1. Income Determination What you always wanted to know and didn’t know how to ask... Debbie Davis & Anita Racicot, MFA Ted Swisher, Santa Fe Habitat

2. Households vs. Family • Based on income earned by all adults in household or family • Households • Used for all housing activities • Could be one or more individuals related or unrelated living in same dwelling unit • Persons who are members of a family • Related by blood, marriage or adoption

3. What is income Wages and tips Social Security, SSI Public assistance (AFDC or unemployment) Alimony and child support

4. . . . more • Pensions, retirement funds • Regular pay to members of Armed Forces • Parental support to students • VA retirement benefits

5. What is NOT income? • Income from kids under 18 years old • WINNING BIG AT THE LOTTERY • Scholarships • Hazardous duty pay • Temporary income, including gifts • FOOD STAMPS • Job Training Partnership Act • Earned income credit

6. Acceptable proof of income • Independent third party verification of wages (Income Verification form) • VA, Social Security award letters • Financial statement • Divorce decree • Unemployment - award notification or checks

7. . . . more • AFDC printout • Notarized letter from parents or payee (example: person paying child support, paying for daycare) • If no alternative, at least 3 pay stubs

8. Assets - what are they?Must be more than $5,000 • Savings accounts • Stocks, bonds, money market funds • Real property equity • Trusts • IRA, Keogh, 401k plans • LOTTERY WINNINGS, inheritances

9. Assets: what they’re NOT. . . • Necessary personal property (stereos, TVs, cars, furniture, etc.) • Interest in Indian trust lands • Vehicles equipped for the handicapped

10. Examples • Military Pay Stub (what is included) • Income Verification (when employed) • Section 8 • AFDC • CSEB printout • Unemployment awards

11. How to calculate income • Employed 40 hours per week: multiply wage by 2080 • $5 x 2080 = $10,400 • Less than 40 hours, multiply hours by wage, then by 52 • 32 x $5 = $160 • $160 x 52 = $8,320

12. More . . . • Monthly: multiply wage x 12 • $800 x 12 = $9,600 • Paid weekly = 52 pay periods • Paid bi-weekly = 26 pay periods • Paid semi-monthly = 24 pay periods • Add in asset income • Total of income sources for ALL MEMBERS OF THE HOUSEHOLD

13. Income Limits • All applicants must be at or below applicable income limit • Income limits (AMGI) published annually by HUD, then MFA Board approves updates • MSA or county where project is located • Based on household size at the time of move in • Household member is anyone that will be occupying unit, including unborn children

14. Additional eligibility subjects. . . • Section 8 • Live-in care attendants • Parents with joint custody • Foster children or adults

15. Documentation • Application • Every prospective applicant must complete • Collects information about household, including names, ages, social security numbers, gender, relationship to head • Must list all sources of income and assets for household • Ask about status – students, receiving rental assistance, temporarily absent family members? • Release language on application or a separate release form must be in file

16. Verifications • FOR ALL HOUSEHOLD INCOME AND ASSETS • Third party (SIMPLY THE BEST!) • Written verifications received from a third party source independent from the applicant • Can be faxed to source, then faxed back • Effective for 90 days from date information returned to management (use a date stamp). • Clarification record can extend for 30 days – shows information re-verified by management by phone. • DON’T WRITE ON THE SOURCE DOCUMENT

17. More Verifications • First party or self affidavits • Must be notarized • Used when no other way to verify information or • Negative verification MFA ALLOWS • Social Security/VA award letters • HSD printouts • Unemployment award notices • Second party only when not possible to get third party • Check stubs (at least 3), grant award letters, bank statements or W-2 forms

18. And don’t forget . . . • Don’t assume there are four weeks in each month • If indicated on verification, don’t forget overtime • Service industry – TIPS! • Child support – must include if ordered but no attempt made to collect • Part-time jobs

19. Assets • Money held in a lump sum that is accessible to the household, including minors • Checking, savings, CD’s are accessible • Trust funds are not accessible • Asset income is greater of actual income or imputed income • Less than $5,000 Affidavit • HUD Passbook rate is 2%

20. Tips for success Do not let anyone move in to your unit, project, home, etc. until you have verified their income.