Presentation on theme: "Calculating Resident Rent"— Presentation transcript:
1 Calculating Resident Rent Homelessness 101:Managing HUD Continuum of Care Homeless Assistance GrantsCalculating Resident RentSponsored by the U.S. Department of Housing and Urban Development (HUD),Office of Community Planning and Development (CPD), San Francisco Regional OfficeTraining provided by [Insert Agency Name Here]Materials created by HomeBase/ The Center for Common Concerns, Inc.
2 Big Picture: What this Training Covers There are specific rules that govern the amount of rent that can be charged of participants in HUD Continuum of Care Homeless Assistance Grant-funded programs. Rental amounts must becalculatedcorrectlyTHIS TRAINING COVERS TENANT RENTAL CALCULATIONS --NOT THE AMOUNT PAID TO THE LANDLORD TO LEASE THE PROPERTY ANDNOT PROGRAM FEES
3 Overview: 6 Responsibilities We have organized what you need to know about accurately calculating resident rent into 6 responsibilities:1. Fix policies 4. Review rental amounts2. Calculate rent 5. Use/account appropriately3. Maintain documentation 6. Monitor
4 Responsibility 1: Rental Calculation Policies, Procedures, & Systems Your agency should havePublished written policies and proceduresCreated systems to ensure compliance with resident rent requirements.Overcharging or Undercharging Rent Has Serious Consequences!
5 1A. Requirement to Charge Rent Not required, but may charge rentSupportive Housing Programs (SHP)RequiredShelter Plus Care (S+C)Section 8 Moderate Rehabilitation SRO
6 1B: Amount of Rent Tenant rental amounts are the highest of 30% of monthly adjusted income (specifically, 1/12th of annual adjusted income)10% of monthly gross incomeSection 8 Moderate Rehabilitation SRO or S+C SRO: a minimum monthly payment (e.g., $25.00 to $50.00 a month) as the Housing Authority specifies, with one exception (refer to the manual for more information)Exception (SHP only): If an SHP recipient charges rent, then the rental amount cannot exceed, but may be less than, the amount calculated above.
7 1C. Verified Information The amount of rent will be a function of:household compositionanticipated incomeanticipated expensesanticipated “allowances”anticipated household-paid utilitiesRental calculations must be based on “verified information”Residents must supply the necessary certifications, releases, information, or other documentation to verify information.
8 1D. Other PP&SYour agency needs to have policies, procedures and systems supporting these other responsibilities:Calculating Rent (Responsibility 2)Proving Compliance (Responsibility 3)Reviewing Calculations (Responsibility 4)Managing Financial Obligations (Responsibility 5)Monitoring Compliance (Responsibility 6)
9 Responsibility 2: Calculate Rental Amount The goal – what is the highest of:30% of monthly adjusted income (specifically, 1/12th of annual adjusted income)10% of monthly gross incomeSection 8 Moderate Rehabilitation SRO or S+C SRO: a minimum monthly payment (e.g., $25.00 to $50.00 a month) as the Housing Authority specifies, with one exception (refer to the manual for more information)
10 Step 1: Determine the Household’s Annual Income Identify household membersCategorize income sources as “included” or “excluded” using Appendices C and DInput information into Rent Calculation Worksheet tab: “Included and Excluded Income”Determine whether Mandatory Earned Income Disallowance applies (SHP, Section 8 SRO projects only)
11 Step 2: Determine the Dependent Allowance $480 per dependentDependents areminors;household members who are disabled or handicapped; andfull-time studentsBut, dependents are NOThead of household or spouse;in SHP and S+C, a person living with the eligible participant because he or she is important for the care of the eligible person; orfoster children
12 Step 3: Determine the Child Care Allowance Anticipated, unreimbursed, reasonable child care costs for children 12 years old and underneeded to permit a household member to work; orneeded to permit a household member to pursue education.The deduction amount cannot exceed the income received from work.
13 Step 4: Determine the Disabled (Handicapped) Assistance Allowance The reasonable, unreimbursed expenses for eitherattendant care for a disabled household member provided by a non-household member; or“auxiliary apparatus” that enables a disabled household member or another household member to work.The amount that is deducted from income is the amount of the unreimbursed expensethat exceeds 3% of gross income,up to the amount earned by the adult household member(s) as a result of the Disabled Assistance.
14 Step 5: Determine Medical Expenses Allowance (Elderly or Disabled) Unreimbursed medical expenses exceeding 3% of annual incomeIncurred by the household’s head, co-head, spouse, or sole memberwho is at least 62 years of age; ordisabledThe amount of this allowance depends on the amount of the Disabled Assistance expenses calculated in Step 4.
15 Step 6: Determine the Elderly/Disabled Household Allowance Any household with a head, co-head, spouse of sole member who isat least 62 years of age ordisabledis entitled to a $400 per household allowance
16 Step 7: Determine the Amount of Resident Rent What is the rental amount – highest of:30% of monthly adjusted income10% of monthly gross incomeFor SHP, your agency’s lesser rental amountFor Section 8 Moderate Rehabilitation SRO or S+C SRO, a minimum monthly payment, but . . .hardships40% of adjusted income
17 Step 8: Determine Household-paid Utilities Offset/Reimbursement Obtain verified information of the anticipated cost of utilities that the household must payAssess reasonableness: compare to your public housing authority’s schedule of utility allowancesIf the cost of utilities is less than the permitted monthly rental amount, the amount of rent is reduced by the cost of utilitiesIf the cost of utilities is more than the permitted monthly rental amount, the household receives a utility reimbursement
18 Responsibility 3: Maintain a Filing System and Documentation to Prove Compliance Documentation to keep in the tenant’s fileAll pieces of rent calculationsCritical pieces to includeVerification of anticipated incomeVerification of anticipated expenses including those relevant to allowances and utilities offset/reimbursement calculationsRental calculationNotes regarding deviations and special circumstances
19 Responsibility 4: Review Rental Amounts Review TimingMust occur at least annually.Interim reviews: a tenant may request if changes in family or income occur that would decrease rent.Residents with Increased IncomePrograms may, but do not need to, increase rent before the next scheduled (at least annual) reviewProgram policies should apply to all tenants equally
20 Responsibility 5: Use of Program Income & Accounting for Rental Income For SHP programs, rent = “program income.”Program income should beTreated as additional SHP funds subject to all applicable requirements for SHPUsed for previously approved eligible activities in the project (although rent can be put into client savings accounts)Used before additional cash withdrawals are made from SHP fundsFor S+C programs, ensure that each tenant pays rent on time and in the correct amount. All grantees, ensure that rent is used per the grant agreement (pp of Calculating Resident Rent booklet)
21 Responsibility 6: Monitor for Compliance and Quality Control HUD requires monitoring all policies and procedures to ensure quality control, including compliance with HUD requirements.
22 MOST IMPORTANT THINGS TO REMEMBER Your agency must have policies and procedures that comply with HUD’s requirements.Rent calculation errors have serious consequences.Help is available if you have questions.Document, document, document!
23 Other ResourcesA list of other resources can be found in your Calculating Resident Rent booklet.Grantees should call their local HUD representative with questions; sponsors should call their grantees.For other support, you can also contact:[Insert Contact Information]
24 For additional information, contact: [Insert Contact Information]Or visit HomeBase’s webpage to access the Calculating Resident Rent materials at: