HUD RHIIP Training – PH/HCV Program Basics

May 2003 Chapter 4: Basic Program Overview 1

HUD RHIIP Training – PH/HCV Program Basics


Learning Objectives

• Explain the legal relationships of a PHA• Review family types which impact rent

calculation• Review the program basics of calculating

income, assets, allowances and deductions and rent

• Apply correct program terminology


Congress

HUD Headquarters

HUD Centers & Field Offices

Local Government

Families and Owners

Local Housing Agency

Governed by BoardAdministered by Executive Director


PHA Structure

• PHAs receive their structure and powers under state law

• Public corporation w/board of directors – can be a department of a local entity

• Contract with HUD under an ACC for funding to operate the PH and HCV programs


PHA Structures Are Different• Vary State to State• Titles differ within PHAs• Scopes of responsibility differ• BUT . . . All agencies that operate the HCV

program must follow same HUD rules, and all agencies are rated under SEMAP and…


PHA Structures Are Different• All agencies that operate the Public Housing

program must follow same HUD rules, and all agencies are rated under PHAS


In Public Housing, families have to live in the building which has the subsidy

attached to it

Project-based Subsidy


Legal Relationships

Lease


Type of Projects

• Mixed Population (Elderly & Disabled)

• Elderly Only

• Disabled Only

• General Occupancy


Tenant-Based Subsidy

Families can choose their unit


Vouch

erHAP Contract

Assisted Lease

PHA/LOCAL ENTITY

HUD

Family Owner


T/F Quiz

1. HUD’s role is to pass legislation.

2. PHAs are created by HUD.

3. PH is tenant-based assistance.

5. All PHAs are a department of the city.

FF

FF

FF

FF


Mandatory References

• Statutes• Regulations

– Public Housing: 960 and 966– HCV: 982– Both: Subpart 5


Mandatory References

• Current Notices– Have an expiration date– May be extended

• Handbooks• Forms

– Often have instructions in addition to form


Optional References

• Guidebooks• Letters from individual HUD staff giving guidance• Notices which have expired (unless changed by

mandatory reference)• Handbooks which have expired (unless changed by

mandatory reference)


Role of Field Office Staff

• Answer questions based on mandatory references

• Refer to HUD Guidebooks but make sure staff know that if the guidance is used by the PHA, it should be included in the PHA’s policy (Admin Plan or ACOP)


Family ReportForm HUD-50058


Understanding the Form

• The HUD-50058 is a primary document to review

• Therefore, the reviewer must:– Understand each line of the form affecting

income and rent calculation applicable to the program being reviewed

– Know where references can be located


Form HUD-50058

• Purpose is to provide HUD with data on who participates in subsidized housing programs

• HUD uses data to:– Analyze the housing programs– Monitor PHAs– Detect fraud– Provide information to Congress– Provide information to other interested parties


Form HUD-50058

• PHA responsibilities– Collect information– Electronically submit information to HUD – Review error analysis reports– Correct errors


HUD-50058 Family Report1. Agency2. Action3. Household4. Background at Admission5. Unit to Be Occupied 6. Assets7. Income (Annual Income)


HUD-50058 Family Report8. Expected Income Per Year (Adjusted Income)9. Total Tenant Payment10. Public Housing only11. Premerger Certificates (now used for project-

based certificates only)12. Sec 8 Voucher Rent Calculation13. Section 8 Moderate Rehabilitation Program


HUD-50058 Family Report14. Manufactured Home Owner Renting the

Space - Premerger Certificates (not used)15. Sec 8 Homeownership (Vouchers)16. Indian Mutual Help (IHAs only)17. FSS/Welfare to Work Addendum


Question

• Which sections will affect income and rent calculation the most?


Form HUD-50058 References

PIH Home Page:www.hud.gov/offices/pih/index.cfmPIC home page:www.hud.gov/offices/pih/systems/pic/index.cfmMTCS Forum:http://chatwrite.hud.gov/pih/pihboard/mtcs/pihboard.htmlGuidebooks and Tools:www.hud.gov/offices/pih/systems/pic/50058/pubs/

http://www.hud.gov/offices/pih/systems/pic/index.cfm


Page Heading

• At the top of every page of the HUD-50058:– The head of household’s name

– The head of household’s SSN

– The date modified


Section 1: Agency


Family Composition

• Basic information about family composition and characteristics is important for:– Establishing the eligibility for admission and continued

occupancy– The family’s qualifications for deductions and

allowance – The appropriate unit size and type for family– The appropriate subsidy standard for the family (HCV)


Section 3: Household


Family Types


Terms

• Household• Family


Definition of Family

• HUD defines:– elderly family– disabled family– displaced family

• Does not affect rent calculation


Definition of Family

• The PHA defines what groups other than the HUD-defined groups constitute a family


Elderly Family

• Family whose head, spouse or sole member is at least 62 years of age


Disabled Family

• Family whose head, spouse or sole member is a person with disabilities


Live-In Aide

• Person who resides in unit to care for family member who is:– disabled or– 50 years of age or more


Live-In Aide Criteria

• Live-in aide is:– essential to care/well being of person– not obligated for support of person– wouldn’t be living in unit except to provide

necessary supportive services• Must approve as reasonable accommodation

for person with disability• Live-in aide is a “household” member


Employed Live-in Aide

• Live-in aides can, and often do, work outside the home– Because they are not ‘family’ members, all

income is excluded


Social Security Number Requirements• All family members age six and over who

have Social Security Numbers are required to disclose them


Social Security Numbers

• If family member has no social security number and they are age 6 or older, they must sign certification– Parent or guardian signs for minor


Social Security Number Requirements• If family member has SSN but cannot verify,

they sign certification– Individual has 60 days from date of

certification to verify SSN– Elderly may be granted 60 day extension


Failure to Disclose Social Security Number• Applicants - denial of assistance• Participants - termination of assistance


T/F Quiz

1. Live-in aides can be employed outside the home

2. Households include live-in aides; families do not.

3. The definition for “disabled family” includes any family member who is a person with a disability

TT

TT

FF


T/F Quiz

4. An individual has 60 days from date of certification to provide verification of their SSN

5. “Family” is defined by HUD.

TT

FF


Citizenship/Eligible Immigrant

C/EI


Restriction on Assistance to Noncitizens• Purpose is to ensure that only citizens,

nationals and eligible immigrants are assisted with HUD subsidy


Eligibility for Assistance

• The eligibility of each individual in the family must be established

• Individuals will fall into one of these categories:– Citizens– Eligible immigrants 62 or older– Other eligible immigrants– Ineligibles, including noncitizen students on

student visas


Families will fall into one of these categories• All members are citizens or eligible

immigrants• Some members are eligible and some are

ineligible (Mixed Family)• All members are ineligible


Family Categories

• An ELIGIBLE family will be comprised of citizen(s), national(s) or noncitizen(s) with eligible immigration status

• An INELIGIBLE family is one in which no member is a citizen, national or eligible immigrant


Mixed Family

• A MIXED family is comprised of citizen(s), or eligible immigrant(s), and those without citizenship or eligible immigrant status


Procedures after Determining Family Status

• Eligible families are admitted with full subsidy• Mixed families eligible for prorated assistance• Ineligible families denied assistance or

assistance is terminated


Verification Requirements• Verification of citizenship or national status is

provided directly by the family by certification:– Persons who claim citizenship status– Persons 62 and older who claim eligible

immigration status (verify age)– Persons who declare themselves ineligible or

don’t contend status


Verification Requirements• Verification is required for all other noncitizens

who claim eligible immigration status (except for persons 62+, who must sign declaration and provide proof of age) …

…continued


Verification Requirements• Verification required….

– Signed declaration form– INS card or other INS document– Signed verification consent– Must use INS SAVE

• Note: SAVE system changing from telephone to online access


Documentation

• Declaration of 214 Status• Verification Consent Form• Listing of Non-contending Family Members• Notice of Section 214 Requirements


Terms(Will define when covered) • Annual Income• Adjusted Annual Income• Total Tenant Payment• Utility Allowance• Utility Reimbursement payment


Terms (continued)(Will define when covered) • Flat rent (PH)• Ceiling Rent (PH)• Tenant Rent (PH)


HCV Terms

• Rent to Owner = total rent paid to owner• Gross Rent = rent to owner plus Utility

Allowance• Total HAP = HAP plus Utility Reimbursement,

if any… continued


HCV Terms…

• Total Family Share: Family Rent to Owner + Utility Allowance

• Tenant Rent to Owner • HAP to Owner = check sent to owner for PHA

portion of rent to owner


Annual Income


Annual Income

• All amounts, monetary or not:– On behalf of the family– Anticipated over the next 12 months– Not excluded in 24 CFR 5.609(c)– Also includes income from assets to which

family has access


Computing Annual Income

Total/Gross Income - Exclusions = Annual Income

Formula


Computing Annual Income• PHAs are now

required to show excluded income of family members on the HUD-50058

5400 4920 480


Converting Income

• Convert earned income to an annual wage

• Multiply hourly wages by the number of hours worked per year (2080 for full-time)


Converting Income

• Multiply weekly wages by 52• Multiply bi-weekly wages by 26• Multiply semi-monthly wages by 24 • Multiply monthly wages by 12

X =


Annual Income

• Employment income– prior to payroll deductions– includes overtime, commissions, fees, and

bonuses


Seasonal Employment

• Presents a challenge for anticipating income• Sometimes employer can’t give accurate

estimation• Many variables could affect work the schedule

and subsequent income:– Weather conditions– Demand for work– Other interruptions


Seasonal Employment

• If an employer cannot give estimate of anticipated income for next 12 months– May use last year’s income as best indicator

of expected future income– May annualize income over shorter period,

then conduct interim at the end of the shorter period or when changes occur


Seasonal Employment

• PHAs should develop policies for calculation of seasonal income


Seasonal Work Question

• Clyde Kunkel is a roofer– Works April through September– Can’t work in bad weather– Employer provides income over past 3 years,

both regular and overtime• How do we calculate Mr. Kunkel’s anticipated

income?


Possible Answers

• Use average number of regular hours over past 3 years times current regular pay rate

PLUS• Use average overtime hours from past 3 years

times current overtime rateOR…

• Annualize current income and conduct an interim when there is a change

• Address treatment in PHA policies


Adult Full Time Student

• For Head, Spouse or Co-Head full time students, count all employment income

• For Adult Full Time Students who qualify as dependents, count only the first $480 of employment income

• How do we determine the student is full time?


Adult Full Time Student

• The educational institution determines the full time status of the student– Vocational Schools included


Income of Minors

• Include any benefits or other non-earned income paid directly to minors

• Who is a minor?


Military Pay

• Count all regular pay, special pay and allowances of member in armed forces

• Do not count special duty pay received for being exposed to hostile fire


Gifts and Contributions

• Count regular contributions made to the family

• Would include the regular payment of a utility bill

• Don’t count sporadic gifts such as birthday presents


Periodic Payments and Allowances• Periodic payments

– Social Security (gross - prior to Medicare deduction)

– If benefits reduced to make up for prior overpayments by SS, count amount actually received


Periodic Payments and Allowances

– Annuities– Insurance policies– Pensions– Disability– Death benefits


Periodic Payments and Allowances• Alimony and child support

– Count amounts awarded as part of divorce or settlement agreement unless otherwise verified• applicant certification• effort to collect amounts, including filing with

courts or agencies responsible for enforcing payments


Lump Sum Payments

• Income– Processing delays of periodic payments such

as welfare or unemployment


Lump Sum Payments

• Assets, not Income– Inheritances– Insurance payments such as worker’s comp– Capital gains– Settlements for personal and property losses– Deferred periodic payments of Social Security

Disability or SSI


Income From a Business

• Includes self-employment• Count net: income minus expenses• Expenses may include depreciation

and interest payments on loans• Expenses do not include expansion or capital

improvements


Public Assistance

• Temporary Assistance for Needy Families• SSI• General Assistance

• Imputed welfare income covered in case study during week


Public Assistance Income in As-Paid States• Only 3 States • Special calculation of income for those states• Also special calculation of TTP (total tenant

payment) which includes Welfare Rent


Payments in Lieu of Earnings

– Unemployment– Workers compensation– Severance pay

Figure for entire year when income for other weeks

is not known


Pop Question

• Which of the following is not considered to be “income” in the HUD definition?A. Wages from employmentB. TANF benefitsC. A lump sum inheritance D. Net income from a business


Pop Question

• Which of the following is not considered to be “income” in the HUD definition?A. Wages from employmentB. TANF benefitsC.C. A lump sum inheritance A lump sum inheritance D. Net income from a business


Section 7: Income


Section 7: Income

Julie

Karen

TonyEric

1

2

34

W

W

WS

10.25 x 2080

150 x 52

100 x 52300 x 12

21,320

7,800

5,2003,600

21,320

3,6005,200 0

4807,320

25,400

155

6j = 155

25,555


Learning Activity 4-1

• Calculating Annual Income


Learning Activity 4-1 Answers

Eric 1 N 600x12 7,200 7,200Eve 2 W 6.25x2080 13,000 13,000

20,200

20,200


Assets and Asset Income


Assets

• Value of assets may affect annual income

• PHA must identify assets and verify market value of assets


Assets Include

• Savings and checking accounts– PHAs establish policies for

determining value of accounts– May elect to count current

balances or average balances for a given period (2 months, 6 months, etc.)


Assets Include

• Stock, bonds, money market funds• Equity in property, other capital investments• Cash value of trusts available to household• Retirement savings accounts, less penalties

for withdrawal


Assets Include

• Contributions to company retirement/pension funds– Count only amounts family can withdraw

without retiring or quitting– After retirement, count as income regular

periodic payments


Assets Include

• Assets which allow unrestricted access• Lump sum receipts

– Inheritances, capital gains, lottery winnings– Social security & SSI lump sum payments


Assets Include

• Personal property held as investment– gems, jewelry, – coin collections,– antique cars, etc.

• Surrender value of life insurance policies


Assets Do Not Include

• Personal property• Assets not accessible to the family• Interest in Indian Trust lands


Income from Assets

• Assets can generate income• Income from assets is counted in determining

annual income


Income from Assets:Examples

• Examples of income from assets– Interest– Dividends– Net income from real or personal property

• Asset income of minors is counted as income (Ex: interest on savings account)


Income from Assets

• When net cash value of family assets are $5,000 or less, actual asset income is used

• When net cash value of family assets exceed $5,000, asset income is the greater of:– Actual asset income, or– Imputed asset income

• Net family assets x HUD-supplied passbook rate


Section 6: Assets


Section 6: Assets

JulieKaren

Tony

12

3

CDsavings

savings

$3600-$100 35002200

500

6200

9044

7

141

025

155155

2.5%2.0%1.3%



• Calculating Assets and Asset Income



• Calculating Assets and Asset IncomeEric 1 Savings 1,000 20

1,000 200225 0

20

1000x .02 20


Income Excluded under HUD Regulations


Income Exclusions

• Listed on Fact Sheet

• Must be included on HUD-50058 form


Income Exclusions

• Income of a live-in aide• Amounts received under training programs

funded by HUD


Income Exclusions

• Resident service stipend– Modest amount (not to exceed $200 per

month) received by a resident for performing a service for the PHA


Income Exclusions

• Training income exclusions– Incremental earnings and benefits to any

family member during participation in a qualified training program


Income Exclusions- Example

• A family member receives $600 in TANF• She enrolls in a qualified State training

program and receives training income of $900 monthly

• TANF benefits stop– What amount of monthly income would be

counted for this family member?


Income Exclusions- Example (Answer)

• A family member receives $600 in TANF. She enrolls in a qualified State training program and receives training income of $900 monthly. TANF benefits stop. What amount of monthly income would be counted for this family member? – $600$600


Income Exclusions

• Adoption assistance payments in excess of $480 per adopted child


Income Exclusions Under Other Federal Statutes


Federally-Mandated Income Exclusions• Published periodically in the Federal Register

– Most recent list published April 20, 2001

• Listed on Fact Sheet

• Must be included on HUD-50058 form



• Identifying income and assets• Page 4-37


Adjusted Income


Adjusted Income

• Annual Income minus allowances– Dependents– Elderly/disabled allowance– Child care– Medical expenses– Disability expenses


Permissive DeductionsPublic Housing Only• A PHA may adopt additional deductions from

annual income• The PHA must establish a written policy for

such deductions


Permissive DeductionsPublic Housing Only• These deductions should not

– Duplicate amounts already deducted from annual income

– Include amounts reimbursed to the family from other sources


Section 8: Expected Income Per Year



• Calculating Adjusted Income


Learning Activity 4-4 Answers Line 8a $20,220

1

480 480

Line 8x $ 480Line 8y $19,740


Formula for TTP

• TTP is highest of:– 30% monthly adj. Income– 10% total monthly income– the welfare rent– minimum rent


Section 9: Total Tenant Payment (TTP)


Section 9: Total Tenant Payment (TTP)

1,525

2,130

213

30

4580

25

458350

N



• Calculating TTP



1685

1691645

30 494

0 25

494

Line 8a $ 20,220Line 8y $ 19,740


Utility Allowance

• PHAs are required to establish and maintain Utility Allowance schedules

• A Utility Allowance is that amount approved by the PHA for reasonable monthly costs of local utility consumption

• Families responsible for utility costs (excluding telephone) will see a Utility Allowance applied to their rent calculation


Allowance for Tenant- Supplied Appliances-HCV Only • For HCV participants, PHAs must also

establish allowances for tenant-supplied appliances such as ranges & refrigerators– Only allowed when owner does not provide

the appliance– Covers cost of the appliance itself, not energy

used to operate the appliance


Overview of Calculation of Public Housing Tenant Rent


Definitions for Income Based Rent• Tenant Rent – amount payable by the family

as rent to the PHA• Utility Reimbursement – amount by which

utility allowance exceeds TTP• Income Based Rent – rent based upon family

income, allowances and deductions


Calculation of TTP and Tenant Rent• To get Tenant Rent, subtract the utility

allowance (UA) from TTP• If UA is greater than the TTP, Tenant Rent is

zero and there is a Utility Reimbursement Payment (URP)– The URP is the difference between the TTP and

the Utility Allowance– (Tenant credit on line 10f of HUD-50058)


Section 10: Public Housing


Utility Allowances

TTP $80- UA 50

Tenant Rent $30

TTP 40- UA 50

Tenant Rent 0

URP $10


Section 10: Public Housing

80600

80

5030

X


Ceiling Rents

• Purpose– to set a maximum rent families will pay in PH,

regardless of how high their income goes• Used prior to 10/1/99 in lieu of Flat Rents


Retaining Ceiling Rents

• As of 10/1/2002, ceiling rents must be adjusted to flat rent level


Flat Rents

• Effective for families admitted or recertified on/after 10/1/99

• Each PHA must establish a flat rent for each unit

• Flat Rent has no formula based limit on what tenant pays. Utility Allowances are not deducted. Flat Rent = THE RENT.


Flat Rents

• Flat rent is:– based on PHA determination of rental value of

the unit– designed to not create a disincentive for

families to stay in PH as their income increases


Flat Rents

• Recertifications are done not less than once every 3 years– annual reexamination of family composition


Flat Rent Methodology

• Market value is rent which would allow the unit to be successfully rented if it wasn’t PH

• Acceptable methodology incorporates the same nine factors used in Section 8 Rent Reasonableness methodology


Flat Rent Methodology

• Relevant factors must include:– Age– Location– Quality– Amenities– Size of Unit

– Housing services– Maintenance– Utilities provided by

PHA– Unit type


Flat Rents: Family Choice• Families elect annually whether to pay

income-based or flat rent• If family elects to pay income-based rent,

family may not switch to flat rent until the next annual reexamination


Flat Rents: Family Choice• If family has elected to pay flat rent but has a

hardship and is unable to pay, the PHA must allow the family to switch to income-based rent

• Income needs to be reviewed only every 3 years


Switching Rent Determination Methods• Allowable hardships to switch from flat to

income-based rent– income decreased due to family

circumstances• loss or reduction of employment or other

income• death in the family


Switching Rent Determination Methods• Allowable hardships to switch from flat to

income-based rent– expenses increased, due to changed

circumstances• medical costs• child care• transportation, education or similar items• other situations in PHA policy



• Calculating Tenant Rent



X

494700

49445

449


Payment Standards for Housing Choice Vouchers


Payment Standard

• Used to calculate total subsidy for the family• PS is maximum subsidy amount• Must establish PS for each BR size and for

each FMR area in PHA jurisdiction


Overview of Calculation of HCV Subsidy and Family Share


Formulas

• Rent Formula– Total Subsidy is lower of Gross Rent or

Payment Standard– Minus TTP


Family Share Vs. TTP

• When GR is equal to or less than PS, the family share is the TTP

• When GR is greater than PS, the family share is the TTP plus the amount that the GR exceeds the PS

• Gross rent minus total HAP = family share


Section 12: Section 8 Vouchers


Gross Rent More than PS (Recertification) Family TTP = $25

• PHA Payment Standard = $600• GR for unit selected by family = $680• $600 minus $25 = $575 total subsidy• $680 (GR) minus $575 = $105• Family share = $105• Here family share is greater than TTP



600

650

30

680600

25

575

105

575

75



• Gross Rent greater than the Payment Standard



750725 50

775750494256

519256

469


Gross Rent Less than PSFamily TTP = $25

• PHA Payment Standard = $600• GR for unit selected by family = $580• $580 minus $25 = $555 total subsidy• $580 (GR) minus $555 = $25• Family share =$25• In this case Family Share is the TTP



600

550

30

580580

25

550

25

555

0

5



• Gross Rent less than Payment Standard



750625

675675

50

494181

494181

444


Maximum Initial Rent Burden • When the gross rent exceeds the PHA’s

payment standard upon the initial occupancy of a unit (new admissions and moves)…

• The family share cannot exceed 40% of the family’s adjusted monthly income


Pop Question

• In which situation must the rent burden test be applied?A. Whenever an owner offers a new lease in the

same unitB. When the gross rent exceeds the payment

standard at initial lease-upC. When the owner increases the rentD. Only when a family moves


Pop Question

• In which situation must the rent burden test be applied?A. Whenever an owner offers a new lease in

the same unitB.B. When the gross rent exceeds the When the gross rent exceeds the

payment standard at initial lease-up *payment standard at initial lease-up *C. When the owner increases the rentD. Only when a family moves

HUD RHIIP Training – PH/HCV Program Basics

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Transcript of HUD RHIIP Training – PH/HCV Program Basics