1. Income Qualification: Assets & Recertification

2. Overview
Asset Income
Asset Specifics
Income at Recertification

3. Asset Income

4. What is considered to be an asset?
Par. 5-7A, Page 5-23
What is considered to be an asset?
Items of value that may be turned into cash
Assets must be accessible to the applicant/ resident
Some items of value are not considered assets
Count all assets/asset income of all family members
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5. Asset Inclusions & Exclusions
Exhibit 5-2
Asset Inclusions & Exclusions

6. Determining Cash Value
Exhibit 5-2; Par. 5-7C, Pg. 5-24
Determining Cash Value
Citation
Asset
Cash Value
Exhibit 5-2
Savings accounts
Current balance
Checking accounts and IRAs that are being occasionally withdrawn from
6 month average balance
Par. 5-7C
Other assets
Market value of asset minus Cost(s) to convert to cash
CHRIS: SAME FOR CITATIONS HERE
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The cash value is the amount the family could receive in cash, if the family converted an asset to cash
Remember:
A family is not required to convert an asset to cash

7. Income from Assets Income from Assets
Par. 5-7B, Page 5-23; Par. 5-7E & F, Pg 5-27 to 5-29; HUD Notice H
Income from Assets
Income from Assets
What is
total cash value of assets?
Calculate total actual yearly income from assets *
<= $5,000
Total income from assets is total actual yearly income from assets
Calculate imputed income by multiplying asset’s total cash value x 0.06%
> $5,000
* Sum of actual yearly income household receives for each asset
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Total income from assets is greater of actual income or imputed income

8. Asset Specifics

9. Income from Trusts Income from Trusts*
Par. 5-7G1, page 5-29
Income from Trusts
Income from Trusts*
If any family member has the right to withdraw the funds from the account, the trust is an asset:
Cash value of the trust is added to total assets
Income to a family member, from the trust, is added to actual income from assets
Example: Family Member creates a Revocable Trust
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© The National Center for Housing Management 9 9

10. Par. 5-7G1, page 5-29
Income from Trusts
If no family member has the right to withdraw the funds in the account:
The trust is not counted as a family asset
Any family income from the trust is counted as non-asset income
Example: Family member creates a Nonrevocable trust and no family member has access to principal
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© The National Center for Housing Management 10 10

11. Not an asset unless it can be taken as a lump sum
Par. 5-7G2, page 5-33
Income from Annuities
Not an asset unless it can be taken as a lump sum
If annuity proceeds are received in regular or periodic payments, count it as non-asset income. The balance of the annuity is not counted as an asset
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© The National Center for Housing Management 11 11

12. Income from Retirement Accounts
Par. 5-7 G4b & 5-7 G4d, Pages 5-36 & 5-37
Income from Retirement Accounts
IRA, Keogh, and similar retirement savings accounts are counted as assets, *unless benefits received through periodic payments*
Include any retirement benefits received through periodic payments in annual income
*Don’t count remaining amounts in the account as an asset*
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© The National Center for Housing Management 12 12

13. Mortgage or Deed of Trust
Paragraph 5-7G7, page 5-37
Mortgage or Deed of Trust
Referred to as “contract sales”
Cash value is amount owed as of effective date
Payments divided into principal and interest, with interest portion counted as asset income
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© The National Center for Housing Management 13 13

14. Income at Recertification

15. 140% Rule
If household income exceeds the current applicable income at recert:
Unit is designated as over-income
100%
140%
Applicable
income
limit
Household remains eligible and unit is considered tax credit qualified

16. If over-income at recertification:
Available Unit Rule
If over-income at recertification:
The next available unit of comparable or smaller size in the same building must be rented to a qualified household
To maintain tax-credit status of the over-income unit:
Rent must remain restricted
Household may not transfer to another building CH

17. Thank You!
Thank You