usda multi-family housing programs ... - rural development · •hb-2, section 6.9(a)(4): it is the...
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Multi-Family Housing ProgramsVerification of Income
March 2017
• Must be dated within 90 days of certification effective date.
• If reverified verbally within 90 days, can be dated within 180 days.
• A 3rd party verification from the employer is required.
• This requirement can be waived in limited cases only.
• May temporarily verify income with pay stubs, checks, or other information to establish grossincome.
• Best practice is to obtain current wage information, along with past actual income (i.e. year-to-date or prior year).
Verification of Wages(Instruction 3560, HB-2, Section 6.11)
• Obtain most recent award letter.
• Must re-verify annually.
• Verify anticipated increases (i.e. COLAs).
• Suggested: if award letter is more than 90 days old, obtain current information to support amount (i.e. bank statement showing deposit amount).
• For unemployment, tenant must complete the form providing current employment status and agreeto immediately inform you if status changes.
Social Security, Public Assistance, Unemployment, Pensions, Other Regular Unearned Income
• Must provide current documentation of income and expenses that cannot be older than the previous fiscal year.
• Any depreciation expense must be on a straight-line basis.
• Do not expense principal payments on debts, or payments on debts incurred for expansion or capital improvements.
• Tax return is required, unless exempt from filing (i.e. net business income is less than $400).
• Suggested: collect year-to-date profit and loss statement or year-end pro-forma P&L.
• Reconcile any discrepancies between above documents.
Self Employment
• Obtain divorce decree, separation agreement, support order, or other documentation showing the required support payments.
• Obtain updated agreements as applicable.
• If the tenant is not receiving support, you must verify that they have requested assistance from support enforcement.
• Annually:
• Print out support enforcement if paid through state.
• The tenant must report actual amount received during the past 12 months.
Alimony, Child Support
• Balance must be verified through bank within 90 days of the effective date of the certification.
• Checking accounts
• Use the average balance from the prior 6 months.
• Use the average reported by the bank.
• Obtain the 6 most recent bank statements (Rural Development does not require complete bank statement).
• Non-checking accounts
• Use the balance reported on the date verified.
Bank Accounts
• Verify current balance and distributions within 90 days of effective date of certification.
• Obtain prior year’s year-end statement.
• You may also want to collect most recent quarterly statement.
• Document in file whether treated as asset or income stream.
• Dividends are treated as income; market gains are not.
• For annuities, verify right of holder to withdraw funds and costs to do so, including tax penalties.
Brokerage accounts, 401Ks, Annuities
• Obtain copy of trust document.
• Obtain current statement from trustee to verify trust distributions.
• Assets of trust will be verified as appropriate when trust is an asset.
Trusts
• Current Asset
• Establish market value annually
• Typically done with assessor’s tax statement.
• If rented, treat as self-employment to calculate income (P&L, tax return).
• Disposed Of Asset
• Establish market value on date of disposition.
• Document any return received (i.e. closing statement).
• Document costs to dispose of asset (i.e. closing statement or statement from real estate professional).
Real Property
• Obtain copy of the document.
• Obtain amortization schedule.
• If paid through 3rd party (escrow), verify payments and status annually within 90 days of the certification effective date.
• Within 90 days of certification, verify balance remaining on contract/mortgage.
• Balance owed on contract/mortgage is market value.
• Interest portion of payment received is actual income.
Mortgage, Contract of Sale
• Medical Expenses:
• Verify annually within 90 days of certification effective date.
• Over-the-counter medication recommended by physician to treat a specific medical condition must also be verified.
• Organize to clearly show amount and purpose of each expense.
• Disability:
• Verified once, then updated if circumstances change.
• Should comply with one of the two federal definitions of disability (see 7 CFR §3560.11).
• Rental Assistance:
• Verification must be based on disability; establish nexus between request and disability.
• Student Status:
• Verify annually within 90 days of certification until no longer a student.
• Use statement from school or school records.
• Child Care:
• Verify annually within 90 days of certification with provider statement of amount paid or copy of co-pay agreement.
Other Items
• HB-2, Section 6.9(A)(4): It is the policy of Rural Development not to accept a tenant certificationfor an applicant or tenant with zero income, unless all income is specifically exempted.
• Attachment 6-B (or similar) is used to document eligibility of tenants/applicants claiming to have no income.
• In completing Attachment 6-B, you will need to assign dollar values to in-kind donations.
• Attachment 6-B documents re-occurring gifts as household income.
• Must obtain a new Attachment 6-B at least quarterly.
• Recommend adding signature block to Attachment 6-B.
Zero Income Tenants
QUESTIONS?
Contact Us:
Jay DeLapp, Multi-Family Housing Program Specialist(541) [email protected]
www.rd.usda.gov/or
In accordance with Federal civil rights law and U.S. Department of Agriculture (USDA) civil rights regulations and policies, the USDA, its Agencies, offices, and employees, and institutions participating in or administering USDA programs are prohibited from discriminating based on race, color, national origin, religion, sex, gender identity (including gender expression), sexual orientation, disability, age, marital status, family/parental status, income derived from a public assistance program, political beliefs, or reprisal or retaliation for prior civil rights activity, in any program or activity conducted or funded by USDA (not all bases apply to all programs). Remedies and complaint filing deadlines vary by program or incident.
Persons with disabilities who require alternative means of communication for program information (e.g., Braille, large print,audiotape, American Sign Language, etc.) should contact the responsible Agency or USDA’s TARGET Center at (202) 720-2600 (voice and TTY) or contact USDA through the Federal Relay Service at (800) 877-8339. Additionally, program information may be made available in languages other than English.
To file a complaint of discrimination, complete the USDA Program Discrimination Complaint Form, AD-3027, found online at http://www.ascr.usda.gov/complaint_filing_cust.html and at any USDA office or write a letter addressed to USDA and provide in the letter all of the information requested in the form. To request a copy of the complaint form, call (866) 632-9992. Submit your completed form or letter to USDA by:
1) Mail: U.S. Department of AgricultureOffice of the Assistant Secretary for Civil Rights1400 Independence Avenue, SWWashington, D.C. 20250-9410;
2) Fax: (202) 690-7442; or3) Email: [email protected].
USDA is an equal opportunity provider, employer, and lender.
