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Annie Stevenson

Annie Stevenson

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Annie Stevenson

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  1. Verification Techniques Annie Stevenson

  2. Welcome to Lunch N Learn! • Upcoming topics for the occupancy series: • 8/1/08: Factors of Eligibility (PH and HCV) • 8/15/08: EIV • 9/4/08: PH Denials and Terminations • 9/5/08: HCV Reasonable Accommodation

  3. Welcome to Lunch N Learn! • Today’s topics: • Total tenant payment calculation • Minimum rent • Utility allowances • Flat rents

  4. Total Tenant Payment

  5. Total Tenant Payment • TTP is highest of: • 10% total monthly income • 30% monthly adjusted Income • the welfare rent • minimum rent

  6. How to Get TTP • Annual Income $2000 • 4 children x $480 1920 • Adjusted Income $ 80 • Annual divided by 12 = $167 (mo. Inc) • Adjusted divided by 12 = $7 (mo adj inc)

  7. How to Get TTP • 10% of $167 = $17 • 30% of $7 = $2 • Minimum Rent $25 • Welfare Rent $0 (N/A) • TTP is ??????

  8. TTP Calculation • Learning activity 1 • TTP calculation on 50058 • 8a = $15,780 • 8y = $11,392 • Minimum rent = $35

  9. Learning Activity 1 Answers 1,315 132 949 30 285 0 35 285 N

  10. Minimum Rent

  11. Minimum Rents • PHAs may establish minimum rents $0 - $50 • PHAs must adopt minimum rent hardship exemption policies

  12. Minimum Rent Hardship Exemptions • Lost eligibility/awaiting determination for Federal, State or local assistance program • Would be evicted as result of requirement

  13. Minimum Rent Hardship Exemptions • Family income decrease because of changed circumstances (unemployed) • Death in family • Other circumstances as determined by PHA or HUD

  14. Minimum Rent Process • PHA notifies family if TTP = Minimum Rent • Family requests exemption • PHA suspends payment beginning of next month (use next higher TTP) • Family not required to pay Minimum Rent during period • PHA may request reasonable documentation of hardship

  15. Minimum Rent Process • PHA must promptly determine • if hardship exists • whether temporary (PHA policy) or long term

  16. Minimum Rent Process • PHA may not evict the family for nonpayment of minimum rent for a 90-day period • Beginning the month following family’s request for a hardship exemption

  17. Minimum Rent Process • If PHA determines no hardship under statute, minimum rent is imposed retroactively

  18. Minimum Rent Process • If PHA determines the hardship is temporary • Must reinstate minimum rent retroactively to beginning of suspension • Reasonable repayment agreement offered

  19. Minimum Rent Process • If PHA determines hardship of long-term duration exists, minimum rent is exempted retroactively to date of family’s request for exemption • Exemption continues until hardship no longer exists

  20. PHA Procedures • PHA must have minimum rent hardship exemption policy • PHA must notify families • Of right to request hardship exemption • Hardship exemptions are subject to PHA’s informal hearing procedures

  21. TTP Calculation: Minimum Rent Hardship Exemption • Learning activity 2 • TTP calculation on 50058 • 8a = $900 • 8y = $55 • Minimum rent = $50 • Family requested and was granted exemption

  22. Learning Activity 2 Answers 75 8 5 30 2 0 0 8 Y

  23. Exemption Doesn’t Apply to Other Factors of TTP • Financial hardship exemption only applies to the payment of minimum rent and not to other elements used to calculate TTP • Example: • 30% of AMI $45 • 10% of MI $27 • PHA’s Min Rent $50 

  24. Utility Allowance

  25. Utility Allowance • PHAs are required to establish and maintain utility allowance schedules (see CFR 965.502) • A utility allowance is that amount approved by the PHA for reasonable monthly costs of local utility consumption

  26. Utility Allowance • Families responsible for utility costs (excluding telephone) will see a utility allowance applied to their rent calculation

  27. Tenant Rent

  28. Definitions for Income-Based Rent • Tenant Rent – amount payable by the family as rent to the PHA • Utility Reimbursement – amount by which utility allowance exceeds TTP • Income Based Rent – rent based upon family income, allowances and deductions

  29. Calculation of Tenant Rent and URP • To get Tenant Rent, subtract the utility allowance (UA) from TTP • If UA is greater than the TTP, Tenant Rent is zero and there is a Utility Reimbursement Payment (URP) • The URP is the difference between the TTP and the Utility Allowance • (Tenant credit on bottom line 10f of 50058)

  30. TTP $80 - UA 50 Tenant Rent $30 TTP 40 - UA 50 Tenant Rent 0 URP $10 Utility Allowances

  31. Rent Calculation • Learning activity 3 • Income-based rent calculation on 50058 • 8a = $12,312 8y = $10,020 • Minimum rent = $50 • Flat Rent = $550 • Utility Allowance = $75

  32. Learning Activity 3 Answers 1,026 103 835 30 251 0 50 251 N

  33. Learning Activity 3 Answers 251 550 251 75 176 X

  34. Rent Calculation • Learning activity 4 • Income-based rent calculation on 50058 • 8a = $3,212 8y = $792 • Minimum rent = $25 • Flat Rent = $425 • Utility Allowance = $100

  35. Learning Activity 4 Answers 268 27 66 30 20 0 25 27 N

  36. Learning Activity 4 Answers 27 425 27 100 73 X

  37. Ceiling Rents • Purpose • to set a maximum rent families will pay in PH, regardless of how high their income goes • Used prior to existence of flat rents

  38. Retaining Ceiling Rents • As of 10/1/2002, ceiling rents had to be adjusted to flat rent level • PH OCC Guidebook says flat rent + utility allowance = ceiling rent • No time limit on ceiling rents

  39. Ceiling Rent Calculation • Calculate TTP as normal • 30% of monthly adjusted income • 10% of monthly income • Welfare Rent (if applicable) • PHA's minimum TTP ($0 - 50 – PHA Policy) then…

  40. Ceiling Rent Calculation • Use the lesser of: • TTP just calculated • Ceiling rent for the unit • Formula: • TTP (ceiling rent) - UA = tenant rent

  41. Rent Calculation • Learning activity 5 • Income-based ceiling rent calculation • TTP = $ 398 • Ceiling rent = $ 350 • Flat Rent = $ 325 • Utility Allowance = $ 25

  42. Learning Activity 5 Answers 398 325 350 350 25 325 X

  43. Flat Rents • Effective for families admitted or recertified on/after 10/1/99 • There must be a flat rent established for each unit • Flat rent has no formula based limit on what tenant pays • Utility allowances are not deducted • Flat Rent = THE RENT

  44. Flat Rents • Flat Rent is: • based on PHA determination of rental value of the unit • designed to not create a disincentive for families to stay in PH as their income increases • Recertifications are done not less than once every 3 years

  45. Flat Rent Methodology • Market value is rent which would allow the unit to be successfully rented after preparation for occupancy • Acceptable methodology incorporates the same 9 factors used in Section 8 rent reasonableness methodology

  46. Flat Rent Methodology • Relevant factors must include: • Age • Location • Quality • Amenities • Size of unit • Housing services • Maintenance • Utilities provided by PHA • Unit type

  47. Flat Rents: Family Choice • Families elect annually whether to pay income based or flat rent • If family has elected to pay flat rent but has a hardship and is unable to pay, the PHA must allow the family to switch to income based rent • Income needs to be reviewed only every 3 years

  48. Switching Rent Determination Methods • Allowable hardships to switch from flat to income based rent • income decreased due to family circumstances • loss or reduction of employment or other income • death in the family

  49. Switching Rent Determination Methods • Allowable hardships to switch from flat to income based rent • expenses increased, due to changed circumstances • medical costs • child care • transportation, education or similar items • other situations in PHA policy

  50. Rent Calculation • Learning Activity 6 • Flat rent calculation • TTP = $ 450 • Flat Rent = $ 400