1. D ETERMINING I NCOME E LIGIBILITY

2. A PPLICATION F ORM How much information do you need to collect to determine income? Household composition All assets and income sources expected over the next 12-months Full time student status Resident must be honest and complete all questions.

3. H OUSEHOLD C OMPOSITION For all non-housing activities: All members of the family [§570.208(a)(2)] Family members living in the same house Related by birth, marriage or adoption For housing activities: Everyone living in the housing unit [§570.208(a)(3)] Single family Single person Two + families Related or unrelated People who may be renting a room (note: the rent received by the owner is not included in the owners income)

4. H OUSEHOLD COMPOSITION CON ’ T Who is included: Everyone in the family or household Earned income of children 18 and over If turning 18 over the next 12 months – prorate If full time student only the first $480 Does not apply if head of household or spouse or part- time student Unearned income attributable to children under 17 Child support TANF payments Other benefits paid on behalf of the minor child

5. H OUSEHOLD COMPOSITION CON ’ T Who is not included: Foster children Live-in aides Children of live-in aides Unborn children Children being pursued for legal custody or adoption who are not currently living with the household Children who do not live in the unit less than 50% of the time Temporarily absent family members Permanently Absent Family Members

6. A NNUAL I NCOME 3 definitions: Section 8 (or Part 5) Census Long Form Adjusted Gross Income on IRS Form 1040 The City chooses All activities meeting the same national objective must use the same definition Non-housing activities – IRS Form 1040 Housing activities – Section 8

7. A NNUAL I NCOME – S ECTION 8 Gross Amount All funds that go to, or are on behalf of people in the family Are anticipated to be received for the next 12 months Are not specifically excluded Are derived from assets to which any family member has access Anticipated income What will be earned over the next 12 months Can base it on the past but increases/decreases need to be taken into account Bonuses, raises, OT, COLAs, etc.

8. A NNUAL I NCOME – S ECTION 8 CON ’ T Inclusions include, but not limited to: Employment income before deductions Net income from a business Interest, dividends and any other net income from real or personal property Full amount from periodic amounts received from Social Security, annuities, insurance policies, retirement funds, etc. Payments in lieu of earnings – unemployment or disability Welfare assistance Periodic and determinable amounts such as child support

9. A NNUAL I NCOME – S ECTION 8 CON ’ T Exclusions include, but not limited to: Employment income of children under 18 Foster care payments Medical care reimbursements Income of a live-in aide Student aid paid to the student or school for educational purposes Special pay for Armed Forces exposed to hostile fire Temporary or non-recurring income Earnings in excess of $480 for each full time student over 18 Refunds or rebates from the State for property taxes

10. A NNUAL I NCOME – S ECTION 8 CON ’ T Can be obtained by using a verifiable certification Verifiable Certification needs to include: Family size Income Ethnicity Race Signature of person completing Section 1001 of Title 18 of U.S. Code information Warning: Section 1001 of Title 18 of U.S. Code makes it a criminal offense to make false statements or misrepresentations to any Department of Agency of the U.S. as to matters within its jurisdiction. City requests 20% of certification be verified with source documentation or third-party For Economic Development Source Documentation

11. A NNUAL I NCOME – IRS F ORM 1040 All funds that go to, or are on behalf of people in the family Are anticipated to be received for the next 12 months Must project forward Use past tax forms as a base 3 rd party verifications are best Pay stubs may be used Ensure raises are included Have handy a calendar(s) How often is the person paid? Once a month? Every 2 weeks?

12. A NNUAL I NCOME – IRS F ORM 1040 Includes, but is not limited to: Salary, wages, tips, unemployment Interest, dividends Alimony received Business income Pensions and annuities Social security benefits Excludes, but is not limited to: IRA deductions Moving expenses Alimony paid

13. G OOD T O K NOW I NFORMATION : Verifications are good for 6 months 6 months starts from the time the funds are committed to the family/household When completing income verifications, verifier should sign and date If not clear how income determined, include worksheets Differences between the two definitions: Child support payments are not part of IRS Form 1040 IRS From 1040 allows for deduction of alimony payments Inheritance and insurance settlement are part of Section 8 asset calculation

14. U SEFUL I NFORMATION Chapter 3 of the “Purple Book” http://www.hud.gov/offices/cpd/affordablehousing/libr ary/modelguides/1780.pdf http://www.hud.gov/offices/cpd/affordablehousing/libr ary/modelguides/1780.pdf For Section 8: HUD Handbook 4350.3 REV-1, Chapter 5 http://www.hud.gov/offices/adm/hudclips/handbooks/h sgh/4350.3/index.cfm http://www.hud.gov/offices/adm/hudclips/handbooks/h sgh/4350.3/index.cfm For IRS Form 1040: 1040 instructions http://www.irs.gov/pub/irs-pdf/i1040.pdf Should review every year to determine if there are changes On Line Income Calculator http://www.hud.gov/offices/cpd/affordablehousing/trai ning/web/calculator/calculator.cfm http://www.hud.gov/offices/cpd/affordablehousing/trai ning/web/calculator/calculator.cfm

15. M OST C URRENT I NCOME L IMITS Ask Duluth On the HUD Website: http://www.huduser.org/portal/datasets/il.html Once on the above page, click on the year you are looking for. Scroll down the next page until you get to the USA map and click on Minnesota. The limits to use are “Duluth, MN-WI MSA”

16. Q UESTIONS ?