distributions of the account balance, any lump sums taken and any regular payments. 223 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 11/1/23 Unlimited copies may be made for internal use. Page 7-38 7-III.K. INCOME FROM EXCLUDED SOURCES [Notice PIH 2023-27] A detailed discussion of excluded income is provided in Chapter 6, Part I. HUD guidance on verification of excluded income draws a distinction between income which is fully excluded and income which is only partially excluded. For fully excluded income, the PHA is not required to verify the income using third-party verification, document why third-party verification is not available, or report the income on the 50058. Fully excluded income is defined as income where the entire amount qualifies to be excluded from the annual income determination in accordance with 24 CFR 5.609(b) and any Federal Register notice on mandatory exclusions issued by HUD (for example, food stamps, earned income of a minor, or foster care funds). PHAs may accept a family’s signed application or reexamination form as self-certification of fully excluded income. They do not have to require additional documentation. However, if there is any doubt that a source of income qualifies for full exclusion, PHAs have the option of requiring additional verification. For partially excluded income, the PHA is required to follow the verification hierarchy and all applicable regulations, and to report the income on the 50058. Partially excluded income is defined as income where only a certain portion of what is reported by the family qualifies to be excluded and the remainder is included in annual income (for example, the income of an adult full-time student). PHA Policy The PHA will accept the family’s self-certification as verification of fully excluded income. The PHA may request additional documentation if necessary to document the income source. The PHA will verify the source and amount of partially excluded income as described in Part 1 of this chapter. 224 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 11/1/23 Unlimited copies may be made for internal use. Page 7-39 7-III.L. ZERO INCOME REVIEWS [Notice PIH 2023-27] A zero income review is an assessment, sometimes periodic, performed by the PHA of the income of a family who claims that they do not receive income from any source, including from assets. During such reviews, it is common for PHAs to request that families complete and sign a worksheet explaining how they pay for the household’s expenses. HUD does not require PHAs to conduct periodic zero income reviews. In calculating annual income, PHAs must not assign monetary value to nonmonetary in-kind donations from a food bank or similar organization received by the family [24 CFR 5.609(b)(24)(vi)]. PHAs that perform zero income reviews must update local discretionary policies, procedures, and forms. Families who begin receiving income which does not trigger an interim reexamination should no longer be considered zero income even though the family’s income is not reflected on the Form HUD-50058. PHA Policy The PHA will check UIV sources and/or may request information from third-party sources to verify that certain forms of income such as unemployment benefits, TANF, SS, SSI, earned income, child support, etc. are not being received by families claiming to have zero annual income. The PHA will also require that each family member who claims zero income status complete a zero income form. If any sources of income are identified on the form, the PHA will verify the income in accordance with the policies in this chapter prior to including the income in the family’s annual income. The PHA will only conduct interims in accordance with PHA policy in Chapter 9. 225 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 11/1/23 Unlimited copies may be made for internal use. Page 7-40 7-III.M. STUDENT FINANCIAL ASSISTANCE [24 CFR 5.609(b)(9)] The regulations under HOTMA distinguish between two categories of student financial assistance paid to both full-time and part-time students. Any assistance to students under section 479B of the Higher Education Act of 1965 (Tile IV of the HEA) must be excluded from the family’s annual income [24 CFR 5.609(b)(9)(i)]. Any other grant-in-aid, scholarship, or other assistance amounts an individual receives for the actual covered costs charged by the institute of higher education not otherwise excluded by the federally mandated income exclusions are excluded [24 CFR 5.609(b)(9)(ii)]. PHA Policy The PHA will request written third-party verification of both the source and the amount of student financial assistance. Family-provided documents from the educational institution attended by the student will be requested, as well as documents generated by any other person or entity providing such assistance, as reported by the student. In addition, unless the student’s only source of assistance is assistance under Title IV of the HEA, the PHA will request written verification of the cost of the student’s tuition, books, supplies, room and board, and other required fees and charges to the student from the educational institution. If the PHA is unable to obtain third-party written verification of the requested information, the PHA will pursue other forms of verification following the verification hierarchy in section 7-I.B. 226 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 11/1/23 Unlimited copies may be made for internal use. Page 7-41 227 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 11/1/23 Unlimited copies may be made for internal use. Page 7-42 PART IV: VERIFYING MANDATORY DEDUCTIONS 7-IV.A. DEPENDENT AND ELDERLY/DISABLED HOUSEHOLD DEDUCTIONS The dependent and elderly/disabled family deductions require only that the PHA verify that the family members identified as dependents or elderly/disabled persons meet the statutory definitions. No further verifications are required. Dependent Deduction See Chapter 6 for a full discussion of this deduction. The PHA will verify that:  Any person under the age of 18 for whom the dependent deduction is claimed is not the head, spouse or cohead of the family and is not a foster child  Any person age 18 or older for whom the dependent deduction is claimed is not a foster adult or live-in aide, and is a person with a disability or a full time student Elderly/Disabled Family Deduction See the Eligibility chapter for a definition of elderly and disabled families and Chapter 6 for a discussion of the deduction. The PHA will verify that the head, spouse, or cohead is 62 years of age or older or a person with disabilities. 228 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 11/1/23 Unlimited copies may be made for internal use. Page 7-43 7-IV.B. HEALTH AND MEDICAL CARE EXPENSE DEDUCTION Policies related to medical expenses are found in Chapter 6. The amount of the deduction will be verified following the standard verification procedures described in Part I. The PHA must comply with the Health Insurance Portability and Accountability Act (HIPAA) (Pub. L. 104-191, 110 Stat. 1936) and the Privacy Act of 1974 (Pub. L. 93-579, 88 Stat. 1896) when requesting documentation to determine unreimbursed health and medical care expenses. The PHA may not request documentation beyond what is sufficient to determine anticipated health and medical care costs. Before placing bills and documentation in the tenant file, the PHA must redact all personally identifiable information [FR Notice 2/14/23]. Amount of Expense PHA Policy Medical expenses will be verified through: Written third-party documents provided by the family, such as pharmacy printouts or receipts. The PHA will make a best effort to determine what expenses from the past are likely to continue to occur in the future. The PHA will also accept evidence of monthly payments or total payments that will be due for medical expenses during the upcoming 12 months. Written third-party verification forms if the family is unable to provide acceptable documentation. If third-party or document review is not possible, written family certification as to costs anticipated to be incurred during the upcoming 12 months. Before placing bills and documentation in the tenant file, the PHA will redact all personally identifiable information. If the PHA receives documentation from a verification source that contains the individual’s specific diagnosis, information regarding the individual’s treatment, and/or information regarding the nature or severity of the person’s disability, the PHA will immediately dispose of this confidential information; this information will never be maintained in the individual’s file. If the information needs to be disposed of, the PHA will note in the individual’s file that verification was received, the date received, and the name and address of the person/organization that provided the verification. Under no circumstances will PHA include an applicant’s or resident’s medical records in the file [Notice PIH 2010-26]. In addition, the PHA must verify that:  The household is eligible for the deduction.  The costs to be deducted are qualified health and medical care expenses.  The expenses are not paid for or reimbursed by any other source.  Costs incurred in past years are counted only once. 229 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 11/1/23 Unlimited copies may be made for internal use. Page 7-44 Eligible Household The health and medical care expense deduction is permitted only for households in which the head, spouse, or cohead is at least 62 or a person with disabilities. The PHA will verify that the family meets the definition of an elderly or disabled family provided in the Eligibility chapter, and as described in Chapter 7 (7-IV.A) of this plan. Qualified Expenses To be eligible for the health and medical care expense deduction, the costs must qualify as medical expenses. See Chapter 6 for the PHA’s policy on what counts as a medical expense. Unreimbursed Expenses To be eligible for the health and medical care expense deduction, the costs must not be reimbursed by another source. PHA Policy The family will be required to certify that the medical expenses are not paid or reimbursed to the family from any source. If expenses are verified through a third party, the third party must certify that the expenses are not paid or reimbursed from any other source. Expenses Incurred in Past Years PHA Policy When anticipated costs are related to on-going payment of medical bills incurred in past years, the PHA will verify: The anticipated repayment schedule The amounts paid in the past, and Whether the amounts to be repaid have been deducted from the family’s annual income in past years 230 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 11/1/23 Unlimited copies may be made for internal use. Page 7-45 7-IV.C. DISABILITY ASSISTANCE EXPENSES Policies related to disability assistance expenses are found in 6-II.E. The amount of the deduction will be verified following the standard verification procedures described in Part I. The PHA must comply with the Health Insurance Portability and Accountability Act (HIPAA) (Pub. L. 104-191, 110 Stat. 1936) and the Privacy Act of 1974 (Pub. L. 93-579, 88 Stat. 1896) when requesting documentation to determine unreimbursed auxiliary apparatus or attendance care costs. The PHA may not request documentation beyond what is sufficient to determine anticipated reasonable attendant care and auxiliary apparatus costs. Before placing bills and documentation in the tenant file, the PHA must redact all personally identifiable information [FR Notice 2/14/23]. Amount of Expense Attendant Care PHA Policy Expenses for attendant care will be verified through: Written third-party documents provided by the family, such as receipts or cancelled checks. Third-party verification form signed by the provider, if family-provided documents are not available. If third-party verification is not possible, written family certification as to costs anticipated to be incurred for the upcoming 12 months. Before placing bills and documentation in the tenant file, the PHA will redact all personally identifiable information. If the PHA receives documentation from a verification source that contains the individual’s specific diagnosis, information regarding the individual’s treatment, and/or information regarding the nature or severity of the person’s disability, the PHA will immediately dispose of this confidential information; this information will never be maintained in the individual’s file. If the information needs to be disposed of, the PHA will note in the individual’s file that verification was received, the date received, and the name and address of the person/organization that provided the verification. Under no circumstances will PHA include an applicant’s or resident’s medical records in the file [Notice PIH 2010-26]. 231 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 11/1/23 Unlimited copies may be made for internal use. Page 7-46 Auxiliary Apparatus PHA Policy Expenses for auxiliary apparatus will be verified through: Written third-party documents provided by the family, such as billing statements for purchase of auxiliary apparatus, or other evidence of monthly payments or total payments that will be due for the apparatus during the upcoming 12 months. Third-party verification form signed by the provider, if family-provided documents are not available. If third-party or document review is not possible, written family certification of estimated apparatus costs for the upcoming 12 months. In addition, the PHA must verify that:  The family member for whom the expense is incurred is a person with disabilities (as described in 7-II.F above).  The expense permits a family member, or members, to work (as described in Chapter 6.).  The expense is not reimbursed from another source (as described in Chapter 6.). Family Member is a Person with Disabilities To be eligible for the disability assistance expense deduction, the costs must be incurred for attendant care or auxiliary apparatus expense associated with a person with disabilities. The PHA will verify that the expense is incurred for a person with disabilities (See 7-II.F.). Family Member(s) Permitted to Work The PHA must verify that the expenses claimed actually enable a family member, or members, (including the person with disabilities) to work. PHA Policy The PHA will request third-party verification from a rehabilitation agency or knowledgeable medical professional indicating that the person with disabilities requires attendant care or an auxiliary apparatus to be employed, or that the attendant care or auxiliary apparatus enables another family member, or members, to work (See 6-II.E.). This documentation may be provided by the family. If third-party verification has been attempted and is either unavailable or proves unsuccessful, the family must certify that the disability assistance expense frees a family member, or members (possibly including the family member receiving the assistance), to work. 232 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 11/1/23 Unlimited copies may be made for internal use. Page 7-47 Unreimbursed Expenses To be eligible for the disability expenses deduction, the costs must not be reimbursed by another source. PHA Policy The family will be required to certify that attendant care or auxiliary apparatus expenses are not paid by or reimbursed to the family from any source. 233 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 11/1/23 Unlimited copies may be made for internal use. Page 7-48 7-IV.D. CHILD CARE EXPENSES Policies related to child care expenses are found in Chapter 6. The amount of the deduction will be verified following the standard verification procedures described in Part I. In addition, the PHA must verify that:  The child is eligible for care (12 or younger).  The costs claimed are not reimbursed.  The costs enable a family member to work, actively seek work, or further their education.  The costs are for an allowable type of child care.  The costs are reasonable. Eligible Child To be eligible for the child care deduction, the costs must be incurred for the care of a child under the age of 13. The PHA will verify that the child being cared for (including foster children) is under the age of 13 (See 7-II.C.). Unreimbursed Expense To be eligible for the child care deduction, the costs must not be reimbursed by another source. PHA Policy The family and the care provider will be required to certify that the child care expenses are not paid by or reimbursed to the family from any source. 234 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 11/1/23 Unlimited copies may be made for internal use. Page 7-49 Pursuing an Eligible Activity The PHA must verify that the family member(s) that the family has identified as being enabled to seek work, pursue education, or be gainfully employed, are actually pursuing those activities. PHA Policy Information to be Gathered The PHA will verify information about how the schedule for the claimed activity relates to the hours of care provided, the time required for transportation, the time required for study (for students), the relationship of the family member(s) to the child, and any special needs of the child that might help determine which family member is enabled to pursue an eligible activity. Seeking Work Whenever possible the PHA will use documentation from a state or local agency that monitors work-related requirements (e.g., welfare or unemployment). In such cases the PHA will request family-provided verification from the agency of the member’s job seeking efforts to date and require the family to submit to the PHA any reports provided to the other agency. In the event third-party verification is not available, the PHA will provide the family with a form on which the family member must record job search efforts. The PHA will review this information at each subsequent reexamination for which this deduction is claimed. Furthering Education The PHA will request third-party documentation to verify that the person permitted to further their education by the child care is enrolled and provide information about the timing of classes for which the person is registered. The documentation may be provided by the family. Gainful Employment The PHA will seek third-party verification of the work schedule of the person who is permitted to work by the child care. In cases in which two or more family members could be permitted to work, the work schedules for all relevant family members may be verified. The documentation may be provided by the family. 235 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 11/1/23 Unlimited copies may be made for internal use. Page 7-50 Allowable Type of Child Care The type of care to be provided is determined by the family, but must fall within certain guidelines, as discussed in Chapter 6. PHA Policy The PHA will verify that the type of child care selected by the family is allowable, as described in Chapter 6. The PHA will verify that the fees paid to the child care provider cover only child care costs (e.g., no housekeeping services or personal services) and are paid only for the care of an eligible child (e.g., prorate costs if some of the care is provided for ineligible family members). The PHA will verify that the child care provider is not an assisted family member. Verification will be made through the head of household’s declaration of family members who are expected to reside in the unit. Reasonableness of Expenses Only reasonable child care costs can be deducted. PHA Policy The actual costs the family incurs will be compared with the PHA’s established standards of reasonableness for the type of care in the locality to ensure that the costs are reasonable. If the family presents a justification for costs that exceed typical costs in the area, the PHA will request additional documentation, as required, to support a determination that the higher cost is appropriate. 236 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 11/1/23 Unlimited copies may be made for internal use. Page 7-51 Exhibit 7-1: Summary of Documentation Requirements for Noncitizens [HCV GB, pp. 5-9 and 5-10)  All noncitizens claiming eligible status must sign a declaration of eligible immigrant status on a form acceptable to the PHA.  Except for persons 62 or older, all noncitizens must sign a verification consent form  Additional documents are required based upon the person's status. Elderly Noncitizens  A person 62 years of age or older who claims eligible immigration status also must provide proof of age such as birth certificate, passport, or documents showing receipt of SS old-age benefits. All other Noncitizens  Noncitizens that claim eligible immigration status also must present the applicable USCIS document. Acceptable USCIS documents are listed below.  Form I-551 Alien Registration Receipt Card (for permanent resident aliens)  Form I-94 Arrival-Departure Record annotated with one of the following:  “Admitted as a Refugee Pursuant to Section 207”  “Section 208” or “Asylum”  “Section 243(h)” or “Deportation stayed by Attorney General”  “Paroled Pursuant to Section 221 (d)(5) of the USCIS”  Form I-94 Arrival-Departure Record with no annotation accompanied by:  A final court decision granting asylum (but only if no appeal is taken);  A letter from a USCIS asylum officer granting asylum (if application is filed on or after 10/1/90) or from a USCIS district director granting asylum (application filed before 10/1/90);  A court decision granting withholding of deportation; or  A letter from an asylum officer granting withholding or deportation (if application filed on or after 10/1/90).  Form I-688 Temporary Resident Card annotated “Section 245A” or Section 210”. Form I-688B Employment Authorization Card annotated “Provision of Law 274a. 12(11)” or “Provision of Law 274a.12”.  A receipt issued by the USCIS indicating that an application for issuance of a replacement document in one of the above listed categories has been made and the applicant’s entitlement to the document has been verified; or  Other acceptable evidence. If other documents are determined by the USCIS to constitute acceptable evidence of eligible immigration status, they will be announced by notice published in the Federal Register 237 © Copyright 2023 by Nan McKay & Associates ACOP 113/1/2023 Unlimited copies may be made for internal use. Page 8-1 Chapter 8 LEASING AND INSPECTIONS [24 CFR 5, Subpart G; 24 CFR 966, Subpart A] INTRODUCTION Public housing leases are the contractual basis of the legal relationship between the HA and the tenant. All units must be occupied pursuant to a dwelling lease agreement that complies with HUD regulations. HUD regulations require the HA to inspect each dwelling unit prior to move-in, at move-out, and annually during the period of occupancy. In addition, the HA may conduct additional inspections in accordance with HA policy. This chapter is divided into two parts as follows: Part I: Leasing. This part describes pre-leasing activities and the HA’s policies pertaining to lease execution, lease modification, and payments under the lease. Part II: Inspections. This part describes the HA’s policies for inspecting dwelling units and notifying families of HUD REAC NSPIRE inspections. PART I: LEASING 8-I.A. OVERVIEW An eligible family may occupy a public housing dwelling unit under the terms of a lease. The lease must meet all regulatory requirements, and must also comply with applicable state and local laws and codes. The term of the lease must be for a period of 12 months. The lease must be renewed automatically for another 12-month term, except that the HA may not renew the lease if the family has violated the community service requirement and if the family is determined to be over income for 24 consecutive months [24 CFR 966.4(a)(2)]. HAs must adopt smoke-free policies, which HUD required to be implemented no later than July 30, 2018. The policy is attached as Exhibit 8-1. HAs must include in the ACOP residential minimum heating standards policies [Notice PIH 2018-19]. The policy is included in Part I of this chapter. Part I of this chapter contains regulatory information on leasing, where applicable, as well as the HA’s leasing policies. For policies on lease requirements for families whose incomes have exceeded the over-income limit for 24 consecutive months, see 13-III.C., Over-Income Families. 238 © Copyright 2023 by Nan McKay & Associates ACOP 113/1/2023 Unlimited copies may be made for internal use. Page 8-11 8-I.G. MINIMUM HEATING STANDARDS [Notice PIH 2018-19] HAs in states, territories, or localities with existing minimum heating standards must use their respective local standards for public housing dwelling units. For HAs where state or local minimum heating standards do not exist, HAs must use the HUD-prescribed heating standards specified in Notice PIH 2018-19. HA Policy The HA is located in an area where local residential heating standards exist and will utilize those standards for public housing units. Therefore, the HA’s minimum heating standards are as follows: Minimum temperature: Dwellings shall be provided with heating facilities capable of maintaining a room temperature of 68 degrees Fahrenheit in all habitable rooms, bathrooms and toilet rooms when the outdoor temperature is minus 20 degrees Fahrenheit or warmer from September 1 to June 1. Cooking appliances shall not be used to provide space heating to meet the requirements of this section. Minimum temperature capability: When the outdoor temperature is below the winter outdoor design temperature of minus 20 degrees Fahrenheit, maintenance of the minimum room temperature shall not be required, provided that the heating system is operating at its full design capacity. Measurement: Temperature measurements must be taken according to the following methodology: The required room temperature shall be measured 3 feet above the floor near the center of the room and 2 feet inward from the center of each exterior wall. 239 © Copyright 2023 by Nan McKay & Associates ACOP 113/1/2023 Unlimited copies may be made for internal use. Page 8-13 PART II: INSPECTIONS 8-II.A. OVERVIEW The PHA is obligated to maintain safe and habitable dwelling units and to make necessary repairs to dwelling units [24 CFR 966.4(e)]. The National Standards for the Inspection Physical Inspection of Real Estate (NSPIRE) are the standard under which HUD housing units, including those under the public housing program, are inspected. NSPIRE ensures that residents of public housing live in safe, habitable dwellings, and the items and components located inside, outside, and within the units are functionally adequate, operable, and free of health and safety hazards [24 CFR 5.703(a)]. Further, units must comply with state and local code requirements (such as fire, mechanical, plumbing, carbon monoxide, property maintenance, and residential code) [24 CFR 5.703(f)] as well as with all requirements related to the evaluation and control of lead-based paint hazards [24 CFR 5.703(e)(2)]. Under NSPIRE, public housing units are subject to three types of inspections: annual self- inspections, NSPIRE Inspections (which are used to assess and score the PHA under the Public Housing Assessment System (PHAS)), and NSPIRE Plus Inspections (which are triggered by poor property conditions). HUD regulations also require the HA to inspect each public housing dwelling unit prior to move-in, and at move-out, and annually during occupancy. In addition, tThe HA may require additional inspections, in accordance with HA pPolicy. This part contains the HA’s policies governing inspections by the HA and HUD, notification of unit entry, and inspection resultsrepair timelines. This section discusses inspections conducted by the HA (including annual self-inspections) and inspections conducted by HUD REAC. 8-II.B. TYPES OF PHA-CONDUCTED INSPECTIONS The PHA is obligated to maintain dwelling units and the project in safe and habitable condition and to make necessary repairs to dwelling units [24 CFR 966.4(e)]. Types of PHA-Conducted Inspections Move-In Inspections [24 CFR 966.4(i)] The lease must require the HA and the family to inspect the dwelling unit prior to occupancy in order to determine the condition of the unit and equipment in the unit. A copy of the initial inspection, signed by the HA and the tenant, must be provided to the tenant and retained in the resident file. HA Policy Any adult family member may attend the initial inspection and sign the inspection form for the head of household. Move-Out Inspections [24 CFR 966.4(i)] The HA must inspect the unit at the time the resident vacates the unit and must allow the resident to participate in the inspection if they wish, unless the tenant vacates without notice to the HA. The HA must provide to the tenant a statement of any charges to be made for maintenance and damage beyond normal wear and tear. 240 © Copyright 2023 by Nan McKay & Associates ACOP 113/1/2023 Unlimited copies may be made for internal use. Page 8-14 The difference between the condition of the unit at move-in and move-out establishes the basis for any charges against the security deposit so long as the work needed exceeds that for normal wear and tear. HA Policy When applicable, the HA will provide the tenant with a statement of charges to be made for maintenance and damage beyond normal wear and tear, within 21 business days of conducting the move-out inspection. Self-Inspections [24 CFR 5.707] Annually all PHAs are required to self-inspect their properties, including all units, to ensure units are maintained in accordance with NSPIRE standards in 24 CFR 5.703. As part of the self- inspection process, PHAs must ensure that deficiencies previously cited and repaired as a result of an NSPIRE inspection have not subsequently failed. The PHA must maintain the results of self-inspections for three years and must provide the results to HUD upon request. Annual Inspections [24 CFR 5.705] Section 6(f)(3) of the United States Housing Act of 1937 requires that HAs inspect each public housing project annually to ensure the project’s units are maintained in decent, safe, and sanitary condition. The HA shall continue using the Uniform Physical Condition Standards (UPCS) in 24 CFR 5, Subpart G, Physical Condition Standards and Inspection Requirements, to conduct annual project inspections. These standards address the inspection of the site area, building systems and components, and dwelling units. HA Policy The HA will inspect all occupied units annually using HUD’s Uniform Physical Condition Standards (UPCS). 241 © Copyright 2023 by Nan McKay & Associates ACOP 113/1/2023 Unlimited copies may be made for internal use. Page 8-15 Quality Control Inspections The purpose of quality control inspections is to assure that all defects were identified in the original inspection, and that repairs were completed at an acceptable level of craftsmanship and within an acceptable time frame. HA Policy Quality control inspections will be conducted in accordance with the PHA’s maintenance plan. Special Inspections HA Policy HA staff may conduct a special inspection for any of the following reasons: Housekeeping Unit condition Suspected lease violation Preventive maintenance Routine maintenance Pre Move-Out There is reasonable cause to believe an emergency exists Other Inspections HA Policy Building exteriors, grounds, common areas and systems will be inspected according to the HA’s maintenance plan. 242 © Copyright 2023 by Nan McKay & Associates ACOP 113/1/2023 Unlimited copies may be made for internal use. Page 8-16 8-II.C. NOTICE AND SCHEDULING OF INSPECTIONS Notice of Entry Non-emergency Entries [24 CFR 966.4(j)(1)] The HA may enter the unit, with reasonable advance notification to perform routine inspections and maintenance, make improvements and repairs, or to show the unit for re-leasing. A written statement specifying the purpose of the HA entry delivered to the dwelling unit at least two days before such entry is considered reasonable advance notification. HA Policy The HA will notify the resident in writing at least 48 hours prior to any non-emergency inspection. For regular annual self-inspections, the family will receive at least 2 two weeks written notice of the inspection to allow the family to prepare the unit for the inspection. Entry for repairs requested by the family will not require prior notice. Resident will indicate on the work order request whether or not the maintenance person may enter the unit when the resident is not home. Residents calling repairs in to management will be asked if it is okay to enter the home. Emergency Entries [24 CFR 966.4(j)(2)] The HA may enter the dwelling unit at any time without advance notice when there is reasonable cause to believe that an emergency exists. If no adult household member is present at the time of an emergency entry, the HA must leave a written statement showing the date, time and purpose of the entry prior to leaving the dwelling unit. Scheduling of PHA-Conducted Inspections HA Policy Inspections will be conducted during business hours (8:00 am – 4:30 pm). If a family needs to reschedule an inspection, they must notify the HA at least 24 hours prior to the scheduled inspection. The HA will reschedule the inspection no more than once unless the resident has a verifiable good cause to delay the inspection. The HA may request verification of such cause. Attendance at Inspections Residents are required to be present for move-in inspections [24 CFR 966.4(i)]. There is no such requirement for other types of inspections. HA Policy While the resident is required to be present for Except at move-in inspections, the resident is not required to be present for the other types of inspections. The resident may attend the inspection if they wish. If no one is at home, the inspector will enter the unit, conduct the inspection and leave a written statement showing the date, time and purpose of the entry prior to leaving the dwelling unit. 243 © Copyright 2023 by Nan McKay & Associates ACOP 113/1/2023 Unlimited copies may be made for internal use. Page 8-17 8-II.D. INSPECTION RESULTS The HA is obligated to maintain dwelling units and the project in decent, safe and sanitary condition and to make necessary repairs to dwelling units [24 CFR 966.4(e)]. Correction timeframes differ depending on whether repairs are considered emergency or non-emergency repairs. Emergency Repairs [24 CFR 966.4(h)] If the unit is damaged to the extent that conditions are created which are hazardous to the life, health, or safety of the occupants, the tenant must immediately notify the HA of the damage, and the HA must make repairs within a reasonable time frame. Under NSPIRE, the PHA must correct all Life-Threatening and Severe deficiencies within 24 hours. If the damage was caused by a household member or guest, the HA must charge the family for the reasonable cost of repairs. The HA may also take lease enforcement action against the family. If the HA cannot make repairs quickly, the HA must offer the family standard alternative accommodations. If the HA can neither repair the defect within a reasonable time frame nor offer alternative housing, rent shall be abated in proportion to the seriousness of the damage and loss in value as a dwelling. Rent shall not be abated if the damage was caused by a household member or guest, or if the resident rejects the alternative accommodations. The family must allow the HA access to the unit to make repairs. HA Policy When conditions in the unit are hazardous to life, health, or safety, the HA will make repairs or otherwise abate the situation within 24 hours. Defects hazardous to life, health or safety include, but are not limited to, the following: Any condition that jeopardizes the security of the unit Major plumbing leaks or flooding, waterlogged ceiling or floor in imminent danger of falling Natural or LP gas or fuel oil leaks Any electrical problem or condition that could result in shock or fire Absence of a working heating system when outside temperature is below 60 degrees Fahrenheit Utilities not in service, including no running hot water Conditions that present the imminent possibility of injury Obstacles that prevent safe entrance or exit from the unit Absence of a functioning toilet in the unit Inoperable smoke detectors 244 © Copyright 2023 by Nan McKay & Associates ACOP 113/1/2023 Unlimited copies may be made for internal use. Page 8-18 In a situation where the unit or building has a fuel burning appliance or an attached garage, missing or inoperable carbon monoxide detectors Non-emergency Repairs HA Policy The HA will correct non-life threatening health and safety defectsdeficiencies resulting from non-emergency work orders identified during the HA conducted inspection within 15 business days of the inspection date. If the HA is unable to make repairs within that period due to circumstances beyond the HA’s control (e.g. required parts or services are not available, weather conditions, etc.) the HA will notify the family of an estimated date of completion. The family must allow the HA access to the unit to make repairs. Resident-Caused Damages HA Policy Damages to the unit beyond wear and tear will be billed to the tenant in accordance with the policies in 8-I.F., Maintenance and Damage Charges. Repeated or excessive damages to the unit beyond normal wear and tear will be considered a serious or repeated violation of the lease. Housekeeping HA Policy Residents whose housekeeping habits pose a non-emergency health or safety risk, encourage insect or rodent infestation, or cause damage to the unit are in violation of the lease. In these instances, the HA will provide proper notice of a lease violation. A reinspection will be conducted within 14-30 days to confirm that the resident has complied with the requirement to abate the problem. Failure to abate the problem or allow for a reinspection is considered a violation of the lease and may result in termination of tenancy in accordance with Chapter 13. Notices of lease violation will also be issued to residents who purposely disengage the unit’s smoke detector. Only one warning will be given. A second incidence will result in lease termination. 245 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 11/1/23 Unlimited copies may be made for internal use. Page 9-1 Chapter 9 This chapter is entirely new REEXAMINATIONS [24 CFR 960.257, 960.259, 966.4] INTRODUCTION With the exception of non-public housing over income families, the PHA is required to reexamine each family’s income and composition periodically, and to adjust the family’s rent accordingly. PHAs must adopt policies for conducting annual and interim reexaminations that are consistent with regulatory requirements and must conduct reexaminations in accordance with such policies [24 CFR 960.257(c)]. The frequency with which the PHA must reexamine the income and composition of a family depends on whether the family pays income-based rent or flat rent. HUD requires the PHA to offer all families the choice of paying income-based rent or flat rent at least annually. The PHA’s policies for offering families a choice of rents are located in Chapter 6. This chapter discusses both annual and interim reexaminations. Part I: Annual Reexaminations for Families Paying Income Based Rents. This part discusses the requirements for annual reexamination of income and family composition. Full reexaminations are conducted at least once a year for families paying income-based rents. Part II: Reexaminations for Families Paying Flat Rents. This part contains the PHA’s policies for conducting full reexaminations of family income and composition for families paying flat rents. These full reexaminations are conducted at least once every three years. This part also contains the PHA’s policies for conducting annual updates of family composition for flat rent families. Part III: Interim Reexaminations. This part includes HUD requirements and PHA policies related to when a family may and must report changes that occur between annual reexaminations. Part IV: Recalculating Tenant Rent. After gathering and verifying required information for an annual or interim reexamination, the PHA must recalculate the tenant rent. While the basic policies that govern these calculations are provided in Chapter 6, this part describes the policies that affect these calculations during a reexamination. Part V: Non-Interim Reexamination Transactions. This part describes transactions that do not entail changes to the family’s adjusted income. Policies governing reasonable accommodation, family privacy, required family cooperation, and program abuse, as described elsewhere in this ACOP, apply to annual and interim reexaminations. 246 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 11/1/23 Unlimited copies may be made for internal use. Page 9-2 247 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 11/1/23 Unlimited copies may be made for internal use. Page 9-3 PART I: ANNUAL REEXAMINATIONS FOR FAMILIES PAYING INCOME-BASED RENTS 24 CFR 960.257 9-I.A. OVERVIEW For those families who choose to pay income-based rent, the PHA must conduct a reexamination of income and family composition at least annually [24 CFR 960.257(a)(1)]. With the exception of over-income families, who must have their income reviewed at 12 and 24 months, for flat rent families, 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 [24 CFR 960.257(a)(2)]. For any non-public housing over income families, the PHA may not conduct an annual reexamination of family income. Policies related to the reexamination process for families paying flat rent are located in Part II of this chapter. For all residents of public housing, whether those residents are paying income-based or flat rents, the PHA must conduct an annual review of community service requirement compliance. This annual reexamination is also a good time to have residents sign consent forms for criminal background checks in case the criminal history of a resident is needed at some point for the purposes of lease enforcement or eviction. The PHA is required to obtain all of the information necessary to conduct reexaminations. How that information will be collected is left to the discretion of the PHA. Families are required to provide current and accurate information on income, assets, allowances and deductions, family composition and community service compliance as part of the reexamination process [24 CFR 960.259]. Unlike when performing an interim reexamination or at intake, at annual reexamination, the PHA must determine the income of the family for the previous 12-month period, except where the PHA uses a streamlined income determination. Income from assets, however, is always anticipated, irrespective of the income examination type [Notice PIH 2023-27]. PHAs also have the option of using a “safe harbor” income verification from another federal means-tested program to verify gross annual income. Chapter 7 contains the PHA’s policies related to streamlined income determinations and the use of safe harbor income verifications. This part contains the PHA’s policies for conducting annual reexaminations. 248 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 11/1/23 Unlimited copies may be made for internal use. Page 9-4 9-I.B. SCHEDULING ANNUAL REEXAMINATIONS The PHA must establish a policy to ensure that the annual reexamination for each family paying an income-based rent is completed within a 12-month period [24 CFR 960.257(a)(1)]. PHA Policy Generally, the PHA will schedule annual reexaminations to coincide with the family's anniversary date. The PHA will begin the annual reexamination process approximately 120 days in advance of the scheduled effective date. Anniversary date is defined as 12 months from the effective date of the family’s last annual reexamination or, during a family’s first year in the program, from the effective date of the family’s initial examination (admission). If the family transfers to a new unit, the HA will perform a “change of unit”, and the anniversary date will remain unchanged unless the family is transferring from Hamilton House or a scattered site unit to Louisiana Court., If a family living at Hamilton House or a scattered site transfers to Louisiana Court the PHA will perform a new annual reexamination, and the anniversary date will be changed. The PHA may also schedule an annual reexamination for completion prior to the anniversary date for administrative purposes. Notification of and Participation in the Annual Reexamination Process The PHA is required to obtain information needed to conduct annual reexaminations. How that information will be collected is left to the discretion of the PHA. However, PHAs should give tenants who were not provided the opportunity to provide contact information at the time of admission the option to complete Form HUD-92006 at this time. The PHA should provide the family with the opportunity to update, change, or remove information from the HUD-92006 at the time of the annual reexamination [Notice PIH 2009-36]. PHA Policy Families generally are required to participate in an annual reexamination interview, which must be attended by the head of household, spouse, or cohead. If participation in an in-person interview poses a hardship because of a family member’s disability, the family should contact the PHA to request a reasonable accommodation (See Chapter 2). Notification of annual reexamination interviews will be sent by first-class mail , email, hand delivered or through the resident portal and will contain the date, time, and location of the interview. In addition, it will inform the family of the information and documentation that must be brought to the interview. If the family is unable to attend a scheduled interview, the family should contact the PHA in advance of the interview to schedule a new appointment. In all circumstances, if a family does not attend the scheduled interview the PHA will send a second notification with a new interview appointment time. If a family fails to attend two scheduled interviews without PHA approval, the family will be in violation of their lease and may be terminated in accordance with the policies in Chapter 13. 249 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 11/1/23 Unlimited copies may be made for internal use. Page 9-5 An advocate, interpreter, or other assistant may assist the family in the interview process. 250 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 11/1/23 Unlimited copies may be made for internal use. Page 9-6 9-I.C. CONDUCTING ANNUAL REEXAMINATIONS The terms of the public housing lease require the family to furnish information regarding income and family composition as may be necessary for the redetermination of rent, eligibility, and the appropriateness of the housing unit [24 CFR 966.4(c)(2)]. PHA Policy Families will be asked to complete the recertification in the resident portal or bring all required information (as described in the reexamination notice) to the reexamination appointment. The required information will include a PHA-designated reexamination form as well as supporting documentation related to the family’s income, expenses, and family composition. Any required documents or information that the family is unable to provide at the time of the interview or any stated deadline must be provided within 10 business days of the interview. If the family is unable to obtain the information or materials within the required time frame, the family may request an extension. If the family does not provide the required documents or information within the required time frame (plus any extensions), the family will be in violation of their lease and may be terminated in accordance with the policies in Chapter 13. The information provided by the family generally must be verified in accordance with the policies in Chapter 7. Unless the family reports a change, or the agency has reason to believe a change has occurred in information previously reported by the family, certain types of information that are verified at admission typically do not need to be re-verified on an annual basis. These include:  Legal identity  Age  Social security numbers  A person’s disability status  Citizenship or immigration status 251 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 11/1/23 Unlimited copies may be made for internal use. Page 9-7 9-I.D. CALCULATING ANNUAL INCOME AT ANNUAL REEXAMINATION [24 CFR 5.609(c)(2) and Notice PIH 2023-27] The PHA must determine the income of the family for the previous 12-month period and use this amount as the family income for annual reexaminations, except where the PHA uses a streamlined income determination as indicated in Chapter 7 of this policy. The PHA may also use Safe harbor income determinations dated within the last 12 months from a means-tested federal public assistance program at annual reexamination as outlined in Chapter 7 of this policy. Except when using streamlined or safe harbor income determinations, in determining the income of the family for the previous 12-month period, any change of income since the family’s last annual reexamination, including those that did not meet the threshold to process an interim reexamination in accordance with PHA policies and 24 CFR 5.657(c) or 960.257(b) must be considered. Income from assets is always anticipated, irrespective of the income examination type. A change in income may be a loss of income or the addition of a new source of income. Changing to a different employer in the prior year does not necessarily constitute a change if the income earned from either employer is substantially the same. The PHA should look at the entirety of the family’s unearned income and earned income from the prior year in which earned income may have been one constant job or many different jobs that start and stop. Cost of Living Adjustments (COLA) to Social Security income and Social Security disability income are always considered changes to income because the COLA is an adjustment that automatically occurs annually by law. See Chapter 6 for PHA policies on when the COLA is applied and Chapter 7 on streamlined determination of income for inflationary adjustments. Notice PIH 2023-27 lists the following steps to calculate both earned and unearned income at annual reexamination. Step 1: The PHA determines annual income for the previous 12-month period by reviewing the following information:  The EIV Income Report pulled within 120 days of the effective date of the annual reexamination;  The income reported on the most recent HUD-50058; and  The amount of prior-year income reported by the family on the PHA’s annual reexamination paperwork. Step 2: The PHA takes into consideration any interim reexamination of family income completed since the last annual reexamination.  If there was an interim reexamination performed, the PHA must use the annual income from the interim to determine the family’s total annual income, provided there are no additional changes.  If the PHA did not perform an interim or there have been changes since the last reexamination, the PHA moves to Step 3. 252 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 11/1/23 Unlimited copies may be made for internal use. Page 9-8 Step 3: If there were changes in annual income not processed by the PHA since the last reexamination, the PHA must use current income. The family will be required to report their income for the prior year and whether there have been permanent changes. If there are no reported changes to an income source, the PHA may use documentation of prior- year income to calculate the annual income. For example, the PHA may use the following documentation:  EIV + self-certification (wages, Supplemental Security Income (SSI), Social Security, and unemployment)  Current written third-party verification from the source verifying prior-year income that is dated within 120 days of receipt by the PHA, for example: - Year-end statements - Paycheck with year-to-date amounts - Tax forms (Form 1040, W2, 1099, etc.) If there are reported changes by the family or the PHA notes discrepancies between EIV and what the family reports, the PHA must follow the verification hierarchy (described in Chapter 7) to document and verify income. Exhibit 9-1 provides detailed examples of how the PHA calculates income from different sources at annual reexamination using the above method. 253 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 11/1/23 Unlimited copies may be made for internal use. Page 9-9 9-I.E. OTHER CONSIDERATIONS Change in Unit Size Changes in family or household composition may make it appropriate to consider transferring the family to comply with occupancy standards. The PHA may use the results of the annual reexamination to require the family to move to an appropriate size unit [24 CFR 960.257(a)(4)]. Policies related to such transfers are located in Chapter 12. Criminal Background Checks Information obtained through criminal background checks may be used for lease enforcement and eviction [24 CFR 5.903(e)(1)(ii)]. Criminal background checks of residents will be conducted in accordance with the policy in Section 13-IV.B. PHA Policy As part of the annual reexamination process the family will be asked about criminal activity. Additionally, HUD recommends that at annual reexaminations PHAs ask whether the tenant, or any member of the tenant’s household, is subject to a lifetime sex offender registration requirement in any state [Notice PIH 2012-28]. PHA Policy At the annual reexamination, the PHA will ask whether the tenant, or any member of the tenant’s household, is subject to a lifetime sex offender registration requirement in any state. The PHA will use the Dru Sjodin National Sex Offender database to verify the information provided by the tenant. If the PHA proposes to terminate assistance based on lifetime sex offender registration information, the PHA must notify the household of the proposed action and must provide the subject of the record and the tenant a copy of the record and an opportunity to dispute the accuracy and relevance of the information prior to termination. [24 CFR 5.903(f) and 5.905(d)]. (See Chapter 13.) Compliance with Community Service For families who include nonexempt individuals, the PHA must determine compliance with community service requirements once each 12 months [24 CFR 960.257(a)(3)]. See Chapter 11 for the PHA’s policies governing compliance with the community service requirement. 254 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 11/1/23 Unlimited copies may be made for internal use. Page 9-10 9-I.F. EFFECTIVE DATES As part of the annual reexamination process, the PHA must make appropriate adjustments in the rent after consultation with the family and upon verification of the information [24 CFR 960.257(a)(1)]. PHA Policy In general, an increase in the tenant rent that results from an annual reexamination will take effect on the family’s anniversary date, and the family will be notified at least 30 days in advance. If less than 30 days remain before the scheduled effective date, the increase will take effect on the first of the month following the end of the 30-day notice period. If the PHA chooses to schedule an annual reexamination for completion prior to the family’s anniversary date for administrative purposes, the effective date will be determined by the PHA, but will always allow for the 30-day notice period. If the family causes a delay in processing the annual reexamination, increases in the tenant rent will be applied retroactively, to the scheduled effective date of the annual reexamination. The family will be responsible for any underpaid rent and may be offered a repayment agreement in accordance with the policies in Chapter 16. In general, a decrease in the tenant rent that results from an annual reexamination will take effect on the family’s anniversary date. If the PHA chooses to schedule an annual reexamination for completion prior to the family’s anniversary date for administrative purposes, the effective date will be determined by the PHA. If the family causes a delay in processing the annual reexamination, d ecreases in the tenant rent will be applied prospectively, from the first day of the month following completion of the reexamination processing. Delays in reexamination processing are considered to be caused by the family if the family fails to provide information requested by the PHA by the date specified, and this delay prevents the PHA from completing the reexamination as scheduled. 255 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 11/1/23 Unlimited copies may be made for internal use. Page 9-11 256 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 11/1/23 Unlimited copies may be made for internal use. Page 9-12 PART II: REEXAMINATIONS FOR FAMILIES PAYING FLAT RENTS [24 CFR 960.253(f)] 9-II.A. OVERVIEW HUD requires that the PHA offer all families the choice of paying income-based rent or flat rent at least annually. The PHA’s policies for offering families a choice of rents are located in Chapter 6. For 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 [24 CFR 960.253(f)]. The PHA is only required to provide the amount of income-based rent the family might pay in those years that the PHA conducts a full reexamination of income and family composition, or upon request of the family after the family submits updated income information [24 CFR 960.253(e)(2)]. However, these regulations are not applicable to over-income families. Once an over-income determination is made, the PHA must conduct an interim reexamination at 12 and 24 months, as applicable, to determine if the family remains over-income [Notice PIH 2023-03]. As it does for families that pay income-based rent, the PHA must also review compliance with the community service requirement for families with nonexempt individuals. This part contains the PHA’s policies for conducting reexaminations of families who choose to pay flat rents. 257 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 11/1/23 Unlimited copies may be made for internal use. Page 9-13 9-II.B. FULL REEXAMINATION OF FAMILY INCOME AND COMPOSITION Frequency of Reexamination PHA Policy For families paying flat rents, the PHA will conduct a full reexamination of family income and composition once every three years. However, for flat rent families who become over-income, this policy will not apply. The PHA will instead conduct an interim reexamination at 12 and 24 months following the initial over-income determination as needed to verify the family remains over-income. The family will continue to be given a choice between income-based and flat rent at each annual reexamination during the over-income grace period. If the family is subsequently determined to no longer be over-income: If the determination is the result of an annual reexamination, the family will be given a choice between income-based or flat rent at reexam. If the family selects flat rent, the PHA will resume reexamination of family income and composition once every three years. If determination is as a result of an interim reexamination, the PHA will conduct an annual reexamination for the family at their next scheduled annual date. If the family selects flat rent, the PHA will resume reexamination of family income and composition once every three years. Families will only be given the choice between income-based and flat rent at annual reexamination. Reexamination Policies PHA Policy In conducting full reexaminations for families paying flat rents, the PHA will follow the policies used for the annual reexamination of families paying income-based rent as set forth in Sections 9-I.B through 9-I.E above. 258 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 11/1/23 Unlimited copies may be made for internal use. Page 9-14 9-II.C. REEXAMINATION OF FAMILY COMPOSITION (“ANNUAL UPDATE”) As noted above, if full reexaminations are conducted every three years for families paying flat rents, in the years between full reexaminations, regulations require the PHA to conduct a reexamination of family composition (“annual update”) [24 CFR 960.257(a)(2)]. Over-income families who select the flat rent are not subject to annual update as their income must be reviewed, and an interim reexamination conducted, at 12 and 24 months as applicable. The annual update process is similar to the annual reexamination process, except that the PHA does not collect information about the family’s income and expenses, and the family’s rent is not recalculated following an annual update. Scheduling The PHA must establish a policy to ensure that the reexamination of family composition for families choosing to pay the flat rent is completed at least annually [24 CFR 960.257(a)(2)]. PHA Policy For families paying flat rents, annual updates will be conducted in each of the 2 years following the full reexamination. In scheduling the annual update, the PHA will follow the policy used for scheduling the annual reexamination of families paying income-based rent as set forth in Section 9-I.B. above. Conducting Annual Updates The terms of the public housing lease require the family to furnish information necessary for the redetermination of rent and family composition [24 CFR 966.4(c)(2)]. PHA Policy Generally, the family will not be required to attend an interview for an annual update. However, if the PHA determines that an interview is warranted, the family may be required to attend. Notification of the annual update will be sent by first-class mail, email, hand delivered or via the resident portal and will inform the family of the information and documentation that must be provided to the PHA. The family will have 10 business days to submit the required information to the PHA. If the family is unable to obtain the information or documents within the required time frame, the family may request an extension. The PHA will accept required documentation by mail, by email, by fax, or in person. If the family’s submission is incomplete, or the family does not submit the information in the required time frame, the PHA will send a second written notice to the family. The family will have 10 business days from the date of the second notice to provide the missing information or documentation to the PHA. If the family does not provide the required documents or information within the required time frame (plus any extensions), the family will be in violation of their lease and may be terminated in accordance with the policies in Chapter 13. 259 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 11/1/23 Unlimited copies may be made for internal use. Page 9-15 Change in Unit Size Changes in family or household composition may make it appropriate to consider transferring the family to comply with occupancy standards. The PHA may use the results of the annual update to require the family to move to an appropriate size unit [24 CFR 960.257(a)(4)]. Policies related to such transfers are located in Chapter 12. Criminal Background Checks Information obtained through criminal background checks may be used for lease enforcement and eviction [24 CFR 5.903(e)]. Criminal background checks of residents will be conducted in accordance with the policy in Section 13-IV.B. PHA Policy As part of the annual reexamination process the family will be asked about criminal activity.Compliance with Community Service For families who include nonexempt individuals, the PHA must determine compliance with community service requirements once each 12 months [24 CFR 960.257(a)(3)]. See Chapter 11 for the PHA’s policies governing compliance with the community service requirement. 260 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 11/1/23 Unlimited copies may be made for internal use. Page 9-16 PART III: INTERIM REEXAMINATIONS 24 CFR 960.257(b); 24 CFR 966.4; and Notice PIH 2023-27 9-III.A. OVERVIEW Family circumstances may change during the period between annual reexaminations. HUD and PHA policies define the types of information about changes in family circumstances that must be reported, and under what circumstances the PHA must process interim reexaminations to reflect those changes. A family may request an interim determination of family income or composition because of any changes since the last determination. The PHA must conduct any interim reexamination within a reasonable period of time after the family request or when the PHA becomes aware of a change in the family’s adjusted income that must be processed in accordance with HUD regulations. What qualifies as a “reasonable time” may vary based on the amount of time it takes to verify information, but the PHA generally should conduct the interim reexamination not longer than 30 days after the PHA becomes aware of changes in income. Notice PIH 2023-27 changes the conditions under which interim reexaminations must be conducted, codifies when interim reexaminations should be processed and made effective, and requires related changes for annual reexaminations and streamlined income determinations. When the PHA determines that an interim reexamination of income is necessary, they must ask the family to report changes in all aspects of adjusted income. 261 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 11/1/23 Unlimited copies may be made for internal use. Page 9-17 9-III.B. CHANGES IN FAMILY AND HOUSEHOLD COMPOSITION Reporting PHAs must require families to report household composition changes; however, PHAs determine the timeframe in which reporting happens [Notice PIH 2023-27]. The PHA must adopt policies prescribing when and under what conditions the family must report changes in family composition [24 CFR 960.257(b)(5)]. Changes in family or household composition may make it appropriate to consider transferring the family to comply with occupancy standards. Policies related to such transfers are located in Chapter 12. PHA Policy All families, those paying income-based rent as well as flat rent, must report all changes in family and household composition that occur between annual reexaminations (or annual updates) within 10 business days of the change. The PHA will conduct interim reexaminations to account for any changes in household composition that occur between annual reexaminations. New Family Members Not Requiring Approval The addition of a family member as a result of birth, adoption, or court-awarded custody does not require PHA approval. However, the family is required to promptly notify the PHA of the addition [24 CFR 966.4(a)(1)(v)]. 262 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 11/1/23 Unlimited copies may be made for internal use. Page 9-18 New Family and Household Members Requiring Approval With the exception of children who join the family as a result of birth, adoption, or court- awarded custody, a family must request PHA approval to add a new family member [24 CFR 966.4(a)(1)(v)] or other household member (live-in aide or foster child) [24 CFR 966.4(d)(3)]. The PHA may adopt reasonable policies concerning residence by a foster child or a live-in aide and defining the circumstances in which PHA consent will be given or denied. Under such policies, the factors considered by the PHA may include [24 CFR 966.4(d)(3)(i)]:  Whether the addition of a new occupant may necessitate a transfer of the family to another unit, and whether such units are available.  The PHA’s obligation to make reasonable accommodation for persons with disabilities. PHA Policy Families must request PHA approval to add a new family member, live-in aide, foster child, or foster adult. This includes any person not on the lease who is expected to stay in the unit for more than 14 consecutive days or a total of 30 cumulative calendar days during any 12-month period and therefore no longer qualifies as a “guest.” Requests must be made in writing and approved by the PHA prior to the individual moving into the unit. If adding a person to a household (other than a child by birth, adoption, or court-awarded custody) will require a transfer to a larger size unit (under the transfer policy in Chapter 12), the PHA will approve the addition only if the family can demonstrate that there are medical needs or other extenuating circumstances, including reasonable accommodation, that should be considered by the PHA. Exceptions will be made on a case-by-case basis. The PHA will not approve the addition of a new family or household member unless the individual meets the PHA’s eligibility criteria (see Chapter 3) and documentation requirements (See Chapter 7, Part II). If the PHA determines that an individual does not meet the PHA’s eligibility criteria or documentation requirements, the PHA will notify the family in writing of its decision to deny approval of the new family or household member and the reasons for the denial. The PHA will make its determination within 10 business days of receiving all information required to verify the individual’s eligibility. 263 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 11/1/23 Unlimited copies may be made for internal use. Page 9-19 Departure of a Family or Household Member The family must promptly notify the PHA if any household member (including a live-in aide, foster child, or foster adult) no longer lives in the unit. The PHA must process an interim for all decreases in adjusted income when a family member permanently moves out of the unit. PHA Policy If a household member ceases to reside in the unit, the family must inform the PHA within 10 business days. This requirement also applies to family members who had been considered temporarily absent, who are now permanently absent. The PHA will process an interim if the family’s adjusted income will decrease as a result of a family member permanently moving out of the unit. 264 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 11/1/23 Unlimited copies may be made for internal use. Page 9-20 9-III.C. CHANGES AFFECTING INCOME OR EXPENSES PHA Policy This section only applies to families paying income-based rent. Families paying flat rent are not required to report changes in income or expenses. Interim reexaminations for changes in income or expenses may be scheduled either because the PHA has reason to believe that changes in income or expenses may have occurred, or because the family reports a change. The PHA must estimate the income of the family for the upcoming 12-month period to determine family income for an interim reexamination [24 CFR 5.609(c)(1)]. Policies for projecting income are found in Chapter 6. Interim Decreases [24 CFR 960.257(b)(2) and Notice PIH 2023-27] A family may request an interim determination of family income for any change since the last determination. However, the PHA may decline to conduct an interim reexamination if the PHA estimates the family’s adjusted income will decrease by an amount that is less than 10 percent of the family’s adjusted income. The PHA may set a lower threshold in PHA policy such as performing an interim for any decreases in adjusted income, although HUD prohibits the PHA from setting a dollar-figure threshold. However, while the PHA has some discretion, HUD requires that the PHA perform an interim reexamination for a decrease in adjusted income of any amount in two circumstances:  When there is a decrease in family size attributed to the death of a family member; or  When a family member permanently moves out of the assisted unit during the period since the family’s last reexamination. In the above circumstances, the PHA must perform an interim reexamination for any decrease in adjusted income. If the net effect of the changes in adjusted income due to a decrease in family size results in no change or an increase in annual adjusted income, then PHA must process the removal of the household member(s) as a non-interim reexamination transaction without making changes to the family’s annual adjusted income. PHA Policy The PHA will conduct an interim reexamination any time the family’s adjusted income has decreased by any amount. 265 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 11/1/23 Unlimited copies may be made for internal use. Page 9-21 Interim Increases [24 CFR 960.257(b)(3) and Notice PIH 2023-27] Increases Less than 10 Percent PHAs must not process interim reexaminations for income increases that result in less than a 10 percent increase in annual adjusted income. Increases 10 Percent or Greater PHAs must conduct an interim reexamination of family income when the PHA becomes aware that the family’s adjusted income has changed by an amount that the PHA estimates will result in an increase of 10 percent or more in adjusted income, with the following exceptions:  PHAs may not consider any increases in earned income when estimating or calculating whether the family’s adjusted income has increased, unless the family has previously received an interim reduction during the same reexamination cycle; and  PHAs may choose not to conduct an interim reexamination during the last three months of a certification period if a family reports an increase in income within three months of the next annual reexamination effective date. When the family previously received an interim reexamination for a decrease to adjusted income during the same annual reexamination cycle, a PHA has the discretion whether to consider a subsequent increase in earned income. PHA Policy Provided a family’s increase meets the 10 percent threshold, the PHA will conduct an interim when the family experiences an increase in earned income and the family previously had an interim performed for a decrease in adjusted income (whether for earned income, unearned income, or a combination of the two) since their last annual. The PHA will not process an interim for increases in earned income when an interim was previously performed since the family’s last annual and the interim resulted in an increase in the family’s rent, nor will the PHA process an interim for an increase in earned income when the family has not had a previous interim reexamination since their last annual. The PHA will also process an interim for any other increases in income that meet the 10 percent threshold. The PHA will not perform an interim reexamination when a family reports an increase in income (whether earned or unearned income) within three months of their annual reexamination effective date. However, families who delay reporting income increases until the last three months of their certification period may be subject to retroactive rent increases in accordance with the PHA policies in Chapter 15. 266 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 11/1/23 Unlimited copies may be made for internal use. Page 9-22 Concurrent Increases in Earned and Unearned Income [Notice PIH 2023-27] When the family reports an increase in both earned and unearned income at the same time, the PHA must look at the earned and unearned income changes independently of each other to determine if an interim reexamination is performed. The PHA will only conduct an interim reexamination when the increase independently meets the 10 percent threshold and all other requirements for performing interim reexaminations. For example, if a family reported increases in both earned and unearned income that overall resulted in a 12 percent increase in their adjusted income, but the change in earned income represented a 7 percent increase and the change in unearned income represented a 5 percent increase, the PHA may not perform an interim for either change since neither change meets the 10 percent threshold amount independently. If the change in unearned income met the 10 percent threshold in this case, the PHA would be required to perform an interim. If the change in earned income met the 10 percent threshold in this case, the PHA would refer to PHA policy to determine whether an interim was required. Cumulative Increases [Notice PIH 2023-27] A series of smaller reported increases in adjusted income may cumulatively meet or exceed the 10-percent increase threshold, at which point the PHA must conduct an interim reexamination in accordance with PHA policy. Public Housing Over-Income Families [24 CFR 960.507(c); Notice PIH 2020-3; and Notice PIH 2023-27] Regardless of changes in adjusted income, in some circumstances the PHA is required to conduct an interim reexamination to determine whether a family’s income continues to exceed the public housing over-income limit. PHAs are required to conduct income examinations of public housing families who have been determined to exceed the over-income limit at specific intervals. When a PHA makes an initial determination that a family is over-income during an interim reexamination, the PHA must conduct a second interim reexamination 12 months after the over- income determination, and then again 12 months after the second over-income determination, unless the family’s income falls below the over-income limit during the 24-month period. This continued evaluation of the family’s over-income status requires the PHA to notify any family that exceeds the over-income limit that they remain over the income limit, even if the family is paying the flat rent [24 CFR 960.253]. An interim income reexamination to determine if a public housing family remains over-income does not reset the family’s normal annual reexamination date. 267 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 11/1/23 Unlimited copies may be made for internal use. Page 9-23 Family Reporting The PHA must adopt policies consistent with HUD regulations prescribing when and under what conditions the family must report a change in family income or composition [24 CFR 960.257(b)(5)]. PHA policy may require families to report only changes that the family estimates meet the threshold for an interim reexamination or the PHA may establish policies requiring that families report all changes in income and household composition, and the PHA will subsequently determine if the change requires an interim reexamination [Notice PIH 2023-27]. When the PHA determines that an interim reexamination of income is necessary, they must ask the family to report changes in all aspects of adjusted income. For example, if the family is reporting a decrease in adjusted income that is more than 10 percent, but the family also had a change in assets that would result in a change in income, the change in assets must also be reviewed [Notice PIH 2023-27]. PHA Policy The family will be required to report all changes in income regardless of the amount of the change, whether the change is to earned or unearned income, or if the change occurred during the last three months of the certification period. Families must report changes in income within 10 business days of the date the change takes effect. The family may notify the PHA of changes either orally or in writing. If the family provides oral notice, the PHA may also require the family to submit the changes in writing. Within 10 business days of the family reporting the change, the PHA will determine whether the change will require an interim reexamination. If the change will not result in an interim reexamination, the PHA will note the information in the tenant file but will not conduct an interim reexamination. The PHA will send the family written notification within 10 business days of making this determination informing the family that the PHA will not conduct an interim reexamination. If the change will result in an interim reexamination, the PHA will determine the documentation the family will be required to submit based on the type of change reported and PHA policies in Chapter 7. The PHA will ask the family to report changes in all aspects of adjusted income at this time. The family must submit any required information or documents within 10 business days of receiving a request from the PHA. This time frame may be extended for good cause with PHA approval. The PHA will accept required documentation by mail, email, fax, or in person. The PHA will conduct the interim within a reasonable time period based on the amount of time it takes to verify the information. Generally, the family will not be required to attend an interview for an interim reexamination. However, if the PHA determines that an interview is warranted, the family may be required to attend. 268 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 11/1/23 Unlimited copies may be made for internal use. Page 9-24 9-III.D. EFFECTIVE DATES Changes Reported Timely [24 CFR 960.257(b)(6) and Notice PIH 2023-27] If the family reports a change in family income or composition timely in accordance with PHA policies:  For rent increases, the PHA must provide the family with 30 days advance written notice. The rent increase is effective the first of the month after the end of that 30-day notice period.  Rent decreases are effective on the first of the month after the date of the actual change leading to the interim reexamination of family income. This means the decrease will be applied retroactively. 269 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 11/1/23 Unlimited copies may be made for internal use. Page 9-25 Changes Not Reported Timely [24 CFR 960.257(b)(6)(ii) and (iii) and Notice PIH 2023-27] If the family failed to report a change in family income or composition timely in accordance with PHA policies:  For rent increases, the PHA must implement any resulting rent increases retroactively to the first of the month following the date of the change leading to the interim reexamination of family income.  For rent decreases, the PHA must implement the change no later than the first rent period following completion of the interim reexamination. However, the PHA may choose to adopt a policy that would make the effective date of the rent decrease retroactive to the first of the month following completion of the reexamination. PHAs may choose to establish conditions or requirements for when such a retroactive application would apply. PHAs that choose to adopt such policies must ensure the earliest date that the retroactive decrease is applied is the later of:  The first of the month following the date of the change that led to the interim reexamination; or  The first of the month following the most recent previous income examination. In applying a retroactive change in rent as the result of an interim reexamination, the PHA must clearly communicate the effect of the retroactive adjustment to the family so that there is no confusion over the amount of the rent that is the family’s responsibility. PHA Policy In general, when the family fails to report a change in income or family composition timely, and the change would lead to a rent decrease, the PHA will apply the decrease the first of the month following completion of the interim reexamination. However, the PHA will apply the results of the interim reexamination retroactively where a family’s ability to report a change in income promptly may have been hampered due to extenuating circumstances such as a natural disaster or disruptions to PHA management operations. The PHA will decide to apply decreases retroactively on a case-by-case basis. When the PHA applies the results of interim decreases retroactively, the PHA will clearly communicate the effect of the retroactive adjustment to the family and may enter into a repayment agreement in accordance with PHA policies. 270 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 11/1/23 Unlimited copies may be made for internal use. Page 9-26 PART IV: RECALCULATING TENANT RENT 9-IV.A. OVERVIEW For those families paying income-based rent, the PHA must recalculate the rent amount based on the income information received during the reexamination process and notify the family of the changes [24 CFR 966.4, 960.257]. While the basic policies that govern these calculations are provided in Chapter 6, this part lays out policies that affect these calculations during a reexamination. 9-IV.B. CHANGES IN UTILITY ALLOWANCES [24 CFR 965.507, 24 CFR 966.4] The tenant rent calculations must reflect any changes in the PHA’s utility allowance schedule [24 CFR 960.253(c)(3)]. Chapter 16 discusses how utility allowance schedules are established. PHA Policy Unless the PHA is required to revise utility allowances retroactively, revised utility allowances will be applied to a family’s rent calculations at the first annual reexamination after the allowance is adopted. 9-IV.C. NOTIFICATION OF NEW TENANT RENT The public housing lease requires the PHA to give the tenant written notice stating any change in the amount of tenant rent, and when the change is effective [24 CFR 966.4(b)(1)(ii)]. When the PHA redetermines the amount of rent (Total Tenant Payment or Tenant Rent) payable by the tenant, not including determination of the PHA’s schedule of Utility Allowances for families in the PHA’s Public Housing Program, or determines that the tenant must transfer to another unit based on family composition, the PHA must notify the tenant that the tenant may ask for an explanation stating the specific grounds of the PHA determination, and that if the tenant does not agree with the determination, the tenant shall have the right to request a hearing under the PHA’s grievance procedure [24 CFR 966.4(c)(4)]. PHA Policy The notice to the family will include the annual and adjusted income amounts that were used to calculate the tenant rent. 271 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 11/1/23 Unlimited copies may be made for internal use. Page 9-27 9-IV.D. DISCREPANCIES During an annual or interim reexamination, the PHA may discover that information previously reported by the family was in error, or that the family intentionally misrepresented information. In addition, the PHA may discover errors made by the PHA. When errors resulting in the overpayment or underpayment of rent are discovered, corrections will be made in accordance with the policies in Chapter 15. 272 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 11/1/23 Unlimited copies may be made for internal use. Page 9-28 PART V: NON-INTERIM REEXAMINATION TRANSACTIONS Notice PIH 2023-27 Families may experience changes within the household that do not trigger an interim reexamination under PHA policy and HUD regulations but which HUD still requires the PHA to report via Form HUD-50058. These are known as non-interim reexamination transactions. In these cases, PHAs will submit a separate, new action code on Form HUD-50058. The following is a list of non-interim reexamination transactions:  Adding or removing a hardship exemption for the child care expense deduction;  Updating or removing the phased-in hardship relief for the health and medical care expense deduction and/or reasonable attendant care and auxiliary apparatus expense deduction (the phased-in relief will begin at an eligible family’s first annual or interim reexamination, whichever is sooner, after January 1, 2024);  Adding or removing general hardship relief for the health and medical care expense deduction and/or reasonable attendant care and auxiliary apparatus expense deduction;  Adding or removing a minimum rent hardship;  Adding or removing a non-family member (i.e., live-in aide, foster child, foster adult);  Ending a family’s EID or excluding 50 percent (decreased from 100 percent) of a family member’s increase in employment income at the start of the second 12-month EID period.  Adding a family member and the increase in adjusted income does not trigger an interim reexamination under the final rule;  Removing a family member and the increase in adjusted income does not trigger an interim reexamination under the final rule;  Adding/updating a family or household member’s Social Security number; and  Updating a family member’s citizenship status from eligible to ineligible or vice versa, resulting in a change to the family’s rent and/or utility reimbursement, if applicable (i.e., family begins receiving prorated assistance or previously prorated assistance becomes full assistance), or updating the prorated rent calculation due to the addition or removal of family members in household with an ineligible noncitizen(s). PHAs must make all other changes to assets, income, and deductions at the next annual or interim reexamination of income, whichever is sooner. 273 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 11/1/23 Unlimited copies may be made for internal use. Page 9-29 274 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 11/1/23 Unlimited copies may be made for internal use. Page 9-30 EXHIBIT 9-1: CALCULATING INCOME AT ANNUAL REEXAMINATION Example 1: Calculating Annual Income at Annual Reexamination Using EIV Staff are processing the 3/1/2024 annual reexamination for Ruby Myers and her minor daughter, Georgia. No interim reexaminations have been processed, and Ruby has not reported any changes to annual income to the PHA since the 3/1/2023 annual reexamination. The SSA- published 2024 COLA is 7 percent. Last reexamination – 3/1/2023 Annual Reexamination Ruby: Wages: $30,000 Georgia: SSI: $10,980 ($915 monthly) The EIV report pulled on 12/15/2023 Ruby: Georgia: Wages Total: $33,651 SSI Total: $10,980 Quarter 3 of 2023: $8,859 (City Public School) 2023 benefit $915 monthly Quarter 2 of 2023: $8,616 (City Public School) Quarter 1 of 2023: $8,823 (City Public School) Quarter 4 of 2022: $7,353 (City Public School) 275 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 11/1/23 Unlimited copies may be made for internal use. Page 9-31 Income Reported on Reexamination Application Ruby: Wages at City Public School: $32,000 (switched jobs but no permanent change to amount) Georgia: SSI benefits: $10,980 (no changes) Calculating Ruby’s wages: Step 1: Determine prior annual income from EIV (i.e., Q4 2022 through Q3 of 2023: $33,651). Step 2: Take into consideration any interim reexamination of family income completed since the last annual reexamination (in this case, there have been no interim reexaminations processed since the last annual reexamination). Step 3: Ruby certifies that the $33,651 of wages in EIV is accurate and reflects her current annual income, so the PHA will use $33,651 for annual wages for the 3/1/2024 annual reexamination given there have been no additional changes to annual income. Calculating Georgia’s SSI benefit: Step 1: Determine the prior annual income from EIV (i.e., $915 x 12 months: $10,980). Step 2: Take into consideration any interim reexamination of family income completed since the last annual reexamination (in this case, there have been no interim reexaminations processed since the last annual reexamination). Step 3: Ruby certifies the SSI income in EIV is accurate and reflects Georgia’s current annual income. The PHA must adjust the prior-year income (2023 SSI benefit) by the 7- percent COLA and will use this amount to calculate annual SSI income for the 3/1/2024 annual reexamination: COLA: $64.05 ($915 x 0.07) New gross SSI benefit: $11,748.60 ($979.05 x 12 months) If Ruby did not agree with the annual wages reported in EIV, the PHA/MFH Owner would be required to verify her current income in accordance with HUD’s verification hierarchy. Summary of Annual Income (as reported on the HUD-50058) Ruby (Head of Household): Other Wage: $33,651 Myers Family Total Annual Income: $45,399 Georgia (Other Youth Under 18): SSI: $11,748 276 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 11/1/23 Unlimited copies may be made for internal use. Page 9-32 Example 2: Calculating Annual Income at Annual Reexamination Using EIV: Family Disagrees with EIV Staff are processing Paul Hewson’s 5/1/2024 annual reexamination. Since the last annual reexamination, Paul reported a decrease in annual income that exceeded 10 percent. Last year, Paul reported a decrease in earned income because he transferred from a full-time job at Sasha’s Sweets to a part-time job at Viking Bakery. Following HUD’s EIV verification hierarchy, staff confirmed Paul was no longer employed at Sasha’s Sweets and decreased his anticipated annual income from $28,000 to $7,500 resulting from his new part-time employment at Viking Bakery; an interim reexamination was processed effective 7/1/2023. After the 7/1/2023 interim, Paul worked briefly at two different jobs, but he says he is no longer working and is not planning to work. 5/1/2023 Annual Reexamination Wages: $28,000 The EIV report pulled on 1/15/2024 Wages Total: $18,271 Quarter 3 of 2023: $2,500 (Viking Bakery) Quarter 3 of 2023: $796 (Sweet Tooth Candy Bar) Quarter 2 of 2023: $1,300 (Sasha’s Sweets) Quarter 2 of 2023: $584 (Larry’s Concessions) Quarter 2 of 2023: $2,401 (Viking Bakery) Quarter 1 of 2023: $6,500 (Sasha’s Sweets) Quarter 4 of 2022: $600 (Sasha’s Sweets) SS/SSI: No history of benefits 277 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 11/1/23 Unlimited copies may be made for internal use. Page 9-33 Income Reported on Reexamination Application Wages: $0 (permanent change; no longer receiving) Social Security: $14,400 ($1,200 monthly) Paul certified on the PHA’s annual reexamination paperwork that he does not agree with the annual wages of $18,271 reported in EIV and it is not reflective of his current anticipated annual income. He reported he is currently unemployed, and provided a copy of an award letter from the Social Security Administration to document that he will begin receiving a monthly disability benefit of $1,200 effective 3/1/2024. Calculating Wages and SS Benefit Step 1: Determine prior annual income taking into consideration the 8/1/2023 interim reexamination (i.e., EIV wages reflected Q4 2022 through Q3 2023: $18,271) Step 2: Take into consideration any interim reexamination of family income completed since the last annual reexamination. In this case, there was a 7/1/2023 interim that reduced wages to $7,500. Step 3: Obtain documentation to verify current income and confirm Paul is no longer employed at Viking Bakery or The Sweet Tooth Candy Bar (the employers reported in the most recent quarter of EIV). This step is necessary, because Paul did not agree with the EIV income report or income reported on the last interim reexamination. Paul reported that he is no longer working at all. Process the annual reexamination effective 5/1/2024 using annual SS income of $14,400 and $0 wages. Summary of Annual Income (as reported on the HUD-50058) Paul (Head of Household): $14,400 (SS) Hewson Family Total Annual Income: $14,400 278 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 11/1/23 Unlimited copies may be made for internal use. Page 9-34 Example 3: Calculating Annual Income at Annual Reexamination Staff are processing the 11/1/2024 annual reexamination for Samantha and Fergus Pool, head of household and spouse. On 2/14/2024 Samantha reported her monthly child support payment was reduced from $200 to $100 per month, but an interim reexamination was not processed because the reduction in child support income for Samantha’s daughter, Hailey, did not result in a decrease of 10 percent or more in annual adjusted income, and the PHA did not establish a lower threshold. Samantha did not report any additional changes to the PHA. Last reexamination – 11/1/2023 Annual Reexamination Samantha: Business income: $28,000 VA disability pension: $12,000 Child support: $2,400 Fergus: Wages: $8,250 Other non-wage income: $3,000 (Go Fund Me online fundraiser) The EIV report pulled on 9/16/2024 Samantha: Fergus: Wages Total: $0 (no wage data reported since Q1 2023) Wages Total: $8,600 Quarter 1 of 2024: $2,100 (Ian’s Fish ‘n’ Chips) Quarter 1 of 2024: $500 (Claire’s Healthcare Supplies) Quarter 4 of 2023: $1,000 (Claire’s Healthcare Supplies) Quarter 3 of 2023: $1,800 (The Onion Garden Shop) Quarter 2 of 2023: $3,200 (Ivar’s Fish Haus) 279 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 11/1/23 Unlimited copies may be made for internal use. Page 9-35 Current Family Circumstances: Income Reported on Reexamination Application Samantha and Fergus reported how much income was earned/received in the previous 12-month period and noted permanent changes, where applicable, for each source of their income on PHA’s annual reexamination form. However, no information was reported by the family concerning other non-wage income. Fergus reported only wages and his current employment at Ian’s Fish ‘n’ Chips for the annual reexamination. The family supplied the supporting documentation noted below to the PHA for the 11/1/2024 annual reexamination. Samantha: Business income: $28,750 (last year); has decreased to $18,000 (permanent change) VA disability benefit: $12,000 (last year); has increased to $12,300 (permanent change) Child support: $2,400 (last year); has decreased to $1,200 (permanent change) Fergus: Wages: $6,000 Calculating Samantha’s Net Business Income Step 1: Determine prior annual net business income (i.e., $28,000 on last HUD–50058. Step 2: Take into consideration any interim reexamination of family income completed since the last annual reexamination. In this case, there have been no interim reexaminations processed since the last annual reexamination. Step 3: Adjust to reflect current net business income. Samantha reported on the annual reexamination application that business income permanently decreased to $18,000. The PHA must obtain supporting documentation from Samantha that demonstrates current net business income. Samantha provided documentation that supported the current annual net business income is $18,000. Process the annual reexamination effective 11/1/2024 using annual net business income determined in Step 3. Calculating Samantha’s VA Pension Income Step 1: Determine prior annual VA pension income (i.e., $12,000 supported by a VA award letter Samantha supplied that documents the prior year monthly VA pension was $1,000). Step 2: Take into consideration any interim reexamination of family income completed since the last annual reexamination. In this case, there have been no interim reexaminations processed since the last annual reexamination. Step 3: The PHA needs to adjust to reflect current VA pension income. Samantha supplies a VA award letter showing a monthly pension of $1,025, or $12,300 annually. Process the annual reexamination effective 11/1/2024 using annual VA pension income determined in Step 3 ($12,300 in this example). 280 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 11/1/23 Unlimited copies may be made for internal use. Page 9-36 Calculating Samantha’s Child Support Income Step 1: Determine prior annual child support income (i.e., $2,400 on the last HUD–50058). Step 2: Take into consideration any interim reexamination of family income completed since the last annual reexamination. In this case, there have been no interim reexaminations processed since the last annual reexamination. The family reported a decrease from $200 to $100 monthly, but the change was not processed because it did not meet the threshold. Step 3: The family reported changes, so the PHA must adjust to reflect current child support income. In this example, the family submitted a child support history report from the local child support office that documents regular $100 monthly child supports payments beginning 3/1/2024 through the current month. Process the annual reexamination effective 11/1/2024 using current annual child support income determined in Step 3 ($1,200 in this example). Calculating Fergus’ Wages Step 1: Determine prior annual income from wages in EIV (i.e., Q2 2023 through Q1 of 2024: $8,600). Step 2: Take into consideration any interim reexamination of family income completed since the last annual reexamination. In this case, there have been no interim reexaminations processed since the last annual reexamination. 281 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 11/1/23 Unlimited copies may be made for internal use. Page 9-37 Step 3: There is a discrepancy between what the family reported and EIV, so the PHA must verify and adjust to reflect current annual income from wages. Fergus reported $6,000 in annual income from wages on the annual reexamination from a single employer, Ian’s Fish ‘n’ Chips. The PHA projected annual income of $7,800 based on the two paystubs for this employer, and EIV shows $8,600 earned in the most recent four quarters in EIV. To complete Step 3, the PHA must do the following:  Resolve the discrepancy between EIV wages, the $6,000 annual income Fergus reported, and the $7,800 projected based on the paystubs he provided, and  Verify he is no longer employed at Claire’s Healthcare Supplies in accordance with HUD’s verification hierarchy and local policies. The PHA determined that Fergus reported his net vs. gross annual income from wages, which he corrected on the annual reexamination form to reflect his current gross annual income of $9,000. The PHA verified Fergus was no longer employed at Claire’s Healthcare Supplies and obtained two additional paystubs. Based on four current and consecutive paystubs, Fergus is now projected to earn $9,360 annually. Process the annual reexamination effective 11/1/2024 using income from wages determined in Step 3 ($9,360 in this example). Calculating Fergus’ Other Non-Wage Income Step 1: Determine prior annual income from other non-wage income (i.e., $3,000 on the last HUD– 50058). Step 2: Take into consideration any interim reexamination of family income completed since the last annual reexamination. In this case, there have been no interim reexaminations processed since the last annual reexamination. Step 3: The family did not report any non-wage income on the annual reexamination form, but it was included on the last HUD–50058. The PHA must verify and adjust to reflect current non-wage income. The PHA must verify no income was received through a “Go Fund Me” online fundraiser so that it may be excluded. Fergus provided a self-certification that he hasn’t solicited funds online and doesn’t plan to in the following year; he also provided records from the account that documented no fundraising activity in the prior 12-month period. Process the annual reexamination effective 11/1/2024 using annual non-wage income of $0 determined in Step 3. Summary of Annual Income (as reported on the HUD-50058) Samantha (Head of Household): Own business: $18,000 Pension: $12,300 Child support: $1,200 Fergus (Co-head): Wages: $9,360 Poole Family Total Annual Income: $40,860 282 © Copyright 2022 2023 Nan McKay & Associates ACOP 9/1/202211/1/2023 Unlimited copies may be made for internal use Page 10-18 10-III.C. OTHER CHARGES Pet-Related Damages During Occupancy HA Policy All reasonable expenses incurred by the HA as a result of damages directly attributable to the presence of the pet in the project will be the responsibility of the resident, including: The cost of repairs and replacements to the resident's dwelling unit Fumigation of the dwelling unit Repairs to common areas of the project The expense of flea elimination shall also be the responsibility of the resident. If the resident is in occupancy when such costs occur, the resident shall be billed for such costs in accordance with the policies in Section 8-I.G, Maintenance and Damage Charges. Pet deposits will not be applied to the costs of pet-related damages during occupancy. Charges for pet-related damage are not part of rent payable by the resident. Pet Waste Removal Charge The regulations do not address the HA’s ability to impose charges for house pet rule violations. However, charges for violation of HA pet rules may be treated like charges for other violations of the lease and HA tenancy rules. HA Policy A separate pet waste removal charge of $25.00 outdoors, $50 indoors per occurrence will be assessed against pet owners who fail to remove pet waste in accordance with this policy. Notices of pet waste removal charges will be in accordance with requirements regarding notices of adverse action. Charges are due and payable 30 calendar days after billing. If the family requests a grievance hearing within the required timeframe, the HA may not take action for nonpayment of the charge until the conclusion of the grievance process. Charges for pet waste removal are not part of rent payable by the resident. 283 © Copyright 2022 2023 Nan McKay & Associates ACOP 9/1/202211/1/2023 Unlimited copies may be made for internal use Page 10-21 10-IV.D. OTHER CHARGES Pet-Related Damages During Occupancy HA Policy All reasonable expenses incurred by the HA as a result of damages directly attributable to the presence of the pet in the project will be the responsibility of the resident, including: The cost of repairs and replacements to the resident's dwelling unit Fumigation of the dwelling unit Repairs to common areas of the project Yard restoration The expense of flea elimination shall also be the responsibility of the resident. If the resident is in occupancy when such costs occur, the resident shall be billed for such costs in accordance with the policies in Section 8-I.G, Maintenance and Damage Charges. Pet deposits will not be applied to the costs of pet-related damages during occupancy. Charges for pet-related damage are not part of rent payable by the resident. Pet Waste Removal Charge The regulations do not address the HA’s ability to impose charges for house pet rule violations. However, charges for violation of HA pet rules may be treated like charges for other violations of the lease and HA tenancy rules. HA Policy A separate pet waste removal charge of $25.00 outdoors, $50 indoors per occurrence will be assessed against pet owners who fail to remove pet waste in accordance with this policy. Such charges will be due and payable 30 calendar days after billing. Charges for pet waste removal are not part of rent payable by the resident. 284 © Copyright 2023 by Nan McKay & Associates ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 12-5 PART II: HA REQUIRED TRANSFERS 12-II.A. OVERVIEW HUD regulations regarding transfers are minimal, leaving it up to the HA to develop reasonable transfer policies. The HA may require that a resident transfer to another unit under some circumstances. For example, the HA may require a resident to transfer to make an accessible unit available to a disabled family. The HA may also transfer a resident in order to maintain occupancy standards based on family composition. Finally, a HA may transfer residents in order to demolish or renovate the unit. A transfer that is required by the HA is an adverse action, and is subject to the notice requirements for adverse actions [24 CFR 966.4(e)(8)(i)]. 12-II.B. TYPES OF HA REQUIRED TRANSFERS HA Policy The types of transfers that may be required by the HA, include, but are not limited to, transfers to make an accessible unit available for a disabled family, transfers to comply with occupancy standards, transfers for demolition, disposition, revitalization, or rehabilitation, and emergency transfers as discussed in Part I of this chapter. Transfers required by the HA are mandatory for the tenant. The family will be given 30 days to vacate the unit after receipt of written notice. Transfers to Make an Accessible Unit Available When a family is initially given an accessible unit, but does not require the accessible features, the HA may require the family to agree to move to a non-accessible unit when it becomes available [24 CFR 8.27(b)]. HA Policy When a non-accessible unit becomes available, the HA will transfer a family living in an accessible unit that does not require the accessible features, to an available unit that is not accessible. The HA may wait until a disabled resident requires the accessible unit before transferring the family that does not require the accessible features out of the accessible unit. 285 © Copyright 2023 by Nan McKay & Associates ACOP 311/1/2023 Unlimited copies may be made for internal use. Page 12-15 12-IV.E. DECONCENTRATION (N/A) HA Policy If subject to deconcentration requirements, the HA will consider its deconcentration goals when transfer units are offered. When feasible, families above the Established Income Range will be offered a unit in a development that is below the Established Income Range, and vice versa, to achieve the HA’s deconcentration goals. A deconcentration offer will be considered a “bonus” offer; that is, if a resident refuses a deconcentration offer, the resident will receive one additional transfer offer. 12-IV.F. REEXAMINATION POLICIES FOR TRANSFERS HA Policy The reexamination date will remain the same as the original month in which the resident entered the program unless the resident transfers from Hamilton House or a scattered site unit to Louisiana Court. 286 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/23 Unlimited copies may be made for internal use. Page 13-8 13-II.J. OVER INCOME FAMILIES [24 CFR 960.507; FR Notice 7/26/18; Notice PIH 2019-11; FR Notice 2/14/23] In the public housing program, an over-income family is defined as a family whose income exceeds the over-income limit for 24 consecutive months. When this occurs, the PHA must either:  Terminate the family’s tenancy within six months of the PHA’s final notification of the end of the 24-month grace period; or  Within 60 days of the PHA’s final notification of the end of the 24-month grace period or the next lease renewal (whichever is sooner), have the family execute a new lease that is consistent with 24 CFR 960.509 and charge the family a monthly rent that is the higher of the applicable fair market rent (FMR) or the amount of monthly subsidy for the unit, including amounts from the operating and capital funds. However, a PHA that owns or operates fewer than 250 public housing units may continue to lease public housing units to families whose incomes exceed the low-income limit at initial occupancy in accordance with 24 CFR 960.503. TT he PHA must establish a continued occupancy policy for over-income families in the ACOP indicating which of the above will occur. PHA Policy For families whose income exceeds the over-income limit for 24 consecutive months, the PHA will terminate the tenancy of the family no more than six months after the final notification of the family’s over-income status in accordance with the continued occupancy policies below. Over-Income Limit [Notice PIH 2019-112023-03] The PHA must publish over-income limits in their ACOP and update them no later than 60 days after HUD publishes new income limits each year. The over-income limit is calculated by multiplying the very low-income limit (VLI) by 2.4, as adjusted for family size. PHA Policy The PHA will rely on the following over-income limits. These numbers will be updated within 60 days of HUD publishing new income limits each year and will be effective for all annual and interim reexaminations once these policies have been adopted. Family Size 1 2 3 4 5 6 7 8 Over- Income Limit $104,400 $119,280 $134,160 $149,040 $161,040 $172,920 $184,920 $196,800 For families larger than eight persons, the over-income limit will be calculated by multiplying the applicable very low-income limit by 2.4. 287 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/23 Unlimited copies may be made for internal use. Page 13-9 Decreases in Income [24 CFR 960.507(c)(4)] If, at any time during the consecutive 24-month period following the initial over-income determination, the PHA determines that the family’s income is below the over-income limit, the PHA’s over-income policies no longer apply to the family. If the PHA later determines that the family’s income exceeds the over-income limit at a subsequent annual or interim reexamination, the family is entitled to a new 24 consecutive month period and new notices under this section. PHA Policy If, at any time during the 24-month period following the initial over-income determination, an over-income family experiences a decrease in income, the family may request an interim redetermination of rent in accordance with PHA policy in Chapter 9. If, as a result, the previously over-income family is now below the over-income limit, the family is no longer subject to over-income provisions as of the effective date of the recertification. The PHA will notify the family in writing within 10 business days of the determination that over-income policies no longer apply to them. Initial Notice of Over-Income Status [24 CFR 960.507(c)(1); Notice PIH 2023-03] If the PHA determines the family has exceeded the over-income limit during an annual or interim reexamination, the PHA must provide written notice to the family of the over-income determination no later than 30 days after the income examination. The notice must state that the family has exceeded the over-income limit and continuing to do so for a total of 24 consecutive months will result in the PHA following its continued occupancy policy for over-income families. The PHA must afford the family an opportunity for a hearing if the family disputes within a reasonable time the PHA’s determination that the family has exceeded the over-income limit. Exhibits 13-1 provides a sample notices based on HUD’s model notices. PHA Policy At annual or interim reexamination, if a family’s income exceeds the applicable over- income limit, within 10 business days of the determination, the PHA will notify the family in writing of the determination. The notice will state and that if the family continues to be over-income for 24 consecutive months, the family will be subject to the PHA’s over-income policies. The notice will state that the family may request a hearing if the family disputes the PHA’s determination in accordance with PHA policies in Chapter 14. The PHA will ensure that all notices and communications are provided in a manner that is effective for persons with hearing, visual and other impairments. 288 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/23 Unlimited copies may be made for internal use. Page 13-10 Second Notice of Over-Income Status [24 CFR 960.507(c)(2); Notice PIH 2023-02; Notice PIH 2023-27] The PHA must conduct an income examination 12 months after the initial over-income determination, even if the family is paying flat rent, unless the PHA determined the family’s income fell below the over-income limit since the initial over-income determination. This includes when the PHA makes an initial determination that a family is over-income during an interim reexamination. In this case the PHA must conduct a second interim reexamination 12 months after the over-income determination, unless the family’s income falls below the over- income limit during the 24-month period. See Chapter 9 for PHA policies on interims for over- income families. If the PHA determines the family continues to exceed the over-income limit for 12 consecutive months, the PHA must provide written notification of this 12-month over-income determination no later than 30 days after the income examination. The notice must state that the family has exceeded the over-income limit for 12 consecutive months and continuing to do so for a total of 24 consecutive months will result in the PHA following its continued occupancy policy for over- income families. Additionally, if applicable under PHA policy, the notice must include an estimate (based on current data) of the alternative non-public housing rent for the family’s unit. The PHA must afford the family an opportunity for a hearing if the family disputes within a reasonable time the PHA’s determination that the family has exceeded the over-income limit. Exhibits 13-2 provides a sample 12-month notices based on HUD’s model notices. PHA Policy If a family’s income continues to exceeds the applicable over-income limit after 12 consecutive months, within 10 business days of the determination, the PHA will notify the family in writing of the determination. The notice will state and that if the family continues to be over-income for 24 consecutive months, the family will be subject to the PHA’s over-income policies. The notice will also state that the family may request a hearing if the family disputes the PHA’s determination in accordance with PHA policies in Chapter 14. The PHA will ensure that all notices and communications are provided in a manner that is effective for persons with hearing, visual, and other impairments. 289 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/23 Unlimited copies may be made for internal use. Page 13-11 Final Notice of Over-Income Status [24 CFR 960.507(c)(3) and 960.509 ; Notice PIH 2023-03; Notice PIH 2023-27] Unless the PHA determined the family’s income fell below the over-income limit since the second over-income determination, the PHA must conduct an income examination 24 months after the initial over income determination, even if the family is paying flat rent. When a PHA makes an initial determination that a family is over-income during an interim reexamination, the PHA must conduct an interim reexamination 12 months after the over-income determination, and then again 12 months after the second over-income determination, unless the family’s income falls below the over-income limit during the 24-month period.. If the family continues to be over-income based on this determination, the PHA must provide written notification of this determination no later than 30 days after the income examination. The notice must state that the family has exceeded the over-income limit for 24 consecutive months and that the PHA will follow its continued occupancy policies for over-income families. The PHA must afford the family an opportunity for a hearing if the family disputes within a reasonable time the PHA’s determination that the family has exceeded the over-income limit. Exhibits 13-3 provides a sample 24-month notices based on HUD’s model notices. PHA Policy For families whose income exceeds the over-income limit for 24 consecutive months, the HA will terminate the tenancy of the family no more than six months after the final notification of the family’s over-income status. During the period before termination, the over-income family will continue to be a public housing program participant until their tenancy is terminated. The HA will continue to charge the family rent in accordance with public housing regulations, will offer the family the choice between income-based and flat rent as required by the regulations, and will prorate rent for mixed families. When an over income family is facing termination after exceeding the grace period of six months, the family may request an interim reexamination, but a decrease in income and the family’s rent will not reset the period before termination or enable the family to avoid termination. The HA will give appropriate notice of lease tenancy termination (notice to vacate) in accordance with state and local laws. 290 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/23 Unlimited copies may be made for internal use. Page 13-38 EXHIBIT 13-1: SAMPLE NOTICE FOR OVER-INCOME FAMILIES – INITIAL NOTIFICATION FOR TERMINATE ONLY OPTION1 This material is based upon work supported, in whole or in part, by Federal award number NAL-C-17-094-05 awarded to NALCAB by the U.S. Department of Housing and Urban Development. The substance and findings of the work are dedicated to the public. Neither the United States Government, nor any of its employees, makes any warranty, express or implied, or assumes any legal liability or responsibility for the accuracy, completeness, or usefulness of any information, apparatus, product, or process disclosed, or represents that its use would not infringe privately- owned rights. Reference herein to any individuals, agencies, companies, products, process, services, service by trade name, trademark, manufacturer, or otherwise does not constitute or imply an endorsement, recommendation, or favoring by the author(s), contributor(s), the U.S. Government or any agency thereof. Opinions contained herein are those of the author(s) and do not necessarily reflect the official position of, or a position that is endorsed by, HUD or any Federal agency. These Sample Notices include provisions required per 24 CFR 960.507(c). Anything included in brackets and italic is meant as instruction to the PHA in creating its own notices. Example: [This text is meant as instruction to the PHA.] 1 This sample notice is presented verbatim from HUD’s sample forms used in the HOTMA Income and Assets Training Series, available at https://www.hudexchange.info/resource/6849/hotma-sample-notices-for-overincome- families/. Only the formatting has been changed to be consistent with the formatting used throughout this ACOP. 291 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/23 Unlimited copies may be made for internal use. Page 13-39 OVER-INCOME FAMILY INITIAL NOTIFICATION _______________________ Housing Authority of St. Louis Park Resident name: Address: Date: Purpose The purpose of this notice is to inform you that the St. Louis Park Housing Authority has determined that your family’s income is above the income limit (over-income) according to federal rules for the public housing program. This is your initial (first) notice. What happens next? For now, your rent will continue to be calculated as usual, you will continue to be offered a choice between income-based and flat rent, and you do not have to move. If your family remains over-income for the following 24 consecutive months, you will no longer be eligible for assistance under the public housing program. If you think that we have made a mistake and your family should not be considered over-income, you may request a hearing by calling: XXX-XXX-XXXX or emailing [address] or requesting more information from PHA staff at: [location]. If you wish to request a hearing, please do so as soon as possible. If you do not wish to request a hearing, you do not need to do anything at this time. 292 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/23 Unlimited copies may be made for internal use. Page 13-40 What about changes to my income? We will continue to reexamine your income every 12 months as usual. After each reexamination, you will receive a notification like this one if your family is still over-income. If your family’s income drops below the over-income limit before the end of the 24 consecutive-month grace period, you will no longer be considered over-income. If your family’s income increases again to an amount that is over-income, you will receive another 24 consecutive month grace period. If your income changes, contact us using the information provided below to learn the policy for requesting an interim reexamination. [PHA: Please note that the following section is optional. The regulations only require this level of detail for the second notice.] What if my family remains over-income for 24 consecutive months? Within 30 days of the recertification, you will receive a notice like this one informing you that your family has remained over-income for 24 consecutive months. According to the Continued Occupancy Policy, families that remain over-income for 24 consecutive months must leave their units and find other housing in no more than six months after receiving notification. If your family continues to reside in the unit after ____ [restate date], the PHA will begin eviction proceedings by issuing a notice to vacate. Until the time of lease termination, you will continue to be a public housing program participant and will continue to be charged your choice of income-based or flat rent. [INSERT PHA CONTACT INFORMATION] 293 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/23 Unlimited copies may be made for internal use. Page 13-41 EXHIBIT 13-2: SAMPLE NOTICE FOR OVER-INCOME FAMILIES – 12-MONTH NOTIFICATION FOR TERMINATE ONLY OPTION 2 This material is based upon work supported, in whole or in part, by Federal award number NAL-C-17-094-05 awarded to NALCAB by the U.S. Department of Housing and Urban Development. The substance and findings of the work are dedicated to the public. Neither the United States Government, nor any of its employees, makes any warranty, express or implied, or assumes any legal liability or responsibility for the accuracy, completeness, or usefulness of any information, apparatus, product, or process disclosed, or represents that its use would not infringe privately- owned rights. Reference herein to any individuals, agencies, companies, products, process, services, service by trade name, trademark, manufacturer, or otherwise does not constitute or imply an endorsement, recommendation, or favoring by the author(s), contributor(s), the U.S. Government or any agency thereof. Opinions contained herein are those of the author(s) and do not necessarily reflect the official position of, or a position that is endorsed by, HUD or any Federal agency. These Sample Notices include provisions required per 24 CFR 960.507(c). Anything included in brackets and italic is meant as instruction to the PHA in creating its own notices. Example: [This text is meant as instruction to the PHA.] 2 This sample notice is presented verbatim from HUD’s sample forms used in the HOTMA Income and Assets Training Series, available at https://www.hudexchange.info/resource/6849/hotma-sample-notices-for-overincome- families/. Only the formatting has been changed to be consistent with the formatting used throughout this ACOP. 294 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/23 Unlimited copies may be made for internal use. Page 13-42 OVER-INCOME FAMILY 12 MONTH NOTIFICATION _______________________ Housing Authority of St. Louis Park Resident name: Address: Date: Purpose The purpose of this notice is to inform you that the St. Louis Park Housing Authority has determined that your family’s income is above the income limit (over-income) according to federal rules for public housing. This is your 12-month (second) notice. What happens next? For now, your rent will continue to be calculated as usual, you will continue to be offered a choice between income-based and flat rent, and you do not have to move. If your family remains over-income for the following 12 consecutive months, you will no longer be eligible for assistance under the public housing program. If you think that we have made a mistake and your family should not be considered over-income, you may request a hearing by calling: XXX-XXX-XXXX or emailing [address] or requesting more information from PHA staff at: [location]. If you wish to request a hearing, please do so as soon as possible. If you do not wish to request a hearing, you do not need to do anything at this time. 295 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/23 Unlimited copies may be made for internal use. Page 13-43 What about changes to my income? We will need to re-examine your income in 12 months. After the reexamination, you will receive a notification like this one if your family is still over-income. If your family’s income drops below the over-income limit before the end of the 24 consecutive-month grace period, you will no longer be considered over-income. If your family’s income increases again to an amount that is over-income, you will receive another 24 consecutive month grace period. If your income changes, contact us using the information provided below to learn the policy for requesting an interim reexamination. What if my family remains over-income in consecutive 12 months? Within 30 days of the recertification, you will receive a notice like this one informing you that your family has remained over-income for 24 consecutive months. According to the Continued Occupancy Policy, families that remain over-income for 24 consecutive months must leave their units and find other housing in no more than six months after receiving notification. If your family continues to reside in the unit after ____ [restate date], ___ [name of PHA] will begin eviction proceedings by issuing a notice to vacate. Until the time of lease termination, you will continue to be a public housing program participant and will continue to be charged your choice of income-based or flat rent. [INSERT PHA CONTACT INFORMATION] 296 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/23 Unlimited copies may be made for internal use. Page 13-44 EXHIBIT 13-3: SAMPLE NOTICE FOR OVER-INCOME FAMILIES – 24-MONTH NOTIFICATION FOR TERMINATION ONLY OPTION 3 This material is based upon work supported, in whole or in part, by Federal award number NAL-C-17-094-05 awarded to NALCAB by the U.S. Department of Housing and Urban Development. The substance and findings of the work are dedicated to the public. Neither the United States Government, nor any of its employees, makes any warranty, express or implied, or assumes any legal liability or responsibility for the accuracy, completeness, or usefulness of any information, apparatus, product, or process disclosed, or represents that its use would not infringe privately- owned rights. Reference herein to any individuals, agencies, companies, products, process, services, service by trade name, trademark, manufacturer, or otherwise does not constitute or imply an endorsement, recommendation, or favoring by the author(s), contributor(s), the U.S. Government or any agency thereof. Opinions contained herein are those of the author(s) and do not necessarily reflect the official position of, or a position that is endorsed by, HUD or any Federal agency. These Sample Notices include provisions required per 24 CFR 960.507(c). Anything included in brackets and italic is meant as instruction to the PHA in creating its own notices. Example: [This text is meant as instruction to the PHA.] 3 This sample notice is presented verbatim from HUD’s sample forms used in the HOTMA Income and Assets Training Series, available at https://www.hudexchange.info/resource/6849/hotma-sample-notices-for-overincome- families/. Only the formatting has been changed to be consistent with the formatting used throughout this ACOP. 297 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/23 Unlimited copies may be made for internal use. Page 13-45 OVER-INCOME FAMILY 24 MONTH NOTIFICATION _______________________ Housing Authority of St. Louis Park Resident name: Address: Date: Purpose The purpose of this notice is to inform you that the St. Louis Park Housing Authroity has determined that your family’s income is above the income limit (over-income) according to federal rules for public housing. This is your 24-month (third) notice. You are no longer eligible for assistance under the public housing program. What if I disagree that my family is over-income? If you think that we have made a mistake and your family should not be considered over-income, you may request a hearing by calling: XXX-XXX-XXXX or emailing [address] or requesting more information from PHA staff at: [location]. If you wish to request a hearing, please do so as soon as possible. What about changes to my income? Changes to your income after you receive this notice will not change our determination. If necessary, you may request an interim reexamination, but a decrease in income or rent will not make you eligible to remain. Because your family has been over-income for 24 consecutive months, you are no longer eligible for assistance under the public housing program. 298 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 311/1/23 Unlimited copies may be made for internal use. Page 13-46 What do I need to do now? According to the Continued Occupancy Policy, your family cannot continue your tenancy. You must find other housing as soon as possible. Our policy is to allow families up to six months to find other housing. If your family continues to reside in the unit after ____ [restate date], the PHA will begin eviction proceedings by issuing a notice to vacate. Until the time of lease termination, you will continue to be a public housing program participant and will continue to be charged your choice of income-based or flat rent. [The following is an optional section where the PHA may include referral services to support a family in finding new housing.] The following services are available to assist you: [INSERT PHA CONTACT INFORMATION] 299 © Copyright 20232 Nan McKay & Associates, Inc. ACOP 9/1/2211/1/23 Unlimited copies may be made for internal use. Page 15-3 PART I: PREVENTING, DETECTING, AND INVESTIGATING ERRORS AND PROGRAM ABUSE 15-I.A. PREVENTING ERRORS AND PROGRAM ABUSE HUD created the Enterprise Income Verification (EIV) system to provide HAs with a powerful tool for preventing errors and program abuse. HAs are required to use the EIV system in its entiretyat annual reexamination in accordance with HUD administrative guidance [24 CFR 5.233]. HAs are further required to:  Provide applicants and residents with form HUD-52675, “Debts Owed to HAs and Terminations”  Require all adult members of an applicant or participant family to acknowledge receipt of form HUD-52675 by signing a copy of the form for retention in the family file HA Policy The HA anticipates that the vast majority of families and HA employees intend to and will comply with program requirements and make reasonable efforts to avoid errors. To ensure that the HA’s program is administered effectively and according to the highest ethical and legal standards, the HA will employ a variety of techniques to ensure that both errors and intentional program abuse are rare. The HA will provide each applicant and resident with a copy of “Is Fraud Worth It?” (form HUD-1141-OIG), which explains the types of actions a family must avoid and the penalties for program abuse. The HA will provide each applicant and resident with a copy of “What You Should Know about EIV,” a guide to the Enterprise Income Verification (EIV) system published by HUD as an attachment to Notice PIH 2017-12. In addition, the HA will require the head of each household to acknowledge receipt of the guide by signing a copy for retention in the family file. The HA will require mandatory orientation sessions for all prospective residents either prior to or upon execution of the lease. The HA will discuss program compliance and integrity issues. At the conclusion of all program orientation sessions, the family representative will be required to sign a program briefing certificate to confirm that all rules and pertinent regulations were explained to them. The HA will routinely provide resident counseling as part of every reexamination interview in order to clarify any confusion pertaining to program rules and requirements. HA staff will be required to review and explain the contents of all HUD- and HA- required forms prior to requesting family member signatures. 300 © Copyright 20232 Nan McKay & Associates, Inc. ACOP 9/1/2211/1/23 Unlimited copies may be made for internal use. Page 15-10 15-II.C. HA-CAUSED ERRORS OR PROGRAM ABUSE The responsibilities and expectations of HA staff with respect to normal program administration are discussed throughout the ACOP. This section specifically addresses actions of a HA staff member that are considered errors or program abuse related to the public housing program. Additional standards of conduct may be provided in the HA personnel policy. HA-caused incorrect rental determinations include (1) failing to correctly apply public housing rules regarding family composition, income, assets, and expenses, and (2) errors in calculation. De Minimis Errors [24 CFR 5.609(c)(4); Notice PIH 2023-27] The PHA will not be considered out of compliance when making annual income determinations solely due to de minimis errors in calculating family income. A de minimis error is an error where the PHA determination of family income deviates from the correct income determination by no more than $30 per month in monthly adjusted income ($360 in annual adjusted income) per family. PHAs must take corrective action to credit or repay a family if the family was overcharged rent, including when PHAs make de minimis errors in the income determination. Families will not be required to repay the PHA in instances where the PHA miscalculated income resulting in a family being undercharged for rent. PHAs state in their policies how they will repay or credit a family the amount they were overcharged as a result of the PHA’s de minimis error in income determination. PHA Policy The PHA will reimburse a family for any family overpayment of rent, regardless of whether the overpayment was the result of staff-caused error, staff program abuse, or a de minimis error. Repayment to the HA The family is not required to repay an underpayment of rent if the error or program abuse is caused by HA staff. HA Reimbursement to Family HA Policy The HA will reimburse a family for any family overpayment of rent, regardless of whether the overpayment was the result of staff-caused error or staff program abuse. 301 © Copyright 2023 Nan McKay & Associates, Inc. ACOP 113/1/23 Unlimited copies may be made for internal use. Page 16-13 PART IV: PUBLIC HOUSING ASSESSMENT SYSTEM (PHAS) 16-IV.A. OVERVIEW The purpose of the Public Housing Assessment System (PHAS) is to improve the delivery of services in public housing and enhance trust in the public housing system among HAs, public housing residents, HUD and the general public by providing a management tool for effectively and fairly measuring the performance of a public housing agency in essential housing operations. 16-IV.B. HAS INDICATORS [24 CFR 902 Subparts A, B, C, D, and E] The table below lists each of the HAS indicators, the points possible under each indicator, and a brief description of each indicator. A HA’s performance is based on a combination of all four indicators. Indicator 1: Physical condition of the HA’s projects Maximum Score: 40  The objective of this indicator is to determine the level to which a HA is maintaining its public housing in accordance with the standard of safe, habitable dwelling units.decent, safe, sanitary, and in good repair.  To determine the physical condition of a HA’s projects, inspections are performed of the following five major areas of each public housing project: site, building exterior, building systems, dwelling units, and common areas.using the National Standards for Inspection of Real Estate (NSPIRE). The inspections are performed by an independent inspector arranged by HUD, and include a statistically valid sample of the units in each project in the HA’s public housing portfolio. Indicator 2: Financial condition of the HA’s projects Maximum Score: 25  The objective of this indicator is to measure the financial condition of the HA’s public housing projects for the purpose of evaluating whether the HA has sufficient financial resources and is capable of managing those financial resources effectively to support the provision of housing that is decent, safe, sanitary, and in good repair.  A HA’s financial condition is determined by measuring each public housing project’s performance in each of the following subindicators: quick ratio, months expendable net assets ratio, and debt service coverage ratio. 302 ACOP 2022 Page A-1 Appendix A St. Louis Park Housing Authority VIOLENCE AGAINST WOMEN ACT (VAWA) POLICY Incorporated in Chapter 16 303 ACOP 2022 Page A-2 Appendix B St. Louis Park Housing Authority Emergency Transfer Plan for Victims of Domestic Violence, Dating Violence, Sexual Assault, or Stalking Public Housing and Housing Choice Voucher Programs Incorporated in Chapter 16 304 ACOP 2022 Page A-3 Appendix C HOUSING AUTHORITY OF THE CITY OF ST. LOUIS PARK LIMITED ENGLISH PROFICIENCY (LEP) PLAN Incorporated in Chapter 2 305 ACOP 2022 Page A-4 Appendix DA MAINTENANCE STANDARD CHARGES Maintenance Standard Charges* Charge Effective 6/1/2022 Keys and Key cards $25each Rekey Door Lock $55 Ripped Screens $25 each Damaged Screens and Frames $55 each Light Bulbs (CFL) $5 each Light Bulbs (florescent) $10 each actual cost of replacement bulb Mini-Blinds $35 each Smoke Detector/CO Detector $40 each Smoke Detector/CO Detector Batteries $10 each Broken Windows $ actual cost + labor at $55/ hour Interior Doors $ actual cost + labor at $55/ hour Exterior Doors $ actual cost + labor at $55/ hour Screen Door $ actual cost + labor at $55/ hour Bi-Fold Closet Doors $ actual cost + labor at $55/ hour Floor Damage (replaced or refinished) $ actual cost minus depreciation After Hours Lock Outs Hamilton House Actual cost charged by Guardian Property Management After Hours Lock Outs Scattered Site No longer offering scattered site lockout assistance Storage $200 per month $ actual cost of offsite storage and related expenses or $300 per 28 days onsite/in unit Extra Refuse and Trash Removal $ actual cost Lawn Maintenance $55/hour or actual cost charged by contractor Snow Removal $55/hour or actual cost charged by contractor Standard Cleaning $55/hour or actual cost charged by contractor Standard Maintenance (above normal wear and tear) $55/hour or actual cost charged by contractor Other Not Listed $ actual cost + labor at $55/hour or actual cost charged by contractor Depreciation Schedule For Proration Purposes Carpet 7 years life expectancy Refrigerator 15 years life expectancy Stove 10 years life expectancy VCT/Linoleum/Sheet Vinyl 10 years life expectancy Wood Floor Finishing 10 years life expectancy *Maintenance Standard Charges are reviewed annually 306 HOUSING AUTHORITY OF ST. LOUIS PARK                    Agenda Item #6b  St. Louis Park, Minnesota  Meeting Date: October 9, 2024    TITLE:  Approve amendments to the Housing Authority Administrative Plan for the Housing  Choice Voucher Program Resolution No. 764  RECOMMENDED ACTION:  Staff recommends that the Housing Authority Board approve  Resolution No. 764 amending the Administrative Plan for the Housing Choice Voucher Program  (Admin Plan).    SUMMARY:  The Housing Authority, as the administrator of the federal housing choice voucher  program, is required to adopt and maintain an Admin Plan outlining policies and processes  related to the administration of the Housing Choice Voucher program. Periodically the plan  needs to be updated as the U.S. Department of Housing and Urban Development (HUD) adopts  new or revises regulations and as the HA determines a need to revise its policies.     On July 29, 2016, the Housing Opportunities Through Modernization Act (HOTMA) was signed  into law. HUD published the HOTMA final rule February 14, 2023 and the effective date was  January 1, 2024; however, the system changes required by HOTMA are not currently available.     HUD required HAs to set a compliance date no later than January 1, 2025 and adopt HOTMA  changes to the Admin Plan by this date. HUD sent a notice September 18, 2024 that HAs will  not be required to be compliant with HOTMA Section 102 and 104 income and asset provisions  by January 1, 2025, except for the Earned Income Disregard (EID) provisions. Although the  implementation of the HOTMA Section 102 and 104 Final Rule remains in effect, these income  and asset provisions of the final rule require access to new HOTMA‐compliance HUD‐50058  forms in the Housing Information Portal (HIP), the not‐yet‐released replacement for IMPS/PIC.  HIP will not be ready by January 1, 2025. HUD plans to issue additional guidance about HOTMA  soon. Changes in chapters 4, 5, 8, 9, 10, 12, 13, 15, 16 and 19 will become effective January 1,  2025. HOTMA related policies in chapters 1, 3, 6, 7, 11, 12, 14, 17 and 18 will be implemented  once HUD issues further guidance and all program participants will be informed of the  implementation date.       Attachments:  Resolution No. 764 Amendment to the Admin Plan    Attachment A: Admin Plan changes    Prepared by:   Nicole Randall, Housing Assistance Administrator  Reviewed by: Marney Olson, Housing Supervisor   307 HOUSING AUTHORITY OF ST. LOUIS PARK  Resolution No. 764     Amendment to the Administrative Plan for the Housing Choice Voucher Program     WHEREAS, HUD requires housing authorities administering the Public Housing Program  to have an Administrative Plan for the Housing Choice Voucher Program (Admin Plan) for the  effective administration and operation of its Housing Choice Voucher program, and    WHEREAS, the St. Louis Park Housing Authority has updated the Admin Plan to reflect  changes to HUD Regulations and Requirements, and     WHEREAS, the Housing Authority has updated the Admin Plan to reflect changes to HA  policy as deemed appropriate, and    WHEREAS, the St. Louis Park Housing Authority will implement changes to chapters 4, 5,  8, 9, 10, 12, 13, 15, 16 and 19 with a January 1, 2025 effective date, and    WHEREAS, HOTMA related policies in chapters 1, 3, 6, 7, 11, 12, 14, 17 and 18 will  implemented once HUD issues further guidance and all program participants will be informed  of the implementation date.    THEREFORE, BE IT RESOLVED, by the Housing Authority of St. Louis Park, that the  updated Admin Plan is hereby adopted.      Adopted by the Authority October 9, 2024           _____________________________       Thom Miller, Chair            ______________________________  Reynold Burrows, Secretary   Attest:       _______________________________  Karen Barton, Executive Director      308 ADMINISTRATIVE PLAN FOR THE HOUSING CHOICE VOUCHER PROGRAM Product # 301-002 January 1, 2005 Revision Date Revision Date September 1, 2005 May 1, 2011 May 1, 2006 April 1, 2012 December 1, 2006 April 1, 2013 July 1, 2007 May 1, 2014 August 1, 2008 October 1, 2014 November 1, 2008 October 1, 2015 October 1, 2009 March 1, 2016 August 1, 2010 March 1, 2017 July 1, 2018 June 1, 2019 April 1, 2020 March 1, 2021 November 9, 2022 2FWREHU Approved by the HA Board of Commissioners: 2FWREHU 309 © Copyright 2021 by Nan McKay & Associates, Inc. All rights reserved Permission to reprint granted only to the Public Housing Authority that has purchased this plan from Nan McKay & Associates, Inc. This document may not be reprinted or distributed to any other person or entity other than the purchasing agency without the express written permission of Nan McKay & Associates, Inc. 310 ADMINISTRATIVE PLAN FOR THE HOUSING CHOICE VOUCHER PROGRAM ST LOUIS PARK HOUSING AUTHORITY 5005 MINNETONKA BLVD ST LOUIS PARK, MN 55416 Approved by the HA Board of Commissioners: October October 9, 2024 311 Copyright 2021 2024 by Nan McKay & Associates, Inc. All rights reserved Permission to reprint granted only to the Public Housing Authority or Housing Agency that has purchased this plan from Nan McKay & Associates, Inc. This document may not be reprinted or distributed to any other person or entity other than the purchasing agency without the express written permission of Nan McKay & Associates, Inc. 312 © Copyright 2018 2024 Nan McKay & Associates, Inc. Adminplan 7/1/1810/9/2024 Unlimited copies may be made for internal use. Intro-i Introduction ABOUT THE REFERENCES CITED IN THE MODEL ADMINISTRATIVE PLAN AUTHORITIES FOR POLICIESREFERENCES CITED IN THE MODEL ADMINISTRATIVE PLAN The authority for PHA policies is derived from many sources. Primary among these sources are federal statutes, federal regulations, and guidance issued by HUD. State law also directs PHA policy. State law must be followed where such law exists and does not conflict with federal regulations. Industry practice may also be used to develop policy as long as it does not conflict with federal requirements or prohibitions. HUD HUD provides the primary source of PHA policy through federal regulations, HUD notices, and handbooks. Compliance with federal regulations, current HUD notices, and current HUD handbooks is mandatory. HUD also provides guidance to PHAs through other means such as HUD-published guidebooks, expired HUD notices, and expired handbooks. Basing PHA policy on HUD guidance is optional, as long as PHA policies comply with federal law, federal regulations and mandatory policy. Because HUD has already determined that the guidance it provides is consistent with mandatory policies, PHA reliance on HUD guidance provides the PHA with a “safe harbor.” Material posted on the HUD website can provide further clarification of HUD policies. For example, FAQs on the HUD website can provide direction on the application of federal regulations in various aspects of the program. State Law Where there is no mandatory federal guidance, PHAs must comply with state law, if it exists. Where state law is more restrictive than federal law, but does not conflict with it, the PHA should follow the state law. Industry Practice Where no law or HUD authority exists on a particular subject, industry practice may support PHA policy. Industry practice refers to a way of doing things or a policy that has been adopted by a majority of PHAs. RESOURCES CITED IN THE MODEL ADMINISTRATIVE PLAN The model administrative plan cites several documents. Where a document or resource is cited frequently, it may be abbreviated. Where it is cited only once or twice, the model administrative plan may contain the entire name of the document or resource. Following is a key to abbreviations used for various sources that are frequently cited in the administrative plan and a list of references and document locations that are referenced in the model administrative plan or that may be helpful to you. 313 © Copyright 2018 2024 Nan McKay & Associates, Inc. Adminplan 7/1/1810/9/2024 Unlimited copies may be made for internal use. Intro-ii HUD HCV Guidebook In November 2019 HUD began issuing a new version of the HCV Guidebook chapter-by- chapter. Unlike the previous version of the HCV Guidebook in which chapters were numbered, the new version of the guidebook includes chapter names, but no numbers. As the new version of the guidebook has not yet been fully released, and since the previous version of the guidebook contains guidance not found in the new version, the model policy cites both versions of the guidebook. Therefore, where the HCV Guidebook is cited in the model policy, the citation will make a distinction between the “old” and “new” versions of the guidebook. The “old” version of the guidebook will continue to be cited as HCV GB with a chapter/page reference (example: HCV GB, p. 5-4). If HUD has also released a new chapter on the same topic with information that either adds new information or updates existing information from the previous guidebook, the new guidebook will be cited as New HCV GB with a chapter title and page reference (example: New HCV GB, Payment Standards, p. 11). On September 29, 2023, HUD issued Notice PIH 2023-27 to implement sections 102 and 104 of the Housing Opportunity Through Modernization Act of 2016 (HOTMA). The notice supersedes relevant portions of the guidebook, specifically the chapters on eligibility, denials, and annual reexaminations and interim reexaminations. Where chapters have not been altered by the HOTMA implementation notice, the model policy continues to cite the HCV Guidebook. Abbreviations Throughout the model administrative plan, abbreviations are used to designate certain documents in citations. The following is a table of abbreviations of documents cited in the model administrative plan. Abbreviation Document CFR Code of Federal Regulations HCV GB Housing Choice Voucher Program Guidebook (7420.10G), April 2001. HUD-50058 IB HUD-50058 Instruction Booklet RHIIP FAQs Rental Housing Integrity Improvement Program (RHIIP) Frequently Asked Questions. VG PIH Notice 2004-01 Verification Guidance, March 9, 2004. HB 4350.3 Occupancy Requirements of Subsidized Multifamily Housing Programs Resources and Where to Find Them The HUD website is https://www.hud.gov/. Guidebooks, handbooks, and other HUD resources may be found at the HUDClips website: https://www.hud.gov/program_offices/administration/hudclips. Following is a list of resources helpful to the PHA or referenced in the model administrative plan, and the online location of each. 314 © Copyright 2018 2024 Nan McKay & Associates, Inc. Adminplan 7/1/1810/9/2024 Unlimited copies may be made for internal use. Intro-iii Document and Location Code of Federal Regulations http://www.gpoaccess.gov/cfr/index.html Earned Income Disregard FAQ www.hud.gov/offices/pih/phr/about/ao_faq_eid.cfm Eligibility of Students for Assisted Housing Under Section 8 of the U.S. Housing Act of 1937; Final Rule http://edocket.access.gpo.gov/2008/pdf/E8 -19435.pdf Enterprise Income Verification (EIV) System, Security Procedures for Upfront Income Verification data http://www.hud.gov/offices/pih/programs/ph/rhiip/docs/eivsecguidepha.pdf Executive Order 11063 http://www.hud.gov/offices/fheo/FHLaws/EXO11063.cfm Federal Register http://www.access.gpo.gov/su_docs/aces/fr -cont.html General Income and Rent Determination FAQs www.hud.gov/offices/pih/programs/ph/rhiip/faq_gird.cfm Housing Choice Voucher Program Guidebook (7420.10G), April 2001 www.hud.gov/offices/pih/programs/hcv/forms/guidebook.cfm HOTMA Final Rule https://www.federalregister.gov/documents/2023/02/14/2023-01617/housing-opportunity- through-modernization-act-of-2016-implementation-of-sections-102-103-and- 104?utm_campaign=subscription+mailing+list&utm_source=federalregister.gov&utm_medium= email HUD-50058 Instruction Booklet http://portal.hud.gov/hudportal/documents/huddoc?id=50058i.pdf HOTMA Implementation Notice, PIH 2023-27 https://www.hud.gov/sites/dfiles/OCHCO/documents/2023 -27pihn.pdf Joint Statement of the Department of Housing and Urban Development and the Department of Justice, issued May 17, 2004 http://www.hud.gov/offices/fheo/library/huddojstatement.pdf Final Guidance to Federal Financial Assistance Recipients Regarding Title VI Prohibition Against National Origin Discrimination Affecting Limited English Proficient Persons, published January 22, 2007 http://www.hud.gov/offices/fheo/promotingfh/FederalRegistepublishedguidance.pdf Notice PIH 2012-10, Verification of Social Security Numbers (SSNs) and Supplemental Security Income (SSI) Benefits; and Effective Use of the Enterprise Income Verification (EIV) System’s Identity Verification Report http://portal.hud.gov/huddoc/pih2012 -10.pdf 315 © Copyright 2018 2024 Nan McKay & Associates, Inc. Adminplan 7/1/1810/9/2024 Unlimited copies may be made for internal use. Intro-iv Notice PIH 2017-12, Administrative Guidance for Effective and Mandated Use of the Enterprise Income Verification (EIV) System https://www.hud.gov/sites/documents/PIH2017-12EIVNOTICE.PDF Notice PIH 2010-26 (HA), Nondiscrimination and Accessibility Notice http://www.hud.gov/offices/pih/publications/notices/10/pih2010 -26.pdf VAWA Resources https://www.hud.gov/vawa OMB Circular A-133 http://www.whitehouse.gov/omb/circulars/a133_compliance_supplement_2010 Project-Based Voucher Program; Final Rule http://www.gpo.gov/fdsys/pkg/FR-2005-10-13/pdf/05-20035.pdf 316 © Copyright 2018 2024 Nan McKay & Associates, Inc. Adminplan 7/1/1810/9/2024 Unlimited copies may be made for internal use. Intro-v Rental Housing Integrity Improvement Program (RHIIP) Frequently Asked Questions. www.hud.gov/offices/pih/programs/ph/rhiip/faq.cfm VAWA Final Rule http://www.gpo.gov/fdsys/pkg/FR-2010-10-27/pdf/2010-26914.pdf Verification FAQ www.hud.gov/offices/pih/programs/ph/rhiip/faq_verif.cfm Verification Guidance, March 2004 (attachment to Notice PIH 2004-1) http://www.hud.gov/offices/pih/publications/notices/04/verifguidance.pdf The HUD Web site is http://portal.hud.gov/hudportal/HUD. Guidebooks, handbooks and other HUD resources may be found at the HUDClips Web site: http://portal.hud.gov/hudportal/HUD?src=/program_offices/administration/hudclips 317 © Copyright 2020 Nan McKay & Associates Adminplan 4/1/20 Unlimited copies may be made for internal use Page 1-6 From 1987 through 1999, public housing agencies managed both the Certificate and Voucher tenant-based assistance programs, with separate rules and requirements for each. From 1994 through 1998, HUD published a series of new rules, known as “conforming” rules, to more closely combine and align the two similar housing programs, to the extent permitted by the law. In 1998, the Quality Housing and Work Responsibility Act (QHWRA) – also known as the Public Housing Reform Act – was signed into law. QHWRA eliminated all statutory differences between the Certificate and Voucher tenant-based programs and required that the two programs be merged into a single tenant-based assistance program, now known as the Housing Choice Voucher (HCV) program. The HCV program was modeled closely on the pre-merger Voucher program. However, unlike the pre-merger Voucher program, the HCV program requires an assisted family to pay at least 30 percent of adjusted income for rent. The transition of assistance from the Certificate and Voucher programs to the new HCV program began in October 1999. By October 2001, all families receiving tenant-based assistance were converted to the HCV program. On July 29, 2016, the Housing Opportunity Through Modernization Act of 2016 (HOTMA) was signed into law. HOTMA made numerous changes to statutes governing HUD programs, including sections of the United States Housing Act of 1937. Title I of HOTMA contains 14 different sections that impact the public housing and Section 8 programs. The Final Rule implementing broad changes to income and asset in Sections 102 and 104 of HOTMA, and for PHAs that administer the public housing program over-income provisions in Section 103, was officially published in the Federal Register on February 14, 2023. On September 29, 2023, HUD issued notice PIH 2023-27, which provided guidance to PHAs on the implementation of the program changes described in the Final Rule. 318 © Copyright 2020 Nan McKay & Associates Adminplan 4/1/20 Unlimited copies may be made for internal use Page 1-9 What Does HUD Do? HUD has the following major responsibilities: x Develop regulations, requirements, handbooks, notices and other guidance to implement HCV housing program legislation passed by Congress; x Allocate HCV program funds to HAs; x Provide technical assistance to HAs on interpreting and applying HCV program requirements; x Monitor HA compliance with HCV program requirements and HA performance in program administration. What Does the HA Do? The HA administers the HCV program under contract with HUD and has the following major responsibilities: x Establish local policies to administer the program; x Review applications from interested applicants to determine whether they are eligible for the program; x Maintain a waiting list and select families for admission; x Issue vouchers to eligible families and provide information on how to lease a unit; x Conduct outreach to owners, with special attention to owners outside areas of poverty or minority concentration; x Approve the rental unit (including assuring compliance with housing quality standards and rent reasonableness), the owner, and the tenancy; x Make housing assistance payments to the owner in a timely manner; x Recertify families for continued eligibility under the program; x Ensure that owners and families comply with their contractual obligations; x Provide families and owners with prompt, professional service; x Comply with all fair housing and equal opportunity requirements, HUD regulations and requirements, the Annual Contributions Contract ACC, HUD-approved applications for funding, the HA’s administrative plan, and other applicable federal, state and local laws. 319 © Copyright 2020 Nan McKay & Associates Adminplan 4/1/20 Unlimited copies may be made for internal use Page 1-14 x Occupancy policies, including definition of what group of persons may qualify as a 'family', definition of when a family is considered to be 'continuously assisted'; standards for denying admission or terminating assistance based on criminal activity or alcohol abuse in accordance with 982.553 (Chapters 3 and 12); x Encouraging participation by owners of suitable units located outside areas of low income or minority concentration (Chapter 13); x Assisting a family that claims that illegal discrimination has prevented the family from leasing a suitable unit (Chapter 2); x Providing information about a family to prospective owners (Chapters 3 and 9); x Disapproval of owners (Chapter 13); x Subsidy standards (Chapter 5); x Family absence from the dwelling unit (Chapter 12); x How to determine who remains in the program if a family breaks up (Chapter 3); x Informal review procedures for applicants (Chapter 16); x Informal hearing procedures for participants (Chapter 16); x The process for establishing and revising voucher payment standards, including policies on administering decreases in the payment standard during the HAP contract term (Chapter 16); x The method of determining that rent to owner is a reasonable rent (initially and during the term of a HAP contract) (Chapter 8); x Special policies concerning special housing types in the program (e.g., use of shared housing) (Chapter 15); x Policies concerning payment by a family to the HA of amounts the family owes the HA (Chapter 16); x Interim redeterminations of family income and composition (Chapter 11); x Restrictions, if any, on the number of moves by a participant family (Chapter 10); x Approval by the board of commissioners or other authorized officials to charge the administrative fee reserve (Chapter 16); x Procedural guidelines and performance standards for conducting required housing quality standards inspections (Chapter 8); and x HA screening of applicants for family behavior or suitability for tenancy (Chapter 3). x Policies governing the project-basing of vouchers in both the standard Project-Based Voucher (PBV) program (Chapter 17) and the RAD Project-Based Voucher program (Chapter 18); and x Special policies governing any special purpose vouchers issued by the PHA (Chapter 19). x 320 © Copyright 2021 Nan McKay & Associates Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 2-3 PART I: NONDISCRIMINATION 2-I.A. OVERVIEW Federal laws require HAs to treat all applicants and participants equally, providing the same opportunity to access services, regardless of family characteristics and background. Federal law prohibits discrimination in housing on the basis of race, color, religion, sex, national origin, age, familial status, and disability. In addition, HUD regulations provide for additional protections regarding sexual orientation, gender identity, and marital status. The HA will comply fully with all federal, state, and local nondiscrimination laws, and with rules and regulations governing fair housing and equal opportunity in housing and employment, including: x Title VI of the Civil Rights Act of 1964 x Title VIII of the Civil Rights Act of 1968 (as amended by the Community Development Act of 1974 and the Fair Housing Amendments Act of 1988) x Executive Orders 11063 and 13988 x Section 504 of the Rehabilitation Act of 1973 x The Age Discrimination Act of 1975 x Title II of the Americans with Disabilities Act (to the extent that it applies, otherwise Section 504 and the Fair Housing Amendments govern) x The Equal Access to Housing in HUD Programs Regardless of Sexual Orientation or Gender Identity Final Rule, published in the Federal Register February 3, 2012 and further clarified in Notice PIH 2014-20 x Violence Against Women Reauthorization Act of 2013Act (VAWA) When more than one civil rights law applies to a situation, the laws will be read and applied together. Any applicable state laws or local ordinances and any legislation protecting individual rights of tenants, applicants, or staff that may subsequently be enacted will also apply. HA Policy There are 13 14 protected classes defined in the Minnesota Human Rights act. These are: Race, Color, Creed, Religion, National Origin, Sex, Gender Identity, Marital Status, Familial Status, Disability, Public Assistance, Age, Sexual Orientation, Local Human Rights Activity. There are some exceptions about how each protected class is covered under the Minnesota Human Rights Act. 321 © Copyright 2021 Nan McKay & Associates Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 2-5 Providing Information to Families and Owners The HA must take steps to ensure that families and owners are fully aware of all applicable civil rights laws. As part of the briefing process, the HA must provide information to HCV applicant families about civil rights requirements and the opportunity to rent in a broad range of neighborhoods [24 CFR 982.301]. The Housing Assistance Payments (HAP) contract informs owners of the requirement not to discriminate against any person because of race, color, religion, sex, national origin, age, familial status, or disability in connection with the contract. 2-I.C. DISCRIMINATION COMPLAINTS General Housing Discrimination Complaints If an applicant or participant believes that any family member has been discriminated against by the HA or an owner, the family should advise the HA. The HA should make every reasonable attempt to determine whether the applicant’s or participant’s assertions have merit and take any warranted corrective action. In addition, the HA is required to provide the applicant or participant with information about how to file a discrimination complaint [24 CFR 982.304]. Upon receipt of a housing discrimination complaint, the HA is required to: x Provide written notice of the complaint to those alleged and inform the complainant that such notice was made x Investigate the allegations and provide the complainant and those alleged with findings and either a proposed corrective action or an explanation of why corrective action is not warranted Keep records of all complaints, investigations, notices, and corrective actions [Notice PIH 2014- 20] x In all cases, the PHA will advise the family that they may file a fair housing complaint if the family feels they have been discriminated against under the Fair Housing Act. HA Policy Within 10 business days of receiving the complaint, the PHA will investigate and attempt to remedy discrimination complaints made against the PHA. The PHA will also advise the family of their right to file a fair housing complaint with HUD’s Office of Fair Housing and Equal Opportunity (FHEO). The fair housing poster, posted in conspicuous and accessible locations in PHA lobbies, will reference how to file a complaint with FHEO. The HA provides written information in the briefing packet about how to access the HUD Fair Housing Equal Opportunity National Toll-Free HOT Line, the HUD pamphlet Fair Housing Equal Opportunity for All, and instructions on how to contact the Minnesota Department of Human Rights via their document Guidelines for Charging Parties. The HUD Hotline information is also printed on the Participant Certification and Statement of Rules and Responsibilities, which is provided to the participant at every annual recertification. 322 © Copyright 2021 Nan McKay & Associates Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 2-6 Applicants or participants who believe that they have been subject to unlawful discrimination may notify the HA either orally or in writing. Within 10 business days of receiving the complaint, the HA will provide a written notice to those alleged to have violated the rule. The HA will also send a written notice to the complainant informing them that the notice was sent to those alleged to have violated the rule, as well as information on how to complete and submit a housing discrimination complaint form to HUD’s Office of Fair Housing and Equal Opportunity (FHEO). The HA will attempt to remedy discrimination complaints made against the HA and will conduct an investigation into all allegations of discrimination. Within 10 business days following the conclusion of the HA’s investigation, the HA will provide the complainant and those alleged to have violated the rule with findings and either a proposed corrective action plan or an explanation of why corrective action is not warranted. The HA will keep a record of all complaints, investigations, notices, and corrective actions. (See Chapter 16.) Complaints under the Equal Access Final Rule [Notice PIH 2014-20] Notice PIH 2014-20 requires an articulated complaint process for allegations of discrimination under the Equal Access Final rule. The Equal Access Final Rule requires that PHAs provide equal access regardless of marital status, gender identity, or sexual orientation. The PHA will be informed on these obligations by the HUD Field Office or FHEO when an Equal Access complaint investigation begins. PHA Policy Applicants or tenant families who believe that they have been subject to unlawful discrimination based on marital status, gender identity, or sexual orientation under the Equal Access Rule may notify the PHA either orally or in writing. Within 10 business days of receiving the complaint, the PHA will provide a written notice to those alleged to have violated the rule. The PHA will also send a written notice to the complainant informing them that notice was sent to those alleged to have violated the rule, as well as information on how to complete and submit a housing discrimination complaint form to HUD’s Office of Fair Housing and Equal Opportunity (FHEO). The PHA will attempt to remedy discrimination complaints made against the PHA and will conduct an investigation into all allegations of discrimination. Within 10 business days following the conclusion of the PHA’s investigation, the PHA will provide the complainant and those alleged to have violated the rule with findings and either a proposed corrective action plan or an explanation of why corrective action is not warranted. The PHA will keep a record of all complaints, investigations, notices, and corrective actions. (See Chapter 16.) 323 © Copyright 2021 Nan McKay & Associates Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 2-7 VAWA Complaint Processing [Notice FHEO 2023-01] A complainant may, not later than one year after an alleged VAWA violation has occurred or terminated, file a complaint with FHEO alleging such violation. If there is a violation that began prior to a year before the complaint is filed, but it continues into the one-year time period, HUD will accept the complaint. FHEO will investigate the complaint if it is timely and FHEO otherwise has jurisdiction. If a complaint is filed more than one year after the alleged violation occurred or terminated, FHEO may, but is not required to, investigate the allegations under the additional authority and procedures described in FHEO 2023-01. Complaints do not need to allege a violation of the Fair Housing Act for FHEO to accept and investigate the complaint. PHA Policy Applicants or tenant families who wish to file a VAWA complaint against the PHA may notify the PHA either orally or in writing. The PHA will advise the family of their right to file a VAWA complaint with HUD’s Office of Fair Housing and Equal Opportunity (FHEO). The PHA will inform the family that not later than one year after an alleged VAWA violation has occurred or terminated, applicants and tenants who believe they have been injured by a VAWA violation or will be injured by such a violation that is about to occur may file a VAWA complaint using FHEO’s online complaint form via mail, email, or telephone. The PHA will attempt to remedy complaints made against the PHA and will conduct an investigation into all allegations of discrimination. The PHA will keep a record of all complaints, investigations, notices, and corrective actions. (See Chapter 16.) 324 © Copyright 2021 Nan McKay & Associates, Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 3-1 Chapter 3 ELIGIBILITY INTRODUCTION The HA is responsible for ensuring that every individual and family admitted to the HCV program meets all program eligibility requirements. This includes any individual approved to join the family after the family has been admitted to the program. The family must provide any information needed by the HA to confirm eligibility and determine the level of the family’s assistance. To be eligible for the HCV program: x The applicant family must: -Qualify as a family as defined by HUD and the HA. -Have income at or below HUD-specified income limits. -Qualify on the basis of citizenship or the eligible immigrant status of family members. -Provide social security number information for household members as required. -Consent to the HA’s collection and use of family information as provided for in HA- provided consent forms. -Not currently be receiving a duplicative subsidy. -Meet net asset and property ownership restriction requirements. - x The HA must determine that the current or past behavior of household members does not include activities that are prohibited by HUD or the HA. This chapter contains three parts: Part I: Definitions of Family and Household Members. This part contains HUD and HA definitions of family and household members and explains initial and ongoing eligibility issues related to these members. Part II: Basic Eligibility Criteria. This part discusses income eligibility, and rules regarding citizenship, social security numbers, and family consent. Part III: Denial of Assistance. This part covers factors related to an applicant’s past or current conduct (e.g. criminal activity) that can cause the HA to deny assistance as well as the asset limitation for HCV. 325 © Copyright 2021 Nan McKay & Associates, Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 3-3 PART I: DEFINITIONS OF FAMILY AND HOUSEHOLD MEMBERS 3-I.A. OVERVIEW Some eligibility criteria and program rules vary depending upon the composition of the family requesting assistance. In addition, some requirements apply to the family as a whole and others apply to individual persons who will live in the assisted unit. This part provides information that is needed to correctly identify family and household members, and to apply HUD's eligibility rules. 3-I.B. FAMILY AND HOUSEHOLD [24 CFR 982.201(c)5.403; FR Notice 02/03/12; Notice PIH 2014-20 and FR Notice 2/14/23] The terms family and household have different meanings in the HCV program. Family To be eligible for assistance, an applicant must qualify as a family. Family as defined by HUD includes, but is not limited to the following, regardless actual or perceived sexual orientation, gender identity, or marital status, a single person, who may be an elderly person, disabled person, near-elderly person, or any other single person; an otherwise eligible youth who has attained at least 18 years of age and not more than 24 years of age and who has left foster care, or will leave foster care within 90 days, in accordance with a transition plan described in section 475(5)(H) of the Social Security Act (42 U.S.C. 675(5)(H)), and is homeless or is at risk of becoming homeless at age 16 or older; or a group of persons residing together. Such group includes, but is not limited to a family with or without children (a child who is temporarily away from the home because of placement in foster care is considered a member of the family), an elderly family, a near-elderly family, a disabled family, a displaced family, or and the remaining member of a tenant family. The HA has the discretion to determine if any other group of persons qualifies as a family. HA Policy A family also includes two or more individuals who are not related by blood, marriage, adoption, or other operation of law but who either can demonstrate that they have lived together previously or certify that each individual’s income and other resources will be available to meet the needs of the family. Each family must identify the individuals to be included in the family at the time of application, and must notify the HA if the family’s composition changes. Household Household is a broader term that includes additional people who, with the HA’s permission, live in an assisted unit, such as live-in aides, foster children, and foster adults. *HQGHU,GHQWLW\PHDQVDFWXDORUSHUFHLYHGJHQGHUFKDUDFWHULVWLFV 6H[XDORULHQWDWLRQPHDQVKRPRVH[XDOLW\KHWHURVH[XDOLW\RUELVH[XDOLW\ 326 © Copyright 2021 Nan McKay & Associates, Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 3-4 3-I.C. FAMILY BREAKUP AND REMAINING MEMBER OF TENANT FAMILY Family Breakup [24 CFR 982.315; Notice PIH 2017-08] Except under the following conditions, the HA has discretion to determine which members of an assisted family continue to receive assistance if the family breaks up: x If the family breakup results from an occurrence of domestic violence, dating violence, sexual assault, or stalking or human trafficking,, the HA must ensure that the victim retains assistance. (For documentation requirements and policies related to domestic violence, dating violence, sexual assault, and stalking and human trafficking,, see section 16-IX.D of this plan.) x In accordance with Notice PIH 2017-08, for HUD-Veterans Affairs Supportive Housing (HUD-VASH) vouchers, when the veteran is the perpretratorperpetrator of domestic violence, dating violence, sexual assault, or stalking or human trafficking,, the victim must continue to be assisted. Upon termination of the perpetrator’s HUD-VASH vouchers, the victim should be given a regular HCV if one is available, and the perpetrator’s HUD-VASH voucher should be used to serve another eligible family. If a regular HCV is not available, the victim will continue to use the HUD-VASH voucher, which must be issued to another eligible family upon the voucher’s turnover. x If a court determines the disposition of property between members of the assisted family, the HA is bound by the court’s determination of which family members continue to receive assistance. HA Policy When a family on the waiting list breaks up into two otherwise eligible families, only one of the new families may retain the original application date. Other former family members may make a new application with a new application date if the waiting list is open. If a family breaks up into two otherwise eligible families while receiving assistance, only one of the new families will continue to be assisted. In the absence of a judicial decision or an agreement among the original family members, the HA will determine which family will retain their placement on the waiting list or continue to receive assistance. In making its determination, the HA will take into consideration the following factors: (1) the interest of any minor children, including custody arrangements; (2) the interest of any ill, elderly, or disabled family members; (3) the interest of any family member who is the victim of domestic violence, dating violence, sexual assault, or stalking or human trafficking,, including a family member who was forced to leave an assisted unit as a result of such actual or threatened abuse; (4) any possible risks to family members as a result of criminal activity; and (5) the recommendations of social service professionals 327 © Copyright 2021 Nan McKay & Associates, Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 3-6 3-I.F. DEPENDENTS AND MINORS [24 CFR 5.603] A minor is a member of the family, other than the head of family or spouse, who is under 18 years of age. A dependent is a family member who is under 18 years of age or a person of any age who is a person with a disability or a full-time student, except that the following persons can never be dependents: the head of household, spouse, cohead, foster children/adults and live-in aides . Identifying each dependent in the family is important because each dependent qualifies the family for a dependent allowance as described in Chapter 6. Joint Custody of Dependents HA Policy Dependents that are subject to a joint custody arrangement will be considered a member of the family, if they live with the applicant or participant family 51 percent or more of the time. When more than one applicant or participant family is claiming the same dependents as family members, the family with primary custody at the time of the initial examination or reexamination will be able to claim the dependents. If there is a dispute about which family should claim them, the HA will make the determination based on available documents such as court orders, or an IRS return showing which family has claimed the child for income tax purposes. 3-I.G. FULL-TIME STUDENT [24 CFR 5.603; HCV GB, p. 5-29] A full-time student (FTS) is a person who is attending school or vocational training on a full-time basis. The time commitment or subject load that is needed to be full-time is defined by the educational institution. Identifying each FTS is important because: (1) each family member that is an FTS, other than the head, spouse, or cohead, qualifies the family for a dependent allowance, and (2) the earned income of such an FTS is treated differently from the income of other family members. 3-I.H. ELDERLY AND NEAR-ELDERLY PERSONS, AND ELDERLY FAMILY [24 CFR 5.100 and 5.403, FR Notice 02/03/12] Elderly Persons An elderly person is a person who is at least 62 years of age. Near-Elderly Persons A near-elderly person is a person who is 50-61 years of age. Elderly Family An elderly family is one in which the head, spouse, cohead, or sole member is an elderly person. Identifying elderly families is important because elderly families qualify for the elderly family allowance as described in Chapter 6. 328 © Copyright 2021 Nan McKay & Associates, Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 3-8 3-I.K. FOSTER CHILDREN AND FOSTER ADULTS [24 CFR 5.603] A fFoster adults is a member of the household who is 18 years of age or older and meets the definition of a foster adult under state law. In general, a foster adult is a person who is 18 years of age or older, is unable to live independently due to a debilitating physical or mental condition, and is placed with the family by an authorized placement agency or by judgment, decree, or other order of any court of competent jurisdiction. are usually persons with disabilities, unrelated to the tenant family, who are unable to live alone [24 CFR 5.609]. The term A foster child is a member of the household who meets the definition of a foster child under state law. In general, a foster child is placed with the family by an authorized placement agency (e.g., public child welfare agency) or by judgment, decree, or other order of any court of competent jurisdiction. Foster children and foster are usually persons with disabilities, unrelated to the tenant family, who are unable to live alone [24 CFR 5.609]. The term foster child is not specifically defined by the regulations. Foster children and foster adults who are living with an applicant or who have been approved by the HA to live with a participant family are considered household members but not family members. The income of foster children/adults is not counted in family annual income, and foster children/adults do not qualify for a dependent deduction [24 CFR 5.603; HUD-50058 IB, p. 13]. HA Policy A foster child is a child that is in the legal guardianship or custody of a state, county, or private adoption or foster care agency, yet is cared for by foster parents in their own homes, under some kind of short-term or long-term foster care arrangement with the custodial agency. A foster child or foster adult may be allowed to reside in the unit if their presence would not result in a violation of HQS space standards according to 24 CFR 982.401 as described in Section 8-I.F. of this policy. Children that are temporarily absent from the home as a result of placement in foster care are discussed in Section 3-I.L. 3-I.L. ABSENT FAMILY MEMBERS Individuals may be absent from the family, either temporarily or permanently, for a variety of reasons including educational activities, placement in foster care, employment, illness, incarceration, and court order. Definitions of Temporarily and Permanently Absent HA Policy Generally an individual who is or is expected to be absent from the assisted unit for 90 consecutive days or less is considered temporarily absent and continues to be considered a family member. Generally an individual who is or is expected to be absent from the assisted unit for more than 90 consecutive days is considered permanently absent and no longer a family member. Exceptions to this general policy are discussed below. 329 © Copyright 2021 Nan McKay & Associates, Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 3-12 PART II: BASIC ELIGIBILITY CRITERIA 3-II.A. INCOME ELIGIBILITY AND TARGETING Income Limits HUD establishes income limits for all areas of the country and publishes them annually in the Federal Register. They are based upon estimates of median family income with adjustments for family size. The income limits are used to determine eligibility for the program and for income targeting purposes as discussed in this section. Definitions of the Income Limits [24 CFR 5.603(b)] Low-income family. A family whose annual income does not exceed 80 percent of the median income for the area, adjusted for family size. Very low-income family. A family whose annual income does not exceed 50 percent of the median income for the area, adjusted for family size. Extremely low-income family. A family whose annual income does not exceed the federal poverty level or 30 percent of the median income for the area,whichever number is higher. Area median income is determined by HUD, with adjustments for smaller and larger families. HUD may establish income ceilings higher or lower than 30, 50, or 80 percent of the median income for an area if HUD finds that such variations are necessary because of unusually high or low family incomes. Using Income Limits for Eligibility [24 CFR 982.201 and Notice PIH 2023-27] Income limits are used for eligibility only at admission. Income eligibility is determined by comparing the annual income of an applicant to the applicable income limit for their family size. Income and net family assets of household members are excluded when determining income eligibility; however, household members are considered for purposes of unit size and subsidy standards. In order to be income eligible, an applicant family must be one of the following: x A very low-income family x A low-income family that has been "continuously assisted" under the 1937 Housing Act. A family is considered to be continuously assisted if the family is already receiving assistance under any 1937 Housing Act program at the time the family is admitted to the HCV program [24 CFR 982.4] HA Policy The HA will consider a family to be continuously assisted if the family was leasing a unit under any 1937 Housing Act program at the time they were selected from the HA’s waiting list. x A low-income family that qualifies for voucher assistance as a non-purchasing household living in HOPE 1 (public housing homeownership), HOPE 2 (multifamily housing homeownership) developments, or other HUD-assisted multifamily homeownership programs covered by 24 CFR 248.173 330 © Copyright 2021 Nan McKay & Associates, Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 3-16 Timeframe for Determination of Citizenship Status [24 CFR 5.508(g)] For new occupants joining the assisted family, the HA must verify status at the first interim or regular reexamination following the person’s occupancy, whichever comes first. If an individual qualifies for a time extension for the submission of required documents, the HA must grant such an extension for no more than 30 days [24 CFR 5.508(h)]. Each family member is required to submit evidence of eligible status only one time during continuous occupancy. HA Policy The HA will verify the citizenship status of applicants at the time other eligibility factors are determined. 3-II.C. SOCIAL SECURITY NUMBERS [24 CFR 5.216 and 5.218, Notice PIH 2018-24] The applicant and all members of the applicant’s household must disclose the complete and accurate social security number (SSN) assigned to each household member, and the documentation necessary to verify each SSN. If a child under age 6 has been added to an applicant family within 6 months prior to voucher issuance, an otherwise eligible family may be admitted to the program and must disclose and document the child’s SSN within 90 days of the effective date of the initial HAP contract. A detailed discussion of acceptable documentation is provided in Chapter 7. Note: These requirements do not apply to noncitizens who do not contend eligible immigration status. In addition, each participant who has not previously disclosed an SSN, has previously disclosed an SSN that HUD or the SSA determined was invalid, or has been issued a new SSN must submit their complete and accurate SSN and the documentation required to verify the SSN at the time of the next interim or annual reexamination or recertification. Participants age 62 or older as of January 31, 2010, whose determination of eligibility was begun before January 31, 2010, are exempt from this requirement and remain exempt even if they move to a new assisted unit. The HA must deny assistance to an applicant family if they do not meet the SSN disclosure and documentation requirements contained in 24 CFR 5.216. 3-II.D. FAMILY CONSENT TO RELEASE OF INFORMATION [24 CFR 5.23 20; HCV GB, p. 5-13] HUD requires that each adult family member, and the head of household, spouse, or cohead, regardless of age, to sign form HUD-9886, Authorization for the Release of Information/Privacy Act Notice, the form HUD-52675 Debts Owed to Public Housing Agencies and Terminations, and other consent forms as needed to collect information relevant to the family’s eligibility and level of assistance. Chapter 7 provides detailed information concerning the consent forms and verification requirements. The consent form remains effective until the family is denied assistance, assistance is terminated, or the family provides written notification to revoke consent. 331 © Copyright 2021 Nan McKay & Associates, Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 3-17 The HA must deny admission to the program if any member of the applicant family fails to sign and submit the consent forms for obtaining information in accordance with 24 CFR 5, Subparts B and F [24 CFR 982.552(b)(3) and 24 CFR 5.232(a)].]. However, this does not apply if the applicant or participant, or any member of their family, revokes their consent with respect to the ability of the PHA to access financial records from financial institutions, unless the PHA establishes a policy that revocation of consent to access financial records will result in denial or termination of assistance or admission [24 CFR 5.232(c)]. PHA Policy The PHA has established a policy that the family’s revocation of consent to allow the PHA to access records from financial institutions will result in denial of admission. 332 © Copyright 2021 Nan McKay & Associates, Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 3-21 Veteran HA Policy A veteran is a person who served in the active military, naval, or air service and who was discharged or released from such service under conditions other than dishonorable. Vulnerable Youth PHA Policy A vulnerable youth is an individual who meets the U.S. Department of Education’s definition of independent student in paragraphs (b), (c), or (h), as adopted in Section II of FR Notice 9/21/16: The individual is an orphan, in foster care, or a ward of the court, or was an orphan, in foster care, or ward of the court at any time when the individual was 13 years of age or older The individual is, or was immediately prior to attaining the age of majority, an emancipated minor or in legal guardianship as determined by a court of competent jurisdiction in the individual’s state of legal residence The individual has been verified during the school year in which the application is submitted as either an unaccompanied youth who is a homeless child or youth, or as unaccompanied, at risk of homelessness, and self-supporting by: A local educational agency homeless liasonliaison The director of a program funded under subtitle B of title IV of the McKinney-Vento Homeless Assistance Act or a designee of the director A financial aid administrator 333 © Copyright 2021 Nan McKay & Associates, Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 3-22 Determining Student Eligibility If a student is applying for assistance on their own, apart from their parents, the HA must determine whether the student is subject to the eligibility restrictions contained in 24 CFR 5.612. If the student is subject to those restrictions, the HA must ensure that: (1) the student is individually eligible for the program, (2) either the student is independent from their parents or the student’s parents are income eligible for the program, and (3) the “family” with which the student is applying is collectively eligible for the program. HA Policy For any student who is subject to the 5.612 restrictions, the HA will: Follow its usual policies in determining whether the student individually and the student’s “family” collectively are eligible for the program Determine whether the student is independent from their parents in accordance with the definition of independent student in this section Follow the policies below, if applicable, in determining whether the student’s parents are income eligible for the program If the HA determines that the student, the student’s parents (if applicable), or the student’s “family” is not eligible, the HA will send a notice of denial in accordance with the policies in Section 3-III.F, and the applicant family will have the right to request an informal review in accordance with the policies in Section 16-III.B. 3-II.F. EIV SYSTEM SEARCHES [Notice PIH 2018-18; EIV FAQs; EIV System Training 9/30/20; and Notice PIH 2023-27] Existing Tenant Search Prior to admission to the program, the HA must search for all household members using the EIV Existing Tenant Search module. The HA must review the reports for any SSA matches involving another HA or a multifamily entity and follow up on any issues identified. The HA must provide the family with a copy of the Existing Tenant Search results if requested. At no time may any family member receive duplicative assistance. If the tenant is a new admission to the HA, and a match is identified at a multifamily property, the HA must report the program admission date to the multifamily property and document the notification in the tenant file. The family must provide documentation of move-out from the assisted unit, as applicable. HA Policy The HA will contact the other HA or owner identified in the report to confirm that the family has moved out of the unit and obtain documentation of current tenancy status, including a form HUD-50058 or 50059, as applicable, showing an end of participation. The HA will only approve assistance contingent upon the move-out from the currently occupied assisted unit. 334 © Copyright 2021 Nan McKay & Associates, Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 3-25 PART III: DENIAL OF ASSISTANCE 3-III.A. OVERVIEW A family that does not meet the eligibility criteria discussed in Parts I and II, must be denied assistance. A PHA may deny assistance for an applicant because of the family’s action or failure to act as described in 24 CFR 982.552 or 982.553. In this section we will discuss other situations and circumstances in which denial of assistance is mandatory for the HA, and those in which denial of assistance is optional for the HA. While the regulations state that the PHA must prohibit admission for certain types of criminal activity and give the PHA the option to deny for other types of previous criminal history, more recent HUD rules and OGC guidance must also be taken into consideration when determining whether a particular individual’s criminal history merits denial of admission. When considering any denial of admission, PHAs may not use arrest records as the basis for the denial. Further, HUD does not require the adoption of “One Strike” policies and reminds PHAs of their obligation to safeguard the due process rights of applicants and tenants [Notice PIH 2015-19]. HUD’s Office of General Counsel issued a memo on April 4, 2016, regarding the application of Fair Housing Act standards to the use of criminal records. This memo states that a PHA violates the Fair Housing Act when their policy or practice has an unjustified discriminatory effect, even when the PHA had no intention to discriminate. Where a policy or practice that restricts admission based on criminal history has a disparate impact on a particular race, national origin, or other protected class, that policy or practice is in violation of the Fair Housing Act if it is not necessary to serve a substantial, legitimate, nondiscriminatory interest of the PHA, or if that interest could be served by another practice that has a less discriminatory effect [OGC Memo 4/4/16]. HUD codified this stance on disparate impact and discriminatory effects in a final rule dated March 31, 2023. In doing so, HUD also standardized its long-practiced three-step approach to assessing burdens of proof. PHAs who impose blanket prohibitions on any person with any conviction record, no matter when the conviction occurred, what the underlying conduct entailed, or what the convicted person has done since then will be unable to show that such policy or practice is necessary to achieve a substantial, legitimate, nondiscriminatory interest. Even a PHA with a more tailored policy or practice that excludes individuals with only certain types of convictions must still prove that its policy is necessary. To do this, the PHA must show that its policy accurately distinguishes between criminal conduct that indicates a demonstrable risk to resident safety and property and criminal conduct that does not. 335 © Copyright 2021 Nan McKay & Associates, Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 3-26 Forms of Denial [24 CFR 982.552(a)(2); HCV GB, p. 5-35] Denial of assistance includes any of the following: x Not placing the family's name on the waiting list x Denying or withdrawing a voucher x Not approving a request for tenancy or refusing to enter into a HAP contract x Refusing to process a request for or to provide assistance under portability procedures Prohibited Reasons for Denial of Program Assistance [24 CFR 982.202(b), 24 CFR 5.2005(b)] HUD rules prohibit denial of program assistance to the program based on any of the following criteria: x Age, disability, race, color, religion, sex, or national origin (See Chapter 2 for additional information about fair housing and equal opportunity requirements.) x Where a family lives prior to admission to the program x Where the family will live with assistance under the program. Although eligibility is not affected by where the family will live, there may be restrictions on the family’s ability to move outside the HA’s jurisdiction under portability. (See Chapter 10.) x Whether members of the family are unwed parents, recipients of public assistance, or children born out of wedlock x Whether the family includes children x Whether a family decides to participate in a family self-sufficiency program x Whether or not a qualified applicant is or has been a victim of domestic violence, dating violence, sexual assault, or stalking or human trafficking if the applicant is otherwise qualified for assistance (See section 3-III.G.) 336 © Copyright 2021 Nan McKay & Associates, Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 3-27 3-III.B. MANDATORY DENIAL OF ASSISTANCE [24 CFR 982.553(a) and 24 CFR 982.552(b)(6)] HUD requires the HA to deny assistance in the following cases: x Any member of the household has been evicted from federally-assisted housing in the last three years for drug-related criminal activity. HUD permits, but does not require, the HA to admit an otherwise-eligible family if the household member has completed a HA-approved drug rehabilitation program or the circumstances which led to eviction no longer exist (e.g., the person involved in the criminal activity no longer lives in the household). HA Policy The HA will admit an otherwise-eligible family who was evicted from federally-assisted housing within the past three years for drug-related criminal activity, if the HA is able to verify that the household member who engaged in the criminal activity has completed a supervised drug rehabilitation program approved by the HA, or the person who committed the crime, is no longer living in the household. x The HA determines that any household member is currently engaged in the use of illegal drugs. HA Policy Currently engaged in is defined as any use of illegal drugs during the previous three months. x The HA has reasonable cause to believe that any household member's current use or pattern of use of illegal drugs, or current abuse or pattern of abuse of alcohol, may threaten the health, safety, or right to peaceful enjoyment of the premises by other residents. HA Policy In determining reasonable cause, the HA will consider all credible evidence, including but not limited to, any record of convictions, arrests, or evictions of household members related to the use of illegal drugs or the abuse of alcohol. A conviction will be given more weight than an arrest. A record or record of arrest will not be used as the sole basis of determining reasonable cause. The HA will also consider evidence from treatment providers or community-based organizations providing services to household members. x Any household member has ever been convicted of drug-related criminal activity for the production or manufacture of methamphetamine on the premises of federally assisted housing x Any household member is subject to a lifetime registration requirement under a state sex offender registration program x Any member of the family fails to sign and submit consent forms for obtaining information. x The family does not meet the restrictions on net assets and real property ownership as required by 24 CFR 5.618. 337 © Copyright 2021 Nan McKay & Associates, Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 3-28 3-III.C. RESTRICTION ON ASSISTANCE BASED ON ASSETS [24 CFR 5.618] There are two circumstances under which a family is ineligible to receive assistance based on asset ownership. First, assistance may not be provided to any family if the family’s net assets exceed $100,000 (adjusted annually by HUD). Second, the family has real property that is suitable for occupancy by the family as a residence and the family has: x A present ownership interest in the real property; and x A legal right to reside in the real property; and x The effective legal authority to sell (based on state or local laws of the jurisdiction where the property is located) the real property. However, the real property restriction does not apply in the following circumstances: x Any property for which the family is receiving assistance for a manufactured home under 24 CFR 982.620 or under the HCV Homeownership program; x Any property that is jointly owned by a member of the family and at least one non-household member who does not live with the family, if the non-household member resides at the jointly owned property; x Any family that is offering the property for sale; or x Any person who is a victim of domestic violence, dating violence, sexual assault, or stalking. - When a family asks for an exception because a family member is a victim of domestic violence, dating violence, sexual assault, or stalking, the PHA must comply with all the confidentiality requirements under VAWA. The PHA must accept a self-certification from the family member, and the restrictions on requesting documentation under VAWA apply. A property is considered suitable for occupancy unless the family demonstrates that it: x Does not meet the disability-related needs for all members of the family (e.g., physical accessibility requirements, disability-related need for additional bedrooms, proximity to accessible transportation, etc.); x Is not sufficient for the size of the family; PHA Policy The PHA defines not sufficient for the size of the family as being overcrowded based on the PHA’s subsidy standards in Chapter 5 of this policy. x Is geographically located so as to be a hardship for the family (e.g., the distance or commuting time between the property and the family's place of work or school would be a hardship to the family, as determined by the PHA or owner); 338 © Copyright 2021 Nan McKay & Associates, Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 3-29 x Is not safe to reside in because of the physical condition of the property (e.g., property’s physical condition poses a risk to the family’s health and safety and the condition of the property cannot be easily remedied); or x Is not a property that a family may reside in under the state or local laws of the jurisdiction where the property is located. 3-III.D. OTHER PERMITTED REASONS FOR DENIAL OF ASSISTANCEOTHER PERMITTED REASONS FOR DENIAL OF ASSISTANCE HUD permits, but does not require, the HA to deny assistance for the reasons discussed in this section. Criminal Activity [24 CFR 982.553] HUD permits, but does not require, the HA to deny assistance if the HA determines that any household member is currently engaged in, or has engaged in during a reasonable time before the family would receive assistance, certain types of criminal activity. HA Policy If any household member is currently engaged in, or has engaged in any of the following criminal activities, within the past three years, the family will be denied assistance. Drug-related criminal activity, defined by HUD as the illegal manufacture, sale, distribution, or use of a drug, or the possession of a drug with intent to manufacture, sell, distribute or use the drug [24 CFR 5.100]. Violent criminal activity, defined by HUD as any criminal activity that has as one of its elements the use, attempted use, or threatened use of physical force substantial enough to cause, or be reasonably likely to cause, serious bodily injury or property damage [24 CFR 5.100]. Criminal activity that may threaten the health, safety, or right to peaceful enjoyment of the premises by other residents or persons residing in the immediate vicinity; or Criminal sexual conduct, including but not limited to sexual assault, incest, open and gross lewdness, or child abuse; or Criminal activity that may threaten the health or safety of property owners, management staff, and persons performing contract administration functions or other responsibilities on behalf of the HA (including a HA employee or a HA contractor, subcontractor, or agent). Immediate vicinity means within a three-block radius of the premises. Evidence of such criminal activity includes, but is not limited to: Any conviction for drug-related or violent criminal activity within the past three years. Records of arrests for drug-related or violent criminal activity within the past three years, although a record or record of arrest(s) will not be used as the sole basis for the denial or proof that the applicant engaged in disqualifying criminal activity. 339 © Copyright 2021 Nan McKay & Associates, Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 3-30 A conviction for drug-related or violent criminal activity will be given more weight than an arrest for such activity. In making its decision to deny assistance, the HA will consider the factors discussed in Section 3-III.FE and 3-III.GSection 3-III.E. Upon consideration of such factors, the HA may, on a case-by-case basis, decide not to deny assistance. 340 © Copyright 2021 Nan McKay & Associates, Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 3-31 Previous Behavior in Assisted Housing [24 CFR 982.552(c)] HUD authorizes the HA to deny assistance based on the family’s previous behavior in assisted housing. Per the alternative requirements listed in the Federal Register notice dated December 29, 2014, HAs are no longer permitted to deny assistance to a family because the family previously failed to meet its obligations under the Family Self-Sufficiency (FSS) program [FR Notice 12/29/14]. HA Policy The HA will deny assistance to an applicant family if: The family does not provide information that the HA or HUD determines is necessary in the administration of the program. The family does not provide complete and true information to the HA. Any family member has been evicted from federally-assisted housing in the last three years. The family owes rent or other amounts to any HA in connection with Section 8 or other public housing assistance under the 1937 Act, unless the family repays the full amount of the debt prior to being selected from the waiting list. If the family has not reimbursed any HA for amounts the HA paid to an owner under a HAP contract for rent, damages to the unit, or other amounts owed by the family under the lease, unless the family repays the full amount of the debt prior to being selected from the waiting list. The family has breached the terms of a repayment agreement entered into with the HA, unless the family repays the full amount of the debt covered in the repayment agreement prior to being selected from the waiting list. A family member has engaged in or threatened violent or abusive behavior toward HA personnel. Abusive or violent behavior towards HA personnel includes verbal as well as physical abuse or violence. Use of racial epithets, or other language, written or oral, that is customarily used to intimidate may be considered abusive or violent behavior. Threatening refers to oral or written threats or physical gestures that communicate intent to abuse or commit violence. In making its decision to deny assistance, the HA will consider the factors discussed in Section 3-III.FE and 3-III.GSection 3-III.E. Upon consideration of such factors, the HA may, on a case-by-case basis, decide not to deny assistance. 341 © Copyright 2021 Nan McKay & Associates, Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 3-32 3-III.DE. SCREENING Screening for Eligibility HAs are authorized to obtain criminal conviction records from law enforcement agencies to screen applicants for admission to the HCV program. This authority assists the HA in complying with HUD requirements and HA policies to deny assistance to applicants who are engaging in or have engaged in certain criminal activities. In order to obtain access to the records the HA must require every applicant family to submit a consent form signed by each adult household member [24 CFR 5.903]. HA Policy The HA will perform a criminal background check through local law enforcement for every adult household member. If the results of the criminal background check indicate that there may be past criminal activity, but the results are inconclusive, the HA will require the household member to obtain and submit a record from the applicable jurisdiction. Failure to do so will result in denial of admission. While a HA has regulatory authority to use criminal conviction records for the purpose of applicant screening for admission, there is is no corresponding authority to use these records to check for criminal and illegal drug activity by participants, and therefore, H Aas may not use records for this purpose. HAs are required to perform criminal background checks necessary to determine whether any household member is subject to a lifetime registration requirement under a state sex offender program in the state where the housing is located, as well as in any other state where a household member is known to have resided [24 CFR 982.553(a)(2)(i)]. HA Policy The HA will use the Dru Sjodin National Sex Offender database to screen applicants for admissionuse the police department to facilitate a check of the Predatory Offender List through the Minnesota Bureau of Criminal Apprehension (BCA). Additionally, HAs must ask whether the applicant, or any member of the applicant’s household, is subject to a lifetime registered sex offender registration requirement in any state [Notice PIH 2012-28]. If the HA proposes to deny assistance based on a criminal record or on lifetime sex offender registration information, the HA must notify the household of the proposed action and must provide the subject of the record and the applicant a copy of the record and an opportunity to dispute the accuracy and relevance of the information prior to a denial of admission. [24 CFR 5.903(f) and 5.905(d)]. 342 © Copyright 2021 Nan McKay & Associates, Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 3-33 Screening for Suitability as a Tenant [24 CFR 982.307] The HA has no liability or responsibility to the owner for the family’s behavior or suitability for tenancy. The HA has the authority to conduct additional screening to determine whether an applicant is likely to be a suitable tenant. HA Policy The HA will not conduct additional screening to determine an applicant family’s suitability for tenancy. The owner is responsible for screening and selection of the family to occupy the owner’s unit. The HA must inform the owner that screening and selection for tenancy is the responsibility of the owner. An owner may consider a family’s history with respect to factors such as: payment of rent and utilities, caring for a unit and premises, respecting the rights of other residents to the peaceful enjoyment of their housing, criminal activity that is a threat to the health, safety or property of others, and compliance with other essential conditions of tenancy. HUD requires the HA to provide prospective owners with the family's current and prior address (as shown in HA records) and the name and address (if known) of the owner at the family's current and prior addresses. HUD permits the HA to provide owners with additional information, as long as families are notified that the information will be provided, and the same type of information is provided to all owners. The HA may not disclose to the owner any confidential information provided to the HA by the family in response to a HA request for documentation of domestic violence, dating violence, sexual assault, or stalking or human trafficking except at the written request or with the written consent of the individual providing the documentation [24 CFR 5.2007(a)(4)]. HA Policy The HA will inform owners of their responsibility to screen prospective tenants, and will provide owners with the required known name and address information if requested. 343 © Copyright 2021 Nan McKay & Associates, Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 3-34 3-III.EF. CRITERIA FOR DECIDING TO DENY ASSISTANCE Evidence [24 CFR 982.553(c)] HA Policy The HA will use the concept of the preponderance of the evidence as the standard for making all admission decisions. Preponderance of the evidence is defined as evidence which is of greater weight or more convincing than the evidence which is offered in opposition to it; that is, evidence which as a whole shows that the fact sought to be proved is more probable than not. Preponderance of the evidence may not be determined by the number of witnesses, but by the greater weight of all evidence. Consideration of Circumstances [24 CFR 982.552(c)(2)] HUD authorizes the HA to consider all relevant circumstances when deciding whether to deny assistance based on a family’s past history except in the situations for which denial of assistance is mandatory (see Section 3-III.B). HA Policy The HA will consider the following facts and circumstances prior to making its decision: The seriousness of the case, especially with respect to how it would affect other residents’ safety or property The effects that denial of assistance may have on other members of the family who were not involved in the action or failure to act The extent of participation or culpability of individual family members, including whether the culpable family member is a minor or a person with disabilities, or (as discussed further in section 3-III.GH) a victim of domestic violence, dating violence, sexual assault, or stalking or human trafficking The length of time since the violation occurred, including the age of the individual at the time of the conduct, as well as the family’s recent history and the likelihood of favorable conduct in the future 344 © Copyright 2021 Nan McKay & Associates, Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 3-35 While a record or recodsrecords of arrest(s) will not be used as sole the basis for denial, an arrest may, however, trigger an investigation to determine whether the applicant actually engaged in disqualifying criminal activity. As part of its investigation, the PHA may obtain the police report associated with the arrest and consider the reported circumstances of the arrest. The PHA may also consider: Any statements made by witnesses or the applicant not included in the police report Whether criminal charges were filed Whether, if filed, criminal charges were abandoned, dismissed, not prosecuted, or ultimately resulted in an acquittal Any other evidence relevant to determining whether or not the applicant engaged in disqualifying activity Evidence of criminal conduct will be considered if it indicates a demonstrable risk to safety and/or property In the case of drug or alcohol abuse, whether the culpable household member is participating in or has successfully completed a supervised drug or alcohol rehabilitation program or has otherwise been rehabilitated successfully The HA will require the applicant to submit evidence of the household member’s current participation in or successful completion of a supervised drug or alcohol rehabilitation program, or evidence of otherwise having been rehabilitated successfully. 345 © Copyright 2021 Nan McKay & Associates, Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 3-38 3-III.GH. PROHIBITION AGAINST DENIAL OF ASSISTANCE TO VICTIMS OF DOMESTIC VIOLENCE, DATING VIOLENCE, SEXUAL ASSAULT, AND STALKING The Violence against Women Act of 2013 (VAWA) and the HUD regulation at 24 CFR 5.2005(b) prohibit HAs from denying an applicant admission to the HCV program on the basis or as a direct result of the fact that the applicant is or has been a victim of domestic violence, dating violence, sexual assault or stalking, if the applicant otherwise qualifies for assistance or admission. x Although the VAWA 2022 statute does not specifically include human trafficking in the list of victims protected under VAWA, in 2022 HUD began including human trafficking as part of the list of victims protected under VAWA (as seen in Notices PIH 2022-06, PIH 2022-22, and PIH 2022-24). In the absence of a final rule implementing VAWA 2022 and to mirror HUD’s recent usage, this policy includes human trafficking in addition to domestic violence, dating violence, sexual assault, and stalking anywhere such a list appears. Definitions of key terms used in VAWA are provided in section 16-IX of this plan, where general VAWA requirements and policies pertaining to notification, documentation, and confidentiality are also located. Notification VAWA 2013 expanded notification requirements to include the obligation forrequires HAs to provide applicants who are denied assistance with a VAWA Notice of Occupancy Rights (form HUD-5380) and a domestic violence certification form (HUD-5382) at the time the applicant is denied. HA Policy The HA acknowledges that a victim of domestic violence, dating violence, sexual assault, or stalking or human trafficking may have an unfavorable history (e.g., a poor credit history, poor rental history, a record of previous damage to an apartment, a prior arrest record) due to adverse factors that would warrant denial under the HA’s policies. While the HA is not required to identify whether adverse factors that resulted in the applicant’s denial are a result of domestic violence, dating violence, sexual assault, or stalking or human trafficking, the applicant may inform the HA that their status as a victim directly related to the grounds for the denial. The HA will request that the applicant provide enough information to the HA to allow the HA to make an objectively reasonable determination, based on all circumstances, whether the adverse factors is a direct result of their status as a victim. The HA will include in its notice of denial the VAWA information described in section 16-IX.C of this plan as well as including a copy of the form HUD-5382. The HA will request in writing that an applicant wishing to claim protection under VAWA notify the HA within 14 business days. 346 © Copyright 2021 Nan McKay & Associates, Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 3-39 Documentation Victim Documentation [24 CFR 5.2007] HA Policy If an applicant claims the protection against denial of assistance that VAWA provides to victims of domestic violence, dating violence, sexual assault or stalking or human trafficking, the HA will request in writing that the applicant provide documentation supporting the claim in accordance with section 16-IX.D of this plan. Perpetrator Documentation HA Policy If the perpetrator of the abuse is a member of the applicant family, the applicant must provide additional documentation consisting of one of the following: x A signed statement (1) requesting that the perpetrator be removed from the application and (2) certifying that the perpetrator will not be permitted to visit or to stay as a guest in the assisted unit. x Documentation that the perpetrator has successfully completed, or is successfully undergoing, rehabilitation or treatment. The documentation must be signed by an employee or agent of a domestic violence service provider or by a medical or other knowledgeable professional from whom the perpetrator has sought or is receiving assistance in addressing the abuse. The signer must attest under penalty of perjury to his or her belief that the rehabilitation was successfully completed or is progressing successfully. The victim and perpetrator must also sign or attest to the documentation. 347 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 4-5 4-I.D. PLACEMENT ON THE WAITING LIST The HA must review each complete application received and make a preliminary assessment of the family’s eligibility. The HA must accept applications from families for whom the list is open unless there is good cause for not accepting the application (such as denial of assistance) for the grounds stated in the regulations [24 CFR 982.206(b)(2)]. Where the family is determined to be ineligible, the HA must notify the family in writing [24 CFR 982.201(f)]. Where the family is not determined to be ineligible, the family will be placed on a waiting list of applicants. No applicant has a right or entitlement to be listed on the waiting list, or to any particular position on the waiting list [24 CFR 982.202(c)]. Ineligible for Placement on the Waiting List HA Policy If the HA can determine from the information provided that a family is ineligible, the family will not be placed on the waiting list. Where a family is determined to be ineligible, the HA will send written notification of the ineligibility determination within 30 business days of the close of the waiting list application process and completion of the lottery process, if applicable. The notice will specify the reasons for ineligibility and will inform the family of its right to request an informal review and explain the process for doing so (see Chapter 16). Eligible for Placement on the Waiting List HA Policy Applicants can view their initial eligibility determination on the HA’s online application website. Placement on the waiting list does not indicate that the family is, in fact, eligible for assistance. A final determination of eligibility will be made when the family is selected from the waiting list. The HA will complete a random drawing for waiting list placement, awarding up to 9550% of waiting list placements to applicants who live, work, have been hired to work or attend school or have been accepted to attend school (K through 12) in St. Louis Park. The remaining placements will be awarded to any other applicant. Applicants will be placed on the waiting list according to any preference(s) for which they qualify, and the date and time randomly applied to all applications from a particular opening of the waiting list. Applicants that qualify for a “super preference” take priority over all other applicants and even when the waiting list is otherwise closed, applications will be accepted for families qualifying for the “super preference”. These applicants are limited to the super preferences listed in 4-III.C. Selection Method. 348 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 4-10 4-II.E. REPORTING CHANGES IN FAMILY CIRCUMSTANCES HA Policy While the family is on the waiting list, the family must inform the HA of changes in application information, including current address, phone number, household composition, income, and community roots factors (live, work, or have minor children in school in St. Louis Park). The changes must be submitted in writing or via the online portal. 4-II.F. UPDATING THE WAITING LIST [24 CFR 982.204] HUD requires the HA to establish policies to use when removing applicant names from the waiting list. Purging the Waiting List The decision to withdraw an applicant family that includes a person with disabilities from the waiting list is subject to reasonable accommodation. If the applicant did not respond to a HA request for information or updates, and the HA determines that the family did not respond because of the family member’s disability, the HA must reinstate the applicant family to their former position on the waiting list [24 CFR 982.204(c)(2)]. HA Policy The waiting list will be updated as needed to ensure that all applicants and applicant information is current and timely. To update the waiting list, the HA will send an update request via first class mailemail to each family on the waiting list to determine whether the family continues to be interested in, and to qualify for, the program. This update request will be sent to the last email address that the HA has on record for the family. The update request will provide a deadline by which the family must respond and will state that failure to respond will result in the applicant’s name being removed from the waiting list. The family’s response must be in writing or via the online portal and may be delivered in person, by mail, by email, or by fax. If the family fails to respond the family will be removed from the waiting list without further notice. If the notice is returned by the post office with no forwarding address, the applicant will be removed from the waiting list without further notice. If the notice is returned by the post office with a forwarding address, the notice will be re- sent to the address indicated. If a family is removed from the waiting list for failure to respond, the HA may reinstate the family if it is determined that the lack of response was due to HA error or to circumstances beyond the family’s control, as a result of a family member’s disability, or as a direct result of status as a victim of domestic violence, dating violence, sexual assault, stalking, or human trafficking, including an adverse factor resulting from such abuse.. The HA may also reinstate the family if they contact the HA within one year 349 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 4-11 two years of removal from the waiting list. If it has been more than two yearsone year the family will need to reapply when the waiting list is open. 350 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 4-12 Removal from the Waiting List HA Policy If at any time an applicant family is on the waiting list, the HA determines that the family is not eligible for assistance (see Chapter 3), the family will be removed from the waiting list. If a family is removed from the waiting list because the HA has determined the family is not eligible for assistance, a notice will be sent to the family’s email address of record as well as to any alternate email address provided on the initial application. The notice will state the reasons the family was removed from the waiting list and will inform the family how to request an informal review regarding the HA’s decision (see Chapter 16) [24 CFR 982.201(f)]. 351 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 4-16 3. Elderly, Disabled Preference (10 points): This preference is given to an applicant whose head or sole member is a person who is elderly or disabled or a non-elderly person with disabilities. a. Elderly Family: A family whose head, spouse or sole member is a person who is at least 62 years of age; two or more persons who are at least 62 years of age living together; or one or more persons who are at least 62 years of age living with one or more live-in aides. b. Disabled Family: A family whose head, spouse, or sole member is a person with disabilities; or two or more persons with disabilities living together; or one or more persons with disabilities living with one or more live-in aides. c. Non elderly persons with disabilities: non-elderly persons with disabilities transitioning out of institutional and other segregated settings, at serious risk of institutionalization, homeless, or at risk of becoming homeless. 4. Near-Elderly Preference (10 points): This preference is given to an applicant whose head, spouse or sole member is a person who is near-elderly and does not qualify for a disabled preference. a. Near-Elderly Family: A family whose head, spouse or sole member is a person who is at least 50 years of age but below the age of 62, living below the age of 62 living with one or more live-in aides. 5. Family of 2+ Members – Nondisabled, Non Elderly, Non Near Elderly (10 points): This preference is given to an applicant whose head, spouse or co-head is non disabled, non elderly, and non near elderly, and the household consists of 2 or more persons living together. Families with the following “super preferences” can apply even when the waiting list is not open: 6.5. Public Housing overcrowded family (25 points): This preference is given to a family living in St. Louis Park public housing that is overcrowded according to the ACOP occupancy policies and the HA does not have a unit large enough in the public housing portfolio to accommodate the family. This only applies to current public housing families that require a six bedroom home or larger due to a change in household composition or a current public housing family that requires a mobility accessible unit and the HA does not have an appropriately sized mobility accessible unit based on the occupancy standards. 7.6. Family terminated due to insufficient funding (25 points): This preference is given to any family that has been terminated from the St. Louis Park HCV program due to insufficient program funding. 352 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 4-17 8.7. VAWA preference (25 points): This preference is given to families that include victims of domestic violence, dating violence, sexual assault, or stalking who are seeking an emergency transfer under VAWA from the HA’s public housing program. 8. Foster Youth Independence Initiative (FYI) preference (25 points): This preference is given to eligible youth referred by Hennepin County with a history of child welfare involvement that are homeless or at risk of being homeless and are seeking to participate in the FYI program. A family can only receive preference points for one of the following preferences: x Elderly, Disabled Preference x Near-Elderly Preference x Family of 2+ Members – Nondisabled, Nonelderly, and Non Near Elderly Income Targeting Requirement [24 CFR 982.201(b)(2)] HUD requires that extremely low-income (ELI) families make up at least 75 percent of the families admitted to the HCV program during the HA’s fiscal year. ELI families are those with annual incomes at or below the federal poverty level or 30 percent of the area median income, whichever is higher To ensure this requirement is met, a HA may skip non-ELI families on the waiting list in order to select an ELI family. Low income families admitted to the program that are “continuously assisted” under the 1937 Housing Act [24 CFR 982.4(b)], as well as low-income or moderate-income families admitted to the program that are displaced as a result of the prepayment of the mortgage or voluntary termination of an insurance contract on eligible low-income housing, are not counted for income targeting purposes [24 CFR 982.201(b)(2)(v)]. HA Policy The HA will monitor progress in meeting the income targeting requirement throughout the fiscal year. Extremely low-income families will be selected ahead of other eligible families on an as-needed basis to ensure the income targeting requirement is met. Order of Selection The HA system of preferences may select families based on local preferences according to the date and time of application or by a random selection process (lottery) [24 CFR 982.207(c)]. If a HA does not have enough funding to assist the family at the top of the waiting list, it is not permitted to skip down the waiting list to a family that it can afford to subsidize when there are not sufficient funds to subsidize the family at the top of the waiting list [24 CFR 982.204(d) and (e)]. HA Policy Families will be selected from the waiting list in accordance with the HA’s hierarchy of preferences. Families will be selected according to the date and time randomly applied to their completed application. 353 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 4-18 4-III.D. NOTIFICATION OF SELECTION When a family has been selected from the waiting list, the HA must notify the family [24 CFR 982.554(a). HA Policy The HA will notify the family by first class mail email and via the applicant portal when it is selected from the waiting list. The notice will inform the family of the following: x Date, time, and location of the scheduled group briefing x A packet of application and other forms to be completed and brought to the briefing x All verification documents that must be brought to the briefing, including information about what constitutes acceptable documentation If a notification letter is returned to the HA with no forwarding address, the family will be removed from the waiting list. The family may be restored to the waiting list if they call within the next 6 months. If the letter is not returned and the family does not respond to the voucher offer, the family will be removed from the waiting list. 4-III.E. THE APPLICATION INTERVIEW HUD recommends that the HA obtain the information and documentation needed to make an eligibility determination though a face-to-face interview with a HA representative [HCV GB, pg. 4-16]. Being invited to attend an interview does not constitute admission to the program. Assistance cannot be provided to the family until all SSN documentation requirements are met. However, if the HA determines that an applicant family is otherwise eligible to participate in the program, the family may retain its place on the waiting list for a period of time determined by the HA [Notice PIH 2018-24]. Reasonable accommodation must be made for persons with disabilities who are unable to attend an interview due to their disability. HA Policy Families selected from the waiting list are required to participate in an eligibility interview at the time of the a group briefing. The head of household and the spouse/cohead will be strongly encouraged to attend the briefing together. However, either the head of household or the spouse/cohead may attend on behalf of the family. The head of household or spouse/cohead must provide acceptable documentation of legal identity. (Chapter 7 provides a discussion of proper documentation of legal identity.) If the family representative does not provide the required documentation at the time of the interview, he or she will be required to provide it before any unit lease up can occur. 354 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 5-2 5-I.B. BRIEFING [24 CFR 982.301] Notification of Briefing Prior to issuance of a voucher, the HA must give the family an oral briefing and provide the family with a briefing packet containing written information about the program. Families may be briefed in individual face-to-face meetings or, through group briefing sessions., or via remote briefing sessions. HA Policy Families will be notified of their eligibility for assistance at the time they are invited to a briefing. The notice will be sent via the online portal by first class mail and will also be sent by email if the family has provided a valid email address to the HA . The notice will advise the family of the type of briefing, who is required to be present at the briefing, and the date and time of the briefing. The notice will also inform the family of any additional requirements for in-person or remote briefings as addressed in relevant policy elsewhere in this section. If the notice is returned by the post office with no forwarding address, the applicant will be denied and their name will not be placed back on the waiting list. If the notice is returned by the post office with a forwarding address, the notice will be resent to the address indicated. In-Person Briefings At the briefing, the HA must ensure effective communication in accordance with Section 504 requirements (Section 504 of the Rehabilitation Act of 1973) and ensure that the briefing site is accessible to individuals with disabilities. For a more thorough discussion of accessibility requirements, refer to Chapter 2. HA Policy In-person briefings will generally be conducted in group meetings. At the family’s written request, the HA may provide an individual briefing. Generally, tThe head of household is required to attend the briefing. If the head of household is unable to attend, the HA may approve another adult family member to attend the briefing. Families that attend group briefings and still need individual assistance will be accommodated as needed throughout the search process. Briefings will be conducted in English. For limited English proficient (LEP) applicants, the HA will provide interpretation services in accordance with the HA’s LEP plan (See Chapter 2). Attendance HA Policy 355 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 5-3 Applicants who fail to attend a scheduled in-person briefing will be scheduled for another briefing if they call to request a reschedule with 3 business days of the briefing. The HA will notify the family of the date and time of the second scheduled briefing. Applicants who fail to attend two scheduled briefings, without prior HA approval, will be denied assistance (see Chapter 3). Remote Briefings [Notice PIH 2020-32] Remote briefings may be conducted over the phone, via video conferencing, or through other virtual platforms. HA Policy The HA has the sole discretion to require that briefings be conducted remotely in case of local, state, or national physical distancing orders, and in cases of inclement weather or natural disaster. If the HA schedules a remote briefing, the HA will conduct a face-to- face briefing upon request of the applicant as a reasonable accommodation for a person with a disability if safety and health concerns can be reasonably addressed. In addition, the HA will conduct a briefing remotely upon request of the applicant as a reasonable accommodation for a person with a disability, if an applicant does not have child carechildcare or transportation that would enable them to attend the briefing, or if the applicant believes an in-person briefing would create an undue health risk. The HA will consider other reasonable requests for a remote briefing on a case-by-case basis. Accessibility Requirements for Persons with Disabilities and LEP Individuals As with in-person briefings, the platform for conducting remote briefings must be accessible and the briefing conducted in accordance with Section 504 and accessibility requirements. This includes ensuring any information, websites, emails, digital notifications, and other virtual platforms are accessible for persons with vision, hearing, and other disabilities. Further, providing effective communication in a digital context may require the use of individualized auxiliary aids or services, such as audio description, captioning, sign language and other types of interpreters, keyboard accessibility, accessible documents, screen reader support, and transcripts. Auxiliary aids or services must be provided in accessible formats, in a timely manner, and in such a way to protect the privacy and independence of the individual. If no method of conducting a remote briefing is available that appropriately accommodates an individual’s disability, the HA may not hold against the individual his or her inability to participate in the remote briefing, and the HA should consider whether postponing the remote briefing to a later date is appropriate or whether there is a suitable alternative. Due to the individualized nature of disability, the appropriate auxiliary aid or service necessary, or reasonable accommodation, will depend on the specific circumstances. Limited English Proficiency (LEP) requirements also apply to remote briefings, including the use of interpretation services and document translation. See Chapter 2 for a more thorough discussion of accessibility and LEP requirements, all of which apply in the context of remote briefings. 356 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 5-4 Conducting Remote Briefings The HA must ensure that the lack of technology or inability to use technology for remote briefings does not pose a disadvantage to families that may not be apparent to the HA. The PHA must ensure that the family has appropriate technological access in order to fully participate in the remote briefing. HA Policy At least 10 business days prior to scheduling the remote briefing, the HA will provide written notification via the online portal first class mail and/or email to families participating in the briefing to advise of technological requirements and to request the family notify the HA of any known barriers. If any family does not respond within five business days, or if the written notification is returned by the post office or the email is rejected, the HA will contact the family by telephone to identify potential technological barriers and to determine which technology resources are accessible to the family. The HA will resolve any barriers using the guidance in Section 6 of Notice PIH 2020-32, including offering the family the opportunity to attend an in-person briefing or have a one-on-one briefing over the phone, as appropriate. The HA will conduct remote briefings via a video conferencing platform when available. If applicants are unable to adequately access the video conferencing platform, the briefing will be conducted by telephone conferencing call-in. If the family is unable to adequately access the telephone conferencing call-in, the remote briefing will be postponed, and an in-person alternative or one-on-one briefing over the phone will be provided. The HA will provide login information and/or conferencing call-in information and an electronic copy of the briefing packet via email at least five business days before the briefing. The HA will provide a paper copy of the briefing packet upon family request, and may reschedule the briefing to allow adequate time for the family to receive the physical briefing packet. The HA will ensure that all electronic information stored or transmitted as part of the briefing meets the requirements for accessibility for persons with disabilities and persons with LEP, and is secure, including ensuring personally identifiable information (PII) is protected. The HA will ensure that families who participate in remote briefings have the opportunity to ask questions as part of the briefing. If families lose connectivity during any remote briefing or otherwise feel they were unable to access information presented during the briefing, the family may request a one- on-one briefing over the phone or in person with the HA. 357 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 5-7 Additional Items to Be Included in the Briefing Packet In addition to items required by the regulations, HAs may wish to include supplemental materials to help explain the program to both participants and owners [HCV GB p. 8-7, Notice PIH 5017- 12]. HA Policy The HA will provide the following additional materials in the briefing packet: The HUD pamphlet on lead-based paint entitled Protect Your Family from Lead in Your Home Information on how to fill out and file a housing discrimination complaint form Information about the protections afforded by the Violence against Women Act of 2013 (VAWA) to victims of domestic violence, dating violence, sexual assault, and stalking (see section 16-IX.C) “Is Fraud Worth It?” (form HUD-1141-OIG), which explains the types of actions a family must avoid and the penalties for program abuse “What You Should Know about EIV,” a guide to the Enterprise Income Verification (EIV) system published by HUD as an attachment to Notice PIH 2017-12 “Debts Owed to Public Housing Agencies and Terminations” (form HUD-52675) Information about local bus service, low cost telephone and internet options, and discounts for family activities in the metro area Information about Family Self Sufficiency (T.R.A.I.L.S.) Information for Owners brochure 358 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 5-8 5-I.C. FAMILY OBLIGATIONS Obligations of the family are described in the housing choice voucher (HCV) regulations and on the voucher itself. These obligations include responsibilities the family is required to fulfill, as well as prohibited actions. The HA must inform families of these obligations during the oral briefing, and the same information must be included in the briefing packet. When the family’s unit is approved and the HAP contract is executed, the family must meet those obligations in order to continue participating in the program. Violation of any family obligation may result in termination of assistance, as described in Chapter 12. Time Frames for Reporting Changes Required by Family Obligations HA Policy Unless otherwise noted below, when family obligations require the family to respond to a request or notify the HA of a change, notifying the HA of the request or change within 10 business days is considered prompt notice. When a family is required to provide notice to the HA, the notice must be in writing. Family Obligations [24 CFR 982.551] The family obligations of the voucher are listed as follows: x The family must supply any information that the HA or HUD determines to be necessary, including submission of required evidence of citizenship or eligible immigration status. x The family must supply any information requested by the HA or HUD for use in a regularly scheduled reexamination or interim reexamination of family income and composition. x The family must disclose and verify social security numbers and sign and submit consent forms for obtaining information. x Any information supplied by the family must be true and complete. x The family is responsible for any Housing Quality Standards (HQS) breach by the family caused by failure to pay tenant-provided utilities or appliances, or damages to the dwelling unit or premises beyond normal ordinary wear and tear caused by any member of the household or guest. The family must allow the HA to inspect the unit at reasonable times and after reasonable notice, as described in Chapter 8 of this plan. 359 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 5-9 x The family must not commit any serious or repeated violation of the lease. HA Policy The HA will determine if a family has committed serious or repeated violations of the lease based on available evidence, including but not limited to, a court-ordered eviction or an owner’s notice to evict, police reports, and affidavits from the owner, neighbors, or other credible parties with direct knowledge. Serious and repeated lease violations will include, but not be limited to, nonpayment of rent, disturbance of neighbors, destruction of property, living or housekeeping habits that cause damage to the unit or premises, and criminal activity. Generally, the criterion to be used will be whether or not the reason for the eviction was the fault of the tenant or guests. Any incidents of, or criminal activity related to, domestic violence, dating violence, sexual assault, or stalking will not be construed as serious or repeated lease violations by the victim [24 CFR 5.2005(c)(1)]. x The family must notify the HA and the owner before moving out of the unit or terminating the lease. x The family must promptly give the HA a copy of any owner eviction notice. x The family must use the assisted unit for residence by the family. The unit must be the family’s only residence. x The composition of the assisted family residing in the unit must be approved by the HA. The family must promptly notify the HA in writing of the birth, adoption, or court-awarded custody of a child. The family must request HA approval to add any other family member as an occupant of the unit. HA Policy The request to add a family member must be submitted in writing and approved prior to the person moving into the unit. The HA will determine eligibility of the new member in accordance with the policies in Chapter 3. x The family must promptly notify the HA in writing if any family member no longer lives in the unit, and in some cases provide verification as applicable/requested. 360 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-1 Chapter 6 INCOME AND SUBSIDY DETERMINATIONS [24 CFR Part 5, Subparts E and F; 24 CFR 982] INTRODUCTION A family’s income determines eligibility for assistance and is also used to calculate the family’s payment and the HA’s subsidy. The HA will use the policies and methods described in this chapter to ensure that only eligible families receive assistance and that no family pays more or less than its obligation under the regulations. This chapter describes HUD regulations and HA policies related to these topics in three parts as follows: x Part I: Annual Income. HUD regulations specify the sources of income to include andwhich are excluded to arrive at a family’sfrom the family’s annual income. These requirements and HA policies for calculating annual income are found in Part I. x Part II: Assets HUD regulations specify the types of assets which are excluded from a family’s annual income. These requirements and PHA policies for calculating income from assets are found in Part II. x Part III: Adjusted Income. Once annual income has been established HUD regulations require the HA to subtract from annual income any of five mandatory deductions for which a family qualifies and allow the PHA to adopt additional permissive deductions. These requirements and HA policies for calculating adjusted income are found in Part IIIII. x Part IIIIV: Calculating Family Share and HA Subsidy. This part describes the statutory formula for calculating total tenant payment (TTP), the use of utility allowances, and the methodology for determining HA subsidy and required family payment. 361 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-2 PART I: ANNUAL INCOME 6-I.A. OVERVIEW [24 CFR 5.609] The general regulatory definition of annual income shown below is from 24 CFR 5.609. 5.609 Annual 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; and (3) Which are not specifically excluded in paragraph [5.609(c)]. (4) Annual income also means amounts derived (during the 12-month period) from assets to which any member of the family has access. Annual Income Includes: x All amounts, not specifically excluded in 24 CFR 5.609(b); x All amounts received from all sources by each member of the family who is 18 years of age or older or is the head of household or spouse; x Unearned income by or on behalf of each dependent who is under 18 years of age; and x Imputed returns of an asset based on the current passbook savings rate, as determined by HUD, when the value of net family assets exceeds $50,000 (which amount HUD will adjust annually) and the actual returns from a given asset cannot be calculated. In addition to this general definition, the regulations at 24 CFR 5.609(b) provide a comprehensive listing of all sources of income that are excluded from annual income. Note, unlike in previous versions of the regulations, the current regulations governing annual income do not list sources of income that are to be included. Instead, HUD relies on the definition of excluded income under 24 CFR 5.609(b) to provide the scope of what is included. To that end, generally, all income is included unless it is specifically excluded by regulation. Annual income includes “all amounts received,” not the amount that a family may be legally entitled to receive but did not receive. For example, a family’s child support or alimony income must be based on payments received, not the amounts to which the family is entitled by court or agency orders [Notice PIH 2023-27]. Annual income also includes all actual anticipated income from assets (provided the income is not otherwise excluded) even if the asset itself is excluded from net family assets [Notice PIH 2023-27]. 24 CFR 5.603(b)(1) describes HUD regulations establish policies for treating specific types of income and assets. The full texts of those portions of the regulations are provided in exhibits at the end of this chapter as follows: x Annual Income Inclusions Full Definition (Exhibit 6-1) x Annual Income Exclusions (Exhibit 6-2) 362 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-3 x Treatment of Family Assets (Exhibit 6-32) x Earned Income Disallowance for Persons with Disabilities (Exhibit 6-4) x The Effect of Welfare Benefit Reduction (Exhibit 6-53) Sections 6-I.B and 6-I.C discuss general requirements and methods for calculating annual income. The rest of this section describes how each source of income is treated for the purposes of determining annual income. HUD regulations present income inclusions and exclusions separately [24 CFR 5.609(b) and 24 CFR 5.609(c)]. In this plan, however, the discussions of income inclusions and exclusions are integrated by topic (e.g., all policies affecting earned income are discussed together in section 6-I.D). Verification requirements for annual income are discussed in Chapter 7. 363 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-4 6-I.B. HOUSEHOLD COMPOSITION AND INCOME Overview Income received by all family members must be counted unless specifically excluded by the regulations. It is the responsibility of the head of household to report changes in family composition in accordance with HUD regulations and PHA policies in Chapter 11 . The rules on which sources of income are counted vary somewhat by family member. The chart below summarizes how family composition affects income determinations. Summary of Income Included and Excluded by Person Live-in aides Income from all sources (both earned and unearned) is excluded [24 CFR 5.609(cb)(58)]. Foster child or foster adult Income from all sources (both earned and unearned) is excluded [24 CFR 5.609(cb)(28)]. Head, spouse, or cohead Other adult family members All sources of income not specifically excluded by the regulations are included. [24 CFR 5.609(a)]. Children under 18 years of ageMinors Employment Earned income of children under 18 years of age is excluded [24 CFR 5.609(bc)(31)]. All other sources of unearned income, except those specifically excluded by the regulations, are included [24 CFR 5.609(a)].Employment income is excluded [24 CFR 5.609(c)(1)]. All other sources of income, except those specifically excluded by the regulations, are included. Full-time students 18 years of age or older (not head, spouse, or cohead) Employment Earned income above $480/yearin excess of the dependent deduction is excluded [24 CFR 5.609(cb)(1114)]. All other sources of unearned income, except those specifically excluded by the regulations, are included. 364 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-5 Temporarily Absent Family Members The current regulations governing annual income do not specifically address temporarily absent family members. The regulations also do not define “temporarily” or “permanently” absent or specify a timeframe associated with a temporary versus a permanent absenceThe The income of family members approved to live in the unit will be counted, even if the family member is temporarily absent from the unit [HCV GB, p. 5-18]. HA Policy Unless specifically excluded by the regulations, the income of all family members approved to live in the unit will be counted, even if the family member is temporarily absent from the unit. Generally an individual who is or is expected to be absent from the assisted unit for 180 consecutive days or less is considered temporarily absent and continues to be considered a family member. Generally an individual who is or is expected to be absent from the assisted unit for more than 180 consecutive days is considered permanently absent and no longer a family member. Exceptions to this general policy are discussed below. Absent Students HA Policy When someone who has been considered a family member attends school away from home, the person will continue to be considered a family member unless information becomes available to the HA indicating that the student has established a separate household or the family declares that the student has established a separate household. Absences Due to Placement in Foster Care Children temporarily absent from the home as a result of placement in foster care (as confirmed by the state child welfare agency) are considered members of the family [24 CFR 5.403]. HA Policy If a child has been placed in foster care, the HA will verify with the appropriate agency whether and when the child is expected to be returned to the home. Unless the agency confirms that the child has been permanently removed from the home, the child will continue to be counted as a family member. Absent Head, Spouse, or Cohead HA Policy An employed head, spouse, or cohead absent from the unit more than 180 consecutive days due to employment will continue to be considered a family member. 365 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-6 Family Members Permanently Confined for Medical Reasons If a family member is confined to a nursing home or hospital on a permanent basis, that person is no longer considered a family member and the income of that person is not counted [HCV GB, p. 5-22]. HA Policy The HA will request verification from a responsible medical professional and will use this determination. If the responsible medical professional cannot provide a determination, the person generally will be considered temporarily absent. The family may present evidence that the family member is confined on a permanent basis and request that the person not be considered a family member. When an individual who has been counted as a family member is determined permanently absent, the family is eligible for the medical expense deduction only if the remaining head, spouse, or cohead qualifies as an elderly person or a person with disabilities. Joint Custody of Dependents HA Policy Dependents that are subject to a joint custody arrangement will be considered a member of the family, if they live with the applicant or participant family 50 percent or more of the time. When more than one applicant or participant family is claiming the same dependents as family members, the family with primary custody at the time of the initial examination or reexamination will be able to claim the dependents. If there is a dispute about which family should claim them, the HA will make the determination based on available documents such as court orders, school records, or an IRS return showing which family has claimed the child for income tax purposes. 366 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-7 Caretakers for a Child HA Policy The approval of a caretaker is at the owner and HA’s discretion and subject to the owner and HA’s screening criteria. If neither a parent nor a designated guardian remains in a household receiving HCV assistance, the HA will take the following actions. (1) If a responsible agency has determined that another adult is to be brought into the assisted unit to care for a child for an indefinite period, the designated caretaker will not be considered a family member until a determination of custody or legal guardianship is made. (2) If a caretaker has assumed responsibility for a child without the involvement of a responsible agency or formal assignment of custody or legal guardianship, the caretaker will be treated as a visitor for 90 days. After the 90 days has elapsed, the caretaker will be considered a family member unless information is provided that would confirm that the caretaker’s role is temporary. In such cases the HA will extend the caretaker’s status as an eligible visitor. (3) At any time that custody or guardianship legally has been awarded to a caretaker, the housing choice voucher will be transferred to the caretaker. (4) During any period that a caretaker is considered a visitor, the income of the caretaker is not counted in annual income and the caretaker does not qualify the family for any deductions from income. 367 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-8 6-I.C. ANTICIPATING CALCULATING ANNUAL INCOME The methodology used for calculating income differs depending on whether income is being calculated at initial occupancy, interim reexamination, or at annual reexamination. However, income from assets is always anticipated regardless of certification type. Anticipating Annual Income [24 CFR 5.609(c)(1)] At initial occupancy and for an interim reexamination of family income, the PHA is required to use anticipated income (current income) for the upcoming 12-month period following the new admission or interim reexamination effective date. The HA is required to count all income “anticipated to be received from a source outside the family during the 12-month period following admission or annual reexamination effective date” [24 CFR 5.609(a)(2)]. Policies related to verifying income are found in Chapter 7anticipatinganticipating annual income are provided below. Basis of Annual Income Projection The HA generally will use current circumstances to determine anticipated income for the coming 12-month period. HUD authorizes the HA to use other than current circumstances to anticipate income when: x An imminent change in circumstances is expected [HCV GB, p. 5-17] x It is not feasible to anticipate a level of income over a 12-month period (e.g., seasonal or cyclic income) [24 CFR 5.609(d)] x The HA believes that past income is the best available indicator of expected future income [24 CFR 5.609(d)] HAs are required to use HUD’s Enterprise Income Verification (EIV) system in its entirety as a third party source to verify employment and income information, and to reduce administrative subsidy payment errors in accordance with HUD administrative guidance [24 CFR 5.233(a)(2)]. HUD allows HAs to use tenant-provided documents (pay stubs) to project income once EIV data has been received in such cases where the family does not dispute the EIV employer data and where the HA does not determine it is necessary to obtain additional third-party data. HA Policy When EIV is obtained and the family does not dispute the EIV employer data, the HA will use current tenant-provided documents to project annual income. When the tenant- provided documents are pay stubs, the HA will make every effort to obtain current and consecutive pay stubs dated within the last 60 days. The HA will obtain written and/or oral third-party verification in accordance with the verification requirements and policy in Chapter 7 in the following cases: If EIV or other UIV data is not available, If the family disputes the accuracy of the EIV employer data, and/or If the HA determines additional information is needed. 368 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-9 In such cases, the HA will review and analyze current data to anticipate annual income. In all cases, the family file will be documented with a clear record of the reason for the decision, and a clear audit trail will be left as to how the HA annualized projected income. When the HA cannot readily anticipate income based upon current circumstances (e.g., in the case of temporary, sporadic, or variable employment, seasonal employment, unstable working hours, or suspected fraud), the HA will review and analyze historical data for patterns of employment, paid benefits, and receipt of other income and use the results of this analysis to establish annual income. Any time current circumstances are not used to project annual income, a clear rationale for the decision will be documented in the file. In all such cases the family may present information and documentation to the HA to show why the historic pattern does not represent the family’s anticipated income. In all cases, the family file will be documented with a clear record of the reason for the decision, and a clear audit trail will be left as to how the PHA annualized projected income. Known Changes in Income If the HA verifies an upcoming increase or decrease in income, annual income will be calculated projected by applying each income amount to the appropriate part of the 12- month period. Example: An employer reports that a full-time employee who has been receiving $8/hour will begin to receive $8.25/hour in the eighth week after the effective date of the new admission or interim reexamination. In such a case the HA would calculate annual income as follows: ($8/hour × 40 hours × 7 weeks) + ($8.25 × 40 hours × 45 weeks). The family may present information that demonstrates that implementing a change before its effective date would create a hardship for the family. In such cases the HA will calculate annual income using current circumstances and then , should the change in income require the PHA to conduct an interim reexamination, conduct an interim reexamination in accordance with PHA policy in Chapter 11. require an interim reexamination when the change actually occurs. This requirement will be imposed even if the HA’s policy on reexaminations does not require interim reexaminations for other types of changes. When tenant-provided third-party documents are used to anticipate annual income, they will be dated within the last 60 days of the reexamination interview date . Projecting Income In HUD’s EIV webcast of January 2008, HUD made clear that HAs are not to use EIV quarterly wages to project annual income. 369 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-10 Calculating Annual Income at Annual Reexamination [24 CFR.609(c)(2); Notice PIH 2023-27] At annual reexamination, PHAs must first determine the family’s income for the previous 12- month period and use this amount as the family income for annual reexaminations; however, adjustments to reflect current income must be made. Any change of income since the family’s last annual reexamination, including those that did not meet the threshold to process an interim reexamination of family income in accordance with PHA policies in Chapter 11 and HUD regulations, must be considered. If, however, there have been no changes to income, then the amount of income calculated for the previous 12-month period is the amount that will be used to determine the family’s rental assistance. Income from assets is always anticipated, irrespective of the income examination type. Policies related to conducting annual reexaminations are located in Chapter 11. 370 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-11 6-I.D. EARNED INCOME Types of Earned Income Included in Annual Income Wages and Related Compensation [24 CFR 5.609(a); Notice PIH 2023-27] The full amount, before any payroll deductions, of wages and salaries, overtime pay, commissions, fees, tips and bonuses, and other compensation for personal services is included in annual income [24 CFR 5.609(b)(1)]. The earned income of each member of the family who is 18 years of age or older, or who is the head of household or spouse/cohead regardless of age, is included in annual income. Income received as a day laborer or seasonal worker is also included in annual income, even if the source, date, or amount of the income varies [24 CFR 5.609 (b)(24)]. Earned income means income or earnings from wages, tips, salaries, other employee compensation, and net income from self-employment. Earned income does not include any pension or annuity, transfer payments (meaning payments made or income received in which no goods or services are being paid for, such as welfare, social security, and governmental subsidies for certain benefits), or any cash or in-kind benefits [24 CFR 5.100]. A day laborer is defined as an individual hired and paid one day at a time without an agreement that the individual will be hired or work again in the future [24 CFR 5.603(b)]. A seasonal worker is defined as an individual who is hired into a short-term position( e.g., for which the customary employment period for the position is six months or fewer) and the employment begins about the same time each year (such as summer or winter). Typically, the individual is hired to address seasonal demands that arise for the particular employer or industry [24 CFR 5.603(b)]. Some examples of seasonal work include employment limited to holidays or agricultural seasons. Seasonal work may include but is not limited to employment as a lifeguard, ballpark vendor, or snowplow driver [Notice PIH 2023-27]. HA Policy The PHA will include in annual income the full amount, before any payroll deductions, of wages and salaries, overtime pay, commissions, fees, tips and bonuses, and other compensation. For persons who regularly receive bonuses or commissions, the HA will verify and then average amounts received for the two years preceding admission or interim reexamination. If only a one-year history is available, the HA will use the prior year amounts. In either case the family may provide, and the HA will consider, a credible justification for not using this history to anticipate future bonuses or commissions. If a new employee has not yet received any bonuses or commissions, the HA will count only the amount estimated by the employer. The file will be documented appropriately. Some Types of Military Pay 371 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-12 All regular pay, special pay and allowances of a member of the Armed Forces are counted [24 CFR 5.609(b)(8)] except for the special pay to a family member serving in the Armed Forces who is exposed to hostile fire [24 CFR 5.609(cb)(711)]. Types of Earned Income Not Counted in Annual Income Temporary, Nonrecurring, or Sporadic Income [24 CFR 5.609(c)(9)] This type of income (including gifts) is not included in annual income. Sporadic income includes temporary payments from the U.S. Census Bureau for employment lasting no longer than 180 days [Notice PIH 2009-19]. HA Policy Sporadic income is income that is not received periodically and cannot be reliably predicted. For example, the income of an individual who works occasionally as a handyman would be considered sporadic if future work could not be anticipated and no historic, stable pattern of income existed. Earnings of a Minor [24 CFR 5.609(b)(3)]Children ’s Earnings A minor is a member of the family, other than the head of household or spouse, who is under 18 years of age. Employment income earned by children (including foster children) under the age of 18 years minors is not included in annual income All other sources of unearned income, except those specifically excluded by the regulations, are included.[24 CFR 5.609(c)(1)]. (See Eligibility chapter for a definition of foster children.) Certain Earned Income of Full-Time Students [24 CFR 5.609(b)(14)] The earned income of a dependent full-time student in excess of the amount of the dependent deduction is excluded from annual income. All sources of unearned income, except those specifically excluded by the regulations, are included.Earnings in excess of $480 for each full- time student 18 years old or older (except for the head, spouse, or cohead) are not counted [24 CFR 5.609(c)(11)]. A family member other than the head of household or spouse/cohead is considered a full-time student if they are attending school or vocational training on a full-time basis [24 CFR 5.603(b)]. To be considered “full-time,” a student must be considered “full-time” by an educational institution with a degree or certificate program [HCV GB, p. 5-29]. 372 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-13 Income of a Live-in Aide Income earned by a live-in aide, as defined in [24 CFR 5.403], is not included in annual income [24 CFR 5.609(c)(5)]. (See Eligibility chapter for a full discussion of live-in aides.) Income Earned under Certain Federal Programs Income from some federal programs is specifically excluded from consideration as income [24 CFR 5.609(c)(17)], including: x Payments to volunteers under the Domestic Volunteer Services Act of 1973 (42 U.S.C. 5044(g), 5058) x Awards under the federal work-study program (20 U.S.C. 1087 uu) x Payments received from programs funded under Title V of the Older Americans Act of 1985 (42 U.S.C. 3056(f)) x Allowances, earnings, and payments to AmeriCorps participants under the National and Community Service Act of 1990 (42 U.S.C. 12637(d)) x Allowances, earnings, and payments to participants in programs funded under the Workforce Investment Act of 1998 (29 U.S.C. 2931) Resident Service Stipend Amounts received under a resident service stipend are not included in annual income. A resident service stipend is a modest amount (not to exceed $200 per individual per month) received by a resident for performing a service for the HA 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 HA’s governing board. No resident may receive more than one such stipend during the same period of time [24 CFR 5.600(c)(8)(iv)]. 373 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-14 State and Local Employment Training Programs Incremental earnings and benefits to any family member resulting 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 are excluded from annual income. 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 training program [24 CFR 5.609(c)(8)(v)]. HA Policy The HA defines training program as “a learning process with goals and objectives, generally having a variety of components, and taking place in a series of sessions over a period of time. It is designed to lead to a higher level of proficiency, and it enhances the individual’s ability to obtain employment. It may have performance standards to measure proficiency. Training may include, but is not limited to: (1) classroom training in a specific occupational skill, (2) on-the- job training with wages subsidized by the program, or (3) basic education” [expired Notice PIH 98-2, p. 3]. The HA defines incremental earnings and benefits as the difference between: (1) the total amount of welfare assistance and earnings of a family member prior to enrollment in a training program, and (2) the total amount of welfare assistance and earnings of the family member after enrollment in the program [expired Notice PIH 98-2, pp. 3–4]. In calculating the incremental difference, the HA will use as the pre-enrollment income the total annualized amount of the family member’s welfare assistance and earnings reported on the family’s most recently completed HUD-50058. End of participation in a training program must be reported in accordance with the HA's interim reporting requirements. 374 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-15 HUD-Funded Training Programs Amounts received under training programs funded in whole or in part by HUD [24 CFR 5.609(c)(8)(i)] are excluded from annual income. Eligible sources of funding for the training include operating subsidy, Section 8 administrative fees, and modernization, Community Development Block Grant (CDBG), HOME program, and other grant funds received from HUD. HA Policy To qualify as a training program, the program must meet the definition of training program provided above for state and local employment training programs. Earned Income Tax Credit Earned income tax credit (EITC) refund payments received on or after January 1, 1991 (26 U.S.C. 32(j)), are excluded from annual income [24 CFR 5.609(c)(17)]. Although many families receive the EITC annually when they file taxes, an EITC can also be received throughout the year. The prorated share of the annual EITC is included in the employee’s payroll check. Earned Income Disallowance The earned income disallowance for persons with disabilities is discussed in section 6-I.E below. 375 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-16 6-I.E. EARNED INCOME DISALLOWANCE FOR PERSONS WITH DISABILITIES [24 CFR 5.617; Streamlining Final Rule (SFR) Federal Register 3/8/16] Notice PIH 2023-27] HOTMA removed the statutory authority for the EID. The EID is available only to families that are eligible for and participating on the program as of December 31, 2023, or before; no new families may be added on or after January 1, 2024. If a family is receiving the EID prior to or on the effective date of December 31, 2023, they are entitled to the full amount of the benefit for a full 24-month period. The policies below are applicable only to such families. No family will still be receiving the EID after December 31, 2025. The EID will sunset on January 1, 2026, and the PHA policies below will no longer be applicable as of that date or when the last qualifying family exhausts their exclusion period, whichever is sooner. The earned income disallowance (EID) encourages people with disabilities to enter the work force by not including the full value of increases in earned income for a period of time. The full text of 24 CFR 5.617 is included as Exhibit 6-4 at the end of this chapter. Eligibility criteria and limitations on the disallowance are summarized below. Eligibility This disallowance applies only to individuals in families already participating in the HCV program (not at initial examination). To qualify, the family must experience an increase in annual income that is the result of one of the following events: x Employment of a family member who is a person with disabilities and who was previously unemployed for one or more years prior to employment. Previously unemployed includes a person who annually has earned not more than the minimum wage applicable to the community multiplied by 500 hours. The applicable minimum wage is the federal minimum wage unless there is a higher state or local minimum wage. x Increased earnings by a family member who is a person with disabilities and whose earnings increase during participation in an economic self-sufficiency or job-training program. A self- sufficiency program includes a program designed to encourage, assist, train, or facilitate the economic independence of HUD-assisted families or to provide work to such families [24 CFR 5.603(b)]. x New employment or increased earnings by a family member who is a person with disabilities and who has received benefits or services under Temporary Assistance for Needy Families (TANF) or any other state program funded under Part A of Title IV of the Social Security Act within the past six months. If the benefits are received in the form of monthly maintenance, there is no minimum amount. If the benefits or services are received in a form other than monthly maintenance, such as one-time payments, wage subsidies, or transportation assistance, the total amount received over the six-month period must be at least $500. 376 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-17 Calculation of the Disallowance Calculation of the earned income disallowance for an eligible member of a qualified family begins with a comparison of the member’s current income with his or her “baseline income.” The family member’s baseline income is his or her income immediately prior to qualifying for the EID. The family member’s baseline income remains constant throughout the period that he or she is participating in the EID. Calculation Method Initial 12-Month Exclusion During the initial exclusion period of 12 consecutive months, the full amount (100 percent) of any increase in income attributable to new employment or increased earnings is excluded. HA Policy The initial EID exclusion period will begin on the first of the month following the date an eligible member of a qualified family is first employed or first experiences an increase in earnings. Second 12-Month Exclusion During the second exclusion period of 12 consecutive months, the HA must exclude at least 50 percent of any increase in income attributable to employment or increased earnings. HA Policy During the second 12-month exclusion period, the HA will exclude 50 percent of any increase in income attributable to new employment or increased earnings. Lifetime Limitation The EID has a two-year (24-month) lifetime maximum. The two-year eligibility period begins at the same time that the initial exclusion period begins and ends 24 months later. During the 24-month period, an individual remains eligible for EID even if they begin to receive assistance from a different housing agency, move between public housing and Section 8 assistance, or have breaks in assistance. The EID will sunset on January 1, 2026. In no circumstances will a family member’s exclusion period continue past January 1, 2026. 377 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-18 6-I.F. BUSINESS AND SELF EMPLOYMENT INCOME [24 CFR 5.609(b)(28) Notice PIH 2023-27] Annual income includes “the net income from the operation of a business or profession. Net income is gross income minus business expenses that allows the business to operate. Gross income is all income amounts received into the business, prior to the deduction of business expenses.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” [24 CFR 5.609(b)(2)]. Business Expenses Net income is “gross income less business expense” [HCV GB, p. 5-19]. HA Policy To determine business expenses that may be deducted from gross income, the PHA will use current applicable Internal Revenue Service (IRS) rules for determining allowable business expenses [see IRS Publication 535], unless a topic is addressed by HUD regulations or guidance as described herein. To determine business expenses that may be deducted from gross income, the HA will use current applicable Internal Revenue Service (IRS) rules for determining allowable business expenses [see IRS Publication 535], unless a topic is addressed by HUD regulations or guidance as described below. Independent Contractors Income received as an independent contractor is included in annual income, even if the source, date, or amount of the income varies [24 CFR 5.609 (b)(24)]. An independent contractor is defined as an individual who qualifies as an independent contractor instead of an employee in accordance with the Internal Revenue Code Federal income tax requirements and whose earnings are consequently subject to the Self-Employment Tax. In general, an individual is an independent contractor if the payer has the right to control or direct only the result of the work and not what will be done and how it will be done [24 CFR 5.603(b)]. Business Expansion HUD regulations do not permit the HA to deduct from gross income expenses for business expansion. HA Policy Business expansion is defined as any capital expenditures made to add new business activities, to expand current facilities, or to operate the business in additional locations. For example, purchase of a street sweeper by a construction business for the purpose of adding street cleaning to the services offered by the business would be considered a 378 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-19 business expansion. Similarly, the purchase of a property by a hair care business to open at a second location would be considered a business expansion. Capital Indebtedness HUD regulations do not permit the HA to deduct from gross income the amortization of capital indebtedness. HA Policy Capital indebtedness is defined as the principal portion of the payment on a capital asset such as land, buildings, and machinery. This means the HA will allow as a business expense interest, but not principal, paid on capital indebtedness. 379 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-20 Negative Business Income If the net income from a business is negative, no business income will be included in annual income; a negative amount will not be used to offset other family income. Withdrawal of Cash or Assets from a Business HUD regulations require the HA to include in annual income the withdrawal of cash or assets from the operation of a business or profession unless the withdrawal reimburses a family member for cash or assets invested in the business by the family. HA Policy Acceptable investments in a business include cash loans and contributions of assets or equipment. For example, if a member of an assisted family provided an up-front loan of $2,000 to help a business get started, the HA will not count as income any withdrawals from the business up to the amount of this loan until the loan has been repaid. Investments do not include the value of labor contributed to the business without compensation. Co-owned Businesses HA Policy If a business is co-owned with someone outside the family, the family must document the share of the business it owns. If the family’s share of the income is lower than its share of ownership, the family must document the reasons for the difference. Assets Owned by a Business Entity If a business entity (e.g., limited liability company or limited partnership) owns the asset, then the family’s asset is their ownership stake in the business, not some portion of the business’s assets. However, if the family holds the assets in their own name (e.g., they own one-third of a restaurant) rather than in the name of a business entity, then the percentage value of the asset owned by the family is what is counted toward net family assets (e.g., one-third of the value of the restaurant) [Notice PIH 2023-27]. 380 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-21 6-I.G. STUDENT FINANCIAL ASSISTANCE [FR Notice 2/14/23 and Notice PIH 2023-27] Introduction Section 479B of the HEA requires that all assistance under Title IV of the HEA and Bureau of Indian Affairs student financial assistance, even assistance provided to students in excess of tuition and required fees or charges, be excluded from HUD income calculations. For Section 8 programs only, however, for over 10 years through FY 2022, HUD appropriations have included a provision that for certain students receiving Section 8 assistance, any amounts received in excess of tuition and any other required fees and charges are considered income (with the exception of students who lived with their parents or who were over the age of 23 with a dependent child). While the language in various consolidated appropriations acts is limited to federal fiscal year covered by the act, this does not rule out the possibility that similar language will be included in future years’ appropriations bills. x For any funds from a year where HUD’s appropriations acts include this limitation, it will apply with respect to Section 8 participants. The PHA will follow the pre-HOTMA Section 8 student financial assistance limitation described below. x During years in which an appropriations act does not contain this Section 8 student financial assistance limitation (or any other such limitation), then the determination of student financial assistance as included/excluded income for all Section 8 students defaults to the methodology described for the public housing program and listed below. Pre-HOTMA Section 8 Student Financial Assistance Limitation [FR 4/10/06; Notice PIH 2015-21] In 2005, Congress passed a law (for Section 8 programs only) requiring that certain student financial assistance be included in annual income. Prior to that, the full amount of student financial assistance was excluded. For some students, the full exclusion still applies. The regulation requiring the inclusion of certain student financial assistance applies only to students who satisfy all of the following conditions: x They are enrolled in an institution of higher education, as defined under the Higher Education Act (HEA) of 1965. x They are seeking or receiving Section 8 assistance on their own—that is, apart from their parents—through the HCV program, the project-based voucher program, or the moderate rehabilitation program. x They are under 24 years of age OR they have no dependent children. For students who satisfy these three conditions, any financial assistance in excess of tuition and any other required fees and charges received: (1) under the 1965 HEA, (2) from a private source, or (3) from an institution of higher education, as defined under the 1965 HEA, must be included in annual income. 381 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-22 To determine annual income in accordance with the above requirements, the PHA will use the definitions of dependent child, institution of higher education, and parents in Chapter 3, along with the following definitions [FR 4/10/06, pp. 18148-18150]: x Assistance under the Higher Education Act of 1965 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. x Assistance from private sources means assistance from nongovernmental sources, including parents, guardians, and other persons not residing with the student in an HCV assisted unit. x Tuition and fees are defined in the same manner in which the Department of Education defines tuition and fees [Notice PIH 2015-21]. x This is the amount of tuition and required fees covering a full academic year most frequently charged to students. x The amount represents what a typical student would be charged and may not be the same for all students at an institution. x If tuition is charged on a per-credit-hour basis, the average full-time credit hour load for an academic year is used to estimate average tuition. x Required fees include all fixed-sum charges that are required of a large proportion of all students. Examples include, but are not limited to, writing and science lab fees and fees specific to the student’s major or program (i.e., nursing program). x Expenses related to attending an institution of higher education must not be included as tuition. Examples include, but are not limited to, room and board, books, supplies, meal plans, transportation and parking, student health insurance plans, and other non-fixed- sum charges. Any student financial assistance not subject to inclusion under the regulations is fully excluded from annual income, whether it is paid directly to the student or to the educational institution the student is attending. This includes any financial assistance received by: x Students residing with parents who are seeking or receiving Section 8 assistance x Students who are enrolled in an educational institution that does not meet the 1965 HEA definition of institution of higher education x Students who are over 23 AND have at least one dependent child, as defined in section 3-II.E x Students who are receiving financial assistance through a governmental program not authorized under the 1965 HEA. HOTMA Student Financial Assistance Requirements [24 CFR 5.609(b)(9)] The regulations under HOTMA distinguish between two categories of student financial assistance paid to both full-time and part-time students. 382 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-23 Types of Assistance Any assistance to students under section 479B of the Higher Education Act of 1965 (Title IV of the HEA) must be excluded from the family’s annual income [24 CFR 5.609(b)(9)(i)]. Examples of assistance under title IV of the HEA include: x Federal Pell Grants; x Teach Grants; x Federal Work Study Programs; x Federal Perkins Loans; x Income earned in employment and training programs under section 134 of the Workforce Innovation and Opportunity Act (WIOA); or x Bureau of Indian Affairs/Education student assistance programs - The Higher Education Tribal Grant - The Tribally Controlled Colleges or Universities Grant Program Any other grant-in-aid, scholarship, or other assistance amounts an individual receives for the actual covered costs charged by the institute of higher education not otherwise excluded by the Federally mandated income exclusions are excluded [24 CFR 5.609(b)(9)(ii)]. Actual covered costs are defined as the actual costs of: x Tuition, books, and supplies; - Including supplies and equipment to support students with learning disabilities or other disabilities x Room and board; and x Other fees required and charged to a student by the education institution. 383 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-24 For a student who is not the head of household or spouse/cohead, actual covered costs also include the reasonable and actual costs of housing while attending the institution of higher education and not residing in an assisted unit. Further, to qualify, other student financial assistance must be expressly: x For tuition, book, supplies, room and board, or other fees required and charged to the student by the educational institution; x To assist a student with the costs of higher education; or x To assist a student who is not the head of household or spouse with the reasonable and actual costs of housing while attending the educational institution and not residing in an assisted unit. The student financial assistance may be paid directly to the student or to the educational institution on the student’s behalf. However, any student financial assistance paid to the student must be verified by the PHA. The financial assistance must be a grant or scholarship received from: x The Federal government; x A state, tribal, or local government ; x A private foundation registered as a nonprofit; x A business entity (such as corporation, general partnership, limited liability company, limited partnership, joint venture, business trust, public benefit corporation, or nonprofit entity); or x An institution of higher education. Student financial assistance, does not include: x Financial support provided to the student in the form of a fee for services performed; (e.g., a work study or teaching fellowship that is not excluded under section 479B of the Higher Education Act HEA); x Gifts, including gifts from family or friends; or x Any amount of the scholarship or grant that, either by itself or in combination with assistance excluded under the HEA, exceeds the actual covered costs of the student. Calculating Income from Student Financial Assistance [HOTMA Student Financial Assistance Resource Sheet; Notice PIH 2023-27] The formula for calculating the amount of other student financial assistance that is excluded from income always begins with deducting the assistance received under 479B of the HEA from the total actual covered costs, because the 479B assistance is intended to pay the student’s actual covered costs. When a student receives assistance from both Title IV of the HEA and from other sources, the assistance received under Title IV of the HEA must be applied to the student’s actual covered costs first and then other student financial assistance is applied to any remaining actual covered costs. Once actual costs are covered, any remaining student financial assistance is considered income. 384 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-25 PHA Policy If a student only receives financial assistance under Title IV of the HEA and does not receive any other student financial assistance, the PHA will exclude the full amount of the assistance received under Title IV from the family’s annual income. The PHA will not calculate actual covered costs in this case. If the student does not receive any assistance under Title IV of the HEA but does receive assistance from another source, the PHA will first calculate the actual covered costs to the student in accordance with 24 CFR 5.609(b)(ii). The PHA will then subtract the total amount of the student’s financial assistance from the student’s actual covered costs. The PHA will include any amount of financial assistance in excess of the student’s actual covered costs in the family’s annual income. Example 1 x Actual covered costs: $20,000 x Other student financial assistance: $25,000 x Excluded income: $20,000 ($25,000 in financial assistance - $20,000 in actual covered costs) x Included income: $5,000 When a student receives assistance from both Title IV of the HEA and from other sources, the PHA will first calculate the actual covered costs to the student in accordance with 24 CFR 5.609(b)(ii). The assistance received under Title IV of the HEA will be applied to the student’s actual covered costs first and then the other student financial assistance will be applied to any remaining actual covered costs. If the amount of assistance excluded under Title IV of the HEA equals or exceeds the actual covered costs, none of the assistance included under other student financial assistance” would be excluded from income. Example 2 x Actual covered costs: $25,000 x Title IV HEA assistance: $26,000 x Title IV HEA assistance covers the students entire actual covered costs. x Other Student Financial Assistance: $5,000 x Excluded income: The entire Title IV HEA assistance of $26,000 x Included income: All other financial assistance of $5,000 385 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-26 If the amount of assistance excluded under Title IV of the HEA is less than the actual covered costs, the PHA will exclude the amount of other student financial assistance up to the amount of the remaining actual covered costs. Example 3 x Actual covered costs: $22,000 x Title IV HEA assistance: $15,000 x The remaining amount not covered by Title IV HEA assistance is $7,000 ($22,000 in actual covered costs - $15,000 in Title IV HEA assistance). x Other Student Financial Assistance: $5,000 x $7,000 in remaining actual covered costs - $5,000 in other financial assistance x Excluded income: $15,000 entire amount of the Title IV HEA Assistance + $5,000 in other financial assistance x Included income: $0 Example 4 x Actual covered costs: $18,000 x Title IV HEA Assistance: $15,000 x The remaining amount not covered by Title IV HEA assistance is $3,000 ($18,000 in actual covered costs - $15,000 in Title IV HEA Assistance) x Other student Financial Assistance: $5,000 x When other student financial assistance is applied, financial assistance exceeds actual covered costs by $2,000 ($3,000 in actual covered costs - $5,000 in other financial assistance). x Included income: $2,000 (the amount by which the financial aid exceeds the student's actual covered costs). 386 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-27 6-I.G. ASSETS [24 CFR 5.609(b)(3); 24 CFR 5.603(b)] Overview There is no asset limitation for participation in the HCV program. However, HUD requires that the HA include in annual income the anticipated “interest, dividends, and other net income of any kind from real or personal property” [24 CFR 5.609(b)(3)]. This section discusses how the income from various types of assets is determined. For most types of assets, the HA must determine the value of the asset in order to compute income from the asset. Therefore, for each asset type, this section discusses: x How the value of the asset will be determined x How income from the asset will be calculated Exhibit 6-1 provides the regulatory requirements for calculating income from assets [24 CFR 5.609(b)(3)], and Exhibit 6-3 provides the regulatory definition of net family assets. This section begins with a discussion of general policies related to assets and then provides HUD rules and HA policies related to each type of asset. Optional policies for family self-certification of assets are found in Chapter 7. General Policies Income from Assets The HA generally will use current circumstances to determine both the value of an asset and the anticipated income from the asset. As is true for all sources of income, HUD authorizes the HA to use other than current circumstances to anticipate income when (1) an imminent change in circumstances is expected (2) it is not feasible to anticipate a level of income over 12 months or (3) the HA believes that past income is the best indicator of anticipated income. For example, if a family member owns real property that typically receives rental income but the property is currently vacant, the HA can take into consideration past rental income along with the prospects of obtaining a new tenant. HA Policy Anytime current circumstances are not used to determine asset income, a clear rationale for the decision will be documented in the file. In such cases the family may present information and documentation to the HA to show why the asset income determination does not represent the family’s anticipated asset income. 387 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-28 Valuing Assets The calculation of asset income sometimes requires the HA to make a distinction between an asset’s market value and its cash value. x The market value of an asset is its worth in the market (e.g., the amount a buyer would pay for real estate or the total value of an investment account). x The cash value of an asset is its market value less all reasonable amounts that would be incurred when converting the asset to cash. HA Policy Reasonable costs that would be incurred when disposing of an asset include, but are not limited to, penalties for premature withdrawal, broker and legal fees, and settlement costs incurred in real estate transactions [HCV GB, p. 5-28]. Lump-Sum Receipts Payments that are received in a single lump sum, such as inheritances, capital gains, lottery winnings, insurance settlements, and proceeds from the sale of property, are generally considered assets, not income. However, such lump-sum receipts are counted as assets only if they are retained by a family in a form recognizable as an asset (e.g., deposited in a savings or checking account) [RHIIP FAQs]. (For a discussion of lump- sum payments that represent the delayed start of a periodic payment, most of which are counted as income, see sections 6-I.H and 6-I.I.) Imputing Income from Assets [24 CFR 5.609(b)(3), Notice PIH 2012-29 ] When net family assets are $5,000 or less, the HA will include in annual income the actual income anticipated to be derived from the assets. When the family has net family assets in excess of $5,000, the HA will include in annual income the greater of (1) the actual income derived from the assets or (2) the imputed income. Imputed income from assets is calculated by multiplying the total cash value of all family assets by an average passbook savings rate as determined by the HA. HA Policy The HA initially set the imputed asset passbook rate at the national rate established by the Federal Deposit Insurance Corporation (FDIC). The HA will review the passbook rate annually. The rate will not be adjusted unless the current HA rate is no longer within 0.75 percent of the national rate. If it is no longer within 0.75 percent of the national rate, the passbook rate will be set at the current national rate. The effective date of changes to the passbook rate will be determined at the time of review. 388 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-29 Determining Actual Anticipated Income from Assets It may or may not be necessary for the HA to use the value of an asset to compute the actual anticipated income from the asset. When the value is required to compute the anticipated income from an asset, the market value of the asset is used. For example, if the asset is a property for which a family receives rental income, the anticipated income is determined by annualizing the actual monthly rental amount received for the property; it is not based on the property’s market value. However, if the asset is a savings account, the anticipated income is determined by multiplying the market value of the account by the interest rate on the account. Withdrawal of Cash or Liquidation of Investments Any withdrawal of cash or assets from an investment will be included in income except to the extent that the withdrawal reimburses amounts invested by the family. For example, when a family member retires, the amount received by the family from a retirement investment plan is not counted as income until the family has received payments equal to the amount the family member deposited into the retirement investment plan. Jointly Owned Assets The regulation at 24 CFR 5.609(a)(4) specifies that annual income includes “amounts derived (during the 12-month period) from assets to which any member of the family has access.” HA Policy If an asset is owned by more than one person and any family member has unrestricted access to the asset, the HA will count the full value of the asset. A family member has unrestricted access to an asset when he or she can legally dispose of the asset without the consent of any of the other owners. If an asset is owned by more than one person, including a family member, but the family member does not have unrestricted access to the asset, the HA will prorate the asset according to the percentage of ownership. If no percentage is specified or provided for by state or local law, the HA will prorate the asset evenly among all owners. Assets Disposed of for Less than Fair Market Value [24 CFR 5.603(b)] HUD regulations require the HA to count as a current asset any business or family asset that was disposed of for less than fair market value during the two years prior to the effective date of the examination/reexamination, except as noted below. 389 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-30 Minimum Threshold The HCV Guidebook permits the HA to set a threshold below which assets disposed of for less than fair market value will not be counted [HCV GB, p. 5-27]. HA Policy The HA will not include the value of assets disposed of for less than fair market value unless the cumulative fair market value of all assets disposed of during the past two years exceeds the gross amount received for the assets by more than $1,000. When the two-year period expires, the income assigned to the disposed asset(s) also expires. If the two-year period ends between annual recertifications, the family may request an interim recertification to eliminate consideration of the asset(s). Assets placed by the family in nonrevocable trusts are considered assets disposed of for less than fair market value except when the assets placed in trust were received through settlements or judgments. Separation or Divorce The regulation also specifies that assets are not considered disposed of for less than fair market value if they are disposed of as part of a separation or divorce settlement and the applicant or tenant receives important consideration not measurable in dollar terms. HA Policy All assets disposed of as part of a separation or divorce settlement will be considered assets for which important consideration not measurable in monetary terms has been received. In order to qualify for this exemption, a family member must be subject to a formal separation or divorce settlement agreement established through arbitration, mediation, or court order. Foreclosure or Bankruptcy Assets are not considered disposed of for less than fair market value when the disposition is the result of a foreclosure or bankruptcy sale. Family Declaration HA Policy Families must declare on the application form at initial certification and each annual recertification all assets that have been disposed of for less than fair market value or that no assets have been disposed of for less than fair market value. The HA may verify the value of the assets disposed of if other information available to the HA does not appear to agree with the information reported by the family. 390 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-31 Types of Assets Checking and Savings Accounts For regular checking accounts and savings accounts, cash value has the same meaning as market value. If a checking account does not bear interest, the anticipated income from the account is zero. HA Policy In determining the value of checking account and savings accounts, the HA will use the current balance. In determining the anticipated income from an interest-bearing checking or savings account, the HA will multiply the value of the account by the current rate of interest paid on the account. Investment Accounts Such as Stocks, Bonds, Saving Certificates, and Money Market Funds Interest or dividends earned by investment accounts are counted as actual income from assets even when the earnings are reinvested. The cash value of such an asset is determined by deducting from the market value any broker fees, penalties for early withdrawal, or other costs of converting the asset to cash. HA Policy In determining the market value of an investment account, the HA will use the value of the account on the most recent investment report. How anticipated income from an investment account will be calculated depends on whether the rate of return is known. For assets that are held in an investment account with a known rate of return (e.g., savings certificates), asset income will be calculated based on that known rate (market value multiplied by rate of earnings). When the anticipated rate of return is not known (e.g., stocks), the HA will calculate asset income based on the earnings for the most recent reporting period. 391 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-32 Equity in Real Property or Other Capital Investments Equity (cash value) in a property or other capital asset is the estimated current market value of the asset less the unpaid balance on all loans secured by the asset and reasonable costs (such as broker fees) that would be incurred in selling the asset [HCV GB, p. 5-25]. HA Policy In determining the equity, the HA will determine market value by examining the current state or county estimated market value for tax purposes. The HA will first use the payoff amount for the loan (mortgage) as the unpaid balance to calculate equity. If the payoff amount is not available, the HA will use the basic loan balance information to deduct from the market value in the equity calculation. Equity in real property and other capital investments is considered in the calculation of asset income except for the following types of assets: x Equity accounts in HUD homeownership programs [24 CFR5.603(b)] x The value of a home currently being purchased with assistance under the HCV program Homeownership Option for the first 10 years after the purchase date of the home [24 CFR 5.603(b), Notice PIH 2012-3] x Equity in owner-occupied cooperatives and manufactured homes in which the family lives [HCV GB, p. 5-25] x Equity in real property when a family member’s main occupation is real estate [HCV GB, p. 5-25]. This real estate is considered a business asset, and income related to this asset will be calculated as described in section 6-I.F. x Interests in Indian Trust lands [24 CFR 5.603(b)] x Real property and capital assets that are part of an active business or farming operation [HCV GB, p. 5-25] The HA must also deduct from the equity the reasonable costs for converting the asset to cash. Using the formula for calculating equity specified above, the net cash value of real property is the market value minus the balance of the loan (mortgage) minus the expenses to convert to cash [Notice PIH 2012-3]. HA Policy For the purposes of calculating expenses to convert to cash for real property, the HA will use ten percent of the market value of the home. A family may have real property as an asset in two ways: (1) owning the property itself and (2) holding a mortgage or deed of trust on the property. In the case of a property owned by a family member, the anticipated asset income generally will be in the form of rent or other payment for the use of the property. If the property generates no income, actual anticipated income from the asset will be zero. 392 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-33 In the case of a mortgage or deed of trust held by a family member, the outstanding balance (unpaid principal) is the cash value of the asset. The interest portion only of payments made to the family in accordance with the terms of the mortgage or deed of trust is counted as anticipated asset income. HA Policy In the case of capital investments owned jointly with others not living in a family’s unit, a prorated share of the property’s cash value will be counted as an asset unless the HA determines that the family receives no income from the property and is unable to sell or otherwise convert the asset to cash. Trusts A trust is a legal arrangement generally regulated by state law in which one party (the creator or grantor) transfers property to a second party (the trustee) who holds the property for the benefit of one or more third parties (the beneficiaries). Revocable Trusts If any member of a family has the right to withdraw the funds in a trust, the value of the trust is considered an asset [HCV GB, p. 5-25]. Any income earned as a result of investment of trust funds is counted as actual asset income, whether the income is paid to the family or deposited in the trust. Nonrevocable Trusts In cases where a trust is not revocable by, or under the control of, any member of a family, the value of the trust fund is not considered an asset. However, any income distributed to the family from such a trust is counted as a periodic payment or a lump- sum receipt, as appropriate [24 CFR 5.603(b)]. (Periodic payments are covered in section 6-I.H. Lump-sum receipts are discussed earlier in this section.) Retirement Accounts Company Retirement/Pension Accounts In order to correctly include or exclude as an asset any amount held in a company retirement or pension account by an employed person, the HA must know whether the money is accessible before retirement [HCV GB, p. 5-26]. While a family member is employed, only the amount the family member can withdraw without retiring or terminating employment is counted as an asset [HCV GB, p. 5-26]. After a family member retires or terminates employment, any amount distributed to the family member is counted as a periodic payment or a lump-sum receipt, as appropriate [HCV GB, p. 5-26], except to the extent that it represents funds invested in the account by the family member. (For more on periodic payments, see section 6-I.H.) The balance in the account is counted as an asset only if it remains accessible to the family member. IRA, Keogh, and Similar Retirement Savings Accounts IRA, Keogh, and similar retirement savings accounts are counted as assets even though early withdrawal would result in a penalty [HCV GB, p. 5-25]. 393 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-34 Personal Property Personal property held as an investment, such as gems, jewelry, coin collections, antique cars, etc., is considered an asset [HCV GB, p. 5-25]. HA Policy In determining the value of personal property held as an investment, the HA will use the family’s estimate of the value. The HA may obtain an appraisal to confirm the value of the asset if there is reason to believe that the family’s estimated value is off by $50 or more. The family must cooperate with the appraiser, but cannot be charged any costs related to the appraisal. Generally, personal property held as an investment generates no income until it is disposed of. If regular income is generated (e.g., income from renting the personal property), the amount that is expected to be earned in the coming year is counted as actual income from the asset. Necessary items of personal property are not considered assets [24 CFR 5.603(b)]. HA Policy Necessary personal property consists of only those items not held as an investment, and may include clothing, furniture, household furnishings, jewelry, and vehicles, including those specially equipped for persons with disabilities. Life Insurance The cash value of a life insurance policy available to a family member before death, such as a whole life or universal life policy, is included in the calculation of the value of the family’s assets [HCV GB 5-25]. The cash value is the surrender value. If such a policy earns dividends or interest that the family could elect to receive, the anticipated amount of dividends or interest is counted as income from the asset whether or not the family actually receives it. 394 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-35 6-I.H. PERIODIC PAYMENTS Periodic payments are forms of income received on a regular basis. HUD regulations specify periodic payments that are and are not included in annual income. Regulations do not specify which types of periodic payments are included in annual income. Income that has a discrete end date and will not be repeated beyond the coming year is excluded from a family’s annual income because it is nonrecurring income. However, this does not include unemployment income and other types of periodic payments that are received at regular intervals (such as weekly, monthly, or yearly) for a period of greater than one year that can be extended. For example, a family receives income from a guaranteed income program in their city that has a discrete beginning and end date. While the guaranteed income will be repeated in the coming year, it will end before the family’s next annual reexamination. This income is fully excluded from annual income. Insurance payments and settlements for personal or property losses, including but not limited to payments under health insurance, motor vehicle insurance, and workers’ compensation, are excluded from annual income. However, periodic payments paid at regular intervals (such as weekly, monthly, or yearly) for a period of greater than one year that are received in lieu of wages for workers’ compensation are included in annual income. Payments received in lieu of wages for worker’s compensation are excluded, even if paid in periodic payments, if the income will last for a period of less than one year. PHA Policy The PHA will include in annual income 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. Payments in lieu of earnings, such as unemployment and disability compensation, and severance pay are also counted as income if they are received in the form of periodic payments. Periodic payments are forms of income received on a regular basis. HUD regulations specify periodic payments that are and are not included in annual income. Periodic Payments Included in Annual Income x Periodic payments from sources such as social security, unemployment and welfare assistance, annuities, insurance policies, retirement funds, and pensions. However, periodic payments from retirement accounts, annuities, and similar forms of investments are counted only after they exceed the amount contributed by the family [24 CFR 5.609(b)(4) and (b)(3)]. x Disability or death benefits and lottery receipts paid periodically, rather than in a single lump sum [24 CFR 5.609(b)(4) and HCV, p. 5-14]. Lump-Sum Payments for the Delayed Start of a Periodic Payment [24 CFR 5.609(b)(16)] Deferred periodic amounts from Supplemental Security Income (SSI) and Social Security benefits that are received in a lump sum amount or in prospective monthly amounts, or any deferred Department of Veterans Affairs (VA) disability benefits that are received in a lump sum 395 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-36 amount or in prospective monthly amounts are excluded from annual income.Most lump-sums received as a result of delays in processing periodic payments, such as unemployment or welfare assistance, are counted as income. However, lump-sum receipts for the delayed start of periodic social security or supplemental security income (SSI) payments are not counted as income. Additionally, any deferred disability benefits that are received in a lump-sum or in prospective monthly amounts from the Department of Veterans Affairs are to be excluded from annual income [24 CFR 5.609(c)(14)]. HA Policy The PHA will include in annual income lump sums received as a result of delays in processing periodic payments (other than those specifically excluded by the regulation), such as unemployment or welfare assistance. When a delayed-start payment is received that is to be included and the family and reportsed this during the period in which the PHA is processing an annual reexamination, the PHA will adjust the family’s rent share and PHA subsidy retroactively for the period the payment was intended to cover. The family may pay in full any amount due or request to enter into a repayment agreement with the PHA. If the delayed-start payment is received outside of the time the PHA is processing an annual reexamination, then the PHA will consider whether the amount meets the threshold to conduct an interim reexamination. If so, the PHA will conduct an interim in accordance with PHA policies in Chapter 11. If not, the PHA will consider the amount when processing the family’s next annual recertification. Retirement Accounts [24 CFR 5.609(b)(26); Notice PIH 2023-27] Income received from any account under a retirement plan recognized as such by the IRS, including individual retirement arrangements (IRAs), employer retirement plans, and retirement plans for self-employed individuals is not considered actual income from assets. However, any distribution of periodic payments from such accounts is included in annual income at the time they are received by the family. An asset moved to a retirement account held by a member of the family is not considered to be an asset disposed of for less than fair market value. Treatment of Overpayment Deductions from Social Security Benefits [Notice PIH 2018-24] The PHA is required to use the gross benefit amount to calculate annual income from Social Security benefits. Annually in October, the Social Security Administration (SSA) announces the cost-of-living adjustment (COLA) by which federal Social Security and SSI benefits are adjusted to reflect the increase, if any, in the cost of living. The federal COLA does not apply to state-paid disability benefits. Effective the day after the SSA has announced the COLA, PHAs are required to factor in the COLA when determining Social Security and SSI annual income for all annual reexaminations and interim reexaminations of family income that have not yet been completed and will be effective January 1 or later of the upcoming year [Notice PIH 2023-27]. 396 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-37 PHA Policy Annual income includes “all amounts received,” not the amount that a family may be legally entitled to receive but which they do not receive. W The PHA must make a special calculation of annual income when the Social Security Administration (SSA) overpays an individual, resulting in a withholding or deduction from their benefit amount until the overpayment is paid in full. The amount and duration of the withholding will vary depending on the amount of the overpayment and the percent of the benefit rate withheld. Regardless of the amount withheld or the length of the withholding period , the PHA must will use the reduced benefit amount after deducting only the amount of the overpayment withholding from the gross benefit amount [Notice PIH 2018-24]. Further, if a family’s social security income is garnished for any reason, the PHA will use the net amount after the garnishment in order to calculate the family’s income. The HA must make a special calculation of annual income when the Social Security Administration (SSA) overpays an individual, resulting in a withholding or deduction from his or her benefit amount until the overpayment is paid in full. The amount and duration of the withholding will vary depending on the amount of the overpayment and the percent of the benefit rate withheld. Regardless of the amount withheld or the length of the withholding period, the HA must use the reduced benefit amount after deducting only the amount of the overpayment withholding from the gross benefit amount [Notice PIH 2018-24]. Alimony and Child Support Annual income includes “all amounts received,” not the amount that a family may be legally entitled to receive but which they do not receive. For example, a family’s child-support or alimony income must be based on payments received, not the amounts to which the family is entitled by court or agency orders [Notice PIH 2023-27]. PHA Policy The PHA will count all regular payments of alimony or child support awarded as part of a divorce or separation agreement. The PHA will count court-awarded amounts for alimony and child support unless the family certifies and the PHA verifies that the payments are not being made. In order to verify that payments are not being made, the PHA will review child support payments over the last three months. If payments are being made regularly, the PHA will use the amount received during the last 12 months (excluding any lump sums received). If payments have been made for a period less than 12 months, the PHA will average all payments that have been made. At new admission or interim recertification, if any lump sum payments were made in the past 12 months, the PHA will determine the likelihood of the family receiving another similar payment within the next 12 months before deciding whether or not this amount will be included in the calculation of annual income. 397 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-38 If the PHA determines and can appropriately verify that the family in all likelihood will not receive a similar payment, then the amount will not be considered when projecting annual income. If the PHA determines that it is likely that the family will receive a similar payment and can appropriately verify it, the amount will be included when projecting annual income. If no payments have been made in the past three months and there are no lump sums, the PHA will not include alimony or child support in annual income 398 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-39 Periodic Payments Excluded from Annual Income x Payments received for the care of foster children or foster adults (usually persons with disabilities, unrelated to the assisted family, who are unable to live alone) [24 CFR 5.609(c)(2)]. Kinship guardianship assistance payments (Kin-GAP) and other similar guardianship payments are treated the same as foster care payments and are likewise excluded from annual income [Notice PIH 2012-1]. HA Policy The HA will exclude payments for the care of foster children and foster adults only if the care is provided through an official arrangement with a local welfare agency [HCV GB, p. 5-18]. x 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 [24 CFR 5.609(c)(16)]. x Amounts received under the Low-Income Home Energy Assistance Program (42 U.S.C. 1626(c)) [24 CFR 5.609(c)(17)]. x Amounts received under the Child Care and Development Block Grant Act of 1990 (42 U.S.C. 9858q) [24 CFR 5.609(c)(17)]. x Earned Income Tax Credit (EITC) refund payments (26 U.S.C. 32(j)) [24 CFR 5.609(c)(17)]. Note: EITC may be paid periodically if the family elects to receive the amount due as part of payroll payments from an employer. x Lump-sums received as a result of delays in processing Social Security and SSI payments (see section 6-I.H.) [24 CFR 5.609(c)(14)]. Lump-sums or prospective monthly amounts received as deferred disability benefits from the Department of Veterans Affairs (VA) [24 CFR 5.609(c)(14)]. 6-I.I. NONRECURRING INCOME [24 CFR 5.609(b)(24 and Notice PIH 2023-27)] Nonrecurring income, which is income that will not be repeated in beyond the coming year (e.g., 12 months following the effective date of the certification) based on information provided by the family, is excluded from annual income. The PHA may accept a self-certification from the family stating that the income will not be repeated in the coming year. See Chapter 7 for PHA policies related to verification of nonrecurring income. Income received as an independent contractor, day laborer, or seasonal worker is not excluded from income as nonrecurring income, even if the source, date, or amount of the income varies. Income that has a discrete end date and will not be repeated beyond the coming year during the family’s upcoming annual reexamination period will be excluded from a family’s annual income as nonrecurring income. This exclusion does not include unemployment income and other types of periodic payments that are received at regular intervals (such as weekly, monthly, or yearly) for a period of greater than one year that can be extended. Income amounts excluded under this category may include, but are not limited to: x Nonrecurring payments made to the family or to a third party on behalf of the family to assist with utilities; 399 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-40 x Payments for eviction prevention; x Security deposits to secure housing; x Payments for participation in research studies (depending on the duration); and x General one-time payments received by or on behalf of the family. Nonrecurring income that is excluded under the regulations includes: x Payments from the U.S. Census Bureau for employment (relating to decennial census or the American Community Survey) lasting no longer than 180 days and not culminating in permanent employment [24 CFR 5.609(b)(24)(i)]. x Direct federal or state payments intended for economic stimulus or recovery [24 CFR 5.609(b)(24)(ii)]. x Amounts directly received by the family as a result of state refundable tax credits or state or federal tax refunds at the time they are received [24 CFR 5.609(b)(24)(iii) and (iv)]. x Gifts for holidays, birthdays, or other significant life events or milestones (e.g., wedding gifts, baby showers, anniversaries) [24 CFR 5.609(b)(24)(v)]. x Non-monetary, in-kind donations, such as food, clothing, or toiletries, received from a food bank or similar organization [24 CFR 5.609(b)(24)(vi)]. When calculating annual income, PHAs are prohibited from assigning monetary value to non-monetary in-kind donations received by the family [Notice PIH 2023-27]. Non-recurring, non-monetary in-kind donations from friends and family are excluded as non-recurring income. x Lump-sum additions to net family assets, including but not limited to lottery or other contest winnings [24 CFR 5.609(b)(24)(vii)]. x 400 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-41 6-I.I. PAYMENTS IN LIEU OF EARNINGS Payments in lieu of earnings, such as unemployment and disability compensation, worker’s compensation, and severance pay, are counted as income [24 CFR 5.609(b)(5)] if they are received either in the form of periodic payments or in the form of a lump-sum amount or prospective monthly amounts for the delayed start of a periodic payment. If they are received in a one-time lump sum (as a settlement, for instance), they are treated as lump-sum receipts [24 CFR 5.609(c)(3)]. (See also the discussion of periodic payments in section 6-I.H and the discussion of lump-sum receipts in section 6-I.G.) 401 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-42 6-I.J. WELFARE ASSISTANCE Overview Welfare assistance is counted in annual income. Welfare assistance includes Temporary Assistance for Needy Families (TANF) and any payments to individuals or families based on need that are made under programs funded separately or jointly by federal, state, or local governments [24 CFR 5.603(b)]. Sanctions Resulting in the Reduction of Welfare Benefits [24 CFR 5.615] The HA must make a special calculation of annual income when the welfare agency imposes certain sanctions on certain families. The full text of the regulation at 24 CFR 5.615 is provided as Exhibit 6-53. The requirements are summarized below. This rule applies only if a family was receiving HCV assistance at the time the sanction was imposed. Covered Families The families covered by 24 CFR 5.615 are those “who receive welfare assistance or other public assistance benefits (‘welfare benefits’) from a State or other public agency (’welfare agency’) under a program for which Federal, State or local law requires that a member of the family must participate in an economic self-sufficiency program as a condition for such assistance” [24 CFR 5.615(b)] Imputed Income When a welfare agency imposes a sanction that reduces a family’s welfare income because the family commits fraud or fails to comply with the agency’s economic self-sufficiency program or work activities requirement, the HA must include in annual income “imputed” welfare income. The HA must request that the welfare agency provide the reason for the reduction of benefits and the amount of the reduction of benefits. The imputed welfare income is the amount that the benefits were reduced as a result of the sanction. This requirement does not apply to reductions in welfare benefits: (1) at the expiration of the lifetime or other time limit on the payment of welfare benefits, (2) if a family member is unable to find employment even though the family member has complied with the welfare agency economic self-sufficiency or work activities requirements, or (3) because a family member has not complied with other welfare agency requirements [24 CFR 5.615(b)(2)]. Offsets The amount of the imputed welfare income is offset by the amount of additional income the family begins to receive after the sanction is imposed. When the additional income equals or exceeds the imputed welfare income, the imputed income is reduced to zero [24 CFR 5.615(c)(4)]. 402 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-43 6-I.K. PERIODIC AND DETERMINABLE ALLOWANCES [24 CFR 5.609(b)(7)] Annual income includes periodic and determinable allowances, such as alimony and child support payments, and regular contributions or gifts received from organizations or from persons not residing with an assisted family. Alimony and Child Support The HA must count alimony or child support amounts awarded as part of a divorce or separation agreement. HA Policy The HA will count court-awarded amounts for alimony and child support unless the HA verifies that the payments are not being made. Regular Contributions or Gifts The HA must count as income regular monetary and nonmonetary contributions or gifts from persons not residing with an assisted family [24 CFR 5.609(b)(7)]. Temporary, nonrecurring, or sporadic income and gifts are not counted [24 CFR 5.609(c)(9)]. HA Policy Examples of regular contributions include: (1) regular payment of a family’s bills (e.g., utilities, telephone, rent, credit cards, and car payments), (2) cash or other liquid assets provided to any family member on a regular basis, and (3) “in-kind” contributions such as groceries and clothing provided to a family on a regular basis. Nonmonetary contributions will be valued at the cost of purchasing the items, as determined by the HA. For contributions that may vary from month to month (e.g., utility payments), the HA will include an average amount based upon past history. 403 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-44 6-I.L. STUDENT FINANCIAL ASSISTANCE [24 CFR 5.609(b)(9); Notice PIH 2015-21] In 2005, Congress passed a law (for Section 8 programs only) requiring that certain student financial assistance be included in annual income. Prior to that, the full amount of student financial assistance was excluded. For some students, the full exclusion still applies. Student Financial Assistance Included in Annual Income [24 CFR 5.609(b)(9);FR 4/10/06; Notice PIH 2015-21] The regulation requiring the inclusion of certain student financial assistance applies only to students who satisfy all of the following conditions: x They are enrolled in an institution of higher education, as defined under the Higher Education Act (HEA) of 1965. x They are seeking or receiving Section 8 assistance on their own—that is, apart from their parents—through the HCV program, the project-based voucher program, or the moderate rehabilitation program. x They are under 24 years of age OR they have no dependent children. For students who satisfy these three conditions, any financial assistance in excess of tuition and any other required fees and charges received: (1) under the 1965 HEA, (2) from a private source, or (3) from an institution of higher education, as defined under the 1965 HEA, must be included in annual income. To determine annual income in accordance with the above requirements, the HA will use the definitions of dependent child, institution of higher education, and parents in section 3-II.E, along with the following definitions [FR 4/10/06, pp. 18148-18150]: x Assistance under the Higher Education Act of 1965 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. x Assistance from private sources means assistance from nongovernmental sources, including parents, guardians, and other persons not residing with the student in an HCV assisted unit. x Tuition and fees are defined in the same manner in which the Department of Education defines tuition and fees [Notice PIH 2015-21]. - This is the amount of tuition and required fees covering a full academic year most frequently charged to students. - The amount represents what a typical student would be charged and may not be the same for all students at an institution. 404 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-45 - If tuition is charged on a per-credit-hour basis, the average full-time credit hour load for an academic year is used to estimate average tuition. - Required fees include all fixed-sum charges that are required of a large proportion of all students. Examples include, but are not limited to, writing and science lab fees and fees specific to the student’s major or program (i.e., nursing program). - Expenses related to attending an institution of higher education must not be included as tuition. Examples include, but are not limited to, room and board, books, supplies, meal plans, transportation and parking, student health insurance plans, and other non-fixed-sum charges. Student Financial Assistance Excluded from Annual Income [24 CFR 5.609(c)(6)] Any student financial assistance not subject to inclusion under 24 CFR 5.609(b)(9) is fully excluded from annual income under 24 CFR 5.609(c)(6), whether it is paid directly to the student or to the educational institution the student is attending. This includes any financial assistance received by: x Students residing with parents who are seeking or receiving Section 8 assistance x Students who are enrolled in an educational institution that does not meet the 1965 HEA definition of institution of higher education x Students who are over 23 AND have at least one dependent child, as defined in section 3-II.E x Students who are receiving financial assistance through a governmental program not authorized under the 1965 HEA. 405 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-46 6-I.M. ADDITIONAL EXCLUSIONS FROM ANNUAL INCOME [24 CFR 5.609(b)] Other exclusions contained in 24 CFR 5.609(c) that have not been discussed earlier in this chapter include the following: x Payments received for the care of foster children or foster adults or state or tribal kinship or guardianship care payments [24 CFR 5.609(b)(4)]. x Insurance payments and settlements for personal or property losses, including but not limited to payments through health insurance, motor vehicle insurance, and workers’ compensation [24 CFR 5.609(b)(5)]. However, periodic payments paid at regular intervals (such as weekly, monthly, or yearly) for a period of greater than one year that are received in lieu of wages for workers’ compensation are included in annual income [Notice PIH 2023-27]. x Amounts received by the family that are specifically for, or in reimbursement of, the cost of health and medical care expenses for any family member [24 CFR 5.609(b)(6)]. x Reimbursement of medical expenses [24 CFR 5.609(c)(4)] x x Any amounts recovered in any civil action or settlement based on a claim of malpractice, negligence, or other breach of duty owed to a family member arising out of law, that resulted in a member of the family becoming disabled [24 CFR 5.609(b)(7)]. x Income and distributions from any Coverdell education savings account under Section 530 of the Internal Revenue Code of 1986 or any qualified tuition program under Section 529 of such Code [24 CFR 5.609(b)(10)]. x Income earned by government contributions to, and distributions from, “baby bond” accounts created, authorized, or funded by federal, state, or local government [24 CFR 5.609(b)(10)]. x The special pay to a family member serving in the Armed Forces who is exposed to hostile fire [24 CFR 5.609(b)(11)]. x Payments related to aid and attendance under 38 U.S.C. 1521 to veterans in need of regular aid and attendance [24 CFR 5.609(b)(17)]. This income exclusion applies only to veterans in need of regular aid and attendance and not to other beneficiaries of the payments, such as a surviving spouse [Notice PIH 2023-27]. x Loan proceeds (the net amount disbursed by a lender to or on behalf of a borrower, under the terms of a loan agreement) received by the family or a third party (e.g., proceeds received by the family from a private loan to enable attendance at an educational institution or to finance the purchase of a car) [24 CFR 5.609(b)(20)]. The loan borrower or co-borrower must be a member of the family for this income exclusion to be applicable [Notice PIH 2023-27]. 406 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-47 x Payments received by tribal members as a result of claims relating to the mismanagement of assets held in trust by the United States, to the extent such payments are also excluded from gross income under the Internal Revenue Code or other federal law [24 CFR 5.609(b)(21)]. Generally, payments received by tribal members in excess of the first $2,000 of per capita shares are included in a family’s annual income for purposes of determining eligibility. However, as explained in Notice PIH 2023-27, payments made under the Cobell Settlement, and certain per capita payments under the recent Tribal Trust Settlements, must be excluded from annual income in HUD programs that adopt the definitions of annual income in 24 CFR 5.609, the Census Long Form, and the IRS Form 1040, including the programs affected by Notice PIH 2023-27. x Replacement housing “gap” payments made in accordance with 49 CFR Part 24 that offset increased out of pocket costs of displaced persons that move from one federally subsidized housing unit to another federally subsidized housing unit. Such replacement housing “gap” payments are not excluded from annual income if the increased cost of rent and utilities is subsequently reduced or eliminated, and the displaced person retains or continues to receive the replacement housing “gap” payments [24 CFR 5.609(b)(23)]. x Income earned on amounts placed in a family’s Family Self-Sufficiency account [24 CFR 5.609(b)(27)]. x Amounts received by participants in other publicly assisted programs which are specifically for or in reimbursement of out-of-pocket expenses incurred e.g., special equipment, clothing, transportation, child care, etc.) and which are made solely to allow participation in a specific program [24 CFR 5.609(c)(812)(iiii)] x 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) [(24 CFR 5.609(cb)(812)(ii)] x x Amounts received under a resident service stipend not to exceed $200 per month. A resident service stipend is a modest amount 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 [24 CFR 5.600(b)(12)(iii)]. x Incremental earnings and benefits to any family member resulting from participation in qualifying training program funded by HUD or in qualifying federal, state, tribal, or local employment training programs (including training programs not affiliated with a local government) and training of a family member as resident management staff are excluded from annual income. 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 training program unless those amounts are excluded under 24 CFR 5.609(b)(9)(i) [24 CFR 5.609(b)(12)(iv)]. x HA Policy x The HA defines training program as “a learning process with goals and objectives, generally having a variety of components, and taking place in a series of sessions over a period of time. 407 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-48 It is designed to lead to a higher level of proficiency, and it enhances the individual’s ability to obtain employment. It may have performance standards to measure proficiency. Training may include but is not limited to: (1) classroom training in a specific occupational skill, (2) on-the-job training with wages subsidized by the program, or (3) basic education” [expired Notice PIH 98-2, p. 3]. x The PHA defines incremental earnings and benefits as the difference between (1) the total amount of welfare assistance and earnings of a family member prior to enrollment in a training program and (2) the total amount of welfare assistance and earnings of the family member after enrollment in the program [expired Notice PIH 98-2, pp. 3–4]. x In calculating the incremental difference, the PHA will use as the pre-enrollment income the total annualized amount of the family member’s welfare assistance and earnings reported on the family’s most recently completed HUD-50058. x End of participation in a training program must be reported in accordance with the HA’s interim reporting requirements (see Chapter 11). x x 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 [24 CFR 5.609(bc)(1013)] x Adoption assistance payments for a child in excess of $480 per adopted child [24 CFR 5.609(bc)(1215)] x Refunds or rebates on property taxes paid on the dwelling unit [24 CFR 5.609(bc)(1520)] x 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 [24 CFR 5.609(c)(16)] x Amounts that HUD is required by federal statute to exclude 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(b) apply. HUD will publish a notice in the Federal Register to identify the benefits that qualify for this exclusion. Updates will be published when necessary. x x Amounts specifically excluded by any other federal statute [24 CFR 5.609(c)(17), FR Notice 5/20/14]. HUD publishes an updated list of these exclusions periodically. The most recent list of exclusions was published in the Federal Register on May 20, 2014. It includes: (a) The value of the allotment provided to an eligible household under the Food Stamp Act of 1977 (7 U.S.C. 2017 (b)) (b) Benefits under Section 1780 of the School Lunch Act and Child Nutrition Act of 1966, including WIC (c) Payments to volunteers under the Domestic Volunteer Services Act of 1973 (42 U.S.C. 5044(g), 5058) 408 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-49 (d) Payments received under the Alaska Native Claims Settlement Act (43 U.S.C. 1626(c)) (e) Income derived from certain submarginal land of the United States that is held in trust for certain Indian tribes (25 U.S.C. 459e) (f) Payments or allowances made under the Department of Health and Human Services’ Low-Income Home Energy Assistance Program (42 U.S.C. 8624(f)) (g) Payments received under programs funded in whole or in part under the Workforce Investment Act of 1998 (29 U.S.C. 2931) (h) Deferred disability benefits from the Department of Veterans Affairs, whether received as a lump sum or in monthly prospective amounts (i) Income derived from the disposition of funds to the Grand River Band of Ottawa Indians (Pub. L. 94-540, 90 Stat. 2503-04) 409 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-50 (j) Payments, funds, or distributions authorized, established, or directed by the Seneca Nation Settlement Act of 1990 (25 U.S.C. 1774f(b)) (k) A lump sum or periodic payment received by an individual Indian pursuant to the Class Action Settlement Agreement in the United States District Court case entitled Elouise Cobell et al. v. Ken Salazar et al., for a period of one year from the time of receipt of that payment as provided in the Claims Resolution Act of 2010 (l) The first $2,000 of per capita shares received from judgment funds awarded by the Indian Claims Commission or the U. S. Claims Court, the interests of individual Indians in trust or restricted lands, including the first $2,000 per year of income received by individual Indians from funds derived from interests held in such trust or restricted lands (25 U.S.C. 1407-1408) (m) Benefits under the Indian Veterans Housing Opportunity Act of 2010 (only applies to Native American housing programs) (n) Payments received from programs funded under Title V of the Older Americans Act of 1985 (42 U.S.C. 3056(f)) (o) Payments received on or after January 1, 1989, from the Agent Orange Settlement Fund or any other fund established pursuant to the settlement in In Re Agent Orange product liability litigation, M.D.L. No. 381 (E.D.N.Y.) (p) Payments received under 38 U.S.C. 1833(c) to children of Vietnam veterans born with spinal bifida, children of women Vietnam veterans born with certain birth defects, and children of certain Korean service veterans born with spinal bifida (q) Payments received under the Maine Indian Claims Settlement Act of 1980 (25 U.S.C. 1721) (r) The value of any child care provided or arranged (or any amount received as payment for such care or reimbursement for costs incurred for such care) under the Child Care and Development Block Grant Act of 1990 (42 U.S.C. 9858q) (s) Earned income tax credit (EITC) refund payments received on or after January 1, 1991 (26 U.S.C. 32(j)) (t) Payments by the Indian Claims Commission to the Confederated Tribes and Bands of Yakima Indian Nation or the Apache Tribe of Mescalero Reservation (Pub. L. 95-433) (u) Amounts of scholarships funded under Title IV of the Higher Education Act of 1965j, including awards under federal work-study programs or under the Bureau of Indian Affairs student assistance programs (20 U.S.C. 1087uu). For Section 8 programs, the exception found in § 237 of Public Law 109–249 applies and requires that the amount of financial assistance in excess of tuition and mandatory fees shall be considered income in accordance with the provisions codified at 24 CFR 5.609(b)(9), except for those persons with disabilities as defined by 42 U.S.C. 1437a(b)(3)(E) (Pub. L. 109–249) (See See Section 6-I.L. for exceptions.) (v) Allowances, earnings and payments to AmeriCorps participants under the National and Community Service Act of 1990 (42 U.S.C. 12637(d)) 410 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-51 (w) Any amount of crime victim compensation (under the Victims of Crime Act) received through crime victim assistance (or payment or reimbursement of the cost of such assistance) as determined under the Victims of Crime Act because of the commission of a crime against the applicant under the Victims of Crime Act (42 U.S.C. 10602) (x) Any amounts in an "individual development account" as provided by the Assets for Independence Act, as amended in 2002 (y) Payments made from the proceeds of Indian tribal trust cases as described in Notice PIH 2013–30, "Exclusion from Income of Payments under Recent Tribal Trust Settlements" (25 U.S.C. 117b(a)) (z) Major disaster and emergency assistance received under the Robert T. Stafford Disaster Relief and Emergency Assistance Act and comparable disaster assistance provided by states, local governments, and disaster assistance organizations (aa) Distributions from an ABLE account, and actual or imputed interest on the ABLE account balance 411 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-52 PART II: ADJUSTED INCOMEASSETS 6-II.A. OVERVIEW Annual income includes all actual anticipated income from assets (unless otherwise excluded by the regulations) even if the asset itself is excluded from net family assets [Notice PIH 2023-27]. The regulation at 24 CFR 5.603(b)(3) provides a list of items that are excluded from the calculation of net family assets. Note, unlike previous versions of the regulations, the current regulations do not list types of assets that are included in annual income. Instead, HUD relies on the definition of items excluded from assets to provide the scope of what is included. Exhibit 6-2 provides the regulatory definition of net family assets. Optional policies for family self-certification of assets are found in Chapter 7. Policies related to the asset limitation may be found in Chapter 3. Income from assets is always anticipated, irrespective of the income examination type. HA Policy The HA generally will use current circumstances to determine both the value of an asset and the anticipated income from the asset. The PHA will use other than current circumstances to anticipate income when (1) an imminent change in circumstances is expected, (2) it is not feasible to anticipate a level of income over 12 months, or (3) the PHA believes that past income is the best indicator of anticipated income. For example, if a family member owns real property that typically receives rental income, but the property is currently vacant, the PHA can take into consideration past rental income along with the prospects of obtaining a new tenant. Any time current circumstances are not used to determine asset income, a clear rationale for the decision will be documented in the file. In such cases the family may present information and documentation to the PHA to show why the asset income determination does not represent the family’s anticipated asset income. 412 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-53 6-II.B. ASSETS DISPOSED OF FOR LESS THAN FAIR MARKET VALUE [24 CFR 5.603(b)(2)] PHAs must include the value of any business or family assets disposed of by an applicant or participant for less than fair market value (including a disposition in trust, but not in a foreclosure or bankruptcy sale) during the two years preceding the date of application or reexamination, as applicable, in excess of the consideration received for the asset. An asset moved to a retirement account held by a member of the family is not considered to be an asset disposed of for less than fair market value. [Notice PIH 2023-27]. Minimum Threshold The HCV Guidebook permits the PHA to set a threshold below which assets disposed of for less than fair market value will not be counted [HCV GB, p. 5-27]. HA Policy The PHA will not include the value of assets disposed of for less than fair market value unless the cumulative fair market value of all assets disposed of during the past two years exceeds the gross amount received for the assets by more than $1,000. Separation or Divorce The regulation also specifies that assets are not considered disposed of for less than fair market value if they are disposed of as part of a separation or divorce settlement and the applicant or tenant receives important consideration not measurable in dollar terms. HA Policy All assets disposed of as part of a separation or divorce settlement will be considered assets for which important consideration not measurable in monetary terms has been received. In order to qualify for this exemption, a family member must be subject to a formal separation or divorce settlement agreement established through arbitration, mediation, or court order. Foreclosure or Bankruptcy Assets are not considered disposed of for less than fair market value when the disposition is the result of a foreclosure or bankruptcy sale. Negative equity in real property or other investments does not prohibit the owner from selling the property or other investments, so negative equity alone would not justify excluding the property or other investments from family assets. Asset Owned by a Business Entity If a business entity (e.g., limited liability company or limited partnership) owns the asset, then the family’s asset is their ownership stake in the business, not some portion of the business’s assets. However, if the family holds the assets in their own name (e.g., they own one third of a restaurant) rather than in the name of a business entity, then the percentage value of the asset owned by the family is what is counted toward net family assets (e.g., one-third of the value of the restaurant) [Notice PIH 2023-27]. 413 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-54 Family Declaration HA Policy Families must sign a declaration form at initial certification and each annual recertification identifying all assets that have been disposed of for less than fair market value or declaring that no assets have been disposed of for less than fair market value. The PHA may verify the value of the assets disposed of if other information available to the PHA does not appear to agree with the information reported by the family. 6-II.C. ASSET INCLUSIONS AND EXCLUSIONS Checking and Savings Accounts [Notice PIH 2023-27] HUD considers bank accounts as non-necessary items of personal property. Whether or not necessary personal property is counted toward net family assets depends on the combined value of all of the family’s assets. x When the combined value of net family assets is greater than $50,000, as adjusted by inflation, checking and/or savings accounts would be counted toward net family assets. x When the combined value of all non-necessary personal property does not exceed $50,000, as adjusted by inflation, all non-necessary personal property is excluded from net family assets. In this case, the value of the family’s checking and/or savings accounts would not be considered when calculating net family assets. However, actual income from checking and savings accounts is always included in a family’s annual income, regardless of the total value of net family assets or whether the asset itself is included or excluded from net family assets, unless that income is specifically excluded. ABLE Accounts [24 CFR 5.609(b)(10); Notice PIH 2019-09] An Achieving a Better Life Experience (ABLE) account is a type of tax-advantaged savings account that an eligible individual can use to pay for qualified disability expenses. Section 103 of the ABLE Act mandates that an individual’s ABLE account (specifically, its account balance, contributions to the account, and distributions from the account) is excluded when determining the designated beneficiary’s eligibility and continued occupancy under certain federal means- tested programs. The PHA must exclude the entire value of the individual’s ABLE account from the household’s assets. Distributions from the ABLE account are also not considered income. However, all wage income received, regardless of which account the money is paid to, is included as income. 414 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-55 Investment Accounts Such as Stocks, Bonds, Saving Certificates, and Money Market Funds [24 CFR 5.603(b)(1)] HUD considers financial investments such as stocks and bonds non-necessary items of personal property. Whether non-necessary personal property is counted toward net family assets depends on the combined value of all of the family’s assets. x When the combined value of net family assets is greater than $50,000, as adjusted by inflation, financial investments such as stocks and bonds are considered part of net family assets. In this case, the value of the family’s checking and/or savings accounts would be counted toward net family assets. x When the combined value of all non-necessary personal property does not exceed $50,000, as adjusted by inflation, all non-necessary personal property is excluded from net family assets. In this case, the value of the family’s financial investments such as stocks and bonds would not be considered when calculating net family assets. However, actual income from financial accounts is always included in a family’s annual income, regardless of the total value of net family assets or whether the asset itself is included or excluded from net family assets, unless that income is specifically excluded. When a stock issues dividends in some years but not others (e.g., due to market performance), the dividend is counted as the actual return when it is issued, but when no dividend is issued, the actual return is $0. When the stock never issues dividends, the actual return is $0. HA Policy The PHA will include interest or dividends earned by investment accounts as actual income from assets even when the earnings are reinvested. The cash value of such an asset is determined by deducting from the market value any broker fees, penalties for early withdrawal, or other costs of converting the asset to cash. In determining the market value of an investment account, the PHA will use the value of the account on the most recent investment report. 415 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-56 Necessary and Non-Necessary Personal Property [24 CFR 5.603(b)(3)(i)] All assets are categorized as either real property (e.g., land, a home) or personal property. Personal property includes tangible items, like boats, as well as intangible items, like bank accounts. The value of necessary items of personal property is excluded from the calculation of net family assets. Necessary items of person property include a car used for commuting or medical devices. HUD defines necessary personal property as items essential to the family for the maintenance, use, and occupancy of the premises as a home; or they are necessary for employment, education, or health and wellness. Necessary personal property includes more than merely items that are indispensable to the bare existence of the family. It may include personal effects (such as items that are ordinarily worn or utilized by the individual), items that are convenient or useful to a reasonable existence, and items that support and facilitate daily life within the family’s home. Necessary personal property also includes items that assist a household member with a disability, including any items related to disability-related needs, or that may be required for a reasonable accommodation for a person with a disability. Necessary personal property does not include bank accounts, other financial investments, or luxury items. Items of personal property that do not qualify as necessary personal property are classified as non-necessary personal property. The combined value of all non-necessary items of personal property is only included in annual income when the combined total value exceeds $50,000 (adjusted annually by HUD). When the combined value of all non-necessary personal property does not exceed $50,000, as adjusted by inflation, all non-necessary personal property is excluded from net family assets. While not an exhaustive list, the following table from Notice PIH 2023-27 provides examples of necessary and non-necessary personal property. 416 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-57 Necessary Personal Property Non-Necessary Personal Property Car(s)/vehicle(s) that a family relies on for transportation for personal or business use (e.g., bike, motorcycle, skateboard, scooter) Furniture, carpets, linens, kitchenware Common appliances Common electronics (e.g., radio, television, DVD player, gaming system) Clothing Personal effects that are not luxury items (e.g., toys, books) Wedding and engagement rings Jewelry used in religious/cultural celebrations and ceremonies Religious and cultural items Medical equipment and supplies Health care–related supplies Musical instruments used by the family Personal computers, phones, tablets, and related equipment Professional tools of trade of the family, for example professional books Educational materials and equipment used by the family, including equipment to accommodate persons with disabilities Equipment used for exercising (e.g., treadmill, stationary bike, kayak, paddleboard, ski equipment) Recreational car/vehicle not needed for day-to- day transportation for personal or business use (campers, motorhomes, traveling trailers, all- terrain vehicles (ATVs)) Bank accounts or other financial investments (e.g., checking account, savings account, stocks/bonds) Recreational boat/watercraft Expensive jewelry without religious or cultural value, or which does not hold family significance Collectibles (e.g., coins/stamps) Equipment/machinery that is not used to generate income for a business Items such as gems/precious metals, antique cars, artwork, etc. HA Policy In determining the value of non-necessary personal property, the PHA will use the family’s estimate of the value. The PHA may obtain an appraisal if there is reason to believe that the family’s estimated value is off by $50 or more. The family must cooperate with the appraiser but cannot be charged any costs related to the appraisal. 417 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-58 Lump-Sum Additions to Net Family Assets [24 CFR 5.609(b)(24(viii); Notice PIH 2023-27] The regulations exclude income from lump-sum additions to family assets, including lottery or other contest winnings as a type of nonrecurring income. In addition, lump sums from insurance payments, settlements for personal or property losses, and recoveries from civil actions or settlements based on claims of malpractice, negligence, or other breach of duty owed to a family member arising out of law that resulted in a member of the family becoming a family member with a disability are excluded from income. Further, deferred periodic amounts from Supplemental Security Income (SSI) and Social Security benefits that are received in a lump sum amount or in prospective monthly amounts, or any deferred Department of Veterans Affairs disability benefits that are received in a lump sum amount or in prospective monthly amounts are also excluded from income. However, these amounts may count toward net family assets. The PHA must consider any actual or imputed returns from assets as income at the next applicable income examination. In the case where the lump sum addition to assets would lead to imputed income, which is unearned income, that increases the family’s annual adjusted income by 10 percent or more, then the addition of the lump sum to the family’s assets will trigger an immediate interim reexamination of income in accordance with Chapter 11. This reexamination of income must take place as soon as the lump sum is added to the family’s net family assets unless the addition takes place in the last three months of family’s income certification period and the PHA chooses not to conduct the examination. For a discussion of lump-sum payments that represent the delayed start of a periodic payment, most of which are counted as income, see sections 6-I.H and 6-I.I. PHA Policy Any lump-sum receipts are only counted as assets if they are retained by a family in a form recognizable as an asset. [RHIIP FAQs]. For example, if the family receives a $1,000 lump sum for lottery winnings, and the family immediately spends the entire amount, the lump sum will not be counted toward net family assets. 418 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-59 Jointly Owned Assets [Notice PIH 2023-27] For assets owned jointly by the family and one or more individuals outside of the assisted family, the PHA must include the total value of the asset in the calculation of net family assets, unless: x The asset is otherwise excluded; x The family can demonstrate that the asset is inaccessible to them; or x The family cannot dispose of any portion of the asset without the consent of another owner who refuses to comply. If the family demonstrates that they can only access a portion of an asset, then only that portion’s value is included in the calculation of net family assets for the family. Any income from a jointly owned asset must be included in annual income, unless: x The income is specifically excluded; x The family demonstrates that they do not have access to the income from that asset; or x The family only has access to a portion of the income from that asset. If the family demonstrates that they can only access a portion of the income from an asset, then only that portion’s value is included in the calculation of income from assets. If an individual is a beneficiary who is entitled to access the account’s funds only upon the death of the account’s owner, and may not otherwise withdraw funds from an account, then the account is not an asset to the assisted family, and the family should provide proper documentation demonstrating that they are only a beneficiary on the account. Trusts [24 CFR 5.609(b)(2) and 5.603(b)(4)] A trust is a legal arrangement generally regulated by state law in which one party (the creator or grantor) transfers property to a second party (the trustee) who holds the property for the benefit of one or more third parties (the beneficiaries). The following types of trust distributions are excluded from annual income: x Distributions of the principal or corpus of the trust; and x Distributions of income from the trust when the distributions are used to pay the costs of health and medical care expenses for a minor. The basis for determining how to treat trusts relies on information about who has access to either the principal in the account or the income from the account. There are two types of trusts, revocable and irrevocable. 419 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-60 When the creator sets up an irrevocable trust, the creator has no access to the funds in the account. Irrevocable trusts not under the control of any member of the family or household are not assets. Typically, special needs trusts are considered irrevocable. The value of the trust is not included in net family assets, so long as the fund continues to be held in a trust that is not revocable by, or under the control of, any member of the family or household [24 CFR 5.603(b)(4)]. Where an irrevocable trust is excluded from net family assets, the PHA must not consider actual income earned by the trust (e.g., interest earned, rental income if property is held in the trust) for so long as the income from the trust is not distributed. If the value of the trust is not considered part of the family’s net assets, then distributions from the trust are treated as follows: x All distributions from the trust’s principal are excluded from income. x Distributions of income earned by the trust (i.e., interest, dividends, realized gains, or other earnings on the trust’s principal), are included as income unless the distribution is used to pay for the health and medical expenses for a minor. A revocable trust is a trust that the creator of the trust may amend or end (revoke). When there is a revocable trust, the creator has access to the funds in the trust account. The value of revocable trusts that are not under the control of the family are excluded from net family assets. This happens when a member of the assisted family is the beneficiary of a revocable trust, but the grantor is not a member of the assisted family. In this case the beneficiary does not “own” the revocable trust, and the value of the trust is excluded from net family assets. For the revocable trust to be considered excluded from net family assets, no family or household member may be the account’s trustee. If this is the case, then distributions from the trust are treated as follows: x All distributions from the trust’s principal are excluded from income. x Distributions of income earned by the trust (i.e., interest, dividends, realized gains, or other earnings on the trust’s principal), are included as income unless the distribution is used to pay for the health and medical expenses for a minor. Revocable trusts under the control of the family or household (e.g., the grantor is a member of the assisted family or household) are considered assets and must be included in net family assets. If the value of the trust is considered part of the family’s net assets, then distributions from the trust are not considered income to the family. The PHA must count all actual returns (e.g., interest earned) from the trust as income or, if the trust has no actual returns (e.g., if the trust is comprised of farmland that is not in use) and the total value of the combined net family assets exceeds $50,000 (as that amount is updated for inflation), as imputed returns, as applicable. 420 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-61 Life Insurance [FR Notice 2/14/23 and Notice PIH 2023-27] Net family assets do not include the value of term life insurance, which has no cash value to the individual before death. The cash value of a life insurance policy available to a family member before death, such as a whole life or universal life policy, is included in the calculation of the value of the family’s assets. The cash value is the surrender value. While the cash value of an insurance policy is considered an asset, the face value of any policy is not. If such a policy earns dividends or interest that the family could elect to receive, the amount of dividends or interest is counted as income from the asset whether or not the family actually receives it. Tax Refunds [24 CFR 5.603(b)(3)(xi) and Notice PIH 2023-27] All amounts received by a family in the form of federal tax refunds or refundable tax credits are excluded from a family’s net family assets for a period of 12 months after receipt by the family. At the time of an annual or interim reexamination of income, if the federal tax refund was received during the 12 months preceding the effective date of the reexamination, then the amount of the refund that was received by the family is subtracted from the total value of the account in which the federal tax refund or refundable tax credits were deposited. When the subtraction results in a negative number, then the balance of the asset is considered $0. If the tax refund or refundable tax credit is deposited into another excluded asset, such as a retirement account or a Coverdell Education Savings Account, then the deposit will have no effect on the balance of the asset (i.e., there is no need for the PHA to subtract the amount of the deposit from the value of the excluded asset). Asset Exclusions [24 CFR 5.603(b)] The following are excluded from the calculations of net family assets: x The value of any account under a retirement plan recognized as such by the IRS, including individual retirement arrangements (IRAs), employer retirement plans, and retirement plans for self-employed individuals [24 CFR 5.603(b)(3)(iii)]. x The value of real property that the family does not have the effective legal authority to sell in the jurisdiction in which the property is located [24 CFR 5.603(b)(3)(iv)]. - Real property as used in this part has the same meaning as that provided under the law of the state in which the property is located [24 CFR 5.100]. - Examples of this include but are not limited to co-ownership situations (including situations where one owner is a victim of domestic violence), where one party cannot unilaterally sell the real property; property that is tied up in litigation; and inherited property in dispute [Notice PIH 2023-27]. x Any amounts recovered in any civil action or settlement based on a claim of malpractice, negligence, or other breach of duty owed to a family member arising out of law, that resulted in a family member being a person with a disability [24 CFR 5.603(b)(3)(v)]; x The value of any Coverdell education savings account under section 530 of the Internal Revenue Code of 1986 [24 CFR 5.603(b)(3)(vi)]; 421 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-62 x The value of any qualified tuition program under Section 529 of such Code [24 CFR 5.603(b)(3)(vi)]; x The value of any “baby bond” account created, authorized, or funded by federal, state, or local government [24 CFR 5.603(b)(3)(vi)]; x Interests in Indian trust land [24 CFR 5.603(b)(3)(vii)]; x Equity in a manufactured home where the family receives assistance under 24 CFR part 982 [24 CFR 5.603(b)(3)(viii)]; x Equity in property under the Homeownership Option for which a family receives assistance under 24 CFR part 982 [24 CFR 5.603(b)(3)(ix)]; x Family Self-Sufficiency accounts [24 CFR 5.603(b)(3)(x)]; x Federal tax refunds or refundable tax credits for a period of 12 months after receipt by the family [24 CFR 5.603(b)(3)(xi)]. x The full amount of assets held in an irrevocable trust [Notice PIH 2023-27]; and x The full amount of assets held in a revocable trust where a member of the family is the beneficiary, but the grantor/owner and trustee of the trust is not a member of the participant family or household [Notice PIH 2023-27]. 422 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-63 6-II.D. DETERMINING INCOME FROM ASSETS In some cases, amounts that are excluded from net family assets may be included as annual income when disbursements are made to a family from an asset. In other cases, amounts are excluded from annual income as a lump-sum addition to net family assets, but those funds are then considered a net family asset if held in an account or other investment that is considered part of net family assets [Notice PIH 2023-27]. Net Family Assets Net family assets are defined as the net cash value of all assets owned by the family, after deducting reasonable costs that would be incurred in disposing real property, savings, stocks, bonds, and other forms of capital investment. HA Policy Reasonable costs that would be incurred when disposing of an asset include, but are not limited to, penalties for premature withdrawal, broker and legal fees, and settlement costs incurred in real estate transactions such as settlement costs and transfer taxes [New PH OCC GB, Income Determinations, p. 24]. The calculation of asset income sometimes requires the PHA to make a distinction between an asset’s market value and its cash value. x The market value of an asset is its worth in the market (e.g., the amount a buyer would pay for real estate or the total value of an investment account). x The cash value of an asset is its market value less all reasonable amounts that would be incurred when converting the asset to cash. The cash value of real property or other assets with negative equity would be considered $0 for the purposes of calculating net family assets. Negative equity in real property or other investments does not prohibit the family from selling the property or other investments, so negative equity alone would not justify excluding the property or other investments from family assets [Notice PIH 2023-27]. 423 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-64 Actual Income from Assets Income from assets must be included on the Form HUD-50058 regardless of the amount of income. Actual income from assets is always included in a family’s annual income, regardless of the total value of net family assets or whether the asset itself is included or excluded from net family assets, unless that income is specifically excluded by 24 CFR 5.609(b). Income or returns from assets are generally considered to be interest, dividend payments, and other actual income earned on the asset, and not the increase in market value of the asset. The increase in market value is relevant to the cash value of the asset for the purpose of determining total net family assets and imputing income. The PHA may determine the net assets of a family based on a self-certification by the family that the net family assets do not exceed $50,000 (adjusted annually by HUD), without taking additional steps to verify the accuracy of the declaration [24 CFR 5.618(b)]. Policies related to verification of assets are found in Chapter 7 of this policy. The PHA may not calculate or include any imputed income from assets when net family assets total $50,000 or less [24 CFR 5.609(b)(1)]. The actual income from assets must be included on the Form HUD-50058. Imputed Income from Assets When net family assets exceed $50,000 (adjusted annually by HUD), the PHA may not rely on self-certification. If actual returns can be calculated, the PHA must include actual income from the asset on the Form HUD-50058 (for example, a savings account or CD where the rate of return is known). If actual returns cannot be calculated, the PHA must calculate imputed returns using the HUD-determined passbook rate (for example, real property or a non-necessary item of personal property such as a recreational boat). If the PHA can compute actual income from some but not all assets, the PHA must compute actual returns where possible and use the HUD-determined passbook rate for assets where actual income cannot be calculated [24 CFR 5.609(a)(2)]. An asset with an actual return of $0 (such as a non-interest-bearing checking account), is not the same as an asset for which an actual return cannot be computed (such as non-necessary personal property). If the asset is a financial asset and there is no income generated (for example, a bank account with a zero percent interest rate or a stock that does not issue cash dividends), then the asset generates zero actual asset income, and imputed income is not calculated. When a stock issues dividends in some years but not others (e.g., due to market performance), the dividend is counted as the actual return when it is issued, and when no dividend is issued, the actual return is $0. When the stock never issues dividends, the actual return is consistently $0. 424 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-65 6-III.A. INTRODUCTIONADJUSTED INCOME Overview HUD regulations require HAs to deduct from annual income any of five mandatory deductions for which a family qualifies and allow the PHA to deduct other permissive deductions in accordance with PHA policy. The resulting amount is the family’s adjusted income. Mandatory deductions are found in 24 CFR 5.611. 5.611 Adjusted income means annual income (as determined under § 5.609) of the members of the family residing or intending to reside in the dwelling unit, after making the following deductions:((a) Mandatory deductions. In determining adjusted income, the responsible entity [HA] must deduct the following amounts from annual income: (a) Mandatory deductions (1) $480 for each dependent (adjusted annually by HUD, rounded to the next lowest multiple of $25);t; (2) $400 525 for any elderly family or disabled family; (adjusted annually by HUD, rounded to the next lowest multiple of $25); (3) The sum of the following, to the extent the sum exceeds three ten percent of annual income: (i) Unreimbursed health and medical care expenses of any elderly family or disabled family; (ii) Unreimbursed reasonable attendant care and auxiliary apparatus expenses for each member of the family who is a person with disabilities, to the extent necessary to enable any member of the family (including the member who is a person with disabilities) to be employed. This deduction may not exceed the earned income received by family members who are 18 years of age or older and who are able to work because of such attendant care or auxiliary apparatus; and (4) Any reasonable child care expenses necessary to enable a member of the family to be employed or to further his or her education. This part covers policies related to these mandatory deductions. Verification requirements related to these deductions are found in Chapter 7. Anticipating Expenses HA Policy Generally, the HA will use current circumstances to anticipate expenses. When possible, for costs that are expected to fluctuate during the year (e.g., child care during school and nonschool periods and cyclical medical expenses), the HA will estimate costs based on historic data and known future costs. If a family has an accumulated debt for medical or disability assistance expenses, the HA will include as an eligible expense the portion of the debt that the family expects to pay during the period for which the income determination is being made. However, amounts previously deducted will not be allowed even if the amounts were not paid as expected in 425 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-66 a preceding period. The HA may require the family to provide documentation of payments made in the preceding year. 426 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-67 When calculating health and medical care expenses, the PHA will include those expenses anticipated to be incurred during the 12 months following the certification date which are not covered by an outside source, such as insurance. The allowance is not intended to give a family an allowance equal to last year’s expenses, but to anticipate regular ongoing and anticipated expenses during the coming year. Since these expenses are anticipated, the PH Occupancy Guidebook states “it is 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 the appropriate verification” [New PH OCC GB, Income Determinations, p. 30]. For annual reexaminations, the PHA will use information for the previous 12-month period. 6-III.B. DEPENDENT DEDUCTION An allowance of $480 is deducted from annual income for each dependent (which amount will be adjusted by HUD annually in accordance with the Consumer Price Index for Urban Wage Earners and Clerical Workers, rounded to the next lowest multiple of $25) [24 CFR 5.611(a)(1)]. Dependent is defined as any family member other than the head, spouse, or cohead who is under the age of 18 or who is 18 or older and is a person with disabilities or a full-time student. Foster children, foster adults, and live-in aides are never considered dependents [24 CFR 5.603(b)]. 6-III.C. ELDERLY OR DISABLED FAMILY DEDUCTION A single deduction of $400 is taken for any elderly or disabled family (which amount will be adjusted by HUD annually in accordance with the Consumer Price Index for Urban Wage Earners and Clerical Workers, rounded to the next lowest multiple of $25) [24 CFR 5.611(a)(2)]. An elderly family is a family whose head, spouse, cohead, or sole member is 62 years of age or older, and a disabled family is a family whose head, spouse, cohead, or sole member is a person with disabilities [24 CFR 5.403]. 427 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-68 6-III.D. HEALTH AND MEDICAL CARE EXPENSES DEDUCTION [24 CFR 5.611(a)(3)(i) AND 5. 5.603(b] Unreimbursed health and medical care expenses may be deducted to the extent that, in combination with any disability assistance expenses, they exceed three ten percent of annual income. The medicalThis expense deduction is permitted only for families in which the head, spouse, or cohead is at least 62 or is a person with disabilities. If a family is eligible for a medical expense deduction, the medical expenses of all family members are counted [VG, p. 28]. Definition of Medical Expenses HUD regulations define health and medical care expenses at 24 CFR 5.603(b) to mean “medical expenses, including medical insurance premiums, that are anticipated during the period for which annual income is computed, and that are not covered by insurance.” any costs incurred in the diagnosis, cure, mitigation, treatment, or prevention of disease or payments for treatments affecting any structure or function of the body. Health and medical care expenses include medical insurance premiums and long-term care premiums that are paid or anticipated during the period for which annual income is computed.” Medical insurance premiums continue to be eligible health and medical care expenses. Health and medical care expenses may be deducted from annual income only if they are eligible and not otherwise reimbursed and may only be deducted for elderly or disabled families. Although HUD revised the definition of health and medical care expenses to reflect the Internal Revenue Service (IRS) general definition of medical expenses, HUD is not permitting PHAs to specifically align their policies with IRS Publication 502 for determining which expenses are included in HUD’s mandatory deduction for health and medical care expenses. PHAs must review each expense to determine whether it is eligible in accordance with HUD’s definition of health and medical care expenses. HA Policy The most current IRS Publication 502, Medical and Dental Expenses, will be used as a reference to determine the costs that qualify as medical expenses. The HA will also allow nonprescription medicines if recommended by a doctor. Summary of Allowable Medical Expenses from IRS Publication 502 Services of medical professionals Surgery and medical procedures that are necessary, legal, noncosmetic Services of medical facilities Hospitalization, long-term care, and in- home nursing services Psychiatric treatment Ambulance services and some costs of transportation related to medical expenses The cost and care of necessary equipment related to a medical condition (e.g., eyeglasses/lenses, 428 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-69 Prescription medicines and insulin Improvements to housing directly related to medical needs (e.g., ramps for a wheel chair, handrails) Substance abuse treatment programs hearing aids, crutches, and artificial teeth) Cost and continuing care of necessary service animals Medical insurance premiums or the cost of a health maintenance organization (HMO) Note: This chart provides a summary of eligible medical expenses only. Detailed information is provided in IRS Publication 502. Medical expenses are considered only to the extent they are not reimbursed by insurance or some other source. 429 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-70 Families That Qualify for Both Health and Medical and Disability Assistance Expenses HA Policy This policy applies only to families in which the head, spouse, or cohead is 62 or older or is a person with disabilities. When expenses anticipated by a family could be defined as either health and medical care or disability assistance expenses, the HA will consider them health and medical care expenses unless it is clear that the expenses are incurred exclusively to enable a person with disabilities to work. 430 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-71 6-III.E. DISABILITY ASSISTANCE EXPENSES DEDUCTION [24 CFR 5.603(b) and 24 CFR 5.611(a)(3)(ii)] Reasonable Unreimbursed reasonable expenses for attendant care and auxiliary apparatus for each member of the family who is a person with disabilitiesa disabled family member may be deducted if they: (1) are necessary to enable a family member 18 years or older to work, (2) are not paid to a family member or reimbursed by an outside source, (3) in combination with any medical expenses, exceed three percent of annual income, and (4) do not exceed the earned income received by the family member who is enabled to work. Earned Income Limit on the Disability Assistance Expense Deduction A family can qualify for the disability assistance expense deduction only if at least one family member (who may be the person with disabilities) is enabled to work [24 CFR 5.603(b)]. The disability expense deduction is capped by the amount of “earned income received by family members who are 18 years of age or older and who are able to work” because of the expense [24 CFR 5.611(a)(3)(ii)]. The earned income used for this purpose is the amount verified before any earned income disallowances or income exclusions are applied. HA Policy The family must identify the family members enabled to work as a result of the disability assistance expenses. In evaluating the family’s request, the HA will consider factors such as how the work schedule of the relevant family members relates to the hours of care provided, the time required for transportation, the relationship of the family members to the person with disabilities, and any special needs of the person with disabilities that might determine which family members are enabled to work. When the HA determines that the disability assistance expenses enable more than one family member to work, the expenses will be capped by the sum of the family members’ incomes. 431 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-72 Eligible Disability Expenses Examples of auxiliary apparatus are provided in the HCV Guidebook as follows: “Auxiliary apparatus are items such as wheelchairs, ramps, adaptations to vehicles, or special equipment to enable a blind person to read or type, but only if these items are directly related to permitting the disabled person or other family member to work” [HCV GB, p. 5-30]. HUD advises HAs to further define and describe auxiliary apparatus [VG, p. 30]. Eligible Auxiliary Apparatus Notice PIH 2023-27] Auxiliary apparatus items may include expenses for wheelchairs, ramps, adaptations to vehicles, guide dogs, assistance animals, or special equipment to enable a person who is blind or has low vision to read or type or special equipment to assist a person who is deaf or hard of hearing. HA Policy Expenses incurred for maintaining or repairing an auxiliary apparatus are eligible. In the case of an apparatus that is specially adapted to accommodate a person with disabilities (e.g., a vehicle or computer), the cost to maintain the special adaptations (but not maintenance of the apparatus itself) is an eligible expense. The cost of service animals trained to give assistance to persons with disabilities, including the cost of acquiring the animal, veterinary care, food, grooming, and other continuing costs of care, will be included. Eligible Attendant Care [Notice PIH 2023-27] Examples of attendant care expenses can include teaching a person with disabilities how to perform day-to-day tasks independently like cleaning, bathing, doing laundry, and cooking. Attendant care can be 24-hour care, or care during sporadic periods throughout the day.The family determines the type of attendant care that is appropriate for the person with disabilities. HA Policy Attendant care includes, but is not limited to, reasonable costs for home medical care, nursing services, in-home or center-based care services, interpreters for persons with hearing impairments, and readers for persons with visual disabilities. Attendant care expenses will be included for the period that the person enabled to work is employed plus reasonable transportation time. The cost of general housekeeping and personal services is not an eligible attendant care expense. However, if the person enabled to work is the person with disabilities, personal services necessary to enable the person with disabilities to work are eligible. If the care attendant also provides other services to the family, the HA will prorate the cost and allow only that portion of the expenses attributable to attendant care that enables a family member to work. For example, if the care provider also cares for a child who is not the person with disabilities, the cost of care must be prorated. Unless otherwise specified by the care provider, the calculation will be based upon the number of hours spent in each activity and/or the number of persons under care. 432 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-73 Payments to Family Members No disability assistance expenses may be deducted for payments to a member of an assisted family [24 CFR 5.603(b)]. However, expenses paid to a relative who is not a member of the assisted family may be deducted if they are not reimbursed by an outside source. Necessary and Reasonable Expenses The family determines the type of care or auxiliary apparatus to be provided and must describe how the expenses enable a family member to work. The family must certify that the disability assistance expenses are necessary and are not paid or reimbursed by any other source. HA Policy The HA determines the reasonableness of the expenses based on typical costs of care or apparatus in the locality. To establish typical costs, the HA will collect information from organizations that provide services and support to persons with disabilities. A family may present, and the HA will consider, the family’s justification for costs that exceed typical costs in the area. Families That Qualify for Both Health and Medical Care and Disability Assistance Expenses HA Policy This policy applies only to families in which the head or spouse is 62 or older or is a person with disabilities. When expenses anticipated by a family could be defined as either health and medical care or disability assistance expenses, the HA will consider them health and medical care expenses unless it is clear that the expenses are incurred exclusively to enable a person with disabilities to work. 433 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-74 6-IIi.F. CHILD CARE EXPENSE DEDUCTION HUD defines child care expenses at 24 CFR 5.603(b) as “amounts anticipated to be paid by the family for the care of children under 13 years of age (including foster children) during the period for which annual income is computed, but only where such care is necessary to enable a family member to actively seek employment, be gainfully employed, or to further his or her education and only to the extent such amounts are not reimbursed. The amount deducted shall reflect reasonable charges for child carechildcare. In the case of child carechildcare necessary to permit employment, the amount deducted shall not exceed the amount of employment income that is included in annual income.” Clarifying the Meaning of Child for This Deduction Child careChildcare expenses do not include child support payments made to another on behalf of a minor who is not living in an assisted family’s household [VG, p. 26]. However, child carechildcare expenses for foster children that are living in the assisted family’s household are included when determining the family’s child care expenses [HCV GB, p. 5-29]. Qualifying for the Deduction Determining Who Is Enabled to Pursue an Eligible Activity HA Policy The family must identify the family member(s) enabled to pursue an eligible activity. The term eligible activity in this section means any of the activities that may make the family eligible for a child carechildcare deduction (seeking work, pursuing an education, or being gainfully employed). In evaluating the family’s request, the HA will consider factors such as how the schedule for the claimed activity relates to the hours of care provided, the time required for transportation, the relationship of the family member(s) to the child, and any special needs of the child that might help determine which family member is enabled to pursue an eligible activity. Seeking Work HA Policy If the child carechildcare expense being claimed is to enable a family member to seek employment, the family must provide evidence of the family member’s efforts to obtain employment at each reexamination. The deduction may be reduced or denied if the family member’s job search efforts are not commensurate with the child carechildcare expense being allowed by the HA. 434 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-75 Furthering Education HA Policy If the child carechildcare expense being claimed is to enable a family member to further his or her education, the member must be enrolled in school (academic or vocational) or participating in a formal training program. The family member is not required to be a full-time student, but the time spent in educational activities must be commensurate with the child carechildcare claimed. Being Gainfully Employed HA Policy If the child carechildcare expense being claimed is to enable a family member to be gainfully employed, the family must provide evidence of the family member’s employment during the time that child care is being provided. Gainful employment is any legal work activity (full- or part-time) for which a family member is compensated. Earned Income Limit on Child Care Expense Deduction When a family member looks for work or furthers his or her education, there is no cap on the amount that may be deducted for child carechildcare – although the care must still be necessary and reasonable. However, when child carechildcare enables a family member to work, the deduction is capped by “the amount of employment income that is included in annual income” [24 CFR 5.603(b)]. The earned income used for this purpose is the amount of earned income verified after any earned income disallowances or income exclusions are applied. When the person who is enabled to work is a person with disabilities who receives the earned income disallowance (EID) or a full-time student whose earned income above $480 is excluded, child carechildcare costs related to enabling a family member to work may not exceed the portion of the person’s earned income that actually is included in annual income. For example, if a family member who qualifies for the EID makes $15,000 but because of the EID only $5,000 is included in annual income, child carechildcare expenses are limited to $5,000. The HA must not limit the deduction to the least expensive type of child carechildcare. If the care allows the family to pursue more than one eligible activity, including work, the cap is calculated in proportion to the amount of time spent working [HCV GB, p. 5-30]. HA Policy When the child carechildcare expense being claimed is to enable a family member to work, only one family member’s income will be considered for a given period of time. When more than one family member works during a given period, the HA generally will limit allowable child carechildcare expenses to the earned income of the lowest-paid member. The family may provide information that supports a request to designate another family member as the person enabled to work. 435 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-76 Eligible Child Care Expenses The type of care to be provided is determined by the assisted family. The HA may not refuse to give a family the child carechildcare expense deduction because there is an adult family member in the household that may be available to provide child care [VG, p. 26]. Allowable Child Care Activities HA Policy For school-age children, costs attributable to public or private school activities during standard school hours are not considered. Expenses incurred for supervised activities after school or during school holidays (e.g., summer day camp, after-school sports league) are allowable forms of child carechildcare. The costs of general housekeeping and personal services are not eligible. Likewise, child carechildcare expenses paid to a family member who lives in the family’s unit are not eligible; however, payments for child care to relatives who do not live in the unit are eligible. If a child carechildcare provider also renders other services to a family or child care is used to enable a family member to conduct activities that are not eligible for consideration, the HA will prorate the costs and allow only that portion of the expenses that is attributable to child care for eligible activities. For example, if the care provider also cares for a child with disabilities who is 13 or older, the cost of care will be prorated. Unless otherwise specified by the child carechildcare provider, the calculation will be based upon the number of hours spent in each activity and/or the number of persons under care. Necessary and Reasonable Costs Child careChildcare expenses will be considered necessary if: (1) a family adequately explains how the care enables a family member to work, actively seek employment, or further his or her education, and (2) the family certifies, and the child carechildcare provider verifies, that the expenses are not paid or reimbursed by any other source. HA Policy Child careChildcare expenses will be considered for the time required for the eligible activity plus reasonable transportation time. For child carechildcare that enables a family member to go to school, the time allowed may include not more than one study hour for each hour spent in class. To establish the reasonableness of child carechildcare costs, the HA will use the schedule of child care costs from a qualified local entity that either subsidizes child care costs or licenses child care providers. Families may present, and the HA will consider, justification for costs that exceed typical costs in the area. 436 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-77 6-III.G. HARDSHIP EXEMPTIONS [24 CFR 5.611(c), (d), and (e)] Health and Medical Care and Disability Assistance Expenses [24 CFR 5.611(c); Notice PIH 2023-27] The regulations provide for two types of hardship exemption categories for families that qualify for unreimbursed health and medical care expenses and/or disability assistance expenses. A family will benefit from this hardship exemption only if the family has eligible expenses that can be deducted in excess of five percent of annual income. In order to claim unreimbursed health and medical care expenses, the family must have a head, cohead, or spouse that is elderly or a person with a disability. In order to claim unreimbursed reasonable attendant care and auxiliary apparatus expenses, the family must include a person with a disability, and the expenses must enable any member of the family (including the member who is a person with a disability) to be employed. Families may be eligible for relief under one of two categories; phased-in relief or general relief, as defined below. Phased-In Relief The first category is applicable to all families who received a deduction for unreimbursed health and medical care and/or reasonable attendant care or auxiliary apparatus expenses based on their most recent income review prior to January 1, 2024. The family must receive phased-in relief if they are determined to be eligible as of January 1, 2024. These families will begin receiving a 24-month phased-in relief at their next annual or interim reexamination, whichever occurs first. For these families, the threshold amount is phased-in as follows: x The family is eligible for a deduction totaling the sum of expenses that exceeds 5 percent of annual income for the first 12 months. x At the conclusion of 12 months, the family is eligible for a deduction totaling the sum of their expenses that exceed 7.5 percent of annual income for another 12 months. x At the conclusion of 24 months, the standard threshold amount of 10 percent would be used, unless the family qualifies for relief under the general hardship relief category. - When an eligible family’s phased-in relief begins at an interim reexamination, the PHA will need to process another transaction one year later to move the family along to the next phase. The transaction can be either an interim reexamination if triggered, or a non- interim reexamination transaction. Prior to the end of the 24-month period, the family may request a hardship exemption under the second category as described below. If the family is found eligible under the second category, the hardship exemption under the first category ends, and the family’s hardship is administered in accordance with the requirements listed below. Once a family requests general relief, the family may no longer receive phased-in relief. 437 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-78 PHAs must track the 24-month phase-period for each eligible family, even if a family’s expenses go below the appropriate phase-in percentage, during the first or second 12-month phase-in period. The phase-in must continue for families who move to another public housing unit at the same PHA. When the family is treated as a new admission under a different property/program (e.g., the family moves from public housing to the HCV program), unless the PHA has a written policy to continue the phased-in relief upon admission, the family’s expense deduction will be calculated using the 10-percent threshold unless request for general relief is approved by the PHA. When a family moves with continued assistance or ports to a new PHA, the family must continue to receive the phased-in relief. The family must receive the remaining calendar months of the percentage phase-in. The PHA must use the existing phase-in documentation to determine the remaining calendar months and the percentage phase-in. PHA Policy The PHA will not continue the phased-in relief for families who move from public housing to HCV. These families will be treated as new admissions and the sum of expenses that exceeds 10 percent of annual income will be used to calculate their adjusted income. General Relief The second category is for families that can demonstrate: x Their health and medical and/or disability assistance expenses increased (other than the transition to the higher threshold); or x The family’s financial hardship is a result of a change in circumstances (as defined in PHA policy) that would not otherwise trigger an interim reexamination. The family may request a hardship exemption under the second category regardless of whether the family previously received the health and medical and/or disability assistance deductions or are currently or were previously receiving relief under the phased-in relief category above. HUD requires that PHAs develop policies defining what constitutes a hardship for purposes of this exemption. 438 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-79 The PHA must obtain third-party verification of the hardship or must document in the file the reason third-party verification was not available. PHAs must attempt to obtain third-party verification prior to the end of the 90-day hardship exemption period. HA Policy To qualify for a hardship exemption, a family must submit a request in writing. The request must show that the family’s health and medical and/or disability assistance expenses have increased (other than the transition to the higher threshold) and that the family’s financial hardship is a result of a change in circumstances. The PHA defines a change in circumstances as a decrease in income or increase in other expenses that has resulted in the family’s financial hardship but does not, on its own, trigger an interim reexam in accordance with PHA policies. Examples of circumstances constituting a financial hardship may include the following situations: The family is awaiting an eligibility determination for a federal, state, or local assistance program, such as a determination for unemployment compensation or disability benefits; The family’s income decreased because of a loss of employment, death of a family member, or due to a natural or federal/state declared disaster; or Other circumstances as determined by the PHA. The family must provide third-party verification of the hardship with the request. If third- party verification is not available, the PHA will document the file with the reason and will attempt to obtain third-party verification prior to the end of the 90-day hardship exemption period. The PHA must promptly notify the family in writing of the change in the determination of adjusted income and the family’s rent resulting from hardship exemptions. The notice must inform the family of when the hardship exemption will begin and expire [24 CFR 5.611(e)(2)]. HA Policy The PHA will make a determination of whether the family qualifies within 30 calendar days and will notify the family in writing of the result within 10 business days of the determination. If the PHA denies the hardship exemption request, the PHA notice will also state that if the family does not agree with the PHA determination, the family may request a hearing. If the family qualifies for an exemption, the PHA will include the date the hardship exemption will begin and the date it will expire as well as information on how to request a 90-day extension based on family circumstances. If the family qualifies, the family will receive a deduction for the sum of eligible expenses that exceed five percent of annual income. 439 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-80 The family’s hardship relief ends when the circumstances that made the family eligible for the relief are no longer applicable or after 90 days, whichever is earlier. However, the PHA may, at its discretion, extend the relief for one or more additional 90-day periods while the family’s hardship condition continues. PHAs are not limited to a maximum number of 90-day extensions. PHAs must establish written policies regarding the types of circumstances that will allow a family to qualify for a financial hardship and when such deductions may be eligible for additional 90-day extensions. PHAs must develop policies requiring families to report if the circumstances that made the family eligible for the hardship exemption are no longer applicable. HA Policy The family may request an extension either orally or in writing prior to the end of the hardship exemption period. The PHA will extend relief for an additional 90-days if the family demonstrates to the PHA’s satisfaction that the family continues to qualify for the hardship exemption based on circumstances described above. The PHA will require updated verification based on the family’s current circumstances. Additional extension may be granted on a case-by-case basis provided the family continues to request extensions prior to the end of each hardship exemption period. Families must report if the circumstances that made the family eligible for the hardship exemption are no longer applicable. At any time, the PHA may terminate the hardship exemption if the PHA determines that the family no longer qualifies for the exemption. Child Care Expense Hardship Exemption [24 CFR 5.611(d) and Notice PIH 2023-27] A family whose eligibility for the child care expense deduction is ending may request a financial hardship exemption to continue receiving the deduction. If the family demonstrates to the PHA’s satisfaction that the family is unable to pay their rent because of the loss of the child care expense deduction, and that the child care expense is still necessary even though the family member is not working, looking for work, or seeking to further their education, the PHA must recalculate the family’s adjusted income and continue the child care deduction. The PHA must develop a policy to define what constitutes a hardship, which includes the family’s inability to pay rent. The PHA must obtain third-party verification of the hardship or must document in the file the reason third-party verification was not available. PHAs must attempt to obtain third-party verification prior to the end of the 90-day hardship exemption period. 440 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-81 HA Policy For a family to qualify, they must demonstrate that their inability to pay rent would be as a result of the loss of this deduction. The PHA defines this hardship as a potential decrease in income or increase in other expenses that would result from the loss of the child care expense and such loss would impact the family’s ability to pay their rent. Some factors to consider when determining if the family is unable to pay rent may include determining that the rent, utility payment, and applicable expenses (child care expenses or health and medical expenses) are more than 40 percent of the family’s adjusted income, or verifying whether the family has experienced unanticipated expenses, such as large medical bills, that have affected their ability to pay their rent. The family must also demonstrate that the child care expense is still necessary even though the family member is no longer employed or furthering their education. The PHA will consider qualification under this criterion on a case-by case basis (for example, if the family member who was employed has left their job in order to provide uncompensated care to an elderly friend or family member who is severely ill and lives across town). The family must provide third-party verification of the hardship with the request. If third- party verification is not available, the PHA will document the file with the reason and will attempt to obtain third-party verification prior to the end of the 90-day hardship exemption period. The PHA must promptly notify the family in writing of the change in the determination of adjusted income and the family’s rent resulting from hardship exemptions. If the PHA denies the request, the notice must specifically state the reason for the denial. PHAs must provide families 30 days’ notice of any increase in rent. If the PHA approves the request, the notice must inform the family of when the hardship exemption will begin and expire [24 CFR 5.611(e)(2)]. The notice must also state the requirement for the family to report to the PHA if the circumstances that made the family eligible for relief are no longer applicable and that the family’s adjusted income and tenant rent will be recalculated upon expiration of the hardship exemption [Notice PIH 2023-27]. HA Policy The PHA will make a determination of whether the family qualifies within 30 calendar days and will notify the family in writing of the result within 10 business days of the determination. If the PHA denies the hardship exemption request, the PHA notice will also state that if the family does not agree with the PHA determination, the family may request an informal hearing. If the family qualifies for an exemption, the PHA will include all required information listed above as well as information on how to request a 90-day extension based on family circumstances. 441 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-82 If the family qualifies, the hardship exemption and the resulting alternative adjusted income calculation must remain in place for a period of up to 90 days. The PHA may, at its discretion, extend the hardship exemptions for additional 90-day periods based on family circumstances and as stated in PHA policies. PHAs are not limited to a maximum number of 90-day extensions. PHAs must develop policies requiring families to report if the circumstances that made the family eligible for the hardship exemption are no longer applicable. PHAs must promptly notify families in writing if they are denied either an initial hardship exemption or an additional 90-day extension of the exemption. If the PHA denies the request, the notice must specifically state the reason for the denial. PHAs must notify the family if the hardship exemption is no longer necessary and the hardship exemption will be terminated because the circumstances that made the family eligible for the exemption are no longer applicable. The notice must state the termination date and provide 30 days’ notice of rent increase, if applicable. HA Policy The family may request an extension either orally or in writing prior to the end of the hardship exemption period. The PHA will extend relief for an additional 90-days if the family demonstrates to the PHA’s satisfaction that the family continues to qualify for the hardship exemption. The PHA will require updated verification based on the family’s current circumstances. Additional extension may be granted on a case-by-case basis provided the family continues to request extensions prior to the end of each hardship exemption period. Families must report if the circumstances that made the family eligible for the hardship exemption are no longer applicable. At any time, the PHA may terminate the hardship exemption if the PHA determines that the family no longer qualifies for the exemption. 6-III.H. PERMISSIVE DEDUCTIONS [24 CFR 5.611(b)(1)(ii)] The PHA may adopt additional permissive deductions from annual income if they establish a policy in the administrative plan. Permissive deductions are additional, optional deductions that may be applied to annual income. As with mandatory deductions, permissive deductions must be based on need or family circumstance and deductions must be designed to encourage self- sufficiency or other economic purpose. If the PHA offers permissive deductions, they must be granted to all families that qualify for them and should complement existing income exclusions and deductions [PH Occ GB, p. 128] Permissive deductions may be used to incentivize or encourage self-sufficiency and economic mobility. A PHA that adopts such deductions must have sufficient funding to cover the increased housing assistance payment cost of the deductions. A PHA will not be eligible for an increase in HCV renewal funding for subsidy costs resulting from such deductions. HA Policy The PHA has opted not to use permissive deductions. 442 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-83 PART IIIIV: CALCULATING FAMILY SHARE AND HA SUBSIDY 6-IIIIV.A. OVERVIEW OF RENT AND SUBSIDY CALCULATIONS TTP Formula [24 CFR 5.628] HUD regulations specify the formula for calculating the total tenant payment (TTP) for an assisted family. TTP is the highest of the following amounts, rounded to the nearest dollar: x 30 percent of the family’s monthly adjusted income (adjusted income is defined in Part II) x 10 percent of the family’s monthly gross income (annual income, as defined in Part I, divided by 12) x The welfare rent (in as-paid states only) x A minimum rent between $0 and $50 that is established by the HA The HA has authority to suspend and exempt families from minimum rent when a financial hardship exists, as defined in section 6-III.B. The amount that a family pays for rent and utilities (the family share) will never be less than the family’s TTP but may be greater than the TTP depending on the rent charged for the unit the family selects. Welfare Rent [24 CFR 5.628] HA Policy Welfare rent does not apply in this locality. Minimum Rent [24 CFR 5.630] HA Policy The minimum rent for this locality is $50. Family Share [24 CFR 982.305(a)(5)] If a family chooses a unit with a gross rent (rent to owner plus an allowance for tenant-paid utilities) that exceeds the HA’s applicable payment standard: (1) the family will pay more than the TTP, and (2) at initial occupancy the HA may not approve the tenancy if it would require the family share to exceed 40 percent of the family’s monthly adjusted income. The income used for this determination must have been verified no earlier than 60 days before the family’s voucher was issued. (For a discussion of the application of payment standards, see section 6-III.C.) 443 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-84 HA Subsidy [24 CFR 982.505(b)] The HA will pay a monthly housing assistance payment (HAP) for a family that is equal to the lower of (1) the applicable payment standard for the family minus the family’s TTP or (2) the gross rent for the family’s unit minus the TTP. (For a discussion of the application of payment standards, see section 6-IIIIV.C.) Utility Reimbursement [24 CFR 982.514(b); 982.514(c)] When the HA subsidy for a family exceeds the rent to owner, the family is due a utility reimbursement. HUD permits the HA to pay the reimbursement to the family or directly to the utility provider. HA Policy The HA will make utility reimbursements directly to the utility provider. The PHA may make all utility reimbursement payments to qualifying families on a monthly basis or may make quarterly payments when the monthly reimbursement amount is $15.00 or less. Reimbursements must be made once per calendar-year quarter and must be prorated if the family leaves the program in advance of its next quarterly reimbursement. The PHA must also adopt hardship policies for families for whom receiving quarterly reimbursement would create a financial hardship. PHA Policy The PHA will issue all utility reimbursements monthly. 444 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-85 6-IIIIV.B. FINANCIAL HARDSHIPS AFFECTING MINIMUM RENT [24 CFR 5.630] Overview If the HA establishes a minimum rent greater than zero, the HA must grant an exemption from the minimum rent if a family is unable to pay the minimum rent because of financial hardship. The financial hardship exemption applies only to families required to pay the minimum rent. If a family’s TTP is higher than the minimum rent, the family is not eligible for a hardship exemption. If the HA determines that a hardship exists, the family share is the highest of the remaining components of the family’s calculated TTP. HUD-Defined Financial Hardship Financial hardship includes the following situations: (1) The family has lost eligibility for or is awaiting an eligibility determination for a federal, state, or local assistance program. This includes a family member who is a noncitizen lawfully admitted for permanent residence under the Immigration and Nationality Act who would be entitled to public benefits but for Title IV of the Personal Responsibility and Work Opportunity Act of 1996. HA Policy A hardship will be considered to exist only if the loss of eligibility has an impact on the family’s ability to pay the minimum rent. For a family waiting for a determination of eligibility, the hardship period will end as of the first of the month following: (1) implementation of assistance, if approved, or (2) the decision to deny assistance. A family whose request for assistance is denied may request a hardship exemption based upon one of the other allowable hardship circumstances. (2) The family would be evicted because it is unable to pay the minimum rent. HA Policy For a family to qualify under this provision, the cause of the potential eviction must be the family’s failure to pay rent to the owner or tenant-paid utilities. (3) Family income has decreased because of changed family circumstances, including the loss of employment. (4) A death has occurred in the family. HA Policy In order to qualify under this provision, a family must describe how the death has created a financial hardship (e.g., because of funeral-related expenses or the loss of the family member’s income). (5) The family has experienced other circumstances determined by the HA. HA Policy The HA has not established any additional hardship criteria. 445 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-86 Implementation of Hardship Exemption Determination of Hardship When a family requests a financial hardship exemption, the HA must suspend the minimum rent requirement beginning the first of the month following the family’s request. The HA then determines whether the financial hardship exists and whether the hardship is temporary or long-term. HA Policy The HA defines temporary hardship as a hardship expected to last 90 days or less. Long- term hardship is defined as a hardship expected to last more than 90 days. When the minimum rent is suspended, the family share reverts to the highest of the remaining components of the calculated TTP. The example below demonstrates the effect of the minimum rent exemption. Example: Impact of Minimum Rent Exemption Assume the HA has established a minimum rent of $50. Family Share – No Hardship Family Share – With Hardship $0 $15 N/A $50 30% of monthly adjusted income 10% of monthly gross income Welfare rent Minimum rent $0 $15 N/A $50 30% of monthly adjusted income 10% of monthly gross income Welfare rent Minimum rent Minimum rent applies. TTP = $50 Hardship exemption granted. TTP = $15 HA Policy To qualify for a hardship exemption, a family must submit a request for a hardship exemption in writing. The request must explain the nature of the hardship and how the hardship has affected the family’s ability to pay the minimum rent. The HA will make the determination of hardship within 30 calendar days. 446 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-87 No Financial Hardship If the HA determines there is no financial hardship, the HA will reinstate the minimum rent and require the family to repay the amounts suspended. HA Policy The HA will require the family to repay the suspended amount within 30 calendar days of the HA’s notice that a hardship exemption has not been granted. Temporary Hardship If the HA determines that a qualifying financial hardship is temporary, the HA must suspend the minimum rent for the 90-day period beginning the first of the month following the date of the family’s request for a hardship exemption. At the end of the 90-day suspension period, the family must resume payment of the minimum rent and must repay the HA the amounts suspended. HUD requires the HA to offer a reasonable repayment agreement, on terms and conditions established by the HA. The HA also may determine that circumstances have changed and the hardship is now a long-term hardship. HA Policy The HA will enter into a repayment agreement in accordance with the procedures found in Chapter 16 of this plan. Long-Term Hardship If the HA determines that the financial hardship is long-term, the HA must exempt the family from the minimum rent requirement for so long as the hardship continues. The exemption will apply from the first of the month following the family’s request until the end of the qualifying hardship. When the financial hardship has been determined to be long-term, the family is not required to repay the minimum rent. HA Policy The hardship period ends when any of the following circumstances apply: (1) At an interim or annual reexamination, the family’s calculated TTP is greater than the minimum rent. (2) For hardship conditions based on loss of income, the hardship condition will continue to be recognized until new sources of income are received that are at least equal to the amount lost. For example, if a hardship is approved because a family no longer receives a $60/month child support payment, the hardship will continue to exist until the family receives at least $60/month in income from another source or once again begins to receive the child support. (3) For hardship conditions based upon hardship-related expenses, the minimum rent exemption will continue to be recognized until the cumulative amount exempted is equal to the expense incurred. 447 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-88 6-IIIIV.C. APPLYING PAYMENT STANDARDS [24 CFR 982.505; 982.503(b)] Overview The HA’s schedule of payment standards is used to calculate housing assistance payments for HCV families. This section covers the application of the HA’s payment standards. The establishment and revision of the HA’s payment standard schedule are covered in Chapter 16. Payment standard is defined as “the maximum monthly assistance payment for a family assisted in the voucher program (before deducting the total tenant payment by the family)” [24 CFR 982.4(b)]. The payment standard for a family is the lower of (1) the payment standard for the family unit size, which is defined as the appropriate number of bedrooms for the family under the HA’s subsidy standards [24 CFR 982.4(b)], or (2) the payment standard for the size of the dwelling unit rented by the family. If the HA has established an exception payment standard for a designated part of a zip code area or FMR area and a family’s unit is located in the exception area, the HA must use the appropriate payment standard for the exception area. The HA is required to pay a monthly housing assistance payment (HAP) for a family that is the lower of (1) the payment standard for the family minus the family’s TTP or (2) the gross rent for the family’s unit minus the TTP. If during the term of the HAP contract for a family’s unit, the owner lowers the rent, the HA will recalculate the HAP using the lower of the initial payment standard or the gross rent for the unit [HCV GB, p. 7-8]. Changes in Payment Standards When the HA revises its payment standards during the term of the HAP contract for a family’s unit, it will apply the new payment standards in accordance with HUD regulations. Decreases If a HA changes its payment standard schedule, resulting in a lower payment standard amount, during the term of a HAP contract, the HA is not required to reduce the payment standard used to calculate subsidy for families under HAP contract as long as the HAP contract remains in effect [FR Notice 11/16/16]. However, if the HA does choose to reduce the payment standard for families currently under HAP contract, the initial reduction to the payment standard may not be applied any earlier than the effective date of the family’s second regular reexamination following the effective date of the decrease in the payment standard amount. At that point, the HA may either reduce the payment standard to the current amount in effect on the HA’s payment standard schedule, or may reduce the payment standard to another amount that is higher than the normally applicable amount on the schedule. The HA may also establish different policies for designated areas within their jurisdiction (e.g., different zip code areas). 448 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-89 In any case, the HA must provide the family with at least 12 months’ notice that the payment standard is being reduced before the effective date of the change. The HA’s policy on decreases in the payment standard during the term of the HAP contract apply to all families under HAP contract at the time of the effective date of the decrease in the payment standard within the designated area. HA Policy If a HA changes its payment standard schedule resulting in a lower payment standard amount, during the term of a HAP contract, the HA will not reduce the payment standard used to calculate subsidy for families under HAP contract as long as the HAP contract remains in effect. The HA will not establish different policies for decreases in the payment standard for designated areas within their jurisdiction. Increases If the payment standard is increased during the term of the HAP contract, the increased payment standard will be used to calculate the monthly housing assistance payment for the family beginning on the effective date of the family’s first regular reexamination on or after the effective date of the increase in the payment standard. Families requiring or requesting interim reexaminations will not have their HAP payments calculated using the higher payment standard until their next annual reexamination [HCV GB, p. 7-8]. Changes in Family Unit Size (Voucher Size) Irrespective of any increase or decrease in the payment standard, if the family unit size increases or decreases during the HAP contract term, the new family unit size must be used to determine the payment standard for the family beginning at the family’s first regular reexamination following the change in family unit size. Reasonable Accommodation If a family requires a higher payment standard as a reasonable accommodation for a family member who is a person with disabilities, the HA is allowed to establish a higher payment standard for the family of not more than 120 percent of the published FMR. 449 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-90 6-IIIIV.D. APPLYING UTILITY ALLOWANCES [24 CFR 982.517] Overview A HA-established utility allowance schedule is used in determining family share and HA subsidy. A family’s utility allowance is determined by the size of dwelling unit leased by a family or the voucher unit size for which the family qualifies using HA subsidy standards, whichever is the lowest of the two. See Chapter 5 for information on the HA’s subsidy standards. For policies on establishing and updating utility allowances, see Chapter 16. Reasonable Accommodation and Individual Relief On request from a family that includes a person with disabilities, the PHA must approve a utility allowance which is higher than the applicable amount on the utility allowance schedule if a higher utility allowance is needed as a reasonable accommodation to make the program accessible and usable by the family member with a disability [24 CFR 982.517(e)]. (See Chapter 2 for policies regarding the request and approval of reasonable accommodations.) HCV program regulations require a HA to approve a utility allowance amount higher than shown on the HA’s schedule if a higher allowance is needed as a reasonable accommodation for a family member with a disability. For example, if a family member with a disability requires such an accommodation, the HA will approve an allowance for air-conditioning, even if the HA has determined that an allowance for air-conditioning generally is not needed. Further, the PHA may grant requests for individual relief from charges in excess of the utility allowance on reasonable grounds, such as special factors not within control of the resident, as the PHA deems appropriate. The family must request the higher allowance and provide the PHA an explanation of the need for individual relief and an explanation about the amount of additional allowance required [see HCV GB, p. 18-8]. PHAs should develop criteria for granting individual relief, notify residents about the availability of individual relief, and notify participants about the availability of individual relief programs (sometimes referred to as “Medical Baseline discounts”) offered by the local utility company. The family must request the higher allowance and provide the HA with an explanation of the need for the reasonable accommodation and information about the amount of additional allowance required [HCV GB, p. 18-8]. HA Policy The family must request the higher allowance and provide the PHA with information about the amount of additional allowance required. The HA will consider the following criteria as valid reasons for granting individual relief: The family’s consumption was mistakenly portrayed as excessive due to defects in the meter or errors in the meter reading. The excessive consumption is caused by a characteristic of the unit or owner- supplied equipment that is beyond the family’s control, such as a particularly 450 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-91 inefficient refrigerator or inadequate insulation. The allowance should be adjusted to reflect the higher consumption needs associated with the unit until the situation is remedied. The resident should be granted individual relief until the allowance is adjusted. The excessive consumption is due to special needs of the family that are beyond their control, such as the need for specialized equipment in the case of a family member who is ill, elderly, or who has a disability. Utility Allowance Revisions At reexamination, the HA must use the current utility allowance schedule [HCV GB, p. 18-8]. HA Policy Revised utility allowances will be applied to a family’s rent and subsidy calculations at the first annual reexamination that is effective after the allowance is adopted. 451 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-92 6-IIIiv.E. PRORATED ASSISTANCE FOR MIXED FAMILIES [24 CFR 5.520] HUD regulations prohibit assistance to ineligible family members. A mixed family is one that includes at least one U.S. citizen or eligible immigrant and any number of ineligible family members. The HA must prorate the assistance provided to a mixed family. The HA will first determine assistance as if all family members were eligible and then prorate the assistance based upon the percentage of family members that actually are eligible. For example, if the HA subsidy for a family is calculated at $500 and two of four family members are ineligible, the HA subsidy would be reduced to $250. 452 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-93 453 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-94 EXHIBIT 6-1: ANNUAL INCOME INCLUSIONS 24 CFR 5.609 (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; and (3) Which are not specifically excluded in paragraph (c) of this section. (4) 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. An allowance for depreciation is permitted only as authorized in paragraph (b)(2) of this section. 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 (except as provided in paragraph (c)(14) of this section); (5) Payments in lieu of earnings, such as unemployment and disability compensation, worker's compensation and severance pay (except as provided in paragraph (c)(3) of this section); 454 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-95 (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 260.311; and (B) Are not otherwise excluded under paragraph (c) of this section. (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 (except as provided in paragraph (c)(7) of this section) 1 Text of 45 CFR 260.31 follows. (9) For section 8 programs only and as provided in 24 CFR 5.612, any financial assistance, in excess of amounts received for tuition, that an individual receives under the Higher Education Act of 1965 (20 U.S.C. 1001 et seq.), from private sources, or from an institution of higher education (as defined under the Higher Education Act of 1965 (20 U.S.C. 1002)), shall be considered income to that individual, except that financial assistance described in this paragraph is not considered annual income for persons over the age of 23 with dependent children. For purposes of this paragraph, “financial assistance” does not include loan proceeds for the purpose of determining income. HHS DEFINITION OF "ASSISTANCE" 45 CFR: GENERAL TEMPORARY ASSISTANCE FOR NEEDY FAMILIES 260.31 What does the term “assistance” mean? (a)(1) The term “assistance” includes cash, payments, vouchers, and other forms of benefits designed to meet a family’s ongoing basic needs (i.e., for food, clothing, shelter, utilities, household goods, personal care items, and general incidental expenses). (2) It includes such benefits even when they are: (i) Provided in the form of payments by a TANF agency, or other agency on its behalf, to individual recipients; and (ii) Conditioned on participation in work experience or community service (or any other work activity under 261.30 of this chapter). 455 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-96 (3) Except where excluded under paragraph (b) of this section, it also includes supportive services such as transportation and child care provided to families who are not employed. (b) [The definition of “assistance”] excludes: (1) Nonrecurrent, short-term benefits that: (i) Are designed to deal with a specific crisis situation or episode of need; (ii) Are not intended to meet recurrent or ongoing needs; and (iii) Will not extend beyond four months. (2) Work subsidies (i.e., payments to employers or third parties to help cover the costs of employee wages, benefits, supervision, and training); (3) Supportive services such as child care and transportation provided to families who are employed; (4) Refundable earned income tax credits; (5) Contributions to, and distributions from, Individual Development Accounts; (6) Services such as counseling, case management, peer support, child care information and referral, transitional services, job retention, job advancement, and other employment-related services that do not provide basic income support; and (7) Transportation benefits provided under a Job Access or Reverse Commute project, pursuant to section 404(k) of [the Social Security] Act, to an individual who is not otherwise receiving assistance. 456 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-97 EXHIBIT 6-2: ANNUAL INCOME EXCLUSIONSFULL DEFINITION 24 CFR 5.609 (a) Annual income includes, with respect to the family: (1) All amounts, not specifically excluded in paragraph (b) of this section, received from all sources by each member of the family who is 18 years of age or older or is the head of household or spouse of the head of household, plus unearned income by or on behalf of each dependent who is under 18 years of age, and (2) When the value of net family assets exceeds $50,000 (which amount HUD will adjust annually in accordance with the Consumer Price Index for Urban Wage Earners and Clerical Workers) and the actual returns from a given asset cannot be calculated, imputed returns on the asset based on the current passbook savings rate, as determined by HUD. (b)Annual income does not include the following: (1) Any imputed return on an asset when net family assets total $50,000 or less (which amount HUD will adjust annually in accordance with the Consumer Price Index for Urban Wage Earners and Clerical Workers) and no actual income from the net family assets can be determined. (2) The following types of trust distributions: (i) For an irrevocable trust or a revocable trust outside the control of the family or household excluded from the definition of net family assets under § 5.603(b): (A) Distributions of the principal or corpus of the trust; and (B) Distributions of income from the trust when the distributions are used to pay the costs of health and medical care expenses for a minor. (ii) For a revocable trust under the control of the family or household, any distributions from the trust; except that any actual income earned by the trust, regardless of whether it is distributed, shall be considered income to the family at the time it is received by the trust. (3) Earned income of children under the 18 years of age. (4) Payments received for the care of foster children or foster adults, or State or Tribal kinship or guardianship care payments. (5) Insurance payments and settlements for personal or property losses, including but not limited to payments through health insurance, motor vehicle insurance, and workers’ compensation. (6) Amounts received by the family that are specifically for, or in reimbursement of, the cost of health and medical care expenses for any family member. (7) Any amounts recovered in any civil action or settlement based on a claim of malpractice, negligence, or other breach of duty owed to a family member arising out of law, that resulted in a member of the family becoming disabled. 457 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-98 (8) Income of a live-in aide, foster child, or foster adult as defined in §§ 5.403 and 5.603, respectively. (9) (i) Any assistance that section 479B of the Higher Education Act of 1965, as amended (20 U.S.C. 1087uu), requires be excluded from a family’s income; and (ii) Student financial assistance for tuition, books, and supplies (including supplies and equipment to support students with learning disabilities or other disabilities), room and board, and other fees required and charged to a student by an institution of higher education (as defined under Section 102 of the Higher Education Act of 1965 (20 U.S.C. 1002)) and, for a student who is not the head of household or spouse, the reasonable and actual costs of housing while attending the institution of higher education and not residing in an assisted unit. (A) Student financial assistance, for purposes of this paragraph (9)(ii), means a grant or scholarship received from— ( 1) The Federal government; (2) A State, Tribe, or local government; (3) A private foundation registered as a nonprofit under 26 U.S.C. 501(c)(3); (4) A business entity (such as corporation, general partnership, limited liability company, limited partnership, joint venture, business trust, public benefit corporation, or nonprofit entity); or (5) An institution of higher education. (B) Student financial assistance, for purposes of this paragraph (9)(ii), does not include— (1) Any assistance that is excluded pursuant to paragraph (b)(9)(i) of this section; (2) Financial support provided to the student in the form of a fee for services performed (e.g., a work study or teaching fellowship that is not excluded pursuant to paragraph (b)(9)(i) of this section); ( 3) Gifts, including gifts from family or friends; or (4) Any amount of the scholarship or grant that, either by itself or in combination with assistance excluded under this paragraph or paragraph (b)(9)(i), exceeds the actual covered costs of the student. The actual covered costs of the student are the actual costs of tuition, books and supplies (including supplies and equipment to support students with learning disabilities or other disabilities), room and board, or other fees required and charged to a student by the education institution, and, for a student who is not the head of household or spouse, the reasonable and actual costs of housing while attending the institution of higher education and not residing in an assisted unit. This calculation is described further in paragraph (b)(9)(ii)€ of this section. 458 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-99 (C) Student financial assistance, for purposes of this paragraph (b)(9)(ii) must be: (1) Expressly for tuition, books, room and board, or other fees required and charged to a student by the education institution; (2) Expressly to assist a student with the costs of higher education; or (3) Expressly to assist a student who is not the head of household or spouse with the reasonable and actual costs of housing while attending the education institution and not residing in an assisted unit. (D) Student financial assistance, for purposes of this paragraph (b)(9)(ii), may be paid directly to the student or to the educational institution on the student’s behalf. Student financial assistance paid to the student must be verified by the responsible entity as student financial assistance consistent with this paragraph (b)(9)(ii). (E) When the student is also receiving assistance excluded under paragraph (b)(9)(i) of this section, the amount of student financial assistance under this paragraph (b)(9)(ii) is determined as follows: (1) If the amount of assistance excluded under paragraph (b)(9)(i) of this section is equal to or exceeds the actual covered costs under paragraph (b)(9)(ii)(B)(4) of this section, none of the assistance described in this paragraph (b)(9)(ii) of this section is considered student financial assistance excluded from income under this paragraph (b)(9)(ii)(E). (2) If the amount of assistance excluded under paragraph (b)(9)(i) of this section is less than the actual covered costs under paragraph (b)(9)(ii)(B)(4) of this section, the amount of assistance described in paragraph (b)(9)(ii) of this section that is considered student financial assistance excluded under this paragraph is the lower of: (i) the total amount of student financial assistance received under this paragraph (b)(9)(ii) of this section, or (ii) the amount by which the actual covered costs under paragraph (b)(9)(ii)(B)(4) of this section exceeds the assistance excluded under paragraph (b)(9)(i) of this section. (10) Income and distributions from any Coverdell education savings account under section 530 of the Internal Revenue Code of 1986 or any qualified tuition program under section 529 of such Code; and income earned by government contributions to, and distributions from, “baby bond” accounts created, authorized, or funded by Federal, State, or local government. (11) The special pay to a family member serving in the Armed Forces who is exposed to hostile fire. (12) (i) 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); 459 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-100 (ii) Amounts received by a participant in other publicly assisted programs which are specifically for or in reimbursement of out-of-pocket expenses incurred (e.g., special equipment, clothing, transportation, child care, etc.) and which are made solely to allow participation in a specific program; (iii) Amounts received under a resident service stipend not to exceed $200 per month. A resident service stipend is a modest amount 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. (iv) Incremental earnings and benefits resulting to any family member from participation in training programs funded by HUD or in qualifying Federal, State, Tribal, 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 unless those amounts are excluded under paragraph (b)(9)(i) of this section. (13) 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. (14) Earned income of dependent fulltime students in excess of the amount of the deduction for a dependent in § 5.611. (15) Adoption assistance payments for a child in excess of the amount of the deduction for a dependent in § 5.611. (16) Deferred periodic amounts from Supplemental Security Income and Social Security benefits that are received in a lump sum amount or in prospective monthly amounts, or any deferred Department of Veterans Affairs disability benefits that are received in a lump sum amount or in prospective monthly amounts. (17) Payments related to aid and attendance under 38 U.S.C. 1521 to veterans in need of regular aid and attendance. (18) 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. (19) Payments made by or authorized by a State Medicaid agency (including through a managed care entity) or other State or Federal agency to a family to enable a family member who has a disability to reside in the family’s assisted unit. Authorized payments may include payments to a member of the assisted family through the State Medicaid agency (including through a managed care entity) or other State or Federal agency for caregiving services the family member provides to enable a family member who has a disability to reside in the family’s assisted unit. (20) Loan proceeds (the net amount disbursed by a lender to or on behalf of a borrower, under the terms of a loan agreement) received by the family or a third party (e.g., proceeds received by the family from a private loan to enable attendance at an educational institution or to finance the purchase of a car). 460 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-101 (21) Payments received by Tribal members as a result of claims relating to the mismanagement of assets held in trust by the United States, to the extent such payments are also excluded from gross income under the Internal Revenue Code or other Federal law. (22) Amounts that HUD is required by Federal statute to exclude 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 paragraph (b) of this section apply. HUD will publish a notice in the Federal Register to identify the benefits that qualify for this exclusion. Updates will be published when necessary. (23) Replacement housing “gap” payments made in accordance with 49 CFR part 24 that offset increased out of pocket costs of displaced persons that move from one federally subsidized housing unit to another Federally subsidized housing unit. Such replacement housing “gap” payments are not excluded from annual income if the increased cost of rent and utilities is subsequently reduced or eliminated, and the displaced person retains or continues to receive the replacement housing “gap” payments. (24) Nonrecurring income, which is income that will not be repeated in the coming year based on information provided by the family. Income received as an independent contractor, day laborer, or seasonal worker is not excluded from income under this paragraph, even if the source, date, or amount of the income varies. Nonrecurring income includes: (i) Payments from the U.S. Census Bureau for employment (relating to decennial census or the American Community Survey) lasting no longer than 180 days and not culminating in permanent employment. (ii) Direct Federal or State payments intended for economic stimulus or recovery. (iii) Amounts directly received by the family as a result of State refundable tax credits or State tax refunds at the time they are received. (iv) Amounts directly received by the family as a result of Federal refundable tax credits and Federal tax refunds at the time they are received. (v) Gifts for holidays, birthdays, or other significant life events or milestones (e.g., wedding gifts, baby showers, anniversaries). (vi) Non-monetary, in-kind donations, such as food, clothing, or toiletries, received from a food bank or similar organization. (vii) Lump-sum additions to net family assets, including but not limited to lottery or other contest winnings. (25) Civil rights settlements or judgments, including settlements or judgments for back pay. (26) Income received from any account under a retirement plan recognized as such by the Internal Revenue Service, including individual retirement arrangements (IRAs), employer retirement plans, and retirement plans for self-employed individuals; except that any 461 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-102 distribution of periodic payments from such accounts shall be income at the time they are received by the family. (27) Income earned on amounts placed in a family’s Family Self Sufficiency Account. (28) Gross income a family member receives through self-employment or operation of a business; except that the following shall be considered income to a family member: (i) 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; and (ii) 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. (c) Annual income does not include the following: (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 (except as provided in paragraph (b)(5) of this section); (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) Subject to paragraph (b)(9) of this section, 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; 462 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-103 (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 HA 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 HA'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, or any deferred Department of Veterans Affairs disability benefits that are received in a lump sum amount or 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. A notice will be published in the Federal Register and distributed to HAs and housing owners identifying the benefits that qualify for this exclusion. Updates will be published and distributed when necessary. [See Section 6-I.M. for a list of benefits that qualify for this exclusion.] 463 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-104 EXHIBIT 6-32: TREATMENT OF FAMILY ASSETS 24 CFR 5.603(b) Net Family Assets (1) Net family assets is the net cash value of all assets owned by the family, after deducting reasonable costs that would be incurred in disposing real property, savings, stocks, bonds, and other forms of capital investment. (2) In determining net family assets, PHAs or owners, as applicable, must include the value of any business or family assets disposed of by an applicant or tenant for less than fair market value (including a disposition in trust, but not in a foreclosure or bankruptcy sale) during the two years preceding the date of application for the program or reexamination, as applicable, in excess of the consideration received therefor. In the case of a disposition as part of a separation or divorce settlement, the disposition will not be considered to be for less than fair market value if the applicant or tenant receives consideration not measurable in dollar terms. Negative equity in real property or other investments does not prohibit the owner from selling the property or other investments, so negative equity alone would not justify excluding the property or other investments from family assets. (3) Excluded from the calculation of net family assets are: (i) The value of necessary items of personal property; (ii) The combined value of all nonnecessary items of personal property if the combined total value does not exceed $50,000 (which amount will be adjusted by HUD in accordance with the Consumer Price Index for Urban Wage Earners and Clerical Workers); (iii) The value of any account under a retirement plan recognized as such by the Internal Revenue Service, including individual retirement arrangements (IRAs), employer retirement plans, and retirement plans for self-employed individuals; (iv) The value of real property that the family does not have the effective legal authority to sell in the jurisdiction in which the property is located; (v) Any amounts recovered in any civil action or settlement based on a claim of malpractice, negligence, or other breach of duty owed to a family member arising out of law, that resulted in a family member being a person with a disability; (vi) The value of any Coverdell education savings account under section 530 of the Internal Revenue Code of 1986, the value of any qualified tuition program under section 529 of such Code, the value of any Achieving a Better Life Experience (ABLE) account authorized under Section 529A of such Code, and the value of any “baby bond” account created, authorized, or funded by Federal, State, or local government. (vii) Interests in Indian trust land; (viii) Equity in a manufactured home where the family receives assistance under 24 CFR part 982; (ix) Equity in property under the Homeownership Option for which a family receives assistance under 24 CFR part 982; (x) Family Self-Sufficiency Accounts; and (xi) Federal tax refunds or refundable tax credits for a period of 12 months after receipt by the family. (4) In cases where a trust fund has been established and the trust is not revocable by, or under the control of, any member of the family or household, the trust fund is not a family asset and the value of the trust is not included in the calculation of net family assets, so long as the fund continues to be held in a trust that is not revocable by, or under the control of, any member of the family or household. (1) Net cash value after deducting reasonable costs that would be incurred in disposing of real property, savings, stocks, bonds, and other forms of capital investment, excluding interests in Indian trust land and excluding equity accounts in HUD homeownership programs. The value of necessary items of personal property such as furniture and automobiles shall be excluded. 464 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-105 (2) In cases where a trust fund has been established and the trust is not revocable by, or under the control of, any member of the family or household, the value of the trust fund will not be considered an asset so long as the fund continues to be held in trust. Any income distributed from the trust fund shall be counted when determining annual income under Sec. 5.609. (3) In determining net family assets, HAs or owners, as applicable, shall include the value of any business or family assets disposed of by an applicant or tenant for less than fair market value (including a disposition in trust, but not in a foreclosure or bankruptcy sale) during the two years preceding the date of application for the program or reexamination, as applicable, in excess of the consideration received therefor. In the case of a disposition as part of a separation or divorce settlement, the disposition will not be considered to be for less than fair market value if the applicant or tenant receives important consideration not measurable in dollar terms. (4) For purposes of determining annual income under Sec. 5.609, the term "net family assets'' does not include the value of a home currently being purchased with assistance under part 982, subpart M of this title. This exclusion is limited to the first 10 years after the purchase date of the home. 465 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-106 EXHIBIT 6-4: EARNED INCOME DISALLOWANCE FOR PERSONS WITH DISABILITIES 24 CFR 5.617 Self-sufficiency incentives for persons with disabilities–Disallowance of increase in annual income. (a) Applicable programs. The disallowance of earned income provided by this section is applicable only to the following programs: HOME Investment Partnerships Program (24 CFR part 92); Housing Opportunities for Persons with AIDS (24 CFR part 574); Supportive Housing Program (24 CFR part 583); and the Housing Choice Voucher Program (24 CFR part 982). (b) Definitions. The following definitions apply for purposes of this section. Baseline income. The annual income immediately prior to implementation of the disallowance described in paragraph (c)(1) of this section of a person with disabilities (who is a member of a qualified family). Disallowance. Exclusion from annual income. Previously unemployed includes a person with disabilities 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. Qualified family. A family residing in housing assisted under one of the programs listed in paragraph (a) of this section or receiving tenant-based rental assistance under one of the programs listed in paragraph (a) of this section. (1) Whose annual income increases as a result of employment of a family member who is a person with disabilities and who was previously unemployed for one or more years prior to employment; (2) Whose annual income increases as a result of increased earnings by a family member who is a person with disabilities during participation in any economic self-sufficiency or other job training program; or (3) Whose annual income increases, as a result of new employment or increased earnings of a family member who is a person with disabilities, during or within six months after receiving assistance, benefits or services under any state program for temporary assistance for needy families funded under Part A of Title IV of the Social Security Act, as determined by the responsible entity in consultation with the local agencies administering temporary assistance for needy families (TANF) and Welfare-to-Work (WTW) programs. The TANF program is not limited to monthly income maintenance, but also includes such benefits and services as one-time payments, wage subsidies and transportation assistance-- provided that the total amount over a six-month period is at least $500. (c) Disallowance of increase in annual income— (1) Initial twelve month exclusion. During the 12-month period beginning on the date a member who is a person with disabilities of a qualified family is first employed or the family first experiences an increase in annual income attributable to employment, the responsible entity must exclude from annual income (as defined in the regulations governing the applicable program listed in paragraph (a) of this section) of a qualified family any increase in income of the family member who is a person with disabilities as a result of employment over prior income of that family member. 466 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-107 (2) Second twelve month exclusion and phse- in. Upon expiration of the 12-month period defined in paragraph (c)(1) of this section and for the subsequent 12-month period, the responsible entity must exclude from annual income of a qualified family at least 50 percent of any increase in income of such family member as a result of employment over the family member’s baseline income. (3) Maximum 2-year disallowance. The disallowance of increased income of an individual family member who is a person with disabilities as provided in paragraph (c)(1) or (c)(2) of this section is limited to a lifetime 24-month period. The disallowance applies for a maximum of 12 months for disallowance under paragraph (c)(1) of this section and a maximum of 12 months for disallowance under paragraph (c)(2) of this section, during the 24- month period starting from the initial exclusion under paragraph (c)(1) of this section. (4) Effect of changes on currently participating families. Families eligible for and participating in the disallowance of earned income under this section prior to May 9, 2016 will continue to be governed by this section in effect as it existed immediately prior to that date (see 24 CFR parts 0 to 199, revised as of April 1, 2016). (d) Inapplicability to admission. The disallowance of increases in income as a result of employment of persons with disabilities under this section does not apply for purposes of admission to the program (including the determination of income eligibility or any income targeting that may be applicable). 467 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-108 EXHIBIT 6-53: THE EFFECT OF WELFARE BENEFIT REDUCTION 24 CFR 5.615 Public housing program and Section 8 tenant-based assistance program: How welfare benefit reduction affects family income. (a) Applicability. This section applies to covered families who reside in public housing (part 960 of this title) or receive Section 8 tenant-based assistance (part 982 of this title). (b) Definitions. The following definitions apply for purposes of this section: Covered families. Families who receive welfare assistance or other public assistance benefits ("welfare benefits'') from a State or other public agency ("welfare agency'') under a program for which Federal, State, or local law requires that a member of the family must participate in an economic self-sufficiency program as a condition for such assistance. Economic self-sufficiency program. See definition at Sec. 5.603. Imputed welfare income. The amount of annual income not actually received by a family, as a result of a specified welfare benefit reduction, that is nonetheless included in the family's annual income for purposes of determining rent. Specified welfare benefit reduction. (1) A reduction of welfare benefits by the welfare agency, in whole or in part, for a family member, as determined by the welfare agency, because of fraud by a family member in connection with the welfare program; or because of welfare agency sanction against a family member for noncompliance with a welfare agency requirement to participate in an economic self-sufficiency program. (2) "Specified welfare benefit reduction'' does not include a reduction or termination of welfare benefits by the welfare agency: (i) at expiration of a lifetime or other time limit on the payment of welfare benefits; (ii) because a family member is not able to obtain employment, even though the family member has complied with welfare agency economic self-sufficiency or work activities requirements; or (iii) because a family member has not complied with other welfare agency requirements. (c) Imputed welfare income. (1) A family's annual income includes the amount of imputed welfare income (because of a specified welfare benefits reduction, as specified in notice to the HA by the welfare agency), plus the total amount of other annual income as determined in accordance with Sec. 5.609. (2) At the request of the HA, the welfare agency will inform the HA in writing of the amount and term of any specified welfare benefit reduction for a family member, and the reason for such reduction, and will also inform the HA of any subsequent changes in the term or amount of such specified welfare benefit reduction. The HA will use this information to determine the amount of imputed welfare income for a family. (3) A family's annual income includes imputed welfare income in family annual income, as determined at the HA's interim or regular reexamination of family income and composition, during the term of the welfare benefits reduction (as specified in information provided to the HA by the welfare agency). 468 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 6-109 (4) The amount of the imputed welfare income is offset by the amount of additional income a family receives that commences after the time the sanction was imposed. When such additional income from other sources is at least equal to the imputed (5) The HA may not include imputed welfare income in annual income if the family was not an assisted resident at the time of sanction. (d) Review of HA decision. (1) Public housing. If a public housing tenant claims that the HA has not correctly calculated the amount of imputed welfare income in accordance with HUD requirements, and if the HA denies the family's request to modify such amount, the HA shall give the tenant written notice of such denial, with a brief explanation of the basis for the HA determination of the amount of imputed welfare income. The HA notice shall also state that if the tenant does not agree with the HA determination, the tenant may request a grievance hearing in accordance with part 966, subpart B of this title to review the HA determination. The tenant is not required to pay an escrow deposit pursuant to Sec. 966.55(e) for the portion of tenant rent attributable to the imputed welfare income in order to obtain a grievance hearing on the HA determination. (2) Section 8 participant. A participant in the Section 8 tenant-based assistance program may request an informal hearing, in accordance with Sec. 982.555 of this title, to review the HA determination of the amount of imputed welfare income that must be included in the family's annual income in accordance with this section. If the family claims that such amount is not correctly calculated in accordance with HUD requirements, and if the HA denies the family's request to modify such amount, the HA shall give the family written notice of such denial, with a brief explanation of the basis for the HA determination of the amount of imputed welfare income. Such notice shall also state that if the family does not agree with the HA determination, the family may request an informal hearing on the determination under the HA hearing procedure. (e) HA relation with welfare agency. (1) The HA must ask welfare agencies to inform the HA of any specified welfare benefits reduction for a family member, the reason for such reduction, the term of any such reduction, and any subsequent welfare agency determination affecting the amount or term of a specified welfare benefits reduction. If the welfare agency determines a specified welfare benefits reduction for a family member, and gives the HA written notice of such reduction, the family's annual incomes shall include the imputed welfare income because of the specified welfare benefits reduction. (2) The HA is responsible for determining the amount of imputed welfare income that is included in the family's annual income as a result of a specified welfare benefits reduction as determined by the welfare agency, and specified in the notice by the welfare agency to the HA. However, the HA is not responsible for determining whether a reduction of welfare benefits by the welfare agency was correctly determined by the welfare agency in accordance with welfare program requirements and procedures, nor for providing the opportunity for review or hearing on such welfare agency determinations. (3) Such welfare agency determinations are the responsibility of the welfare agency, and the family may seek appeal of such determinations through the welfare agency's normal due process procedures. The HA shall be entitled to rely on the welfare agency notice to the HA of the welfare agency's determination of a specified welfare benefits reduction. 469 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 7-1 Chapter 7 VERIFICATION [24 CFR 982.516, 24 CFR 982.551, 24 CFR 5.230, Notice PIH 2018-182023-27] INTRODUCTION The HA must verify all information that is used to establish the family’s eligibility and level of assistance and is required to obtain written authorization from the family in order to collect the information. Applicants and program participants must cooperate with the verification process as a condition of receiving assistance. The HA must not pass on the cost of verification to the family. The HA will must follow the verification guidance provided by HUD in Notice PIH 2018- 182023-27 and any subsequent guidance issued by HUD. This chapter summarizes those requirements and provides supplementary HA policies. Part I describes the general verification process. Part II provides more detailed requirements related to family information. Part III provides information on income and assets, and Part IV covers mandatory deductions. Verification policies, rules and procedures will be modified as needed to accommodate persons with disabilities. All information obtained through the verification process will be handled in accordance with the records management policies of the HA. PART I: GENERAL VERIFICATION REQUIREMENTS 7-I.A. FAMILY CONSENT TO RELEASE OF INFORMATION [24 CFR 982.516 AND 982.551, 24 CFR 5.230; and Notice PIH 2023-27] Consent Forms The family must supply any information that the HA or HUD determines is necessary to the administration of the program and must consent to HA verification of that information [24 CFR 982.551]. All adult family members must sign consent forms as needed to collect information relevant to the family’s eligibility and level of assistance. While PHAs must use form HUD- 9886, this form does not release all the information necessary to the administration of the program. The PHA must also develop its own release forms to cover all other necessary information. Consent FormsForm HUD-9886 [24 CFR 5.230(b)(1), b(2), (c)(4), and (c)(5)]; Notice PIH 2023-27 It is required that allAll adult applicants and participants sign form HUD-9886, Authorization for Release of Information. All adult family members (and the head and spouse/cohead, regardless of age) are required to sign the Form HUD-9886 at admission. Participants, prior to January 1, 2024, signed and submitted Form HUD-9886 at each annual reexamination. HOTMA eliminated this requirement and instead required that the Form HUD-9886 be signed only once. On or after January 1, 2024 (regardless of the PHA’s HOTMA compliance date), current program 470 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 7-2 participants must sign and submit a new Form HUD-9886 at their next interim or annual reexamination. This form will only be signed once. Another Form HUD-9886 will not be submitted to the PHA except under the following circumstances: x When any person 18 years or older becomes a member of the family; x When a current member of the family turns 18; or x As required by HUD or the PHA in administrative instructions. The PHA has the discretion to establish policies around when family members must sign consent forms when they turn 18. PHAs must establish these policies stating when family members will be required to sign consent forms at intervals other than at reexamination. PHA Policy HUD Form 9886 will be signed by all adult household members annually. The purpose of form HUD-9886 is to facilitate automated data collection and computer matching from specific sources and provides the family's consent only for the specific purposes listed on the form. HUD and the HA may collect information from State Wage Information Collection Agencies (SWICAs) and current and former employers of adult family members. Only HUD is authorized to collect information directly from the Internal Revenue Service (IRS) and the Social Security Administration (SSA). Adult family members must sign other consent forms as needed to collect information relevant to the family’s eligibility and level of assistance. The PHA may obtain any financial record from any financial institution, as the terms financial record and financial institution are defined in the Right to Financial Privacy Act (12 U.S.C. 3401), whenever the PHA determines the record is needed to determine an applicant’s or participant’s eligibility for assistance or level of benefits [24 CFR 5.230(c)(4)]. The executed form will remain effective until the family is denied assistance, assistance is terminated, or the family provides written notification to the PHA to revoke consent. Penalties for Failing to Consent [24 CFR 5.232] If any family member who is required to sign a consent form fails to do so, the HA will must deny admission to applicants and terminate assistance of participants. The family may request an informal review (applicants) or informal hearing (participants) in accordance with HA procedures. However, this does not apply if the applicant, participant, or any member of their family, revokes their consent with respect to the ability of the PHA to access financial records from financial institutions, unless the PHA establishes a policy that revocation of consent to access financial records will result in denial or termination of assistance or admission [24 CFR 5.232(c)]. PHAs may not process interim or annual reexaminations of income without the family’s executed consent forms. PHA Policy 471 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 7-3 The PHA has established a policy that revocation of consent to access financial records will result in denial of admission or termination of assistance in accordance with PHA policy. In order for a family to revoke their consent, the family must provide written notice to the PHA. Within 10 business days of the date the family provides written notice, the PHA will send the family a notice acknowledging receipt of the request and explaining that revocation of consent will result in denial or termination of assistance, as applicable. At the same time, the PHA will notify their local HUD office. 472 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 7-4 7-I.B. USE OF OTHER PROGRAMS’ INCOME DETERMINATIONS [24 CFR 5.609(c)(3) and Notice PIH 2023-27] PHAs may, but are not required to, determine a family’s annual income, including income from assets, prior to the application of any deductions, based on income determinations made within the previous 12-month period, using income determinations from means-tested federal public assistance programs. PHAs are not required to accept or use determinations of income from other federal means-tested forms of assistance. If the PHA adopts a policy to accept this type of verification, the PHA must establish in policy when they will accept Safe Harbor income determinations and from which programs. PHAs must also create policies that outline the course of action when families present multiple verifications from the same or different acceptable Safe Harbor programs. Means-tested federal public assistance programs include: x Temporary Assistance for Needy Families (TANF) (42 U.S.C. 601, et seq.); x Medicaid (42 U.S.C. 1396 et seq.); x Supplemental Nutrition Assistance Program (SNAP) (42 U.S.C. 2011 et seq.); x Earned Income Tax Credit (EITC) (26 U.S.C. 32); x Low-Income Housing Credit (LIHTC) program (26 U.S.C. 42); x Special Supplemental Nutrition Program for Woman, Infants, and Children (WIC) (42 U.S.C. 1786); x Supplemental Security Income (SSI) (42 U.S.C. 1381 et seq.); x Other programs administered by the HUD Secretary; x Other means-tested forms of federal public assistance for which HUD has established a memorandum of understanding; and x Other federal benefit determinations made in other forms of means-tested federal public assistance that the Secretary determines to have comparable reliability and announces through the Federal Register. 473 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 7-5 If the PHA elects to use the annual income determination from one of the above-listed forms of means-tested federal public assistance, then they must obtain the income information by means of a third-party verification. The third-party verification must state the family size, must be for the entire family, and must state the amount of the family’s annual income. The annual income need not be broken down by family member or income type. Annual income includes income earned from assets, therefore when using Safe Harbor to verify a family’s income, PHAs will neither further inquire about a family’s net family assets, nor about the income earned from those assets, except with respect to whether or not the family owns assets that exceed the asset limitation in 24 CFR 5.618. The Safe Harbor documentation will be considered acceptable if any of the following dates fall into the 12-month period prior to the receipt of the documentation by the PHA: x Income determination effective date; x Program administrator’s signature date; x Family’s signature date; x Report effective date; or x Other report-specific dates that verify the income determination date. The only information that PHAs are permitted to use to determine income under this method is the total income determination made by the federal means-tested program administrator. Other federal programs may provide additional information about income inclusions and exclusions in their award letters; however, these determinations and any other information must not be considered by the PHA. PHAs are not permitted to mix and match Safe Harbor income determinations and other income verifications. If the PHA is unable to obtain Safe Harbor documentation or if the family disputes the other program’s income determination, the PHA must calculate the family’s annual income using traditional methods as outlined in Notice PIH 2023-27 and this chapter. If the PHA uses a Safe Harbor determination to determine the family’s income, the family is obligated to report changes in income that meet the PHA’s reporting requirement and occur after the effective date of the transaction. 474 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 7-6 The amounts of unreimbursed reasonable attendant care expenses and child-care expenses deducted from a family’s annual income, except for when a family is approved for a child-care expense hardship exemption, must still be capped by the amount earned by any family member who is enabled to work as a result of the expense. PHAs are therefore required to obtain third- party verification of the applicable employment income and cap the respective expense deductions accordingly. HA Policy The HA will not use Safe Harbor income verifications 7-I.C. STREAMLINED INCOME DETERMINATIONS [24 CFR 960.257(c); Notice PIH 2023-27] HUD permits PHAs to streamline the income determination process for family members with fixed sources of income. While third-party verification of all income sources must be obtained during the intake process and every three years thereafter, in the intervening years, the PHA may determine income from fixed sources by applying a verified cost of living adjustment (COLA) or other inflationary adjustment factor. Streamlining policies are optional. The PHA may, however, obtain third-party verification of all income, regardless of the source. Further, upon request of the family, the PHA must perform third-party verification of all income sources. Fixed sources of income include Social Security and SSI benefits, pensions, annuities, disability or death benefits, and other sources of income subject to a COLA or rate of interest. The determination of fixed income may be streamlined even if the family also receives income from other non-fixed sources. Two streamlining options are available, depending upon the percentage of the family’s income that is received from fixed sources. When 90 percent or more of a family’s unadjusted income is from fixed sources, the PHA may apply the inflationary adjustment factor to the family’s fixed-income sources, provided that the family certifies both that 90 percent or more of their unadjusted income is fixed and that their sources of fixed income have not changed from the previous year. Sources of non-fixed income are not required to be adjusted and must not be adjusted by a COLA, but PHAs may choose to adjust sources of non-fixed income based on third-party verification. PHAs have the discretion to either adjust the non-fixed income or carry over the calculation of non-fixed income from the first year to years two and three. 475 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 7-7 When less than 90 percent of a family’s unadjusted income consists of fixed income, PHAs may apply a COLA to each of the family’s sources of fixed income. PHAs must determine all other income using standard verification requirements as outlined in Notice PIH 2023-27. PHA Policy The HA will not use streamlined income determinations 7-I.B. OVERVIEW OF VERIFICATION REQUIREMENTS HUD’s Verification Hierarchy [Notice PIH 2018-18] 7-I.D. VERIFICATION HIERARCHY [Notice PIH 2023-27] When the PHA does not use a streamlined determination of income or an income determination from a means-tested federal assistance program, HUD requires the PHA to obtain third-party verification of: x Reported family annual income; x The value of net family assets when the net value exceeds $50,000 (as adjusted annually); x Expenses related to deductions from annual income; and x Other factors that affect the determination of adjusted income. HUD mandates the use of the EIV system and offers administrative guidance on the use of other methods to verify family information and specifies the circumstances in which each method will be used. In general HUD requires the HA to use the most reliable form of verification that is available and to document the reasons when the HA uses a lesser form of verification. HUD developed a hierarchy that described verification documentation from most acceptable to least acceptable. The PHA must demonstrate efforts to obtain third party verification prior to accepting self-certification except instances when self-certification is explicitly allowed. In order of priority, the hierarchy is: x Highest: Level 6: Up-front Income Verification (UIV) using HUD’s Enterprise Income Verification (EIV) system x Highest: Level 5: Up-front Income Verification (UIV) using a non-EIV system x High: Level 4: - Written third-party verification from the source, also known as “family-provided verification” - Or EIV plus self-certification x Medium: Level 3: Written third-party verification form x Medium: Level 2: Oral third-party verification x Low: Level 1: Self-certification (not third-party verification) 476 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 7-8 In order of priority, the forms of verification that the HA will use are: x Written Third-Party Verification (may be provided by applicant or participant) x Up-front Income Verification (UIV) using a non-HUD system (The Work Number) x Written Third-party Verification Form x Oral Third-party Verification x Up-front Income Verification (UIV) using HUD’s Enterprise Income Verification (EIV) system x Self-Certification Each of the verification methods is discussed in subsequent sections below. Requirements for Acceptable Documents HA Policy Any documents used for verification generally must be dated within 60 days of the date they are provided to the HA. The documents must not be damaged, altered or in any way illegible. Print-outs from Web pages are considered original documents. The HA staff member who views the original document must make a photocopy. .Any family self-certifications must be made in a format acceptable to the HA and must be signed in the presence of a HA representative or notary public. 477 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 7-9 File Documentation The HA must document in the file how the figures used in income and rent calculations were determined. All verification attempts, information obtained, and decisions reached during the verification process will be recorded in the family’s file in sufficient detail to demonstrate that the HA has followed all of the verification policies set forth in this plan. The record should be sufficient to enable a staff member or HUD reviewer to understand the process followed and conclusions reached. HA Policy The HA will document, in the family file, the following: Reported family annual income Value of assets Expenses related to deductions from annual income Other factors influencing adjusted income When the HA is unable to obtain third-party verification, the HA will document in the family file the reason that third-party verification was not available [24 CFR 982.516(a)(2); Notice PIH 2018-18]. 7-I.E. LEVEL 5 AND 6 VERIFICATION: 7-I.C. UP-FRONT INCOME VERIFICATION (UIV) Up-front income verification (UIV) refers to the HA’s use of the verification tools available from independent sources that maintain computerized information about earnings and benefits for a number of individuals. PHAs may use UIV sources before or during a family reexamination. . UIV will be used to the extent that these systems are available to the HA. There may be legitimate differences between the information provided by the family and UIV- generated information. If the family disputes the accuracy of UIV data, no adverse action can be taken until the HA has independently verified the UIV information and the family has been granted an opportunity to contest any adverse findings through the informal review/hearing process of the HA. See Chapter 6 for the HA’s policy on the use of UIV/EIV to project annual income. 478 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 7-10 Upfront Income Verification Using HUD’s Enterprise Income Verification (EIV) System (Mandatory) HAs must use HUD’s EIV system in its entirety as a third-party source to verify tenant employment and income information during annual and streamlined mandatory reexaminations or recertifications of family composition and income in accordance with 24 CFR 5.236 and Notice PIH 2023-27administrative guidance issued by HUD . The HUD’S EIV system contains data showing earned income, unemployment benefits, social security benefits, and SSI benefits for participant families. The following policies apply to the use of HUD’s EIV system. EIV Income and IVT Reports PHAs are required to obtain an EIV Income and IVT report for each family any time the PHA conducts an annual reexamination. However, PHAs are not required to use the EIV Income and IVT reports: x At annual reexamination if the PHA used Safe Harbor verification from another means-test federal assistance program to determine the family’s income; or x During any interim reexaminations. The EIV Income and IVT Reports are also not available for program applicants at admission. When required to use the EIV Income Report, in order for the report to be considered current, the PHA must pull the report within 120 days of the effective date of the annual reexamination. 479 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 7-11 The EIV Income Report may be used to verify and calculate income at annual reexamination if the family self-certifies that the amount is accurate and representative of current income. The family must be provided with the information in EIV. PHA Policy Except for when Safe Harbor verification from another means-tested federal assistance program is used to determine the family’s annual income, the PHA will obtain EIV income and IVT reports for all annual reexaminations for all families on a monthly basis. The PHA will ensure that all EIV Income Reports are pulled within 120 days of the effective date of the annual reexamination. Income and IVT reports will only be used for interim reexaminations as necessary. For example, EIV may be used to verify that families claiming zero income are not receiving income from any sources listed in EIV. Income and IVT reports will be retained in participant files with the applicable annual documents or interim reexamination documents (if applicable) for the duration of the family’s participation. When the PHA determines through EIV reports and third-party verification that a family has concealed or under-reported income, corrective action will be taken pursuant to the policies in Chapter 14, Program Integrity. New Hires Report [Notice PIH 2023-27] The New Hires Report identifies participant families who have new employment within the last six months. The report is updated monthly. PHAs must review this information at annual reexamination except when the PHA uses Safe Harbor verification from another means-tested federal assistance program to determine the family’s income. PHAs that do not require families to undergo interim reexaminations for earned income increases after an interim decrease are not required to review this report between a family’s annual reexamination. If the PHA requires an interim for increases in earned income after an interim decrease, then the PHA must review the report quarterly after the family’s interim decrease. PHA Policy The PHA will process interim increases for increases in earned income after an interim decrease, therefore must review the report quarterly after a family’s interim decrease. 480 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 7-12 No Income Reported by HHS or SSA Report This report is a tool for PHAs to identify participants who passed the SSA identity test, but no income information was reported by either HHS or SSA records. This scenario does not mean that the participant does not have any income. PHAs obtain written, third-party verification of any income reported by the participant. The PHA must identify in its policies and procedures when this report will be pulled [Notice PIH 2023-27]. PHA Policy The PHA will generate the No Income Reported by HHS or SSA Report quarterly and will retain the report. The PHA will re-verify the status of participants identified on the report quarterly. Based on the information provided by the family and in EIV, the PHA may require that family members provide verifications or sign release forms in order to obtain additional verification. When the PHA determines through this report and third-party verification that a family has concealed or under-reported income, corrective action will be taken pursuant to the policies in Chapter 14, Program Integrity The data shown on income and income validation tool (IVT) reports is updated quarterly. Data may be between 3 and 6 months old at the time reports are generated. HA Policy The HA will obtain income and IVT reports for annual reexaminations on a monthly basis. Reports will be generated as part of the regular reexamination process. Income and IVT reports will be compared to family-provided information as part of the annual reexamination process. Income reports may be used in the calculation of annual income, as described in Chapter 6-I.C. Income reports may also be used to meet the regulatory requirement for third party verification, as described above. Policies for resolving discrepancies between income reports and family-provided information will be resolved as described in Chapter 6-I.C. and in this chapter. Income and IVT reports will be used in interim reexaminations to identify any discrepancies between reported income and income shown in the EIV system, and as necessary to verify and calculate earned income, unemployment benefits, Social Security and/or SSI benefits. EIV will also be used to verify that families claiming zero income are not receiving income from any of these sources. Income and IVT reports will be retained in participant files with the applicable annual or interim reexamination documents. When the HA determines through EIV reports and third-party verification that a family has concealed or under-reported income, corrective action will be taken pursuant to the policies in Chapter 14, Program Integrity. 481 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 7-13 EIV Identity Verification The EIV system verifies tenant identities against SSA records. These records are compared to PIC HUD data for a match on social security number, name, and date of birth. HAs are required to use EIV’s Identity Verification Report on a monthly basis to improve the availability of income information in EIV [Notice PIH 2018-182023-27]. When identity verification for a participant fails, a message will be displayed within the EIV system and no income information will be displayed. HA Policy The HA will identify participants whose identity verification has failed by reviewing EIV’s Identity Verification Report on a monthly basis. The HA will attempt to resolve PIC/SSA discrepancies by obtaining appropriate documentation from the participant. When the HA determines that discrepancies exist due to as a result of HA errors such as spelling errors or incorrect birth dates, the errors will be correctedit will correct the errors promptly. Deceased Tenants Reports [Notice PIH 2012-4 and Notice PIH 2023-27] The Deceased Tenant Report identifies residents that have been reported by the SSA as deceased. The PHA is required to review the report at least quarterly. PHA Policy The PHA will review the Deceased Tenants Report on a monthly basis. When the Deceased Tenants Report identifies an individual as being deceased, PHAs must immediately send a letter to the head of household or emergency contact person (if the head of household is deceased and there is no other adult household member) to confirm the death of the listed household member. The PHA must notify the owner in writing of the deceased head of household. The PHA will list the EOP as the last day of the month in which the death occurred. The landlord is entitled to receive the full HAP amount for the month in which the tenant death occurred. When the only remaining household member is the live-in aide, the live-in aide is not entitled or eligible for any rental assistance or continued occupancy. The PHA may not designate the live-in aide as the new head of household or change the relation code on the Form HUD-50058. Other EIV Reports [Notice PIH 2023-27] The PHA is required to review the Multiple Subsidy Report at least quarterly and the Failed EIV Pre-Screening and Failed Verification (Failed SSA Identity Test) reports at least monthly. Upfront Income Verification Using Non-HUD Systems (Optional) 482 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 7-14 HUD encourages PHAs to utilize other upfront verification sources such as the Work Number and web-based state benefits systemsIn In addition to mandatory use of the EIV system, HUD encourages HAs to utilize other upfront verification sources. HA Policy The HA will inform all applicants and participants of its use of the following UIV resources during the admission and reexamination process: HUD’s EIV system 483 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 7-15 7-I.F. LEVEL 4 VERIFICATION [Notice PIH 2023-27] HUD identifies two types of Level 4 verification: written-third party verification from the source and EIV + self-certification. EIV +_Self-Certification EIV may be used as written third-party verification and may be used to calculate income if the family agrees with the information in EIV and self-certifies that the amount is accurate and representative of current income. This practice is known as EIV + self-certification. When calculating income using this method, the PHA may use its discretion to determine which method of calculation is reasonable: the last four quarters combined or an average of any number of quarters. The family must be provided with the information from EIV. PHA Policy At annual reexamination, if the PHA is unable to use a determination of income from a means-tested federal assistance program and if there are no reported changes to an income source, the PHA may use EIV + self-certification as verification of employment income, provided the family agrees with the amounts listed in EIV. The PHA may use an average of the last two quarters of income listed in EIV to determine income from employment. The PHA may provide the family with the information in EIV. The family may be required to sign a self-certification stating that the amount listed in EIV is accurate and representative of current income. If the family disagrees with the amount in EIV, the amount is not reflective of current income, or if less than two quarters are available in EIV, the PHA will use written third-party verification from the source as outlined below. The PHA will not use this method of verification at new admission since EIV is not available for applicant families or at interim reexamination since the income information in EIV is not current. Written Third-Party Verification from the Source Written, third-party verification from the source is also known as “tenant-provided verification.” In order to qualify as written-third party verification from the source, the documents must be original or authentic and (generally) dated within 120 days of the date received by the PHA. For fixed-income sources, a statement dated within the appropriate benefit year is acceptable documentation. Documents may be supplied by the family or received from a third-party source. Examples of acceptable tenant-provided documents include, but are not limited to pay stubs, payroll summary reports, employer notice or letters of hire and termination, SSA benefit verification letters, bank statements, child support payment stubs, welfare benefit letters and/or printouts, and unemployment monetary benefit notices. Income tax returns with corresponding official tax forms and schedules attached and including third-party receipt of transmission for income tax return filed (i.e., tax preparer’s transmittal receipt, summary of transmittal from online source, etc.) are an acceptable form of written, third-party verification. 484 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 7-16 The PHA is required to obtain, at minimum, two current and consecutive pay stubs when calculating income using third-party verification from the source. For new income sources or when two pay stubs are not available, the PHA should determine income based on the information from a traditional written, third-party verification form or the best available information. When the family disputes EIV-reported employment income, the PHA uses written third-party verification. When verification of assets is required, PHAs are required to obtain a minimum of one statement that reflects the current balance of banking/financial accounts. PHA Policy In general, the PHA will use third-party verification from the source in the following circumstances: At annual reexamination when EIV + self-certification is not used; For all new admissions; and For all interim reexaminations. The PHA will not use this method if the PHA is able to use an income determination from a means-tested federal assistance program or if the PHA uses EIV + self- certification as outlined above. In general, third-party documents provided by the family or the source must be dated within 120 days of the date received by the PHA. However, for fixed-income sources, a statement dated within the appropriate benefit year is acceptable documentation. The PHA may reject documentation provided by the family if the document is not an original, if the document appears to be forged, or if the document is altered, mutilated, or illegible. If the PHA determines that third-party documents provided by the family are not acceptable, the PHA will explain the reason to the family and request additional documentation from the family or will use a lower form of verification such as a written third-party verification form. When verification of assets held by a banking or financial institution is required, the PHA will obtain one statement that reflects the current balance of the account. When pay stubs are used, the PHA will require the family to provide the two most current, consecutive pay stubs. At the PHA’s discretion, if additional paystubs are needed due to the family’s circumstances (e.g., sporadic income, fluctuating schedule, etc.), the PHA may request additional paystubs or a payroll record. 7-I.G. LEVEL 3 VERIFICATION: WRITTEN, THIRD-PARTY FORM [Notice PIH 2023 -27] This type of verification is a form developed by the PHA and used uniformly for all families when needed to collect information from a third-party source. This is known as “traditional third- 485 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 7-17 party verification.” PHAs send a PHA-developed form directly to the third-party source by mail, fax, or email and the source completes the form by hand (in writing or typeset). The PHA may use this method when higher forms are unavailable or are rejected by the PHA or when the family is unable to provide acceptable verification. The PHA may skip this level of verification and may instead substitute oral third-party verification before moving to self- certification. PHA Policy Typically, the PHA will attempt to send written third-party verification forms to the verification source whenever higher forms of verification are unavailable. However, on a case-by-case basis, the PHA may choose to obtain oral third-party verification without first attempting, and in lieu of, a written-third party verification form. 7.I.H. LEVEL 2: ORAL THIRD-PARTY VERIFICATION [Notice PIH 2023-27] 7-I.D. THIRD-PARTY WRITTEN AND ORAL VERIFICATION HUD’s current verification hierarchy defines two types of written third-party verification. The more preferable form, “written third-party verification,” consists of an original document generated by a third-party source, which may be received directly from a third-party source or provided to the HA by the family. If written third-party verification is not available, the HA must attempt to obtain a “written third-party verification form.” This is a standardized form used to collect information from a third party. Written Third-Party Verification [Notice PIH 2018-18] Written third-party verification documents must be original and authentic and may be supplied by the family or received from a third-party source. Examples of acceptable tenant-provided documents include, but are not limited to: pay stubs, payroll summary reports, employer notice or letters of hire and termination, SSA benefit verification letters, bank statements, child support payment stubs, welfare benefit letters and/or printouts, and unemployment monetary benefit notices. The HA is required to obtain, at minimum, two current and consecutive pay stubs for determining annual income from wages. The HA may reject documentation provided by the family if the document is not an original, if the document appears to be forged, or if the document is altered, mutilated, or illegible. HA Policy Third-party documents provided by the family must be dated within 60 120 days of the HA request date. If the HA determines that third-party documents provided by the family are not acceptable, the HA will explain the reason to the family and request additional documentation. 486 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 7-18 As verification of earned income, the HA will require the family to provide at least the two most current, consecutive pay stubs. The four most recent paystubs are preferred. At the HA’s discretion, if additional paystubs are needed due to the family’s circumstances (e.g. sporadic income, fluctuating schedule, etc.) the HA may request additional paystubs or a payroll record. 487 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 7-19 Written Third-Party Verification Form When upfront verification is not available and the family is unable to provide written third-party documents, the HA must request a written third-party verification form. HUD’s position is that this traditional third-party verification method presents administrative burdens and risks which may be reduced through the use of family-provided third-party documents. HAs may mail, fax, or e-mail third-party written verification form requests to third-party sources. HA Policy The HA will send third-party verification forms directly to the third party. Third-party verification forms will be sent when third-party verification documents are unavailable or are rejected by the HA. Oral Third-Party Verification [Notice PIH 2018-18] For third-party oral verification, HAs contact sources, identified by UIV techniques or by the family, by telephone or in person. Oral third-party verification is mandatory if neither form of written third-party verification is available. Third-party oral verification may be used when requests for written third-party verification forms have not been returned within a reasonable time—e.g., 10 business days. HAs should must document in the file the date and time of the telephone call or visit, the name of the person contacted, the telephone number, as well as the information confirmed. The PHA may skip this level of verification if they attempted written third-party verification via a form and the source did not respond and move directly to self-certification. HA Policy In general, the PHA will attempt to obtain written third-party verification via a form from the verification source. If written third-party verification forms are not returned within 10 business days, the PHA will accept self-certification from the family without attempting to obtain oral third-party verification. However, if the PHA chooses to obtain oral third-party verification, the PHA will document in the file the date and time of the telephone call or visit, the name of the person contacted and the telephone number, as well as the information confirmed In collecting third-party oral verification, HA staff will record in the family’s file the name and title of the person contacted, the date and time of the conversation (or attempt), the telephone number used, and the facts provided. When any source responds verbally to the initial written request for verification the HA will accept the verbal response as oral verification but will also request that the source complete and return any verification forms that were provided. 488 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 7-20 When Third-Party Verification is Not Required [Notice PIH 2018-182023-27] Third-party verification may not be available in all situations. HUD has acknowledged that it may not be cost-effective or reasonable to obtain third-party verification of income, assets, or expenses when these items would have a minimal impact on the family’s total tenant payment. HA Policy The cost of postage and envelopes to obtain third-party verification of income, assets, and expenses is not an unreasonable cost [VG, p. 18]. Primary Documents Third-party verification is not required when legal documents are the primary source, such as a birth certificate or other legal documentation of birth. Imputed Assets HUD permits HAs to accept a self-certification from a family as verification of assets disposed of for less than fair market value [HCV GB, p. 5-28]. HA Policy The HA will accept a self-certification from a family as verification of assets disposed of for less than fair market value. Value of Assets and Asset Income [24 CFR 982.516(a)] For families with net assets totaling $5,000 or less, the HA may accept the family’s declaration of asset value and anticipated asset income. However, the HA is required to obtain third-party verification of all assets regardless of the amount during the intake process and at least every three years thereafter. HA Policy For families with net assets totaling $5,000 or less, the HA will accept the family’s self- certification of the value of family assets and anticipated asset income when applicable. The family’s declaration must show each asset and the amount of income expected from that asset. All family members 18 years of age and older must sign the family’s declaration. The HA will use third-party documentation for assets as part of the intake process, whenever a family member is added to verify the individual’s assets, and every three years thereafter. 489 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 7-21 7-I.E. SELF-CERTIFICATION When HUD required third-party verification, self-certification or “tenant declaration,” is used as a last resort when the HA is unable to obtain third-party verification. Self-certification, however, is an acceptable form of verification when: x A source of income is fully excluded x Net family assets total $5,000 or less and the HA has adopted a policy to accept self certification at annual recertification, when applicable When the HA was required to obtain third-party verification but instead relies on a tenant declaration for verification of income, assets, or expenses, the family’s file must be documented to explain why third-party verification was not available. HA Policy When information cannot be verified by a third party or by review of documents, family members will be required to submit self-certifications attesting to the accuracy of the information they have provided to the HA. The HA may require a family to certify that a family member does not receive a particular type of income or benefit. The self-certification must be made in a format acceptable to the HA and must be signed by the family member whose information or status is being verified. 490 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 7-22 491 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 7-23 PART II: VERIFYING FAMILY INFORMATION 7-II.A. VERIFICATION OF LEGAL IDENTITY HA Policy The HA will require families to furnish verification of legal identity for each household member via Social Security card. Legal identity will be verified for all applicants at the time of eligibility determination and in cases where the HA has reason to doubt the identity of a person representing him or herself to be a participant. 492 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 7-24 7-II.B. SOCIAL SECURITY NUMBERS [24 CFR 5.216, Notice PIH 2018-24] The family must provide documentation of a valid social security number (SSN) for each member of the household, with the exception of individuals who do not contend eligible immigration status. Exemptions also include,also include existing program participants who were at least 62 years of age as of January 31, 2010, and had not previously disclosed an SSN. Note that an individual who previously declared to have eligible immigration status may not change his or her declaration for the purpose of avoiding compliance with the SSN disclosure and documentation requirements or penalties associated with noncompliance with these requirements. Nor may the head of household opt to remove a household member from the family composition for this purpose. The HA must accept the following documentation as acceptable evidence of the social security number: x An original SSN card issued by the Social Security Administration (SSA) x An original SSA-issued document, which contains the name and SSN of the individual x An original document issued by a federal, state, or local government agency, which contains the name and SSN of the individual The HA may only reject documentation of an SSN provided by an applicant or participant if the document is not an original document or if the original document has been altered, mutilated, is illegible, or appears to be forged. HA Policy The HA will explain to the applicant or participant the reasons the document is not acceptable and request that the individual obtain and submit acceptable documentation of the SSN to the HA within 90 days. In the case of Moderate Rehabilitation Single Room Occupancy (SRO) individuals, the required documentation must be provided within 90 calendar days from the date of admission into the program. The HA must grant one additional 90-day extension if it determines that the applicant’s failure to comply was due to circumstances that were beyond the applicant’s control and could not have been reasonably foreseen. PHA Policy The PHA will grant one additional 90-day extension if needed for reasons beyond the participant’s control such as delayed processing of the SSN application by the SSA, natural disaster, fire, death in the family, or other emergency. If the individual fails to comply with SSN disclosure and documentation requirements upon expiration of the provided time period, the PHA will terminate the individual’s assistance. If an applicant family includes a child under 6 years of age who joined the household within the 6 months prior to the date of voucher issuance, an otherwise eligible family may be admitted to the program and the family must provide documentation of the child’s SSN within 90 days of the effective date of the initial HAP contract. A 90-day extension will be granted if the HA determines that the participant’s failure to comply was due to unforeseen circumstances and was outside of the participant’s control. 493 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 7-25 HA Policy The HA will grant one additional 90-day extension if needed for reasons beyond the applicant’s control, such as delayed processing of the SSN application by the SSA, natural disaster, fire, death in the family, or other emergency. When a participant requests to add a new household member who is at least 6 years of age, or who is under the age of 6 and has an SSN, the participant must provide the complete and accurate SSN assigned to each new member at the time of reexamination or recertification, in addition to the documentation required to verify it. The HA may not add the new household member until such documentation is provided. When a participant requests to add a new household member who is under the age of 6 and has not been assigned an SSN, the participant must provide the SSN assigned to each new child and the required documentation within 90 calendar days of the child being added to the household. A 90-day extension will be granted if the HA determines that the participant’s failure to comply was due to unforeseen circumstances and was outside of the participant’s control. During the period the HA is awaiting documentation of the SSN, the child will be counted as part of the assisted household. HA Policy The HA will grant one additional 90-day extension if needed for reasons beyond the participant’s control such as delayed processing of the SSN application by the SSA, natural disaster, fire, death in the family, or other emergency. Social security numbers must be verified only once during continuously-assisted occupancy. HA Policy The HA will verify each disclosed SSN by: Obtaining documentation from applicants and participants that is acceptable as evidence of social security numbers Making a copy of the original documentation submitted, returning it to the individual, and retaining a copy in the file folder Once the individual’s verification status is classified as “verified,” the HA may, at its discretion, remove and destroy copies of documentation accepted as evidence of social security numbers. The retention of the EIV Summary Report or Income Report is adequate documentation of an individual’s SSN. 494 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 7-26 7-II.C. DOCUMENTATION OF AGE A birth certificate or other official record of birth is the preferred form of age verification for all family members. For elderly family members an original document that provides evidence of the receipt of social security retirement benefits is acceptable. Age must be verified only once during continuously-assisted occupancy. NOTE: Dates of birth and first and last name are verified thru PIC – must match with Soc Sec records 7-II.D. FAMILY RELATIONSHIPS Applicants and program participants are required to identify the relationship of each household member to the head of household. Definitions of the primary household relationships are provided in the Eligibility chapter. HA Policy Family relationships are verified only to the extent necessary to determine a family’s eligibility and level of assistance. Certification by the head of household normally is sufficient verification of family relationships. Marriage HA Policy Certification by the head of household is normally sufficient verification. If the HA has reasonable doubts about a marital relationship, the HA will require the family to document the marriage. 495 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 7-27 Separation or Divorce HA Policy Certification by the head of household is normally sufficient verification. If the HA has reasonable doubts about a separation or divorce, the HA will require the family to provide documentation of the divorce or separation. Absence of Adult Member HA Policy If an adult member who was formerly a member of the household is reported to be permanently absent, the family must provide evidence to support that the person is no longer a member of the family (e.g., documentation of another address at which the person resides such as a lease or utility bill). Foster Children and Foster Adults HA Policy Third-party verification from the state or local government agency responsible for the placement of the individual with the family is required. 496 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 7-28 7-II.E. VERIFICATION OF STUDENT STATUS General Requirements HA Policy The HA requires families to provide information about the student status of all students who are 18 years of age or older. This information will be verified only if: The family reports full-time student status for an adult other than the head, spouse, or cohead. The family reports child carechildcarechildcare expenses to enable a family member to further his or her education. The family includes a student enrolled in an institution of higher education. Restrictions on Assistance to Students Enrolled in Institutions of Higher Education This section applies only to students who are seeking assistance on their own, separately from their parents. It does not apply to students residing with parents who are seeking or receiving HCV assistance. HA Policy In accordance with the verification hierarchy described in section 7-1.B, the HA will determine whether the student is exempt from the restrictions in 24 CFR 5.612 by verifying any one of the following exemption criteria: The student is enrolled at an educational institution that does not meet the definition of institution of higher education in the Higher Education Act of 1965 (see section Exhibit 3-2). The student is at least 24 years old. The student is a veteran, as defined in section 3-II.E. The student is married. The student has at least one dependent child, as defined in section 3-II.E. The student is a person with disabilities, as defined in section 3-II.E, and was receiving assistance prior to November 30, 2005. If the HA cannot verify at least one of these exemption criteria, the HA will conclude that the student is subject to the restrictions on assistance at 24 CFR 5.612. In addition to verifying the student’s income eligibility, the HA will then proceed to verify either the student’s parents’ income eligibility (see section 7-III.J) or the student’s independence from their parents (see below). 497 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 7-29 Independent Student HA Policy The HA will verify a student’s independence from their parents to determine that the student’s parents’ income is not relevant for determining the student’s eligibility by doing all of the following: Either reviewing and verifying previous address information to determine whether the student has established a household separate from their parents for at least one year, or reviewing and verifying documentation relevant to determining whether the student meets the U.S. Department of Education’s definition of independent student (see section 3-II.E) Reviewing the student’s prior year income tax returns to verify the student is independent or verifying the student meets the U.S. Department of Education’s definition of independent student (see section 3-II.E) Requesting and obtaining written certification directly from the student’s parents identifying the amount of support they will be providing to the student, even if the amount of support is $0, except in cases in which the HA determines that the student is a vulnerable youth (see section 3-II.E) 7-II.F. DOCUMENTATION OF DISABILITY The HA must verify the existence of a disability in order to allow certain income disallowances and deductions from income. The HA is not permitted to inquire about the nature or extent of a person’s disability [24 CFR 100.202(c)]. The HA may not inquire about a person’s diagnosis or details of treatment for a disability or medical condition. If the HA receives a verification document that provides such information, the HA will not place this information in the tenant file. Under no circumstances will the HA request a participant’s medical record(s). For more information on health care privacy laws, see the Department of Health and Human Services’ website at http://www.hhs.gov/ocr/privacy/. The above cited regulation does not prohibit the following inquiries, provided these inquiries are made of all applicants, whether or not they are persons with disabilities [VG, p. 24]: x Inquiry into an applicant’s ability to meet the requirements of ownership or tenancy x Inquiry to determine whether an applicant is qualified for a dwelling available only to persons with disabilities or to persons with a particular type of disability x Inquiry to determine whether an applicant for a dwelling is qualified for a priority available to persons with disabilities or to persons with a particular type of disability x Inquiring whether an applicant for a dwelling is a current illegal abuser or addict of a controlled substance x Inquiring whether an applicant has been convicted of the illegal manufacture or distribution of a controlled substance 498 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 7-30 Family Members Receiving SSA Disability Benefits Verification of the receipt of disability benefits from the Social Security Administration (SSA) is sufficient verification of disability for the purpose of qualifying for waiting list preferences (if applicable) or certain income disallowances and deductions [VG, p. 23]. HA Policy For family members claiming disability who receive disability benefits from the SSA, the HA will attempt to obtain information about disability benefits through the HUD Enterprise Income Verification (EIV) system. If documentation from HUD’s EIV System is not available, the HA will request a current (dated within the last 60 days) SSA benefit verification letter from each family member claiming disability status. If the family is unable to provide the document(s), the HA will ask the family to request a benefit verification letter by either calling SSA at 1-800-772-1213, or by requesting it from www.ssa.gov. Once the applicant or participant receives the benefit verification letter they will be required to provide it to the HA. Family Members Not Receiving SSA Disability Benefits Receipt of veteran’s disability benefits, worker’s compensation, or other non-SSA benefits based on the individual’s claimed disability are not sufficient verification that the individual meets HUD’s definition of disability in 24 CFR 5.403. HA Policy For family members claiming disability who do not receive disability benefits from the SSA, a knowledgeable professional must provide third-party verification that the family member meets the HUD definition of disability. See the Eligibility chapter for the HUD definition of disability. The knowledgeable professional will verify whether the family member does or does not meet the HUD definition. 499 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 7-31 7-II.G. CITIZENSHIP OR ELIGIBLE IMMIGRATION STATUS [24 CFR 5.508] Overview Housing assistance is not available to persons who are not citizens, nationals, or eligible immigrants. Prorated assistance is provided for "mixed families" containing both eligible and ineligible persons. A detailed discussion of eligibility requirements is in the Eligibility chapter. This verifications chapter discusses HUD and HA verification requirements related to citizenship status. The family must provide a certification that identifies each family member as a U.S. citizen, a U.S. national, an eligible noncitizen or an ineligible noncitizen and submit the documents discussed below for each family member. Once eligibility to receive assistance has been verified for an individual it need not be collected or verified again during continuously-assisted occupancy. [24 CFR 5.508(g)(5)] U.S. Citizens and Nationals HUD requires a declaration for each family member who claims to be a U.S. citizen or national. The declaration must be signed personally by any family member 18 or older and by a guardian for minors. The HA may request verification of the declaration by requiring presentation of a birth certificate, United States passport or other appropriate documentation. HA Policy Family members who claim U.S. citizenship or national status will not be required to provide additional documentation unless the HA receives information indicating that an individual’s declaration may not be accurate. 500 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 7-32 Eligible Immigrants Documents Required All family members claiming eligible immigration status must declare their status in the same manner as U.S. citizens and nationals. The documentation required for eligible noncitizens varies depending upon factors such as the date the person entered the U.S., the conditions under which eligible immigration status has been granted, age, and the date on which the family began receiving HUD-funded assistance. Exhibit 7-1 at the end of this chapter summarizes documents family members must provide. HA Verification [HCV GB, pp. 5-3 and 5-7] For family members age 62 or older who claim to be eligible immigrants, proof of age is required in the manner described in 7-II.C. of this plan. No further verification of eligible immigration status is required. For family members under the age of 62 who claim to be eligible immigrants, the HA must verify immigration status with the United States Citizenship and Immigration Services (USCIS). The HA will follow all USCIS protocols for verification of eligible immigration status. 7-II.H. VERIFICATION OF PREFERENCE STATUS The HA must verify any preferences claimed by an applicant that determined placement on the waiting list. 501 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 7-33 PART III: VERIFYING INCOME AND ASSETS Chapter 6, Part I of this plan describes in detail the types of income that are included and excluded and how assets and income from assets are handled. Any assets and income reported by the family must be verified. This part provides HA policies that supplement the general verification procedures specified in Part I of this chapter. 7-III.A. EARNED INCOME Tips HA Policy Tips are verified by their inclusion on paystubs. Where tips are earned but not reported on paystubs they will be determined through the interview process and oral self-certification at the time of annual recertification or interim certification of a new job. Wages HA Policy For wages other than tips, the family must provide originals of at least the two most current, consecutive pay stubs. Four paystubs are preferred. 7-III.B. BUSINESS AND SELF EMPLOYMENT INCOME HA Policy Business owners and self-employed persons will be required to provide: An audited financial statement for the previous fiscal year if an audit was conducted. If an audit was not conducted, a statement of income and expenses must be submitted and the business owner or self-employed person must certify to its accuracy. All schedules completed for filing federal and local taxes in the preceding year. If accelerated depreciation was used on the tax return or financial statement, an accountant's calculation of depreciation expense, computed using straight-line depreciation rules. The HA will provide a format for any person who is unable to provide such a statement to record income and expenses for the coming year. The business owner/self-employed person will be required to submit the information requested and to certify to its accuracy at all future reexaminations. At any reexamination the HA may request documents that support submitted financial statements such as manifests, appointment books, cash books, or bank statements. If a family member has been self-employed less than three (3) months, the HA will accept the family member's certified estimate of income. If the family member has been self-employed for three (3) to twelve (12) months the HA will require the family to provide documentation of income and expenses for this period and use that information to project income. 502 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 7-34 7-III.C. PERIODIC PAYMENTS AND PAYMENTS IN LIEU OF EARNINGS For policies governing streamlined income determinations for fixed sources of income, please see Chapter 11. HA Policy Social Security/SSI Benefits To verify the SS/SSI benefits of applicants, the HA will request a current (dated within the last 60 days) SSA benefit verification letter from each family member that receives social security benefits. If the family is unable to provide the document(s), the PHA will may help the applicant request a benefit verification letter from SSA’s Web site at www.ssa.gov or ask the family to request one by calling SSA at 1-800-772-1213. Once the applicant has received the benefit verification letter they will be required to provide it to the HA. To verify the SS/SSI benefits of participants, the HA will obtain information about social security/SSI benefits through the HUD EIV System, and confirm with the participant(s) that the current listed benefit amount is correct. If the participant disputes the EIV- reported benefit amount, or if benefit information is not available in HUD systems, the HA will request a current SSA benefit verification letter from each family member that receives social security benefits. If the family is unable to provide the document(s) the HA will help the participant request a benefit verification letter from SSA’s Web site at www.ssa.gov or ask the family to request one by calling SSA at 1-800-772-1213. Once the participant has received the benefit verification letter they will be required to provide it to the HA. 503 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 7-35 7-III.D. ALIMONY OR CHILD SUPPORT HA Policy The methods the HA will use to verify alimony and child support payments differ depending on whether the family declares that it receives regular payments. If the family declares that it receives regular payments, verification will be obtained in the following order of priority: Third-party verification form from the state or local child support enforcement agency Third-party verification form from the person paying the support Copies of the receipts and/or payment stubs for the 60 days prior to HA request Family's self-certification of amount received If the family declares that it receives irregular or no payments, it will follow the verification process listed above. Note: Families are not required to undertake independent enforcement action. 504 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 7-36 7-III.E. ASSETS AND INCOME FROM ASSETS Assets Disposed of for Less than Fair Market Value The family must certify whether any assets have been disposed of for less than fair market value in the preceding two years. The HA needs to verify only those certifications that warrant documentation [HCV GB, p. 5-28]. HA Policy The HA will verify the value of assets disposed of only if: The HA does not already have a reasonable estimation of its value from previously collected information, or The amount reported by the family in the certification appears obviously in error. Example 1: An elderly participant reported a $10,000 certificate of deposit at the last annual reexamination and the HA verified this amount. Now the person reports that she has given this $10,000 to her son. The HA has a reasonable estimate of the value of the asset; therefore, reverification of the value of the asset is not necessary. Example 2: A family member has disposed of its 1/4 share of real property located in a desirable area and has valued her share at approximately 5,000. Based upon market conditions, this declaration does not seem realistic. Therefore, the HA will verify the value of this asset. 7-III.F. NET INCOME FROM RENTAL PROPERTY HA Policy The family must provide: A current executed lease for the property that shows the rental amount or certification from the current tenant A self-certification from the family members engaged in the rental of property providing an estimate of expenses for the coming year and the most recent IRS Form 1040 with Schedule E (Rental Income). If schedule E was not prepared, the HA will require the family members involved in the rental of property to provide a self-certification of income and expenses for the previous year and may request documentation to support the statement including: tax statements, insurance invoices, bills for reasonable maintenance and utilities, and bank statements or amortization schedules showing monthly interest expense. 505 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 7-37 7-III.G. RETIREMENT ACCOUNTS HA Policy The HA will accept written third-party documents supplied by the family as evidence of the status of retirement accounts. The type of original document that will be accepted depends upon the family member’s retirement status. Before retirement, the HA will accept an original document from the entity holding the account with a date that shows it is the most recently scheduled statement for the account but in no case earlier than 6 months from the effective date of the examination. Upon retirement, the HA will accept an original document from the entity holding the account that reflects any distributions of the account balance, any lump sums taken and any regular payments. After retirement, the HA will accept an original document from the entity holding the account dated no earlier than 12 months before that reflects any distributions of the account balance, any lump sums taken and any regular payments. 506 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 7-38 7-III.H. INCOME FROM EXCLUDED SOURCES A detailed discussion of excluded income is provided in Chapter 6, Part I. HUD guidance on verification of excluded income draws a distinction between income which is fully excluded and income which is only partially excluded. For fully excluded income, the HA is not required to follow the verification hierarchy, document why third-party verification is not available, or report the income on the 50058. Fully excluded income is defined as income that is entirely excluded from the annual income determination (for example, food stamps, earned income of a minor, or foster care funds) [Notice PIH 2013-04]. HAs may accept a family’s signed application or reexamination form as self-certification of fully excluded income. They do not have to require additional documentation. However, if there is any doubt that a source of income qualifies for full exclusion, HAs have the option of requiring additional verification. For partially excluded income, the HA is required to follow the verification hierarchy and all applicable regulations, and to report the income on the 50058. Partially excluded income is defined as income where only a certain portion of what is reported by the family qualifies to be excluded and the remainder is included in annual income (for example, the income of an adult full-time student, or income excluded under the earned income disallowance). HA Policy The HA will accept the family’s self-certification as verification of fully excluded income. The HA may request additional documentation if necessary to document the income source. The HA will verify the source and amount of partially excluded income as described in Part 1 of this chapter. 7-III.I. ZERO ANNUAL INCOME STATUS HA Policy The HA will check UIV sources and/or request information from third-party sources to verify that certain forms of income such as unemployment benefits, TANF, SS, SSI, and earnings are not being received by families claiming to have zero annual income. The HA will require the family to complete and submit a zero income certification form. 507 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 7-39 7-III.J. STUDENT FINANCIAL ASSISTANCE Any financial assistance, in excess of amounts received for tuition, that a person attending an institution of higher education receives under the Higher Education Act of 1965, from private sources, or from an institution of higher education must be considered income unless the student is over the age of 23 with dependent children or is residing with parents who are seeking or receiving HCV assistance [24 CFR 5.609(b)(9) and FR 4/10/06]. For students over the age of 23 with dependent children or students residing with parents who are seeking or receiving HCV assistance, the full amount of student financial assistance is excluded from annual income [24 CFR 5.609(c)(6)]. The full amount of student financial assistance is also excluded for students attending schools that do not qualify as institutions of higher education (as defined in Exhibit 3-2). Excluded amounts are verified only if, without verification, the HA would not be able to determine whether or to what extent the income is to be excluded (see section 7-III.H). HA Policy For a student subject to having a portion of their student financial assistance included in annual income in accordance with 24 CFR 5.609(b)(9), the HA will request written third- party verification of both the source and the amount. Family-provided documents from the educational institution attended by the student will be requested, as well as documents generated by any other person or entity providing such assistance, as reported by the student. In addition, the HA will request written verification of the student’s tuition amount. If the HA is unable to obtain third-party written verification of the requested information, the HA will pursue other forms of verification following the verification hierarchy in section 7-I.B. 508 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 7-40 7-III.K. PARENTAL INCOME OF STUDENTS SUBJECT TO ELIGIBILITY RESTRICTIONS If a student enrolled at an institution of higher education is under the age of 24, is not a veteran, is not married, does not have a dependent child, and is not a person with disabilities receiving HCV assistance as of November 30, 2005, the income of the student’s parents must be considered when determining income eligibility, unless the student is determined independent from his or her parents or a vulnerable youth in accordance with HA policy [24 CFR 5.612, FR Notice 4/10/06, p. 18146, and FR Notice 9/21/16]. This provision does not apply to students residing with parents who are seeking or receiving HCV assistance. It is limited to students who are seeking or receiving assistance on their own, separately from their parents. HA Policy If the HA is required to determine the income eligibility of a student’s parents, the HA will request an income declaration and certification of income from the appropriate parent(s) (as determined in section 3-II.E). The HA will send the request directly to the parents, who will be required to certify to their income under penalty of perjury. The parents will be required to submit the information directly to the HA. The required information must be submitted (postmarked) within 10 business days of the date of the HA’s request or within any extended timeframe approved by the HA. The HA reserves the right to request and review supporting documentation at any time if it questions the declaration or certification. Supporting documentation may include, but is not limited to, Internal Revenue Service (IRS) tax returns, consecutive and original pay stubs, bank statements, pension benefit statements, benefit award letters, and other official and authentic documents from a federal, state, or local agency. 509 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 7-41 PART IV: VERIFYING MANDATORY DEDUCTIONS 7-IV.A. DEPENDENT AND ELDERLY/DISABLED HOUSEHOLD DEDUCTIONS The dependent and elderly/disabled family deductions require only that the HA verify that the family members identified as dependents or elderly/disabled persons meet the statutory definitions. No further verifications are required. Dependent Deduction See Chapter 6 (6-II.B.) for a full discussion of this deduction. The HA must verify that: x Any person under the age of 18 for whom the dependent deduction is claimed is not the head, spouse, or cohead of the family and is not a foster child x Any person age 18 or older for whom the dependent deduction is claimed is not a foster adult or live-in aide, and is a person with a disability or a full time student Elderly/Disabled Family Deduction See Eligibility chapter for a definition of elderly and disabled families and Chapter 6 (6-II.C.) for a discussion of the deduction. The HA must verify that the head, spouse, or cohead is 62 years of age or older or a person with disabilities. 510 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 7-42 7-IV.B. MEDICAL EXPENSE DEDUCTION Policies related to medical expenses are found in 6-II.D. The amount of the deduction will be verified following the standard verification procedures described in Part I. Amount of Expense HA Policy Medical expenses will be verified through: Written third-party documents provided by the family, such as pharmacy printouts or receipts. The HA will make a best effort to determine what expenses from the past are likely to continue to occur in the future. The HA will also accept evidence of monthly payments or total payments that will be due for medical expenses during the upcoming 12 months. Written third-party verification forms, if the family is unable to provide acceptable documentation. If third-party or document review is not possible, written family certification as to costs anticipated to be incurred during the upcoming 12 months. In addition, the HA must verify that: x The household is eligible for the deduction. x The costs to be deducted are qualified medical expenses. x The expenses are not paid for or reimbursed by any other source. x Costs incurred in past years are counted only once. 511 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 7-43 Eligible Household The medical expense deduction is permitted only for households in which the head, spouse, or cohead is at least 62, or a person with disabilities. The HA must verify that the family meets the definition of an elderly or disabled family provided in the Eligibility chapter and as described in Chapter 7 (7-IV.A.) of this plan. Qualified Expenses To be eligible for the medical expenses deduction, the costs must qualify as medical expenses. See Chapter 6 (6-II.D.) for the HA’s policy on what counts as a medical expense. Unreimbursed Expenses To be eligible for the medical expenses deduction, the costs must not be reimbursed by another source. HA Policy The family will be required to certify that the medical expenses are not paid or reimbursed to the family from any source. If expenses are verified through a third party, the third party must certify that the expenses are not paid or reimbursed from any other source. Certification by the family includes listing the expenses on and signing the initial or annual application Expenses Incurred in Past Years HA Policy When anticipated costs are related to on-going payment of medical bills incurred in past years, the HA will verify: The anticipated repayment schedule The amounts paid in the past, and Whether the amounts to be repaid have been deducted from the family’s annual income in past years 512 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 7-44 7-IV.C. DISABILITY ASSISTANCE EXPENSES Policies related to disability assistance expenses are found in 6-II.E. The amount of the deduction will be verified following the standard verification procedures described in Part I. Amount of Expense Attendant Care HA Policy The HA will accept written third-party documents provided by the family. If family-provided documents are not available, the HA will provide a third-party verification form directly to the care provider requesting the needed information. Expenses for attendant care will be verified through: Written third-party documents provided by the family, such as receipts or cancelled checks. Third-party verification form signed by the provider, if family-provided documents are not available. If third-party verification is not possible, written family certification as to costs anticipated to be incurred for the upcoming 12 months. Auxiliary Apparatus HA Policy Expenses for auxiliary apparatus will be verified through: Written third-party documents provided by the family, such as billing statements for purchase of auxiliary apparatus, or other evidence of monthly payments or total payments that will be due for the apparatus during the upcoming 12 months. Third-party verification form signed by the provider, if family-provided documents are not available. If third-party verification is not possible, written family certification of estimated apparatus costs for the upcoming 12 months. In addition, the HA must verify that: x The family member for whom the expense is incurred is a person with disabilities (as described in 7-II.F above). x The expense permits a family member, or members, to work (as described in 6-II.E.). x The expense is not reimbursed from another source (as described in 6-II.E.). 513 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 7-45 Family Member is a Person with Disabilities To be eligible for the disability assistance expense deduction, the costs must be incurred for attendant care or auxiliary apparatus expense associated with a person with disabilities. The HA will verify that the expense is incurred for a person with disabilities (See 7-II.F.). Family Member(s) Permitted to Work The HA must verify that the expenses claimed actually enable a family member, or members, (including the person with disabilities) to work. HA Policy The HA will request third-party verification from a rehabilitation agency or knowledgeable medical professional indicating that the person with disabilities requires attendant care or an auxiliary apparatus to be employed, or that the attendant care or auxiliary apparatus enables another family member, or members, to work (See 6-II.E.). This documentation may be provided by the family. If third-party verification has been attempted and is either unavailable or proves unsuccessful, the family must certify that the disability assistance expense frees a family member, or members (possibly including the family member receiving the assistance), to work. Unreimbursed Expenses To be eligible for the disability expenses deduction, the costs must not be reimbursed by another source. HA Policy The family will be required to certify that attendant care or auxiliary apparatus expenses are not paid by or reimbursed to the family from any source. 514 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 7-46 7-IV.D. CHILD CARECHILDCARE EXPENSES Policies related to child carechildcare expenses are found in Chapter 6 (6-II.F). The amount of the deduction will be verified following the standard verification procedures described in Part I of this chapter. In addition, the HA must verify that: x The child is eligible for care (12 or younger). x The costs claimed are not reimbursed. x The costs enable a family member to work, actively seek work, or further their education. x The costs are for an allowable type of child carechildcare. x The costs are reasonable. Eligible Child To be eligible for the child carechildcare deduction, the costs must be incurred for the care of a child under the age of 13. The HA will verify that the child being cared for (including foster children) is under the age of 13 (See 7-II.C.). Unreimbursed Expense To be eligible for the child carechildcare deduction, the costs must not be reimbursed by another source. HA Policy The family (and the care provider) will be required to certify that the child carechildcare expenses are not paid or reimbursed to the family from any source. 515 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 7-47 Pursuing an Eligible Activity The HA must verify that the family member(s) that the family has identified as being enabled to seek work, pursue education, or be gainfully employed, are actually pursuing those activities. HA Policy Information to be Gathered The HA will verify information about how the schedule for the claimed activity relates to the hours of care provided, the time required for transportation, the time required for study (for students), the relationship of the family member(s) to the child, and any special needs of the child that might help determine which family member is enabled to pursue an eligible activity. Seeking Work Whenever possible the HA will use documentation from a state or local agency that monitors work-related requirements (e.g., welfare or unemployment). In such cases the HA will request family-provided verification from the agency of the member’s job seeking efforts to date, and require the family to submit to the HA any reports provided to the other agency. In the event third-party verification is not available, the HA will provide the family with a form on which the family member must record job search efforts. The HA will review this information at each subsequent reexamination for which this deduction is claimed. Furthering Education The HA will request third-party documentation to verify that the person permitted to further his or her education by the child carechildcare is enrolled and provide information about the timing of classes for which the person is registered. The documentation may be provided by the family. Gainful Employment The HA will seek third-party verification of the work schedule of the person who is permitted to work by the child carechildcare. In cases in which two or more family members could be permitted to work, the work schedules for all relevant family members may be verified. The documentation may be provided by the family. 516 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 7-48 Allowable Type of Child CareChildcare The type of care to be provided is determined by the family, but must fall within certain guidelines, as discussed in Chapter 6. HA Policy The HA will verify that the type of child carechildcare selected by the family is allowable, as described in Chapter 6 (6-II.F). The HA will verify that the fees paid to the child carechildcare provider cover only child carechildcare costs (e.g., no housekeeping services or personal services) and are paid only for the care of an eligible child (e.g., prorate costs if some of the care is provided for ineligible family members). The HA will verify that the child carechildcare provider is not an assisted family member. Verification will be made through the head of household’s declaration of family members who are expected to reside in the unit. Reasonableness of Expenses Only reasonable child carechildcare costs can be deducted. HA Policy If the family presents a justification for costs that exceed typical costs in the area, the HA will request additional documentation, as required, to support a determination that the higher cost is appropriate. 517 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 7-49 EXHIBIT 7-1: SUMMARY OF DOCUMENTATION REQUIREMENTS FOR NONCITIZENS [HCV GB, pp. 5-9 and 5-10] x All noncitizens claiming eligible status must sign a declaration of eligible immigrant status on a form acceptable to the HA. x Except for persons 62 or older, all noncitizens must sign a verification consent form x Additional documents are required based upon the person's status. Elderly Noncitizens x A person 62 years of age or older who claims eligible immigration status also must provide proof of age such as birth certificate, passport, or documents showing receipt of SS old-age benefits. All other Noncitizens x Noncitizens that claim eligible immigration status also must present the applicable USCIS document. Acceptable USCIS documents are listed below. x Form I-551 Alien Registration Receipt Card (for permanent resident aliens) x Form I-94 Arrival-Departure Record annotated with one of the following: x “Admitted as a Refugee Pursuant to Section 207” x “Section 208” or “Asylum” x “Section 243(h)” or “Deportation stayed by Attorney General” x “Paroled Pursuant to Section 221 (d)(5) of the USCIS” x Form I-94 Arrival-Departure Record with no annotation accompanied by: x A final court decision granting asylum (but only if no appeal is taken); x A letter from a USCIS asylum officer granting asylum (if application is filed on or after 10/1/90) or from a USCIS district director granting asylum (application filed before 10/1/90); x A court decision granting withholding of deportation; or x A letter from an asylum officer granting withholding or deportation (if application filed on or after 10/1/90). x Form I-688 Temporary Resident Card annotated “Section 245A” or Section 210”. Form I-688B Employment Authorization Card annotated “Provision of Law 274a. 12(11)” or “Provision of Law 274a.12”. x A receipt issued by the USCIS indicating that an application for issuance of a replacement document in one of the above listed categories has been made and the applicant’s entitlement to the document has been verified; or x Other acceptable evidence. If other documents are determined by the USCIS to constitute acceptable evidence of eligible immigration status, they will be announced by notice published in the Federal Register 518 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 7-50 519 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 8-14 Inspection Results and Reinspections HA Policy If any HQS violations are identified, the owner will be notified of the deficiencies and be given a time frame to correct them. If requested by the owner, the time frame for correcting the deficiencies may be extended by the HA for good cause. The HA may usemay use written landlord certification that the required corrections have been made. The HA may also reinspect the unit within 5 business days of the date the owner notifies the HA that the required corrections have been made. If the time period for correcting the deficiencies (or any HA-approved extension) has elapsed, or the unit fails HQS at the time of the reinspection, the HA will notify the owner and the family that the unit has been rejected and that the family must search for another unit. The HA may agree to conduct a second reinspection, for good cause, at the request of the family and owner. Following a failed reinspection, the family may submit a new Request for Tenancy Approval after the owner has made repairs, if they are unable to locate another suitable unit. Utilities Generally, at initial lease-up the owner is responsible for demonstrating that all utilities are in working order including those utilities that the family will be responsible for paying. HA Policy If utility service is not available for testing at the time of the initial inspection, the HA will allow the utilities to be placed in service after the unit has met all other HQS requirements. Appliances [Form HUD-52580] HA Policy If the family is responsible for supplying the stove and/or refrigerator, the HA will allow the stove and refrigerator to be placed in the unit after the unit has met all other HQS requirements. The required appliances must be in place before the HAP contract is executed by the HA. The HA will execute the HAP contract based upon a certification from the family that the appliances have been installed and are working. 520 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 8-15 8-II.C. ANNUAL/BIENNIAL HQS INSPECTIONS [24 CFR 982.405 and 982.406 ; Notice PIH 2016-05] HA Policy Each unit under HAP contract must be inspected biennially within 24 months of the last full HQS inspection. The HA reserves the right to require annual inspections of any unit or owner at any time. The HA will not rely on alternative inspection standards. Scheduling the Inspection HA Policy If an adult cannot be present on the scheduled date, the family should request that the HA reschedule the inspection. The HA and family will agree on a new inspection date that generally should take place within five business days of the originally- scheduledoriginally scheduled date. The HA may schedule an inspection more than five business days after the original date for good cause. If the family misses the first scheduled appointment without requesting a new inspection date, the HA will automatically schedule a second inspection. If the family misses two scheduled inspections without HA approval, the HA will consider the family to have violated its obligation to make the unit available for inspection. This may result in termination of the family’s assistance in accordance with Chapter 12. 8-II.D. SPECIAL INSPECTIONS [24 CFR 982.405(g)] If a participant or government official reports a life-threatening condition which the owner would be required to repair within 24 hours, the PHA must inspect the unit within 24 hours of notification. If the reported condition is not life-threatening, the PHA must inspect the unit within 15 days of notification. HA Policy During a special inspection, the HA generally will inspect only those deficiencies that were reported. However, the inspector will record any additional HQS deficiencies that are observed and will require the responsible party to make the necessary repairs. If the annual/biennial inspection has been scheduled or is due within 90 days of the date the special inspection is scheduled the HA may elect to conduct a full annual/biennial inspection. 521 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 8-22 Rents Charged for Other Units on the Premises The Request for Tenancy Approval (HUD-52517) requires owners to provide information, on the form itself, about the rent charged for other unassisted comparable units on the premises if the premises include more than 4 units. By accepting the HA payment each monthmonth, the owner certifies that the rent is not more than the rent charged for comparable unassisted units on the premises. If asked to do so, the owner must give the HA information regarding rents charged for other units on the premises. 522 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 8-23 8-III.D . HA RENT REASONABLENESS METHODOLOGY How Market Data Is Collected HA Policy The HA will collect and maintain data on market rents in the HA's jurisdiction by means of the annual Rental Studyusing information from assessing . How Rents Are Determined HA Policy The rent for a unit proposed for HCV assistance will be compared to the rent charged for comparable units in the same market area. The HA will develop a range of prices for comparable units by bedroom size within defined market areas. Units proposed for HCV assistance will be compared to the units within this rent range. Because units may be similar, but not exactly like the unit proposed for HCV assistance, the HA may make adjustments to the range of prices to account for these differences. The adjustment must reflect the local market. Not all differences in units require adjustments (e.g., the presence or absence of a garbage disposal may not affect the rent in some market areas). Adjustments may vary by unit type (e.g., a second bathroom may be more valuable in a three-bedroom unit than in a two-bedroom). The adjustment must reflect the rental value of the difference—not its construction costs (e.g., it might cost $20,000 to put on a new roof, but the new roof might not make any difference in what a tenant would be willing to pay because rental units are presumed to have functioning roofs). When a comparable project offers rent concessions (e.g., first month rent-free, or reduced rent) reported monthly rents will be adjusted accordingly. For example, if a comparable project reports rents of $500/month but new tenants receive the first month's rent free, the actual rent for the unit would be calculated as follows: $500 x 11 months = 5500/12 months = actual monthly rent of $488. The HA will notify the owner of the rent the HA can approve based upon its analysis of rents for comparable units. The owner may submit information about other comparable units in the market area. The HA will confirm the accuracy of the information provided and consider this additional information when making rent determinations. The owner must submit any additional information within five business days of the HA’s request for information or the owner’s request to submit information. 523 © Copyright 2019 Nan McKay & Associates, Inc. Adminplan 6/1/19 Unlimited copies may be made for internal use. Page 9-2 9-I.A. TENANT SCREENING The HA has no liability or responsibility to the owner or other persons for the family’s behavior or suitability for tenancy [24 CFR 982.307(a)(1)]. The HA may elect to screen applicants for family behavior or suitability for tenancy. See Chapter 3 for a discussion of the HA’s policies with regard to screening applicant families for program eligibility [24 CFR 982.307(a)(1)]. The owner is responsible for screening and selection of the family to occupy the owner’s unit. At or before HA approval of the tenancy, the HA must inform the owner that screening and selection for tenancy is the responsibility of the owner [24 CFR 982.307(a)(2)]. The HA must also inform the owner or manager or their rights and obligations under the Violence against Women Act of 2013 (VAWA) [24 CFR 5.2005(a)(2)]. The HA must provide the owner with the family’s current and prior address (as shown in the HA records) and the name and address (if known to the HA) of the landlord at the family’s current and prior address [24 CFR 982.307(b)(1)]. The HA is permitted, but not required, to offer the owner other information in the HA’s possession about the tenancy history or drug trafficking of family members [24 CFR 982.307(b)(2)]. The HA’s policy on providing information to the owner must be included in the family’s briefing packet [24 CFR 982.307(b)(3)]. The HA may not disclose to the owner any confidential information provided by the family in response to a HA request for documentation of domestic violence, dating violence, sexual assault, or stalking or human trafficking except at the written request or with the written consent of the individual providing the documentation [see 24 CFR 5.2007(b)(4)]. HA Policy The HA will not screen applicants for family behavior or suitability for tenancy. The HA will not provide additional screening information to the owner. 524 © Copyright 2019 Nan McKay & Associates, Inc. Adminplan 6/1/19 Unlimited copies may be made for internal use. Page 9-4 The RTA must be submitted no later than the expiration date stated on the voucher. [HCV GB p.8-15]. HA Policy The RTA must be signed by both the family and the owner. The owner may submit the RTA on behalf of the family , but this is not advised/preferred. Completed RTA (including the proposed dwelling lease) must be submitted as hard copies, in-person, by mail, email, or by fax.. In-person is strongly recommended.or via the online portal. The family may not submit, and the HA will not process, more than one (1) RTA at a time. When the family submits the RTA the HA will review the RTA for completeness. If the RTA is incomplete (including lack of signature by family, owner, or both), or if the dwelling lease is not submitted with the RTA, the HA will notify the family of the deficiencies. Missing information and/or missing documents will only be accepted as hard copies, in-person, by mail, by email, or by the online portalfax. The HA will not accept missing information over the phone. When the family submits the RTA and proposed lease, the HA will also review the terms of the RTA for consistency with the terms of the proposed lease. If the terms of the RTA are not consistent with the terms of the proposed lease, the HA will notify the family and the owner of the discrepancies. Corrections to the terms of the RTA and/or the proposed lease will only be accepted as hard copies, in-person, by mail, by email, or by faxvia the online portal. The HA will not accept corrections by phone. Because of the time sensitive nature of the tenancy approval process, the HA will attempt to communicate with the owner and family by phone, faxthe online portal, or email. The HA will use mail when the parties cannot be reached by phone, faxthe online portal, or email. 9-I.C. OWNER PARTICIPATION The HA does not formally approve an owner to participate in the HCV program. However, there are a number of criteria where the HA may deny approval of an assisted tenancy based on past owner behavior, conflict of interest, or other owner-related issues. There are also criteria for which the HA must disapprove an owner. No owner has a right to participate in the HCV program [24 CFR 982.306(e)] See Chapter 13 for a full discussion of owner qualification to participate in the HCV program. 525 © Copyright 2019 Nan McKay & Associates, Inc. Adminplan 6/1/19 Unlimited copies may be made for internal use. Page 9-9 Term of Assisted Tenancy The initial term of the assisted dwelling lease must be for at least one year [24 CFR 982.309]. The initial lease term is also stated in the HAP contract. The HUD program regulations permit the HA to approve a shorter initial lease term if certain conditions are met. HA Policy The HA will approve an initial lease term of less than one (1) year due to prevailing market practice. During the initial term of the lease, the owner may not raise the rent to owner [24 CFR 982.309]. Any provisions for renewal of the dwelling lease will be stated in the dwelling lease [HCV Guidebook, pg. 8-22]. There are no HUD requirements regarding any renewal extension terms, except that they must be stated in the dwelling lease if they exist. The HA may execute the HAP contract even if there is less than one year remaining from the beginning of the initial lease term to the end of the last expiring funding increment under the consolidated ACC. [24 CFR 982.309(b)]. Security Deposit [24 CFR 982.313 (a) and (b)] The owner may collect a security deposit from the tenant. The HA may prohibit security deposits in excess of private market practice, or in excess of amounts charged by the owner to unassisted tenants. However, if the HA chooses to do so, language to this effect must be added to Part A of the HAP contract [Form HUD-52641]. HA Policy The HA will allow the owner to collect any security deposit amount the owner determines is appropriate. Therefore, no modifications to the HAP contract will be necessary. 526 © Copyright 2019 Nan McKay & Associates, Inc. Adminplan 6/1/19 Unlimited copies may be made for internal use. Page 9-10 Separate Non-Lease Agreements between Owner and Tenant Owners may not demand or accept any rent payment from the family in excess of the rent to the owner as approved by the HA minus the HA’s housing assistance payments to the owner [24 CFR 982.451(b)(4)]. The owner may not charge the tenant extra amounts for items customarily included in rent in the locality, or provided at no additional cost to unsubsidized tenants in the premises [24 CFR 982.510(c)]. HA Policy The HA permits owners and families to execute separate, non-lease agreements for services, appliances (other than range and refrigerator) and other items that are not included in the lease. Any items, appliances, or other services that are customarily provided to unassisted families as part of the dwelling lease with those families, orfamilies or are permanently installed in the dwelling unit must be included in the dwelling lease for the assisted family. These items, appliances or services cannot be placed under a separate non-lease agreement between the owner and family. Side payments for additional rent, or for items, appliances or services customarily provided to unassisted families as part of the dwelling lease for those families, are prohibited. Any items, appliances, or other services that are not customarily provided to unassisted families as part of the dwelling lease with those families, are not permanently installed in the dwelling unit and where the family has the sole option of not utilizing the item, appliance or service, may be included in a separate non-lease agreement between the owner and the family. The family is not liable and cannot be held responsible under the terms of the assisted dwelling lease for any charges pursuant to a separate non-lease agreement between the owner and the family. Non-payment of any charges pursuant to a separate non-lease agreement between the owner and the family cannot be a cause for eviction or termination of tenancy under the terms of the assisted dwelling lease. Separate non-lease agreements that involve additional items, appliances or other services may be considered amenities offered by the owner and may be taken into consideration when determining the reasonableness of the rent for the property. 527 © Copyright 2019 Nan McKay & Associates, Inc. Adminplan 6/1/19 Unlimited copies may be made for internal use. Page 9-11 HA Review of Lease The HA will review the dwelling lease for compliance with all applicable requirements. HA Policy If the dwelling lease is incomplete or incorrect, the HA will notify the family and the owner of the deficiencies. Missing and corrected lease information will only be accepted as hard copies, in-person, by mail, email, or by faxthe online portal. The HA will not accept missing and corrected information over the phone. Because the initial leasing process is time-sensitive, the HA will attempt to communicate with the owner and family by phone, faxthe online portal, or email. The HA will use mail when the parties can’t be reached by phone, faxthe online portal, or email. The HA is permitted, but is not required, to review the lease to determine if the lease complies with State and local law and is permitted to decline to approve the tenancy if the HA determines that the lease does not comply with State or local law [24 CFR 982.308(c)] HA Policy The HA will not review the owner’s lease for compliance with state/local law. 528 © Copyright 2019 Nan McKay & Associates, Inc. Adminplan 6/1/19 Unlimited copies may be made for internal use. Page 9-13 9-I.G. HAP CONTRACT EXECUTION [24 CFR 982.305] The HAP contract is a written agreement between the HA and the owner of the dwelling unit. Under the HAP contract, the HA agrees to make housing assistance payments to the owner on behalf of the family, and the owner agrees to comply with all program requirements as stated in the HAP contract. The HAP contract form is prescribed by HUD. If the HA has given approval for the family of the assisted tenancy, the owner and the HA must execute the HAP contract. The term of the HAP contract must be the same as the term of the lease [24 CFR 982.451(a)(2)]. The HA is permitted to execute a HAP contract even if the funding currently available does not extend for the full term of the HAP contract. The HA must make a best effort to ensure that the HAP contract is executed before the beginning of the lease term. Regardless, the HAP contract must be executed no later than 60 calendar days from the beginning of the lease term. The HA may not pay any housing assistance payment to the owner until the HAP contract has been executed. If the HAP contract is executed during the period of 60 calendar days from the beginning of the lease term, the HA will pay housing assistance payments after execution of the HAP contract (in accordance with the terms of the HAP contract), to cover the portion of the lease term before execution of the HAP contract (a maximum of 60 days). Any HAP contract executed after the 60 day period is void, and the HA may not pay any housing assistance payment to the owner. HA Policy The owner and the assisted family will execute the dwelling lease and the owner must provide a copy to the HA. The HA will ensure that both the owner and the assisted family receive copies of the dwelling lease. The owner and the HA will execute the HAP contract. The HA will ensure that the owner receives a copy of the executed HAP contract. As required under VAWA 2013, once the HAP contract and lease have been executed and the family has been admitted to the program, the PHA will notify families of their rights under VAWA by providing all families with a copy of the domestic violence certification form (HUD-5382) as well as the VAWA notice of occupancy rights (form HUD-5380). See Chapter 13 for a discussion of the HAP contract and contract provisions. 529 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 10-2 x The owner has given the family a notice to vacate, has commenced an action to evict the family, or has obtained a court judgment or other process allowing the owner to evict the family [24 CFR 982.315(b)(2)]. The family must give the HA a copy of any owner eviction notice [24 CFR 982.551(g)]. x The family or a member of the family is or has been the victim of domestic violence, dating violence, sexual assault, or stalking or human trafficking and the move is needed to protect the health or safety of the family or family member [24 CFR 982.315(b)(4)]. This condition applies even when the family has moved out of its unit in violation of the lease, with or without prior notification to the HA, if the family or family member who is the victim reasonably believed that he or she was imminently threatened by harm from further violence if he or she remained in the unit [24 CFR 982.315(b)(4), 24 CFR 982.353(b)]. The HA must adopt an emergency transfer plan as required by regulations at 24 CFR 5.2007(e). HA Policy If a family requests permission to move with continued assistance based on a claim that the move is necessary to protect the health or safety of a family member who is or has been the victim of domestic violence, dating violence, sexual assault, stalking or human traffickingor stalking, the HA will request that the resident request the emergency transfer using form HUD-5383, and the HA will request documentation in accordance with section 16-IX.D of this plan. The HA reserves the right to waive the documentation requirement if it determines that a statement or other corroborating evidence from the family or family member will suffice. In such cases the HA will document the waiver in the family’s file. The HA may choose to provide a voucher to facilitate an emergency transfer of the victim without first terminating the assistance of the perpetrator. Before granting an emergency transfer, the HA will ensure the victim is eligible to receive continued assistance based on the citizenship or immigration status of the victim. The HA has adopted an emergency transfer plan, which is included as Exhibit 16-3 to this plan. x The HA has terminated the HAP contract for the family’s unit for the owner’s breach [24 CFR 982.315(b)(1)(i)]. x The HA determines that the family’s current unit does not meet the HQS space standards because of an increase in family size or a change in family composition. In such cases, the HA must issue the family a new voucher, and the family and HA must try to find an acceptable unit as soon as possible. If an acceptable unit is available for the family, the HA must terminate the HAP contract for the family’s old unit in accordance with the HAP contract terms and must notify both the family and the owner of the termination. The HAP contract terminates at the end of the calendar month that follows the calendar month in which the HA gives notice to the owner. [24 CFR 982.403(a) and (c)] 530 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 10-4 Grounds for Denial or Termination of Assistance The HA may deny a family permission to move if it has grounds for denying or terminating the family’s assistance [24 CFR 982.315(e)(2)]. HA Policy If the HA has grounds for denying or terminating a family’s assistance, the HA will act on those grounds in accordance with the regulations and policies set forth in Chapters 3 and 12, respectively. In general, it will not deny a family permission to move for this reason; however, it retains the discretion to do so under special circumstances. Restrictions on Elective Moves [24 CFR 982.315(c)] HUD regulations permit the HA to prohibit any elective move by a participant family during the family’s initial lease term. They also permit the HA to prohibit more than one elective move by a participant family during any 12-month period. However, such prohibitions, if adopted, do not apply when the family or a member of the family is or has been the victim of domestic violence, dating violence, sexual assault, stalking or human trafficking or stalking and the move is needed to protect the health or safety of the family or family member. (For the policy on documentation of abuse, see section 10-I.A.) In addition, the HA may not establish a policy permitting moves only at reexamination [Notice PIH 2016-09]. HA Policy No prohibition on frequency of moves. 531 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 10-8 10-II.B. INITIAL HA ROLE Allowable Moves under Portability A family may move with voucher assistance only to an area where there is at least one HA administering a voucher program [24 CFR 982.353(b)]. If there is more than one HA in the area, the initial HA provides the family with the contact information for the receiving HAs that serve the area, and the family selects the receiving HA. The family must inform the initial HA which HA it has selected. If the family prefers not to select the receiving HA, the initial HA will select the receiving HA on behalf of the family [24 CFR 982.255(b)]. Applicant families that have been issued vouchers as well as participant families may qualify to lease a unit outside the HA’s jurisdiction under portability. HUD regulations and HA policy determine whether a family qualifies. Applicant Families Under HUD regulations, most applicant families qualify to lease a unit outside the HA’s jurisdiction under portability. However, HUD gives the HA discretion to deny a portability move by an applicant family for the same two reasons that it may deny any move by a participant family: insufficient funding and grounds for denial or termination of assistance. If a HA intends to deny a family permission to move under portability due to insufficient funding, the HA must notify HUD within 10 business days of the determination to deny the move [24 CFR 982.355(e)]. HA Policy In determining whether or not to deny an applicant family permission to move under portability because the HA lacks sufficient funding or has grounds for denying assistance to the family, the initial HA will follow the policies established in section 10-I.B of this chapter. If the HA does deny the move due to insufficient funding, the HA will notify HUD in writing within 10 business days of the HA’s determination to deny the move. In addition, the HA may establish a policy denying the right to portability to nonresident applicants during the first 12 months after they are admitted to the program [24 CFR 982.353(c)]. HA Policy If neither the head of household nor the spouse/cohead of an applicant family had a domicile (legal residence) in the HA’s jurisdiction at the time that the family’s initial application for assistance was submitted, the family must lease a unit within the initial HA’s jurisdiction for at least 12 months before requesting portability. The HA will consider exceptions to this policy for purposes of reasonable accommodation (see Chapter 2), for reasons of a large bedroom size, or reasons related to domestic violence, dating violence, sexual assault, stalking or human traffickingor stalking. 532 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 10-9 Participant Families The initial HA must not provide portable assistance for a participant if a family has moved out of its assisted unit in violation of the lease [24 CFR 982.353(b)]. The Violence against Women Act of 2013 (VAWA) creates an exception to this prohibition for families who are otherwise in compliance with program obligations but have moved to protect the health or safety of a family member who is or has been a victim of domestic violence, dating violence, sexual assault, or stalking or human traffickingstalking and who reasonably believed he or she was imminently threatened by harm from further violence if he or she remained in the unit [24 CFR 982.353(b)]. HA Policy The HA will determine whether a participant family may move out of the HA’s jurisdiction with continued assistance in accordance with the regulations and policies set forth here and in sections 10-I.A and 10-I.B of this chapter. The HA will notify the family of its determination in accordance with the approval policy set forth in section 10- I.C of this chapter. Determining Income Eligibility Applicant Families An applicant family may lease a unit in a particular area under portability only if the family is income eligible for admission to the voucher program in that area [24 CFR 982.353(d)(1)]. The family must specify the area to which the family wishes to move [24 CFR 982.355(c)(1)]. The initial HA is responsible for determining whether the family is income eligible in the area to which the family wishes to move [24 CFR 982.353(d)(1), 24 CFR 982.355(9)]. If the applicant family is not income eligible in that area, the HA must inform the family that it may not move there and receive voucher assistance [Notice PIH 2016-09]. Participant Families The income eligibility of a participant family is not redetermined if the family moves to a new jurisdiction under portability [24 CFR 982.353(d)(2)]. Reexamination of Family Income and Composition No new reexamination of family income and composition is required for an applicant family. HA Policy For a participant family approved to move out of its jurisdiction under portability, the HA generally will conduct a reexamination of family income and composition. 533 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 10-10 Briefing The regulations and policies on briefings set forth in Chapter 5 of this plan require the HA to provide information on portability to all applicant families that qualify to lease a unit outside the HA’s jurisdiction under the portability procedures. Therefore, no special briefing is required for these families. HA Policy No formal briefing will be required for a participant family wishing to move outside the HA’s jurisdiction under portability. However, the HA will provide the family with the same oral and written explanation of portability that it provides to applicant families selected for admission to the program (see Chapter 5). The HA will provide the name, address, and phone of the contact for the HAs in the jurisdiction to which they wish to move. If there is more than one HA with jurisdiction over the area to which the family wishes to move, the HA will advise the family that the family selects the receiving HA and notify the initial HA of which receiving HA was selected. The HA will provide the family with contact information for all of the receiving HAs that serve the area. The HA will not provide any additional information about receiving HAs in the area. The HA will further inform the family that if the family prefers not to select the receiving HA, the initial HA will select the receiving HA on behalf of the family. In this case, the HA will not provide the family with information for all receiving HAs in the area. The HA will advise the family that they will be under the RHA’s policies and procedures, including screening, subsidy standards, voucher extension policies, and payment standards. Voucher Issuance and Term An applicant family has no right to portability until after the family has been issued a voucher [24 CFR 982.353(b)]. In issuing vouchers to applicant families, the HA will follow the regulations and procedures set forth in Chapter 5. HA Policy For participating families approved to move under portability, the HA will issue a new voucher within 10 business days of the HA’s written written approval to move. The initial term of the voucher will be 60 days. 534 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 10-16 Briefing HUD allows the receiving HA to require a briefing for an incoming portable family as long as the requirement does not unduly delay the family’s search [Notice PIH 2016-09]. HA Policy The HA will require the family to attend a briefing after receiving the portability paperwork from the Initial HA and before the first lease-up date . The HA will provide the family with information about the HA’s payment and subsidy standards, procedures for requesting approval of a unit, the unit inspection process, and the leasing process by phone, mail or email or the online portal at the time of the family’s initial contact regarding porting to the jurisdiction. Income Eligibility and Reexamination The receiving HA does not redetermine eligibility for a portable family that was already receiving assistance in the initial HA’s voucher program [24 CFR 982.355(c)(9)]. If the receiving HA opts to conduct a new reexamination for a current participant family, the receiving HA may not delay issuing the family a voucher or otherwise delay approval of a unit [24 CFR 982.355(c)(11)]. HA Policy The HA will not delay approving a unit for the family until a reexamination process is complete unless the family is an applicant and the HA cannot otherwise confirm that the family is income eligible for admission to the program in the area where the unit is located. In conducting its own reexamination, the HA will rely upon any verifications provided by the initial HA to the extent that they (a) accurately reflect the family’s current circumstances and (b) were obtained within the last 120 days. Any new information may be verified by documents provided by the family and adjusted, if necessary, when third party verification is received. 535 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 10-17 Voucher Issuance When a family moves into its jurisdiction under portability, the receiving HA is required to issue the family a voucher [24 CFR 982.355(c)(13)]. The family must submit a request for tenancy approval to the receiving HA during the term of the receiving HA’s voucher [24 CFR 982.355(c)(15)]. Timing of Voucher Issuance HUD expects the receiving HA to issue the voucher within two weeks after receiving the family’s paperwork from the initial HA if the information is in order, the family has contacted the receiving HA, and the family complies with the receiving HA’s procedures [Notice PIH 2016-09]. HA Policy When a family ports into its jurisdiction, the HA will issue the family a voucher based on the paperwork provided by the initial HA unless the family’s paperwork from the initial HA is incomplete, the family’s voucher from the initial HA has expired or the family does not comply with the HA’s procedures. The HA will update the family’s information when verification has been completed. Voucher Term The term of the receiving HA’s voucher may not expire before 30 calendar days from the expiration of the initial HA’s voucher [24 CFR 982.355(c)(13)]. If the initial HA extends the term of the voucher, the receiving HA’s voucher may not expire before 30 days from the new expiration date of the initial HA’s voucher [Notice PIH 2016-09]. HA Policy The receiving HA’s voucher will expire on the same date as the initial HA’s voucher. If the initial HA extends the term of the voucher, the receiving HA’s voucher will expire 30 calendar days from the new expiration date of the initial HA’s voucher. Voucher Extensions [24 CFR 982.355(c)(14), Notice 2016-09] Once the receiving HA issues the portable family a voucher, the receiving Ha’s HA’s policies on extensions of the voucher term apply. The receiving HA must inform the initial HA of any extension granted to the term of the voucher. It must also bear in mind the billing deadline provided by the initial HA. Unless willing and able to absorb the family, the receiving HA should ensure that any voucher expiration date would leave sufficient time to process a request for tenancy approval, execute a HAP contract, and deliver the initial billing to the initial HA. HA Policy The HA generally will not extend the term of the voucher that it issues to an incoming portable family unless the HA plans to absorb the family into its own program, in which case it will follow the policies on voucher extension set forth in section 5-II.E. The HA will consider an exception to this policy as a reasonable accommodation to a person with disabilities (see Chapter 2). 536 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 11-1 Chapter 11 REEXAMINATIONS INTRODUCTION The HA is required to reexamine each family’s income and composition at least annually, and to adjust the family’s level of assistance accordingly. Interim reexaminations are also needed in certain situations. This chapter discusses both annual and interim reexaminations, and the recalculation of family share and subsidy that occurs as a result. HUD regulations and HA policies concerning reexaminations are presented in three parts: Part I: Annual Reexaminations. This part discusses the process for conducting annual reexaminations. Part II: Interim Reexaminations. This part details the requirements for families to report changes in family income and composition between annual reexaminations. Part III: Recalculating Family Share and Subsidy Amount. This part discusses the recalculation of family share and subsidy amounts based on the results of annual and interim reexaminations. Part IV: Non-Interim Reexamination Transaction. This part describes transactions that do not entail changes to the family’s adjusted income. Part IV: Non-Interim Reexamination Transaction. This part describes transactions that do not entail changes to the family’s adjusted income. Policies governing reasonable accommodation, family privacy, required family cooperation, and program abuse, as described elsewhere in this plan, apply to both annual and interim reexaminations. PART I: ANNUAL REEXAMINATIONS [24 CFR 982.516] 11-I.A. OVERVIEW The HA must conduct a reexamination of family income and composition at least annually. This includes gathering and verifying current information about family composition, income, and expenses. Based on this updated information, the family’s income and rent must be recalculated. This part discusses the schedule for annual reexaminations, the information to be collected and verified, and annual reexamination effective dates. Unlike when performing an interim reexamination or at intake, at annual reexamination, the PHA must determine the income of the family for the previous 12-month period, except where the PHA uses a streamlined income determination. Income from assets, however, is always anticipated, irrespective of the income examination type [Notice PIH 2023-27]. PHAs also have the option of using a “safe harbor” income verification from another federal means-tested program to verify gross annual income. Chapter 7 contains the PHA’s policies related to streamlined income determinations and the use of safe harbor income verifications. 537 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 11-2 Unlike when performing an interim reexamination or at intake, at annual reexamination, the PHA must determine the income of the family for the previous 12-month period, except where the PHA uses a streamlined income determination. Income from assets, however, is always anticipated, irrespective of the income examination type [Notice PIH 2023-27]. PHAs also have the option of using a “safe harbor” income verification from another federal means-tested program to verify gross annual income. Chapter 7 contains the PHA’s policies related to streamlined income determinations and the use of safe harbor income verifications. 538 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 11-3 11-I.B STREAMLINED ANNUAL REEXAMINATIONS [24 CFR 982.516(b)] HUD permits HAs to streamline the income determination process for family members with fixed sources of income. While third-party verification of all income sources must be obtained during the intake process and every three years thereafter, in the intervening years the HA may determine income from fixed sources by applying a verified cost of living adjustment (COLA) or rate of interest. The HA may, however, obtain third-party verification of all income, regardless of the source. Further, upon request of the family, the HA must perform third-party verification of all income sources. Fixed sources of income include Social Security and SSI benefits, pensions, annuities, disability or death benefits, and other sources of income subject to a COLA or rate of interest. The determination of fixed income may be streamlined even if the family also receives income from other non-fixed sources. Two streamlining options ae available, depending upon the percentage of the family’s income that is received from fixed sources. If at least 90 percent of the family’s income is from fixed sources, the HA may streamline the verification of fixed income but is not required to verify non-fixed income amounts. If the family receives less than 90 percent of its income from fixed sources, the PHA may streamline the verification of fixed income and must verify non-fixed income annually. HA Policy The HA chooses not to streamline the annual reexamination process for fixed-income sources. The HA will obtain third-party verification of all sources of income annually. 539 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 11-4 11-I.CB. SCHEDULING ANNUAL REEXAMINATIONS The HA must establish a policy to ensure that the annual reexamination for each family is completed within a 12-month period, and may require reexaminations more frequently [HCV GB p. 12-1]. HA Policy The HA will begin the annual reexamination process 90 days in advance of its scheduled effective date. Generally, the HA will schedule annual reexamination effective dates to coincide with the family’s anniversary date. Anniversary date is defined as 12 months from the effective date of the family’s last annual reexamination or, during a family’s first year in the program, from the effective date of the family’s initial examination (admission). If the family moves to a new unit, the HA will perform a new annual reexamination. The HA also may schedule an annual reexamination for completion prior to the anniversary date for administrative purposes. Notification of and Participation in the Annual Reexamination Process The HA is required to obtain the information needed to conduct annual reexaminations. How that information will be collected is left to the discretion of the HA. However, HAs should give tenants who were not provided the opportunity the option to complete Form HUD-92006 at this time [Notice PIH 2009-36]. HA Policy Families generally aremay be required to participate in an annual reexamination interview, which must be attended by the head of household, spouse, or cohead. If participation in an in-person interview poses a hardship because of a family member’s disability, the family should contact the HA to request a reasonable accommodation (see Chapter 2). Notification of annual reexamination interviews will be sent by first-class mail , email or the online portal and will contain the dates available for appointments, and location of the interview. instructions for completing the annual reexam. In addition, it will inform the family of the information and documentation that must be brought to the interview. If a family does not attend a scheduled interview, the HA will send a second notification with a new interview dates. If a family fails to attend two scheduled interviews options without HA approval, or if the notice is returned by the post office with no forwarding address,complete their annual reexam by the date indicated a second notice will be sent by first class mail, email or the online portal. If the family fails to complete the recertification after the second notice, a notice of termination (see Chapter 12) will be sent to the online portal, emailed, mailed via first class mail to the family’s address of record, and to any alternate address provided in the family’s file. 540 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 11-5 An advocate, interpreter, or other assistant may assist the family in the interview process. The family and the HA must execute a certification attesting to the role and the assistance provided by any such third party. 541 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 11-6 11-I.D. CONDUCTING ANNUAL REEXAMINATIONS As part of the annual reexamination process, families are required to provide updated information to the HA regarding the family’s income, expenses, and composition [24 CFR 982.551(b)]. HA Policy Families will be asked to bring provide all required information (as described in the reexamination noticevia the online portal) to the reexamination appointmentduring the reexamination process. The required information will include a HA-designated reexamination forms, an Authorization for the Release of Information/Privacy Act Notice, as well as supporting documents or forms related to the family’s income, expenses, and family composition. Any required documents or information that the family is unable to provide at the time of the interview must be provided within 10 business days of the interview. If the family is unable to obtain the information or materials within the required time frame, the family may request an extension. If the family does not provide the required documents or information within the required time period (plus any extensions), the family will be sent a notice of termination (See Chapter 12). Additionally, HUD recommends that at annual reexaminations HAs ask whether the tenant, or any member of the tenant’s household, is subject to a lifetime sex offender registration requirement in any state [Notice PIH 2012-28]. HA Policy At the annual reexamination, the HA will ask whether the tenant, or any member of the tenant’s household, is subject to a lifetime sex offender registration requirement in any state. The HA will use the Dru Sjodin National Sex Offender database to verify the information provided by the tenant. If the HA proposes to terminate assistance based on lifetime sex offender registration information, the HA must notify the household of the proposed action and must provide the subject of record and the tenant a copy of the record and an opportunity to dispute the accuracy and relevance of the information prior to termination. [24 CRF 5.903(f) and 5.905(d). (See Chapter 12.) 542 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 11-7 The information provided by the family generally must be verified in accordance with the policies in Chapter 7. Unless the family reports a change, or the HA has reason to believe a change has occurred in information previously reported by the family, certain types of information that are verified at admission typically do not need to be re-verified on an annual basis. These include: x Legal identity x Age x Social security numbers x A person’s disability status x Citizenship or immigration status If adding a new family member to the unit causes overcrowding according to the housing quality standards (HQS) (see Chapter 8), the HA must issue the family a new voucher, and the family and HA must try to find an acceptable unit as soon as possible. If an acceptable unit is available for rental by the family, the HA must terminate the HAP contract in accordance with its terms [24 CFR 982.403]. 543 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 11-8 11-I.ED. DETERMINING ONGOING ELIGIBILITY OF CERTAIN STUDENTS [24 CFR 982.552(b)(5)] Section 327 of Public Law 109-115 established new restrictions on the ongoing eligibility of certain students (both part- and full-time) who are enrolled in institutions of higher education. If a student enrolled in an institution of higher education is under the age of 24, is not a veteran, is not married, does not have a dependent child, and is not a person with disabilities receiving HCV assistance as of November 30, 2005, the student’s eligibility must be reexamined along with the income eligibility of the student’s parents on an annual basis. In these cases, both the student and the student’s parents must be income eligible for the student to continue to receive HCV assistance. If, however, a student in these circumstances is determined independent from his or her parents or is considered a vulnerable youth in accordance with HA policy, the income of the student’s parents will not be considered in determining the student’s ongoing eligibility. Students who reside with parents in an HCV assisted unit are not subject to this provision. It is limited to students who are receiving assistance on their own, separately from their parents. HA Policy During the annual reexamination process, the HA will determine the ongoing eligibility of each student who is subject to the eligibility restrictions in 24 CFR 5.612 by reviewing the student’s individual income as well as the income of the student’s parents. If the student has been determined “independent” from their parents or is considered a vulnerable youth based on the policies in Sections 3-II.E and 7-II.E, the parents’ income will not be reviewed. If the student is no longer income eligible based on their own income or the income of their parents, the student’s assistance will be terminated in accordance with the policies in Section 12- I.D. If the student continues to be income eligible based on their own income and the income of their parents (if applicable), the HA will process a reexamination in accordance with the policies in this chapter. 11-I.E. CALCULATING ANNUAL INCOME AT ANNUAL REEXAMINATION [24 CFR 5.609(c)(2) and Notice PIH 2023-27] The PHA must determine the income of the family for the previous 12-month period and use this amount as the family income for annual reexaminations, except where the PHA uses a streamlined income determination as indicated in Chapter 7 of this policy. The PHA may also use Safe harbor income determinations dated within the last 12 months from a means-tested federal public assistance program at annual reexamination as outlined in Chapter 7 of this policy. Except when using streamlined or Safe Harbor income determinations, in determining the income of the family for the previous 12-month period, any change of income since the family’s last annual reexamination, including those that did not meet the threshold to process an interim reexamination in accordance with PHA policies and 24 CFR 5.657(c) or 960.257(b) must be considered. Income from assets is always anticipated, irrespective of the income examination type. 544 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 11-9 A change in income may be a loss of income or the addition of a new source of income. Changing to a different employer in the prior year does not necessarily constitute a change if the income earned from either employer is substantially the same. The PHA should look at the entirety of the family’s unearned income and earned income from the prior year in which earned income may have been one constant job or many different jobs that start and stop. Cost of Living Adjustments (COLA) to Social Security income and Social Security disability income are always considered changes to income because the COLA is an adjustment that automatically occurs annually by law. See Chapter 6 for PHA policies on when the COLA is applied and Chapter 7 on streamlined determination of income for inflationary adjustments. Notice PIH 2023-27 lists the following steps to calculate both earned and unearned income at annual reexamination. x Step 1: The PHA determines annual income for the previous 12-month period by reviewing the following information: x The EIV Income Report pulled within 120 days of the effective date of the annual reexamination; x The income reported on the most recent HUD–50058; and x The amount of prior-year income reported by the family on the PHA’s annual reexamination paperwork. x Step 2: The PHA takes into consideration any interim reexamination of family income completed since the last annual reexamination. x If there was an interim reexamination performed, the PHA must use the annual income from the interim to determine the family’s total annual income, provided there are no additional changes. x If the PHA did not perform an interim or there have been changes since the last reexamination, the PHA moves to Step 3. 545 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 11-10 x Step 3: If there were changes in annual income not processed by the PHA since the last reexamination, the PHA must use current income. The family will be required to report their income for the prior year and whether there have been permanent changes. x If there are no reported changes to an income source, the PHA may use documentation of prior-year income to calculate the annual income. For example, the PHA may use the following documentation: x EIV + self-certification (wages, Supplemental Security Income (SSI), Social Security, and unemployment) x Current written third-party verification from the source verifying prior-year income that is dated within 120 days of receipt by the PHA, for example: - Year-end statements - Paycheck with year-to-date amounts - Tax forms (Form 1040, W2, 1099, etc.) x If there are reported changes by the family or the PHA notes discrepancies between EIV and what the family reports, the PHA must follow the verification hierarchy (described in Chapter 7) to document and verify income. Exhibit 11-1 provides detailed examples of how the PHA calculates income from different sources at annual reexamination using the above method. x PHA Policy x The HA will not be using streamlining or Safe Harbor. 546 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 11-11 11-I.F. EFFECTIVE DATES The HA must establish policies concerning the effective date of changes that result from an annual reexamination [24 CFR 982.516]. HA Policy In general, an increase in the family share of the rent that results from an annual reexamination will take effect on the family’s anniversary date, and the family will be notified at least 30 days in advance. If less than 30 days remain before the scheduled effective date, the increase will take effect on the first of the month following the end of the 30-day notice period. If a family moves to a new unit, the increase will take effect on the effective date of the new lease and HAP contract, and no 30-day notice is required. If the HA chooses to schedule an annual reexamination for completion prior to the family’s anniversary date for administrative purposes, the effective date will be determined by the HA, but will always allow for the 30-day notice period. If the family causes a delay in processing the annual reexamination, increases in the family share of the rent will be applied retroactively, to the scheduled effective date of the annual reexamination. The family will be responsible for any overpaid subsidy and may be offered a repayment agreement in accordance with the policies in Chapter 16. In general, a decrease in the family share of the rent that results from an annual reexamination will take effect on the family’s anniversary date. If a family moves to a new unit, the decrease will take effect on the effective date of the new lease and HAP contract. If the HA chooses to schedule an annual reexamination for completion prior to the family’s anniversary date for administrative purposes, the effective date will be determined by the HA. If the family causes a delay in processing the annual reexamination, d ecreases in the family share of the rent will be applied prospectively, from the first day of the month following completion of the reexamination processing. Delays in reexamination processing are considered to be caused by the family if the family fails to provide information requested by the HA by the date specified, and this delay prevents the HA from completing the reexamination as scheduled. 547 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 11-12 548 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 11-13 PART II: INTERIM REEXAMINATIONS [24 CFR 982.516 ; Notice PIH 2023-27] 11-II.A. OVERVIEW Family circumstances may change between annual reexaminations. HUD and HA policies dictate what kinds of information about changes in family circumstances must be reported, and under what circumstances the HA must process interim reexaminations to reflect those changes. HUD regulations also permit the HA to conduct interim reexaminations of income or family composition at any time. When an interim reexamination is conducted, only those factors that have changed are verified and adjusted [HCV GB, p. 12-10]. A family may request an interim determination of family income or composition because of any changes since the last determination. The PHA must conduct any interim reexamination within a reasonable period of time after the family request or when the PHA becomes aware of a change in the family’s adjusted income that must be processed in accordance with HUD regulations. What qualifies as a “reasonable time” may vary based on the amount of time it takes to verify information, but the PHA generally should conduct the interim reexamination not longer than 30 days after the PHA becomes aware of changes in income. Notice PIH 2023-27 changes the conditions under which interim reexaminations must be conducted, codifies when interim reexaminations should be processed and made effective, and requires related changes for annual reexaminations and streamlined income determinations. When the PHA determines that an interim reexamination of income is necessary, they must ask the family to report changes in all aspects of adjusted income. In addition to specifying what information the family must report, HUD regulations permit the family to request an interim determination if other aspects of the family’s income or composition changes. The HA must complete the interim reexamination within a reasonable time after the family’s request. This part includes HUD and HA policies describing what changes families are required to report, what changes families may choose to report, and how the HA will process both HA- and family- initiated interim reexaminations. 11-II.B. CHANGES IN FAMILY AND HOUSEHOLD COMPOSITION Reporting PHAs must require families to report household composition changes; however, PHAs determine the timeframe in which reporting happens [Notice PIH 2023-27].The family is required to report all changes in family composition. The HA must adopt policies prescribing when and under what conditions the family must report changes in income and family composition [24 CFR 960.257(b)(5)].. However, due to family obligations under the program, the HA has limited discretion in this area. HA Policy All families must report all changes in family and household composition that occur between annual reexaminations within 10 business days of the change. 549 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 11-14 The HA will conduct interim reexaminations to account for any changes in household composition that occur between annual reexaminations. New Family Members Not Requiring HA Approval The addition of a family member as a result of birth, adoption, or court-awarded custody does not require HA approval. However, the family is required to promptly notify the HA of the addition [24 CFR 982.551(h)(2)]. HA Policy The family must inform the HA of the birth, adoption, or court-awarded custody of a child within 30 days. In the case of a birth the child cannot be added to the household composition until a Social Security card is received 550 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 11-15 New Family and Household Members Requiring Approval With the exception of children who join the family as a result of birth, adoption, or court- awarded custody, a family must request HA approval to add a new family member [24 CFR 982.551(h)(2)] or other household member (live-in aide or foster child) [24 CFR 982.551(h)(4)]. When any new family member is added, the HA must make appropriate adjustments in the family share of the rent and the HAP payment at the effective date of either the annual or interim reexamination [24 CFR 982.516(e)(2)]. If a change in family size causes a violation of Housing Quality Standards (HQS) space standards (see Chapter 8), the HA must issue the family a new voucher, and the family and HA must try to find an acceptable unit as soon as possible. If an acceptable unit is available for rental by the family, the HA must terminate the family’s HAP contract in accordance with its terms [24 CFR 982.403]. HA Policy Families must request HA approval to add a new family member, live-in aide, foster child, or foster adult. This includes any person not on the lease who is expected to stay in the unit for more than 30 consecutive days or 90 cumulative days within a 12-month period and therefore no longer qualifies as a “guest.” Requests must be made in writing and approved by the HA prior to the individual moving into the unit. The HA will not approve the addition of a new family or household member unless the individual meets the HA’s eligibility criteria (see Chapter 3) and documentation requirements (see Chapter 7, Part II). If the HA determines an individual meets the HA’s eligibility criteria and documentation requirements, the HA will provide written approval to the family. If the approval of a new family member or live-in aide will cause overcrowding according to HQS standards, the approval letter will explain that the family will be issued a voucher and will be required to move. The HA will not increase bedroom size when members are added other than by birth, adoption, court-awarded custody, Delegation of Parental Authority, marriage, additions of foster children, foster adults and live-in aides. Additions of family members sustained for twelve (12) months may increase voucher size (see Chapter 5). If the HA determines that an individual does not meet the HA’s eligibility criteria or documentation requirements, the HA will notify the family in writing of its decision to deny approval of the new family or household member and the reasons for the denial. The HA will make its determination within 10 business days of receiving all information required to verify the individual’s eligibility. 551 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 11-16 Departure of a Family or Household Member Families must promptly notify the HA if any family household member no longer lives in the unit[24 CFR 982.551(h)(3)]. Because household members are considered when determining the family unit (voucher) size [24 CFR 982.402], the HA also needs to know when any live-in aide, foster child, or foster adult ceases to reside in the unit. The PHA must process an interim for all decreases in adjusted income when a family member permanently moves out of the unit. HA Policy If a household member ceases to reside in the unit, the family must inform the PHA within 10 business days. This requirement also applies to a family member who has been considered temporarily absent at the point that the family concludes the individual is permanently absent. If a household member ceases to reside in the unit, the family must inform the HA within 30 business days. This requirement also applies to a family member who has been considered temporarily absent at the point that the family concludes the individual is permanently absent. If a live-in aide, foster child, or foster adult ceases to reside in the unit, the family must inform the HA within 30 days. 552 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 11-17 Overview Interim reexaminations for changes in income or expenses may be scheduled either because the PHA has reason to believe that changes in income or expenses may have occurred, or because the family reports a change. The PHA must estimate the income of the family for the upcoming 12-month period to determine family income for an interim reexamination [24 CFR 5.609(c)(1)]. Policies for projecting income are found in Chapter 6. Interim Decreases [24 CFR 982.516(c)(2) and Notice PIH 2023-27] A family may request an interim determination of family income for any change since the last determination. However, the PHA may decline to conduct an interim reexamination if the PHA estimates the family’s adjusted income will decrease by an amount that is less than 10 percent of the family’s adjusted income. The PHA may set a lower threshold in PHA policy such as performing an interim for any decreases in adjusted income, although HUD prohibits the PHA from setting a dollar-figure threshold. However, while the PHA has some discretion, HUD requires that the PHA perform an interim reexamination for a decrease in adjusted income of any amount in two circumstances: x When there is a decrease in family size attributed to the death of a family member; or x When a family member permanently moves out of the assisted unit during the period since the family’s last reexamination. In the above circumstances, the PHA must perform an interim reexamination for any decrease in adjusted income. If the net effect of the changes in adjusted income due to a decrease in family size results in no change or an increase in annual adjusted income, then PHA must process the removal of the household member(s) as a non-interim reexamination transaction without making changes to the family’s annual adjusted income. PHA Policy The PHA will conduct an interim reexamination any time the family’s adjusted income has decreased by any amount. 553 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 11-18 Interim Increases [24 CFR 982.516(c)(3) and Notice PIH 2023-27] Increases Less than 10 Percent PHAs must not process interim reexaminations for income increases that result in less than a 10 percent increase in annual adjusted income. Increases 10 Percent or Greater PHAs must conduct an interim reexamination of family income when the PHA becomes aware that the family’s adjusted income has changed by an amount that the PHA estimates will result in an increase of 10 percent or more in adjusted income, with the following exceptions: x PHAs may not consider any increases in earned income when estimating or calculating whether the family’s adjusted income has increased, unless the family has previously received an interim reduction during the same reexamination cycle; and x PHAs may choose not to conduct an interim reexamination during the last three months of a certification period if a family reports an increase in income within three months of the next annual reexamination effective date. When the family previously received an interim reexamination for a decrease to adjusted income during the same annual reexamination cycle, a PHA has the discretion whether to consider a subsequent increase in earned income. PHA Policy When a family reports an increase in their earned income between annual reexaminations, the PHA will conduct an interim reexamination. The PHA will process an interim reexamination for any increases in unearned income of 10 percent or more in adjusted income. The PHA will not perform an interim reexamination when a family reports an increase in income (whether earned or unearned income) within three months of their annual reexamination effective date. However, families who delay reporting income increases until the last three months of their certification period may be subject to retroactive rent increases in accordance with the PHA policies in Chapter 14. 554 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 11-19 Concurrent Increases in Earned and Unearned Income [Notice PIH 2023-27] When the family reports an increase in both earned and unearned income at the same time, the PHA must look at the earned and unearned income changes independently of each other to determine if an interim reexamination is performed. The PHA will only conduct an interim reexamination when the increase independently meets the 10 percent threshold and all other requirements for performing interim reexaminations. For example, if a family reported increases in both earned and unearned income that overall resulted in a 12 percent increase in their adjusted income, but the change in earned income represented a 7 percent increase and the change in unearned income represented a 5 percent increase, the PHA may not perform an interim for either change since neither change meets the 10 percent threshold amount independently. If the change in unearned income met the 10 percent threshold in this case, the PHA would be required to perform an interim. If the change in earned income met the 10 percent threshold in this case, the PHA would refer to PHA policy to determine whether an interim was required. Cumulative Increases [Notice PIH 2023-27] A series of smaller reported increases in adjusted income may cumulatively meet or exceed the 10-percent increase threshold, at which point the PHA must conduct an interim reexamination in accordance with PHA policy. 555 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 11-20 Family Reporting The PHA must adopt policies consistent with HUD regulations prescribing when and under what conditions the family must report a change in family income or composition [24 CFR 982.516(d)]. PHA policy may require families to report only changes that the family estimates meet the threshold for an interim reexamination or the PHA may establish policies requiring that families report all changes in income and household composition, and the PHA will subsequently determine if the change requires an interim reexamination [Notice PIH 2023-27]. When the PHA determines that an interim reexamination of income is necessary, they must ask the family to report changes in all aspects of adjusted income. For example, if the family is reporting a decrease in adjusted income that is more than 10 percent, but the family also had a change in assets that would result in a change in income, the change in assets must also be reviewed [Notice PIH 2023-27]. PHA Policy The family will be required to report all changes in income regardless of the amount of the change, whether the change is to earned or unearned income, or if the change occurred during the last three months of the certification period. Families must report changes in income within 10 business days of the date the change takes effect. The family must notify the PHA of changes in writing or via the online portal. Within 10 business days of the family reporting the change, the PHA will determine whether the change will require an interim reexamination. If the change will not result in an interim reexamination, the PHA will note the information in the tenant file but will not conduct an interim reexamination. The PHA will send the family written notification within 10 business days of making this determination informing the family that the PHA will not conduct an interim reexamination. If the change will result in an interim reexamination, the PHA will determine the documentation the family will be required to submit based on the type of change reported and PHA policies in Chapter 7. The PHA will ask the family to report changes in all aspects of adjusted income at this time. The family must submit any required information or documents within 10 business days of receiving a request from the PHA. This time frame may be extended for good cause with PHA approval. The PHA will accept required documentation by mail, email, fax, or in person. The PHA will conduct the interim within a reasonable time period based on the amount of time it takes to verify the information. Generally, the family will not be required to attend an interview for an interim reexamination. However, if the PHA determines that an interview is warranted, the family may be required to attend. 11-II.C. CHANGES AFFECTING INCOME OR EXPENSES 556 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 11-21 Interim reexaminations can be scheduled either because the HA has reason to believe that changes in income or expenses may have occurred, or because the family reports a change. When a family reports a change, the HA may take different actions depending on whether the family reported the change voluntarily, or because it was required to do so. HA-Initiated Interim Reexaminations HA-initiated interim reexaminations are those that are scheduled based on circumstances or criteria defined by the HA. They are not scheduled because of changes reported by the family. HA Policy The HA will conduct interim reexaminations in each of the following instances: For families receiving the Earned Income Disallowance (EID), the HA will conduct an interim reexamination at the start and conclusion of the 24-month eligibility period. If the family has reported zero income, the HA will conduct an interim reexamination every 3 months as long as the family continues to report that they have no income. If at the time of the annual reexamination, it is not feasible to anticipate a level of income for the next 12 months (e.g. seasonal or cyclic income), the HA will schedule an interim reexamination to coincide with the end of the period for which it is feasible to project income. If at the time of the annual reexamination, tenant declarations were used on a provisional basis due to the lack of third-party verification, and third-party verification becomes available, the HA will conduct an interim reexamination. The HA may conduct an interim reexamination at any time in order to correct an error in a previous reexamination, or to investigate a tenant fraud complaint. 557 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 11-22 Family-Initiated Interim Reexaminations The HA must adopt policies prescribing when and under what conditions the family must report changes in family income or expenses [24 CFR 982.516(c)]. In addition, HUD regulations require that the family be permitted to obtain an interim reexamination any time the family has experienced a change in circumstances since the last determination [24 CFR 982.516(b)(2)]. Required Reporting HUD regulations give the HA the freedom to determine the circumstances under which families will be required to report changes affecting income. HA Policy Families are required to report all increases in gross income in excess of $300 per month within 10 days of the date the change takes effect. Families are not required to report any other changes in income or expenses. Optional Reporting The family may request an interim reexamination any time the family has experienced a change in circumstances since the last determination [24 CFR 982.516(b)(2)]. The HA must process the request if the family reports a change that will result in a reduced family income [HCV GB, p. 12-9]. If a family reports a decrease in income from the loss of welfare benefits due to fraud or non- compliance with a welfare agency requirement to participate in an economic self-sufficiency program, the family’s share of the rent will not be reduced [24 CFR 5.615]. For more information regarding the requirement to impute welfare income see Chapter 6. HA Policy If a family reports a change that it was not required to report and that would result in an increase in the family share of the rent, the HA will note the information in the tenant file, but will not conduct an interim reexamination. If a family reports a change that it was not required to report and that would result in a decrease in the family share of rent, the HA will conduct an interim reexamination. See Section 11-II.D. for effective dates. Families may report changes in income or expenses at any time. 558 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 11-23 11-II.D. PROCESSING THE INTERIM REEXAMINATION Method of Reporting HA Policy The family may notify the HA of changes either orally or in writing. If the family provides oral notice, the HA may also require the family to submit the changes in writing. Generally, the family will not be required to attend an interview for an interim reexamination. However, if the HA determines that an interview is warranted, the family may be required to attend. Based on the type of change reported, the HA will determine the documentation the family will be required to submit. The family must submit any required information or documents in a timely manner. For decreases to take effect the following month the documentation must be received by the 25th day of the month. The HA will accept required documentation by mail, by email, by fax, or in person. Effective Dates The HA must establish the time frames in which any changes that result from an interim reexamination will take effect [24 CFR 982.516(d)]. The changes may be applied either retroactively or prospectively, depending on whether there is to be an increase or a decrease in the family share of the rent, and whether the family reported any required information within the required time frames [HCV GB, p. 12-10]. HA Policy If the family share of the rent is to increase: The increase generally will be effective on the first of the month following 30 days’ notice to the family. If a family fails to report a change within the required time frames, or fails to provide all required information within the required time frames, the increase will be applied retroactively, to the date it would have been effective had the information been provided on a timely basis. The family will be responsible for any overpaid subsidy and may be offered a repayment agreement in accordance with the policies in Chapter 16. If the family share of the rent is to decrease: The decrease will be effective on the first day of the month following the month in which the change was reported and all required documentation was submitted. 11-II.D. EFFECTIVE DATES [24 CFR 982.516(e) and Notice 2023-27] Changes Reported Timely [Notice PIH 2023-27] If the family reports a change in family income or composition timely in accordance with PHA policies: 559 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 11-24 x For rent increases, the PHA must provide the family with 30 days advance written notice. The rent increase is effective the first of the month after the end of that 30-day notice period. x Rent decreases are effective on the first of the month after the date of the actual change leading to the interim reexamination of family income. This means the decrease will be applied retroactively. Changes Not Reported Timely [Notice PIH 2023-27] If the family failed to report a change in family income or composition timely in accordance with PHA policies: x For rent increases, the PHA must implement any resulting rent increases retroactively to the first of the month following the date of the change leading to the interim reexamination of family income. x For rent decreases, the PHA must implement the change no later than the first rent period following completion of the interim reexamination. However, the PHA may choose to adopt a policy that would make the effective date of the rent decrease retroactive to the first of the month following completion of the reexamination. PHAs may choose to establish conditions or requirements for when such a retroactive application would apply. PHAs that choose to adopt such policies must ensure the earliest date that the retroactive decrease is applied is the later of: x The first of the month following the date of the change that led to the interim reexamination; or x The first of the month following the most recent previous income examination. 560 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 11-25 In applying a retroactive change in rent as the result of an interim reexamination, the PHA must clearly communicate the effect of the retroactive adjustment to the family so that there is no confusion over the amount of the rent that is the family’s responsibility. PHA Policy When the family fails to report a change in income or family composition timely, and the change would lead to a rent decrease, the PHA will apply the decrease the first of the month following completion of the interim reexamination. However, the PHA will apply the results of the interim reexamination retroactively where a family’s ability to report a change in income promptly may have been hampered due to extenuating circumstances such as a natural disaster or disruptions to PHA management operations. The PHA will decide to apply decreases retroactively on a case-by-case basis. When the PHA applies the results of interim decreases retroactively, the PHA will clearly communicate the effect of the retroactive adjustment to the family and may enter into a repayment agreement in accordance with PHA policies. The PHA will also clearly communicate the effect of the retroactive adjustment to the owner. 561 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 11-26 PART III: RECALCULATING FAMILY SHARE AND SUBSIDY AMOUNT 11-III.A. OVERVIEW After gathering and verifying required information for an annual or interim reexamination, the HA must recalculate the family share of the rent and the subsidy amount, and notify the family and owner of the changes [24 CFR 982.516(d)(2), HCV 12-6 and 12-10]. While the basic policies that govern these calculations are provided in Chapter 6, this part lays out policies that affect these calculations during a reexamination. 11-III.B. CHANGES IN PAYMENT STANDARDS AND UTILITY ALLOWANCES In order to calculate the family share of the rent and HAP amount correctly, changes in payment standards, subsidy standards, or utility allowances may need to be updated and included in the HA’s calculations. Specific policies governing how subsidy standards, payment standards, and utility allowances are applied are discussed below. Payment Standards [24 CFR 982.505] The family share of the rent and HAP calculations must use the correct payment standard for the family, taking into consideration the family unit size, the size of unit, and the area in which the unit is located [HCV GB, p. 12-5]. See Chapter 6 for information on how to select the appropriate payment standard. When the HA changes its payment standards or the family’s situation changes, new payment standards are applied at the following times: x If the HA’s payment standard amount changes during the term of the HAP contract, the date on which the new standard is applied depends on whether the standard has increased or decreased: - If the payment standard amount has increased, the increased payment standard will be applied at the first annual reexamination following the effective date of the increase in the payment standard. - If the payment standard amount has decreased, during the term of a HAP contract, the PHA is not required to reduce the payment standard as the HAP contract remains in effect. At the family’s second annual reexamination, the PHA may, but is not required to, apply the decreased payment standard or may gradually implement the reduced payment standard (See Chapter 6 for the PHA’s policy on decreases in the payment standard). - x If the family moves to a new unit, or a new HAP contract is executed due to changes in the lease (even if the family remains in place) the current payment standard applicable to the family will be used when the new HAP contract is processed. 562 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 11-27 Subsidy Standards [24 CFR 982.505(c)(4)] If there is a change in the family unit size that would apply to a family during the HAP contract term, either due to a change in family composition, or a change in the HA’s subsidy standards (see Chapter 5), the new family unit size must be used to determine the payment standard amount for the family at the family’s first annual reexamination following the change in family unit size. Utility Allowances [24 CFR 982.517(d)] The family share of the rent and HAP calculations must reflect any changes in the family’s utility arrangement with the owner, or in the HA’s utility allowance schedule [HCV GB, p. 12-5]. Chapter 16 discusses how utility allowance schedules are established. When there are changes in the utility arrangement with the owner, the HA must use the utility allowances in effect at the time the new lease and HAP contract are executed. At reexamination, the HA must use the HA current utility allowance schedule [HCV GB, p.18-8] HA Policy Revised utility allowances will be applied to a family’s rent and subsidy calculations at the first annual reexamination after the allowance is adopted. 11-III.C. NOTIFICATION OF NEW FAMILY SHARE AND HAP AMOUNT The HA must notify the owner and family of any changes in the amount of the HAP payment [HUD-52641, HAP Contract]. The notice must include the following information [HCV GB, p. 12-6]: x The amount and effective date of the new HAP payment x The amount and effective date of the new family share of the rent x The amount and effective date of the new tenant rent to owner The family must be given an opportunity for an informal hearing regarding the HA’s determination of their annual or adjusted income, and the use of such income to compute the housing assistance payment [24 CFR 982.555(a)(1)(i)] (see Chapter 16). HA Policy The notice to the family will include the annual and adjusted income amounts that were used to calculate the family share of the rent and the housing assistance payment and instructions to contact the HA if any income or other information is incorrect. 11-III.D. DISCREPANCIES During an annual or interim reexamination, the HA may discover that information previously reported by the family was in error, or that the family intentionally misrepresented information. In addition, the HA may discover errors made by the HA. When errors resulting in the overpayment or underpayment of subsidy are discovered, corrections will be made in accordance with the policies in Chapter 13. 563 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 11-28 PART IV: NON-INTERIM REEXAMINATION TRANSACTIONS [Notice PIH 2023-27] Families may experience changes within the household that do not trigger an interim reexamination under PHA policy and HUD regulations but which HUD still requires the PHA to report to HUD via Form HUD-50058. These are known as non-interim reexamination transactions. In these cases, PHAs will submit a separate, new action code on Form HUD-50058. The following is a list of non-interim reexamination transactions: x Adding or removing a hardship exemption for the child care expense deduction; x Updating or removing the phased-in hardship relief for the health and medical care expense deduction and/or reasonable attendant care and auxiliary apparatus expense deduction (the phased-in relief will begin at an eligible family’s first annual or interim reexamination, whichever is sooner, after January 1, 2024); x Adding or removing general hardship relief for the health and medical care expense deduction and/or reasonable attendant care and auxiliary apparatus expense deduction; x Adding or removing a minimum rent hardship; x Adding or removing a non-family member (i.e., live-in aide, foster child, foster adult); x Ending a family’s EID or excluding 50 percent (decreased from 100 percent) of a family member’s increase in employment income at the start of the second 12- month EID period. x Adding a family member and the increase in adjusted income does not trigger an interim reexamination under the final rule; x Removing a family member and the increase in adjusted income does not trigger an interim reexamination under the final rule; x Adding/updating a family or household member’s Social Security number; and x Updating a family member’s citizenship status from eligible to ineligible or vice versa, resulting in a change to the family’s rent and/or utility reimbursement, if applicable (i.e., family begins receiving prorated assistance or previously prorated assistance becomes full assistance), or updating the prorated rent calculation due to the addition or removal of family members in household with an ineligible noncitizen(s). PHAs must make all other changes to assets, income, and deductions at the next annual or interim reexamination of income, whichever is sooner. 564 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 11-29 565 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 11-30 EXHIBIT 11-1: CALCULATING Income AT ANNUAL REEXAMINATION Example 1: Calculating Annual Income at Annual Reexamination Using EIV Staff are processing the 3/1/2024 annual reexamination for Ruby Myers and her minor daughter, Georgia. No interim reexaminations have been processed, and Ruby has not reported any changes to annual income to the PHA since the 3/1/2023 annual reexamination. The SSA published 2024 COLA is 7 percent. Last reexamination – 3/1/2023 Annual Reexamination Ruby: Wages: $30,000 Georgia: SSI: $10,980 ($915 monthly)s The EIV report pulled on 12/15/2023 Ruby: Georgia: Wages Total: $33,651 SSI Total: $10,980 Quarter 3 of 2023: $8,859 (City Public School) 2023 benefit $915 monthly Quarter 2 of 2023: $8,616 (City Public School) Quarter 1 of 2023: $8,823 (City Public School) Quarter 4 of 2022: $7,353 (City Public School) 566 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 11-31 Income Reported on Reexamination Application Ruby: Wages at City Public School: $32,000 (switched jobs but no permanent change to amount) Georgia: SSI benefits: $10,980 (no changes) Calculating Ruby’s wages: Step 1: Determine prior annual income from EIV (i.e., Q4 2022 through Q3 of 2023: $33,651). Step 2: Take into consideration any interim reexamination of family income completed since the last annual reexamination (in this case, there have been no interim reexaminations processed since the last annual reexamination). Step 3: Ruby certifies that the $33,651 of wages in EIV is accurate and reflects her current annual income, so the PHA will use $33,651 for annual wages for the 3/1/2024 annual reexamination given there have been no additional changes to annual income. Calculating Georgia’s SSI benefit: Step 1: Determine the prior annual income from EIV (i.e., $915 x 12 months: $10,980). Step 2: Take into consideration any interim reexamination of family income completed since the last annual reexamination (in this case, there have been no interim reexaminations processed since the last annual reexamination). Step 3: Ruby certifies the SSI income in EIV is accurate and reflects Georgia’s current annual income. The PHA must adjust the prior-year income (2023 SSI benefit) by the 7- percent COLA and will use this amount to calculate annual SSI income for the 3/1/2024 annual reexamination: COLA: $64.05 ($915 x 0.07) New gross SSI benefit: $11,748.60 ($979.05 x 12 months) If Ruby did not agree with the annual wages reported in EIV, the PHA/MFH Owner would be required to verify her current income in accordance with HUD’s verification hierarchy. Summary of Annual Income (as reported on the HUD-50058) Ruby (Head of Household): Other Wage: $33,651 Myers Family Total Annual Income: $45,399 Georgia (Other Youth Under 18): SSI: $11,748 567 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 11-32 Example 2: Calculating Annual Income at Annual Reexamination Using EIV: Family Disagrees with EIV Staff are processing Paul Hewson’s 5/1/2024 annual reexamination. Since the last annual reexamination, Paul reported a decrease in annual income that exceeded 10 percent. Last year, Paul reported a decrease in earned income because he transferred from a full-time job at Sasha’s Sweets to a part-time job at Viking Bakery. Following HUD’s EIV verification hierarchy, staff confirmed Paul was no longer employed at Sasha’s Sweets and decreased his anticipated annual income from $28,000 to $7,500 resulting from his new part-time employment at Viking Bakery; an interim reexamination was processed effective 7/1/2023. After the 7/1/2023 interim, Paul worked briefly at two different jobs, but he says he is no longer working and is not planning to work. 5/1/2023 Annual Reexamination Wages: $28,000 The EIV report pulled on 1/15/2024 Wages Total: $18,271 Quarter 3 of 2023: $2,500 (Viking Bakery) Quarter 3 of 2023: $796 (Sweet Tooth Candy Bar) Quarter 2 of 2023: $1,300 (Sasha’s Sweets) Quarter 2 of 2023: $584 (Larry’s Concessions) Quarter 2 of 2023: $2,401 (Viking Bakery) Quarter 1 of 2023: $6,500 (Sasha’s Sweets) Quarter 4 of 2022: $600 (Sasha’s Sweets) SS/SSI: No history of benefits 568 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 11-33 Income Reported on Reexamination Application Wages: $0 (permanent change; no longer receiving) Social Security: $14,400 ($1,200 monthly) Paul certified on the PHA’s annual reexamination paperwork that he does not agree with the annual wages of $18,271 reported in EIV and it is not reflective of his current anticipated annual income. He reported he is currently unemployed, and provided a copy of an award letter from the Social Security Administration to document that he will begin receiving a monthly disability benefit of $1,200 effective 3/1/2024. Calculating Wages and SS Benefit Step 1: Determine prior annual income taking into consideration the 8/1/2023 interim reexamination (i.e., EIV wages reflected Q4 2022 through Q3 2023: $18,271) Step 2: Take into consideration any interim reexamination of family income completed since the last annual reexamination. In this case, there was a 7/1/2023 interim that reduced wages to $7,500. Step 3: Obtain documentation to verify current income and confirm Paul is no longer employed at Viking Bakery or The Sweet Tooth Candy Bar (the employers reported in the most recent quarter of EIV). This step is necessary, because Paul did not agree with the EIV income report or income reported on the last interim reexamination. Paul reported that he is no longer working at all. Process the annual reexamination effective 5/1/2024 using annual SS income of $14,400 and $0 wages. Summary of Annual Income (as reported on the HUD-50058) Paul (Head of Household): $14,400 (SS) Hewson Family Total Annual Income: $14,400 569 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 11-34 Example 3: Calculating Annual Income at Annual Reexamination Staff are processing the 11/1/2024 annual reexamination for Samantha and Fergus Pool, head of household and spouse. On 2/14/2024 Samantha reported her monthly child support payment was reduced from $200 to $100 per month, but an interim reexamination was not processed because the reduction in child support income for Samantha’s daughter, Hailey, did not result in a decrease of 10 percent or more in annual adjusted income, and the PHA did not establish a lower threshold. Samantha did not report any additional changes to the PHA. Last reexamination – 11/1/2023 Annual Reexamination Samantha: Business income: $28,000 VA disability pension: $12,000 Child support: $2,400 Fergus: Wages: $8,250 Other non-wage income: $3,000 (Go Fund Me online fundraiser) The EIV report pulled on 9/16/2024 Samantha: Fergus: Wages Total: $0 (no wage data reported since Q1 2023) Wages Total: $8,600 Quarter 1 of 2024: $2,100 (Ian’s Fish ‘n’ Chips) Quarter 1 of 2024: $500 (Claire’s Healthcare Supplies) Quarter 4 of 2023: $1,000 (Claire’s Healthcare Supplies) Quarter 3 of 2023: $1,800 (The Onion Garden Shop) Quarter 2 of 2023: $3,200 (Ivar’s Fish Haus) 570 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 11-35 Current Family Circumstances: Income Reported on Reexamination Application Samantha and Fergus reported how much income was earned/received in the previous 12-month period and noted permanent changes, where applicable, for each source of their income on PHA’s annual reexamination form. However, no information was reported by the family concerning other non-wage income. Fergus reported only wages and his current employment at Ian’s Fish ‘n’ Chips for the annual reexamination. The family supplied the supporting documentation noted below to the PHA for the 11/1/2024 annual reexamination. Samantha: Business income: $28,750 (last year); has decreased to $18,000 (permanent change) VA disability benefit: $12,000 (last year); has increased to $12,300 (permanent change) Child support: $2,400 (last year); has decreased to $1,200 (permanent change) Fergus: Wages: $6,000 Calculating Samantha’s Net Business Income Step 1: Determine prior annual net business income (i.e., $28,000 on last HUD–50058. Step 2: Take into consideration any interim reexamination of family income completed since the last annual reexamination. In this case, there have been no interim reexaminations processed since the last annual reexamination. Step 3: Adjust to reflect current net business income. Samantha reported on the annual reexamination application that business income permanently decreased to $18,000. The PHA must obtain supporting documentation from Samantha that demonstrates current net business income. Samantha provided documentation that supported the current annual net business income is $18,000. Process the annual reexamination effective 11/1/2024 using annual net business income determined in Step 3. Calculating Samantha’s VA Pension Income Step 1: Determine prior annual VA pension income (i.e., $12,000 supported by a VA award letter Samantha supplied that documents the prior year monthly VA pension was $1,000). Step 2: Take into consideration any interim reexamination of family income completed since the last annual reexamination. In this case, there have been no interim reexaminations processed since the last annual reexamination. Step 3: The PHA needs to adjust to reflect current VA pension income. Samantha supplies a VA award letter showing a monthly pension of $1,025, or $12,300 annually. Process the annual reexamination effective 11/1/2024 using annual VA pension income determined in Step 3 ($12,300 in this example). 571 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 11-36 Calculating Samantha’s Child Support Income Step 1: Determine prior annual child support income (i.e., $2,400 on the last HUD–50058). Step 2: Take into consideration any interim reexamination of family income completed since the last annual reexamination. In this case, there have been no interim reexaminations processed since the last annual reexamination. The family reported a decrease from $200 to $100 monthly, but the change was not processed because it did not meet the threshold. Step 3: The family reported changes, so the PHA must adjust to reflect current child support income. In this example, the family submitted a child support history report from the local child support office that documents regular $100 monthly child supports payments beginning 3/1/2024 through the current month. Process the annual reexamination effective 11/1/2024 using current annual child support income determined in Step 3 ($1,200 in this example). Calculating Fergus’ Wages Step 1: Determine prior annual income from wages in EIV (i.e., Q2 2023 through Q1 of 2024: $8,600). Step 2: Take into consideration any interim reexamination of family income completed since the last annual reexamination. In this case, there have been no interim reexaminations processed since the last annual reexamination. Step 3: There is a discrepancy between what the family reported and EIV, so the PHA must verify and adjust to reflect current annual income from wages. Fergus reported $6,000 in annual income from wages on the annual reexamination from a single employer, Ian’s Fish ‘n’ Chips. The PHA projected annual income of $7,800 based on the two paystubs for this employer, and EIV shows $8,600 earned in the most recent four quarters in EIV. To complete Step 3, the PHA must do the following: x Resolve the discrepancy between EIV wages, the $6,000 annual income Fergus reported, and the $7,800 projected based on the paystubs he provided, and x Verify he is no longer employed at Claire’s Healthcare Supplies in accordance with HUD’s verification hierarchy and local policies. The PHA determined that Fergus reported his net vs. gross annual income from wages, which he corrected on the annual reexamination form to reflect his current gross annual income of $9,000. The PHA verified Fergus was no longer employed at Claire’s Healthcare Supplies and obtained two additional paystubs. Based on four current and consecutive paystubs, Fergus is now projected to earn $9,360 annually. Process the annual reexamination effective 11/1/2024 using income from wages determined in Step 3 ($9,360 in this example). 572 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 11-37 Calculating Fergus’ Other Non-Wage Income Step 1: Determine prior annual income from other non-wage income (i.e., $3,000 on the last HUD– 50058). Step 2: Take into consideration any interim reexamination of family income completed since the last annual reexamination. In this case, there have been no interim reexaminations processed since the last annual reexamination. Step 3: The family did not report any non-wage income on the annual reexamination form, but it was included on the last HUD–50058. The PHA must verify and adjust to reflect current non-wage income. The PHA must verify no income was received through a “Go Fund Me” online fundraiser so that it may be excluded. Fergus provided a self-certification that he hasn’t solicited funds online and doesn’t plan to in the following year; he also provided records from the account that documented no fundraising activity in the prior 12-month period. Process the annual reexamination effective 11/1/2024 using annual non-wage income of $0 determined in Step 3. Summary of Annual Income (as reported on the HUD-50058) Samantha (Head of Household): Own business: $18,000 Pension: $12,300 Child support: $1,200 Fergus (Co-head): Wages: $9,360 Poole Family Total Annual Income: $40,860 573 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 12-7 Other Authorized Reasons for Termination of Assistance [24 CFR 982.552(c), 24 CFR 5.2005(c)] HUD permits the HA to terminate assistance under a number of other circumstances. It is left to the discretion of the HA whether such circumstances in general warrant consideration for the termination of assistance. As discussed further in section 12-II.E, the Violence against Women Act of 2013 explicitly prohibits HAs from considering incidents of, or criminal activity directly related to, domestic violence, dating violence, sexual assault, or stalking or human trafficking as reasons for terminating the assistance of a victim of such abuse. Additionally, per the alternative requirements listed in the Federal Register notice dated December 29, 2017, Has are no longer permitted to terminate assistance to a family due to the family’s failure to meet its obligations under the Family Self-Sufficiency (FSS) contract of participation [FR Notice 12/29/14]. HA Policy The HA will terminate a family’s assistance if: The family has failed to comply with any family obligations under the program. See Exhibit 12-1 for a listing of family obligations and related HA policies. Any family member has been evicted from federally-assisted housing in the last five three years. Any family member has committed fraud, bribery, or any other corrupt or criminal act in connection with any federal housing program. The family currently owes rent or other amounts to any HA in connection with Secion 8 or public housing programs assistance under the 1937 Act. The family has not reimbursed any HA for amounts the HA paid to an owner under a HAP contract for rent, damages to the unit, or other amounts owed by the family under the lease. The family has breached the terms of a repayment agreement entered into with the HA. 574 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 12-12 12-II.D. CRITERIA FOR DECIDING TO TERMINATE ASSISTANCE Evidence For criminal activity, HUD permits the HA to terminate assistance if a preponderance of the evidence indicates that a household member has engaged in the activity, regardless of whether the household member has been arrested or convicted [24 CFR 982.553(c)]. HA Policy The HA will use the concept of the preponderance of the evidence as the standard for making all termination decisions. Preponderance of the evidence is defined as evidence which is of greater weight or more convincing than the evidence which is offered in opposition to it; that is, evidence which as a whole shows that the fact sought to be proved is more probable than not. Preponderance of the evidence may not be determined by the number of witnesses, but by the greater weight of all evidence. Use of Criminal Conviction Records after Admission [24 CFR 5.903] The regulation at 24 CFR 5.903 governs a HA’s access to and use of criminal conviction records obtained from a “law enforcement agency” such as the National Crime Information Center (NCIC), police departments, and other law enforcement agencies that hold criminal conviction records. While the regulatory listing of permitted uses for these records includes HA screening of applicants for admission to the HCV program, it specifically excludsed the use of records for lease enforcement and eviction of HCV participants and excludes by omission a HA’s use of records to terminate assistance for participants. While a HA has regulatory ability to use criminal conviction records for the purpose of applicant screening for admission, there is no corresponding authority to use thse these records to check for criminal and illegal drug activity by participants, and therefore, Has may not use records for this purpose. The limintationslimitations, however, do not apply to criminal conviction information searches from non-federal sources (i.e., sources other than the “law enforcement agencies” defined in 24 CFR 5.902(b)). There is no prohibition that bars a HA from using non-federal sources to conduct criminal background checks of program participants. Consideration of Circumstances [24 CFR 982.552(c)(2)(i)] The HA is permitted, but not required, to consider all relevant circumstances when determining whether a family’s assistance should be terminated. HA Policy The HA will consider the following facts and circumstances when making its decision to terminate assistance: The seriousness of the case, especially with respect to how it would affect other residents’ safety or property. The effects that termination of assistance may have on other members of the family who were not involved in the action or failure to act. The extent of participation or culpability of individual family members, including whether the culpable family member is a minor or a person with disabilities or 575 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 12-13 (as discussed further in section 12-II.E) a victim of domestic violence, dating violence, sexual assault or stalking or human trafficking. The length of time since the violation occurred, including the age of the individual at the time of the conduct, as well as the family’s recent history and the likelihood of favorable conduct in the future. While a record of arrest will not be used as the sole basis for termination, an arrest may, however, trigger an investigation to determine whether the participant actually engaged in disqualifying criminal activity. As part of its investigation, the PHA may obtain the police report associated with the arrest and consider the reported circumstances of the arrest. The PHA may also consider: Any statements made by witnesses or the participant not included in the police report Whether criminal charges were filed Whether, if filed, criminal charges were abandoned, dismissed, not prosecuted, or ultimately resulted in an acquittal Any other evidence relevant to determining whether or not the participant engaged in disqualifying activity Evidence of criminal conduct will be considered if it indicates a demonstrable risk to safety and/or property In the case of drug or alcohol abuse, whether the culpable household member is participating in or has successfully completed a supervised drug or alcohol rehabilitation program or has otherwise been rehabilitated successfully. The HA will require the participant to submit evidence of the household member’s current participation in or successful completion of a supervised drug or alcohol rehabilitation program, or evidence of otherwise having been rehabilitated successfully. In the case of program abuse, the dollar amount of the overpaid assistance and whether or not a false certification was signed by the family. Reasonable Accommodation [24 CFR 982.552(c)(2)(iv)] If the family includes a person with disabilities, the HA’s decision to terminate the family’s assistance is subject to consideration of reasonable accommodation in accordance with 24 CFR Part 8. HA Policy If a family indicates that the behavior of a family member with a disability is the reason for a proposed termination of assistance, the HA will determine whether the behavior is related to the disability. If so, upon the family’s request, the HA will determine whether alternative measures are appropriate as a reasonable accommodation. The HA will only consider accommodations that can reasonably be expected to address the behavior that is the basis of the proposed termination of assistance. See Chapter 2 for a discussion of reasonable accommodation. 576 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 12-14 12-II.E. TERMINATIONS RELATED TO DOMESTIC VIOLENCE, DATING VIOLENCE, SEXUAL ASSAULT , OR STALKING OR HUMAN TRAFFICKING This section describes the protections against termination of assistance that the Violence against Women Act of 2013 (VAWA) provides for victims of domestic violence, dating violence, sexual assault and stalking and human trafficking. For general VAWA requirements, key VAWA definitions, and HA policies pertaining to notification, documentation, and confidentiality, see section 16-IX of this plan. VAWA Protections against Termination VAWA provides four specific protections against termination of HCV assistance for victims of domestic violence, dating violence, sexual assault or stalking. (Note: The second, third, and fourth protections also apply to terminations of tenancy or occupancy by owners participating in the HCV program, as do the limitations discussed under the next heading.) • Although the VAWA 2022 statute does not specifically include human trafficking in the list of victims protected under VAWA, in 2022 HUD began including human trafficking as part of the list of victims protected under VAWA (as seen in Notices PIH 2022-06, PIH 2022-22, and PIH 2022-24). In the absence of a final rule implementing VAWA 2022 and to mirror HUD’s recent usage, this policy includes human trafficking in addition to domestic violence, dating violence, sexual assault, and stalking anywhere such a list appears. First, VAWA provides that a HA may not terminate assistance to a family that moves out of an assisted unit in violation of the lease, with or without prior notification to the HA, if the move occurred to protect the health or safety of a family member who is or has been the victim of domestic violence, dating violence, sexual assault , or stalking or human trafficking and who reasonably believed he or she was imminently threatened by harm from further violence if he or she remained in the unit [24 CFR 982.315(b)(4)]. Second, it provides that an incident or incidents of actual or threatened domestic violence, dating violence, sexual assault or stalking or human trafficking may not be construed either as a serious or repeated lease violation by the victim or as good cause to terminate the assistance of the victim [24 CFR 5.2005(c)(1)]. Third, it provides that criminal activity directly related to domestic violence, dating violence, sexual assault or stalking or human trafficking may not be construed as cause for terminating the assistance of a tenant if a member of the tenant’s household, a guest, or another person under the tenant’s control is the one engaging in the criminal activity and the tenant or affiliated individual or other individual is the actual or threatened victim of the domestic violence, dating violence, or sexual assault, stalking or human trafficking [see 24 CFR 5.2005(c)(2)]. Fourth, it gives HAs the authority to terminate assistance to any tenant or lawful occupant who engages in criminal acts of physical violence against family members or others without terminating assistance to, or otherwise penalizing, the victim of the violence [24 CFR 5.2009(a)]. PHAs and owners may not coerce, intimidate, threaten, interfere with, or retaliate against any person who exercises or assists or encourages a person to exercise any rights or protections under VAWA [FR Notice 1/4/23]. 577 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 12-15 Limitations on VAWA Protections [24 CFR 5.2005(d) and (e)] VAWA does not limit the authority of a HA to terminate the assistance of a victim of abuse for reasons unrelated to domestic violence, dating violence, sexual assault , or stalking or human trafficking so long as the HA does not subject the victim to a more demanding standard than it applies to other program participants [24 CFR 5.2005(d)(1)]. Likewise, VAWA does not limit the authority of a HA to terminate the assistance of a victim of domestic violence, dating violence, sexual assault or stalking or human trafficking if the HA can demonstrate an actual and imminent threat to other tenants or those employed at or providing service to the assisted property if the victim is not terminated from assistance [24 CFR 5.2005(d)(2)]. HUD regulations define actual and imminent threat to mean words, gestures, actions, or other indicators of a physical threat that (a) is real, (b) would occur within an immediate time frame, and (c) could result in death or serious bodily harm [24 CFR 5.2005(d)(2) and (e)]. In determining whether an individual would pose an actual and imminent threat, the factors to be considered include: x The duration of the risk x The nature and severity of the potential harm x The likelihood that the potential harm will occur x The length of time before the potential harm would occur [24 CFR 5.2005(e)] In order to demonstrate an actual and imminent threat, the HA must have objective evidence of words, festuresgestures, actions, or other indicators. Even when a victim poses an actual and imminent threat, however, HUD regulations authorize a HA to terminate the victim’s assistance “only when there are no other actions that could be taken to reduce or eliminate the threat” [24 CFR 5.2005(d)(3)]. HA Policy In determining whether a program participant who is a victim of domestic violence, dating violence, sexual assault or stalking or human trafficking is an actual and imminent threat to other tenants or those employed at or providing service to a property, the HA will consider the following, and any other relevant, factors: Whether the threat is toward an employee or tenant other than the victim of domestic violence, dating violence, sexual assault, or stalking or human trafficking Whether the threat is a physical danger beyond a speculative threat Whether the threat is likely to happen within a short period of time Whether the threat to other tenants or employees can be eliminated in some other way, such as by helping the victim relocate to a confidential location or seeking a legal remedy to prevent the perpetrator from acting on the threat 578 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 12-16 If the participant wishes to contest the HA’s determination that he or she is an actual and imminent threat to other tenants or employees, the participant may do so as part of the informal hearing. 579 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 12-17 Documentation of Abuse [24 CFR 5.2007] HA Policy When an individual facing termination of assistance for reasons related to domestic violence, dating violence, sexual assault, or stalking or human trafficking claims protection under VAWA, the HA will request that the individual provide documentation supporting the claim in accordance with the policies in section 16-IX.D of this plan. The HA reserves the right to waive the documentation requirement if it determines that a statement or other corroborating evidence from the individual will suffice. In such cases the HA will document the waiver in the individual’s file. Terminating the Assistance of a Domestic Violence Perpetrator Although VAWA provides protection against termination of assistance for victims of domestic violence, it does not provide such protection for perpetrators. VAWA gives the HA the explicit authority to “terminate assistance to any individual who is a tenant or lawful occupant and who engages in criminal acts of physical violence against family members or others” without terminating assistance to “or otherwise penalizing the victim of such violence who is also a tenant or lawful occupant” [24 CFR 5.2009(a)]. This authority is not dependent on a bifurcated lease or other eviction action by an owner against an individual family member. Further, this authority supersedes any local, state, or other federal law to the contrary. However, if the HA chooses to exercise this authority, it must follow any procedures prescribed by HUD or by applicable local, state, or federal law regarding termination of assistance. This means that the HA must follow the same rules when terminating assistance to an individual as it would when terminating the assistance of an entire family [FR Notice3/16/07 Federal Register notice on the applicability of VAWA to HUD programs]. If the perpetrator remains in the unit, the PHA continues to pay the owner until the PHA terminates the perpetrator from the program. The PHA must not stop paying HAP until 30 days after the owner bifurcates the lease to evict the perpetrator. The PHA may pay HAP for the full month if the 30-day period will end mid-month [Notice PIH 2017-08]. If the perpetrator is the only participant eligible to receive assistance, the PHA will provide any remaining participant a chance to establish eligibility for the program. If the remaining participant cannot do so, the PHA will provide them with 30 days to establish eligibility for another housing program prior to termination of the HAP contract. 580 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 12-18 HA Policy The HA will terminate assistance to a family member if the HA determines that the family member has committed criminal acts of physical violence against other family members or others. This action will not affect the assistance of the remaining, nonculpable family members. In making its decision, the HA will consider all credible evidence, including, but not limited to, a signed certification (form HUD-5382) or other documentation of abuse submitted to the HA by the victim in accordance with this section and section 16-IX.D. The HA will also consider the factors in section 12-II.D. Upon such consideration, the HA may, on a case-by-case basis, choose not to terminate the assistance of the culpable family member. If the HA does terminate the assistance of the culpable family member, it will do so in accordance with applicable law, HUD regulations, and the policies in this plan. 581 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 12-19 12-II.F. TERMINATION NOTICE HUD regulations require HAs to provide written notice of termination of assistance to a family only when the family is entitled to an informal hearing. However, since the family’s HAP contract and lease will also terminate when the family’s assistance terminates [form HUD- 52641], it is a good business practice to provide written notification to both owner and family anytime assistance will be terminated, whether voluntarily or involuntarily. HA Policy Whenever a family’s assistance will be terminated, the HA will send a written notice of termination to the family and to the owner. The HA will also send a form HUD-5382 and form HUD-5380 to the family with the termination notice. The notice will state the date on which the termination will become effective. This date generally will be at least 30 calendar days following the date of the termination notice, but exceptions will be made whenever HUD rules, other HA policies, or the circumstances surrounding the termination require. When the HA notifies an owner that a family’s assistance will be terminated, the HA will, if appropriate, advise the owner of their right to offer the family a separate, unassisted lease. If a family whose assistance is being terminated is entitled to an informal hearing, the notice of termination that the HA sends to the family must meet the additional HUD and HA notice requirements discussed in section 16-III.C of this plan. VAWA 2013 expands notification requirements to requires HAs to provide notice of VAWA rights and the HUD 5382 form when a HA terminates a household’s housing benefits. HA Policy Whenever the HA decides to terminate a family’s assistance because of the family’s action or failure to act, the HA will include in its termination notice the VAWA information described in section 16-IX.C of this plan and a form HUD-5382 and form HUD-5380. The HA will request in writing that a family member wishing to claim protection under VAWA notify the HA within 14 business days. Still other notice requirements apply in two situations: x If a criminal record is the basis of a family’s termination, the HA must provide a copy of the record to the subject of the record and the tenant so that they have an opportunity to dispute the accuracy and relevance of the record [24 CFR 982.553(d)(2)]. x If immigration status is the basis of a family’s termination, as discussed in section 12-I.D, the special notice requirements in section 16-III.D must be followed. 582 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 12-20 PART III: TERMINATION OF TENANCY BY THE OWNER 12-III.A. OVERVIEW Termination of an assisted tenancy is a matter between the owner and the family; the HA is not directly involved. However, the owner is under some constraints when terminating an assisted tenancy. Termination of tenancy for certain reasons will also result in termination of assistance as discussed in this section. 12-III.B. GROUNDS FOR OWNER TERMINATION OF TENANCY [24 CFR 982.310, 24 CFR 5.2005(c), and Form HUD-52641-A, Tenancy Addendum] During the term of the lease, the owner is not permitted to terminate the tenancy except for serious or repeated violations of the lease, certain violations of state or local law, or other good cause. Serious or Repeated Lease Violations The owner is permitted to terminate the family’s tenancy for serious or repeated violations of the terms and conditions of the lease, except when the violations are related to incidents of actual or threatened domestic violence, dating violence, sexual assault or stalking or human trafficking and the victim is protected from eviction by the Violence against Women Act of 2013 (see section 12-II.E). A serious lease violation includes failure to pay rent or other amounts due under the lease. However, the HA’s failure to make a HAP payment to the owner is not a violation of the lease between the family and the owner. Violation of Federal, State, or Local Law The owner is permitted to terminate the tenancy if a family member violates federal, state, or local law that imposes obligations in connection with the occupancy or use of the premises. Criminal Activity or Alcohol Abuse The owner may terminate tenancy during the term of the lease if any covered person—meaning any member of the household, a guest, or another person under the tenant’s control—commits any of the following types of criminal activity (for applicable definitions see 24 CFR 5.100): x Any criminal activity that threatens the health or safety of, or the right to peaceful enjoyment of the premises by, other residents (including property management staff residing on the premises) x Any criminal activity that threatens the health or safety of, or the right to peaceful enjoyment of their residences by, persons residing in the immediate vicinity of the premises x Any violent criminal activity on or near the premises x Any drug-related criminal activity on or near the premises However, in the case of criminal activity directly related to domestic violence, dating violence, sexual assault or stalking or human trafficking, if the tenant or an affiliated individual is the victim, the criminal activity may not be construed as cause for terminating the victim’s tenancy (see section 12-II.E). 583 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 12-21 The owner may terminate tenancy during the term of the lease if any member of the household is: x Fleeing to avoid prosecution, custody, or confinement after conviction for a crime or an attempt to commit a crime that is a felony under the laws of the place from which the individual flees, or that, in the case of the State of New Jersey, is a high misdemeanor; or x Violating a condition of probation or parole imposed under federal or state law. The owner may terminate tenancy during the term of the lease if any member of the household has engaged in abuse of alcohol that threatens the health, safety, or right to peaceful enjoyment of the premises by other residents. Evidence of Criminal Activity The owner may terminate tenancy and evict by judicial action a family for criminal activity by a covered person if the owner determines the covered person has engaged in the criminal activity, regardless of whether the covered person has been arrested or convicted for such activity and without satisfying the standard of proof used for a criminal conviction. This is the case except in certain incidents where the criminal activity directly relates to domestic violence, dating violence, sexual assault, or stalking or human trafficking, and the tenant or an affiliated individual is the victim or threatened victim of the domestic violence, dating violence, sexual assault, or stalking or human trafficking. Other Good Cause During the initial lease term, the owner may not terminate the tenancy for “other good cause” unless the owner is terminating the tenancy because of something the family did or failed to do. During the initial lease term or during any extension term, other good cause includes the disturbance of neighbors, destruction of property, or living or housekeeping habits that cause damage to the unit or premises. After the initial lease term, “other good cause” for termination of tenancy by the owner includes: x Failure by the family to accept the offer of a new lease or revision x The owner’s desire to use the unit for personal or family use, or for a purpose other than as a residential rental unit x A business or economic reason for termination of the tenancy (such as sale of the property, renovation of the unit, or desire to lease the unit at a higher rent) After the initial lease term, the owner may give the family notice at any time, in accordance with the terms of the lease. If a property is subject to foreclosure, during the term of the lease, then ew owner of the property does not have good cause to terminate the tenant’s lease, unless the new owner will occupy the unit as their primary residence and has provided the tenant with at least a 90-day notice. In that case, the lease may be terminated effective on the date of sale, although the tenant is still entitled to a 90-day notice to vacate. See Section 13-II.G for a discussion of Ha policies relating to units in foreclosure. 584 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 12-23 12-III.D. DECIDING WHETHER TO TERMINATE TENANCY [24 CFR 982.310(h), 24 CFR 982.310(h)(4)] An owner who has grounds to terminate a tenancy is not required to do so, and may consider all of the circumstances relevant to a particular case before making a decision. These might include: x The nature of the offending action x The seriousness of the offending action; x The effect on the community of the termination, or of the owner’s failure to terminate the tenancy; x The extent of participation by the leaseholder in the offending action; x The effect of termination of tenancy on household members not involved in the offending activity; x The demand for assisted housing by families who will adhere to lease responsibilities; x The extent to which the leaseholder has shown personal responsibility and taken all reasonable steps to prevent or mitigate the offending action; x The effect of the owner's action on the integrity of the program. The owner may require a family to exclude a household member in order to continue to reside in the assisted unit, where that household member has participated in or been culpable for action or failure to act that warrants termination. In determining whether to terminate tenancy for illegal use of drugs or alcohol abuse by a household member who is no longer engaged in such behavior, the owner may consider whether such household member is participating in or has successfully completed a supervised drug or alcohol rehabilitation program, or has otherwise been rehabilitated successfully (42 U.S.C. 13661). For this purpose, the owner may require the tenant to submit evidence of the household member's current participation in, or successful completion of, a supervised drug or alcohol rehabilitation program or evidence of otherwise having been rehabilitated successfully. The owner's termination of tenancy actions must be consistent with the fair housing and equal opportunity provisions in 24 CFR 5.105. An owner’s decision to terminate tenancy for incidents related to domestic violence, dating violence, sexual assault or stalking or human trafficking is limited by the Violence against Women Act of 2013 (VAWA) and the conforming regulations in 24 CFR Part 5, Subpart L. (See section 12-II.E.) 12-III.E. EFFECT OF TENANCY TERMINATION ON THE FAMILY’S ASSISTANCE If a termination is not due to a serious or repeated violation of the lease, and if the HA has no other grounds for termination of assistance, the HA may issue a new voucher so that the family can move with continued assistance (see Chapter 10). 585 © Copyright 2020 Nan McKay & Associates, Inc. Adminplan 4/1/20 Unlimited copies may be made for internal use. Page 12-24 EXHIBIT 12-1: STATEMENT OF FAMILY OBLIGATIONS Following is a listing of a participant family’s obligations under the HCV program: x The family must supply any information that the HA or HUD determines to be necessary, including submission of required evidence of citizenship or eligible immigration status. x The family must supply any information requested by the HA or HUD for use in a regularly scheduled reexamination or interim reexamination of family income and composition. x The family must disclose and verify social security numbers and sign and submit consent forms for obtaining information. x Any information supplied by the family must be true and complete. x The family is responsible for any Housing Quality Standards (HQS) breach by the family caused by failure to pay tenant-provided utilities or appliances, or damages to the dwelling unit or premises beyond normal wear and tear caused by any member of the household or guest. HA Policy Damages beyond normal wear and tear will be considered to be damages which could be assessed against the security deposit. x The family must allow the HA to inspect the unit at reasonable times and after reasonable notice, as described in Chapter 8 of this plan. x The family must not commit any serious or repeated violation of the lease. HA Policy The HA will determine if a family has committed serious or repeated violations of the lease based on available evidence, including but not limited to, a court-ordered eviction or an owner’s notice to evict, police reports, and affidavits from the owner, neighbors, or other credible parties with direct knowledge. Serious and repeated lease violations will include, but not be limited to, nonpayment of rent, disturbance of neighbors, destruction of property, living or housekeeping habits that cause damage to the unit or premises, and criminal activity. Generally, the criterion to be used will be whether or not the reason for the eviction was the fault of the tenant or guests. Any incidents of, or criminal activity related to, domestic violence, dating violence, sexual assault, or stalking or human trafficking will not be construed as serious or repeated lease violations by the victim [see 24 CFR 5.2005(c)(1)]. x The family must notify the HA and the owner before moving out of the unit or terminating the lease. HA Policy The family must comply with lease requirements regarding written notice to the owner. The family must provide written notice to the HA at the same time the owner is notified. x The family must promptly give the HA a copy of any owner eviction notice. 586 © Copyright 2019 Nan McKay & Associates, Inc. Adminplan 6/1/19 Unlimited copies may be made for internal use. Page 14-3 PART I: PREVENTING, DETECTING, AND INVESTIGATING ERRORS AND PROGRAM ABUSE 14-I.A. PREVENTING ERRORS AND PROGRAM ABUSE HUD created the Enterprise Income Verification (EIV) system to provide HAs with a powerful tool for preventing errors and detecting program abuse. HAs are required to use the EIV system at annual reexamination in accordance with HUD administrative guidance [24 CFR 5.233]. HAs are further required to: x Provide applicants and participants with form HUD-52675, “Debts Owed to HAs and Terminations” x Require all adult members of an applicant or participant family to acknowledge receipt of form HUD-52675 by signing a copy of the form for retention in the family file HA Policy To ensure that the HA’s HCV program is administered according to the highest ethical and legal standards, the HA will employ a variety of techniques to ensure that both errors and intentional program abuse are rare. The HA will discuss program compliance and integrity issues during the voucher briefing sessions described in Chapter 5. The HA will provide each applicant and participant with a copy of “Is Fraud Worth It?” (form HUD-1141-OIG), which explains the types of actions a family must avoid and the penalties for program abuse. The HA will provide each applicant and participant with a copy of “What You Should Know about EIV,” a guide to the Enterprise Income Verification (EIV) system published by HUD as an attachment to Notice PIH 2010-192017-12. In addition, the HA will require the head of each household to acknowledge receipt of the guide by signing a copy for retention in the family file. The HA will place a warning statement about the penalties for fraud (as described in 18 U.S.C. 1001 and 1010) on the application and recertification forms. HA staff will be required to review and explain the contents of all HUD- and HA- required forms prior to requesting family member signatures. At every regular reexamination, HA staff will explain any changes in HUD regulations or HA policy that affect program participants. The HA will provide owners with ongoing information about the program, with an emphasis on actions and situations to avoid. The HA will provide each HA employee with the necessary training on program rules and the organization’s standards of conduct and ethics. 587 © Copyright 2019 Nan McKay & Associates, Inc. Adminplan 6/1/19 Unlimited copies may be made for internal use. Page 14-4 For purposes of this chapter the term error refers to an unintentional error or omission. Program abuse or fraud refers to a single act or pattern of actions that constitute a false statement, omission, or concealment of a substantial fact, made with the intent to deceive or mislead. 14-I.B. DETECTING ERRORS AND PROGRAM ABUSE In addition to taking steps to prevent errors and program abuse, the HA will use a variety of activities to detect errors and program abuse. Quality Control and Analysis of Data Under the Section 8 Management Assessment Program (SEMAP), HUD requires the HA to review a random sample of tenant records annually to determine if the records conform to program requirements and to conduct quality control inspections of a sample of units to ensure HQS compliance [24 CFR, Part 985]. (See Chapter 16 for additional information about SEMAP requirements). HA Policy In addition to the SEMAP quality control requirements, the HA will employ a variety of methods to detect errors and program abuse. The HA routinely will use HUD and other non-HUD sources of up-front income verification. This includes may include The Work Number and any other private or public databases available to the HA. At each annual reexamination, current information provided by the family will be compared to information provided at the last annual reexamination to identify inconsistencies and incomplete information. The HA will compare family-reported income and expenditures to detect possible unreported income. Independent Audits and HUD Monitoring OMB Circular A-133 requires all HAs that expend $500,000 or more in federal awards annually to have an independent audit (IPA). In addition, HUD conducts periodic on-site and automated monitoring of HA activities and notifies the HA of errors and potential cases of program abuse. HA Policy The HA will use the results reported in any IPA or HUD monitoring reports to identify potential program abuses as well as to assess the effectiveness of the HA’s error detection and abuse prevention efforts. Individual Reporting of Possible Errors and Program Abuse HA Policy The HA will encourage staff, program participants, and the public to report possible program abuse. 588 © Copyright 2019 Nan McKay & Associates, Inc. Adminplan 6/1/19 Unlimited copies may be made for internal use. Page 14-12 14-II.D. HA-CAUSED ERRORS OR PROGRAM ABUSE The responsibilities and expectations of HA staff with respect to normal program administration are discussed throughout this plan. This section specifically addresses actions of a HA staff member that are considered errors or program abuse related to the HCV program. Additional standards of conduct may be provided in the HA personnel policy. HA-caused incorrect subsidy determinations include (1) failing to correctly apply HCV rules regarding family composition, income, assets, and expenses, (2) assigning the incorrect voucher size to a family, and (3) errors in calculation. De Minimis Errors [24 CFR 5.609(c)(4)] The PHA will not be considered out of compliance when making annual income determinations solely due to de minimis errors in calculating family income. A de minimis error is an error where the PHA determination of family income deviates from the correct income determination by no more than $30 per month in monthly adjusted income ($360 in annual adjusted income) per family. PHAs must take corrective action to credit or repay a family if the family was overcharged rent, including when PHAs make de minimis errors in the income determination. Families will not be required to repay the PHA in instances where the PHA miscalculated income resulting in a family being undercharged for rent. PHAs state in their policies how they will repay or credit a family the amount they were overcharged as a result of the PHA’s de minimis error in income determination. PHA Policy The PHA will reimburse a family for any family overpayment of rent, regardless of whether the overpayment was the result of staff-caused error, staff program abuse, or a de minimis error. Repayment to the HA Neither a family nor an owner is required to repay an overpayment of subsidy if the error or program abuse is caused by HA staff [HCV GB. 22-12 ]. HA Reimbursement to Family or Owner The HA must reimburse a family for any underpayment of subsidy, regardless of whether the underpayment was the result of staff-caused error or staff or owner program abuse. Funds for this reimbursement must come from the HA’s administrative fee reserves [HCV GB p. 22-12]. Prohibited Activities HA Policy Any of the following will be considered evidence of program abuse by HA staff: Failing to comply with any HCV program requirements for personal gain Failing to comply with any HCV program requirements as a result of a conflict of interest relationship with any applicant, participant, or owner 589 © Copyright 2017 Nan McKay & Associates, Inc. Adminplan 7/1/17 Unlimited copies may be made for internal use. Page 15-1 Chapter 15 SPECIAL HOUSING TYPES [24 CFR 982 Subpart M] INTRODUCTION The HA may permit a family to use any of the special housing types discussed in this chapter. However, the HA is not required to permit families receiving assistance in its jurisdiction to use these housing types, except that HAs must permit use of any special housing type if needed as a reasonable accommodation for a person with a disability. The HA also may limit the number of families who receive HCV assistance in these housing types and cannot require families to use a particular housing type. No special funding is provided for special housing types. HA Policy Families will not be permitted to use any special housing types, unless use is needed as a reasonable accommodation so that the program is readily accessible to a person with disabilities. However, policy language is included in this chapter where relevant in the event the PHA does grant use as a reasonable accommodation. Special housing types include single room occupancy (SRO), congregate housing, group homes, shared housing, cooperative housing, manufactured homes where the family owns the home and leases the space, and homeownership [24 CFR 982.601]. This chapter consists of the following seven parts. Each part contains a description of the housing type and any special requirements associated with it. Except as modified by this chapter, the general requirements of the HCV program apply to special housing types. Part I: Single Room Occupancy Part II: Congregate Housing Part III: Group Homes Part IV: Shared Housing Part V: Cooperative Housing Part VI: Manufactured Homes (including manufactured home space rental) Part VII: Homeownership 590 © Copyright 2017 Nan McKay & Associates, Inc. Adminplan 7/1/17 Unlimited copies may be made for internal use. Page 15-7 PART III: GROUP HOME [24 CFR 982.610 through 982.614 and HCV GB p. 7-4] 15-III.A. OVERVIEW A group home is a state-licensed facility intended for occupancy by elderly persons and/or persons with disabilities. Except for live-in aides, all persons living in a group home, whether assisted or not, must be elderly persons or persons with disabilities. Persons living in a group home must not require continuous medical or nursing care. A group home consists of bedrooms for residents, which can be shared by no more than two people, and a living room, kitchen, dining area, bathroom, and other appropriate social, recreational, or community space that may be shared with other residents. No more than 12 persons may reside in a group home including assisted and unassisted residents and any live-in aides. If approved by the HA, a live-in aide may live in the group home with a person with disabilities. The HA must approve a live-in aide if needed as a reasonable accommodation so that the program is readily accessible to and usable by persons with disabilities. When providing HCV assistance in a group home, a separate lease and HAP contract is executed for each assisted family, and the standard form of the HAP contract is used. 15-III.B. PAYMENT STANDARD, UTILITY ALLOWANCE, AND HAP CALCULATION Unless there is a live-in aide, the family unit size for an assisted occupant of a group home must be zero- or one-bedroom, depending on the HA’s subsidy standard. If there is a live-in aide, the aide must be counted in determining the household’s unit size. The payment standard used to calculate the HAP is the lower of the payment standard for the family unit size or the prorata pro rata share of the payment standard for the group home size. The prorata pro rata share is calculated by dividing the number of persons in the assisted household by the number of persons (assisted and unassisted) living in the group home. The HAP for an assisted occupant in a group home is the lower of the payment standard minus the TTP or the gross rent minus the TTP. The utility allowance for an assisted occupant in a group home is the prorata pro rata share of the utility allowance for the group home. The rents paid for participants residing in group homes are subject to generally applicable standards for rent reasonableness. The rent for an assisted person must not exceed the prorata pro rata portion of the reasonable rent for the group home. In determining reasonable rent, the HA should consider whether sanitary facilities and facilities for food preparation and service are common facilities or private facilities. 591 © Copyright 2017 Nan McKay & Associates, Inc. Adminplan 7/1/17 Unlimited copies may be made for internal use. Page 15-9 PART IV: SHARED HOUSING [24 CFR 982.615 through 982.618] 15-IV.A. OVERVIEW Shared housing is a single housing unit occupied by an assisted family and another resident or residents. The shared unit consists of both common space for use by the occupants of the unit and separate private space for each assisted family. An assisted family may share a unit with other persons assisted under the HCV program or with other unassisted persons. The owner of a shared housing unit may reside in the unit, but housing assistance may not be paid on behalf of the owner. The resident owner may not be related by blood or marriage to the assisted family. If approved by the HA, a live-in aide may reside with the family to care for a person with disabilities. The HA must approve a live-in aide if needed as a reasonable accommodation so that the program is readily accessible to and usable by persons with disabilities. When providing HCV assistance in shared housing, a separate lease and HAP contract are executed for each assisted family, and the standard form of the HAP contract is used. 15-IV.B. PAYMENT STANDARD, UTILITY ALLOWANCE AND HAP CALCULATION The payment standard for a family in shared housing is the lower of the payment standard for the family unit size or the prorata pro rata share of the payment standard for the shared housing unit size. The prorata pro rata share is calculated by dividing the number of bedrooms available for occupancy by the assisted family in the private space by the total number of bedrooms in the unit. The HAP for a family in shared housing is the lower of the payment standard minus the TTP or the gross rent minus the TTP. The utility allowance for an assisted family living in shared housing is the lower of the utility allowance for the family unit size (voucher size) or the prorata pro rata share of the utility allowance for the shared housing unit. Example: A family holds a 2-bedroom voucher. The family decides to occupy 3 out of 4 bedrooms available in the unit. The utility allowance for a 4-bedroom unit equals $200 The utility allowance for a 2-bedroom unit equals $100 The prorata pro rata share of the utility allowance is $150 (3/4 of $200) The PHA will use the 2-bedroom utility allowance of $100. The rents paid for families living in shared housing are subject to generally applicable standards for rent reasonableness. The rent paid to the owner for the assisted family must not exceed the 592 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 16-1 Chapter 16 PROGRAM ADMINISTRATION INTRODUCTION This chapter discusses administrative policies and practices that are relevant to the activities covered in this plan. The policies are discussed in seven parts as described below: Part I: Administrative Fee Reserve. This part describes the HA’s policies with regard to oversight of expenditures from its administrative fee reserve. Part II: Setting Program Standards and Schedules. This part describes what payment standards are, and how they are updated, as well as how utility allowances are established and revised. Part III: Informal Reviews and Hearings. This part outlines the requirements and procedures for informal reviews and hearings, and for informal hearings regarding citizenship status. Part IV: Owner or Family Debts to the HA. This part describes policies for recovery of monies that the HA has overpaid on behalf of families, or to owners, and describes the circumstances under which the HA will offer repayment agreements to owners and families. Also discussed are the consequences for failure to make payments in accordance with a repayment agreement. Part V: Section 8 Management Assessment Program (SEMAP). This part describes what the SEMAP scores represent, how they are established, and how those scores affect a HA. Part VI: Record-Keeping. All aspects of the program involve certain types of record- keeping. This part outlines the privacy rights of applicants and participants and record retention policies the HA will follow. Part VII: Reporting and Record Keeping for Children with Elevated Blood Lead Level. This part describes the HA’s responsibilities for reporting, data collection, and record keeping relative to children with elevated blood lead levels that are less than six years of age, and are receiving HCV assistance. Part VIII: Determination of Insufficient Funding. This part describes the HA’s policies for determining if there is sufficient funding to issue vouchers, to approve moves to higher cost units or areas, and to continue assistance for all participant families. Part IX: Violence against Women Act (VAWA): Notification, Documentation, Confidentiality. This part contains key terms used in VAWA and describes requirements related to notifying families and owners about their rights and responsibilities under VAWA; requesting documentation from victims of domestic violence, dating violence, sexual assault, and = stalking and human trafficking; and maintaining the confidentiality of information obtained from victims. 593 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 16-9 16-II.C. UTILITY ALLOWANCES [24 CFR 982.517] A HA-established utility allowance schedule is used in determining family share and HA subsidy. The HA must maintain a utility allowance schedule for (1) all tenant-paid utilities, (2) the cost of tenant-supplied refrigerators and ranges, and (3) other tenant-paid housing services such as trash collection. The utility allowance schedule must be determined based on the typical cost of utilities and services paid by energy-conservative households that occupy housing of similar size and type in the same locality. In developing the schedule, the HA must use normal patterns of consumption for the community as a whole, and current utility rates. The utility allowance must include the utilities and services that are necessary in the locality to provide housing that complies with housing quality standards. Costs for telephone, cable/satellite television, and internet services are not included in the utility allowance schedule. In the utility allowance schedule, the HA must classify utilities and other housing services according to the following general categories: space heating; air conditioning; cooking; water heating; water; sewer; trash collection; other electric; cost of tenant-supplied refrigerator; cost of tenant-supplied range; and other specified housing services. The cost of each utility and housing service must be stated separately by unit size and type. Chapter 18 of the HCV Guidebook provides detailed guidance to the HA about establishing utility allowance schedules. Air Conditioning An allowance for air-conditioning must be provided when the majority of housing units in the market have central air-conditioning or are wired for tenant-installed air conditioners. HA Policy There is no air conditioning allowance. Reasonable Accommodation and Individual Relief Upon request from a family that includes a person with disabilities, the PHA must approve a utility allowance which is higher than the applicable amount on the utility allowance schedule if a higher utility allowance is needed as a reasonable accommodation to make the program accessible and usable by the family member with a disability [24 CFR 982.517(e)]. HCV program regulations require a HA to approve a utility allowance amount higher than shown on the HA’s schedule if a higher allowance is needed as a reasonable accommodation for a family member with a disability. For example, if a family member with a disability requires such an accommodation, the HA will approve an allowance for air-conditioning, even if the HA has determined that an allowance for air-conditioning generally is not needed (See Chapter 2 for policies regarding the request and approval of reasonable accommodations). Further, the PHA may grant requests for relief from charges in excess of the utility allowance on reasonable grounds, such as special needs of the elderly, ill, or residents with disabilities, or special factors not within control of the resident, as the PHA deems appropriate. The family must request the higher allowance and provide the PHA with an explanation of the need for the 594 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 16-10 individual relief and information about the amount of additional allowance required [see HCV GB, p. 18-8]. PHAs should develop criteria for granting individual relief and to notify residents about the availability of individual relief, and also to notify participants about the availability of individual relief programs (sometimes referred to as “Medical Baseline discounts”) offered by the local utility company. Policies for granting exception utility allowances can be found in Section 6- III.D. of this plan. Utility Allowance Revisions The HA must review its schedule of utility allowances each year, and must revise the schedule if there has been a change of 10 percent or more in any utility rate since the last time the allowance for that utility was revised [24 CFR 982.517(c)(1)].. The HA must maintain information supporting its annual review of utility allowance and any revisions made in its utility allowance schedule. 595 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 16-15 Conducting Remote Informal Reviews The PHA must ensure that the lack of technology or inability to use technology for remote informal reviews does not pose a disadvantage to families that may not be apparent to the HA. The PHA should determine through a survey or other means if these barriers exist prior to conducting the remote informal review and, if the family does not have the proper technology to fully participate, either postpone the informal review or provide an alternative means of access. As with in-person informal reviews, the HA must provide all materials presented, whether paper or electronic, to the family prior to the remote informal review. The family must also be provided with an accessible means by which to transmit their own evidence. The PHA must ensure that the applicant has the right to hear and be heard. All HA policies and processes for remote informal reviews must be conducted in accordance with due process requirements and be in compliance with HUD regulations at 24 CFR 982.554 and guidance specified in Notice PIH 2020-32. HA Policy The HA will conduct remote informal reviews via a video conferencing platform, when available. If, after attempting to resolve any barriers, applicants are unable to adequately access the video conferencing platform at any point, or upon applicant request, the informal review will be conducted by telephone conferencing call-in. If the family is unable to adequately access the telephone conferencing call-in at any point, the remote informal review will be postponed, and an in-person alternative will be provided promptly within a reasonable time. At least five business days prior to scheduling the remote review, the HA will provide the family with login information and/or conferencing call-in information and an electronic and/or physical copy of all materials being presented via first class mail and/or email. The notice will advise the family of technological requirements for the hearing informal review and request the family notify the HA of any known barriers. The HA will resolve any barriers using the guidance in Section 6 of Notice PIH 2020-32, including offering the family the opportunity to attend an in-person hearinginformal review. If the informal review is to be conducted remotely, the HA will require the family to provide any documents directly relevant to the informal review at least 24 hours before the scheduled review through the mail, via email, or text. The HA will scan and email copies of these documents to the HA representative the same day. Documents will be shared electronically whenever possible. The HA will follow up the email with a phone call and/or email to the applicant at least one business day prior to the remote informal review to ensure that the applicant received all information and is comfortable accessing the video conferencing or call-in platform. The HA will ensure that all electronic information stored or transmitted with respect to the informal review is secure, including protecting personally identifiable information (PII), and meets the requirements for accessibility for persons with disabilities and persons with LEP. 596 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 16-23 Pre-Hearing Right to Discovery [24 CFR 982.555(e)] Participants and the HA are permitted pre-hearing discovery rights. The family must be given the opportunity to examine before the hearing any HA documents that are directly relevant to the hearing. The family must be allowed to copy any such documents at their own expense. If the HA does not make the document available for examination on request of the family, the HA may not rely on the document at the hearing. For the purpose of informal hearings, documents include records and regulations. HA Policy The family will be allowed to copy any documents related to the hearing at no cost to the family. The family must request discovery of HA documents no later than 12:00 p.m. on the business day prior to the scheduled hearing date. If the hearing will be conducted remotely, the HA will compile a hearing packet, consisting of all documents the HA intends to produce at the informal hearing. The PHA will mail provide copies of the hearing packet to the family, the family’s representatives, if any, and the hearing officer at least three days before the scheduled remote informal hearing. The original hearing packet will be in the possession of the HA representative and retained by the HA. Documents will be shared electronically whenever possible. The HA hearing procedures may provide that the HA must be given the opportunity to examine at the HA offices before the hearing any family documents that are directly relevant to the hearing. The HA must be allowed to copy any such document at the HA’s expense. If the family does not make the document available for examination on request of the HA, the family may not rely on the document at the hearing. HA Policy For in-person hearings, the HA will not require pre-hearing discovery by the HA of family documents directly relevant to the hearing. If the informal hearing is to be conducted remotely, the HA will require the family to provide any documents directly relevant to the informal hearing at least 24 hours before the scheduled hearing through the mail, via email, or text. The HA will scan and email copies of these documents to the hearing officer and the HA representative the same day. Documents will be shared electronically whenever possible. Participant’s Right to Bring Counsel [24 CFR 982.555(e)(3)] At its own expense, the family may be represented by a lawyer or other representative at the informal hearing. Informal Hearing Officer [24 CFR 982.555(e)(4)] Informal hearings will be conducted by a person or persons approved by the HA, other than the person who made or approved the decision or a subordinate of the person who made or approved the decision. 597 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 16-30 Evidence The family must be provided the opportunity to examine and copy at the family’s expense, at a reasonable time in advance of the hearing, any documents in the possession of the HA pertaining to the family’s eligibility status, or in the possession of the USCIS (as permitted by USCIS requirements), including any records and regulations that may be relevant to the hearing. HA Policy The family will be allowed to copy any documents related to the hearing at a cost of $.25 per pageno charge. The family must request discovery of HA documents no later than 12:00 p.m. on the business day prior to the hearing. The family must be provided the opportunity to present evidence and arguments in support of eligible status. Evidence may be considered without regard to admissibility under the rules of evidence applicable to judicial proceedings. The family must also be provided the opportunity to refute evidence relied upon by the HA, and to confront and cross-examine all witnesses on whose testimony or information the HA relies. Representation and Interpretive Services The family is entitled to be represented by an attorney or other designee, at the family’s expense, and to have such person make statements on the family’s behalf. The family is entitled to request an interpreter. Upon request, the HA will provide competent interpretation services, free of charge. Recording of the Hearing The family is entitled to have the hearing recorded by audiotape. The HA may, but is not required to provide a transcript of the hearing. HA Policy The HA will not provide a transcript of an audio taped hearing. Hearing Decision The HA must provide the family with a written final decision, based solely on the facts presented at the hearing, within 14 calendar days of the date of the informal hearing. The decision must state the basis for the decision. 598 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 16-42 PART VI: RECORD KEEPING 16-VI.A. OVERVIEW The HA must maintain complete and accurate accounts and other records for the program in accordance with HUD requirements, in a manner that permits a speedy and effective audit. All such records must be made available to HUD or the Comptroller General of the United States upon request. In addition, the HA must ensure that all applicant and participant files are maintained in a way that protects an individual’s privacy rights. 16-VI.B. RECORD RETENTION [24 CFR 982.158] During the term of each assisted lease, and for at least three years thereafter, the HA must keep: x A copy of the executed lease; x The HAP contract; and x The application from the family. In addition, the HA must keep the following records for at least three years: x Records that provide income, racial, ethnic, gender, and disability status data on program applicants and participants; x An application from each ineligible family and notice that the applicant is not eligible; x HUD-required reports; x Unit inspection reports; x Lead-based paint records as required by 24 CFR 35, Subpart B. x Accounts and other records supporting HA budget and financial statements for the program; x Records to document the basis for HA determination that rent to owner is a reasonable rent (initially and during the term of a HAP contract); and x Other records specified by HUD. Notice PIH 2014-20 requires HAs to keep records of all complaints, investigations, notices, and corrective actions related to violations of the Fair Housing Act or the equal access final rule. HA Policy The HA will keep for at least three years records of all complaints, investigations, notices, and corrective actions related to violations of the Fair Housing Act, the equal access final rule, or VAWA. The HA must keep confidential records of all emergency transfers requested by victims of domestic violence, dating violence, sexual assault, and stalking and human trafficking under the 599 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 16-43 HA’s Emergency Transfer Plan, as well as the outcomes of such requests, and retain the records for a period of three years [see24 CFR 5.2002(3)(12).] If an informal hearing to establish a family’s citizenship status is held, longer retention requirements apply for some types of documents. For specific requirements, see Section 16- III.D., Retention of Documents. 600 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 16-45 Criminal Records The HA may only disclose the criminal conviction records which the HA receives from a law enforcement agency to officers or employees of the HA, or to authorized representatives of the HA who have a job-related need to have access to the information [24 CFR 5.903(e)]. The HA must establish and implement a system of records management that ensures that any criminal record received by the HA from a law enforcement agency is maintained confidentially, not misused or improperly disseminated, and destroyed, once the purpose for which the record was requested has been accomplished, including expiration of the period for filing a challenge to the HA action without institution of a challenge or final disposition of any such litigation [24 CFR 5.903(g)]. The HA must establish and implement a system of records management that ensures that any sex offender registration information received by the HA from a State or local agency is maintained confidentially, not misused or improperly disseminated, and destroyed, once the purpose for which the record was requested has been accomplished, including expiration of the period for filing a challenge to the HA action without institution of a challenge or final disposition of any such litigation. However, a record of the screening, including the type of screening and the date performed must be retained [Notice PIH 2012-28]. This requirement does not apply to information that is public information, or is obtained by a HA other than under 24 CFR 5.905. Medical/Disability Records HAs are not permitted to inquire about the nature or extent of a person’s disability. The HA may not inquire about a person’s diagnosis or details of treatment for a disability or medical condition. If the HA receives a verification document that provides such information, the HA should not place this information in the tenant file. The HA should destroy the document. Documentation of Domestic Violence, Dating Violence, Sexual Assault, or Stalking or Human Trafficking For requirements and HA policies related to management of documentation obtained from victims of domestic violence, dating violence, sexual assault, or stalking or human trafficking, see section 16-IX.E. 601 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 16-51 PART IX: VIOLENCE AGAINST WOMEN ACT (VAWA): NOTIFICATION, DOCUMENTATION, CONFIDENTIALITY 16-IX.A. OVERVIEW The Violence against Women Act of 2013 (VAWA) provides special protections for victims of domestic violence, dating violence, sexual assault and stalking and human trafficking who are applying for or receiving assistance under the housing choice voucher (HCV) program. If your state or local laws provide greater protection for such victims, those laws apply in conjunction with VAWA. x Although the VAWA 2022 statute does not specifically include human trafficking in the list of victims protected under VAWA, in 2022 HUD began including human trafficking as part of the list of victims protected under VAWA (as seen in Notices PIH 2022-06, PIH 2022-22, and PIH 2022-24). In the absence of a final rule implementing VAWA 2022 and to mirror HUD’s recent usage, this policy includes human trafficking in addition to domestic violence, dating violence, sexual assault, stalking or human trafficking anywhere such a list appears. In addition to definitions of key terms used in VAWA, this part contains general VAWA requirements and HA policies in three areas: notification, documentation, and confidentiality. Specific VAWA requirements and HA policies are located primarily in the following sections: 3- I.C, “Family Breakup and Remaining Member of Tenant Family”; 3-III.G, “Prohibition against Denial of Assistance to Victims of Domestic Violence, Dating Violence, and Stalking and Human Trafficking”; 10-I.A, “Allowable Moves”; 10-I.B, “Restrictions on Moves”; 12-II.E, “Terminations Related to Domestic Violence, Dating Violence, Sexual Assault, or Stalking or Human Trafficking”; and 12-II.F, “Termination Notice.” 16-IX.B. DEFINITIONS [24 CFR 5.2003, 42 USC 13925] As used in VAWA: x The term affiliated individual means, with respect to a person: - A spouse, parent, brother or sister, or child of that individual, or an individual to whom that individual stands in the position or place of a parent; or - Any other individual, tenant, or lawful occupant living in the household of the victim of domestic violence, dating violence, sexual assault, stalking or human trafficking. x The term bifurcate means, with respect to a public housing or Section 8 lease, to divide a lease as a matter of law such that certain tenants can be evicted or removed while the remaining family members’ lease and occupancy rights are allowed to remain intact. x The term dating violence means violence committed by a person who is or has been in a social relationship of a romantic or intimate nature with the victim; and where the existence of such a relationship shall be determined based on a consideration of the following factors: - The length of the relationship 602 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 16-52 - The type of relationship - The frequency of interaction between the persons involved in the relationship x The term domestic violence includes felony or misdemeanor crimes committed by a current or former spouse or intimate partner of the victim under the family or domestic violence laws of the jurisdiction receiving grant funding, and in the case of victim services, includes the user or attempted use of physical abuse or sexual abuse, or a pattern of any other coercive behavior committed, enabled, or solicited to gain or maintain power and control over a victim, including verbal, psychological, economic, or technological abuse that may or may not constitute criminal behavior, by a person who is: - The current or former spouse or intimate partner of the victim, or person similarly situated to a spouse or intimate partner of the victim - A person who is cohabitating or has cohabitated with the victim as a spouse or intimate partner - A person with whom the victim shares a child in common - A person who commits acts against an youth or adult victim who is protected from those acts under the domestic or family violence laws of the jurisdiction x The term economic abuse means behavior that is coercive, deceptive, or unreasonably controls or restrains a person’s ability to acquire, use, or maintain economic resources to which they are entitle, including using coercion, fraud, and manipulation to: - Restrict a person’s access to money, assets, credit, or financial information - Unfairly use a person’s personal economic resources, including money, assets, and credit, for one’s own advantage - Exert undue influence over a person’s financial and economic behavior or decisions, including forcing default on joint or other financial obligations, exploiting powers of attorney, guardianship, or conservatorship, or to whom one has a fiduciary duty x of violence committed by a current or former spouse or intimate partner of the victim, by a person with whom the victim shares a child in common, by a person who is cohabitating with or has cohabitated with the victim as a spouse or intimate partner, by a person similarly situated to a spouse of the victim under the domestic or family violence laws of the jurisdiction receiving grant monies, or by any other person against an adult or youth victim who is protected from that person’s acts under the domestic or family violence laws of the jurisdiction. 603 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 16-53 x The term affiliated individual means, with respect to a person: - A spouse, parent, brother or sister, or child of that individual, or an individual to whom that individual stands in the position or place of a parent; or -x Any other individual, tenant or lawful occupant living in the household of the victim of domestic violence, dating violence, sexual assault, or stalking. x The term sexual assault means: - Any nonconsensual sexual act proscribed by federal, tribal, or state law, including when the victim lacks the capacity to consent x The term stalking means: - To engage in a course of conduct directed at a specific person that would cause a reasonable person to fear for his or her safety or the safety of others, or suffer substantial emotional distress. x The term technological abuse means an act or pattern of behavior that occurs within domestic violence, dating violence, sexual assault, stalking or human trafficking and is intended to harm, threaten, intimidate, control, stalk, harass, impersonate, exploit, extort, or monitor another person, except as otherwise permitted by law, that occurs using any form of technology, including but not limited to: - Internet enabled devices - Online spaces and platforms - Computers - Mobile devices - Cameras and imaging programs - Apps - Location tracking devices - Communication technologies - Any other emergency technologies 604 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 16-54 16-IX.C. NOTIFICATION [24 CFR 5.2005(a)] Notification to Public The HA adopts the following policy to help ensure that all actual and potential beneficiaries of its HCV program are aware of their rights under VAWA. HA Policy The HA will post the following information regarding VAWA in its offices and on its website. It will also make the information readily available to anyone who requests it. A copy of the notice of occupancy rights under VAWA to housing choice voucher program applicants and participants who are or have been victims of domestic violence, dating violence, sexual assault, or stalking or human trafficking ( Form HUD-5380, see Exhibit 16-1) A copy of form HUD-5382, Certification of Domestic Violence, Dating Violence, Sexual Assault, or Stalking or Human Trafficking and Alternate Documentation (see Exhibit 16-2) A copy of the HA’s emergency transfer plan (Exhibit 16-3) A copy of HUD’s Emergency Transfer Request for Certain Victims of Domestic Violence, Dating Violence, Sexual Assault, or Stalking or Human Traifficking, Form HUD-5383 (Exhibit 16-4) The National Domestic Violence Hot Line: 1-800-799-SAFE (7233) or 1-800-787-3224 (TTY) (included in Exhibits 16-1 and 16-2) Contact information for local victim advocacy groups or service providers 605 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 16-56 Notification to Owners and Managers While HAs are no longer required by regulation to notify owners and managers participating in the HCV program of their rights and obligations under VAWA, the HA may still choose to inform them. HA Policy The HA will provide owners and managers with information about their rights and obligations under VAWA when they begin their participation in the program via the HAP Contract and Lease Addenedum The VAWA information provided to owners will consist of the notice in Exhibit 16-5 and a copy of form HUD-5382, Certification of Domestic Violence, Dating Violence, and Stalking and Human Trafficking and Alternate Documentation. 606 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 16-57 16-IX.D. DOCUMENTATION [24 CFR 5.2007] A HA presented with a claim for initial or continued assistance based on status as a victim of domestic violence, dating violence, sexual assault, stalking, human trafficking or criminal activity related to any of these forms of abuse may—but is not required to—request that the individual making the claim document the abuse. Any request for documentation must be in writing, and the individual must be allowed at least 14 business days after receipt of the request to submit the documentation. The HA may extend this time period at its discretion. [24 CFR 5.2007(a)] The individual may satisfy the HA’s request by providing any one of the following three forms of documentation [24 CFR 5.2007(b)]: (1) A completed and signed HUD-approved certification form (HUD-5382, Certification of Domestic Violence, Dating Violence, Sexual Assault, or Stalking or Human Trafficking), which must include the name of the perpetrator only if the name of the perpetrator is safe to provide and is known to the victim. The form may be filled out and submitted on behalf of the victim. (2) A federal, state, tribal, territorial, or local police report or court record, or an administrative record (3) Documentation signed by a person who has assisted the victim in addressing domestic violence, dating violence, sexual assault or stalking human trafficking, or the effects of such abuse. This person may be an employee, agent, or volunteer of a victim service provider; an attorney; a mental health professional; or a medical professional. The person signing the documentation must attest under penalty of perjury to the person’s belief that the incidents in question are bona fide incidents of abuse. The victim must also sign the documentation. The HA may not require third-party documentation (forms 2 and 3) in addition to certification (form 1), except as specified below under “Conflicting Documentation,” nor may it require certification in addition to third-party documentation [FR Notice 11/16/16VAWA final rule]. HA Policy Any request for documentation of domestic violence, dating violence, sexual assault or stalking or human trafficking will be in writing, will specify a deadline of 14 business days following receipt of the request, will describe the three forms of acceptable documentation, will provide explicit instructions on where and to whom the documentation must be submitted, and will state the consequences for failure to submit the documentation or request an extension in writing by the deadline. The HA may, in its discretion, extend the deadline for 10 business days. In determining whether to extend the deadline, the HA will consider factors that may contribute to the victim’s inability to provide documentation in a timely manner, including cognitive limitations, disabilities, limited English proficiency, absence from the unit, administrative delays, the danger of further violence, and the victim’s need to address health or safety issues.Any extension granted by the HA will be in writing. Once the victim provides documentation, the HA will acknowledge receipt of the documentation within 10 days. 607 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 16-58 Conflicting Documentation [24 CFR 5.2007(e)] In cases where the HA receives conflicting certification documents from two or more members of a household, each claiming to be a victim and naming one or more of the other petitioning household members as the perpetrator, the HA may determine which is the true victim by requiring each to provide acceptable third-party documentation, as described above (forms 2 and 3)The HA may also request third-party documentation when submitted documentation contains information that conflicts with existing information already available to the PHA. Individuals have 30 calendar days to return third-party verification to the PHA. If the PHA does not receive thirdparty documentation, and the PHA will deny or terminate assistance as a result, the PHA must hold separate hearings for the tenants [Notice PIH 2017-08]. The HA must honor any court orders issued to protect the victim or to address the distribution of property. HA Policy If presented with conflicting certification documents from members of the same household, the HA will attempt to determine which is the true victim by requiring each of them to provide third-party documentation in accordance with 24 CFR 5.2007(e) and by following any HUD guidance on how such determinations should be made. When requesting third-party documents, the PHA will provide contact information for local domestic violence and legal aid offices. In such cases, applicants or tenants will be given 30 calendar days from the date of the request to provide such documentation. If the PHA does not receive third-party documentation within the required timeframe (and any extensions) the PHA will deny VAWA protections and will notify the applicant or tenant in writing of the denial. If, as a result, the applicant or tenant is denied or terminated from the program, the PHA will hold separate hearings for the applicants or tenants. Discretion to Require No Formal Documentation [24 CFR 5.2007(d)] The HA has the discretion to provide benefits to an individual based solely on the individual’s statement or other corroborating evidence—i.e., without requiring formal documentation of abuse in accordance with 24 CFR 5.2007(b). HUD recommends documentation in a confidential manner when a verbal statement or other evidence is acceptable. HA Policy If the HA accepts an individual’s statement or other corroborating evidence (as determined by the victim) of domestic violence, dating violence, sexual assault or stalking or human trafficking, the HA will document acceptance of the statement or evidence in the individual’s file. 608 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 16-59 Failure to Provide Documentation [24 CFR 5.2007(c)] In order to deny relief for protection under VAWA, a HA must provide the individual requesting relief with a written request for documentation of abuse. If the individual fails to provide the documentation within 14 business days from the date of receipt, or such longer time as the HA may allow, the HA may deny relief for protection under VAWA. 16-IX.E. CONFIDENTIALITY [24 CFR 5.2007(b)(4)] All information provided to the HA regarding domestic violence, dating violence, sexual assault or stalking or human trafficking, including the fact that an individual is a victim of such violence or stalking, must be retained in confidence. This means that the HA (1) may not enter the information into any shared database, (2) may not allow employees or others to access the information unless they are explicitly authorized to do so and have a need to know the information for purposes of their work, and (3) may not provide the information to any other entity or individual, except to the extent that the disclosure is (a) requested or consented to by the individual in writing, (b) required for use in an eviction proceeding, or (c) otherwise required by applicable law. HA Policy If disclosure is required for use in an eviction proceeding or is otherwise required by applicable law, the HA will inform the victim before disclosure occurs so that safety risks can be identified and addressed. 609 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 16-60 EXHIBIT 16-1: NOTICE OF OCCUPANCY RIGHTS UNDER THE VIOLENCE AGAINST WOMEN ACT, FORM HUD-5380 St. Louis Park Housing Authority (HA) Notice of Occupancy Rights under the Violence Against Women Act 1 To all Tenants and Applicants The Violence Against Women Act (VAWA) provides protections for victims of domestic violence, dating violence, sexual assault, or stalking or human trafficking. VAWA protections are not only available to women, but are available equally to all individuals regardless of sex, gender identity, or sexual orientation.2 The U.S. Department of Housing and Urban Development (HUD) is the Federal agency that oversees that the Public Housing and Housing Choice Voucher program is in compliance with VAWA. This notice explains your rights under VAWA. A HUD-approved certification form is attached to this notice. You can fill out this form to show that you are or have been a victim of domestic violence, dating violence, sexual assault, or stalking or human trafficking, and that you wish to use your rights under VAWA.” Protections for Applicants If you otherwise qualify for assistance under the Public Housing or Housing Choice Voucher program, you cannot be denied admission or denied assistance because you are or have been a victim of domestic violence, dating violence, sexual assault, or stalking or human trafficking. Protections for Tenants If you are receiving assistance under Public Housing or the Housing Choice Voucher Program, you may not be denied assistance, terminated from participation, or be evicted from your rental housing because you are or have been a victim of domestic violence, dating violence, sexual assault, or stalking or human trafficking. Also, if you or an affiliated individual of yours is or has been the victim of domestic violence, dating violence, sexual assault, or stalking or human trafficking by a member of your household or any guest, you may not be denied rental assistance or occupancy rights under Public Housing or the Housing Choice Voucher Program solely on the basis of criminal activity directly relating to that domestic violence, dating violence, sexual assault, or stalking or human trafficking. Affiliated individual means your spouse, parent, brother, sister, or child, or a person to whom you stand in the place of a parent or guardian (for example, the affiliated individual is in your care, custody, or control); or any individual, tenant, or lawful occupant living in your household. 1 Despite the name of this law, VAWA protection is available regardless of sex, gender identity, or sexual orientation. 2 Housing providers cannot discriminate on the basis of any protected characteristic, including race, color, national origin, religion, sex, familial status, disability, or age. HUD-assisted and HUD-insured housing must be made available to all otherwise eligible individuals regardless of actual or perceived sexual orientation, gender identity, or marital status. 610 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 16-61 Removing the Abuser or Perpetrator from the Household The HA may divide (bifurcate) your lease in order to evict the individual or terminate the assistance of the individual who has engaged in criminal activity (the abuser or perpetrator) directly relating to domestic violence, dating violence, sexual assault, or stalking or human trafficking. If the HA chooses to remove the abuser or perpetrator, the HA may not take away the rights of eligible tenants to the unit or otherwise punish the remaining tenants. If the evicted abuser or perpetrator was the sole tenant to have established eligibility for assistance under the program, the HA must allow the tenant who is or has been a victim and other household members to remain in the unit for 30 days, in order to establish eligibility under the program or under another HUD housing program covered by VAWA, or, find alternative housing. In removing the abuser or perpetrator from the household, the HA must follow Federal, State, and local eviction procedures. In order to divide a lease, the HA may, but is not required to, ask you for documentation or certification of the incidences of domestic violence, dating violence, sexual assault, or stalking or human trafficking. Moving to Another Unit Upon your request, the HA may permit you to move to another unit, subject to the availability of other units, and still keep your assistance. In order to approve a request, the HA may ask you to provide documentation that you are requesting to move because of an incidence of domestic violence, dating violence, sexual assault, or stalking or human trafficking. If the request is a request for emergency transfer, the housing provider may ask you to submit a written request or fill out a form where you certify that you meet the criteria for an emergency transfer under VAWA. The criteria are: 1. You are a victim of domestic violence, dating violence, sexual assault, or stalking or human trafficking. If your housing provider does not already have documentation that you are a victim of domestic violence, dating violence, sexual assault, or stalking or human trafficking, your housing provider may ask you for such documentation, as described in the documentation section below. 2. You expressly request the emergency transfer. Your housing provider may choose to require that you submit a form, or may accept another written or oral request. 3. You reasonably believe you are threatened with imminent harm from further violence if you remain in your current unit. This means you have a reason to fear that if you do not receive a transfer you would suffer violence in the very near future. OR You are a victim of sexual assault and the assault occurred on the premises during the 90-calendar-day period before you request a transfer. If you are a victim of sexual assault, then in addition to qualifying for an emergency transfer because you reasonably believe you are threatened with imminent harm from further violence if you remain in your unit, you may qualify for an emergency transfer if the sexual assault occurred on the premises of the property from which you are seeking your transfer, and that assault happened within the 90-calendar- day period before you expressly request the transfer. 611 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 16-62 The HA will keep confidential requests for emergency transfers by victims of domestic violence, dating violence, sexual assault, or stalking or human trafficking, and the location of any move by such victims and their families. The HA’s emergency transfer plan provides further information on emergency transfers, and the HA must make a copy of its emergency transfer plan available to you if you ask to see it. Documenting You Are or Have Been a Victim of Domestic Violence, Dating Violence, Sexual Assault or Stalking or Human Trafficking The HA can, but is not required to, ask you to provide documentation to “certify” that you are or have been a victim of domestic violence, dating violence, sexual assault, or stalking or human trafficking. Such request from the HA must be in writing, and the HA must give you at least 14 business days (Saturdays, Sundays, and Federal holidays do not count) from the day you receive the request to provide the documentation. The HA may, but does not have to, extend the deadline for the submission of documentation upon your request. You can provide one of the following to the HA as documentation. It is your choice which of the following to submit if the HA asks you to provide documentation that you are or have been a victim of domestic violence, dating violence, sexual assault, or stalking or human trafficking. xA complete HUD-approved certification form given to you by the HA with this notice, that documents an incident of domestic violence, dating violence, sexual assault, or stalking. The form will ask for your name, the date, time, and location of the incident of domestic violence, dating violence, sexual assault, or stalking or human trafficking, and a description of the incident. The certification form provides for including the name of the abuser or perpetrator if the name of the abuser or perpetrator is known and is safe to provide. xA record of a Federal, State, tribal, territorial, or local law enforcement agency, court, or administrative agency that documents the incident of domestic violence, dating violence, sexual assault, or stalking or human trafficking. Examples of such records include police reports, protective orders, and restraining orders, among others. xA statement, which you must sign, along with the signature of an employee, agent, or volunteer of a victim service provider, an attorney, a medical professional or a mental health professional (collectively, “professional”) from whom you sought assistance in addressing domestic violence, dating violence, sexual assault, or stalking or human trafficking , or the effects of abuse, and with the professional selected by you attesting under penalty of perjury that he or she believes that the incident or incidents of domestic violence, dating violence, sexual assault, or stalking or human trafficking are grounds for protection. xAny other statement or evidence that the HA has agreed to accept. If you fail or refuse to provide one of these documents within the 14 business days, the HA does not have to provide you with the protections contained in this notice. If the HA receives conflicting evidence that an incident of domestic violence, dating violence, sexual assault, or stalking or human trafficking has been committed (such as certification forms from two or more members of a household each claiming to be a victim and naming one or more of the other petitioning household members as the abuser or perpetrator), the HA has the right to request that you provide third-party documentation within thirty 30 calendar days in order to 612 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 16-63 resolve the conflict. If you fail or refuse to provide third-party documentation where there is conflicting evidence, the HA does not have to provide you with the protections contained in this notice. Confidentiality The HA must keep confidential any information you provide related to the exercise of your rights under VAWA, including the fact that you are exercising your rights under VAWA. The HA must not allow any individual administering assistance or other services on behalf of the HA (for example, employees and contractors) to have access to confidential information unless for reasons that specifically call for these individuals to have access to this information under applicable Federal, State, or local law. The HA must not enter your information into any shared database or disclose your information to any other entity or individual. The HA, however, may disclose the information provided if: xYou give written permission to the HA to release the information on a time limited basis. xThe HA needs to use the information in an eviction or termination proceeding, such as to evict your abuser or perpetrator or terminate your abuser or perpetrator from assistance under this program. xA law requires the HA or your landlord to release the information. VAWA does not limit the HA’s duty to honor court orders about access to or control of the property. This includes orders issued to protect a victim and orders dividing property among household members in cases where a family breaks up. Reasons a Tenant Eligible for Occupancy Rights under VAWA May Be Evicted or Assistance May Be Terminated You can be evicted and your assistance can be terminated for serious or repeated lease violations that are not related to domestic violence, dating violence, sexual assault, or stalking or human trafficking committed against you. However, the HA cannot hold tenants who have been victims of domestic violence, dating violence, sexual assault, or stalking or human trafficking to a more demanding set of rules than it applies to tenants who have not been victims of domestic violence, dating violence, sexual assault, or stalking or human trafficking. The protections described in this notice might not apply, and you could be evicted and your assistance terminated, if the HA can demonstrate that not evicting you or terminating your assistance would present a real physical danger that: 1. Would occur within an immediate time frame, and 2. Could result in death or serious bodily harm to other tenants or those who work on the property. If the HA can demonstrate the above, the HA should only terminate your assistance or evict you if there are no other actions that could be taken to reduce or eliminate the threat. Other Laws VAWA does not replace any Federal, State, or local law that provides greater protection for victims of domestic violence, dating violence, sexual assault, or stalking or human trafficking. You may be entitled to additional housing protections for victims of domestic violence, dating 613 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 16-64 violence, sexual assault, or stalking or human trafficking under other Federal laws, as well as under State and local laws. 614 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 16-67 EXHIBIT 16-2: CERTIFICATION OF DOMESTIC VIOLENCE, DATING VIOLENCE, SEXUAL ASSAULT, OR STALKING OR HUMAN TRAFFICKING AND ALTERNATE DOCUMENTATION, FORM HUD-5382 CERTIFICATION OF U.S. Department of Housing OMB Approval No. 2577-0286 DOMESTIC VIOLENCE, and Urban Development Exp. 06/30/2017 DATING VIOLENCE, SEXUAL ASSAULT, OR STALKING or HUMAN TRAFFICKING, AND ALTERNATE DOCUMENTATION Purpose of Form: The Violence Against Women Act (“VAWA”) protects applicants, tenants, and program participants in certain HUD programs from being evicted, denied housing assistance, or terminated from housing assistance based on acts of domestic violence, dating violence, sexual assault, or stalking or human trafficking against them. Despite the name of this law, VAWA protection is available to victims of domestic violence, dating violence, sexual assault, and stalking or human trafficking, regardless of sex, gender identity, or sexual orientation. Use of This Optional Form: If you are seeking VAWA protections from your housing provider, your housing provider may give you a written request that asks you to submit documentation about the incident or incidents of domestic violence, dating violence, sexual assault, or stalking or human trafficking. In response to this request, you or someone on your behalf may complete this optional form and submit it to your housing provider, or you may submit one of the following types of third-party documentation: (1) A document signed by you and an employee, agent, or volunteer of a victim service provider, an attorney, or medical professional, or a mental health professional (collectively, “professional”) from whom you have sought assistance relating to domestic violence, dating violence, sexual assault, or stalking or human trafficking, or the effects of abuse. The document must specify, under penalty of perjury, that the professional believes the incident or incidents of domestic violence, dating violence, sexual assault, or stalking or human trafficking occurred and meet the definition of “domestic violence,” “dating violence,” “sexual assault,” or “stalking” in HUD’s regulations at 24 CFR 5.2003. (2) A record of a Federal, State, tribal, territorial or local law enforcement agency, court, or administrative agency; or (3) At the discretion of the housing provider, a statement or other evidence provided by the applicant or tenant. Submission of Documentation: The time period to submit documentation is 14 business days from the date that you receive a written request from your housing provider asking that you provide documentation of the occurrence of domestic violence, dating violence, sexual assault, or stalking or human trafficking. Your housing provider may, but is not required to, extend the time period to submit the documentation, if you request an extension of the time period. If the requested information is not received within 14 business days of when you received the request for the documentation, or any extension of the date provided by your housing provider, your housing provider does not need to grant you any of the VAWA protections. Distribution or issuance of this form does not serve as a written request for certification. Confidentiality: All information provided to your housing provider concerning the incident(s) of domestic violence, dating violence, sexual assault, or stalking or human trafficking shall be kept confidential and such details shall not be entered into any shared database. Employees of your housing provider are not to have access to these details unless to grant or deny VAWA protections to you, and such employees may not disclose this information to any other entity or individual, except to the extent 615 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 16-69 TO BE COMPLETED BY OR ON BEHALF OF THE VICTIM OF DOMESTIC VIOLENCE, DATING VIOLENCE, SEXUAL ASSAULT, OR STALKING OR HUMAN TRAFFICKING 1. Date the written request is received by victim: _________________________________________ 2. Name of victim: ___________________________________________________________________ 3. Your name (if different from victim’s):________________________________________________ 4. Name(s) of other family member(s) listed on the lease:___________________________________ ___________________________________________________________________________________ 5. Residence of victim: ________________________________________________________________ 6. Name of the accused perpetrator (if known and can be safely disclosed):____________________ __________________________________________________________________________________ 7. Relationship of the accused perpetrator to the victim:___________________________________ 8. Date(s) and times(s) of incident(s) (if known):___________________________________________ _________________________________________________________________ 10. Location of incident(s):_____________________________________________________________ This is to certify that the information provided on this form is true and correct to the best of my knowledge and recollection, and that the individual named above in Item 2 is or has been a victim of domestic violence, dating violence, sexual assault, or stalking or human trafficking. I acknowledge that submission of false information could jeopardize program eligibility and could be the basis for denial of admission, termination of assistance, or eviction. Signature __________________________________Signed on (Date) ___________________________ Public Reporting Burden: The public reporting burden for this collection of information is estimated to average 1 hour per response. This includes the time for collecting, reviewing, and reporting the data. The information provided is to be used by the housing provider to request certification that the applicant or tenant is a victim of domestic violence, dating violence, sexual assault, or stalking or human trafficking. The information is subject to the confidentiality requirements of VAWA. This agency may not collect this information, and you are not required to complete this form, unless it displays a currently valid Office of Management and Budget control number. In your own words, briefly describe the incident(s): ______________________________________________________________________________________ ______________________________________________________________________________________ ______________________________________________________________________________________ 616 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 16-70 EXHIBIT 16-3: EMERGENCY TRANSFER PLAN FOR VICTIMS OF DOMESTIC VIOLENCE, DATING VIOLENCE, SEXUAL ASSAULT, OR STALKING OR HUMAN TRAFFICKING (HCV VERSION) Attachment: Certification form HUD-5382 St. Louis Park Housing Authority Emergency Transfer Plan for Victims of Domestic Violence, Dating Violence, Sexual Assault, or Stalking or Human Trafficking Public Housing and Housing Choice Voucher Programs Emergency Transfers The St. Louis Park Housing Authority (HA) is concerned about the safety of its tenants, and such concern extends to tenants who are victims of domestic violence, dating violence, sexual assault, or stalking or human trafficking. In accordance with the Violence Against Women Act (VAWA),3 the HA allows tenants who are victims of domestic violence, dating violence, sexual assault, or stalking or human trafficking to request an emergency transfer from the tenant’s current unit to another unit. The ability to request a transfer is available regardless of sex, gender identity, or sexual orientation.4 The ability of the HA to honor such request for tenants currently receiving assistance, however, may depend upon a preliminary determination that the tenant is or has been a victim of domestic violence, dating violence, sexual assault, or stalking or human trafficking, and on whether the HA has another dwelling unit that is available and is safe to offer the tenant for temporary or more permanent occupancy. This plan identifies tenants who are eligible for an emergency transfer, the documentation needed to request an emergency transfer, confidentiality protections, how an emergency transfer may occur, and guidance to tenants on safety and security. This plan is based on a model emergency transfer plan published by the U.S. Department of Housing and Urban Development (HUD), the federal agency that oversees that the public housing and housing choice voucher (HCV) programs are in compliance with VAWA. Eligibility for Emergency Transfers A tenant who is a victim of domestic violence, dating violence, sexual assault, or stalking or human trafficking, as provided in HUD’s regulations at 24 CFR part 5, subpart L, is eligible for an emergency transfer if the tenant reasonably believes that there is a threat of imminent harm from further violence if the tenant remains within the same unit. If the tenant is a victim of sexual assault, the tenant may also be eligible to transfer if the sexual assault occurred on the premises within the 90-calendar- day period preceding a request for an emergency transfer. 3Despite the name of this law, VAWA protection is available to all victims of domestic violence, dating violence, sexual assault, and stalking or human trafficking, regardless of sex, gender identity, or sexual orientation. 4Housing providers cannot discriminate on the basis of any protected characteristic, including race, color, national origin, religion, sex, familial status, disability, or age. HUD-assisted and HUD-insured housing must be made available to all otherwise eligible individuals regardless of actual or perceived sexual orientation, gender identity, or marital status. 617 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 16-78 EXHIBIT 16-5: OWNER NOTIFICATION OF RIGHTS AND OBLIGATIONS HOUSING AUTHORITY OF ST. LOUIS PARK NOTIFICATION OF YOUR RIGHTS AND OBLIGATIONS UNDER THE VIOLENCE AGAINST WOMEN ACT (VAWA) VAWA provides protections for Section 8 Housing Choice Voucher (HCV) and PBV applicants, tenants, and participants from being denied assistance on the basis or as a direct result of being a victim of domestic violence, dating violence, sexual assault and stalking. Purpose Many of VAWA’s protections to victims of domestic violence, dating violence, sexual assault and stalking involve action by the public housing agency (PHA), but some situations involve action by owners of assisted housing. The purpose of this notice (herein called “Notice”) is to explain your rights and obligations under VAWA, as an owner of housing assisted through the Housing Authority of St. Louis Park’s HCV program. Each component of this Notice also provides citations to HUD’s applicable regulations. Denial of Tenancy Protections for applicants: Owners cannot deny tenancy based on the applicant having been or currently being a victim of domestic violence, dating violence, sexual assault, or stalking. However, the applicant must be otherwise eligible for tenancy. (See 24 Code of Federal Regulations (CFR) 982.452(b)(1).) Eviction Protections for HCV participants: Incidents or threats of domestic violence, dating violence, sexual assault, or stalking will not be considered a serious or repeated lease violation by the victim, or good cause to terminate the tenancy of the victim (24 CFR 5.2005(c)). Protection also applies to criminal activity related directly to domestic violence, dating violence, sexual assault, or stalking, conducted by a member of a tenant’s household or any guest or other person under the tenant’s control, if the tenant or an affiliated individual of the tenant is the victim or threatened victim of such domestic violence, dating violence, sexual assault, or stalking (24 CFR 5.2005(b)(2)). Limitations of VAWA protections: a. Nothing in the VAWA Final RuleVAWA limits the authority of an owner, when notified of a court order, to comply with a court order with respect to (24 CFR 5.2005(d)(1)): 1) The rights of access or control of property, including civil protection orders issued to protect a victim of domestic violence, dating violence, sexual assault, or stalking; or 2) The distribution or possession of property among members of a household in a case. b. Nothing in the VAWA Final RuleVAWA limits an owner from evicting a victim of domestic violence, dating violence, sexual assault, or stalking for a lease violation that is not premised on an act of domestic violence, dating violence, sexual assault, or stalking, as long as the owner does not subject the victim to more demanding standards than other tenants when deciding whether to evict. (See 24 CFR 5.2005(d)(2).) c. Nothing in the VAWA Final RuleVAWA limits an owner from evicting a tenant (including the victim of domestic violence, dating violence, sexual assault, or stalking) if the owner can demonstrate an actual and imminent threat to other tenants or those employed at or providing services to the HCV property would be present if the tenant or lawful occupant is not evicted. (See 618 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 16-81 If the owner makes a written request for documentation, the owner may require submission of that documentation within 14 business days after the date that the individual received the written request for documentation. (24 CFR 5.2007(a)(2)). The owner may extend this time period at its discretion. During the 14 business day period and any granted extensions of that time, no adverse actions, such as evictions or terminations, can be taken against the individual requesting VAWA protection. Once a victim provides documentation of domestic violence, dating violence, sexual assault, or stalking, the owner is encouraged to acknowledge receipt of the documentation in a timely manner. If the applicant or tenant fails to provide documentation that meets the criteria in 24 CFR 5.2007 within 14 business days after receiving the written request for that documentation or within the designated extension period, nothing in VAWA Final Rule may be construed to limit the authority of the covered housing provider to: a. Deny admission by the applicant or tenant to the housing or program; b. Deny assistance under the covered housing program to the applicant or tenant; c. Terminate the participation of the tenant in the covered housing program; or d. Evict the tenant, or a lawful occupant that commits a violation of a lease. An individual’s failure to timely provide documentation of domestic violence, dating violence, sexual assault, or stalking does not result in a waiver of the individual’s right to challenge the denial of assistance or termination, nor does it preclude the individual’s ability to raise an incident of domestic violence, dating violence, sexual assault, or stalking at eviction or termination proceedings. Owners may not coerce, intimidate, threaten, interfere with, or retaliate against any person who exercises or assists or encourages a person to exercise any rights or protections under VAWAs (See FR Notice 1/4/23.) Moves A victim of domestic violence, dating violence, sexual assault, or stalking may move in violation of their lease if the move is required to protect their safety. If a move results in the termination of the Housing Assistance Payment Contract, the lease is automatically terminated. Lease Bifurcation Owners may choose to bifurcate a lease, or remove a household member from a lease in order to evict, remove, terminate occupancy rights, or terminate assistance to such member who engages in criminal activity directly relating to domestic violence, dating violence, sexual assault, or stalking against an affiliated individual or other individual. (See 24 CFR 5.2009(a).) If an owner chooses to bifurcate the lease, the owner must comply with the reasonable time to establish eligibility under the covered housing program or find alternative housing following lease bifurcation provision in 24 CFR 5.2009(b). VAWA protections, including bifurcation, do not apply to guests or unreported members of a household or anyone else residing in a household who is not a tenant. Eviction, removal, termination of occupancy rights, or termination of assistance must be effected in accordance with the procedures prescribed by federal, state, or local law for termination of leases. To avoid unnecessary delay in the bifurcation process, HUD recommends that owners seek court-ordered eviction of the perpetrator pursuant to applicable laws. This process results in the underlying lease becoming null and void once the owner regains possession of the unit. The owner would then execute a new lease with the victim. 619 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 16-82 Evictions Due to “Actual and Imminent Threat” or Violations Not Premised on Abuse The VAWA Final RuleVAWA generally prohibits eviction on the basis or as a direct result of the fact that the applicant or tenant is or has been a victim of domestic violence, dating violence, sexual assault, or stalking, if the applicant or tenant otherwise qualifies for assistance, participation or occupancy. (See 24 CFR 5.2005.) However, the VAWA Final RuleVAWA does not prohibit an owner from evicting a tenant for any violation not premised on an act of domestic violence, dating violence, sexual assault, or stalking that is in question against the tenant or an affiliated individual of the tenant. Nor does the VAWA Final Rule prohibit an owner from evicting a tenant if the owner can demonstrate an actual and imminent threat to other tenants or those employed at or providing services to property of the owner would be present if that tenant or lawful occupant is not evicted or terminated from assistance. (See 5.2005(d)(2) and (3).) In order to demonstrate an actual and imminent threat to other tenants or employees at the property, the covered housing provider must have objective evidence of words, gestures, actions, or other indicators that meet the standards in the following definition: Actual and imminent threat refers to a physical danger that is real, would occur within an immediate time frame, and could result in death or serious bodily harm. In determining whether an individual would pose an actual and imminent threat, the factors to be considered include: x The duration of the risk; x The nature and severity of the potential harm; x The likelihood that the potential harm will occur; and x The length of time before the potential harm would occur. (See 24 CFR 5.2003 and 5.2005(d)(2).) Confidentiality Any information submitted to a covered housing provider under 24 CFR 5.2007, including the fact that an individual is a victim of domestic violence, dating violence, sexual assault, or stalking, must be maintained in strict confidence by the covered housing provider. (See 24 CFR 5.2007(c).) Employees of the owner (or those within their employ, e.g., contractors) must not have access to the information unless explicitly authorized by the owner for reasons that specifically call for these individuals to have access to this information under applicable Federal, State, or local law (e.g., the information is needed by an employee to provide the VAWA protections to the victim). The owner must not enter this information into any shared database, or disclose this information to any other entity or individual, except to the extent that disclosure is: a. Requested or consented to in writing by the individual (victim) in a time-limited release; b. Required for use in an eviction proceeding or hearing regarding termination of assistance from the covered program; or c. Otherwise required by applicable law. When communicating with the victim, owners must take precautions to ensure compliance with these confidentiality requirements. 620 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 16-83 Service Providers The Housing Authority of St. Louis Park has extensive relationships with local service providers. Housing Authority staff are available to provide referrals to shelters, counselors, and advocates. These resources are also provided in the Housing Authority’s Annual and 5- Year Plan, Administrative Plan, VAWA Notice of Occupancy Rights, and Emergency Transfer Plan. A list of local service providers is attached to this Notice. Definitions Actual and imminent threat refers to a physical danger that is real, would occur within an immediate time frame, and could result in death or serious bodily harm. In determining whether an individual would pose an actual and imminent threat, the factors to be considered include: the duration of the risk, the nature and severity of the potential harm, the likelihood that the potential harm will occur, and the length of time before the potential harm would occur. Affiliated individual, with respect to an individual, means: (1) A spouse, parent, brother, sister, or child of that individual, or a person to whom that individual stands in the place of a parent or guardian (for example, the affiliated individual is a person in the care, custody, or control of that individual); or (2) Any individual, tenant, or lawful occupant living in the household of that individual. Bifurcate means to divide a lease as a matter of law, subject to the permissibility of such process under the requirements of the applicable HUD-covered program and State or local law, such that certain tenants or lawful occupants can be evicted or removed and the remaining tenants or lawful occupants can continue to reside in the unit under the same lease requirements or as may be revised depending upon the eligibility for continued occupancy of the remaining tenants and lawful occupants. Dating violence means violence committed by a person: (1) Who is or has been in a social relationship of a romantic or intimate nature with the victim; and (2) Where the existence of such a relationship shall be determined based on a consideration of the following factors: (i) The length of the relationship; (ii) The type of relationship; and (iii) The frequency of interaction between the persons involved in the relationship. Domestic violence includes felony or misdemeanor crimes of violence committed by a current or former spouse or intimate partner of the victim under the family or domestic violence laws of the jurisdiction receiving grant funding, and in the case of victim services, includes the user or attempted use of physical abuse or sexual abuse, or a pattern of any other coercive behavior committed, enabled, or solicited to gain or maintain power and control over a victim, including verbal, psychological, economic, or technological abuse that may or may not constitute criminal behavior, by a person who is: x The current or former spouse or intimate partner of the victim, or person similarly situated to a spouse or intimate partner of the victim x A person who is cohabitating or has cohabitated with the victim as a spouse or intimate partner x A person with whom the victim shares a child in common 621 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 16-84 x A person who commits acts against an youth or adult victim who is protected from those acts under the domestic or family violence laws of the jurisdiction current or former spouse or intimate partner of the victim, by a person with whom the victim shares a child in common, by a person who is cohabitating with or has cohabitated with the victim as a spouse or intimate partner, by a person similarly situated to a spouse of the victim under the domestic or family violence laws of the jurisdiction receiving grant monies, or by any other person against an adult or youth victim who is protected from that person's acts under the domestic or family violence laws of the jurisdiction. The term “spouse or intimate partner of the victim” includes a person who is or has been in a social relationship of a romantic or intimate nature with the victim, as determined by the length of the relationship, the type of the relationship, and the frequency of interaction between the persons involved in the relationship. 622 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 16-85 Sexual assault means any nonconsensual sexual act proscribed by Federal, tribal, or State law, including when the victim lacks capacity to consent. Stalking means engaging in a course of conduct directed at a specific person that would cause a reasonable person to: (1) Fear for the person’s individual safety or the safety of others; or (2) Suffer substantial emotional distress. VAWA means the Violence Against Women Act of 1994, as amended (42 U.S.C. 13925 and 42 U.S.C. 14043e et seq.). Attached: Legal services and the domestic violence resources for the Metro area Form HUD-5382 Certification of Domestic Violence, Dating Violence, Sexual Assault, or Stalking or Human Trafficking The Housing Authority of St. Louis Park VAWA Notice of Occupancy Rights 623 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 17-14 17-II.E. SUBSIDY LAYERING REQUIREMENTS [24 CFR 983.55, Notice PIH 2013-11, and FR Notice 2/28/203/13/23] The subsidy layering review is intended to prevent excessive public assistance by combining (layering) housing assistance payment subsidy under the PBV program with other governmental housing assistance from federal, state, or local agencies, including assistance such as tax concessions or tax credits. HUD requires new construction and rehabilitation housing that will include forms of governmental assistance other than PBVs to undergo a subsidy layering review (SLR) prior to entering into an Agreement to Enter into Housing Assistance Payments Contract (AHAP). Subsidy layering requirements do not apply to existing housing, when PBV is the only governmental assistance, or for projects already subject to a PBV HAP contract, even if the project is recapitalized with outside sources of funding. When a HA selects a new construction or rehabilitation project, the PHA must require information regarding all HUD and/or other federal, state, or local governmental assistance to be disclosed by the project owner using Form HUD-2880. Appendix A of FR Notice 2/28/203/13/23 contains a list of all required documentation. Either HUD or a HUD-approved housing credit agency (HCA) in the PHA’s jurisdiction performs the subsidy layering review. The HA must request an SLR through their local HUD Field Office or, if eligible, through a participating HCA. If the SLR request is submitted to an approved HCA, and the proposed project-based voucher assistance meets HUD subsidy layering requirements, the HCA must submit a certification to HUD and notify the HA. The HA may proceed to execute an AHAP at that time if the environmental approval is received. The HAP contract must contain the owner's certification that the project has not received and will not receive (before or during the term of the HAP contract) any public assistance for acquisition, development, or operation of the housing other than assistance disclosed in the subsidy layering review in accordance with HUD requirements. 624 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 17-25 PART IV: REHABILITATED AND NEWLY CONSTRUCTED UNITS 17-IV.A. OVERVIEW [24 CFR 983.151] There are specific requirements that apply to PBV assistance for newly constructed or rehabilitated housing that do not apply to PBV assistance in existing housing. This part describes the requirements unique to this type of assistance. Housing selected for this type of assistance may not at a later date be selected for PBV assistance as existing housing. 17-IV.B. AGREEMENT TO ENTER INTO HAP CONTRACT In order to offer PBV assistance in rehabilitated or newly constructed units, the HA must enter into an agreement to enter into HAP contract (Agreement) with the owner of the property. The Agreement must be in the form required by HUD [24 CFR 983.152(b)]. The HA may not enter into an Agreement if commencement of construction or rehabilitation has commenced after proposal submission [24 CFR 983.152(c)]. Construction begins when excavation or site preparation (including clearing of the land) begins for the housing. Rehabilitation begins with the physical commencement of rehabilitation activity on the housing. In the Agreement the owner agrees to develop the PBV contract units to comply with HQS, and the HA agrees that upon timely completion of such development in accordance with the terms of the Agreement, the HA will enter into a HAP contract with the owner for the contract units [24 CFR 983.152(a)]. 625 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 17-39 17-VI.C. ORGANIZATION OF THE WAITING LIST [24 CFR 983.251(c)] The HA may establish a separate waiting list for PBV units or it may use the same waiting list for both tenant-based and project-based assistance. The HA may also merge the PBV waiting list with a waiting list for other assisted housing programs offered by the HA. If the HA chooses to offer a separate waiting list for PBV assistance, the HA must offer to place applicants who are listed on the tenant-based waiting list on the waiting list for PBV assistance. If a HA decides to establish a separate PBV waiting list, the HA may use a single waiting list for the HA’s whole PBV program, or it may establish separate waiting lists for PBV units in particular projects or buildings or for sets of such units. HA Policy The HA will establish and manage separate waiting lists for individual projects or buildings that are receiving PBV assistance. The HA currently has waiting lists for the following PBV projects: x Excelsior & Grand The waiting lists for Vail in the Park, and Wayside Supportive Housing and Perspectives are maintained by those organizations on behalf of the HA due to the requirements of their supportive services. 17-VI.D. SELECTION FROM THE WAITING LIST [24 CFR 983.251(c)] Applicants who will occupy units with PBV assistance must be selected from the HA’s waiting list. The HA may establish selection criteria or preferences for occupancy of particular PBV units. The HA may place families referred by the PBV owner on its PBV waiting list. Income Targeting [24 CFR 983.251(c)(6)] At least 75 percent of the families admitted to the HA’s tenant-based and project-based voucher programs during the HA fiscal year from the waiting list must be extremely-low income families. The income targeting requirement applies to the total of admissions to both programs. Units with Accessibility Features [24 CFR 983.251(c)(7)] When selecting families to occupy PBV units that have special accessibility features for persons with disabilities, the HA must first refer families who require such features to the owner. 626 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 17-43 17-VI.G. TENANT SCREENING [24 CFR 983.255] HA Responsibility The HA is not responsible or liable to the owner or any other person for the family’s behavior or suitability for tenancy. However, the HA may opt to screen applicants for family behavior or suitability for tenancy and may deny applicants based on such screening. HA Policy The HA will not conduct screening to determine a PBV applicant family’s suitability for tenancy beyond the normal HCV requirements. The HA must provide the owner with an applicant family’s current and prior address (as shown in HA records) and the name and address (if known by the HA) of the family’s current landlord and any prior landlords. In addition, the HA may offer the owner other information the HA may have about a family, including information about the tenancy history of family members or about drug trafficking and criminal activity by family members. The HA must provide applicant families a description of the HA policy on providing information to owners, and the HA must give the same types of information to all owners. The HA may not disclose to the owner any confidential information provided in response to a request for documentation of domestic violence, dating violence, sexual assault, or stalking or human trafficking except at the written request or with the written consent of the individual providing the documentation [see24 CFR 5.2007(a)(4)]. HA Policy The HA will inform owners of their responsibility to screen prospective tenants, and will provide owners with the required known name and address information, at the time of the turnover HQS inspection or before. The HA will not provide any additional information to the owner, such as tenancy history, criminal history, etc. Owner Responsibility The owner is responsible for screening and selection of the family to occupy the owner’s unit. When screening families the owner may consider a family’s background with respect to the following factors: x Payment of rent and utility bills; x Caring for a unit and premises; x Respecting the rights of other residents to the peaceful enjoyment of their housing; x Drug-related criminal activity or other criminal activity that is a threat to the health, safety, or property of others; and x Compliance with other essential conditions of tenancy. 627 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 17-51 Emergency Transfers under VAWA [Notice PIH 2017-08] Except where special consideration is needed for the project-based voucher program, the PHA will follow VAWA policies as outlined in Chapter 16 Part IX of this administrative plan, including using the Emergency Transfer Plan as the basis for PBV transfers under VAWA (Exhibit 16-4). HUD requires that the PHA include policies that address when a victim has been living in a unit for less than a year or when a victim seeks to move sooner than a tenant-based voucher is available. PHA Policy When the victim of domestic violence, dating violence, sexual assault, or stalkingor human trafficking has lived in the unit for less than one year, the PHA will provide several options for continued assistance. The PHA will first try to transfer the participant to another PBV unit in the same development or transfer to a different development where the PHA has PBV units. The PHA will expedite the administrative processes in this case in an effort to conduct the transfer as quickly as possible. If no units are available for an internal transfer, or if there is reasonable cause to believe that such a transfer would put the victim in jeopardy, the participant may receive continued assistance through an external transfer to either tenant-based rental assistance (HCV) or assistance in the PHA’s public housing program. Such a decision will be made by the PHA based on the availability of tenant-based vouchers and/or vacancies in public housing units. Such families must be selected from the waiting list for the applicable program. The PHA has adopted a waiting list preference for victims of domestic violence, dating violence, sexual assault, and stalking or human trafficking in both its HCV and public housing programs in order to expedite this process. See Section 4-III.C. of this administrative plan. If a victim wishes to move after a year of occupancy in the unit, but no tenant- based vouchers are available, the PHA will offer the participant an internal transfer to another PBV unit in the same development or a transfer to a different development where the PHA has PBV units. The PHA will expedite the administrative processes in this case in an effort to conduct the transfer as quickly as possible. If no units are available for an internal transfer, or if there is reasonable cause to believe that such a transfer would put the victim in jeopardy, the participant may receive continued assistance through an external transfer to the PHA’s public housing program. The PHA has adopted a waiting list preference for victims of domestic violence, dating violence, sexual assault, and stalking or human trafficking as part of the public housing ACOP in order to expedite this process. 628 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 17-60 Owner Certification of Reasonable Rent By accepting each monthly housing assistance payment, the owner certifies that the rent to owner is not more than rent charged by the owner for other comparable unassisted units in the premises. At any time, the HA may require the owner to submit information on rents charged by the owner for other units in the premises or elsewhere. 17-VIII.D. EFFECT OF OTHER SUBSIDY AND RENT CONTROL In addition to the rent limits discussed in Section 17-VIII.B above, other restrictions may limit the amount of rent to owner in a PBV unit. In addition, certain types of subsidized housing are not even eligible to receive PBV assistance (see Section 17-II.D). Other Subsidy [24 CFR 983.304] To comply with HUD subsidy layering requirements, at the discretion of HUD or its designee, a HA shall reduce the rent to owner because of other governmental subsidies, including tax credits or tax exemptions, grants, or other subsidized funding.Forfunding. For units receiving assistance under the HOME program, rents may not exceed rent limits as required by that program. For units in any of the following types of federally subsidized projects, the rent to owner may not exceed the subsidized rent (basic rent) or tax credit rent as determined in accordance with requirements for the applicable federal program: x An insured or non-insured Section 236 project; x A formerly insured or non-insured Section 236 project that continues to receive Interest Reduction Payment following a decoupling action; x A Section 221(d)(3) below market interest rate (BMIR) project; x A Section 515 project of the Rural Housing Service; x Any other type of federally subsidized project specified by HUD. Combining Subsidy Rent to owner may not exceed any limitation required to comply with HUD subsidy layering requirements. Rent Control [24 CFR 983.305] In addition to the rent limits set by PBV program regulations, the amount of rent to owner may also be subject to rent control or other limits under local, state, or federal law. 629 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 17-67 EXHIBIT 17-2: PBV DEVELOPMENT INFORMATION EXCELSIOR AND GRAND Date: 11/6/2019 DEVELOPMENT INFORMATION Development Name: Excelsior and Grand LLC Address: 3820 Grand Way, St. Louis Park, MN 55416 Owner Information: Excelsior and Grand, LLC 952.594.8813 Property Management Company: None PHA-Owned: No Mixed Finance Development: Excelsior and Grand is a mixed use development featuring one and two bedroom apartments along Excelsior Boulevard. The site also features =/-65.000 square feet of service retail and =/-985 parking spaces. HAP CONTRACT Effective Date of Contract: February 1, 2003 HOTMA Requirements: Pre-HOTMA Term of HAP Contract: 10 years with an automatic renewal for an additional 10 years Expiration Date of Contract: January 31, 2023 PBV UNITS 0 BR 1 BR 2 BR 3 BR 4 BR 5 BR Total # of Units 18 Initial Contract Rent $ $ $883 $ $ $ Accessible Units and Features: None Target Population: None 630 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 17-68 Excepted Units: None Supportive Services: No Elderly Units: No Disabled Units No Are units excepted because they are located in a low-poverty census tract area?: No WAITING LIST AND SELECTION Waiting List Type: Site based waiting list Preferences: Same as HCV Preference Verification: Same as HCV; see Chapter 7 For the PBV program, is the income limit the same as the HCV program? Same as HCV OCCUPANCY Subsidy Standards: Same as HCV Utilities: Electric cooking, other electric, gas heat, and gas water heat will be paid by the tenant. Vacancy Payments: If an assisted family moves out of the contract unit leased to an occupied by the family, the PHA shall continue housing assistance payments to the owner for a vacancy period of up to 30 days from the move out date if: a) the owner gives the PHA prompt notice of the vacancy; b) The vacancy is not the fault of the owner; and c) The owner has taken every reasonable action to minimize the likelihood and length of vacancy. 631 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 17-71 EXHIBIT 17-417-3: PBV DEVELOPMENT INFORMATION PERSPECTIVES, INC Date: 12/28/2020 DEVELOPMENT INFORMATION Development Name: Perspectives, Inc. Address: 2753 Louisiana Court, St. Louis Park, MN 55426 Owner Information: Perspectives Inc. Property Management Company: None PHA-Owned: No Mixed Finance Development: No HAP CONTRACT Effective Date of Contract: October 1, 2020 HOTMA Requirements: None Term of HAP Contract: 5 years Expiration Date of Contract: September 30, 2025 PBV UNITS 0 BR 1 BR 2 BR 3 BR 4 BR 5 BR Total # of Units 2 1020 Initial Contract Rent $ $685 $765 $ $ $ Accessible Units and Features: None Target Population: Women that are homeless and are dual diagnosed (chemical and mental health diagnosis). 632 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 19-1 Chapter 19 SPECIAL PURPOSE VOUCHERS INTRODUCTION Special purpose vouchers are specifically funded by Congress in separate appropriations from regular HCV program funding in order to target specific populations. Special purpose vouchers include vouchers for the following programs: x Family Unification Program (FUP) x Foster Youth to Independence (FYI) program x Veterans Affairs Supportive Housing (VASH) x Mainstream x Non-Elderly Disabled (NED) x Stability Voucher program x HA Policy The HA will administer the following types of special purpose vouchers: Family Unification Program (FUP), Foster Youth to Independence (FYI), Veterans Affairs Supportive Housing (VASH) and Mainstream. This chapter describes HUD regulations and HA policies for administering special purpose vouchers. The policies outlined in this chapter are organized into five sections, as follows: Part I: Family Unification Program (FUP) Part II: Foster Youth to Independence (FYI) program intentionally left blank Part III: Veterans Affairs Supportive Housing (VASH) intentionally left blank Part IV: Mainstream voucher program Part V: Non-Elderly Disabled (NED) vouchers intentionally left blank Part VI: Stability Voucher program intentionally left blank Except as addressed by this chapter and as required under federal statute and HUD requirements, the general requirements of the HCV program apply to special purpose vouchers. 633 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 19-16 19-I.J. PROJECT-BASING FUP VOUCHERS [Notice PIH 2017-21] The HA may project-base FUP vouchers without HUD approval in accordance with Notice PIH 2017-21 and all statutory and regulatory requirements for the PBV program. Project-based FUP vouchers are subject to the PBV program percentage limitation discussed in Section 17-I.A. The HA may limit PBVs to one category of FUP-eligible participants (families or youth) or a combination of the two. HA Policy The HA will not project-base FUP vouchers.has project based 3 FUP family vouchers at Perspectives. All other FUP vouchers will be used to provide tenant-based assistance. 634 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 19-17 PART II: FOSTER YOUTH TO INDEPENDENCE INITIATIVE 19-II.A. PROGRAM OVERVIEW [Notice PIH 2020-28; Notice PIH 2023-04 2021-26; FR Notice 1/24/22] The Foster Youth to Independence (FYI) initiative was announced in 2019. The FYI initiative allows PHAs who partner with a Public Child Welfare Agency (PCWA) to request targeted HCVs to serve eligible youth with a history of child welfare involvement that are homeless or at risk of being homeless. Rental assistance and supportive services are provided to qualified youth for a period of between 36 and 60 months. Funding is available either competitively though an FYI NOFA or noncompetitively on a rolling basis in accordance with the application requirements outlined in Notice PIH 2020-28, or Notice PIH 2021-26, or Notice PIH 2023-04, as applicable. Under the noncompetitive process, PHAs are limited to 25 vouchers in a fiscal year with the ability to request additional vouchers. Where the PHA has a combined FYI and/or FUP size of no more than 10 vouchers, the PHA may request FYI vouchers with at least 50 percent utilization of its FUP and/or FYI vouchers. Where the PHA has a combined FYI and/or FUP size of 11 or more vouchers, the PHA may request FYI vouchers with for those PHAs with 90 percent or greater utilization or utilization of its FUP and/or FYI vouchers, as applicable. For competitive awards, the number of vouchers is dependent on PHA program size and need. 635 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 19-18 19-II.B. PARTNERING AGENCIES [Notice PIH 2021-262023-04; FYI Updates and Partnering Opportunities Webinar] Public Child Welfare Agency (PCWA) The PHA must enter into a partnership agreement with a PCWA in the PHA’s jurisdiction in the form of a Memorandum of Understanding (MOU) or letter of intent. The PCWA is responsible for identifying and referring eligible youth to the PHA and providing or securing a commitment for the provision of supportive services once youth are admitted to the program. HA Policy The PHA will implement a Foster Youth to Independence (FYI) program in partnership with Hennepin County Child Welfare)]. The PCWA is responsible for: x Identifying FYI-eligible youth; x Developing a system of prioritization based on the level of need of the youth and the appropriateness of intervention; x Providing a written certification to the PHA that the youth is eligible; and x Providing or securing supportive services for 36 months. Continuum of Care (CoC) and Other Partners HUD strongly encourages PHAs to add other partners into the partnership agreement with the PCWA such as state, local, philanthropic, faith-based organizations, and the CoC, or a CoC recipient it designates. HA Policy In addition to the PCWA, the PHA will implement the FYI program in partnership with Hennepin County Continuum of Care. 636 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 19-19 19-II.C. YOUTH ELIGIBILITY CRITERIA [Notice PIH 2021-262023-04; FYI Q&As; FYI FAQs] The PCWA is responsible for certifying that the youth has prior qualifying foster care involvement. As determined by the PCWA, eligible youth: x Are at least 18 years of age and not more than 24 years of age (have not yet reached their 25th birthday); - Youth must be no more than 24 years of age at the time the PCWA certifies them as eligible and at the time of HAP contract execution. x Have left foster care or will leave foster care within 90 days, in accordance with a transition plan described in section 475(5)(H) of the Social Security Act; - Placements can include, but are not limited to, placements in foster family homes, foster homes of relatives, group homes, emergency shelters, residential facilities, child care institutions, and pre-adoptive homes in accordance with 24 CFR 5.576; x Are homeless or at risk of becoming homeless at age 16 and older; - At risk of being homeless is fully defined at 24 CFR 576.2. o This includes a person that is exiting a publicly funded institution, or system of care (such as a healthcare facility, a mental health facility, foster care or other youth facility, or correction program or institution). Therefore, youth being discharged from an institution may be eligible for an FYI voucher [FYI FAQs]. Eligibility is not limited to single persons. For example, pregnant and/or parenting youth are eligible to receive assistance assuming they otherwise meet eligibility requirements. 637 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 19-20 19-II.D. SUPPORTIVE SERVICES [Notice PIH 2021-262023-04; FYI Updates and Partnering Opportunities Webinar; FYI Q&As] Supportive services may be provided by the PHA, PCWA, or a third party. The PCWA must provide or secure a commitment to provide supportive services for participating youth for the period of time defined in the NOFA/O for which the funding was made available. At a minimum, the following supportive services must be offered: x Basic life skills information/counseling on money management, use of credit, housekeeping, proper nutrition/meal preparation, and access to health care (e.g., doctors, medication, and mental and behavioral health services); x Counseling on compliance with rental lease requirements and with HCV program participant requirements, including assistance/referrals for assistance on security deposits, utility hook- up fees, and utility deposits; x Providing such assurances to owners of rental property as are reasonable and necessary to assist eligible youth to rent a unit with a voucher; x Job preparation and attainment counseling (where to look/how to apply, dress, grooming, relationships with supervisory personnel, etc.); and x Educational and career advancement counseling regarding attainment of general equivalency diploma (GED) or attendance/financing of education at a technical school, trade school, or college, including successful work ethic and attitude models. HA Policy Additional supportive services will not be offered. Since participation in supportive services is optional, but strongly encouraged, an FYI participant may decline supportive services. 638 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 19-21 19-II.E. REFERRALS AND WAITING LIST MANAGEMENT [Notice PIH 2021-262023- 04; FYI Updates and Partnering Opportunities Webinar FYI FAQs] Referrals The PCWA is responsible for certifying that the youth has prior qualifying foster care involvement. Once the PCWA sends the PHA the referral certifying the youth is program- eligible, the PHA determines HCV eligibility. The PCWA must have a system for identifying eligible youth within the agency’s caseload and reviewing referrals from other partners, as applicable. The PCWA must also have a system for prioritization of referrals to ensure that youth are prioritized for an FYI voucher based upon their level of need and appropriateness of the intervention. Referrals may come from other organizations in the community who work with the population, but the PCWA must certify that the youth meets eligibility requirements, unless the PCWA has vested another organization with this authority. The PHA is not required to maintain full documentation that demonstrates the youth’s eligibility as determined by the PCWA but should keep the referral or certification from the PCWA. The PCWA is not required to provide the PHA with HCV eligibility documents. HA Policy The PHA and PCWA have identified staff positions to serve as lead FYI liaisons. These positions will be responsible for transmission and acceptance of referrals. The PCWA must commit sufficient staff and resources to ensure eligible youths are identified, prioritized, and determined eligible in a timely manner. When vouchers are available, the PHA liaison responsible for acceptance of referrals will contact the PCWA liaison via email indicating the number of vouchers available and requesting an appropriate number of referrals. No more than 10 business days from the date the PCWA receives this notification, the PCWA liaison must provide the PHA with a list of eligible referrals, a completed release form, and a written certification for each referral indicating the referral is eligible. The list will include the name, address, and contact phone number for each adult individual who is being referred. The PHA will maintain a copy of each certification from the PCWA in the participant’s file along with other eligibility paperwork. 639 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 19-22 Waiting List Placement [Notice PIH 2021-262023-04 and FYI FAQs] The PHA must use the HCV waiting list for the FYI program. Youth already on the HCV program may not be transferred to an FYI voucher since they are not homeless or at-risk of homelessness. Once a referral is made, the PHA must compare the list of PCWA referrals to its HCV waiting list to determine if any applicants on the PCWA’s referral list are already on the PHA’s HCV waiting list. Applicants already on the PHA’s HCV waiting list retain the order of their position on the list. Applicants not already on the PHA’s HCV waiting list must be placed on the HCV waiting list. If the PHA’s HCV waiting list is closed, the PHA must open its HCV waiting list in order to accept new referrals. The PHA may reopen the waiting list to accept an FYI eligible youth without opening the waiting list for other applicants; however, the requirements at 24 CFR 982.206 for giving public notice when opening and closing the waiting list apply (see section 4- II.C., Opening and Closing the Waiting List of this administrative plan). HA Policy Within 10 business days of receiving the referral from the PCWA, the PHA will review the HCV waiting list and will send the PCWA a list confirming whether or not referrals are on the waiting list. Referrals who are already on the list will retain their position and the list will be notated to indicate the applicant is FYI-eligible. For those referrals not already on the waiting list, the PHA will work with the PCWA to ensure they receive and successfully complete a pre-application or application, as applicable. Once the pre-application or application has been completed, the PHA will place the referral on the HCV waiting list with the date and time of the original referral and an indication that the referral is FYI-eligible. Waiting List Selection The PHA selects eligible youths based on the PHA’s regular HCV waiting list selection policies in Chapter 4, including any preferences that may apply. 640 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 19-23 19-II.F. PHA HCV ELIGIBILITY DETERMINATION [FYI FAQs] Once an eligible youth is selected from the HCV waiting list, the PHA must determine whether the youth meets HCV program eligibility requirements. Applicants must be eligible under both FYI eligibility requirements and HCV eligibility requirements as outlined in Chapter 3 of this policy. The PCWA may, but is not obligated to, provide information to the PHA on the youth’s criminal history. HA Policy Subject to privacy laws, the PCWA will provide any available information regarding the applicant’s criminal history to the PHA. The PHA will consider the information in making its eligibility determination in accordance with the PHA’s policies in Chapter 3, Part III. Additional Eligibility Factors Youth must be no more than 24 years old both at the time of PCWA certification and at the time of the HAP execution. If a youth is 24 at the time of PCWA certification but will turn 25 before the HAP contract is executed, the youth is no longer eligible for a FYI voucher. HA Policy Any applicant that does not meet the eligibility criteria for the HCV program listed in Chapter 3 or any eligibility criteria listed in this section will be notified by the PHA in writing following policies in Section 3-III.F, including stating the reasons the applicant was found ineligible and providing an opportunity for an informal review. 641 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 19-24 19-II.G. LEASE UP [FR Notice 1/24/22] Once the PHA determines that the family or youth meets HCV eligibility requirements, the youth will be issued an FYI voucher in accordance with PHA policies. During the family briefing, PHAs must inform the FYI voucher holder of: x The extension of assistance provisions and requirements; x The availability of the FSS program and offer them an FSS slot, if available, or offer to place them on the FSS waiting list (provided the PHA has an FSS program); and x The supportive services available to them, the existence of any other programs or services, and their eligibility for such programs and services. However, participation in supportive services cannot be required as a condition of receiving FYI assistance. HA Policy Eligible applicants will be notified by the PHA in writing following policies in Section 3- III.F. of this policy. FYI youth will be briefed individually. The PHA will provide all aspects of the written and oral briefing as outlined in Part I of Chapter 5. Vouchers will be issued in accordance with PHA policies in Chapter 5, Part II, except that the PHA will consider one additional 30-day extension beyond the first automatic extension for any reason, not just those listed in the policy in Section 5-II.E. Once the youth locates a unit, the HA conducts all other processes relating to voucher issuance and administration per HCV program regulations and the HA policy in Chapter 9. Should a youth fail to use the voucher, the HA may issue the voucher to another eligible youth if one has been identified [Notice PIH 2021-262023-04]. Turnover [Notice PIH 2023-04FYI FAQs] For PHAs awarded FYI Tenant Protection Vouchers (TPVs) under Notice PIH 2019-20 where the recipient of the FYI TPV leaves the program, the PHA may request an FYI voucher under the requirements of Notice PIH 2021-26. For PHAs awarded FYI vouchers under Notices PIH 2020-28 and PIH 2021-26, where the recipient of the FYI voucher leaves the program, the PHA must continue to use the FYI voucher for eligible youth upon turnover. Where there are more eligible youth than available FYI turnover vouchers, the PHA may request an FYI voucher under the requirements of Notice PIH 2021-26. If another eligible youth is not available, the PHA must notify HUD, and HUD will reduce the PHA’s HCV assistance to account for the removal of the FYI assistance from the PHA’s HCV baselineAwards of FYI Tenant Protection Vouchers (TPVs) continue to be administered under the requirements of Notice PIH 2019-20. This includes turnover requirements and the requirement to inform HUD should a youth not use a voucher or leave the program. For example, FYI TPVs awarded under Notice PIH 2019-20 “sunset” when a youth leaves the program. This means that the PHA cannot reissue FYI TPV assistance issued under that notice to another youth when an initial youth exits the HCV program. HUD does not have the authority to allow the voucher to be used for a youth other than the one identified in the request. 642 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 19-25 19-II.H. MAXIM]UM ASSISTANCE PERIOD [Notice PIH 2021-262023-04 and FYI FAQs; FR Notice 1/24/22] Vouchers are limited by statute to a total of between 36 months and 60 months of housing assistance. At the end of the statutory time period, assistance must be terminated. However, any period of time for which no subsidy (HAP) is being paid on behalf of the youth does not count toward the limitation. It is not permissible to reissue another FYI TPV to the same youth upon expiration of their FYI assistance. Participants do not “age out” of the program. A participant may continue with the program until they have received the period of assistance for which they are eligible. Age limits are only applied for entry into the program. Extension of Assistance FYI voucher holders who first leased or lease a unit after December 27, 2020, may be eligible for an extension of assistance up to 24 months beyond the 36-month time limit (for a total of 60 months of assistance). While FYI voucher holders cannot be required to participate in the Family Self-Sufficiency (FSS) program as a condition of receipt of assistance, an eligible youth who participates in the FSS program and is in compliance with the applicable terms and conditions of the program is entitled to receive assistance for up to an additional 24 months. A FYI voucher holders must accept an FSS slot if it is offered to them prior to the 36-month mark in order to receive an extension of assistance (unless the youth meets one of the statutory exceptions described below). Statutory Exceptions FYI voucher holders will be entitled to receive an extension of assistance for up to 24 months beyond the 36-month time limit without participating in the PHA’s FSS program if they certify that they meet one of the exceptions below: x The FYI voucher holder is a parent or other household member responsible for the care of a dependent child under the age of six or for the care of an incapacitated person. HA Policy The PHA will apply this exception in a manner that provides extensions of FYI assistance to the broadest population possible consistent with the statutory requirements. The FYI voucher holder will be required to self-certify that they meet this exception on a PHA-provided form. This certification is the only documentation that the FYI voucher holder must submit. The child or incapacitated person is not required to reside in the household in order for the FYI voucher holder to certify they meet this exception. For example, a child in a joint custody arrangement under the age of six who resides in the household only part time may qualify the FYI voucher holder for this exception. 643 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 19-26 x The FYI voucher holder is a person who is regularly and actively participating in a drug addiction or alcohol treatment and rehabilitation program. HAPolicy The PHA will define regular and active participation in a manner that provides extensions of FYI voucher holder assistance to the broadest population possible consistent with the statutory requirements. The FYI voucher holder will be required to self-certify that they meet this exception on a PHA-provided form. This certification is the only documentation that the FYI voucher holder must submit. x The FYI voucher holder is a person who is incapable of complying with the requirement to participate in a FSS program as described above or engage in education, workforce development, or employment activities as described below, as applicable, due to a documented medical condition. HA Policy The PHA will apply this requirement in a manner that provides extensions of FYI voucher holder assistance to the broadest population possible consistent with statutory requirements. The FYI voucher holder will be required to self-certify that they meet this exception on a HA-provided form. This certification is the only documentation that the FYI voucher holder must submit. An FYI voucher holder that meets one of the above exceptions must still be offered an opportunity to enroll in the PHA’s FSS program (if it is available to them) and receive any supportive services available to FYI voucher holders. An FYI voucher holder may choose to participate in an FSS program or engage in education, workforce development, or employment activities, even if they meet one of the above statutory exceptions. 644 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 19-27 Education, Workforce Development, or Employment Activities If a PHA that carries out an FSS program is unable to offer a FYI voucher holder an FSS slot during their first 36 months of receiving FYI assistance, the FYI voucher holder is considered to have been “unable to enroll” in the program and may have their voucher extended by meeting the education, workforce development, or employment criteria described below: x The FYI voucher holder was engaged in obtaining a recognized postsecondary credential or a secondary school diploma or its recognized equivalent. HA Policy The PHA will use the definitions of recognized postsecondary credential and secondary school diploma or its recognized equivalent under the Workforce Innovation and Opportunity Act (WIOA). WIOA defines a recognized postsecondary credential as a credential consisting of an industry-recognized certificate or certification, a certificate of completion of an apprenticeship, a license recognized by the state involved or federal government, or an associate or baccalaureate degree (29 U.S.C. 3102). Examples of a recognized postsecondary credential include, but are not limited to, an associate’s degree, bachelor’s degree, occupational licensure, or occupational certification (see U.S. Department of Labor, Training and Employment Guidance Letter No. 10–16, Change 1). For the purpose of WIOA, the U.S. Department of Labor defines a secondary school diploma or its recognized equivalent as a secondary school diploma (or alternate diploma) that is recognized by a state and that is included for accountability purposes under the Elementary and Secondary Education Act of 1965 (ESEA), as amended by the Every Student Succeeds Act (ESSA). A secondary school equivalency certification signifies that a student has completed the requirement for a high school education. Examples of a secondary school diploma or its recognized equivalent include, but are not limited to, obtaining certification of attaining passing scores on a state-recognized high school equivalency test, earning a secondary school diploma or state-recognized equivalent, or obtaining certification of passing a state-recognized competency-based assessment. x The FYI voucher holder was enrolled in an institution of higher education, as such term is defined in section 101(a) of the Higher Education Act of 1965 (20 U.S.C. 1001(a)) or an institution that meets the definition of a proprietary institution of higher education or a postsecondary vocational institution under sections 102(b)(1) and (c)(1) of the Higher Education Act of 1965 (20 U.S.C. 1002(b)(1) and (c)(1)), respectively. HA Policy The FYI voucher holder must be enrolled in education activities on at least a half-time basis, as defined by the institution which they attend. However, the PHA may make exceptions to this requirement if the FYI voucher holder is unable to enroll in a sufficient number of classes due to a lack of course offerings by the educational institution where they are enrolled. 645 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 19-28 x The FYI voucher holder was participating in a career pathway, as such term is defined in Section 3 of the Workforce Innovation and Opportunity Act (29 U.S.C. 3102). x The FYI voucher holder was employed. HA Policy The PHA will consider the FYI voucher holder to be employed if they work a minimum of 20 hours per week. The PHA may make exceptions to this requirement if the FYI voucher holder’s hours are reduced due to circumstances beyond their control or the FYI voucher holder must temporarily reduce their work hours due to a verified family emergency. FSS Enrollment at 24 Months If the FYI voucher holder has not been provided an opportunity to enroll in the FSS program during the first 24 months of FYI assistance, HUD encourages the PHA to remind the FYI voucher holder at the 24-month reexamination of the education, workforce development, and employment requirements described above so that they have enough time to meet these requirements prior to the expiration of the 36-month time period for FYI assistance. HA Policy If the FYI voucher holder has not been provided an opportunity to enroll in the FSS program during the first 24 months of FYI assistance, the PHA will remind the FYI voucher holder at their second regular reexam of the education, workforce development, and employment requirements described above. FSS Enrollment Between 36 and 48 Months If an FSS slot becomes available between the 36-month and 48-month mark: x The PHA must offer the slot to an FYI voucher holder who had their voucher extended based on meeting the education, workforce development, or employment requirement listed above, or one of the statutory exceptions listed above (even if the FYI voucher holder previously declined an FSS slot because they met one of the statutory exceptions). x The PHA must work with the FYI voucher holder to determine whether enrollment in FSS is feasible and in their best interest given any education, workforce development, or employment activities that the FYI voucher holder is engaged in and any statutory exceptions that apply to the FYI voucher holder, as well as the remaining time on their voucher. x If the FYI voucher holder accepts the FSS slot, the PHA must work with them to establish Contract of Participation goals and an Individual Training and Services Plan (ITSP) that can be accomplished within the time period left on the voucher. If the FYI voucher holder is offered an FSS slot prior to the 36-month mark, the FYI voucher holder: x Will be required to enroll in the FSS program in order to receive an extension of assistance at the end of the 36-month time period (unless they meet one of the statutory exceptions described above). 646 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 19-29 x Will not be considered to have been “unable to enroll” in the FSS program, and as a result, will not be eligible to receive an extension of assistance based on meeting the education, workforce development, or employment requirements described above. FSS Enrollment After 48 Months The PHA may, but is not required, to offer an FYI voucher holder an FSS slot that becomes available between the 48-month mark and the 60-month mark, since the FYI voucher holder will have already received their second and final extension. PHA Policy If an FSS slot becomes available between the 48 and 60-month marks, the PHA will not offer the FSS slot to an FYI voucher holder. Extensions of Assistance At the 36-month and 48-month reexamination, the PHA must extend FYI assistance if the FYI voucher holder is participating in and in compliance with the FSS program as long as the FYI voucher holder is still eligible for the HCV program. In any case, the FYI voucher holder cannot receive more than a total of 60 months of FYI assistance even if the FSS Contract of Participation time period extends beyond the voucher 60- month mark. No FSS Program or Unable to Enroll in FSS If a PHA does not carry out an FSS program or the FYI voucher holder has been unable to enroll in the program during the first 36 months of receiving FYI assistance, the FYI voucher holder is entitled to receive an extension of assistance for up to two successive 12-month periods beyond the 36-month time limit provided that the FYI voucher holder engaged in at least one of the education, workforce development, or employment activities described above for not less than nine months of the 12-month period preceding each extension. In order to meet the nine months out of the preceding 12 months requirement, the FYI voucher holder may have engaged in one of the education, workforce development, or employment activities described above or a combination of these activities. Verification Prior to Annual Reexam In order to provide an extension of assistance, the PHA must verify compliance with the above requirements at the end of the 36-month time period and the 48-month time periods. The PHA does not need to verify compliance with these requirements at the end of the 60-month time period since the maximum length of assistance is 60 months. To verify compliance with the education, workforce development, or employment requirement or one of the statutory exceptions, the PHA must provide the FYI voucher holder written notification informing them that they may receive an extension of their FYI assistance and providing instructions on how the FYI voucher holder may demonstrate that they meet one of these conditions. This notification must be provided sufficiently in advance of the end of the 36- month or 48-month time periods, as applicable, to allow the FYI voucher holder to demonstrate that they meet the education, workforce development, or employment requirement, or one of the statutory exceptions, and for the PHA to conduct an annual reexamination prior to the expiration of the FYI assistance. 647 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 19-30 HA Policy The PHA will verify compliance with the education, workforce development, or employment requirement, or one of the statutory exceptions, at the end of the 36-month and 48-month time periods prior to the FYI voucher holder’s scheduled annual reexamination. The PHA will not verify compliance at the end of the 60-month time period. The PHA will provide each FYI voucher holder on the PHA’s program with a written notification informing them that they may receive an extension of their FYI assistance if they meet conditions outlined in this chapter and providing them with instructions on how they may demonstrate compliance at least 60 days prior to their scheduled annual reexam date. When necessary, the PHA will provide this notification in a format accessible to FYI voucher holders with disabilities and in a translated format for FYI voucher holders with limited English proficiency in accordance with Chapter 2. The PHA will use the following verification methods to verify an FYI voucher holder’s eligibility for voucher extensions: To verify compliance with the FSS requirement, the PHA will examine its records to confirm, or obtain confirmation from the PHA’s FSS program staff, that the FYI participant is in compliance with FSS program requirements and has not been terminated from the FSS program. To meet the education, workforce development, or employment requirement, the PHA will verify that the FYI voucher holder was engaged in at least one education, workforce development, or employment activity for at least nine months of the 12-month period immediately preceding the end of the 36-month or 48-month time period, as applicable. Due to the timing of when the PHA verifies compliance and conducts the annual reexamination, the FYI voucher holder may have not yet met the nine-month requirement but may be able to demonstrate that they will meet the nine-month requirement as of the end of the 36-month or 48- month time period. In such cases, the FYI voucher holder will still be considered to have met the requirements. In order for the FYI voucher holder to meet one of the statutory exceptions described above, the FYI voucher holder must submit a certification to the PHA that they meet one of these exceptions. This certification is the only documentation that the FYI voucher holder must submit in order to demonstrate that they meet one of the statutory exceptions. An FYI voucher holder who received an extension of voucher assistance at the end of the 36- month time period based on meeting one of the conditions described in this chapter does not have to meet the same conditions when they reach the end of the 48-month time period. The FYI voucher holder may demonstrate that they meet a different condition in order to receive an extension of their assistance. 648 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 19-31 If the PHA determines that the FYI voucher holder meets one of the statutory conditions, the PHA would then conduct an annual reexamination. If the annual reexamination determines that the FYI voucher holder is still eligible for the HCV program, the PHA must provide the FYI voucher holder the extension of voucher assistance. Termination of Assistance for Failure to Meet Conditions Failure of the FYI voucher holder to meet one of the above conditions will only impact their ability to receive subsequent extensions of assistance. It will not serve as a basis for terminating the FYI assistance prior to the annual reexam. If the FYI voucher holder does not meet any of the statutory conditions described in in this chapter, the youth is subject to the statutory time limit of 36 months or the time limit of any extension that the youth has already received, and the FYI voucher must be terminated once they reach this time limit. The calculation of the time limit begins from the date the first HAP contract is signed (for tenant-based vouchers) or from the date the FYI voucher holder entered into the initial lease agreement (for project-based vouchers). The number of months is calculated based on the number of months that HAP subsidy is being paid on behalf of the FYI voucher holder, not the number of months that they are in the FYI program. Prior to termination, the PHA must offer the FYI voucher holder the opportunity to request an informal hearing, in accordance with Chapter 16. 19-II.I. TERMINATION OF ASSISTANCE [FYI FAQs] Termination of a FYI voucher is handled in the same way as with any HCV; therefore, termination of a FYI voucher must be consistent with HCV regulations at 24 CFR Part 982, Subpart L and PHA policies in Chapter 12. Given the statutory time limit that requires FYI vouchers to sunset, a PHA must terminate the youth’s assistance once the limit on assistance has expired. A PHA cannot terminate a FYI youth’s assistance for noncompliance with PCWA case management, nor may the PHA terminate assistance for a FYI youth for not accepting services from the PCWA. The PHA may not transfer the assistance of FYI voucher holders to regular HCV assistance upon the expiration of the limit on assistance. However, the PHA may issue a regular HCV to FYI voucher holders if they were selected from the waiting list in accordance with PHA policies. The PHA may also adopt a waiting list preference for FYI voucher holders who are being terminated for this reason. HA Policy The PHA will not provide a selection preference on the PHA’s HCV waiting list for FYI voucher holders who are terminated due to the time limit on assistance. 649 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 19-32 19-II.J. PORTABILITY [FYI FAQs] Portability for an FYI youth is handled in the same way as for a regular HCV family. A PHA may not restrict or deny portability for an FYI youth for reasons other than those specified in the HCV program regulations, as reflected in Chapter 10 of the administrative plan. An FYI youth does not have to port to a jurisdiction that administers FYI vouchers. If the receiving PHA absorbs the voucher, the PHA may absorb the youth into its regular HCV program if it has vouchers available to do so. If the receiving PHA absorbs the youth into its regular HCV program, that youth becomes a regular HCV participant with none of the limitations of an FYI voucher. The initial and receiving PHA must work together to initiate termination of assistance upon expiration of the time limit on assistance. 19-II.K. PROJECT-BASING FYI VOUCHERS [FYI FAQs; FR Notice 1/24/22; Notice PIH 2024-03] The PHAs that have initiated the selection process to project-base FYI and/or FUP vouchers may project-base certain FYI vouchersbe eligible to project-base FYI and FUP units formally identified for project basing without HUD approval in accordance with all applicable PBV regulations and PHA policies in Chapter 17. This includes FYI vouchers awarded under Notices PIH 2020-28, and PIH 2021-26, and PIH 2023-04. Assistance awarded under Notice PIH 2019- 20 is prohibited from being project-based. HAPolicy The PHA will not project-base FYI vouchers. All FYI vouchers will be used to provide tenant-based assistance. PART II: FOSTER YOUTH TO INDEPENDENCE INITIATIVE Intentionally left blank. The Housing Authority does administer the Foster Youth to Independence Initiative program. PART III: VETERANS AFFAIRS SUPPORTIVE HOUSING (VASH) PROGRAM 19-III.A. OVERVIEW Since 2008, HCV program funding has provided rental assistance under a supportive housing program for homeless veterans. The Veterans Affairs Supportive Housing (VASH) program combines HCV rental assistance with case management and clinical services provided by the Department of Veterans Affairs (VA) at VA medical centers (VAMCs) and Community-Based Outpatient Clinics (CBOCs), or through a designated service provider (DSP) as approved by the VA Secretary. Eligible families are homeless veterans and their families that agree to participate in VA case management and are referred to the VAMC’s partner PHA for HCV assistance. The VAMC or DSP’s responsibilities include: x Screening homeless veterans to determine whether they meet VASH program participation criteria; 650 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 19-33 x Referring homeless veterans to the PHA; - The term homeless veteran means a veteran who is homeless (as that term is defined in subsection (a) or (b) of Section 103 of the McKinney-Vento Homeless Assistance Act (42 U.S.C. 11302)). See 38 U.S.C. 2002. x Providing appropriate treatment and supportive services to potential VASH participants, if needed, prior to PHA issuance of a voucher; x Providing housing search assistance to VASH participants; x Identifying the social service and medical needs of VASH participants, and providing or ensuring the provision of regular ongoing case management, outpatient health services, hospitalization, and other supportive services as needed throughout the veterans’ participation period; and x Maintaining records and providing information for evaluation purposes, as required by HUD and the VA. VASH vouchers are awarded noncompetitively based on geographic need and PHA administrative performance. Eligible PHAs must be located within the jurisdiction of a VAMC and in an area of high need based on data compiled by HUD and the VA. When Congress funds a new allocation of VASH vouchers, HUD invites eligible PHAs to apply for a specified number of vouchers. Generally, the HUD-VASH program is administered in accordance with regular HCV program requirements. However, HUD is authorized to waive or specify alternative requirements to allow PHAs to effectively deliver and administer VASH assistance. Alternative requirements are established in the HUD-VASH Operating Requirements, which were originally published in the Federal Register on May 6, 2008, and updated September 27, 2021. Unless expressly waived by HUD, all regulatory requirements and HUD directives regarding the HCV program are applicable to VASH vouchers, including the use of all HUD-required contracts and other forms, and all civil rights and fair housing requirements. In addition, the PHA may request additional statutory or regulatory waivers that it determines are necessary for the effective delivery and administration of the program. 651 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 19-34 The VASH program is administered in accordance with applicable Fair Housing requirements since civil rights requirements cannot be waived under the program. These include applicable authorities under 24 CFR 5.105(a) and 24 CFR 982.53 including, but not limited to, the Fair Housing Act, Section 504 of the Rehabilitation Act of 1973, Title VI of the Civil Rights Act of 1964, the Americans with Disabilities Act, and the Age Discrimination Act and all PHA policies as outlined in Chapter 2 of this document. When HUD-VASH recipients include veterans with disabilities or family members with disabilities, reasonable accommodation requirements in Part II of Chapter 2 of this policy apply. 19-III.B. REFERRALS [FR Notice 9/27/21 and HUD-VASH Qs and As] VAMC case managers will screen all families in accordance with VA screening criteria and refer eligible families to the PHA for determination of program eligibility and voucher issuance. The PHA has no role in determining or verifying the veteran’s eligibility under VA screening criteria, including determining the veteran’s homelessness status. The PHA must accept referrals from the partnering VAMC and must maintain written documentation of referrals in VASH tenant files. Upon turnover, VASH vouchers must be issued to eligible veteran families as identified by the VAMC. HA Policy In order to expedite the screening process, the PHA will provide all forms and a list of documents required for the VASH application to the VAMC. Case managers will work with veterans to complete the eligibility screening process via the online portal. After the VAMC has given the PHA a complete referral, the PHA will perform an eligibility screening within five business days of receipt of a VAMC referral. 652 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 19-35 19-III.C. HCV PROGRAM ELIGIBILITY [FR Notice 9/27/21] Eligible participants are homeless veterans and their families who agree to participate in case management from the VAMC. x A VASH Veteran or veteran family refers to either a single veteran or a veteran with a household composed of two or more related persons. It also includes one or more eligible persons living with the veteran who are determined to be important to the veteran’s care or well-being. x A veteran for the purpose of VASH is a person whose length of service meets statutory requirements, and who served in the active military, naval, or air service, was discharged or released under conditions other than dishonorable, and is eligible for VA health care. Under VASH, PHAs do not have authority to determine family eligibility in accordance with HCV program rules and PHA policies. The only reasons for denial of assistance by the PHA are failure to meet the income eligibility requirements and/or that a family member is subject to a lifetime registration requirement under a state sex offender registration program. Under portability, the receiving PHA must also comply with these VASH screening requirements. Social Security Numbers When verifying Social Security numbers (SSNs) for homeless veterans and their family members, an original document issued by a federal or state government agency, which contains the name and SSN of the individual along with other identifying information of the individual, is acceptable in accordance with Section 7-II.B. of this policy. In the case of the homeless veteran, the PHA must accept the Certificate of Release or Discharge from Active Duty (DD-214) or the VA-verified Application for Health Benefits (10-10EZ) as verification of SSN and cannot require the veteran to provide a Social Security card. A VA- issued identification card may also be used to verify the SSN of a homeless veteran. Proof of Age The DD-214 or 10-10EZ must be accepted as proof of age in lieu of birth certificates or other PHA-required documentation as outlined in Section 7-II.C. of this policy. A VA-issued identification card may also be used to verify the age of a homeless veteran. Photo Identification A VA-issued identification card must be accepted in lieu of another type of government-issued photo identification. These cards also serve as verification of SSNs and date of birth. 653 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 19-36 Income Eligibility The PHA must determine income eligibility for VASH families in accordance with 24 CFR 982.201 and policies in Section 3-II.A. If the family is over-income based on the most recently published income limits for the family size, the family will be ineligible for HCV assistance. While income-targeting does not apply to VASH vouchers, the PHA may include the admission of extremely low-income VASH families in its income targeting numbers for the fiscal year in which these families are admitted. HA Policy While income-targeting requirements will not be considered by the PHA when families are referred by the partnering VAMC, the PHA will include any extremely low-income VASH families that are admitted in its income targeting numbers for the fiscal year in which these families are admitted. Screening The PHA may not screen any potentially eligible family members or deny assistance for any grounds permitted under 24 CFR 982.552 and 982.553 with one exception: the PHAs is still required to prohibit admission if any member of the household is subject to a lifetime registration requirement under a state sex offender registration program. Accordingly, with the exception of denial for registration as a lifetime sex offender under state law and PHA policies on how sex offender screenings will be conducted, PHA policy in Sections 3-III.B. through 3-III.E. do not apply to VASH. The prohibition against screening families for anything other than lifetime sex offender status applies to all family members, not just the veteran. If a family member is subject to lifetime registration under a state sex offender registration program, the remaining family members may be served if the family agrees to remove the sex offender from its family composition. This is true unless the family member subject to lifetime registration under a state sex offender registration program is the homeless veteran, in which case the family would be denied admission to the program [New HCV GB, HUD-VASH, p. 6]. Denial of Assistance [Notice PIH 2008-37] Once a veteran is referred by the VAMC, the PHA must either issue a voucher or deny assistance. If the PHA denies assistance, it must provide the family with prompt notice of the decision and a brief statement of the reason for denial in accordance with Section 3-III.F. Like in the standard HCV program, the family must be provided with the opportunity for an informal review in accordance with policies in Section 3-III.F. In addition, a copy of the denial notice must be sent to the VAMC case manager. 654 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 19-37 19-III.D. CHANGES IN FAMILY COMPOSITION Adding Family Members [FR Notice 9/27/21] When adding a family member after the family has been admitted to the program, PHA policies in Section 3-II.B. apply. Other than the birth, adoption, or court-awarded custody of a child, the PHA must approve additional family members and will apply its regular screening criteria in doing so. Remaining Family Members [HUD-VASH Qs and As] If the homeless veteran dies while the family is being assisted, the voucher would remain with the remaining members of the tenant family. The PHA may use one of its own regular vouchers, if available, to continue assisting this family and free up a VASH voucher for another VASH- eligible family. If a regular voucher is not available, the family would continue utilizing the VASH voucher. Once the VASH voucher turns over, however, it must go to a homeless veteran family. Family Break Up [HUD-VASH Qs and As] In the case of divorce or separation, since the set-aside of VASH vouchers is for veterans, the voucher must remain with the veteran. This overrides the PHA’s policies in Section 3-I.C. on how to determine who remains in the program if a family breaks up. 655 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 19-38 19-III.E. LEASING [FR Notice 9/27/21] Waiting List The PHA does not have the authority to maintain a waiting list or apply local preferences for HUD–VASH vouchers. Policies in Chapter 4 relating to applicant selection from the waiting list, local preferences, special admissions, cross-listing, and opening and closing the waiting list do not apply to VASH vouchers. Exception Payment Standards To assist VASH participants in finding affordable housing, especially in competitive markets, HUD allows PHAs to establish a HUD-VASH exception payment standard. PHAs may go up to but no higher than 120 percent of the published area-wide fair market rent (FMR) or small area fair market rent (SAFMR) specifically for VASH families. PHAs who want to establish a VASH exception payment standard over 120 percent must still request a waiver from HUD through the regular waiver process outlined in Notice PIH 2018-16. Voucher Issuance Unlike the standard HCV program which requires an initial voucher term of at least 60 days, VASH vouchers must have an initial search term of at least 120 days. PHA policies on extensions as outlined in Section 5-II.E. will apply. HA Policy All VASH vouchers will have an initial term of 120 calendar days. The family must submit a Request for Tenancy Approval and proposed lease within the 120-day period unless the PHA grants an extension. The PHA must track issuance of HCVs for families referred by the VAMC or DSP in PIC as required in Notice PIH 2011-53. Initial Lease Term Unlike in the standard the HCV program, VASH voucher holders may enter into an initial lease that is for less than 12 months. Accordingly, PHA policy in Section 9-I.E., Term of Assisted Tenancy, does not apply. Ineligible Housing [FR Notice 6/18/14] Unlike in the standard HCV program, VASH families are permitted to live on the grounds of a VA facility in units developed to house homeless veterans. This applies to both tenant-based assistance and PBV. Therefore, 24 CFR 982.352(a)(5) and 983.53(a)(2), which prohibit units on the physical grounds of a medical, mental, or similar public or private institution, do not apply to VASH for this purpose only. Accordingly, PHA policy in 9-I.D., Ineligible Units, does not apply for this purpose only. 656 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 19-39 HQS Pre-Inspections To expedite the leasing process, PHAs may pre-inspect available units that veterans may be interested in leasing in order to maintain a pool of eligible units. If a VASH family selects a unit that passed an HQS inspection (without intervening occupancy) within 45 days of the date of the Request for Tenancy Approval (Form HUD-52517), the unit may be approved if it meets all other conditions under 24 CFR 982.305. However, the veteran must be free to select their unit and cannot be steered to these units. HA Policy The HA will not pre inspect any units. 657 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 19-40 19-III.F. PORTABILITY [FR Notice 9/27/21 and Notice PIH 2011-53] General Requirements Portability policies under VASH depend on whether the family wants to move within or outside of the initial VA facility’s catchment area (the area in which the VAMC or DSP operates). In all cases, the initial VA facility must be consulted prior to the move and provide written confirmation that case management will continue to be provided in the family’s new location. VASH participant families may only reside in jurisdictions that are accessible to case management services, as determined by case managers at the partnering VAMC or DSP. Under VASH, applicant families may move under portability even if the family did not have legal residency in the jurisdiction of the initial PHA when they applied. As a result, PHA policies in Section 10-II.B. about nonresident applicants do not apply. If the family no longer requires case management, there are no portability restrictions. Normal portability rules apply. Portability within the Initial VAMC or DSP’s Catchment Area A VASH family can move within the VAMC’s catchment area as long as case management can still be provided, as determined by the VA. If the initial PHA’s partnering VAMC will still provide the case management services, the receiving PHA must process the move in accordance with portability procedures: x If the receiving PHA has been awarded VASH vouchers, it can choose to either bill the initial PHA or absorb the family if it has a VASH voucher available to do so. - If the PHA absorbs the family, the VAMC or DSP providing the initial case management must agree to the absorption and the transfer of case management. x If the receiving PHA does not administer a VASH program, it must always bill the initial PHA. Portability Outside of the Initial VAMC or DSP’s Catchment Area If a family wants to move to another jurisdiction where it will not be possible for the initial PHA’s partnering VAMC or DSP to provide case management services, the initial VAMC or DSP must first determine that the VASH family could be served by another VAMC S or DSP that is participating in the VASH program, and the receiving PHA has an available VASH voucher. In these cases, the family must be absorbed by the receiving PHA either as a new admission or as a portability move-in, as applicable. Upon absorption, the initial PHA’s VASH voucher will be available to lease to a new VASH-eligible family, and the absorbed family will count toward the number of VASH slots awarded to the receiving PHA. 658 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 19-41 Portability Outside of the Initial VAMC or DSP’s Catchment Area under VAWA Veterans who request to port beyond the catchment area of the VAMC or DSP where they are receiving case management to protect the health or safety of a person who is or has been the victim of domestic violence, dating violence, sexual assault, or stalking, or human trafficking, and who reasonably believes they are threatened with imminent harm from further violence by remaining in the unit may port prior to receiving approval from the receiving VAMC or DSP. The initial PHA must follow its emergency transfer plan (see Exhibit 16-3). PHAs may require verbal self-certification or a written request from a participant seeking a move beyond the catchment area of the VAMC or DSP. The verbal self-certification or written request must include either a statement expressing why the participant reasonably believes that there is a threat of imminent harm from further violence if they were to remain in the same unit or a statement that the tenant was a sexual assault victim and that the sexual assault occurred on the premises during the 90-day period preceding the participants request for the move. The participant must still port to a PHA that has a VASH program. If the receiving PHA does not have a VASH voucher available to lease, they may bill the initial PHA until a VASH voucher is available, at which point the porting veteran must be absorbed into the receiving PHA’s program. 659 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 19-42 19-III.G. TERMINATION OF ASSISTANCE [FR Notice 9/27/21] With the exception of terminations for failure to receive case management, HUD has not established any alternative requirements for termination of assistance for VASH participants. However, prior to terminating VASH participants, HUD strongly encourages PHAs to exercise their discretion under 24 CFR 982.552(c)(2) as outlined in Section 12-II.D. of this policy and consider all relevant circumstances of the specific case. This includes granting reasonable accommodations for persons with disabilities, as well as considering the role of the case manager and the impact that ongoing case management services can have on mitigating the conditions that led to the potential termination. VASH participant families may not be terminated after admission for a circumstance or activities that occurred prior to admission and were known to the PHA but could not be considered at the time of admission due to VASH program requirements. The PHA may terminate the family’s assistance only for program violations that occur after the family’s admission to the program. Cessation of Case Management As a condition of receiving HCV rental assistance, a HUD-VASH-eligible family must receive case management services from the VAMC or DSP. A VASH participant family’s assistance must be terminated for failure to participate, without good cause, in case management as verified by the VAMC or DSP. However, a VAMC or DSP determination that the participant family no longer requires case management is not grounds for termination of voucher or PBV assistance. In such a case, at its option, the PHA may offer the family continued assistance through one of its regular vouchers. If the PHA has no voucher to offer, the family will retain its VASH voucher or PBV unit until such time as the PHA has an available voucher for the family. VAWA [FR Notice 9/27/21] When a veteran’s family member is receiving protection under VAWA because the veteran is the perpetrator of domestic violence, dating violence, sexual assault, or stalking, or human trafficking, the victim must continue to be assisted. Upon termination of the perpetrator’s VASH assistance, the victim must be given a regular HCV if one is available, and the perpetrator’s VASH voucher must be used to serve another eligible veteran family. If a regular HCV is not available, the perpetrator must be terminated from assistance and the victim will continue to use the VASH voucher. 660 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 19-43 19-III.H. PROJECT-BASING VASH VOUCHERS General Requirements [Notice PIH 2017-21 and FR Notice 9/27/21] PHAs are authorized to project-base their tenant-based VASH vouchers without additional HUD review or approval in accordance with Notice PIH 2017-21 and all PBV program requirements provided that the VAMC will continue to make supportive services available. In addition, since 2010, HUD has awarded VASH vouchers specifically for project-based assistance in the form of PBV HUD-VASH set-aside vouchers. While these vouchers are excluded from the PBV program cap as long as they remain under PBV HAP contract at the designated project, all other VASH vouchers are subject to the PBV program percentage limitation discussed in Section 17-I.A. Note that VASH supportive services only need to be provided to VASH families receiving PBV assistance in the project, not all families receiving PBV assistance in the project. If a VASH family does not require or no longer requires case management, the unit continues to count as an excepted PBV unit as long as the family resides in the unit. If the PHA project-bases VASH vouchers, the PHA must consult with the partnering VAMC or DSP to ensure approval of the project or projects. PHAs may project-base VASH vouchers in projects alongside other PBV units and may execute a single HAP contract covering both the VASH PBVs and the other PBVs. The PHA must refer only VASH families to PBV units exclusively made available to VASH families and to PBV units funded through a HUD set-aside award. If a VASH family is referred to the PHA and there is an available PBV unit that is not exclusively made available to VASH families, the PHA may offer to refer the family to the owner if allowable under the selection policy for that project, and the owner and PHA may amend the HAP contract to designate the PBV unit as a VASH PBV unit. The PHA and owner may agree to amend a PBV HAP contract to redesignate a regular PBV unit as a unit specifically designated for VASH families so long as the PHA first consults with the VAMC or DSP. Additionally, the PHA and owner may agree to amend a PBV HAP contract to redesignate a unit specifically designated for VASH families as a regular PBV unit, so long as the unit is not funded through a VASH PBV set-aside award and is eligible for regular PBV (i.e., the unit is not on the grounds of a medical facility and the unit is eligible under the PHA’s program and project caps). Policies for VASH PBV units will generally follow PHA policies for the standard PBV program as listed in Chapter 17, with the exception of the policies listed below. 661 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 19-44 Failure to Participate in Case Management [FR Notice 9/27/21] Upon notification by the VAMC or DSP of the family’s failure to participate, without good cause, in case management, the PHA must provide the family a reasonable time period to vacate the unit. The PHA must terminate assistance to the family at the earlier of either the time the family vacates or the expiration of the reasonable time period given to vacate. HA Policy Upon notification by the VAMC or DSP that a VASH PBV family has failed to participate in case management without good cause, the PHA will provide written notice of termination of assistance to the family and the owner within 10 business days. The family will be given 60 days from the date of the notice to move out of the unit. The PHA may make exceptions to this 60-day period if needed for reasons beyond the family’s control such as death, serious illness, or other medical emergency of a family member. If the family fails to vacate the unit within the established time, the owner may evict the family. If the owner does not evict the family, the PHA must remove the unit from the HAP contract or amend the HAP contract to substitute a different unit in the project if the project is partially assisted. The PHA may add the removed unit to the HAP contract after the ineligible family vacates the property. Moves [HUD-VASH Qs and As, FR Notice 9/27/21] When a VASH PBV family is eligible to move from its PBV unit in accordance with Section 17- VIII.C. of this policy, but there is no other comparable tenant-based rental assistance, the following procedures must be implemented: x If a VASH tenant-based voucher is not available at the time the family wants (and is eligible) to move, the PHA may require a family who still requires case management to wait for a VASH tenant-based voucher for a period not to exceed 180 days; x If a VASH tenant-based voucher is still not available after that period, the family must be allowed to move with its VASH voucher. Alternatively, the PHA may allow the family to move with its VASH voucher without having to meet this 180-day period. In either case, the PHA is required to replace the assistance in the PBV unit with one of its regular vouchers, unless the PHA and owner agree to temporarily remove the unit from the HAP contract; and x If a VASH veteran is determined to no longer require case management, the PHA must allow the family to move with the first available tenant-based voucher if no t VASH voucher is immediately available and cannot require the family to wait for a VASH voucher to become available. PART III: VETERANS AFFAIRS SUPPORTIVE HOUSING (VASH) PROGRAM Intentionally left blank. The Housing Authority does not administer the Veterans Affairs Supportive Housing (VASH) Program. 662 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 19-45 PART IV: MAINSTREAM VOUCHER PROGRAM 19-IV.A. PROGRAM OVERVIEW [Notice PIH 2020-01] Mainstream vouchers assist non-elderly persons with disabilities and their families in the form of either project-based or tenant-based voucher assistance. Aside from separate funding appropriations and serving a specific population, Mainstream vouchers follow the same program requirements as standard vouchers. The HA does not have special authority to treat families that receive a Mainstream voucher differently from other applicants and participants. For example, the HA cannot apply different payment standards, establish conditions for allowing portability, or apply different screening criteria to Mainstream families. The Mainstream voucher program, (previously referred to as the Mainstream 5-Year program or the Section 811 voucher program) was originally authorized under the National Affordable Housing Act of 1990. Mainstream vouchers operated separately from the regular HCV program until the passage of the Frank Melville Supportive Housing Investment Act of 2010. Funding for Mainstream voucher renewals and administrative fees was first made available in 2012. In 2017 and 2019, incremental vouchers were made available for the first time since the Melville Act (in addition to renewals and administrative fees), and HAs were invited to apply for a competitive award of Mainstream vouchers under the FY17 and FY19 NOFAs. In 2020, Notice PIH 2020-22 provided an opportunity for any HA administering an HCV program to apply for Mainstream vouchers noncompetitively, while Notice PIH 2020-09 authorized an increase in Mainstream voucher units and budget authority for those HAs already awarded Mainstream vouchers under the FY17 and FY19 NOFAs. Funds for Mainstream vouchers may be recaptured and reallocated if the HA does not comply with all program requirements or fails to maintain a utilization rate of 80 percent for the HA’s Mainstream vouchers. 663 © Copyright 2021 Nan McKay & Associates, Inc. Adminplan 3/1/21 Unlimited copies may be made for internal use. Page 19-49 PART IV: NON-ELDERLY DISABLED (NED) VOUCHERS Intentionally left blank. The Housing Authority does not administer Non-Elderly Disabled (NED) Vouchers PART VI: STABILITY VOUCHER PROGRAM Intentionally left blank. The Housing Authority does not administer Stability Vouchers. 664     HOUSING AUTHORITY OF ST. LOUIS PARK                    Agenda Item # 6c  St. Louis Park, Minnesota  Meeting Date:  October 9, 2024      TITLE: Approval of revised payment standards for the housing choice voucher program,   Resolution No. 765    RECOMMENDED ACTION:  Staff recommends the board of commissioners approve resolution No. 765  revising the housing choice voucher program zero, one‐, two‐, three‐ and five‐bedroom payment  standards effective January 1, 2025.        POLICY CONSIDERATION: Does the board agree with the recommendation to increase the payment  standards for the zero, one‐, two‐, three‐and five‐bedroom units?    SUMMARY:  HUD issued new fair market rents (FMRs) for the metro area with an effective date of  October 1, 2024.  HUD’s FMRs are established at the 40th percentile of area median rents.  The FMRs  provide a guide to establishing the payment standards for the voucher program.  The payment  standards should be at an amount generally needed to rent a moderately‐priced dwelling unit in the  local housing market. Payment standards are required by regulation to be established at an amount  between 90% and 110% of the FMR.       The payment standard is the amount used to calculate the amount of housing assistance a family will  receive under the housing choice voucher program; however, the payment standard does not limit and  does not affect the amount of rent a landlord may charge or the family may pay.  A family which  receives a housing choice voucher can select a unit with a rent that is below or above the payment  standard.  The housing choice voucher participant must pay 30% of their monthly adjusted gross income  for rent and utilities, and if the unit rent is greater than the payment standard the participant is required  to pay the additional amount. In accordance with HUD regulation, whenever a participant moves to a  new unit where the rent exceeds the payment standard, the participant may not pay more than 40  percent of their adjusted monthly income for rent.     Factors considered in establishing local payment standards include the following:                                                      Current market conditions and local vacancy rates   Current and future HUD budgetary implications   CoStar rental survey data   Gross rents of current participants    Impact on program participants   Local Payment Standards for metro area housing authorities   HUD regulatory requirements     The payment standards were last adjusted in November 2023 to be effective January 2024.        Regulation requires that the zero, one and five‐bedroom payment standards be adjusted to be within  90% and 110% of the FMR.     The FMRs increased moderately, between 2 and 4 percent in 2024. Typically, the housing authority has  set payment standards between 90 and 95 percent to serve as many households as possible.  Staff are  recommending the zero‐, three‐ and five‐bedroom payment standards be set at 90% while the one and  two payment standards be set higher at 94% and 95% respectively due to the current rent burdens and  gross rents of current participants.  As of October 2024, 14.5% of 1 bedroom voucher participants and  665 25.1% of two‐bedroom voucher households are paying greater than 40% of their income for their gross  rent.  HUD guidance states that payment standards should be adjusted if a significant percentage of the  participants are paying greater than 30% of their income for their gross rent. Increasing these payment  standards will ensure more participants are able to pay approximately 30% of their income for gross  rent and keep the agency in compliance with HUD regulations.     New payment standards apply to anyone “porting in” to St. Louis Park and persons moving to a new unit  on or after January 1, 2025.  Existing participants will be subject to the new payment standard at the  time of their next annual rent recertification.      NEXT STEPS:    Staff recommends the board approve Resolution No. 765 revising the zero, one‐, two‐, three‐ and five‐ bedroom size housing choice voucher program payment standards effective January 1, 2025.      The current and proposed payment standards are as follows:  Bedroom Size FMR 90% 110% Current PS Proposed PS  EFF 1220 1098 1342 1057 1100  1 BR 1381 1243 1519 1221 1300  2 BR 1685 1517 1854 1540 1600  3 BR 2244 2020 2468 1970 2020  4 BR 2513 2262 2764 2355 2355  5 BR 2890 2601 3179 2565 2605      Prepared by:   Nicole Randall, housing assistance administrator  Reviewed by: Marney Olson, housing supervisor                                                         666   RESOLUTION NO. 765    RESOLUTION OF THE HOUSING AUTHORITY OF ST. LOUIS PARK  REVISING THE HOUSING CHOICE VOUCHER ZERO, ONE‐, TWO‐, THREE‐ AND FIVE‐BEDROOM   PAYMENT STANDARDS     WHEREAS, the Department of Housing and Urban Development requires that the housing  authority establish and maintain payment standards for the housing choice voucher program, and     WHEREAS, the payment standard is the amount that is used to calculate the amount of housing  assistance a family will receive under the housing choice voucher program, and    WHEREAS, the payment standard should be an amount generally needed to rent a moderately‐ priced dwelling unit in the local housing market, and        WHEREAS, HUD issued fair market rents (FMRs) for the Minneapolis metropolitan area effective  October 1, 2024, and     WHEREAS, the FMRs provide a guide in establishing the payment standards, and     WHEREAS, the payment standards must be established in an amount between 90% and 110% of  the FMR,     NOW THEREFORE BE IT RESOLVED that the housing choice voucher payment standards for the  zero, one‐, two‐, three‐ and five‐bedroom units be revised effective January 1, 2025 pursuant to the chart  outlined below.     HOUSING CHOICE VOUCHER PAYMENT STANDARDS    The current and proposed payment standards are as follows:  Bedroom Size FMR 90% 110% Current PS Proposed PS  EFF 1220 1098 1342 1057 1100  1 BR 1381 1243 1519 1221 1300  2 BR 1685 1517 1854 1540 1600  3 BR 2244 2020 2468 1970 2020  4 BR 2513 2262 2764 2355 2355  5 BR 2890 2601 3179 2565 2605      Adopted by the Housing Authority October 9, 2024                  Thom Miller, Chair             Reynold Burrows, Secretary    ATTEST:           Karen Barton, Executive Director   667 668 HOUSING AUTHORITY OF ST. LOUIS PARK Agenda Item #6d   St. Louis Park, Minnesota  Meeting Date: October 9, 2024  TITLE: Statutory board and commission discussion with the St. Louis Park City Council  RECOMMENDED ACTION: This item is for discussion purposes.     POLICY CONSIDERATION: The city council will discuss the following questions with representatives of  the city’s statutory boards and commissions:  What has each commission been working on in 2024? How can the council support boards and commissions in the future? SUMMARY: The city council expressed a desire to play a more significant role with boards and  commissions. In response, staff organized a conversation with the advisory board and commissions in  September and statutory boards and commissions October 28, 2024.  The goal of the conversation is for council to hear from boards and commissions what they are working  on and how they might work together better going forward.   Housing Authority Board work completed in 2024:  Reviewed claims and monthly financials (ongoing) Approved the Section 8 Management Assessment Program (SEMAP) certification Approved an amendment to the Vail Place project based voucher contract Reviewed Community Development Block Grant proposed allocation and provided feedback Review and approved the HA to enter into a contract for exterior improvements at Hamilton House. The HA board is required to approve contracts over $175,000 done through a sealed bid/competitive process. Reviewed and discussed 2023 Housing Activity Report Approved assignment of the project based voucher contract with Perspectives to Trellis Audit presentation and discussion with the HA auditor Approved amendment extending the project based voucher contract with Trellis for 20 years Housing Authority Board work in process (on October 9, 2024 agenda):  5‐Year Agency Plan and Annual Plan 5 year Capital Funds Plan Changes to the public housing Admissions and Continued Occupancy Policy (ACOP) and the Administrative Plan for Housing Choice Voucher program HCV payment standards Housing Authority Board work for remainder of 2024:  Utility allowances for public housing and HCV 669  Public housing flat rent   Renewal of FSS contract with STEP    2025 budget   Discuss Bring it Home state rental assistance program    Collection write‐offs     Staff will review the list of work by the HA board in 2024 and how the HA board thinks the council can  support their work in the future.       Prepared by:  Marney Olson, Housing Supervisor  Reviewed by: Nicole Randall, Housing Assistance Administrator         670 Item 7. a. Check# Bank - Vendor - Date Payable #Property Amount Account Aug 2024 - HAP P-1339 hcv 520.00 111203000 - Cash Restricted-HAP Sep 2024 - HAP P-1339 hcv 520.00 111203000 - Cash Restricted-HAP Total 0 (genfund) - St Louis Park Ah I. LLLp (v0001340) - 09/26/24 (09/2 1,040.00 S Wardere - May 2024 P-1341 hcv 724.00 111203000 - Cash Restricted-HAP S Wardere - Jun 2024 P-1341 hcv 724.00 111203000 - Cash Restricted-HAP S Wardere - Jul 2024 P-1341 hcv 724.00 111203000 - Cash Restricted-HAP S Wardere - Mar 2024 P-1341 hcv 724.00 111203000 - Cash Restricted-HAP S Wardere - Apr 2024 P-1341 hcv 724.00 111203000 - Cash Restricted-HAP Total 1 (genfund) - Metropolitan Council HRA (v0001609) - 09/26/24 (09 3,620.00 E Borkovec - Aug 2024 P-1340 hcv 55.00 111203000 - Cash Restricted-HAP E Borkovec - Sep 2024 P-1340 hcv 55.00 111203000 - Cash Restricted-HAP Total 2 (genfund) - Trellis Louisiana Court Acquisiton LLC (v0001623) - 09 110.00 Refunding Q-575 P-1139 hamilton 182.45 211402000 - Security Deposit Clearing Account Total 30942 (genfund) - - 09/04/24 (09/24)182.45 4316 Mackey - Yard dig & replace sewer pipes P-1293 scatter 9,650.00 443011000 - Contract-Plumbing Total 30943 (genfund) - Brothers Underground (v0000230) - 09/12/24 (0 9,650.00 Consulting Services - 8/15/24-8/31/24 P-1289 hamilton 506.25 419022000 - Other Misc Admin Expenses Consulting Services - 8/15/24-8/31/24 P-1289 kidspark 101.25 419022000 - Other Misc Admin Expenses Consulting Services - 8/15/24-8/31/24 P-1289 hcv 1,215.00 419022000 - Other Misc Admin Expenses Consulting Services - 8/15/24-8/31/24 P-1289 stablehm 202.50 419022000 - Other Misc Admin Expenses Total 30944 (genfund) - Dashboard Solution Llc (v0000377) - 09/12/24 (2,025.00 Payment Detail 0 (genfund) - St Louis Park Ah I. LLLp (v0001340) - 09/26/24 (09/24) 1 (genfund) - Metropolitan Council HRA (v0001609) - 09/26/24 (09/24) 2 (genfund) - Trellis Louisiana Court Acquisiton LLC (v0001623) - 09/26/24 (09/24) 30942 (genfund) - - 09/04/24 (09/24) 30943 (genfund) - Brothers Underground (v0000230) - 09/12/24 (09/24) 30944 (genfund) - Dashboard Solution Llc (v0000377) - 09/12/24 (09/24) Page 1 of 7 671 10/3/2024 12:15 PM Payment Detail rty=.all AND Bank=genfund AND mm/yy=09/2024-09/2024 AND Check Date=09/01/2024-09/30/2024 AND All Checks=Yes AND Include Voids=All C HH - 5 lawn mowings - Aug P-1292 hamilton 1,000.00 443009000 - Contract-Grounds Total 30945 (genfund) - Eide (v0000431) - 09/12/24 (09/24)1,000.00 HH -Fascia, Facade & Lintel - bid,sward, & construcito P-1290 cfp2022 3,868.04 140010000 - Site Improvement Total 30946 (genfund) - Finn Daniels Architects (v0000491) - 09/12/24 (3,868.04 Acctg Serv & Yardi - July 2024 P-1295 hamilton 876.00 417000000 - Accounting Fees Acctg Serv & Yardi - July 2024 P-1295 hcv 722.70 417000000 - Accounting Fees Acctg Serv & Yardi - July 2024 P-1295 stablehm 197.10 417000000 - Accounting Fees Acctg Serv & Yardi - July 2024 P-1295 genfund 197.10 417000000 - Accounting Fees Acctg Serv & Yardi - July 2024 P-1295 kidspark 197.10 417000000 - Accounting Fees Total 30947 (genfund) - Hawkins Ash Cpa'S (v0000597) - 09/12/24 (09/2,190.00 3330 Aquila - build of of grease & rust P-1296 scatter 240.00 443011000 - Contract-Plumbing HH #313 - build up of grease P-1297 hamilton 240.00 443011000 - Contract-Plumbing 6429 W Franklin - build of grease P-1308 scatter 140.00 443011000 - Contract-Plumbing Total 30948 (genfund) - Jeff'S SOS Drain & Sewer Ser., Inc. (v0000693) - 620.00 HH - disposal P-1298 hamilton 70.00 434000000 - Garbage/Trash Removal HH - disposal P-1299 hamilton 55.00 434000000 - Garbage/Trash Removal Total 30949 (genfund) - Jr'S Appliance Disposal Inc (v0000721) - 09/12/125.00 HH #131 - Remove & install carpet & pad P-1306 hamilton 1,150.00 443019000 - Unit Turnaround Contract Cost Total 30950 (genfund) - La Van Floor Covering Company (v0000765) - 09 1,150.00 30945 (genfund) - Eide (v0000431) - 09/12/24 (09/24) 30946 (genfund) - Finn Daniels Architects (v0000491) - 09/12/24 (09/24) 30947 (genfund) - Hawkins Ash Cpa'S (v0000597) - 09/12/24 (09/24) 30948 (genfund) - Jeff'S SOS Drain & Sewer Ser., Inc. (v0000693) - 09/12/24 (09/24) 30949 (genfund) - Jr'S Appliance Disposal Inc (v0000721) - 09/12/24 (09/24) 30950 (genfund) - La Van Floor Covering Company (v0000765) - 09/12/24 (09/24) 30951 (genfund) - Metro Water Conditioning Inc (v0000885) - 09/12/24 (09/24) Page 2 of 7 672 10/3/2024 12:15 PM Payment Detail rty=.all AND Bank=genfund AND mm/yy=09/2024-09/2024 AND Check Date=09/01/2024-09/30/2024 AND All Checks=Yes AND Include Voids=All C HH - 49 50# solar salt P-1294 hamilton 386.75 442001000 - Maintenance Materials Total 30951 (genfund) - Metro Water Conditioning Inc (v0000885) - 09/1 386.75 HH - 2 boiler licenses P-1311 hamilton 20.00 443013000 - Contract-HVAC Total 30952 (genfund) - Mn Dept Labor & Industry (v0000938) - 09/12/2 20.00 HH - Maintenance Service Sept 2024 P-1300 hamilton 278.00 443017000 - Contract-Elevator Monitoring Total 30953 (genfund) - Platinum Standard Elevator Llc (v0001095) - 09/ 278.00 HH - Elevators not working witn emergency power P-1307 hamilton 239.00 443006000 - Contract-Electrical Total 30954 (genfund) - Snyder Electric Co (v0001324) - 09/12/24 (09/2 239.00 FSS Management Aug 2024 P-1287 fssgrant 5,244.75 423000000 - Tenant Services Contract Costs Total 30955 (genfund) - STEP (v0001366) - 09/12/24 (09/24)5,244.75 HH - Admin Allocation & Ser Coor Serv 8/24 P-1286 hamilton 6,000.00 421002000 - Project Coordinator HH - Admin Allocation & Ser Coor Serv 8/24 P-1286 hamilton 620.83 419022000 - Other Misc Admin Expenses Total 30956 (genfund) - Vail Place (v0001489) - 09/12/24 (09/24) (Void 6,620.83 HH - Admin Allocation & Ser Coor Serv 8/24 P-1286 hamilton -6,000.00 421002000 - Project Coordinator HH - Admin Allocation & Ser Coor Serv 8/24 P-1286 hamilton -620.83 419022000 - Other Misc Admin Expenses Total 30956 (genfund) - Vail Place (v0001489) - 09/12/24 (09/24) (Void -6,620.83 HA/ROSS Update Meeting Treats 9/10/24 P-1288 hamilton 46.08 419022000 - Other Misc Admin Expenses Total 30957 (genfund) - Warren (v0001516) - 09/12/24 (09/24)46.08 30952 (genfund) - Mn Dept Labor & Industry (v0000938) - 09/12/24 (09/24) 30953 (genfund) - Platinum Standard Elevator Llc (v0001095) - 09/12/24 (09/24) 30954 (genfund) - Snyder Electric Co (v0001324) - 09/12/24 (09/24) 30955 (genfund) - STEP (v0001366) - 09/12/24 (09/24) 30956 (genfund) - Vail Place (v0001489) - 09/12/24 (09/24) (Voided) 30956 (genfund) - Vail Place (v0001489) - 09/12/24 (09/24) (Voider) 30957 (genfund) - Warren (v0001516) - 09/12/24 (09/24) Page 3 of 7 673 10/3/2024 12:15 PM Payment Detail rty=.all AND Bank=genfund AND mm/yy=09/2024-09/2024 AND Check Date=09/01/2024-09/30/2024 AND All Checks=Yes AND Include Voids=All C Jodi Flanders-Mathis - in-house training 5/28-5/30/24 P-1309 hamilton 815.05 414000000 - Staff Training Jodi Flanders-Mathis - in-house training 5/28-5/30/24 P-1309 hcv 815.06 414000000 - Staff Training Lynn Baxter - in-house training 6/17-6/18/24 P-1310 hamilton 983.92 414000000 - Staff Training Lynn Baxter - in-house training 6/17-6/18/24 P-1310 hcv 983.92 414000000 - Staff Training Total 30958 (genfund) - Yardi Systems, Inc. (v0001591) - 09/12/24 (09/3,597.95 HH - Service for Aug 2024 P-1305 hamilton 650.00 443099000 - Contract Costs-Other Total 30959 (genfund) - MKC, Inc. (v0001615) - 09/12/24 (09/24)650.00 Rent - July 2024 P-1301 hamilton 770.00 418000000 - Office Rent Rent - July 2024 P-1301 hcv 480.00 418000000 - Office Rent Computer - July 2024 P-1302 hamilton 615.15 419022000 - Other Misc Admin Expenses Computer - July 2024 P-1302 hcv 343.43 419022000 - Other Misc Admin Expenses Phone & Pad lines - Jun & Jul 2024 P-1303 hamilton 307.81 419007000 - Telephone Phone & Pad lines - Jun & Jul 2024 P-1303 hcv 40.01 419007000 - Telephone Salary Reimbursement 7/22/24-8/27/24 P-1304 hamilton 3,681.49 419022000 - Other Misc Admin Expenses Salary Reimbursement 7/22/24-8/27/24 P-1304 hcv 3,681.49 419022000 - Other Misc Admin Expenses Salary Reimbursement 7/22/24-8/27/24 P-1304 stablehm 836.70 419022000 - Other Misc Admin Expenses Salary Reimbursement 7/22/24-8/27/24 P-1304 kidspark 167.34 419022000 - Other Misc Admin Expenses Total 30960 (genfund) - City of St. Louis Park (v0001618) - 09/12/24 (09 10,923.42 HH -Fascia, Facade & Lintel repairs P-1291 cfp2023 249,825.30 140010000 - Site Improvement Total 30961 (genfund) - Frerichs Construction Company (v0001621) - 09/ 249,825.30 HH #211 #306 - Bed Bug Conventional service P-1323 hamilton 248.00 443007000 - Contract-Pest Control Total 30962 (genfund) - Adam's Pest Control, Inc. (v0000030) - 09/20/24 248.00 30958 (genfund) - Yardi Systems, Inc. (v0001591) - 09/12/24 (09/24) 30959 (genfund) - MKC, Inc. (v0001615) - 09/12/24 (09/24) 30960 (genfund) - City of St. Louis Park (v0001618) - 09/12/24 (09/24) 30961 (genfund) - Frerichs Construction Company (v0001621) - 09/12/24 (09/24) 30962 (genfund) - Adam's Pest Control, Inc. (v0000030) - 09/20/24 (09/24) 30963 (genfund) - All Inc (v0000065) - 09/20/24 (09/24) Page 4 of 7 674 10/3/2024 12:15 PM Payment Detail rty=.all AND Bank=genfund AND mm/yy=09/2024-09/2024 AND Check Date=09/01/2024-09/30/2024 AND All Checks=Yes AND Include Voids=All C 4316 Mackey - Install fridge & remove excess P-1319 scatter 878.50 442001000 - Maintenance Materials Total 30963 (genfund) - All Inc (v0000065) - 09/20/24 (09/24)878.50 HH - checked generator to elevator P-1326 hamilton 240.00 443099000 - Contract Costs-Other Total 30964 (genfund) - Allied Generators (v0000072) - 09/20/24 (09/24 240.00 Consulting Services - 9/1/24-9/15/24 P-1316 hamilton 656.25 419022000 - Other Misc Admin Expenses Consulting Services - 9/1/24-9/15/24 P-1316 kidspark 131.25 419022000 - Other Misc Admin Expenses Consulting Services - 9/1/24-9/15/24 P-1316 hcv 1,575.00 419022000 - Other Misc Admin Expenses Consulting Services - 9/1/24-9/15/24 P-1316 stablehm 262.50 419022000 - Other Misc Admin Expenses Total 30965 (genfund) - Dashboard Solution Llc (v0000377) - 09/20/24 (2,625.00 2700 Colorado - remove washcloth from line P-1324 scatter 195.00 443011000 - Contract-Plumbing Total 30966 (genfund) - Jeff'S SOS Drain & Sewer Ser., Inc. (v0000693) - 195.00 HH #316 - Junk removal P-1325 hamilton 601.57 434000000 - Garbage/Trash Removal Total 30967 (genfund) - Junk King (v0000723) - 09/20/24 (09/24)601.57 1420 Maryland - reset toilet P-1315 scatter 417.06 443011000 - Contract-Plumbing HH - 1st floor ladies - install auto-sensing faucet P-1317 hamilton 535.16 443011000 - Contract-Plumbing Total 30968 (genfund) - Muska Plumbing Llc (v0000979) - 09/20/24 (09/952.22 NAHRO Fall Conference -8/14-817-Brainerd hotel & m P-1320 hcv 813.67 414000000 - Staff Training Total 30969 (genfund) - Randall (v0001144) - 09/20/24 (09/24)813.67 Completion billing 2023 Fed Single Audit P-1314 hcv 1,500.00 417100000 - Auditing Fees 30964 (genfund) - Allied Generators (v0000072) - 09/20/24 (09/24) 30965 (genfund) - Dashboard Solution Llc (v0000377) - 09/20/24 (09/24) 30966 (genfund) - Jeff'S SOS Drain & Sewer Ser., Inc. (v0000693) - 09/20/24 (09/24) 30967 (genfund) - Junk King (v0000723) - 09/20/24 (09/24) 30968 (genfund) - Muska Plumbing Llc (v0000979) - 09/20/24 (09/24) 30969 (genfund) - Randall (v0001144) - 09/20/24 (09/24) 30970 (genfund) - Redpath And Company (v0001155) - 09/20/24 (09/24) Page 5 of 7 675 10/3/2024 12:15 PM Payment Detail rty=.all AND Bank=genfund AND mm/yy=09/2024-09/2024 AND Check Date=09/01/2024-09/30/2024 AND All Checks=Yes AND Include Voids=All C Total 30970 (genfund) - Redpath And Company (v0001155) - 09/20/24 (1,500.00 HH - Admin Allocation & Ser Coor Serv 8/24 P-1313 rosssvc 6,000.00 421002000 - Project Coordinator HH - Admin Allocation & Ser Coor Serv 8/24 P-1313 rosssvc 620.83 419022000 - Other Misc Admin Expenses Total 30971 (genfund) - Vail Place (v0001489) - 09/20/24 (09/24)6,620.83 HH - supplies P-1321 hamilton 51.39 442001000 - Maintenance Materials HH - supplies P-1322 hamilton 50.01 442001000 - Maintenance Materials Total 30972 (genfund) - ODP Business Solutions, LLC (v0001612) - 09/20 101.40 HH - Application Reports P-1318 hamilton 76.00 419022000 - Other Misc Admin Expenses Total 30973 (genfund) - MRI Software (v0001616) - 09/20/24 (09/24)76.00 Cleaning - Oct 2024 P-1332 hamilton 2,500.00 443010000 - Contract-Janitorial/Cleaning Total 30974 (genfund) - CMT Janitorial Services (v0000311) - 09/26/24 (2,500.00 4316 Macey - collapsed main line P-1333 scatter 420.00 443011000 - Contract-Plumbing Total 30975 (genfund) - Jeff'S SOS Drain & Sewer Ser., Inc. (v0000693) - 420.00 Annual Conference 2024 P-1334 hcv 325.00 414000000 - Staff Training Total 30976 (genfund) - Minnesota NAHRO (v0000923) - 09/26/24 (09/2 325.00 HH - Admin Allocation & Ser Coor Serv 9/24 P-1338 rosssvc 6,000.00 421002000 - Project Coordinator HH - Admin Allocation & Ser Coor Serv 9/24 P-1338 rosssvc 620.83 419022000 - Other Misc Admin Expenses Total 30977 (genfund) - Vail Place (v0001489) - 09/26/24 (09/24)6,620.83 30971 (genfund) - Vail Place (v0001489) - 09/20/24 (09/24) 30972 (genfund) - ODP Business Solutions, LLC (v0001612) - 09/20/24 (09/24) 30973 (genfund) - MRI Software (v0001616) - 09/20/24 (09/24) 30974 (genfund) - CMT Janitorial Services (v0000311) - 09/26/24 (09/24) 30975 (genfund) - Jeff'S SOS Drain & Sewer Ser., Inc. (v0000693) - 09/26/24 (09/24) 30976 (genfund) - Minnesota NAHRO (v0000923) - 09/26/24 (09/24) 30977 (genfund) - Vail Place (v0001489) - 09/26/24 (09/24) Page 6 of 7 676 10/3/2024 12:15 PM Payment Detail rty=.all AND Bank=genfund AND mm/yy=09/2024-09/2024 AND Check Date=09/01/2024-09/30/2024 AND All Checks=Yes AND Include Voids=All C Rent - Sept 2024 P-1335 hamilton 770.00 418000000 - Office Rent Rent - Sept 2024 P-1335 hcv 480.00 418000000 - Office Rent Computer - Sept 2024 P-1336 hamilton 615.15 419022000 - Other Misc Admin Expenses Computer - Sept 2024 P-1336 hcv 343.43 419022000 - Other Misc Admin Expenses Ford Van - oil change, HVAC & Check engine light P-1337 hamilton 369.17 443099000 - Contract Costs-Other Total 30978 (genfund) - City of St. Louis Park (v0001618) - 09/26/24 (09 2,577.75 Move out security deposit P-1957 scatter 286.66 211402000 - Security Deposit Clearing Account Total 30980 (genfund) - - 09/30/24 (09/24)286.66 324,374.17 30978 (genfund) - City of St. Louis Park (v0001618) - 09/26/24 (09/24) 30980 (genfund) - - 09/30/24 (09/24) Page 7 of 7 677