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S+CRent Calculation

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Rent Calculation

• The tenant rent portion must be calculated to be 30% of a household’s monthly adjusted income

• Must have copies of the initial and all subsequent rent calculations---MUST BE DATED

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Rent Calculation

• Must have proper income verification (pay stub, MFIP benefit, etc) for each calculation of rent

• When monitoring, HUD finds it helpful if each income verification is attached to the corresponding rent calculation

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Rent Calculation

• Rent needs to be calculated:

– At the time a participant enters the program

– At least once a year after the initial calculation

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Rent Calculation

• If there is a change in family composition---birth of a child, etc., or if the household’s income decreases, the participant may request a new calculation

• If a participant’s income increases, his/her rent does not need to be recalculated until the next scheduled (annual) recalculation

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Rent Calculation

• Grantees may institute mandatory savings programs, but ensure you are aware of how the savings will affect a participant’s eligibility for mainstream resources

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Rent Calculation

• We recommend that grantees: – develop clear WRITTEN rent calculation policies– communicate the policy to participants– and apply the policy uniformly to all residents

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Rent Calculation• Questions to think about when developing a

policy:– If your program is in a partnership, which entity is

responsible for verifying income/calculating rent? Is this clear in the MOU?

– Does the program have other funding sources? Which ones? What are the income verification/rent calculation requirements of those funding sources?

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Rent Calculation• Questions to think about when developing a

policy:– Are you going to require income verification more

than once a year? How often? Under what circumstances?

– Will you require that participants inform you if they have an income increase? Income decrease? What will be the increase/decrease threshold for reporting?

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Rent Calculation

• Questions to think about when developing a policy

– If a participant has an unexpected, non-recurring loss in income that prevents him/her from being able to pay rent that month, will you do a one-month only rent re-calculation?

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Rent Calculation

• Questions to think about when developing a policy

– Who will be responsible for income/rent calculations?

• What training will s/he receive?

• With which resources will s/he be provided?

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Rent Calculation

• Questions to think about when developing a policy

– What supportive interventions will you have in place to help the participant pay his/her rent?

– What will you do if a participant does not pay rent on time?

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Rent Calculation

• Questions to think about when developing a policy

– In most cases, failure to pay rent does not qualify a participant for termination

– The S+C regulations state that a participant may only be terminated in “the most severe cases”

– How does your organization define “most severe”

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S+C Rent Calculation Worksheet

• Questions 1-8 refer to the income a household expects to receive in the next 12 months

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S+C Rent Calculation Worksheet

• Sources of funds that DO NOT COUNT as income

– Student assistance—loans, grants, etc.

– Compensation received from HUD, local and/or state training programs

– The monetary value of food stamps

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S+C Rent Calculation Worksheet

A complete list of what is included/excluded from income can be found in 24 CFR Section 5.09

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S+C Rent Calculation Worksheet

• Four mandatory deductions:1. $480 for each dependent

2.$400 for any disabled family

3.To the extent that the sum of unreimbursed medical expenses of a disabled or elderly family member AND unreimbursed attendant care and auxiliary apparatus expenses exceeds 3% of income

4.Unreimbursed child care expenses

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S+C Rent Calculation Worksheet

• Dependent deduction (line #13)– For each dependent living with the participant,

deduct $480 from annual income– Dependents include household members under

the age of 18, elderly dependents, full-time students, the handicapped or disabled

– Dependents do not include the family head, spouse, or foster children

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S+C Rent Calculation Worksheet

• Disabled/Elderly family deduction (line #14)– S+C requires that an adult household

member qualify as disabled, so this deduction automatically applies to each S+C household

– Deduct $400 from the annual income of each S+C household

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S+C Rent Calculation Worksheet

• Disabled/Elderly family deduction (line #14)– One deduction per qualified family per

year (even if three qualifying members of the household are disabled, the household can only deduct $400 per year)

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S+C Rent Calculation Worksheet

• Child care deduction (line #15)– Deduct the amount of reasonable, non-

reimbursed child care expenses expected in the next 12 months for kids 12 and under

– The child care must enable a household member to work or go to school

– The amount deducted cannot exceed the amount of income received from the work

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S+C Rent Calculation Worksheet

• Attendant Care and Auxiliary Apparatus Deduction AKA Handicapped Assistance Allowance (line #16a)– The reasonable, anticipated, unreimbursed

expenses for attendant care or auxiliary apparatus (wheelchair etc.) that enables that individual or other household member to work

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S+C Rent Calculation Worksheet

• Attendant Care and Auxiliary Apparatus Deduction AKA Handicapped Assistance Allowance (line #16a)– Amount deducted cannot exceed the amount

earned by adult household members as a result of the handicapped assistance

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S+C Rent Calculation Worksheet

• Medical Expenses of Elderly or Disabled Residents Deduction (line #16b)

– Determine amount of out-of-pocket, non-reimbursed medical expenses expected for elderly or disabled residents for the coming year

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S+C Rent Calculation Worksheet

• The amount of unreimbursed attendant care and auxiliary apparatus expenses AND unreimbursed medical expenses are added together (line#16c)

• The combined amount that exceeds 3% of annual income is deducted from annual income (line #16d)

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Utility Allowances Lines #22 and #23

• If a participant pays for his/her own utilities, an allowance for utilities must be subtracted from the total rent

• PHAs (public housing authorities) have copies of HUD-approved utility allowance charts

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Utility Allowances Lines #22 and #23

• If a participant’s rent is calculated to be $40 per month, and PHA utility allowance is $60, then grantee must reimburse the participant $20 each month

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Rent Calculation

• Common Mistakes

– Not giving disability deduction– Not asking about out of pocket medical or

daycare expenses– Not having any documentation to show how

income/rent was calculated

Questions? Contact your friendly neighborhood CPD Rep:

Ben 612.370.3019 ext. 2237

Deb: 612.370.3019 ext. 2215

Joe: 612.370.3019 ext. 2157

Mary: 612.370.3019 ext. 2102

Sara: 612.370.3019 ext. 2103

Tom:612.370.3019 ext. 2108