3. Administrative Plan FY 2026/27 — Anaheim City Council, August 25, 2026 (part 2 of 5)

4-II.C. OPENING AND CLOSING THE WAITING LIST [24 CFR 982.206 AND PIH NOTICE 2012-34]
Closing the Waiting List [24 CFR 982.206]
A PHA is permitted to close the waiting list if it has an adequate pool of families to use its available HCV assistance. Alternatively, the PHA may elect to continue to accept applications only from certain categories of families that meet particular preferences or funding criteria.

PHA Policy
The PHA currently maintains a continuously open waiting list. However, with PHA Board approval, the PHA can elect to close the waiting list when the estimated waiting period for housing assistance for applicants on the list reaches 36 months for the most current applicants. In the event the list is closed, where the PHA has particular preferences or funding criteria that require a specific category of family, the PHA may elect to continue to accept applications from these applicants while closing the waiting list to others.

Reopening the Waiting List
If the waiting list has been closed, it cannot be reopened until the PHA publishes a notice in local newspapers of general circulation, minority media, and other suitable media outlets. The notice must comply with HUD fair housing requirements and must specify who may apply, and where and when applications will be received.

The PHA may open its waiting list only to certain local preferences [PIH Notice 2012-34].

PHA Policy
The PHA will announce the reopening of the waiting list at least 10 business days prior to the date applications will first be accepted. If the list is only being reopened for certain categories of families, this information will be contained in the notice.

The PHA will give public notice by publishing the relevant information in one or more suitable media outlets including, but not limited to:
• The PHA website
• Orange County Register
• Anaheim Bulletin
• La Opinion

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Lottery Option [PIH Notice 2012-34]
The PHA may consider the use of a lottery or other random choice technique to select which applicants will be placed on the waiting list. The PHA should consider whether this is a reasonable approach in their jurisdiction. If a PHA uses this approach, the PHA must describe it in their PHA plan or administrative plan and any public notice of a waiting list opening must clearly state that this system will be used to place applicants on the waiting list.

PHA Policy
The PHA may use the lottery system to select applicants to be placed on the waiting list and their order of placement. If the PHA decides to use the lottery system, the PHA will fully describe the system of lottery selection to be used in the public notice.

After all complete and unduplicated applications are received during the waiting list opening, the PHA may conduct a random lottery to select the applicants if more than the maximum number of applications are received. Applicants will either be randomly assigned a number or an application date and time. The PHA may also use another method to determine a random order of applicants on the waiting list. The randomly placed applicants will be sorted according to the PHA preferences listed in Section 4- III.C.

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4-II.D. FAMILY OUTREACH [HCV GB, PP. 4-2 TO 4-4]
The PHA must conduct outreach as necessary to ensure that the PHA has a sufficient number of applicants on the waiting list to use the HCV resources it has been allotted.

Because HUD requires the PHA to admit a specified percentage of extremely low-income families to the program (see Chapter 4, Part III), the PHA may need to conduct special outreach to ensure that an adequate number of such families apply for assistance [HCV GB, p. 4-20 to 4- 21].

PHA outreach efforts must comply with fair housing requirements. This includes:
• Analyzing the housing market area and the populations currently being served to identify underserved populations
• Ensuring that outreach efforts are targeted to media outlets that reach eligible populations that are underrepresented in the program
• Avoiding outreach efforts that prefer or exclude people who are members of a protected class PHA outreach efforts must be designed to inform qualified families about the availability of assistance under the program. These efforts may include, as needed, any of the following activities:
• Submitting press releases to local newspapers, including minority newspapers • Developing informational materials and flyers to distribute to other agencies • Providing application forms to other public and private agencies that serve the low-income population
• Developing partnerships with other organizations that serve similar populations, including agencies that provide services for persons with disabilities PHA Policy
The PHA will monitor the characteristics of the population being served and the characteristics of the population as a whole in the PHA’s jurisdiction. Targeted outreach efforts will be undertaken if a comparison suggests that certain populations are being underserved.

4-II.E. REPORTING CHANGES IN FAMILY CIRCUMSTANCES
PHA Policy
While the family is on the waiting list, the family must inform the PHA of changes in contact information, including current residence, mailing address, family composition, income, and phone number, as they occur. The changes must be submitted in writing or online.

The PHA uses the current mailing address to send notifications when there are openings in the program. When mail is returned by the post office, the applicant’s name will be removed from the waiting list. A notice of denial (see Chapter 3) will not be sent to the family’s address of record, as the address on record will no longer be considered valid.

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4-II.F. UPDATING THE WAITING LIST [24 CFR 982.204]
HUD requires the PHA to establish policies to use when removing applicant names from the waiting list.

Purging the Waiting List
The decision to withdraw an applicant family that includes a person with disabilities from the waiting list is subject to reasonable accommodation. If the applicant did not respond to a PHA request for information or updates, and the PHA determines that the family did not respond because of the family member’s disability, the PHA must reinstate the applicant family to their former position on the waiting list [24 CFR 982.204(c)(2)].

PHA Policy
When the PHA is actively conducting outreach to applicants on the waiting list, the notification of available housing opportunities will serve as verification and will be used to purge the waiting list.

When the PHA is not actively conducting outreach, that is, no notification of housing opportunities have gone out in the last 12 month period, the waiting list will be updated as needed to ensure that all applicant information is current and timely.

To update the waiting list, the PHA will send an update request via first-class mail to each family on the waiting list to determine whether the family continues to be interested in, and to qualify for, the program. This update request will be sent to the last address that the PHA has on record for the family. The update request will provide a deadline by which the family must respond and will state that failure to respond will result in the applicant’s name being removed from the waiting list.

The family’s response must be in writing and may be delivered in person, by mail, by fax, or through an online format, as specified in the notification to the family. Responses should be postmarked or received by the PHA not later than 15 business days from the date of the PHA letter.

If the family fails to respond within 15 business days, the family will be removed from the waiting list without further notice.

If the notice is returned by the post office, the applicant will be removed from the waiting list without further notice.

If a family is removed from the waiting list for failure to respond, the PHA may reinstate the family if it is determined that the lack of response was due to PHA error, or to circumstances beyond the family’s control, as a result of a family member’s disability, or as a direct result of status as a victim of domestic violence, dating violence, sexual assault, stalking, or human trafficking, including an adverse factor resulting from such abuse.

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Removal from the Waiting List
PHA Policy
Families will be allowed to remain on the preliminary waiting list until there are openings in the program and it is time to assess the family’s eligibility for the active waiting list.

If at any time an applicant family is on the waiting list, the PHA determines that the family is not eligible for assistance (see Chapter 3), the family will be removed from the waiting list.

If a family is removed from the waiting list because the PHA has determined the family is not eligible for assistance, a notice will be sent to the family’s address of record. The notice will state the reasons the family was removed from the active waiting list and will inform the family how to request an informal review regarding the PHA’s decision (see Chapter 16) [24 CFR 982.201(f)].
© Copyright 2023 Nan McKay & Associates, Inc. Adminplan 4/1/26 Unlimited copies may be made for internal use.

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PART III: SELECTION FOR HCV ASSISTANCE

4-III.A. OVERVIEW
As vouchers become available, families on the waiting list must be selected for assistance in accordance with the policies described in this part.

The order in which families are selected from the waiting list depends on the selection method chosen by the PHA and is impacted in part by any selection preferences for which the family qualifies. The availability of targeted funding also may affect the order in which families are selected from the waiting list.

The PHA must maintain a clear record of all information required to verify that the family is selected from the waiting list according to the PHA’s selection policies [24 CFR 982.204(b) and 982.207(e)].

4-III.B. SELECTION AND HCV FUNDING SOURCES
Special Admissions [24 CFR 982.203]
HUD may award funding for specifically-named families living in specified types of units (e.g., a family that is displaced by demolition of ublic housing; a non-purchasing family residing in a HOPE 1 or 2 projects). In these cases, the PHA may admit such families whether or not they are on the waiting list, and, if they are on the waiting list, without considering the family’s position on the waiting list. These families are considered non-waiting list selections. The PHA must maintain records showing that such families were admitted with special program funding.

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Targeted Funding [24 CFR 982.204(e)]
HUD may award a PHA funding for a specified category of families on the waiting list. The PHA must use this funding only to assist the families within the specified category. Within this category of families, the order in which such families are assisted is determined according to the policies provided in Section 4-III.C.

PHA Policy
The PHA administers the following types of targeted funding:

Mainstream for Persons with a Disability - Mainstream vouchers are awarded to disabled families on the HCV waiting list. AHA applies local preferences in determining the order in which Mainstream vouchers are awarded to eligible families.

Family Unification Program (FUP) – FUP vouchers are awarded to families who are referred to AHA by the Orange County Department of Children Services.

AHA applies local preferences in determining the order in which FUP vouchers are awarded to eligible families. As allowed by HUD regulations, when a FUP voucher is vacated, AHA will use the initial FUP voucher to assist families from the regular HCV waiting list.

Non-Elderly Disabled (NEDs) Vouchers – NEDs vouchers are awarded to non- elderly disabled families on the HCV waiting list. AHA applies local preferences in determining the order in which NEDs vouchers are awarded to eligible families.

Emergency Housing Vouchers (EHV) - EHVs are issued to individuals and families who are homeless, at-risk of homelessness, fleeing, or attempting to flee, domestic violence, dating violence, sexual assault, stalking, or human trafficking, or were recently homeless or have a high risk of housing instability. EHVs are administered in accordance to the policies in Chapter 16 Part X of this Plan.

HUD-Veteran Affairs Supportive Housing (HUD-VASH) - HUD-VASH vouchers are issued to homeless Veterans or Veteran families and are administered in accordance with the policies in Chapter 16 Part XI of this Plan.

Regular HCV Funding
Regular HCV funding may be used to assist any eligible family on the waiting list. Families are selected from the waiting list according to the policies provided in Section 4-III.C.

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4-III.C. SELECTION METHOD
PHAs must describe the method for selecting applicant families from the waiting list, including the system of admission preferences that the PHA will use [24 CFR 982.202(d)].

Local Preferences [24 CFR 982.207; HCV p. 4-16]
PHAs are permitted to establish local preferences and to give priority to serving families that meet those criteria. HUD specifically authorizes and places restrictions on certain types of local preferences. HUD also permits the PHA to establish other local preferences, at its discretion.

Any local preferences established must be consistent with the PHA plan and the consolidated plan, and must be based on local housing needs and priorities that can be documented by generally accepted data sources.

PHA Policy
The PHA may open its waiting list only to certain local preferences [PIH Notice 2012- 34].

The following is a list of local preferences offered by the PHA in their order of selection.

1. Special Needs Populations
a. The PHA will commit up to 50% of annual new admission vouchers to assist Anaheim-based families who are either:
i. Homeless and referred by an approved local service provider because they are participating in a local transitional housing program or are receiving other supportive and shelter services from that provider.

Providers may be required to verify that applicants had ties to Anaheim prior to entering the shelter and commit to providing appropriate services to the client; or
ii. Participating in a city-funded homeless or at risk of becoming homeless program and have been referred by the connected service agency.
b. Families who are being terminated from the Housing Opportunities for Persons with AIDS (HOPWA) program, due to the qualifying member being deceased.

Applicants must meet all eligibility requirements. Admissions will be on a first-come, first-served basis and are subject to funding availability.

2. Emergency Housing Voucher (EHV) families (PIH Notice 2025-19) Currently assisted EHV families whose assistance is at risk of termination due to a lack of program funding, in the following order:
a. EHV families with an elderly and disabled head of household, spouse, or co- head.
b. EHV families with an elderly head of household, spouse, or co-head. c. EHV families with a disabled head of household, spouse, or co-head. d. EHV families with minors under 18.
e. All other families who are currently assisted under the EHV program. © Copyright 2023 Nan McKay & Associates, Inc. Adminplan 4/1/26 Unlimited copies may be made for internal use.

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Within each sub-category, families will be placed in randomized order to ensure fairness in the transition process.

3. The PHA may issue vouchers to families who live or work in the City of Anaheim and are referred by the Anaheim Police Department. These types of referrals will be limited to victims of a crime, the magnitude or impact of which requires rapid relocation.

Referrals must be made in writing on Anaheim Police Department letterhead, and signed by the Chief or Deputy Chief of Police only. Eligibility, including background checks, will be confirmed for all members. All referrals are subject to the approval of the Executive Director or designee.

4. Eligible families who are displaced as a result of a project sponsored by the City of Anaheim Community Development Department or other City of Anaheim Department.

5. Any family that has been terminated from the City of Anaheim HCV program due to insufficient program funding.

6. Families who live, work, or have been hired to work in Anaheim (Residency preference).

State Required Priority: Veterans (including surviving spouses of veterans) and current members of the armed services will have priority within the preference categories listed above. To receive a veteran’s preference, the household must include a veteran, a surviving spouse of a veteran, or a current member of the armed forces. The veteran must be able to document a discharge status other than dishonorable.

Income Targeting Requirement [24 CFR 982.201(b)(2)]
HUD requires that extremely low-income (ELI) families make up at least 75% of the families admitted to the HCV program during the PHA’s fiscal year. ELI families are those with annual incomes at or below 30% of the area median income. To ensure this requirement is met, a PHA may skip non-ELI families on the waiting list in order to select an ELI family.

Low income families admitted to the program that are “continuously assisted” under the 1937 Housing Act [24 CFR 982.4(b)], as well as low-income or moderate-income families admitted to the program that are displaced as a result of the prepayment of the mortgage or voluntary termination of an insurance contract on eligible low-income housing, are not counted for income targeting purposes [24 CFR 982.201(b)(2)(v)].

PHA Policy
The PHA will monitor progress in meeting the ELI requirement throughout the fiscal year. Extremely low-income families will be selected ahead of other eligible families on an as-needed basis to ensure the income targeting requirement is met.

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Order of Selection
The PHA system of preferences may select families based on local preferences according to the date and time of application or by a random selection process (lottery) [24 CFR 982.207(c)]. If a PHA does not have enough funding to assist the family at the top of the waiting list, it is not permitted to skip down the waiting list to a family that it can afford to subsidize when there are not sufficient funds to subsidize the family at the top of the waiting list [24 CFR 982.204(d) and (e)].

PHA Policy
Families will be selected from the waiting list based on the targeted funding or selection preference(s) for which they qualify, and in accordance with the PHA’s hierarchy of preferences, if applicable. Within each targeted funding or preference category, families will be selected on a first-come, first-served basis according to the date and time their complete application is received by the PHA. Documentation will be maintained by the PHA as to whether families on the list qualify for and are interested in targeted funding.

If a higher-placed family on the waiting list is not qualified or not interested in targeted funding, there will be a notation maintained so that the PHA does not have to ask higher- placed families each time targeted selections are made.

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4-III.D. NOTIFICATION OF SELECTION
When a family has been selected from the waiting list, the PHA must notify the family [24 CFR 982.554(a)].

PHA Policy
The PHA will notify families on the preliminary waiting list by first class mail when they are selected from the waiting list. The notice will inform the family of the following:

The method of the application process:

If the application process will require an in-person interview, then the notice will contain the date, time, location of the scheduled application interview, any procedures for rescheduling, and list who is required to attend If the application process will be conducted by-mail, the notice will contain the application due date and any procedures for requesting an extension Documents that must be provided to the PHA to document the legal identity of household members, including information about what constitutes acceptable documentation
Other documents and information that should be submitted to the PHA by the established due date
If a notification letter is returned by the post office, the family will be removed from the waiting list. A notice of denial (see Chapter 3) will not be sent to the family’s address of record, as the address on record is will no longer be considered valid.

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4-III.E. THE APPLICATION INTERVIEW
HUD recommends that the PHA obtain the information and documentation needed to make an eligibility determination through a face-to-face interview with a PHA representative [HCV GB, pg. 4-16]. Being invited to attend an interview does not constitute admission to the program.

Assistance cannot be provided to the family until all SSN documentation requirements are met.

However, if the PHA determines that an applicant family is otherwise eligible to participate in the program, the family may retain its place on the waiting list for a period of time determined by the PHA [Notice PIH 2018-24].

Reasonable accommodation must be made for persons with disabilities who are unable to attend an interview due to their disability.

PHA Policy
Families selected from the waiting list may be required to participate in an eligibility interview or a mail-in application.

If the family is required to attend an interview, the head of household and the spouse/cohead will be strongly encouraged to attend the interview together. However, either the head of household or the spouse/cohead may attend the interview on behalf of the family. Verification of information pertaining to adult members of the household not present at the interview will not begin until signed release forms are returned to the PHA.

The interview will be conducted only if the head of household or spouse/cohead provides appropriate documentation of legal identity. (Chapter 7 provides a discussion of proper documentation of legal identity). If the family representative does not provide the required documentation, the appointment may be rescheduled when the proper documents have been obtained.

If the family is required to complete a mail-in application, all required verifications must be submitted with the completed application by the due date indicated on the cover letter.

Pending disclosure and documentation of social security numbers, the PHA will allow the family to retain its place on the waiting list for a maximum of 30 days. If not all household members have disclosed their SSNs at the next time the PHA is issuing vouchers, the PHA will issue a voucher to the next eligible applicant family on the waiting list.

The family must provide the information necessary to establish the family’s eligibility and determine the appropriate level of assistance, must complete required forms, provide required signatures, and submit required documentation. If any materials are missing, the PHA will provide the family with a written list of items that must be submitted.

Any required documents or information that the family is unable to provide at the interview must be provided within 10 business days of the interview. If the family completed a mail-in application and was unable to provide all required documents at that time, the family will be mailed a letter indicating all outstanding documents. The family will have 10 business days from the date of that letter to provide all required documents. (Chapter 7 provides details about longer submission deadlines for particular items, including documentation of Social Security numbers and eligible noncitizen status). If the family is unable to obtain the information or materials within the required time frame, the © Copyright 2023 Nan McKay & Associates, Inc. Adminplan 4/1/26 Unlimited copies may be made for internal use.

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family may request an extension. If the required documents and information are not provided within the required time frame (plus any extensions), the family will be sent a notice of denial (See Chapter 3).

An advocate, interpreter, or other assistant may assist the family with the application and the interview process.

Interviews will be conducted in English. For limited English proficient (LEP) applicants, the PHA will provide translation services in accordance with the PHA’s LEP plan.

If the family is unable to attend a scheduled interview, the family must contact the PHA in advance of the interview to schedule a new appointment. If a family does not attend a scheduled interview without the PHA’s prior approval, the family will be denied assistance based on the family’s failure to supply information needed to determine eligibility. A notice of denial will be issued in accordance with policies contained in Chapter 3.

If the family is required to complete a mail-in application and is unable to submit the application by the due date, the family must contact the PHA in advance and request an extension. If the family does not submit the application by the due date and does not have a PHA-approved extension, the family will be denied assistance based on the family’s failure to supply information needed to determine eligibility. A notice of denial will be issued in accordance with policies contained in Chapter 3.

If the family did not attend an interview or submit their application packet due to circumstances beyond their control, including disability, illness or other circumstances, the PHA may grant the family a second opportunity to attend an interview or submit the mail-in application. The PHA may require appropriate documentation of the circumstances claimed by the family prior to granting the accommodation. © Copyright 2023 Nan McKay & Associates, Inc. Adminplan 4/1/26 Unlimited copies may be made for internal use.

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4-III.F. COMPLETING THE APPLICATION PROCESS
The PHA must verify all information provided by the family (see Chapter 7). Based on verified information, the PHA must make a final determination of eligibility (see Chapter 3) and must confirm that the family qualified for any special admission, targeted funding admission, or selection preference that affected the order in which the family was selected from the waiting list.

PHA Policy
If the PHA determines that the family is ineligible, the PHA will send written notification of the ineligibility determination within 10 business days of the determination. The notice will specify the reasons for ineligibility and will inform the family of its right to request an informal review (Chapter 16).

If a family fails to qualify for any criteria that affected the order in which it was selected from the waiting list (e.g. targeted funding, extremely low-income), the family will be returned to its original position on the waiting list. If the family failed to qualify for a preference that affected the order in which it was selected from the waiting list, the family will be returned to the waiting list without the benefit of preference. The PHA will notify the family in writing that it has been returned to the waiting list, and will specify the reasons for it.

If the family applies to a waiting list that is only open for a specific preference, and the family does not qualify, the family will be sent a notice of denial as outlined in Section 3- III.F. If the PHA determines that the family is eligible to receive assistance, the PHA will invite the family to attend a briefing in accordance with the policies in Chapter 5. © Copyright 2023 Nan McKay & Associates, Inc. Adminplan 4/1/26 Unlimited copies may be made for internal use.

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CHAPTER 5

BRIEFINGS AND VOUCHER ISSUANCE

INTRODUCTION
This chapter explains the briefing and voucher issuance process. When a family is determined to be eligible for the Housing Choice Voucher (HCV) program, the PHA must ensure that the family fully understands the way the program operates and the family’s obligations under the program. This is accomplished through both an oral briefing and provision of a briefing packet containing the HUD-required documents and other information the family needs to know in order to lease a unit under the program. Once the family is fully informed of the program’s requirements, the PHA issues the family a voucher. The voucher includes the unit size for which the family qualifies based on the PHA’s subsidy standards, as well as the issue and expiration date of the voucher. The voucher is the document that authorizes the family to begin its search for a unit and limits the amount of time the family has to successfully locate an acceptable unit.

This chapter describes HUD regulations and PHA policies related to these topics in two parts:

Part I: Briefings and Family Obligations. This part details the program’s requirements for briefing families orally, and for providing written materials describing the program and its requirements. It includes a particular focus on the family’s obligations under the program.

Part II: Subsidy Standards and Voucher Issuance. This part discusses the PHA’s standards for determining how many bedrooms a family of a given composition qualifies for, which in turn affects the amount of subsidy the family can receive. It also discusses the policies that dictate how vouchers are issued, and how long families have to locate a unit.

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PART I: BRIEFINGS AND FAMILY OBLIGATIONS

5-I.A. OVERVIEW
HUD regulations require the PHA to conduct mandatory briefings for applicant families who qualify for a voucher. The briefing provides a broad description of owner and family responsibilities, explains the PHA’s procedures, and includes instructions on how to lease a unit.

This part describes how oral briefings will be conducted, specifies what written information will be provided to families, and lists the family’s obligations under the program. The PHA must take reasonable steps to ensure meaningful access by persons with Limited English proficiency.

5-I.B. BRIEFING [24 CFR 982.301]
General Briefing Guidelines
To ensure that applicants have an equal opportunity to participate in the program, the PHA must ensure that notices and communications during all the briefing sessions and meetings are provided in a manner that is effective for persons with hearing, visual, and other disabilities consistent with Section 504, and the ADA [HCV Guidebook, Housing Search and Leasing Chapter, November 2020].

PHA Policy
Briefings will be conducted in group meetings.

Generally, the head of household is required to attend the briefing. If the head of household is unable to attend, the PHA may approve another adult family member to attend the briefing.

Families that attend group briefings and still need individual assistance will be referred to an appropriate PHA staff person.

Briefings will be conducted in English. For limited English proficient (LEP) applicants, the PHA will provide translation services in accordance with the PHA’s LEP plan in Chapter 2.III.

The PHA will ensure effective communication with program accessibility to persons with disabilities by complying with the policies in Chapter 2.II.F.

Attendance
PHA Policy
Applicants who fail to attend a scheduled briefing will automatically be scheduled for another briefing. The PHA will notify the family of the date and time of the second scheduled briefing. Applicants who fail to attend two scheduled briefings, without PHA approval, will be denied assistance (see Chapter 3).

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Notification of Briefing
Prior to issuance of a voucher, the PHA must give the family an oral briefing and provide the family with a briefing packet containing written information about the program. Families may be briefed in individual face-to-face meetings, through group briefing sessions, or via remote briefing sessions.

PHA Policy
Families will be notified of their eligibility for assistance at the time they are invited to attend a briefing. The notice will identify who is required to attend the briefing, as well as the date and time of the scheduled briefing. The notice may be sent by first-class mail and/or by email if the family has provided a valid email address to the PHA.

The notice will advise the family of the type of briefing, who is required to be present at the briefing, and the date and time of the briefing. The notice will also inform the family of any additional requirements for in-person or remote briefings, as outlined in the sections below.

If the notice is returned by the post office, the family will be removed from the waiting list. A notice of denial (see Chapter 3) will not be sent to the family’s address of record, as the address on record is no longer be considered valid.

In-Person Briefings
At the briefing, the PHA must ensure effective communication in accordance with Section 504 requirements (Section 504 of the Rehabilitation Act of 1973) and ensure that the briefing site is accessible to individuals with disabilities. For a more thorough discussion of accessibility requirements, refer to Chapter 2.

Remote Briefings [Notice PIH 2020-32]
Remote briefings may be conducted over the phone, via video conferencing, or through other virtual platforms.

PHA Policy
The PHA has the sole discretion to require that briefings be conducted remotely. If the PHA schedules a remote briefing, the PHA will conduct a face-to-face briefing upon request of the applicant as a reasonable accommodation for a person with a disability if safety and health concerns can be reasonably addressed.

In addition, the PHA will conduct a briefing remotely upon request of the applicant as a reasonable accommodation for a person with a disability, if an applicant does not have childcare or transportation that would enable them to attend the briefing, or if the applicant believes an in-person briefing would create an undue health risk. The PHA will consider other reasonable requests for a remote briefing on a case-by-case basis.

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Accessibility Requirements for Persons with Disabilities and LEP Individuals As with in-person briefings, the platform for conducting remote briefings must be accessible, and the briefing must be conducted in accordance with Section 504 and accessibility requirements.

This includes ensuring any information, websites, emails, digital notifications, and other virtual platforms are accessible for persons with vision, hearing, and other disabilities. Further, providing effective communication in a digital context may require the use of individualized auxiliary aids or services, such as audio description, captioning, sign language and other types of interpreters, keyboard accessibility, accessible documents, screen reader support, and transcripts.

Auxiliary aids or services must be provided in accessible formats, in a timely manner, and in such a way to protect the privacy and independence of the individual.

If no method of conducting a remote briefing is available that appropriately accommodates an individual’s disability, the PHA may not hold against the individual their inability to participate in the remote briefing, and the PHA should consider whether postponing the remote briefing to a later date is appropriate or whether there is a suitable alternative.

Due to the individualized nature of disability, the appropriate auxiliary aid or service necessary, or reasonable accommodation, will depend on the specific circumstances.

Limited English Proficiency (LEP) requirements also apply to remote briefings, including the use of interpretation services and document translation. See Chapter 2 for a more thorough discussion of accessibility and LEP requirements, all of which apply in the context of remote briefings.

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Conducting Remote Briefings
The PHA must ensure that the lack of technology or inability to use technology for remote briefings does not pose a disadvantage to families that may not be apparent to the PHA. The PHA must ensure that the family has appropriate technological access in order to fully participate in the remote briefing.

PHA Policy
The PHA will provide written notice via first-class mail and/or email to families attending the briefing, outlining the technological requirements for connection. The written notice will also request that the family notify the PHA of any known technological barriers. The PHA may also contact the family by telephone prior to the briefing to identify potential technological barriers and to determine which technology resources are accessible to the family. The PHA will resolve any barriers using the guidance in Section 6 of Notice PIH 2020-32, including offering the family the opportunity to attend an in-person briefing or have a one-on-one briefing over the phone, as appropriate.

The PHA may conduct remote briefings via a video conferencing platform when available. If applicants are unable to adequately access the video conferencing platform, the briefing will be conducted by telephone conferencing call-in. If the family is unable to adequately access the telephone conferencing call-in, the remote briefing will be postponed, and an in-person alternative or one-on-one briefing over the phone will be provided.

The PHA will provide login information and/or conferencing call-in information and an electronic copy of the briefing packet via email at the time they are invited to the SSbriefing. The PHA will provide a paper copy of the briefing packet upon family request and may reschedule the briefing to allow adequate time for the family to receive the physical briefing packet.

The PHA will ensure that all electronic information stored or transmitted as part of the briefing meets the requirements for accessibility for persons with disabilities and persons with LEP, and is secure, including ensuring personally identifiable information (PII) is protected (Notice PIH 2015-06).

The PHA will ensure that families who participate in remote briefings have the opportunity to ask questions as part of the briefing.

If families lose connectivity during any remote briefing or otherwise feel they were unable to access information presented during the briefing, the family may request a one- on-one briefing over the phone or in person with the PHA.

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Oral Briefing [24 CFR 982.301(a)]
Each briefing must provide information on the following subjects:
• How the Housing Choice Voucher program works;
• Family and owner responsibilities;
• Where the family can lease a unit, including renting a unit inside or outside the PHA’s jurisdiction and any information on selecting a unit that HUD provides; • An explanation of how portability works;
• The PHA must inform the family of how portability may affect the family’s assistance through screening, subsidy standards, payment standards, and any other elements of the portability process which may affect the family’s assistance; and • An explanation of the advantages of areas that do not have a high concentration of low- income families.

The PHA may not discourage the family from choosing to live anywhere in the PHA’s jurisdiction or outside the PHA’s jurisdiction under portability, unless otherwise expressly authorized by statute, regulation, PIH Notice, or court order.

The PHA must take appropriate steps to ensure effective communication in accordance with 24 CFR 8.6 and 28 CFR part 35, subpart E, and must provide information on the reasonable accommodation process.

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Briefing Packet [24 CFR 982.301(b); New HCV GB, Housing Search and Leasing, p. 7] Documents and information provided in the briefing packet must include the following:
• The term of the voucher, and the PHA’s policies on any extensions or suspensions of the term. If the PHA allows extensions, the packet must explain how the family can request an extension.
• A description of the method used to calculate the housing assistance payment for a family, including how the PHA determines the payment standard for a family and how the PHA determines total tenant payment for a family.
• An explanation of how the PHA determines the maximum allowable rent for an assisted unit. • Where the family may lease a unit and an explanation of how portability works, including information on how portability may affect the family’s assistance through screening, subsidy standards, payment standards, and any other elements of the portability process that may affect the family’s assistance.
• The HUD-required tenancy addendum, which must be included in the lease. • The form the family must use to request approval of tenancy, and an explanation of how to request approval.
• A statement of the PHA policy on providing information about families to prospective owners.
• The PHA subsidy standards, including when the PHA will consider granting exceptions as allowed by 24 CFR 982.404(b)(8), and when exceptions are required as a reasonable accommodation for persons with disabilities under Section 504, the Fair Housing Act, or the Americans with Disabilities Act (ADA).
• Materials (e.g., brochures) on how to select a unit and any additional information on selecting a unit that HUD provides (e.g., HUD brochure entitled, “A Good Place to Live”). • Section 504 coordinator, a copy of the housing discrimination complaint form, and information on how to request a reasonable accommodation or modification (including information on requesting exception payment standards as a reasonable accommodation) under Section 504, the Fair Housing Act, or the Americans with Disabilities Act (ADA). • A list of landlords known to the PHA who may be willing to lease a unit to the family or other resources (e.g., newspapers, organizations, online search tools) known to the PHA that may assist the family in locating a unit. PHAs must ensure that the list of landlords or other resources covers areas outside of poverty or minority concentration. • Notice that if the family includes a person with disabilities, the PHA is subject to requirements under 24 CFR 8.28(a)(3) to provide a current listing of accessible units known to the PHA, and if necessary, other assistance in locating an available unit. • The family obligations under the program.
• PHA informal hearing procedures including when the PHA is required to offer a participant family the opportunity for an informal hearing, and how to request the hearing. © Copyright 2023 Nan McKay & Associates, Inc. Adminplan 4/1/26 Unlimited copies may be made for internal use.

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• An explanation of the advantages of moving to an area that does not have a high concentration of low-income families, which may include access to accessible and high- quality housing, transit, employment opportunities, educational opportunities, recreational facilities, public safety stations, retail services, and health services.

If the PHA is located in a metropolitan FMR area, the following additional information must be included in the briefing packet in order to receive full points under SEMAP Indicator 7, Expanding Housing Opportunities [24 CFR 985.3(g)]:
• Maps showing areas with housing opportunities outside areas of poverty or minority concentration, both within its jurisdiction and its neighboring jurisdiction • Information about the characteristics of these areas including job opportunities, schools, transportation, and other services
• An explanation of how portability works, including a list of portability contact persons for neighboring PHAs with names, addresses, and telephone numbers

Additional Items to Be Included in the Briefing Packet
In addition to items required by the regulations, PHAs may wish to include supplemental materials to help explain the program to both participants and owners [HCV GB p. 8-7, Notice PIH 2017-12].

PHA Policy
The PHA will provide the following additional materials in the briefing packet:

Requirements for notifying the PHA of any changes in income or family composition
The grounds on which the PHA may terminate assistance for a participant family because of family action or failure to act
The HUD pamphlet on lead-based paint entitled, “Protect Your Family from Lead in Your Home” [24 CFR 35.88]
Information on how to fill out and file a housing discrimination complaint form The form HUD-5380 domestic violence certification form and the form HUD-5382 notice of occupancy rights, which contain information on VAWA protections for victims of domestic violence, dating violence, sexual assault, and stalking
“Is Fraud Worth It?” (form HUD-1141-OIG), which explains the types of actions a family must avoid and the penalties for program abuse “What You Should Know about EIV,” a guide to the Enterprise Income Verification (EIV) system published by HUD as an attachment to Notice PIH 2017-12
Information on the FSS program – benefits of the program and how to enroll © Copyright 2023 Nan McKay & Associates, Inc. Adminplan 4/1/26 Unlimited copies may be made for internal use.

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5-I.C. FAMILY OBLIGATIONS
Obligations of the family are described in the housing choice voucher (HCV) regulations and on the voucher itself. These obligations include responsibilities the family is required to fulfill, as well as prohibited actions. The PHA must inform families of these obligations during the oral briefing, and the same information must be included in the briefing packet. When the family’s unit is approved and the HAP contract is executed, the family must meet those obligations in order to continue participating in the program. Violation of any family obligation may result in termination of assistance, as described in Chapter 12.

Time Frames for Reporting Changes Required By Family Obligations PHA Policy
Unless otherwise noted below, when family obligations require the family to respond to a request or notify the PHA of a change, notifying the PHA of the request or change within 10 business days is considered prompt notice.

When a family is required to provide notice to the PHA, the notice must be in writing.

Family Obligations [24 CFR 982.551]
The family obligations of the voucher are listed as follows:
• The family must supply any information that the PHA or HUD determines to be necessary, including submission of required evidence of citizenship or eligible immigration status.

PHA Policy
If an applicant or participant reports expenses that exceeds their income, the PHA will require the individual to provide a reasonable explanation for the circumstance (such as the loss of a job). The PHA will also require documentation that supports the applicant or participant’s claim. If the applicant or participant does not provide a reasonable explanation and documentation explaining why their expenses exceed their income, they will not have met the family obligations.
• The family must supply any information requested by the PHA or HUD for use in a regularly scheduled reexamination or interim reexamination of family income and composition. • The family must disclose and verify social security numbers and sign and submit consent forms for obtaining information.
• Any information supplied by the family must be true and complete. • The family may be held responsible for a breach of housing quality standards caused by the family’s failure to pay tenant-provided utilities or appliances, or damages to the dwelling unit or premises beyond normal wear and tear caused by any member of the household or guest.

PHA Policy
Damages beyond normal wear and tear will be considered to be damages which could be assessed against the security deposit.
© Copyright 2023 Nan McKay & Associates, Inc. Adminplan 4/1/26 Unlimited copies may be made for internal use.

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• The family must allow the PHA to inspect the unit at reasonable times and after reasonable notice, as described in Chapter 8 of this plan.
• The family must not commit any serious or repeated violation of the lease.

PHA Policy
The PHA will determine if a family has committed serious or repeated violations of the lease based on available evidence, including but not limited to, a court-ordered eviction, or an owner’s notice to evict.

Serious and repeated lease violations will include, but not be limited to, nonpayment of rent, disturbance of neighbors, destruction of property, living or housekeeping habits that cause damage to the unit or premises, and criminal activity. Generally, the criterion to be used will be whether or not the reason for the eviction was through no fault of the tenant or guests. Any incidents of, or criminal activity related to, domestic violence, dating violence, sexual assault, stalking, or human trafficking will not be construed as serious or repeated lease violations by the victim [see 24 CFR 5.2005(c)(1)]. • The family must notify the PHA and the owner before moving out of the unit or terminating the lease.

PHA Policy
The family must comply with lease requirements regarding written notice to the owner.

The family must provide written notice to the PHA at the same time the owner is notified. • The family must promptly give the PHA a copy of any owner eviction notice. • The family must use the assisted unit for residence by the family. The unit must be the family’s only residence.
• The composition of the assisted family residing in the unit must be approved by the PHA.

The family must promptly notify the PHA in writing of the birth, adoption, or court-awarded custody of a child. The family must request PHA approval to add any other member as an occupant of the unit.

PHA Policy
The request to add a family household member must be submitted in writing and approved prior to the person moving into the unit. The PHA will determine eligibility of the new member in accordance with the policies in Chapter 3.

The family must also comply with any lease provisions governing who can live in the unit. The family must also notify the landlord prior to moving in a new adult family member.
• The family must promptly notify the PHA in writing if any family member no longer lives in the unit.

PHA Policy
The family must submit any requested information verifying that a family member is no longer in the household.

If the PHA has given approval, a foster child or a live-in aide may reside in the unit. The PHA has the discretion to adopt reasonable policies concerning residency by a foster child or a live-in aide, and to define when PHA consent may be given or denied. For © Copyright 2023 Nan McKay & Associates, Inc. Adminplan 4/1/26 Unlimited copies may be made for internal use.

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policies related to the request and approval/disapproval of foster children, foster adults, and live-in aides, see Chapter 3 (Sections I.K and I.M), and Chapter 11 (Section II.B) • The family must not sublease the unit, assign the lease, or transfer the unit.

PHA Policy
Subleasing includes receiving payment to cover rent and utility costs by a person living in the unit who is not listed as a family member.
• The family must supply any information requested by the PHA to verify that the family is living in the unit or information related to family absence from the unit. • The family must promptly notify the PHA when the family is absent from the unit.

PHA Policy
Notice is required under this provision only when all family members will be absent from the unit for any period greater than 30 calendar days. Written notice must be a request for extension beyond 30 days and must be provided to the PHA at least 10 days prior to the start of the extended absence. For policies regarding the approval of extended absences, please refer to 12-I.E Mandatory Policies and Other Authorized Terminations. • The family must pay utility bills and provide and maintain any appliances that the owner is not required to provide under the lease [Form HUD-52646, Voucher]. • The family must not own or have any interest in the unit, (other than in a cooperative and owners of a manufactured home leasing a manufactured home space). • Family members must not commit fraud, bribery, or any other corrupt or criminal act in connection with the program. (See Chapter 14, Program Integrity for additional information). • Family members must not engage in drug-related criminal activity or violent criminal activity or other criminal activity that threatens the health, safety or right to peaceful enjoyment of other residents and persons residing in the immediate vicinity of the premises. See Chapter 12 for HUD and PHA policies related to drug-related and violent criminal activity. • Members of the household must not engage in abuse of alcohol in a way that threatens the health, safety or right to peaceful enjoyment of the other residents and persons residing in the immediate vicinity of the premises. See Chapter 12 for a discussion of HUD and PHA policies related to alcohol abuse.
• An assisted family or member of the family must not receive HCV program assistance while receiving another housing subsidy, for the same unit or a different unit under any other federal, state or local housing assistance program.
• A family must not receive HCV program assistance while residing in a unit owned by a parent, child, grandparent, grandchild, sister or brother of any member of the family, unless the PHA has determined (and has notified the owner and the family of such determination) that approving rental of the unit, notwithstanding such relationship, would provide reasonable accommodation for a family member who is a person with disabilities. [Form HUD-52646, Voucher]
© Copyright 2023 Nan McKay & Associates, Inc. Adminplan 4/1/26 Unlimited copies may be made for internal use.

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PART II: SUBSIDY STANDARDS AND VOUCHER ISSUANCE

5-II.A. OVERVIEW
The PHA must establish subsidy standards that determine the number of bedrooms needed for families of different sizes and compositions. This part presents the policies that will be used to determine the family unit size (also known as the voucher size) a particular family should receive, and the policies that govern making exceptions to those standards. The PHA must also establish policies related to the issuance of the voucher, to the voucher term, and to any extensions or suspensions of the voucher term.

5-II.B. DETERMINING FAMILY UNIT (VOUCHER) SIZE [24 CFR 982. 402] For each family, the PHA determines the appropriate number of bedrooms under the PHA subsidy standards and enters the family unit size on the voucher that is issued to the family. The family unit size does not dictate the size of unit the family must actually lease, nor does it determine who within a household will share a bedroom/sleeping room.

The following requirements apply when the PHA determines family unit size:
• The subsidy standards must provide for the smallest number of bedrooms needed to house a family without overcrowding.
• The subsidy standards must be consistent with space requirements under 24 CFR 5.703. • The subsidy standards must be applied consistently for all families of like size and composition.
• A child who is temporarily away from the home because of placement in foster care is considered a member of the family in determining the family unit size. • A family that consists of a pregnant woman (with no other persons) must be treated as a two- person family.
• Any live-in aide (approved by the PHA to reside in the unit to care for a family member who is disabled or is at least 50 years of age) must be counted in determining the family unit size; © Copyright 2023 Nan McKay & Associates, Inc. Adminplan 4/1/26 Unlimited copies may be made for internal use.

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• Unless a live-in-aide resides with a family, the family unit size for any family consisting of a single person must be either a zero- or one-bedroom unit, as determined under the PHA subsidy standards.

PHA Policy
The PHA will assign one bedroom for each two persons within the household, except in the following circumstances:

Live-in aides will be allocated a separate bedroom.

Single person families will be allocated one bedroom.

Foster children will be included in determining unit size only if they will be in the unit for more than 3 uninterrupted months.

The PHA will reference the following chart in determining the appropriate voucher size for a family:

Voucher Size Persons in Household
(Minimum – Maximum)
1 Bedroom 1-2
2 Bedrooms 2-4
3 Bedrooms 3-6
4 Bedrooms 4-8
5 Bedrooms 5-10

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5-II.C. EXCEPTIONS TO SUBSIDY STANDARDS
In determining family unit size for a particular family, the PHA may grant an exception to its established subsidy standards if the PHA determines that the exception is justified by the age, sex, health, handicap, or relationship of family members or other personal circumstances [24 CFR 982.402(b)(8)]. Reasons may include, but are not limited to:
• A need for an additional bedroom for medical equipment • A need for a separate bedroom for reasons related to a family member’s disability, medical or health condition
For a single person who is not elderly, disabled, or a remaining family member, an exception cannot override the regulatory limit of a zero or one bedroom [24 CFR 982.402(b)(8)].

PHA Policy
The PHA will consider granting an exception for the following reasons specified in the regulation: health and as a reasonable accommodation for a person with a disability.

The family must request any exception to the subsidy standards in writing. The request must explain the need or justification for a larger family unit size, and must include appropriate documentation. Requests based on health-related reasons must be verified by a knowledgeable professional source (e.g., doctor or health professional), unless the disability and the disability–related need for accommodation is readily apparent or otherwise known. Under the sole discretion of the PHA, the family’s continued need for an additional bedroom due to special medical equipment may be re-verified during an annual or interim reexamination or an inspection.

The PHA will notify the family of its determination within 15 business days of receiving the family’s request. If a participant family’s request is denied, the notice will inform the family of their right to request an informal hearing.

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5-II.D. VOUCHER ISSUANCE [24 CFR 982.302]
When a family is selected from the waiting list (or as a special admission as described in Chapter 4), or when a participant family wants to move to another unit, the PHA issues a Housing Choice Voucher, form HUD-52646. This chapter deals only with voucher issuance for applicants. For voucher issuance associated with moves of program participants, please refer to Chapter 10.

The voucher is the family’s authorization to search for housing. It specifies the unit size for which the family qualifies and includes both the date of voucher issuance and date of expiration.

It contains a brief description of how the program works and explains the family obligations under the program. The voucher is evidence that the PHA has determined the family to be eligible for the program, and that the PHA expects to have money available to subsidize the family if the family finds an approvable unit. However, the PHA does not have any liability to any party by the issuance of the voucher, and the voucher does not give the family any right to participate in the PHA’s Housing Choice Voucher program [Voucher, Form HUD-52646].

The PHA must issue the family a voucher within 60 days of determining the family eligible [24 CFR 982.201(e)].

PHA Policy
Vouchers will be issued to eligible applicants immediately following the mandatory briefing.

The PHA should have sufficient funds to house an applicant before issuing a voucher. If funds are insufficient to house the family at the top of the waiting list, the PHA must wait until it has adequate funds before it calls another family from the list [HCV GB p. 8-10].

PHA Policy
Prior to issuing any vouchers, the PHA will determine whether it has sufficient funding in accordance with the policies in Part VIII of Chapter 16.

If the PHA determines that there is insufficient funding after a voucher has been issued, the PHA may rescind the voucher and place the affected family back on the waiting list. © Copyright 2023 Nan McKay & Associates, Inc. Adminplan 4/1/26 Unlimited copies may be made for internal use.

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5-II.E. VOUCHER TERM, EXTENSIONS, AND SUSPENSIONS
Voucher Term [24 CFR 982.303]
The initial term of a voucher must be at least 60 calendar days. The initial term must be stated on the voucher [24 CFR 982.303(a)].

PHA Policy
The initial voucher term will be 60 calendar days.

The family must submit a Request for Tenancy Approval and proposed lease within the 60-day period unless the PHA grants an extension.

Extensions of Voucher Term [24 CFR 982.303(b)]
The PHA has the authority to grant extensions of search time, to specify the length of an extension, and to determine the circumstances under which extensions will be granted. There is no limit on the number of extensions that the PHA can approve. Discretionary policies related to extension and expiration of search time must be described in the PHA’s administrative plan [24 CFR 982.54].

PHAs must approve additional search time if needed as a reasonable accommodation to make the program accessible to and usable by a person with disabilities. The extension period must be reasonable for the purpose.

The family must be notified in writing of the PHA’s decision to approve or deny an extension.

The PHA’s decision to deny a request for an extension of the voucher term is not subject to informal review [24 CFR 982.554(c)(4)].

PHA Policy
The PHA will automatically approve one 60- day extension upon written request from the family, except in cases of incoming billable portability vouchers. For additional information regarding extensions of portability vouchers, please see Chapter 15.

The PHA will approve additional extensions, not to exceed a maximum of 180 days, only in the following circumstances:

The PHA has determined that additional search time is necessary due to extraordinary market conditions, such as an extremely low vacancy rate.

It is necessary due to reasons beyond the family’s control, as determined by the PHA. Following is a list of extenuating circumstances that the PHA may consider in making its decision. The presence of these circumstances does not guarantee that an extension will be granted:

Serious illness or death in the familyOther family emergency Extensions beyond 180 calendar days will only be considered as a reasonable accommodation for a person with disabilities.

Any request for an additional extension beyond 180 days must include the reason(s) why an additional extension is necessary and comply with Chapter 2.II. of this Plan. © Copyright 2023 Nan McKay & Associates, Inc. Adminplan 4/1/26 Unlimited copies may be made for internal use.

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The PHA may require the family to provide documentation to support any extension request or obtain verification from a qualified third party.

All requests for extensions to the voucher term must be made in writing and submitted to the PHA prior to the expiration date of the voucher (or extended term of the voucher).

The PHA will decide whether to approve or deny an extension request within 15 business days of the date the request is received and will immediately provide the family written notice of its decision.

Suspensions of Voucher Term [24 CFR 982.303(c) and FR 08/20/2015, Aug. 20, 2015] The PHA must provide for suspension of the initial or any extended term of the voucher from the date that the family submits a Request for Tenancy Approval (RTA) until the date the PHA notifies the family in writing whether the request has been approved or denied. “Suspension” means stopping the clock on a family’s voucher term from the time a family submits the RTA until the time the PHA approves or denies the request [24 CFR 982.4]. The PHA’s determination not to suspend a voucher term is not subject to informal review [24 CFR 982.554(c)(4)].

PHA Policy
When a Request for Tenancy Approval and proposed lease is received by the PHA, the term of the voucher will be suspended while the PHA processes the request.

Expiration of Voucher Term
Once a family’s housing choice voucher term (including any extensions) expires, the family is no longer eligible to search for housing under the program. If the family still wishes to receive assistance, the PHA may require that the family reapply, or may place the family on the waiting list with a new application date but without requiring reapplication. Such a family does not become ineligible for the program on the grounds that it was unable to locate a unit before the voucher expired [HCV GB p. 8-13].

PHA Policy
If an applicant family’s voucher term or extension expires before the family has submitted a Request for Tenancy Approval (RTA), the PHA will require the family to reapply for assistance. If an RTA that was submitted prior to the expiration date of the voucher is subsequently disapproved by the PHA, the family will be granted any remaining time left on the voucher, based on the PHA’s suspension policy. If an RTA is submitted on the day the voucher term expires, the PHA will accept the RTA but no further time will be allotted unless a family has requested and is eligible for an extension prior to the voucher expiration date.

Within 15 business days after the expiration of the voucher term or any extension, the PHA will notify the family in writing that the voucher term has expired and that the family must reapply when the waiting list is open in order to be placed on the waiting list. © Copyright 2023 Nan McKay & Associates, Inc. Adminplan 4/1/26 Unlimited copies may be made for internal use.

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CHAPTER 6

INCOME AND SUBSIDY DETERMINATIONS

[24 CFR Part 5, Subparts E and F; 24 CFR 982]

INTRODUCTION
A family’s income determines eligibility for assistance and is also used to calculate the family’s payment and the PHA’s subsidy. The PHA will use the policies and methods described in this chapter to ensure that only eligible families receive assistance and that no family pays more or less than its obligation under the regulations. This chapter describes HUD regulations and PHA policies related to these topics in three parts as follows:
• Part I: Annual Income. HUD regulations specify the sources of income to include and exclude to arrive at a family’s annual income. These requirements and PHA policies for calculating annual income are found in Part I.
• Part II: Adjusted Income. Once annual income has been established HUD regulations require the PHA to subtract from annual income any of five mandatory deductions for which a family qualifies. These requirements and PHA policies for calculating adjusted income are found in Part II.
• Part III: Calculating Family Share and PHA Subsidy. This part describes the statutory formula for calculating total tenant payment (TTP), the use of utility allowances, and the methodology for determining PHA subsidy and required family payment. © Copyright 2023 Nan McKay & Associates, Inc. Adminplan 4/1/26 Unlimited copies may be made for internal use.

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PART I: ANNUAL INCOME

6-I.A. OVERVIEW
The general regulatory definition of annual income shown below is from 24 CFR 5.609.

5.609 Annual income.
(a) Annual income means all amounts, monetary or not, which:
(1) Go to, or on behalf of, the family head or spouse (even if temporarily absent) or to any other family member; or
(2) Are anticipated to be received from a source outside the family during the 12-month period following admission or annual reexamination effective date; and (3) Which are not specifically excluded in paragraph [5.609(c)]. (4) Annual income also means amounts derived (during the 12-month period) from assets to which any member of the family has access.

In addition to this general definition, HUD regulations establish policies for treating specific types of income and assets. The full texts of those portions of the regulations are provided in exhibits at the end of this chapter as follows:
• Annual Income Inclusions (Exhibit 6-1)
• Annual Income Exclusions (Exhibit 6-2)
• Treatment of Family Assets (Exhibit 6-3)
• The Effect of Welfare Benefit Reduction (Exhibit 6-4) Sections 6-I.B and 6-I.C discuss general requirements and methods for calculating annual income. The rest of this section describes how each source of income is treated for the purposes of determining annual income. HUD regulations present income inclusions and exclusions separately [24 CFR 5.609(b) and 24 CFR 5.609(c)]. In this plan, however, the discussions of income inclusions and exclusions are integrated by topic (e.g., all policies affecting earned income are discussed together in section 6-I.D). Verification requirements for annual income are discussed in Chapter 7.
© Copyright 2023 Nan McKay & Associates, Inc. Adminplan 4/1/26 Unlimited copies may be made for internal use.

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6-I.B. HOUSEHOLD COMPOSITION AND INCOME
Income received by all family members must be counted unless specifically excluded by the regulations or PHA policies. It is the responsibility of the head of household to report changes in family composition. The rules on which sources of income are counted vary somewhat by family member. The chart below summarizes how family composition affects income determinations.

PHA Policy
If a family member is receiving public benefits or retirement income as a payee on behalf of an individual that is not in the household, that income will not be counted.

Summary of Income Included and Excluded by Person
Live-in aides Income from all sources is excluded [24 CFR 5.609(c)(5)].

Foster child or foster adult Income from all sources is excluded [24 CFR 5.609(c)(2)].

Head, spouse, or cohead
Other adult family members
All sources of income not specifically excluded by the
regulations are included.

Children under 18 years of age Employment income is excluded [24 CFR 5.609(c)(1)]. All other sources of income, except those specifically excluded by the regulations, are included.

Full-time students 18 years of
age or older (not head, spouse,
or cohead)
Employment income above the dependent deduction is
excluded [24 CFR 5.609(c)(11)]. All other sources of
income, except those specifically excluded by the
regulations, are included.

Temporarily Absent Family Members
The income of family members approved to live in the unit will be counted, even if the family member is temporarily absent from the unit [HCV GB, p. 5-18].

PHA Policy
Generally an individual who is or is expected to be absent from the assisted unit for 180 consecutive days or less is considered temporarily absent and continues to be considered a family member. Generally an individual who is or is expected to be absent from the assisted unit for more than 180 consecutive days is considered permanently absent and no longer a family member. Exceptions to this general policy are discussed below.

Absent Students
PHA Policy
When someone who has been considered a family member attends school away from home, the person will continue to be considered a family member unless information becomes available to the PHA indicating that the student has established a separate household or the family declares that the student has established a separate household. © Copyright 2023 Nan McKay & Associates, Inc. Adminplan 4/1/26 Unlimited copies may be made for internal use.

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Absences Due to Placement in Foster Care
Children temporarily absent from the home as a result of placement in foster care are considered members of the family [24 CFR 5.403].

PHA Policy
If a child has been placed in foster care, the PHA will verify with the appropriate agency whether and when the child is expected to be returned to the home. Unless the agency confirms that the child has been permanently removed from the home, the child will be counted as a family member.

Absent Head, Spouse, or Cohead
PHA Policy
An employed head, spouse, or cohead absent from the unit more than 180 consecutive days due to employment will continue to be considered a family member.

Family Members Permanently Confined for Medical Reasons If a family member is confined to a nursing home or hospital on a permanent basis, that person is no longer considered a family member and the income of that person is not counted [HCV GB, p. 5-22].

PHA Policy
The PHA will request verification from a responsible medical professional and will use this determination. If the responsible medical professional cannot provide a determination, the person generally will be considered temporarily absent. The family may present evidence that the family member is confined on a permanent basis and request that the person not be considered a family member.

When an individual who has been counted as a family member is determined permanently absent, the family is eligible for the medical expense deduction only if the remaining head, spouse, or cohead qualifies as an elderly person or a person with disabilities.

Joint Custody of Dependents
PHA Policy
Dependents that are subject to a joint custody arrangement will be considered a member of the family, if they live with the applicant or participant family 50 percent or more of the time.

When more than one applicant or participant family is claiming the same dependents as family members, the family with primary custody at the time of the initial examination or reexamination will be able to claim the dependents. If there is a dispute about which family should claim them, the PHA will make the determination based on available documents such as court orders, or an IRS return showing which family has claimed the child for income tax purposes.
© Copyright 2023 Nan McKay & Associates, Inc. Adminplan 4/1/26 Unlimited copies may be made for internal use.

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Caretakers for a Child
PHA Policy
The approval of a caretaker is at the owner and PHA’s discretion and subject to the owner and PHA’s screening criteria. If neither a parent nor a designated guardian remains in a household receiving HCV assistance, the PHA will take the following actions. (1) If a responsible agency has determined that another adult is to be brought into the assisted unit to care for a child for an indefinite period, the designated caretaker will not be considered a family member until a determination of custody or legal guardianship is made.
(2) If a caretaker has assumed responsibility for a child without the involvement of a responsible agency or formal assignment of custody or legal guardianship, the caretaker will be treated as a visitor for 90 days. After the 90 days have elapsed, the caretaker will be considered a family member unless information is provided that would confirm that the caretaker’s role is temporary. In such cases the PHA will extend the caretaker’s status as an eligible visitor. The caretaker is responsible for notifying the owner of the property and the PHA of their presence in the assisted unit.

(3) At any time that custody or guardianship legally has been awarded to a caretaker, the housing choice voucher will be transferred to the caretaker once he/she passes all necessary eligibility requirements including a criminal background screening. (4) During any period that a caretaker is considered a visitor, the income of the caretaker is not counted in annual income and the caretaker does not qualify the family for any deductions from income.

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6-I.C. ANTICIPATING ANNUAL INCOME
The PHA is required to count all income “anticipated to be received from a source outside the family during the 12-month period following admission or annual reexamination effective date” [24 CFR 5.609(a)(2)]. Policies related to anticipating annual income are provided below. Let me know if there is anything else I can help you with.

Basis of Annual Income Projection
The PHA generally will use current circumstances to determine anticipated income for the coming 12-month period. HUD authorizes the PHA to use other than current circumstances to anticipate income when:
• An imminent change in circumstances is expected [HCV GB, p. 5-17] • It is not feasible to anticipate a level of income over a 12-month period (e.g., seasonal or cyclic income) [24 CFR 5.609(d)]
• The PHA believes that past income is the best available indicator of expected future income [24 CFR 5.609(d)]
PHAs are required to use HUD’s Enterprise Income Verification (EIV) system in its entirety as a third-party source to verify employment and income information, and to reduce administrative subsidy payment errors in accordance with HUD administrative guidance [24 CFR 5.233(a)(2)].

HUD allows PHAs to use paystubs to project income once EIV data has been received in such cases where the family does not dispute the EIV employer data and where the PHA does not determine it is necessary to obtain additional third-party data. The PHA may also accept a statement dated within the appropriate benefit year for fixed income sources.

PHA Policy
When EIV is obtained and the family does not dispute the EIV employer data, the PHA will use current tenant-provided documents to project annual income. When the tenant- provided documents are pay stubs, the PHA will make every effort to obtain current and consecutive pay stubs dated within the last 60 days.

The PHA will obtain written and/or oral third-party verification in accordance with the verification requirements and policy in Chapter 7 in the following cases:

If EIV or other UIV data is not available,
If the family disputes the accuracy of the EIV employer data, and/or If the PHA determines additional information is needed.

In such cases, the PHA will review and analyze current data to anticipate annual income.

In all cases, the family file will be documented with a clear record of the reason for the decision, and a clear audit trail will be left as to how the PHA annualized projected income.
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When the PHA cannot readily anticipate income based upon current circumstances (e.g., in the case of seasonal employment, unstable working hours, or suspected fraud), the PHA will review and analyze historical data for patterns of employment, paid benefits, and receipt of other income and use the results of this analysis to establish annual income.

Any time current circumstances are not used to project annual income, a clear rationale for the decision will be documented in the file. In all such cases, the family may present information and documentation to the PHA to show why the historic pattern does not represent the family’s anticipated income.

Known Changes in Income
If the PHA verifies an upcoming increase or decrease in income, annual income will be calculated by applying each income amount to the appropriate part of the 12-month period.

Example: An employer reports that a full-time employee who has been receiving $8/hour will begin to receive $8.25/hour in the eighth week after the effective date of the reexamination. In such a case the PHA would calculate annual income as follows:
($8/hour × 40 hours × 7 weeks) + ($8.25 × 40 hours × 45 weeks).

The family may present information that demonstrates that implementing a change before its effective date would create a hardship for the family. In such cases the PHA will calculate annual income using current circumstances and then require an interim reexamination when the change actually occurs. This requirement will be imposed even if the PHA’s policy on reexaminations does not require interim reexaminations for other types of changes.

When tenant-provided third-party documents are used to anticipate annual income, they will be dated within the last 60 days of the reexamination interview date. Statements dated within the appropriate benefit year will be accepted for fixed income sources.

EIV quarterly wages will not be used to project annual income at an annual or interim reexamination.

Projecting Income
In HUD’s EIV webcast of January 2008, HUD made clear that PHAs are not to use EIV quarterly wages to project annual income.

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6-I.D. EARNED INCOME
Types of Earned Income Included in Annual Income
Wages and Related Compensation [24 CFR 5.609(a); Notice PIH 2023-27; Notice PIH 2024- 38]
The earned income of each member of the family who is 18 years of age or older, or who is the head of household or spouse/cohead regardless of age, is included in annual income. Income received as a day laborer or seasonal worker is also included in annual income, even if the source, date, or amount of the income varies [24 CFR 5.609 (b)(24)].

Earned income means income or earnings from wages, tips, salaries, other employee compensation, and net income from self-employment. Earned income does not include any pension or annuity, transfer payments (meaning payments made or income received in which no goods or services are being paid for, such as welfare, social security, and governmental subsidies for certain benefits), or any cash or in-kind benefits [24 CFR 5.100].

Unearned income means any annual income, as calculated under 24 CFR § 5.609, that is not earned income. A day laborer is defined as an individual hired and paid one day at a time without an agreement that the individual will be hired or work again in the future [24 CFR

5.603(b)]. Income earned as a day laborer is not considered nonrecurring income.

A seasonal worker is defined as an individual who is hired into a short-term position ( e.g., for which the customary employment period for the position is six months or fewer) and the employment begins about the same time each year (such as summer or winter). Typically, the individual is hired to address seasonal demands that arise for the particular employer or industry [24 CFR 5.603(b)]. Some examples of seasonal work include employment limited to holidays or agricultural seasons. Seasonal work may include but is not limited to employment as a lifeguard, ballpark vendor, holiday retail worker, or snowplow driver [Notice PIH 2023-27]. Income earned as a seasonal worker is not considered nonrecurring income.

PHA Policy
The PHA will include in annual income the full amount of wages and salaries, overtime pay, commissions, fees, tips and bonuses, and other compensation, before any payroll deductions.

For persons who regularly receive bonuses or commissions, the PHA will verify, and then average amounts received for the year preceding admission or reexamination. In either case the family may provide, and the PHA will consider, a credible justification for not using this history to anticipate future bonuses or commissions. If a new employee has not yet received any bonuses or commissions, the PHA will count only the amount estimated by the employer. The file will be documented appropriately.

Some Types of Military Pay
All regular pay, special pay and allowances of a member of the Armed Forces are counted [24 CFR 5.609(b)(8)] except for the special pay to a family member serving in the Armed Forces who is exposed to hostile fire [24 CFR 5.609(c)(7)].
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Types of Earned Income Not Counted in Annual Income
Temporary, Nonrecurring, or Sporadic Income [24 CFR 5.609(c)(9)] This type of income (including gifts) is not included in annual income. Sporadic income includes temporary payments from the U.S. Census Bureau for employment lasting no longer than 180 days [Notice PIH 2009-19].

PHA Policy
Sporadic income is income that is not received periodically and cannot be reliably predicted. For example, the income of an individual who works occasionally as a handyman would be considered sporadic if future work could not be anticipated and no historic, stable pattern of income existed.

Children’s Earnings
Employment income earned by children (including foster children) under the age of 18 years is not included in annual income [24 CFR 5.609(c)(1)]. (See Eligibility chapter for a definition of foster children.)
Certain Earned Income of Full-Time Students
Earnings in excess of $480 for each full-time student 18 years old or older (except for the head, spouse, or cohead) are not counted [24 CFR 5.609(c)(11)]. To be considered “full-time,” a student must be considered “full-time” by an educational institution with a degree or certificate program [HCV GB, p. 5-29].

Income of a Live-in Aide
Income earned by a live-in aide, as defined in [24 CFR 5.403], is not included in annual income [24 CFR 5.609(c)(5)]. (See Eligibility chapter for a full discussion of live-in aides.) Income Earned under Certain Federal Programs
Income from some federal programs is specifically excluded from consideration as income [24 CFR 5.609(c)(17)], including:
• Payments to volunteers under the Domestic Volunteer Services Act of 1973 (42 U.S.C. 5044(g), 5058)
• Awards under the federal work-study program (20 U.S.C. 1087 uu) • Payments received from programs funded under Title V of the Older Americans Act of 1985 (42 U.S.C. 3056(f))
• Allowances, earnings, and payments to AmeriCorps participants under the National and Community Service Act of 1990 (42 U.S.C. 12637(d))
• Allowances, earnings, and payments to participants in programs funded under the Workforce Investment Act of 1998 (29 U.S.C. 2931)
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Resident Service Stipend
Amounts received under a resident service stipend are not included in annual income. A resident service stipend is a modest amount (not to exceed $200 per individual per month) received by a resident for performing a service for the PHA or owner, on a part-time basis, that enhances the quality of life in the development. Such services may include, but are not limited to, fire patrol, hall monitoring, lawn maintenance, resident initiatives coordination, and serving as a member of the PHA’s governing board. No resident may receive more than one such stipend during the same period of time [24 CFR 5.600(c)(8)(iv)].

State and Local Employment Training Programs
Incremental earnings and benefits to any family member resulting from participation in qualifying state or local employment training programs (including training programs not affiliated with a local government) and training of a family member as resident management staff are excluded from annual income. Amounts excluded by this provision must be received under employment training programs with clearly defined goals and objectives and are excluded only for the period during which the family member participates in the training program [24 CFR

5.609(c)(8)(v)].

PHA Policy
The PHA defines training program as “a learning process with goals and objectives, generally having a variety of components, and taking place in a series of sessions over a period to time. It is designed to lead to a higher level of proficiency, and it enhances the individual’s ability to obtain employment. It may have performance standards to measure proficiency. Training may include, but is not limited to: (1) classroom training in a specific occupational skill, (2) on-the-job training with wages subsidized by the program, or (3) basic education” [expired Notice PIH 98-2, p. 3].

The PHA defines incremental earnings and benefits as the difference between: (1) the total amount of welfare assistance and earnings of a family member prior to enrollment in a training program, and (2) the total amount of welfare assistance and earnings of the family member after enrollment in the program [expired Notice PIH 98-2, pp. 3–4].

In calculating the incremental difference, the PHA will use as the pre-enrollment income the total annualized amount of the family member’s welfare assistance and earnings reported on the family’s most recently completed HUD-50058.

End of participation in a training program must be reported in accordance with the PHA's interim reporting requirements.
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HUD-Funded Training Programs
Amounts received under training programs funded in whole or in part by HUD [24 CFR

5.609(c)(8)(i)] are excluded from annual income. Eligible sources of funding for the training include operating subsidy, Section 8 administrative fees, and modernization, Community Development Block Grant (CDBG), HOME program, and other grant funds received from HUD.

PHA Policy
To qualify as a training program, the program must meet the definition of training program provided above for state and local employment training programs.

Earned Income Tax Credit
Earned income tax credit (EITC) refund payments received on or after January 1, 1991 (26 U.S.C. 32(j)), are excluded from annual income [24 CFR 5.609(c)(17)]. Although many families receive the EITC annually when they file taxes, an EITC can also be received throughout the year. The prorated share of the annual EITC is included in the employee’s payroll check. © Copyright 2023 Nan McKay & Associates, Inc. Adminplan 4/1/26 Unlimited copies may be made for internal use.

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6-I.E. EARNED INCOME DISALLOWANCE FOR PERSONS WITH DISABILITIES [24 CFR 5.617; Streamlining Final Rule (SFR) Federal Register 3/8/16; Notice PIH 2023-27] HOTMA removed the statutory authority for the EID. The EID is available only to families that are eligible for and participating in the program as of December 31, 2023, or before; no new families may be added on or after January 1, 2024. If a family is receiving the EID prior to or on the effective date of December 31, 2023, they are entitled to the full amount of the benefit for a full 24-month period. The policies below are applicable only to such families. No family will still be receiving the EID after December 31, 2025. The EID will sunset on January 1, 2026, and the PHA policies below will no longer be applicable as of that date or when the last qualifying family exhausts their exclusion period, whichever is sooner.

Calculation of the Disallowance
Calculation of the earned income disallowance for an eligible member of a qualified family begins with a comparison of the member’s current income with their “baseline income.” The family member’s baseline income is their income immediately prior to qualifying for the EID.

The family member’s baseline income remains constant throughout the period that they are participating in the EID.

Calculation Method
Initial 12-Month Exclusion
During the initial exclusion period of 12 consecutive months, the full amount (100 percent) of any increase in income attributable to new employment or increased earnings is excluded.

PHA Policy
The initial EID exclusion period will begin on the first of the month following the date an eligible member of a qualified family is first employed or first experiences an increase in earnings assuming the family reports the employment or earnings in a timely manner.

If employment is not reported in a timely manner, the EID exclusion may still begin on the first of the month following the date in which the eligible event occurred on the premise that the family has benefitted from the exclusion during the period that the income was not fully declared.

Second 12-Month Exclusion and Phase-In
During the second exclusion period of 12 consecutive months, the PHA must exclude at least 50 percent of any increase in income attributable to employment or increased earnings.

PHA Policy
During the second 12-month exclusion period, the PHA will exclude half (50 percent of any increase in income attributable to employment or increased earnings. © Copyright 2023 Nan McKay & Associates, Inc. Adminplan 4/1/26 Unlimited copies may be made for internal use.

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Lifetime Limitation
The EID has a two-year (24-month) lifetime maximum. The two-year eligibility period begins at the same time that the initial exclusion period begins and ends 24 months later. During the 24- month period, an individual remains eligible for EID even if they begin to receive assistance from a different housing agency, move between public housing and Section 8 assistance, or have breaks in assistance. The EID will sunset on January 1, 2026. In no circumstances will a family member’s exclusion period continue past January 1, 2026. © Copyright 2023 Nan McKay & Associates, Inc. Adminplan 4/1/26 Unlimited copies may be made for internal use.

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6-I.F. BUSINESS INCOME [24 CFR 5.609(B)(2)]
Annual income includes “the net income from the operation of a business or profession.

Expenditures for business expansion or amortization of capital indebtedness shall not be used as deductions in determining net income. An allowance for depreciation of assets used in a business or profession may be deducted, based on straight line depreciation, as provided in Internal Revenue Service regulations. Any withdrawal of cash or assets from the operation of a business or profession will be included in income, except to the extent the withdrawal is reimbursement of cash or assets invested in the operation by the family” [24 CFR 5.609(b)(2)].

Business Expenses
Net income is “gross income less business expense” [HCV GB, p. 5-19].

PHA Policy
To determine business expenses that may be deducted from gross income, the PHA will use current applicable Internal Revenue Service (IRS) rules for determining allowable business expenses [see IRS Publication 535], unless a topic is addressed by HUD regulations or guidance as described below.

Business expenses must be directly related in nature to the family member’s business.

Independent Contractors [24 CFR 5.609(b)(24); FR Register Notice 02/14/2023; Notice PIH 2023-27; and Notice PIH 2024-38]
Income received as an independent contractor is included in annual income, even if the source, date, or amount of the income varies [24 CFR 5.609 (b)(24)].

An independent contractor is defined as an individual who qualifies as an independent contractor instead of an employee in accordance with the Internal Revenue Code Federal income tax requirements and whose earnings are consequently subject to the Self-Employment Tax. In general, an individual is an independent contractor if the payer has the right to control or direct only the result of the work and not what will be done and how it will be done [24 CFR 5.603(b)].

This may include individuals such as third-party delivery and transportation service providers and “gig workers” like babysitters, landscapers, rideshare drivers, and house cleaners. Income earned as an independent contractor is not considered nonrecurring income.

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Business Expansion
HUD regulations do not permit the PHA to deduct from gross income expenses for business expansion.

PHA Policy
Business expansion is defined as any capital expenditures made to add new business activities, to expand current facilities, or to operate the business in additional locations.

For example, purchase of a street sweeper by a construction business for the purpose of adding street cleaning to the services offered by the business would be considered a business expansion. Similarly, the purchase of a property by a hair care business to open at a second location would be considered a business expansion.

Capital Indebtedness
HUD regulations do not permit the PHA to deduct from gross income the amortization of capital indebtedness.

PHA Policy
Capital indebtedness is defined as the principal portion of the payment on a capital asset such as land, buildings, and machinery. This means the PHA will allow as a business expense interest, but not principal, paid on capital indebtedness.

Negative Business Income
If the net income from a business is negative, no business income will be included in annual income; a negative amount will not be used to offset other family income.

Withdrawal of Cash or Assets from a Business
HUD regulations require the PHA to include in annual income the withdrawal of cash or assets from the operation of a business or profession unless the withdrawal reimburses a family member for cash or assets invested in the business by the family.

PHA Policy
Acceptable investments in a business include cash loans and contributions of assets or equipment. For example, if a member of an assisted family provided an up-front loan of $2,000 to help a business get started, the PHA will not count as income any withdrawals from the business up to the amount of this loan until the loan has been repaid.

Investments do not include the value of labor contributed to the business without compensation.

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Co-owned Businesses
PHA Policy
If a business is co-owned with someone outside the family, the family must document the share of the business it owns. If the family’s share of the income is lower than its share of ownership, the family must document the reasons for the difference. © Copyright 2023 Nan McKay & Associates, Inc. Adminplan 4/1/26 Unlimited copies may be made for internal use.

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6-I.G. ASSETS [24 CFR 5.609(B)(3) AND 24 CFR 5.603(B)]
Overview
There is no asset limitation for participation in the HCV program. However, HUD requires that the PHA include in annual income the anticipated “interest, dividends, and other net income of any kind from real or personal property” [24 CFR 5.609(b)(3)]. This section discusses how the income from various types of assets is determined. For most types of assets, the PHA must determine the value of the asset in order to compute income from the asset. Therefore, for each asset type, this section discusses:
• How the value of the asset will be determined
• How income from the asset will be calculated
Exhibit 6-1 provides the regulatory requirements for calculating income from assets [24 CFR

5.609(b)(3)] and Exhibit 6-3 provides the regulatory definition of net family assets. This section begins with a discussion of general policies related to assets and then provides HUD rules and PHA policies related to each type of asset.

General Policies
Income from Assets
The PHA generally will use current circumstances to determine both the value of an asset and the anticipated income from the asset. As is true for all sources of income, HUD authorizes the PHA to use other than current circumstances to anticipate income when (1) an imminent change in circumstances is expected (2) it is not feasible to anticipate a level of income over 12 months or (3) the PHA believes that past income is the best indicator of anticipated income. For example, if a family member owns real property that typically receives rental income but the property is currently vacant, the PHA can take into consideration past rental income along with the prospects of obtaining a new tenant.

PHA Policy
Anytime current circumstances are not used to determine asset income, a clear rationale for the decision will be documented in the file. In such cases the family may present information and documentation to the PHA to show why the asset income determination does not represent the family’s anticipated asset income. © Copyright 2023 Nan McKay & Associates, Inc. Adminplan 4/1/26 Unlimited copies may be made for internal use.

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Valuing Assets
The calculation of asset income sometimes requires the PHA to make a distinction between an asset’s market value and its cash value.
• The market value of an asset is its worth (e.g., the amount a buyer would pay for real estate or the balance in an investment account).
• The cash value of an asset is its market value less all reasonable amounts that would be incurred when converting the asset to cash.

PHA Policy
Reasonable costs that would be incurred when disposing of an asset include, but are not limited to, penalties for premature withdrawal, broker and legal fees, and settlement costs incurred in real estate transactions [HCV GB, p. 5-28].

Lump-Sum Receipts
Payments that are received in a single lump sum, such as inheritances, capital gains, lottery winnings, insurance settlements, and proceeds from the sale of property, are generally considered assets, not income. However, such lump-sum receipts are counted as assets only if they are retained by a family in a form recognizable as an asset (e.g., deposited in a savings or checking account) [RHIIP FAQs]. (For a discussion of lump-sum payments that represent the delayed start of a periodic payment, most of which are counted as income, see sections 6-I.H and 6-I.I.) Imputing Income from Assets [24 CFR 5.609(b)(3)]
When net family assets are $5,000 or less, the PHA will include in annual income the actual income anticipated to be derived from the assets. When the family has net family assets in excess of $5,000, the PHA will include in annual income the greater of (1) the actual income derived from the assets or (2) the imputed income. Imputed income from assets is calculated by multiplying the total cash value of all family assets by the current HUD-established passbook savings rate.

Determining Actual Anticipated Income from Assets
It may or may not be necessary for the PHA to use the value of an asset to compute the actual anticipated income from the asset. When the value is required to compute the anticipated income from an asset, the market value of the asset is used. For example, if the asset is a property for which a family receives rental income, the anticipated income is determined by annualizing the actual monthly rental amount received for the property; it is not based on the property’s market value. However, if the asset is a savings account, the anticipated income is determined by multiplying the market value of the account by the interest rate on the account.

Withdrawal of Cash or Liquidation of Investments
Any withdrawal of cash or assets from an investment will be included in income except to the extent that the withdrawal reimburses amounts invested by the family. For example, when a family member retires, the amount received by the family from a retirement plan is not counted as income until the family has received payments equal to the amount the family member deposited into the retirement fund.

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Jointly Owned Assets
The regulation at 24 CFR 5.609(a)(4) specifies that annual income includes “amounts derived (during the 12-month period) from assets to which any member of the family has access.” PHA Policy
If an asset is owned by more than one person and any family member has unrestricted access to the asset, the PHA will count the full value of the asset. A family member has unrestricted access to an asset when they can legally dispose of the asset without the consent of any of the other owners.

If an asset is owned by more than one person, including a family member, but the family member does not have unrestricted access to the asset, the PHA will prorate the asset according to the percentage of ownership. If no percentage is specified or provided for by state or local law, the PHA will prorate the asset evenly among all owners.

Assets Disposed Of for Less than Fair Market Value [24 CFR 5.603(b)] HUD regulations require the PHA to count as a current asset any business or family asset that was disposed of for less than fair market value during the two years prior to the effective date of the examination/reexamination, except as noted below.

Minimum Threshold
The HCV Guidebook permits the PHA to set a threshold below which assets disposed of for less than fair market value will not be counted [HCV GB, p. 5-27].

PHA Policy
The PHA will not include the value of assets disposed of for less than fair market value unless the cumulative fair market value of all assets disposed of during the past two years exceeds the gross amount received for the assets by more than $1,000.

When the two-year period expires, the income assigned to the disposed asset(s) also expires. If the two-year period ends between annual recertifications, the family may request an interim recertification to eliminate consideration of the asset(s).

Assets placed by the family in nonrevocable trusts are considered assets disposed of for less than fair market value except when the assets placed in trust were received through settlements or judgments.

Separation or Divorce
The regulation also specifies that assets are not considered disposed of for less than fair market value if they are disposed of as part of a separation or divorce settlement and the applicant or tenant receives important consideration not measurable in dollar terms.

PHA Policy
All assets disposed of as part of a separation or divorce settlement will be considered assets for which important consideration not measurable in monetary terms has been received. In order to qualify for this exemption, a family member must be subject to a formal separation or divorce settlement agreement established through arbitration, mediation, or court order.
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Foreclosure or Bankruptcy
Assets are not considered disposed of for less than fair market value when the disposition is the result of a foreclosure or bankruptcy sale.

Family Declaration
PHA Policy
Families must sign a declaration form at initial certification and each annual recertification identifying all assets that have been disposed of for less than fair market value or declaring that no assets have been disposed of for less than fair market value.

The PHA may verify the value of the assets disposed of if other information available to the PHA does not appear to agree with the information reported by the family.

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Types of Assets [24 CFR 5.659(e)]
The PHA will determine the value of assets as indicated under each asset type.

Checking and Savings Accounts
For regular checking accounts and savings accounts, cash value has the same meaning as market value. If a checking account does not bear interest, the anticipated income from the account is zero.

PHA Policy
In determining the value of checking account, the PHA will use, at minimum, the average monthly balance for the last two months. The PHA may request additional bank statements if the statements indicate discrepancies or possible unreported income. If this occurs, the PHA will use the average monthly balance of all of the statements that were received.

In determining the value of a savings account, the PHA will use the current balance.

In determining the anticipated income from an interest-bearing checking or savings account, the PHA will multiply the value of the account by the current rate of interest paid on the account.

Investment Accounts Such as Stocks, Bonds, Saving Certificates, and Money Market Funds Interest or dividends earned by investment accounts are counted as actual income from assets even when the earnings are reinvested. The cash value of such an asset is determined by deducting from the market value any broker fees, penalties for early withdrawal, or other costs of converting the asset to cash.

PHA Policy
In determining the market value of an investment account, the PHA will use the value of the account on the most recent investment report.

How anticipated income from an investment account will be calculated depends on whether the rate of return is known.

For assets that are held in an investment account with a known rate of return (e.g., savings certificates), asset income will be calculated based on that known rate (market value multiplied by rate of earnings).

When the anticipated rate of return is not known (e.g., stocks), the PHA will calculate asset income based on the earnings for the most recent reporting period. © Copyright 2023 Nan McKay & Associates, Inc. Adminplan 4/1/26 Unlimited copies may be made for internal use.

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Equity in Real Property or Other Capital Investments
Equity (cash value) in a property or other capital asset is the estimated current market value of the asset less the unpaid balance on all loans secured by the asset and reasonable costs (such as broker fees) that would be incurred in selling the asset [HCV GB, p. 5-25].

Equity in real property and other capital investments is considered in the calculation of asset income except for the following types of assets:
• Equity accounts in HUD homeownership programs [24 CFR5.603(b)] • The value of a home currently being purchased with assistance under the HCV program Homeownership Option for the first 10 years after the purchase date of the home [24 CFR

5.603(b), Notice PIH 2012-3]
• Equity in owner-occupied cooperatives and manufactured homes in which the family lives [HCV GB, p. 5-25]
• Equity in real property when a family member’s main occupation is real estate [HCV GB, p. 5-25]. This real estate is considered a business asset, and income related to this asset will be calculated as described in section 6-I.F.
• Interests in Indian Trust lands [24 CFR 5.603(b)]
• Real property and capital assets that are part of an active business or farming operation [HCV GB, p. 5-25]
A family may have real property as an asset in two ways: (1) owning the property itself and (2) holding a mortgage or deed of trust on the property. In the case of a property owned by a family member, the anticipated asset income generally will be in the form of rent or other payment for the use of the property. If the property generates no income, actual anticipated income from the asset will be zero.

In the case of a mortgage or deed of trust held by a family member, the outstanding balance (unpaid principal) is the cash value of the asset. The interest portion only of payments made to the family in accordance with the terms of the mortgage or deed of trust is counted as anticipated asset income.

PHA Policy
In the case of capital investments owned jointly with others not living in a family’s unit, a prorated share of the property’s cash value will be counted as an asset unless the PHA determines that the family receives no income from the property and is unable to sell or otherwise convert the asset to cash.

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Trusts
A trust is a legal arrangement generally regulated by state law in which one party (the creator or grantor) transfers property to a second party (the trustee) who holds the property for the benefit of one or more third parties (the beneficiaries).

Revocable Trusts
If any member of a family has the right to withdraw the funds in a trust, the value of the trust is considered an asset [HCV GB, p. 5-25]. Any income earned as a result of investment of trust funds is counted as actual asset income, whether the income is paid to the family or deposited in the trust.

Nonrevocable Trusts
In cases where a trust is not revocable by, or under the control of, any member of a family, the value of the trust fund is not considered an asset. However, any income distributed to the family from such a trust is counted as a periodic payment or a lump-sum receipt, as appropriate [24 CFR

5.603(b)]. (Periodic payments are covered in section 6-I.H. Lump-sum receipts are discussed earlier in this section.)
Retirement Accounts
Company Retirement/Pension Accounts
In order to correctly include or exclude as an asset any amount held in a company retirement or pension account by an employed person, the PHA must know whether the money is accessible before retirement [HCV GB, p. 5-26].

While a family member is employed, only the amount the family member can withdraw without retiring or terminating employment is counted as an asset [HCV GB, p. 5-26].

After a family member retires or terminates employment, any amount distributed to the family member is counted as a periodic payment or a lump-sum receipt, as appropriate [HCV GB, p. 5- 26], except to the extent that it represents funds invested in the account by the family member. (For more on periodic payments, see section 6-I.H.) The balance in the account is counted as an asset only if it remains accessible to the family member.

IRA, Keogh, and Similar Retirement Savings Accounts
IRA, Keogh, and similar retirement savings accounts are counted as assets even though early withdrawal would result in a penalty [HCV GB, p. 5-25].

PHA Policy
In cases where the PHA is unable to determine actual cash value, the PHA will deduct the 20% IRS mandatory income tax withholding when determining the value of asset.

Retirement accounts that are only accessible through the form of a hardship will be considered accessible. Retirement accounts that are only accessible through the form of a loan will not be considered accessible.
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Personal Property
Personal property held as an investment, such as gems, jewelry, coin collections, antique cars, etc., is considered an asset [HCV GB, p. 5-25].

PHA Policy
In determining the value of personal property held as an investment, the PHA will use the family’s estimate of the value. The PHA may obtain an appraisal to confirm the value of the asset if there is reason to believe that the family’s estimated value is off by $50 or more. The family must cooperate with the appraiser but cannot be charged any costs related to the appraisal.

Generally, personal property held as an investment generates no income until it is disposed of. If regular income is generated (e.g., income from renting the personal property), the amount that is expected to be earned in the coming year is counted as actual income from the asset.

Necessary items of personal property are not considered assets [24 CFR 5.603(b)].

PHA Policy
Necessary personal property consists of only those items not held as an investment, and may include clothing, furniture, household furnishings, jewelry, and vehicles, including those specially equipped for persons with disabilities.

Life Insurance
The cash value of a life insurance policy available to a family member before death, such as a whole life or universal life policy, is included in the calculation of the value of the family’s assets [HCV GB 5-25]. The cash value is the surrender value. If such a policy earns dividends or interest that the family could elect to receive, the anticipated amount of dividends or interest is counted as income from the asset whether or not the family actually receives it. © Copyright 2023 Nan McKay & Associates, Inc. Adminplan 4/1/26 Unlimited copies may be made for internal use.

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6-I.H. PERIODIC PAYMENTS
Periodic payments are forms of income received on a regular basis. HUD regulations specify periodic payments that are and are not included in annual income.

Periodic Payments Included in Annual Income
• Periodic payments from sources such as social security, unemployment and welfare assistance, annuities, insurance policies, retirement funds, and pensions. However, periodic payments from retirement accounts, annuities, and similar forms of investments are counted only after they exceed the amount contributed by the family [24 CFR 5.609(b)(4) and (b)(3)]. • Disability or death benefits and lottery receipts paid periodically, rather than in a single lump sum [24 CFR 5.609(b)(4) and HCV, p. 5-14].

Lump-Sum Payments for the Delayed Start of a Periodic Payment Most lump-sums received as a result of delays in processing periodic payments, such as unemployment or welfare assistance, are counted as income. However, lump-sum receipts for the delayed start of periodic social security or supplemental security income (SSI) payments are not counted as income. Additionally, any deferred disability benefits that are received in a lump-sum or in prospective monthly amounts from the Department of Veterans Affairs are to be excluded from annual income [24 CFR 5.609(c)(14)].

PHA Policy
When a delayed-start payment is received and reported during the period in which the PHA is processing an annual reexamination, the PHA will adjust the family share and PHA subsidy retroactively for the period the payment was intended to cover. The family may pay in full any amount due or request to enter into a repayment agreement with the PHA.

Treatment of Overpayment Deductions from Social Security Benefits The PHA must make a special calculation of annual income when the Social Security Administration (SSA) overpays an individual, resulting in a withholding or deduction from their benefit amount until the overpayment is paid in full. The amount and duration of the withholding will vary depending on the amount of the overpayment and the percent of the benefit rate withheld. Regardless of the amount withheld or the length of the withholding period, the PHA must use the reduced benefit amount after deducting only the amount of the overpayment withholding from the gross benefit amount [Notice PIH 2018-24]. © Copyright 2023 Nan McKay & Associates, Inc. Adminplan 4/1/26 Unlimited copies may be made for internal use.

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Periodic Payments Excluded from Annual Income
• Payments received for the care of foster children or foster adults (usually persons with disabilities, unrelated to the assisted family, who are unable to live alone) [24 CFR

5.609(c)(2)]. Kinship guardianship assistance payments (Kin-GAP) and other similar guardianship payments are treated the same as foster care payments and are likewise excluded from annual income [Notice PIH 2012-1].

PHA Policy
The PHA will exclude payments for the care of foster children and foster adults only if the care is provided through an official arrangement with a local welfare agency [HCV GB, p. 5-18].
• Amounts paid by a state agency to a family with a member who has a developmental disability and is living at home to offset the cost of services and equipment needed to keep the developmentally disabled family member at home [24 CFR 5.609(c)(16)]. • Amounts received under the Low-Income Home Energy Assistance Program (42 U.S.C. 1626(c)) [24 CFR 5.609(c)(17)].
• Amounts received under the Childcare and Development Block Grant Act of 1990 (42 U.S.C. 9858q) [24 CFR 5.609(c)(17)].
• Earned Income Tax Credit (EITC) refund payments (26 U.S.C. 32(j)) [24 CFR 5.609(c)(17)].

Note: EITC may be paid periodically if the family elects to receive the amount due as part of payroll payments from an employer.
• Lump-sums received as a result of delays in processing Social Security and SSI payments (see section 6-I.H.) [24 CFR 5.609(c)(14)].
• Lump-sums or prospective monthly amounts received as deferred disability benefits from the Department of Veterans Affairs (VA) [24 CFR 5.609(c)(14)].

6-I.I. PAYMENTS IN LIEU OF EARNINGS
Payments in lieu of earnings, such as unemployment and disability compensation, worker’s compensation, and severance pay, are counted as income [24 CFR 5.609(b)(5)] if they are received either in the form of periodic payments or in the form of a lump-sum amount or prospective monthly amounts for the delayed start of a periodic payment. If they are received in a one-time lump sum (as a settlement, for instance), they are treated as lump-sum receipts [24 CFR 5.609(c)(3)]. (See also the discussion of periodic payments in section 6-I.H and the discussion of lump-sum receipts in section 6-I.G.)
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6-I.J. WELFARE ASSISTANCE
Overview
Welfare assistance is counted in annual income. Welfare assistance includes Temporary Assistance for Needy Families (TANF) and any payments to individuals or families based on need that are made under programs funded separately or jointly by federal, state, or local governments [24 CFR 5.603(b)].

Sanctions Resulting in the Reduction of Welfare Benefits [24 CFR 5.615] The PHA must make a special calculation of annual income when the welfare agency imposes certain sanctions on certain families. The full text of the regulation at 24 CFR 5.615 is provided as Exhibit 6-5. The requirements are summarized below. This rule applies only if a family was receiving HCV assistance at the time the sanction was imposed.

Covered Families
The families covered by 24 CFR 5.615 are those “who receive welfare assistance or other public assistance benefits (‘welfare benefits’) from a State or other public agency (’welfare agency’) under a program for which Federal, State or local law requires that a member of the family must participate in an economic self-sufficiency program as a condition for such assistance” [24 CFR

5.615(b)]
Imputed Income
When a welfare agency imposes a sanction that reduces a family’s welfare income because the family commits fraud or fails to comply with the agency’s economic self-sufficiency program or work activities requirement, the PHA must include in annual income “imputed” welfare income.

The PHA must request that the welfare agency provide the reason for the reduction of benefits and the amount of the reduction of benefits. The imputed welfare income is the amount that the benefits were reduced as a result of the sanction.

This requirement does not apply to reductions in welfare benefits: (1) at the expiration of the lifetime or other time limit on the payment of welfare benefits, (2) if a family member is unable to find employment even though the family member has complied with the welfare agency economic self-sufficiency or work activities requirements, or (3) because a family member has not complied with other welfare agency requirements [24 CFR 5.615(b)(2)].

Offsets
The amount of the imputed welfare income is offset by the amount of additional income the family begins to receive after the sanction is imposed. When the additional income equals or exceeds the imputed welfare income, the imputed income is reduced to zero [24 CFR

5.615(c)(4)].
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6-I.K. PERIODIC AND DETERMINABLE ALLOWANCES
Annual income includes periodic and determinable allowances, such as alimony and child support payments, and regular contributions or gifts received from organizations or from persons not residing with an assisted family.

Alimony and Child Support
The PHA must count alimony or child support amounts awarded as part of a divorce or separation agreement.

PHA Policy
The PHA will count court-awarded amounts for alimony and child support unless the PHA verifies that: (1) the payments are not being made, and (2) the family has made reasonable efforts to collect amounts due, including filing with courts or agencies responsible for enforcing payments [HCV GB, pp. 5-23 and 5-47].

Families who do not have court-awarded alimony and child support awards are required to take proactive steps to initiate collection efforts to secure any funds that may be owed to them. Exceptions may be granted in VAWA related cases where the safety of the victim or other family member may be at risk if such action is taken.

Regular Contributions or Gifts
The PHA must count as income regular monetary and nonmonetary contributions or gifts from persons not residing with an assisted family [24 CFR 5.609(b)(7)]. Temporary, nonrecurring, or sporadic income and gifts are not counted as income [24 CFR 5.609(c)(9)].

PHA Policy
Examples of regular contributions include: (1) regular payment of a family’s bills (e.g., utilities, telephone, rent, credit cards, and car payments), (2) cash or other liquid assets provided to any family member on a regular basis, and (3) “in-kind” contributions such as groceries and clothing provided to a family on a regular basis.

Nonmonetary contributions will be valued at the cost of purchasing the items, as determined by the PHA. For contributions that may vary from month to month (e.g., utility payments), the PHA will include an average amount based upon past history.

Any income received less than four times during the year will be considered temporary income and not counted.
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6-I.L. NONRECURRING INCOME [24 CFR 5.609(B)(24); NOTICE PIH 2023-27; AND NOTICE PIH 2024-38]
Nonrecurring income, which is income that will not be repeated in the coming year based on information provided by the family. Income received as an independent contractor, day laborer, or seasonal worker is not excluded from income as nonrecurring income, even if the source, date, or amount of the income varies.

Income that has a discrete end date and will not be repeated beyond the coming year during the family’s upcoming annual reexamination period will be excluded from a family’s annual income as nonrecurring income. This exclusion does not include unemployment income and other types of periodic payments that are received at regular intervals (such as weekly, monthly, or yearly).

Income amounts excluded under this category may include, but are not limited to:
• Nonrecurring payments made to the family or to a third party on behalf of the family to assist with utilities;
PHA Policy
Nonrecurring payments made to the family or to a third party on behalf of the family to assist with utilities are excluded from the annual income. However, if a family repeatedly says that a payment is nonrecurring but the PHA can establish a pattern of the payments actually being nonrecurring year after year, the PHA will no longer consider the payments nonrecurring. • Payments for eviction prevention;
• Security deposits to secure housing;
• Payments for participation in research studies (depending on the duration); and • General one-time payments received by or on behalf of the family.

Nonrecurring income that is excluded under the regulations includes:
• Payments from the U.S. Census Bureau for employment (relating to decennial census or the American Community Survey) lasting no longer than 180 days and not culminating in permanent employment [24 CFR 5.609(b)(24)(i)].
• Direct federal or state payments intended for economic stimulus or recovery [24 CFR

5.609(b)(24)(ii)].
• Amounts directly received by the family as a result of state refundable tax credits or state or federal tax refunds at the time they are received [24 CFR 5.609(b)(24)(iii) and (iv)]. • Gifts for holidays, birthdays, or other significant life events or milestones (e.g., wedding gifts, baby showers, anniversaries) [24 CFR 5.609(b)(24)(v)] • Non-monetary, in-kind donations, such as food, clothing, or toiletries, received from a food bank or similar organization [24 CFR 5.609(b)(24)(vi)]. When calculating annual income, PHAs are prohibited from assigning monetary value to such non-monetary in-kind donations received by the family [Notice PIH 2023-27]. Non-recurring, non-monetary in-kind donations from friends and family are excluded as non-recurring income. However, the value of regular in-kind donations (such as the value of groceries) received by friends and family are included. • Lump-sum additions to net family assets, including but not limited to lottery or other contest winnings [24 CFR 5.609(b)(24)(vii)].
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6-I.M. STUDENT FINANCIAL ASSISTANCE [24 CFR 5.609(B)(9); AND NOTICE PIH 2015-21]
In 2005, Congress passed a law (for Section 8 programs only) requiring that certain student financial assistance be included in annual income. Prior to that, the full amount of student financial assistance was excluded. For some students, the full exclusion still applies.

Student Financial Assistance Included in Annual Income [24 CFR 5.609(b)(9); FR 4/10/06; Notice PIH 2015-21]
The regulation requiring the inclusion of certain student financial assistance applies only to students who satisfy all of the following conditions:
• They are enrolled in an institution of higher education, as defined under the Higher Education Act (HEA) of 1965.
• They are seeking or receiving Section 8 assistance on their own—that is, apart from their parents—through the HCV program, the project-based voucher program, or the moderate rehabilitation program.
• They are under 24 years of age OR they have no dependent children.

For students who satisfy these three conditions, any financial assistance in excess of tuition and any other required fees and charges received: (1) under the 1965 HEA, (2) from a private source, or (3) from an institution of higher education, as defined under the 1965 HEA, must be included in annual income.

To determine annual income in accordance with the above requirements, the PHA will use the definitions of dependent child, institution of higher education, and parents in Section 3-II.E, along with the following definitions [FR 4/10/06, pp. 18148-18150]:
• Assistance under the Higher Education Act of 1965 includes Pell Grants, Federal Supplement Educational Opportunity Grants, Academic Achievement Incentive Scholarships, State Assistance under the Leveraging Educational Assistance Partnership Program, the Robert G.

Byrd Honors Scholarship Program, and Federal Work Study programs. • Assistance from private sources means assistance from nongovernmental sources, including parents, guardians, and other persons not residing with the student in an HCV assisted unit. • Tuition and fees are defined in the same manner in which the Department of Education defines tuition and fees [Notice PIH 2015-21].
- This is the amount of tuition and required fees covering a full academic year most frequently charged to students.
- The amount represents what a typical student would be charged and may not be the same for all students at an institution.
- If tuition is charged on a per-credit-hour basis, the average full-time credit hour load for an academic year is used to estimate average tuition.
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- Required fees include all fixed-sum charges that are required of a large proportion of all students. Examples include, but are not limited to, writing and science lab fees and fees specific to the student’s major or program (i.e., nursing program). - Expenses related to attending an institution of higher education must not be included as tuition. Examples include, but are not limited to, room and board, books, supplies, meal plans, transportation and parking, student health insurance plans, and other non-fixed- sum charges.

Student Financial Assistance Excluded from Annual Income [24 CFR 5.609(c)(6)] Any student financial assistance not subject to inclusion under 24 CFR 5.609(b)(9) is fully excluded from annual income under 24 CFR 5.609(c)(6), whether it is paid directly to the student or to the educational institution the student is attending. This includes any financial assistance received by:
• Students residing with parents who are seeking or receiving Section 8 assistance • Students who are enrolled in an educational institution that does not meet the 1965 HEA definition of institution of higher education
• Students who are over 23 AND have at least one dependent child, as defined in Section 3-II.E
• Students who are receiving financial assistance through a governmental program not authorized under the 1965 HEA.
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6-I.N. ADDITIONAL EXCLUSIONS FROM ANNUAL INCOME [24 CFR 5.609(B); FR NOTICE 1/31/2024; NOTICE PIH 2023-27; AND NOTICE PIH 2024-38] Other exclusions contained in 24 CFR 5.609(b) and FR Notice 1/31/24 that have not been discussed earlier in this chapter include the following:
• Payments received for the care of foster children or foster adults or state or tribal kinship or guardianship care payments [24 CFR 5.609(b)(4)].
• Insurance payments and settlements for personal or property losses, including but not limited to payments through health insurance, motor vehicle insurance, and workers’ compensation [24 CFR 5.609(b)(5)]. However, periodic payments paid at regular intervals (such as weekly, monthly, or yearly) for a period of greater than one year that are received in lieu of wages are included in annual income [Notice PIH 2023-27].
• Amounts received by the family that are specifically for, or in reimbursement of, the cost of health and medical care expenses for any family member [24 CFR 5.609(b)(6)]. • Any amounts recovered in any civil action or settlement based on a claim of malpractice, negligence, or other breach of duty owed to a family member arising out of law, that resulted in a member of the family becoming disabled [24 CFR 5.609(b)(7)]. • Income and distributions from any Coverdell education savings account under Section 530 of the Internal Revenue Code of 1986 or any qualified tuition program under Section 529 of such Code [24 CFR 5.609(b)(10)].
• Income earned by government contributions to, and distributions from, “baby bond” accounts created, authorized, or funded by federal, state, or local government [24 CFR 5.609(b)(10)]. • The special pay to a family member serving in the Armed Forces who is exposed to hostile fire [24 CFR 5.609(b)(11)].
• Payments related to aid and attendance under 38 U.S.C. 1521 to veterans in need of regular aid and attendance [24 CFR 5.609(b)(17)]. This income exclusion applies only to veterans in need of regular aid and attendance and not to other beneficiaries of the payments, such as a surviving spouse [Notice PIH 2023-27].
• Loan proceeds (the net amount disbursed by a lender to or on behalf of a borrower, under the terms of a loan agreement) received by the family or a third party (e.g., proceeds received by the family from a private loan to enable attendance at an educational institution or to finance the purchase of a car) [24 CFR 5.609(b)(20)]. The loan borrower or co-borrower must be a member of the family for this income exclusion to be applicable [Notice PIH 2023-27]. • Payments received by tribal members as a result of claims relating to the mismanagement of assets held in trust by the United States, to the extent such payments are also excluded from gross income under the Internal Revenue Code or other federal law [24 CFR 5.609(b)(21)].

Generally, payments received by tribal members in excess of the first $2,000 of per capita shares are included in a family’s annual income for purposes of determining eligibility.

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and certain per capita payments under the recent Tribal Trust Settlements, must be excluded from annual income.
• Replacement housing “gap” payments made in accordance with 49 CFR Part 24 that offset increased out of pocket costs of displaced persons that move from one federally subsidized housing unit to another federally subsidized housing unit. Such replacement housing “gap” payments are not excluded from annual income if the increased cost of rent and utilities is subsequently reduced or eliminated, and the displaced person retains or continues to receive the replacement housing “gap” payments [24 CFR 5.609(b)(23)]. • Income earned on amounts placed in a family’s Family Self-Sufficiency account [24 CFR

5.609(b)(27)].
• Amounts received by participants in other publicly assisted programs which are specifically for or in reimbursement of out-of-pocket expenses incurred e.g., special equipment, clothing, transportation, childcare, etc.) and which are made solely to allow participation in a specific program [24 CFR 5.609(i)(12)(ii)].
• Amounts received by a person with a disability that are disregarded for a limited time for purposes of Supplemental Security Income eligibility and benefits because they are set aside for use under a Plan to Attain Self-Sufficiency (PASS) [(24 CFR 5.609(b)(12)(i)]. • Amounts received under a resident service stipend not to exceed $200 per month. A resident service stipend is a modest amount received by a resident for performing a service for the PHA or owner, on a part-time basis, that enhances the quality of life in the development [24 CFR 5.609 I(12)(ii)].

Incremental earnings and benefits to any family member resulting from participation in qualifying training program funded by HUD or in qualifying federal, state, tribal, or local employment training programs (including training programs not affiliated with a local government) and training of a family member as resident management staff are excluded from annual income. Amounts excluded by this provision must be received under employment training programs with clearly defined goals and objectives and are excluded only for the period during which the family member participates in the training program unless those amounts are excluded under 24 CFR 5.609(b)(9)(i) [24 CFR 5.609(b)(12)(iv)].

PHA Policy
The PHA defines training program as “a learning process with goals and objectives, generally having a variety of components, and taking place in a series of sessions over a period of time. It is designed to lead to a higher level of proficiency, and it enhances the individual’s ability to obtain employment. It may have performance standards to measure proficiency. Training may include but is not limited to: (1) classroom training in a specific occupational skill, (2) on-the-job training with wages subsidized by the program, or (3) basic education” [expired Notice PIH 98-2, p. 3].

The PHA defines incremental earnings and benefits as the difference between (1) the total amount of welfare assistance and earnings of a family member prior to enrollment in a training program and (2) the total amount of welfare assistance and earnings of the family member after enrollment in the program [expired Notice PIH 98-2, pp. 3–4].
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End of participation in a training program must be reported in accordance with the PHA’s interim reporting requirements (see Chapter 11).
• Reparation payments paid by a foreign government pursuant to claims filed under the laws of that government by persons who were persecuted during the Nazi era [24 CFR 5.609(b)(13)]. • Adoption assistance payments for a child in excess of the amount of the dependent deduction per adopted child [24 CFR 5.609(b)(15)].
• Refunds or rebates on property taxes paid on the dwelling unit [24 CFR 5.609(b)(20)]. • Amounts that HUD is required by federal statute to exclude from consideration as income for purposes of determining eligibility or benefits under a category of assistance programs that includes assistance under any program to which the exclusions set forth in 24 CFR 5.609(b) apply. HUD will publish a notice in the Federal Register to identify the benefits that qualify for this exclusion. Updates will be published when necessary.

HUD publishes an updated list of these exclusions periodically. The most recent list of exclusions was published in the Federal Register on January 31, 2024. It includes:
(a) The value of the allotment provided to an eligible household under the Food Stamp Act of 1977 (7 U.S.C. 2017 (b)). This exclusion also applies to assets. (b) Benefits under Section 1780 of the Richard B. Russell School Lunch Act and Child Nutrition Act of 1966, including WIC and reduced-price lunches. (c) Payments, including for supportive services and reimbursement of out-of-pocket expenses, to volunteers under the Domestic Volunteer Services Act of 1973 (42 U.S.C. 5044(g), 5058). The exclusion also applies to assets.
- Except, the exclusion does not apply when the Chief Executive Officer of the Corporation for National and Community Service determines that the value of all such payments, adjusted to reflect the number of hours such volunteers are serving, is equivalent to or greater than the minimum wage then in effect under the Fair Labor Standards Act of 1938 (29 U.S.C. 201 et seq.) or the minimum wage, under the laws of the State where such volunteers are serving, whichever is the greater (42 U.S.C. 5044(f)(1)).
(d) Certain payments received under the Alaska Native Claims Settlement Act (43 U.S.C. 1626(c)).
(e) Income derived from certain submarginal land of the United States that is held in trust for certain Indian tribes (25 U.S.C. 5506).
(f) Payments or allowances made under the Department of Health and Human Services’ Low-Income Home Energy Assistance Program (42 U.S.C. 8624(f)(1)). (g) Allowances, earnings, and payments to individuals participating in programs under the Workforce Investment Act of 1998 which was reauthorized as the Workforce Innovation and Opportunity Act of 2014 (29 U.S.C. 3241(a)(2)). © Copyright 2023 Nan McKay & Associates, Inc. Adminplan 4/1/26 Unlimited copies may be made for internal use.

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(h) Deferred disability benefits from the Department of Veterans Affairs, whether received as a lump sum or in monthly prospective amounts.
(i) Income derived from the disposition of funds to the Grand River Band of Ottawa Indians (Pub. L. 94-540, 90 Section 6).
(j) Payments, funds, or distributions authorized, established, or directed by the Seneca Nation Settlement Act of 1990 (25 U.S.C. 1774f(b)).
(k) A lump sum or periodic payment received by an individual Indian pursuant to the Class Action Settlement Agreement in the United States District Court case entitled Elouise Cobell et al. v. Ken Salazar et al., for a period of one year from the time of receipt of that payment as provided in the Claims Resolution Act of 2010. (l) The first $2,000 of per capita shares received from judgment funds awarded by the Indian Claims Commission or the U. S. Claims Court, the interests of individual Indians in trust or restricted lands, including the first $2,000 per year of income received by individual Indians from funds derived from interests held in such trust or restricted lands (25 U.S.C. 1407-1408). This exclusion does not include proceeds of gaming operations regulated by the Commission (25 U.S.C. 1407–1408).
(m) Payments received from programs funded under Title V of the Older Americans Act of 1965 (42 U.S.C. 3056(f)).
(n) Payments received on or after January 1, 1989, from the Agent Orange Settlement Fund or any other fund established pursuant to the settlement in In Re Agent Orange product liability litigation, M.D.L. No. 381 (E.D.N.Y.). This exclusion also applies to assets. (o) Payments received under 38 U.S.C. 1833(c) to children of Vietnam veterans born with spinal bifida, children of women Vietnam veterans born with certain birth defects, and children of certain Korean and Thailand service veterans born with spinal bifida (42
U.S.C. 12637(d)).
(p) Payments received under the Maine Indian Claims Settlement Act of 1980 (25 U.S.C. 1721). This exclusion also applies to assets.
(q) The value of any childcare provided or arranged (or any amount received as payment for such care or reimbursement for costs incurred for such care) under the Childcare and Development Block Grant Act of 1990 (42 U.S.C. 9858q).
(r) Earned income tax credit (EITC) refund payments received on or after January 1, 1991 (26 U.S.C. 32(j)). This exclusion also applies to assets. (s) Payments by the Indian Claims Commission to the Confederated Tribes and Bands of Yakima Indian Nation or the Apache Tribe of Mescalero Reservation (Pub. L. 95-433) This exclusion also applies to assets.
(t) Amounts of student financial assistance funded under Title IV of the Higher Education Act of 1965j, including awards under federal work-study programs or under the Bureau of Indian Affairs student assistance programs (20 U.S.C. 1087uu). For Section 8 programs, only, any financial assistance in excess of amounts received by an individual for tuition and any other required fees and charges under the Higher Education Act of 1965 (20 U.S.C. 1001 et seq.), from private sources, or an institution of higher education © Copyright 2023 Nan McKay & Associates, Inc. Adminplan 4/1/26 Unlimited copies may be made for internal use.

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(as defined under the Higher Education Act of 1965 (20 U.S.C. 1002)), shall be considered income if the individual is over the age of 23 with dependent children (Pub. L. 109–115, section 327 (as amended)).
(u) Allowances, earnings, and payments to AmeriCorps participants under the National and Community Service Act of 1990 (42 U.S.C. 12637(d)).
(v) Any amount of crime victim compensation t
hat provides medical or other assistance (or
payment or reimbursement of the cost of such assistance) under the Victims of Crime Act of 1984 received through a crime victim assistance program, unless the total amount of assistance that the applicant receives from all such programs is sufficient to fully compensate the applicant for losses suffered as a result of the crime (34 U.S.C. 20102(c)).
(w) Any amounts in an “individual development account” are excluded from assets and any assistance, benefit, or amounts earned by or provided to the individual development account are excluded from income, as provided by the Assets for Independence Act, as amended (42 U.S.C. 604(h)(4)).
(x) Major disaster and emergency assistance received under the Robert T. Stafford Disaster Relief and Emergency Assistance Act and comparable disaster assistance provided by states, local governments, and disaster assistance organizations. This exclusion also applies to assets.
(y) Distributions from an ABLE account, distributions from and certain contributions to an ABLE account established under the ABLE Act of 2014 (Pub. L. 113–295.), as described in Notice PIH 2019–09 or subsequent or superseding notice is excluded from income and assets.
(z) The amount of any refund (or advance payment with respect to a refundable credit) issued under the Internal Revenue Code is excluded from income and assets for a period of 12 months from receipt (26 U.S.C. 6409).
(aa) Assistance received by a household under the Emergency Rental Assistance Program pursuant to the Consolidated Appropriations Act, 2021 (Pub. L. 116–260, section 501(j)), and the American Rescue Plan Act of 2021.
(ab) Per capita payments made from the proceeds of Indian Tribal Trust Settlements listed in IRS Notice 2013-1 and 2013-55 must be excluded from annual income unless the per capita payments exceed the amount of the original Tribal Trust Settlement proceeds and are made from a Tribe’s private bank account in which the Tribe has deposited the settlement proceeds. Such amounts received in excess of the Tribal Trust Settlement are included in the gross income of the members of the Tribe receiving the per capita payments as described in IRS Notice 2013-1. The first $2,000 of per capita payments are also excluded from assets unless the per capita payments exceed the amount of the original Tribal Trust Settlement proceeds and are made from a Tribe’s private bank account in which the Tribe has deposited the settlement proceeds (25 U.S.C. 117b(a), 25 U.S.C. 1407).

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(ac) Any amounts (i) not actually received by the family, (ii) that would be eligible for exclusion under 42 U.S.C. 1382b(a)(7), and (iii) received for service-connected disability under 38 U.S.C. Chapter 11 or dependency and indemnity compensation under 38 U.S.C. Chapter 13 (25 U.S.C. 4103(9)(C)) as provided by an amendment by the Indian Veterans Housing Opportunity Act of 2010 (Pub. L. 111–269 section 2) to the definition of income applicable to programs under the Native American Housing Assistance and Self-Determination Act (NAHASDA) (25 U.S.C. 4101 et seq.).

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PART II: ADJUSTED INCOME
6-II.A. INTRODUCTION
Overview
HUD regulations require PHAs to deduct from annual income any of five mandatory deductions for which a family qualifies. The resulting amount is the family’s adjusted income. Mandatory deductions are found in 24 CFR 5.611.

5.611(a) Mandatory deductions. In determining adjusted income, the responsible entity [PHA] must deduct the following amounts from annual income:
(1) $480 for each dependent;
(2) $400 for any elderly family or disabled family;
(3) The sum of the following, to the extent the sum exceeds three percent of annual income:
(i) Unreimbursed medical expenses of any elderly family or disabled family; (ii) Unreimbursed reasonable attendant care and auxiliary apparatus expenses for each member of the family who is a person with disabilities, to the extent necessary to enable any member of the family (including the member who is a person with disabilities) to be employed. This deduction may not exceed the earned income received by family members who are 18 years of age or older and who are able to work because of such attendant care or auxiliary apparatus; and (4) Any reasonable childcare expenses necessary to enable a member of the family to be employed or to further his or her education.

This part covers policies related to these mandatory deductions. Verification requirements related to these deductions are found in Chapter 7.

Anticipating Expenses
PHA Policy
Generally, the PHA will use current circumstances to anticipate expenses. When possible, for costs that are expected to fluctuate during the year (e.g., childcare during school and nonschool periods and cyclical medical expenses), the PHA will estimate costs based on historic data and known future costs.

If a family has an accumulated debt for medical or disability assistance expenses, the PHA will include as an eligible expense the portion of the debt that the family expects to pay during the period for which the income determination is being made. However, amounts previously deducted will not be allowed even if the amounts were not paid as expected in a preceding period. The PHA may require the family to provide documentation of payments made in the preceding year.
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6-II.B. DEPENDENT DEDUCTION
An allowance of $480 is deducted from annual income for each dependent [24 CFR 5.611(a)(1)].

Dependent is defined as any family member other than the head, spouse, or cohead who is under the age of 18 or who is 18 or older and is a person with disabilities or a full-time student. Foster children, foster adults, and live-in aides are never considered dependents [24 CFR 5.603(b)].

6-II.C. ELDERLY OR DISABLED FAMILY DEDUCTION
A single deduction of $400 is taken for any elderly or disabled family [24 CFR 5.611(a)(2)]. An elderly family is a family whose head, spouse, cohead, or sole member is 62 years of age or older, and a disabled family is a family whose head, spouse, cohead, or sole member is a person with disabilities [24 CFR 5.403].

6-II.D. HEALTH AND MEDICAL CARE EXPENSES DEDUCTION [24 CFR

5.611(A)(3)(I) AND 5.603(B); NOTICE PIH 2023-27; AND NOTICE PIH 2024-38] Unreimbursed health and medical care expenses may be deducted to the extent that, in combination with any disability assistance expenses, they exceed three percent of annual income.

This medical expense deduction is permitted only for families in which the head, spouse, or cohead is at least 62 or is a person with disabilities. If a family is health and medical care expense deduction, the unreimbursed health and medical care expenses of all family members are included.

Definition of Medical Expenses
HUD regulations define health and medical care expenses at 24 CFR 5.603(b) to mean “any costs incurred in the diagnosis, cure, mitigation, treatment, or prevention of disease or payments for treatments affecting any structure or function of the body. Health and medical care expenses include medical insurance premiums and long-term care premiums that are paid or anticipated during the period for which annual income is computed.” Health and medical care expenses may be deducted from annual income only if they are eligible under this definition and not otherwise reimbursed.

Although HUD revised the definition of health and medical care expenses to reflect the Internal Revenue Service (IRS) general definition of medical expenses, HUD is not permitting PHAs to specifically align their policies to IRS Publication 502. PHAs must review each expense to determine whether it is eligible in accordance with HUD’s definition.

While PHA policies may not specifically align with IRS Publication 502, HUD recommends PHAs use it as a standard for determining allowable expenses, and the PHA may list examples of allowable expenses in their policy provided they comply with HUD’s definition at 24 CFR © Copyright 2023 Nan McKay & Associates, Inc. Adminplan 4/1/26 Unlimited copies may be made for internal use.

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5.603. The PHA may not define health and medical care expenses more narrowly than the regulation.

PHA Policy
The PHA will use the most current IRS Publication 502 as a standard for determining if expenses claimed by eligible families qualify as health and medical care expenses.

However, under no circumstances will the PHA deduct any expenses listed in IRS Publication 502 that do not conform with HUD’s definition of health and medical care expenses.

Summary of Typical Allowable Health and Medical Care Expenses

Services of medical professionals
Surgery and medical procedures that are
necessary, legal, non-cosmetic
Services of medical facilities
Hospitalization, long-term care, and in-
home nursing services
Prescription medicines and insulin, but
not nonprescription medicines even if
recommended by a doctor
Improvements to housing directly related
to medical needs (e.g., ramps for a wheel
chair, handrails)
Medical insurance premiums or the cost
of a health maintenance organization
(HMO)
Medicare Part B and Part D premiums
Substance abuse treatment programs
Psychiatric treatment
Ambulance services and some costs of
transportation related to medical
expenses. The PHA will use the most
current medical mileage rate listed in
IRS Publication 502.

The cost and care of necessary
equipment related to a medical
condition (e.g., eyeglasses/lenses,
hearing aids, crutches, and artificial
teeth)
The costs of buying, training, and
maintaining a guide dog or other service
animal to assist a visually impaired or
hearing disabled person, or a person
with other physical disabilities. In
general, this includes any costs, such as
food, grooming, and veterinary care,
incurred in maintaining the health and
vitality of the service animal so that it
may perform its duties.

Note: This chart provides a summary of eligible health and medical care expenses only. In all cases, the PHA will consider whether health and medical expenses care expenses claimed by the family are eligible under HUD’s definition..

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Families That Qualify for Both Health and Medical and Disability Assistance Expenses PHA Policy
This policy applies only to families in which the head, spouse, or cohead is 62 or older or is a person with disabilities.

When expenses anticipated by a family could be defined as either a health and medical care or disability assistance expenses, the PHA will consider them health and medical care expenses unless it is clear that the expenses are incurred exclusively to enable a person with disabilities to work.
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6-II.E. DISABILITY ASSISTANCE EXPENSES DEDUCTION [24 CFR 5.603(B) AND 24 CFR 5.611(A)(3)(II)]
Reasonable expenses for attendant care and auxiliary apparatus for a disabled family member may be deducted if they: (1) are necessary to enable a family member 18 years or older to work, (2) are not paid to a family member or reimbursed by an outside source, (3) in combination with any medical expenses, exceed three percent of annual income, and (4) do not exceed the earned income received by the family member who is enabled to work.

Earned Income Limit on the Disability Assistance Expense Deduction A family can qualify for the disability assistance expense deduction only if at least one family member (who may be the person with disabilities) is enabled to work [24 CFR 5.603(b)].

The disability expense deduction is capped by the amount of “earned income received by family members who are 18 years of age or older and who are able to work” because of the expense [24 CFR 5.611(a)(3)(ii)]. The earned income used for this purpose is the amount verified before any earned income disallowances or income exclusions are applied.

PHA Policy
The family must identify the family members enabled to work as a result of the disability assistance expenses. In evaluating the family’s request, the PHA will consider factors such as how the work schedule of the relevant family members relates to the hours of care provided, the time required for transportation, the relationship of the family members to the person with disabilities, and any special needs of the person with disabilities that might determine which family members are enabled to work.

When the PHA determines that the disability assistance expenses enable more than one family member to work, the expenses will be capped by the sum of the family members’ incomes.
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Eligible Disability Expenses
Examples of auxiliary apparatus are provided in the HCV Guidebook as follows: “Auxiliary apparatus are items such as wheelchairs, ramps, adaptations to vehicles, or special equipment to enable a blind person to read or type, but only if these items are directly related to permitting the disabled person or other family member to work” [HCV GB, p. 5-30].

HUD advises PHAs to further define and describe auxiliary apparatus [VG, p. 30].

Eligible Auxiliary Apparatus
PHA Policy
Expenses incurred for maintaining or repairing an auxiliary apparatus are eligible. In the case of an apparatus that is specially adapted to accommodate a person with disabilities (e.g., a vehicle or computer), the cost to maintain the special adaptations (but not maintenance of the apparatus itself) is an eligible expense.

The cost of service animals
trained to give assistance to persons with disabilities, including the cost of acquiring the animal, veterinary care, food, grooming, and other continuing costs of care, will be included.

Eligible Attendant Care
The family determines the type of attendant care that is appropriate for the person with disabilities.

PHA Policy
Attendant care includes, but is not limited to, reasonable costs for home medical care, nursing services, in-home or center-based care services, interpreters for persons with hearing impairments, and readers for persons with visual disabilities.

Attendant care expenses will be included for the period that the person enabled to work is employed plus reasonable transportation time. The cost of general housekeeping and personal services is not an eligible attendant care expense. However, if the person enabled to work is the person with disabilities, personal services necessary to enable the person with disabilities to work are eligible.

If the care attendant also provides other services to the family, the PHA will prorate the cost and allow only that portion of the expenses attributable to attendant care that enables a family member to work. For example, if the care provider also cares for a child who is not the person with disabilities, the cost of care must be prorated. Unless otherwise specified by the care provider, the calculation will be based upon the number of hours spent in each activity and/or the number of persons under care.

Payments to Family Members
No disability assistance expenses may be deducted for payments to a member of an assisted family [24 CFR 5.603(b)]. However, expenses paid to a relative who is not a member of the assisted family may be deducted if they are not reimbursed by an outside source.

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Necessary and Reasonable Expenses
The family determines the type of care or auxiliary apparatus to be provided and must describe how the expenses enable a family member to work. The family must certify that the disability assistance expenses are necessary and are not paid or reimbursed by any other source.

PHA Policy
The PHA determines the reasonableness of the expenses based on typical costs of care or apparatus in the locality. To establish typical costs, the PHA will collect information from organizations that provide services and support to persons with disabilities. A family may present, and the PHA will consider, the family’s justification for costs that exceed typical costs in the area.

Families That Qualify for Both Medical and Disability Assistance Expenses PHA Policy
This policy applies only to families in which the head or spouse is 62 or older or is a person with disabilities.

When expenses anticipated by a family could be defined as either medical or disability assistance expenses, the PHA will consider them medical expenses unless it is clear that the expenses are incurred exclusively to enable a person with disabilities to work. © Copyright 2023 Nan McKay & Associates, Inc. Adminplan 4/1/26 Unlimited copies may be made for internal use.

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6-II.F. CHILDCARE EXPENSE DEDUCTION
HUD defines childcare expenses at 24 CFR 5.603(b) as “amounts anticipated to be paid by the family for the care of children under 13 years of age during the period for which annual income is computed, but only where such care is necessary to enable a family member to actively seek employment, be gainfully employed, or to further his or her education and only to the extent such amounts are not reimbursed. The amount deducted shall reflect reasonable charges for childcare.

In the case of childcare necessary to permit employment, the amount deducted shall not exceed the amount of employment income that is included in annual income.”

Clarifying the Meaning of Child for This Deduction
Childcare expenses do not include child support payments made to another on behalf of a minor who is not living in an assisted family’s household [VG, p. 26]. However, childcare expenses for foster children that are living in the assisted family’s household are included when determining the family’s childcare expenses [HCV GB, p. 5-29].

Qualifying for the Deduction
Determining Who Is Enabled to Pursue an Eligible Activity PHA Policy
The family must identify the family member(s) enabled to pursue an eligible activity. The term eligible activity in this section means any of the activities that may make the family eligible for a childcare deduction (seeking work, pursuing an education, or being gainfully employed).

In evaluating the family’s request, the PHA will consider factors such as how the schedule for the claimed activity relates to the hours of care provided, the time required for transportation, the relationship of the family member(s) to the child, and any special needs of the child that might help determine which family member is enabled to pursue an eligible activity.

Seeking Work
PHA Policy
If the childcare expense being claimed is to enable a family member to seek employment, the family must provide evidence of the family member’s efforts to obtain employment at each reexamination. The deduction may be reduced or denied if the family member’s job search efforts are not commensurate with the childcare expense being allowed by the PHA.
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Furthering Education
PHA Policy
If the childcare expense being claimed is to enable a family member to further their education, the member must be enrolled in school (academic or vocational) or participating in a formal training program. The family member is not required to be a full-time student, but the time spent in educational activities must be commensurate with the childcare claimed.

Being Gainfully Employed
PHA Policy
If the childcare expense being claimed is to enable a family member to be gainfully employed, the family must provide evidence of the family member’s employment during the time that childcare is being provided. Gainful employment is any legal work activity (full- or part-time) for which a family member is compensated.

Earned Income Limit on Childcare Expense Deduction
When a family member looks for work or furthers their education, there is no cap on the amount that may be deducted for childcare – although the care must still be necessary and reasonable.

However, when childcare enables a family member to work, the deduction is capped by “the amount of employment income that is included in annual income” [24 CFR 5.603(b)].

The earned income used for this purpose is the amount of earned income verified after any income exclusions are applied.

When the person who is enabled to work is a full-time student whose earned income above $480 is excluded, childcare costs related to enabling a family member to work may not exceed the portion of the person’s earned income that actually is included in annual income.

The PHA must not limit the deduction to the least expensive type of childcare. If the care allows the family to pursue more than one eligible activity, including work, the cap is calculated in proportion to the amount of time spent working [HCV GB, p. 5-30].

PHA Policy
When the childcare expense being claimed is to enable a family member to work, only one family member’s income will be considered for a given period of time. When more than one family member works during a given period, the PHA generally will limit allowable childcare expenses to the earned income of the lowest-paid member. The family may provide information that supports a request to designate another family member as the person enabled to work.
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Eligible Childcare Expenses
The type of care to be provided is determined by the assisted family. The PHA may not refuse to give a family the childcare expense deduction because there is an adult family member in the household that may be available to provide childcare [VG, p. 26].

Allowable Childcare Activities
PHA Policy
For school-age children, costs attributable to public or private school activities during standard school hours are not considered. Expenses incurred for supervised activities after school or during school holidays (e.g., summer day camp, after-school sports league) are allowable forms of childcare.

The costs of general housekeeping and personal services are not eligible. Likewise, childcare expenses paid to a family member who lives in the family’s unit are not eligible; however, payments for childcare to relatives who do not live in the unit are eligible.

If a childcare provider also renders other services to a family or childcare is used to enable a family member to conduct activities that are not eligible for consideration, the PHA will prorate the costs and allow only that portion of the expenses that is attributable to childcare for eligible activities. For example, if the care provider also cares for a child with disabilities who is 13 or older, the cost of care will be prorated. Unless otherwise specified by the childcare provider, the calculation will be based upon the number of hours spent in each activity and/or the number of persons under care.

Necessary and Reasonable Costs
Childcare expenses will be considered necessary if: (1) a family adequately explains how the care enables a family member to work, actively seek employment, or further their education, and (2) the family certifies, and the childcare provider verifies, that the expenses are not paid or reimbursed by any other source.

PHA Policy
Childcare expenses will be considered for the time required for the eligible activity plus reasonable transportation time. For childcare that enables a family member to go to school, the time allowed may include not more than one study hour for each hour spent in class.

To establish the reasonableness of childcare costs, the PHA will use the schedule of childcare costs from the local welfare agency. Families may present, and the PHA will consider, justification for costs that exceed typical costs in the area. © Copyright 2023 Nan McKay & Associates, Inc. Adminplan 4/1/26 Unlimited copies may be made for internal use.

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PART III: CALCULATING FAMILY SHARE AND PHA SUBSIDY

6-III.A. OVERVIEW OF RENT AND SUBSIDY CALCULATIONS
TTP Formula [24 CFR 5.628]
HUD regulations specify the formula for calculating the total tenant payment (TTP) for an assisted family. TTP is the highest of the following amounts, rounded to the nearest dollar:
• 30 percent of the family’s monthly adjusted income (adjusted income is defined in Part II) • 10 percent of the family’s monthly gross income (annual income, as defined in Part I, divided by 12)
• The welfare rent (in as-paid states only)
• A minimum rent between $0 and $50 that is established by the PHA The PHA has authority to suspend and exempt families from minimum rent when a financial hardship exists, as defined in section 6-III.B.

The amount that a family pays for rent and utilities (the family share) will never be less than the family’s TTP but may be greater than the TTP depending on the rent charged for the unit the family selects.

Welfare Rent [24 CFR 5.628]
PHA Policy
Welfare rent does not apply in this locality.

Minimum Rent [24 CFR 5.630]
PHA Policy
The minimum rent for this locality is $50.

Family Share [24 CFR 982.305(a)(5)]
If a family chooses a unit with a gross rent (rent to owner plus an allowance for tenant-paid utilities) that exceeds the PHA’s applicable payment standard: (1) the family will pay more than the TTP, and (2) at initial occupancy the PHA may not approve the tenancy if it would require the family share to exceed 40 percent of the family’s monthly adjusted income. (For a discussion of the application of payment standards, see section 6-III.C.) © Copyright 2023 Nan McKay & Associates, Inc. Adminplan 4/1/26 Unlimited copies may be made for internal use.

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PHA Subsidy [24 CFR 982.505(b)]
The PHA will pay a monthly housing assistance payment (HAP) for a family that is equal to the lower of (1) the applicable payment standard for the family minus the family’s TTP or (2) the gross rent for the family’s unit minus the TTP. (For a discussion of the application of payment standards, see section 6-III.C.)

Utility Reimbursement [24 CFR 982.514(b); 982.514(c)]
When the PHA subsidy for a family exceeds the rent to owner, the family is due a utility reimbursement. HUD permits the PHA to pay the reimbursement to the family or directly to the utility provider.

PHA Policy
The PHA will make utility reimbursements to the family. © Copyright 2023 Nan McKay & Associates, Inc. Adminplan 4/1/26 Unlimited copies may be made for internal use.

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6-III.B. FINANCIAL HARDSHIPS AFFECTING MINIMUM RENT [24 CFR 5.630] Overview
If the PHA establishes a minimum rent greater than zero, the PHA must grant an exemption from the minimum rent if a family is unable to pay the minimum rent because of financial hardship.

The financial hardship exemption applies only to families required to pay the minimum rent. If a family’s TTP is higher than the minimum rent, the family is not eligible for a hardship exemption. If the PHA determines that a hardship exists, the family share is the highest of the remaining components of the family’s calculated TTP.

HUD-Defined Financial Hardship
Financial hardship includes the following situations:
(1) The family has lost eligibility for or is awaiting an eligibility determination for a federal, state, or local assistance program. This includes a family member who is a noncitizen lawfully admitted for permanent residence under the Immigration and Nationality Act who would be entitled to public benefits but for Title IV of the Personal Responsibility and Work Opportunity Act of 1996.

PHA Policy
A hardship will be considered to exist only if the loss of eligibility has an impact on the family’s ability to pay the minimum rent.

For a family waiting for a determination of eligibility, the hardship period will end as of the first of the month following: (1) implementation of assistance, if approved, (2) the decision to deny assistance, or (3) receipt of new income from another source that would allow the family to pay the minimum rent. A family whose request for assistance is denied may request a hardship exemption based upon one of the other allowable hardship circumstances.
(2) The family would be evicted because it is unable to pay the minimum rent.

PHA Policy
For a family to qualify under this provision, the cause of the potential eviction must be the family’s failure to pay rent to the owner or tenant-paid utilities. (3) Family income has decreased because of changed family circumstances, including the loss of employment.
(4) A death has occurred in the family.

PHA Policy
In order to qualify under this provision, a family must describe how the death has created a financial hardship (e.g., funeral-related expenses or loss of the family member’s income).
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(5) The family has experienced other circumstances determined by the PHA.

PHA Policy
The PHA has not established any additional hardship criteria.

Implementation of Hardship Exemption
Determination of Hardship
When a family requests a financial hardship exemption, the PHA must suspend the minimum rent requirement beginning the first of the month following the family’s request.

The PHA then determines whether the financial hardship exists and whether the hardship is temporary or long-term.

PHA Policy
The PHA defines temporary hardship as a hardship expected to last 90 days or less.

Long-term hardship is defined as a hardship expected to last more than 90 days.

When the minimum rent is suspended, the family share reverts to the highest of the remaining components of the calculated TTP. The example below demonstrates the effect of the minimum rent exemption.

Example: Impact of Minimum Rent Exemption
Assume the PHA has established a minimum rent of $50.

Family Share – No Hardship Family Share – With Hardship $0
$15
N/A
$50
30% of monthly adjusted income
10% of monthly gross income
Welfare rent
Minimum rent
$0
$15
N/A
$50
30% of monthly adjusted income
10% of monthly gross income
Welfare rent
Minimum rent
Minimum rent applies.

TTP = $50
Hardship exemption granted.

TTP = $15
PHA Policy
To qualify for a hardship exemption, a family must submit a request for a hardship exemption in writing. The request must explain the nature of the hardship and how the hardship has affected the family’s ability to pay the minimum rent.

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No Financial Hardship
If the PHA determines there is no financial hardship, the PHA will reinstate the minimum rent and require the family to repay the amounts suspended.

PHA Policy
The PHA will require the family to repay the suspended amount within 30 calendar days of the PHA’s notice that a hardship exemption has not been granted.

Temporary Hardship
If the PHA determines that a qualifying financial hardship is temporary, the PHA must suspend the minimum rent for the 90-day period beginning the first of the month following the date of the family’s request for a hardship exemption.

At the end of the 90-day suspension period, the family must resume payment of the minimum rent and must repay the PHA the amounts suspended. HUD requires the PHA to offer a reasonable repayment agreement, on terms and conditions established by the PHA. The PHA also may determine that circumstances have changed and the hardship is now a long-term hardship.

PHA Policy
The PHA will enter into a repayment agreement in accordance with the procedures found in Chapter 16 of this plan.

Long-Term Hardship
If the PHA determines that the financial hardship is long-term, the PHA must exempt the family from the minimum rent requirement for so long as the hardship continues. The exemption will apply from the first of the month following the family’s request until the end of the qualifying hardship. When the financial hardship has been determined to be long-term, the family is not required to repay the minimum rent.

PHA Policy
The hardship period ends when any of the following circumstances apply:
(1) At an interim or annual reexamination, the family’s calculated TTP is greater than the minimum rent.
(2) For hardship conditions based on loss of income, the hardship condition will continue to be recognized until new sources of income are received that are at least equal to the amount lost. For example, if a hardship is approved because a family no longer receives a $60/month child support payment, the hardship will continue to exist until the family receives at least $60/month in income from another source or once again begins to receive the child support.
(3) For hardship conditions based upon hardship-related expenses, the minimum rent exemption will continue to be recognized until the cumulative amount exempted is equal to the expense incurred.
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6-III.C. APPLYING PAYMENT STANDARDS [24 CFR 982.505]
Overview
The PHA’s schedule of payment standards is used to calculate housing assistance payments (HAP) for HCV families. This section covers the application of the PHA’s payment standards.

The establishment and revision of the PHA’s payment standard schedule are covered in Chapter

16. Payment standard is defined as “the maximum monthly assistance payment for a family assisted in the voucher program (before deducting the total tenant payment (TTP) by the family)” [24 CFR 982.4(b)].

The payment standard for a family is the lower of (1) the payment standard for the family unit size, which is defined as the appropriate number of bedrooms for the family under the PHA’s subsidy standards [24 CFR 982.4(b)], or (2) the payment standard for the size of the dwelling unit rented by the family [24 CFR 982.505(c)(1)].

If the PHA has established an exception payment standard for a designated part of an FMR area in accordance with 24 CFR 982.503 and a family’s unit is located in the exception area, the PHA must use the appropriate payment standard for the exception area [24 CFR 982.505(c)(2)].

The PHA is required to pay a monthly housing assistance payment (HAP) for a family that is the lower of (1) the payment standard for the family minus the family’s TTP or (2) the gross rent for the family’s unit minus the TTP.

If during the term of the HAP contract for a family’s unit, the owner lowers the rent, the PHA will recalculate the HAP using the lower of the initial payment standard or the gross rent for the unit [HCV GB, p. 7-8].

Changes in Payment Standards
For new HAP contracts, the PHA applies the payment standard in effect at the time of HAP contract execution.

The PHA must administer decreases in the payment standard amount for the family in accordance with the PHA policy as described in the administrative plan and apply the policy consistently to all families.

If a PHA changes its payment standard schedule, resulting in a lower payment standard amount, during the term of a HAP contract, the PHA is not required to reduce the payment standard used to calculate subsidy for families under HAP contract as long as the HAP contract remains in effect.

Decreases [24 CFR 982.505(c)(3) and Notice PIH 2024-34] If the amount on the payment standard schedule is decreased during the term of the HAP contract, the lower payment standard generally will be used beginning at the effective date of the family’s second regular reexamination following the effective date of the decrease in the payment standard.
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If the PHA does choose to reduce the payment standard for families currently under HAP contract, the initial reduction to the payment standard may not be applied any earlier than two years following the effective date of the decrease in the payment standard and only with proper written notice to the family in accordance with 24 CFR 982.505(c)(3)(iii).

The PHA must provide the family with at least 12 months’ notice that the payment standard is being reduced before the effective date of the change. In the written notice, the PHA must state the new payment standard amount, explain that the family’s new payment standard amount will be the greater of the amount listed in the current written notice or the new amount (if any) on the PHA’s payment standard schedule at the end of the 12-month period, and make clear where the family will find the PHA’s payment standard schedule. The PHA’s policy on decreases in the payment standard during the term of the HAP contract apply to all families under HAP contract at the time of the effective date of the decrease in the payment standard within the designated area.

PHA Policy
The PHA will determine the payment standard for the family as follows:

Step 1: At the first regular reexamination following the decrease in the payment standard, the PHA will determine the payment standard for the family using the lower of the payment standard for the family unit size or the size of the dwelling unit rented by the family.

Step 2: The PHA will compare the payment standard from step 1 to the payment standard last used to calculate the monthly housing assistance payment for the family. The payment standard used by the PHA at the first regular reexamination following the decrease in the payment standard will be the higher of these two payment standards. The PHA will advise the family that the application of the lower payment standard will be deferred until the second regular reexamination following the effective date of the decrease in the payment standard.

Step 3: At the second regular reexamination following the decrease in the payment standard, the lower payment standard will be used to calculate the monthly housing assistance payment for the family unless the PHA has subsequently increased the payment standard, in which case the payment standard will be determined in accordance with procedures for increases in payment standards described below.

Increases [24 CFR 982.505(c)(4) and Notice PIH 2024-34] For new HAP contracts, the PHA applies the payment standard in effect at the time of HAP contract execution.

If the payment standard is increased during the term of the HAP contract, the increased payment standard will be applied no later than the earliest of:
• The effective date of an increase in the gross rent that would result in an increase in the family share;
PHA Policy
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This would only apply to rent increases, as the PHA will continue to apply utility allowances at the first annual reexamination that is effective after the utility allowance is adopted in accordance with policies in Chapter 6-III.D. • The family’s first regular or interim reexamination; or • One year following the effective date of the increase in the payment standard amount.

The PHA may adopt a policy to apply a payment standard increase at any time earlier than the date calculated above as long as the policy is included in the administrative plan and applied consistently to all families [24 CFR 982.505(c)(5)].

PHA Policy
The PHA may, at its discretion and subject to available funding, adopt payment standard increases earlier than the date required by the regulations.

Changes in Family Unit Size (Voucher Size) [24 CFR 982.505(c)(6) and Notice PIH 2024-34] Irrespective of any increase or decrease in the payment standard, if the family unit size increases or decreases during the HAP contract term, the new family unit size must be used to determine the payment standard immediately but no later than the family’s first regular reexamination following the change in family unit size.

PHA Policy
If the family size (voucher size) changes during the term of a HAP contract, the new family size will be used to determine the payment standard immediately.

Moves
If the family moves to a new unit, or a new HAP contract is executed due to changes in the lease (even if the family remains in place), the current payment standard applicable to the family will be used when the new HAP contract is effective.

Reasonable Accommodation [24 CFR 982.503(d)(5)]
If a family requires a higher payment standard as a reasonable accommodation for a family member who is a person with disabilities, the PHA is allowed to establish a higher payment standard for the family of not more than 120 percent of the published FMR without HUD approval or prior notification to HUD. A PHA may establish a payment standard greater than 120 percent of the applicable FMR as a reasonable accommodation in accordance with 24 CFR part 8, after requesting and receiving HUD approval. See Chapter 16 for more information. © Copyright 2023 Nan McKay & Associates, Inc. Adminplan 4/1/26 Unlimited copies may be made for internal use.

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6-III.D. APPLYING UTILITY ALLOWANCES [24 CFR 982.517]
Overview
A PHA-established utility allowance schedule is used in determining family share and PHA subsidy. A family's utility allowance is determined by the size of dwelling unit leased by a family or the voucher unit size for which the family qualifies using PHA subsidy standards, whichever is the lowest of the two. See Chapter 5 for information on the PHA’s subsidy standards.

For policies on establishing and updating utility allowances, see Chapter 16.

Flat Fees [24 CFR 982.517(b)(2)(iii)]
The PHA may base its utility allowance payments on actual flat fees charged by an owner for utilities that are billed directly by the owner, but only if the flat fee charged by the owner is no greater than the PHA’s applicable utility allowance for the utilities covered by the fee. If the owner charges a flat fee for some but not all utilities, the PHA must pay a separate allowance for any tenant-paid utilities not covered in the flat fee.

PHA Policy
The PHA will not base utility allowance payments on flat fees charged by the owner.

Reasonable Accommodation
HCV program regulations require a PHA to approve a utility allowance amount higher than shown on the PHA’s schedule if a higher allowance is needed as a reasonable accommodation for a family member with a disability. For example, if a family member with a disability requires such an accommodation, the PHA will approve an allowance for air-conditioning, even if the PHA has determined that an allowance for air-conditioning generally is not needed.

The family must request the higher allowance and provide the PHA with an explanation of the need for the reasonable accommodation and information about the amount of additional allowance required [HCV GB, p. 18-8].

Utility Allowance Revisions
At reexamination, the PHA must use the PHA current utility allowance schedule [24 CFR 982.517, HCV GB, p. 18-8].

PHA Policy
Revised utility allowances will be applied to a family’s rent and subsidy calculations at the first annual reexamination that is effective after the allowance is adopted.

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6-III.E. PRORATED ASSISTANCE FOR MIXED FAMILIES [24 CFR 5.520] HUD regulations prohibit assistance to ineligible family members. A mixed family is one that includes at least one U.S. citizen or eligible immigrant and any number of ineligible family members. The PHA must prorate the assistance provided to a mixed family. The PHA will first determine assistance as if all family members were eligible and then prorate the assistance based upon the percentage of family members that actually are eligible. For example, if the PHA subsidy for a family is calculated at $500 and two of four family members are ineligible, the PHA subsidy would be reduced to $250.
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EXHIBIT 6-1: ANNUAL INCOME FULL DEFINITION
24 CFR 5.609
(a) Annual income includes, with respect to
the family:
(1) All amounts, not specifically excluded in
paragraph (b) of this section, received from all
sources by each member of the family who is
18 years of age or older or is the head of
household or spouse of the head of household,
plus unearned income by or on behalf of each
dependent who is under 18 years of age, and
(2) When the value of net family assets
exceeds the HUD-published threshold amount
(which amount HUD will adjust annually in
accordance with the Consumer Price Index for
Urban Wage Earners and Clerical Workers)
and the actual returns from a given asset
cannot be calculated, imputed returns on the
asset based on the current passbook savings
rate, as determined by HUD.

(b)Annual income does not include the following:
(1) Any imputed return on an asset when net
family assets are less than or equal to the
HUD-published threshold amount (which
amount HUD will adjust annually in
accordance with the Consumer Price Index for
Urban Wage Earners and Clerical Workers)
and no actual income from the net family
assets can be determined.
(2) The following types of trust distributions:
(i) For an irrevocable trust or a revocable trust
outside the control of the family or household
excluded from the definition of net family
assets under § 5.603(b):
(A) Distributions of the principal or corpus of
the trust; and
(B) Distributions of income from the trust
when the distributions are used to pay the costs
of health and medical care expenses for a
minor.
(ii) For a revocable trust under the control of
the family or household, any distributions
from the trust; except that any actual income
earned by the trust, regardless of whether it is
distributed, shall be considered income to the
family at the time it is received by the trust.
(3) Earned income of children under the 18
years of age.
(4) Payments received for the care of foster
children or foster adults, or State or Tribal
kinship or guardianship care payments.
(5) Insurance payments and settlements for
personal or property losses, including but not
limited to payments through health insurance,
motor vehicle insurance, and workers’
compensation.
(6) Amounts received by the family that are
specifically for, or in reimbursement of, the
cost of health and medical care expenses for
any family member.
(7) Any amounts recovered in any civil action
or settlement based on a claim of malpractice,
negligence, or other breach of duty owed to a
family member arising out of law, that resulted
in a member of the family becoming disabled.
(8) Income of a live-in aide, foster child, or
foster adult as defined in §§ 5.403 and 5.603,
respectively.
(9)
(i) Any assistance that section 479B of the
Higher Education Act of 1965, as amended (20
U.S.C. 1087uu), requires be excluded from a
family’s income; and
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(ii) Student financial assistance for tuition,
books, and supplies (including supplies and
equipment to support students with learning
disabilities or other disabilities), room and
board, and other fees required and charged to a
student by an institution of higher education
(as defined under Section 102 of the Higher
Education Act of 1965 (20 U.S.C. 1002)) and,
for a student who is not the head of household
or spouse, the reasonable and actual costs of
housing while attending the institution of
higher education and not residing in an
assisted unit.
(A) Student financial assistance, for purposes
of this paragraph (9)(ii), means a grant or
scholarship received from— (
1) The Federal government;
(2) A State, Tribe, or local government;
(3) A private foundation registered as a
nonprofit under 26 U.S.C. 501(c)(3);
(4) A business entity (such as corporation,
general partnership, limited liability company,
limited partnership, joint venture, business
trust, public benefit corporation, or nonprofit
entity); or
(5) An institution of higher education.
(B) Student financial assistance, for purposes
of this paragraph (9)(ii), does not include—
(1) Any assistance that is excluded pursuant to
paragraph (b)(9)(i) of this section;
(2) Financial support provided to the student in
the form of a fee for services performed (e.g.,
a work study or teaching fellowship that is not
excluded pursuant to paragraph (b)(9)(i) of this
section); (
3) Gifts, including gifts from family or friends;
or
(4) Any amount of the scholarship or grant
that, either by itself or in combination with
assistance excluded under this paragraph or
paragraph (b)(9)(i), exceeds the actual covered
costs of the student. The actual covered costs
of the student are the actual costs of tuition,
books and supplies (including supplies and
equipment to support students with learning
disabilities or other disabilities), room and
board, or other fees required and charged to a
student by the education institution, and, for a
student who is not the head of household or
spouse, the reasonable and actual costs of
housing while attending the institution of
higher education and not residing in an
assisted unit. This calculation is described
further in paragraph (b)(9)(ii)€ of this section.
(C) Student financial assistance, for purposes
of this paragraph (b)(9)(ii) must be:
(1) Expressly for tuition, books, room and
board, or other fees required and charged to a
student by the education institution;
(2) Expressly to assist a student with the costs
of higher education; or
(3) Expressly to assist a student who is not the
head of household or spouse with the
reasonable and actual costs of housing while
attending the education institution and not
residing in an assisted unit.
(D) Student financial assistance, for purposes
of this paragraph (b)(9)(ii), may be paid
directly to the student or to the educational
institution on the student’s behalf. Student
financial assistance paid to the student must be
verified by the responsible entity as student
financial assistance consistent with this
paragraph (b)(9)(ii).
(E) When the student is also receiving
assistance excluded under paragraph (b)(9)(i)
of this section, the amount of student financial
assistance under this paragraph (b)(9)(ii) is
determined as follows:
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(1) If the amount of assistance excluded under
paragraph (b)(9)(i) of this section is equal to or
exceeds the actual covered costs under
paragraph (b)(9)(ii)(B)(4) of this section, none
of the assistance described in this paragraph
(b)(9)(ii) of this section is considered student
financial assistance excluded from income
under this paragraph (b)(9)(ii)(E).
(2) If the amount of assistance excluded under
paragraph (b)(9)(i) of this section is less than
the actual covered costs under paragraph
(b)(9)(ii)(B)(4) of this section, the amount of
assistance described in paragraph (b)(9)(ii) of
this section that is considered student financial
assistance excluded under this paragraph is the
lower of:
(i) the total amount of student financial
assistance received under this paragraph
(b)(9)(ii) of this section, or
(ii) the amount by which the actual covered
costs under paragraph (b)(9)(ii)(B)(4) of this
section exceeds the assistance excluded under
paragraph (b)(9)(i) of this section.
(10) Income and distributions from any
Coverdell education savings account under
section 530 of the Internal Revenue Code of
1986 or any qualified tuition program under
section 529 of such Code; and income earned
by government contributions to, and
distributions from, “baby bond” accounts
created, authorized, or funded by Federal,
State, or local government.
(11) The special pay to a family member
serving in the Armed Forces who is exposed to
hostile fire.
(12)
(i) Amounts received by a person with a
disability that are disregarded for a limited
time for purposes of Supplemental Security
Income eligibility and benefits because they
are set aside for use under a Plan to Attain
Self-Sufficiency (PASS);
(ii) Amounts received by a participant in other
publicly assisted programs which are
specifically for or in reimbursement of out-of-
pocket expenses incurred (e.g., special
equipment, clothing, transportation, childcare,
etc.) and which are made solely to allow
participation in a specific program;
(iii) Amounts received under a resident service
stipend not to exceed $200 per month. A
resident service stipend is a modest amount
received by a resident for performing a service
for the PHA or owner, on a part-time basis,
that enhances the quality of life in the
development.
(iv) Incremental earnings and benefits
resulting to any family member from
participation in training programs funded by
HUD or in qualifying Federal, State, Tribal, or
local employment training programs
(including training programs not affiliated
with a local government) and training of a
family member as resident management staff.

Amounts excluded by this provision must be
received under employment training programs
with clearly defined goals and objectives and
are excluded only for the period during which
the family member participates in the
employment training program unless those
amounts are excluded under paragraph
(b)(9)(i) of this section.
(13) Reparation payments paid by a foreign
government pursuant to claims filed under the
laws of that government by persons who were
persecuted during the Nazi era.
(14) Earned income of dependent fulltime
students in excess of the amount of the
deduction for a dependent in § 5.611.
(15) Adoption assistance payments for a child
in excess of the amount of the deduction for a
dependent in § 5.611.
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(16) Deferred periodic amounts from
Supplemental Security Income and Social
Security benefits that are received in a lump
sum amount or in prospective monthly
amounts, or any deferred Department of
Veterans Affairs disability benefits that are
received in a lump sum amount or in
prospective monthly amounts.
(17) Payments related to aid and attendance
under 38 U.S.C. 1521 to veterans in need of
regular aid and attendance.
(18) Amounts received by the family in the
form of refunds or rebates under State or local
law for property taxes paid on the dwelling
unit.
(19) Payments made by or authorized by a
State Medicaid agency (including through a
managed care entity) or other State or Federal
agency to a family to enable a family member
who has a disability to reside in the family’s
assisted unit. Authorized payments may
include payments to a member of the assisted
family through the State Medicaid agency
(including through a managed care entity) or
other State or Federal agency for caregiving
services the family member provides to enable
a family member who has a disability to reside
in the family’s assisted unit.
(20) Loan proceeds (the net amount disbursed
by a lender to or on behalf of a borrower,
under the terms of a loan agreement) received
by the family or a third party (e.g., proceeds
received by the family from a private loan to
enable attendance at an educational institution
or to finance the purchase of a car).
(21) Payments received by Tribal members as
a result of claims relating to the
mismanagement of assets held in trust by the
United States, to the extent such payments are
also excluded from gross income under the
Internal Revenue Code or other Federal law.
(22) Amounts that HUD is required by Federal
statute to exclude from consideration as
income for purposes of determining eligibility
or benefits under a category of assistance
programs that includes assistance under any
program to which the exclusions set forth in
paragraph (b) of this section apply. HUD will
publish a notice in the Federal Register to
identify the benefits that qualify for this
exclusion. Updates will be published when
necessary.
(23) Replacement housing “gap” payments
made in accordance with 49 CFR part 24 that
offset increased out of pocket costs of
displaced persons that move from one
federally subsidized housing unit to another
Federally subsidized housing unit. Such
replacement housing “gap” payments are not
excluded from annual income if the increased
cost of rent and utilities is subsequently
reduced or eliminated, and the displaced
person retains or continues to receive the
replacement housing “gap” payments.
(24) Nonrecurring income, which is income
that will not be repeated in the coming year
based on information provided by the family.

Income received as an independent contractor,
day laborer, or seasonal worker is not excluded
from income under this paragraph, even if the
source, date, or amount of the income varies.

Nonrecurring income includes:
(i) Payments from the U.S. Census Bureau for
employment (relating to decennial census or
the American Community Survey) lasting no
longer than 180 days and not culminating in
permanent employment.
(ii) Direct Federal or State payments intended
for economic stimulus or recovery.
(iii) Amounts directly received by the family
as a result of State refundable tax credits or
State tax refunds at the time they are received.
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(iv) Amounts directly received by the family
as a result of Federal refundable tax credits
and Federal tax refunds at the time they are
received.
(v) Gifts for holidays, birthdays, or other
significant life events or milestones (e.g.,
wedding gifts, baby showers, anniversaries).
(vi) Non-monetary, in-kind donations, such as
food, clothing, or toiletries, received from a
food bank or similar organization.
(vii) Lump-sum additions to net family assets,
including but not limited to lottery or other
contest winnings.
(25) Civil rights settlements or judgments,
including settlements or judgments for back
pay.
(26) Income received from any account under
a retirement plan recognized as such by the
Internal Revenue Service, including individual
retirement arrangements (IRAs), employer
retirement plans, and retirement plans for self-
employed individuals; except that any
distribution of periodic payments from such
accounts shall be income at the time they are
received by the family.
(27) Income earned on amounts placed in a
family’s Family Self Sufficiency Account.
(28) Gross income a family member receives
through self-employment or operation of a
business; except that the following shall be
considered income to a family member:
(i) Net income from the operation of a
business or profession. Expenditures for
business expansion or amortization of capital
indebtedness shall not be used as deductions in
determining net income. An allowance for
depreciation of assets used in a business or
profession may be deducted, based on straight
line depreciation, as provided in Internal
Revenue Service regulations; and
(ii) Any withdrawal of cash or assets from the
operation of a business or profession will be
included in income, except to the extent the
withdrawal is reimbursement of cash or assets
invested in the operation by the family.
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EXHIBIT 6-2: TREATMENT OF FAMILY ASSETS
24 CFR 5.603(b) Net Family Assets
(1) Net cash value after deducting reasonable
costs that would be incurred in disposing of
real property, savings, stocks, bonds, and other
forms of capital investment, excluding
interests in Indian trust land and excluding
equity accounts in HUD homeownership
programs. The value of necessary items of
personal property such as furniture and
automobiles shall be excluded.
(2) In cases where a trust fund has been
established and the trust is not revocable by, or
under the control of, any member of the family
or household, the value of the trust fund will
not be considered an asset so long as the fund
continues to be held in trust. Any income
distributed from the trust fund shall be counted
when determining annual income under Sec.

5.609.
(3) In determining net family assets, PHAs or
owners, as applicable, shall include the value
of any business or family assets disposed of by
an applicant or tenant for less than fair market
value (including a disposition in trust, but not
in a foreclosure or bankruptcy sale) during the
two years preceding the date of application for
the program or reexamination, as applicable, in
excess of the consideration received therefor.

In the case of a disposition as part of a
separation or divorce settlement, the
disposition will not be considered to be for less
than fair market value if the applicant or tenant
receives important consideration not
measurable in dollar terms.
(4) For purposes of determining annual income
under Sec. 5.609, the term "net family assets''
does not include the value of a home currently
being purchased with assistance under part
982, subpart M of this title. This exclusion is
limited to the first 10 years after the purchase
date of the home.
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EXHIBIT 6-3: THE EFFECT OF WELFARE BENEFIT REDUCTION
24 CFR 5.615
Public housing program and Section 8 tenant-based assistance program: How welfare benefit reduction affects family income.
(a) Applicability. This section applies to
covered families who reside in public housing
(part 960 of this title) or receive Section 8
tenant-based assistance (part 982 of this title).
(b) Definitions. The following definitions
apply for purposes of this section:

Covered families. Families who receive
welfare assistance or other public assistance
benefits ("welfare benefits'') from a State or
other public agency ("welfare agency'') under a
program for which Federal, State, or local law
requires that a member of the family must
participate in an economic self-sufficiency
program as a condition for such assistance.

Economic self-sufficiency program. See
definition at Sec. 5.603.

Imputed welfare income. The amount of
annual income not actually received by a
family, as a result of a specified welfare
benefit reduction, that is nonetheless included
in the family's annual income for purposes of
determining rent.

Specified welfare benefit reduction.
(1) A reduction of welfare benefits by the
welfare agency, in whole or in part, for a
family member, as determined by the welfare
agency, because of fraud by a family member
in connection with the welfare program; or
because of welfare agency sanction against a
family member for noncompliance with a
welfare agency requirement to participate in an
economic self-sufficiency program.
(2) "Specified welfare benefit reduction'' does
not include a reduction or termination of
welfare benefits by the welfare agency:
(i) at expiration of a lifetime or other time
limit on the payment of welfare benefits;
(ii) because a family member is not able to
obtain employment, even though the family
member has complied with welfare agency
economic self-sufficiency or work activities
requirements; or
(iii) because a family member has not
complied with other welfare agency
requirements.
(c) Imputed welfare income.
(1) A family's annual income includes the
amount of imputed welfare income (because of
a specified welfare benefits reduction, as
specified in notice to the PHA by the welfare
agency), plus the total amount of other annual
income as determined in accordance with Sec.

5.609.
(2) At the request of the PHA, the welfare
agency will inform the PHA in writing of the
amount and term of any specified welfare
benefit reduction for a family member, and the
reason for such reduction, and will also inform
the PHA of any subsequent changes in the
term or amount of such specified welfare
benefit reduction. The PHA will use this
information to determine the amount of
imputed welfare income for a family.
(3) A family's annual income includes imputed
welfare income in family annual income, as
determined at the PHA's interim or regular
reexamination of family income and
composition, during the term of the welfare
benefits reduction (as specified in information
provided to the PHA by the welfare agency).
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(4) The amount of the imputed welfare income
is offset by the amount of additional income a
family receives that commences after the time
the sanction was imposed. When such
additional income from other sources is at
least equal to the imputed
(5) The PHA may not include imputed welfare
income in annual income if the family was not
an assisted resident at the time of sanction.
(d) Review of PHA decision.
(1) Public housing. If a public housing tenant
claims that the PHA has not correctly
calculated the amount of imputed welfare
income in accordance with HUD requirements,
and if the PHA denies the family's request to
modify such amount, the PHA shall give the
tenant written notice of such denial, with a
brief explanation of the basis for the PHA
determination of the amount of imputed
welfare income. The PHA notice shall also
state that if the tenant does not agree with the
PHA determination, the tenant may request a
grievance hearing in accordance with part 966,
subpart B of this title to review the PHA
determination. The tenant is not required to
pay an escrow deposit pursuant to Sec.
966.55(e) for the portion of tenant rent
attributable to the imputed welfare income in
order to obtain a grievance hearing on the
PHA determination.
(2) Section 8 participant. A participant in the
Section 8 tenant-based assistance program
may request an informal hearing, in
accordance with Sec. 982.555 of this title, to
review the PHA determination of the amount
of imputed welfare income that must be
included in the family's annual income in
accordance with this section. If the family
claims that such amount is not correctly
calculated in accordance with HUD
requirements, and if the PHA denies the
family's request to modify such amount, the
PHA shall give the family written notice of
such denial, with a brief explanation of the
basis for the PHA determination of the amount
of imputed welfare income. Such notice shall
also state that if the family does not agree with
the PHA determination, the family may
request an informal hearing on the
determination under the PHA hearing
procedure.
(e) PHA relation with welfare agency.
(1) The PHA must ask welfare agencies to
inform the PHA of any specified welfare
benefits reduction for a family member, the
reason for such reduction, the term of any such
reduction, and any subsequent welfare agency
determination affecting the amount or term of
a specified welfare benefits reduction. If the
welfare agency determines a specified welfare
benefits reduction for a family member, and
gives the PHA written notice of such
reduction, the family's annual incomes shall
include the imputed welfare income because of
the specified welfare benefits reduction.
(2) The PHA is responsible for determining
the amount of imputed welfare income that is
included in the family's annual income as a
result of a specified welfare benefits reduction
as determined by the welfare agency, and
specified in the notice by the welfare agency to
the PHA. However, the PHA is not responsible
for determining whether a reduction of welfare
benefits by the welfare agency was correctly
determined by the welfare agency in
accordance with welfare program requirements
and procedures, nor for providing the
opportunity for review or hearing on such
welfare agency determinations.
(3) Such welfare agency determinations are
the responsibility of the welfare agency, and
the family may seek appeal of such
determinations through the welfare agency's
normal due process procedures. The PHA shall
be entitled to rely on the welfare agency notice
to the PHA of the welfare agency's
determination of a specified welfare benefits
reduction.
© Copyright 2024 Nan McKay & Associates, Inc. Adminplan 4/1/26 Unlimited copies may be made for internal use. Page 7-1 CHAPTER 7

VERIFICATION
[24 CFR 982.516, 24 CFR 982.551, 24 CFR 5.230, Notice PIH 2018-18]

INTRODUCTION
The PHA must verify all information that is used to establish the family’s eligibility and level of assistance and is required to obtain written authorization from the family in order to collect the information. Applicants and program participants must cooperate with the verification process as a condition of receiving assistance. The PHA must not pass on the cost of verification to the family.

The PHA will follow the verification guidance provided by HUD in Notice PIH 2018-18 and any subsequent guidance issued by HUD. This chapter summarizes those requirements and provides supplementary PHA policies.

Part I describes the general verification process;
Part II provides more detailed requirements related to family information; Part III provides information on income and assets; and Part IV covers mandatory deductions.

Verification policies, rules and procedures will be modified as needed to accommodate persons with disabilities. All information obtained through the verification process will be handled in accordance with the records management policies of the PHA. © Copyright 2024 Nan McKay & Associates, Inc. Adminplan 4/1/26 Unlimited copies may be made for internal use. Page 7-2 PART I: GENERAL VERIFICATION REQUIREMENTS

7-I.A. FAMILY CONSENT TO RELEASE INFORMATION [24 CFR 982.516 AND 982.551, 24 CFR 5.230]
Consent Forms
The family must supply any information that the PHA or HUD determines is necessary to the administration of the program and must consent to PHA verification of that information [24 CFR 982.551]. All adult family members must sign consent forms as needed to collect information relevant to the family’s eligibility and level of assistance. While PHAs must use form HUD- 9886-A, this form does not release all the information necessary to the administration of the program. The PHA must also develop its own release forms to cover all other necessary information.

Form HUD-9886-A [24 CFR 5.230(b)(1), b(2), (c)(4), and (c)(5); and Notice PIH 2023-27] All adult applicants and participants sign form HUD-9886-A, Authorization for Release of Information. All adult family members (and the head and spouse/cohead, regardless of age) are required to sign the Form HUD-9886-A at admission. Participants, prior to January 1, 2024, signed and submitted Form HUD-9886 at each annual reexamination. HOTMA eliminated this requirement and instead required that the Form HUD-9886-A be signed only once. On or after January 1, 2024 (regardless of the PHA’s HOTMA compliance date), current program participants must sign and submit a new Form HUD-9886-A at their next interim or annual reexamination. This form will only be signed once. Another Form HUD-9886-A will not be submitted to the PHA except under the following circumstances:
• When any person 18 years or older becomes a member of the family; • When a current member of the family turns 18; or
• As required by HUD or the PHA in administrative instructions.

The PHA has the discretion to establish policies around when family members must sign consent forms when they turn 18. PHAs must establish these policies stating when family members will be required to sign consent forms at intervals other than at reexamination.

PHA Policy
Family members turning 18 years of age between annual recertifications will be required to sign the required Consent to the Release of Information Form HUD-9886-A at the family’s next annual reexamination, unless the PHA opts to collect the form earlier, at its discretion, following the individual’s 18th birthday.

The purpose of form HUD-9886-A is to facilitate automated data collection and computer matching from specific sources and provide the family's consent only for the specific purposes listed on the form. HUD and the PHA may collect information from State Wage Information Collection Agencies (SWICAs) and current and former employers of adult family members.

Only HUD is authorized to collect information directly from the Internal Revenue Service (IRS) and the Social Security Administration (SSA).
© Copyright 2024 Nan McKay & Associates, Inc. Adminplan 4/1/26 Unlimited copies may be made for internal use. Page 7-3 The PHA may obtain any financial record from any financial institution, as the terms financial record and financial institution are defined in the Right to Financial Privacy Act (12 U.S.C. 3401), whenever the PHA determines the record is needed to determine an applicant’s or participant’s eligibility for assistance or level of benefits [24 CFR 5.230(c)(4)].

The executed form will remain effective until the family is denied assistance, assistance is terminated, or the family provides written notification to the PHA to revoke consent.

Penalties for Failing to Consent [24 CFR 5.232, Notice PIH 2023-27, and Notice PIH 2024-38] If any family member who is required to sign a consent form fails to do so, the PHA must deny admission to applicants and terminate assistance of participants. The family may request an informal review (applicants) or informal hearing (participants) in accordance with PHA procedures.

However, this does not apply if the applicant, participant, or any member of their family, revokes their consent with respect to the ability of the PHA to access financial records from financial institutions, unless the PHA establishes a policy that revocation of consent to access financial records will result in denial of admission or termination of assistance [24 CFR 5.232(c)].

Revocation of consent or refusal to sign the consent forms prohibits the PHA from requesting and accessing income information and financial records, including pulling EIV reports and using the EIV data to verify income (although the data matches between HUD and other agencies will continue to occur automatically if the family is not terminated from the program). The PHA will not be able to process interim or annual reexaminations of income, including when a family’s income decreases and the family requests an interim reexamination to decrease tenant rent, without the family’s executed consent form(s). The PHA must explain to families the consequences of revoking their consent and notify their local HUD office of a family’s revocation of consent [Notice PIH 2023-27].

PHA Policy
The PHA has established a policy that revocation of consent to access financial records will result in denial of admission or termination of assistance in accordance with PHA policy.

In order for a family to revoke their consent, the family must submit written notice using a form provided by the PHA. The form provided will explain the potential consequences of this action. The PHA will grant the family 10 business days to return the form. This notice will also offer the family an opportunity to reestablish consent to access financial records before the effective date of the denial or termination, as applicable.

If the family does not return the revocation form by the due date, the PHA will send a denial or proposed termination for not complying with the Family Obligation of supplying information that the PHA determines to be necessary listed in Chapter 5 (in accordance with Chapters 3 or 12, as applicable).

Within 10 business days of the date the family provides written notice, the PHA will send the family a notice of denial or proposed termination (in accordance with Chapters 3 or 12, as applicable). Additionally, the PHA will notify their local HUD office of the revocation.
© Copyright 2024 Nan McKay & Associates, Inc. Adminplan 4/1/26 Unlimited copies may be made for internal use. Page 7-4 7-I.B. OVERVIEW OF VERIFICATION REQUIREMENTS
Use of Other Programs’ Income Determinations [24 CFR 5.609(c)(3); Notice PIH 2023-27; HUD Letter 02/23/2024]
PHAs may, but are not required to, determine a family’s annual income, including income from assets, prior to the application of any deductions, based on income determinations made within the previous 12-month period, using income determinations from means-tested federal public assistance programs. In PIH Notice 2023-27, HUD clarified that verification is deemed acceptable if the documentation shows that the income determination was made within 12 months prior to the receipt of the verification by the PHA.

PHAs are not required to accept or use determinations of income from other federal means-tested forms of assistance. If the PHA adopts a policy to accept this type of verification, the PHA must establish in policy when they will accept Safe Harbor income determinations and from which programs. PHAs must also create policies that outline the course of action when families present multiple verifications from the same or different acceptable Safe Harbor programs.

Means-tested federal public assistance programs include:
• Temporary Assistance for Needy Families (TANF) (42 U.S.C. 601, et seq.); • Medicaid (42 U.S.C. 1396 et seq.);
• Supplemental Nutrition Assistance Program (SNAP) (42 U.S.C. 2011 et seq.); • Low-Income Housing Tax Credit (LIHTC) program (26 U.S.C. 42); • Special Supplemental Nutrition Program for Woman, Infants, and Children (WIC) (42 U.S.C. 1786);
• Supplemental Security Income (SSI) (42 U.S.C. 1381 et seq.); • Other programs administered by the HUD Secretary;
• Other means-tested forms of federal public assistance for which HUD has established a memorandum of understanding; and
• Other federal benefit determinations made in other forms of means-tested federal public assistance that the Secretary determines to have comparable reliability and announces through the Federal Register.

If the PHA elects to use the annual income determination from one of the above-listed forms of means-tested federal public assistance, then they must obtain the income information by means of a third-party verification. The third-party verification must state the family size, must be for the entire family, and must state the amount of the family’s annual income. The annual income need not be broken down by family member or income type. Annual income includes income earned from assets, therefore when using Safe Harbor to verify a family’s income, PHAs will neither further inquire about a family’s net family assets, nor about the income earned from those assets, except with respect to whether or not the family owns assets that exceed the asset limitation in 24 CFR 5.618. The Safe Harbor documentation will be considered acceptable if any of the following dates fall into the 12-month period prior to the receipt of the documentation by the PHA:
© Copyright 2024 Nan McKay & Associates, Inc. Adminplan 4/1/26 Unlimited copies may be made for internal use. Page 7-5 • Income determination effective date;
• Program administrator’s signature date;
• Family’s signature date;
• Report effective date; or
• Other report-specific dates that verify the income determination date.

The only information that PHAs are permitted to use to determine income under this method is the total income determination made by the federal means-tested program administrator. Other federal programs may provide additional information about income inclusions and exclusions in their award letters; however, these determinations and any other information must not be considered by the PHA. PHAs are not permitted to mix and match Safe Harbor income determinations and other income verifications.

If the PHA is unable to obtain Safe Harbor documentation or if the family disputes the other program’s income determination, the PHA must calculate the family’s annual income using traditional methods as outlined in Notice PIH 2023-27 and this chapter.

If the PHA uses a Safe Harbor determination to determine the family’s income, the family is obligated to report changes in income that meet the PHA’s reporting requirement and occur after the effective date of the transaction.

The amounts of unreimbursed reasonable attendant care expenses and childcare expenses deducted from a family’s annual income, except for when a family is approved for a childcare expense hardship exemption, must still be capped by the amount earned by any family member who is enabled to work as a result of the expense. PHAs are, therefore, required to obtain third- party verification of the applicable employment income and cap the respective expense deductions accordingly.

PHA Policy
When available and applicable, the PHA may accept the Safe Harbor determinations of income of the other programs listed above at annual reexamination to determine the family’s total annual income. The PHA will still require third-party verification of all deductions such as the health and medical care expense or childcare expense deductions.

Further, if the family is eligible for and claims the disability assistance expense or childcare expense deductions, where applicable, the PHA will obtain third-party verification of the amount of employment income of the individual(s) enabled to work in order to cap the respective expenses as required.

Prior to using any Safe Harbor determination from another program, the PHA will ask the family if they agree with the income amounts listed. If the family disputes the income amounts on the Safe Harbor determination, the PHA will obtain third-party verification of all sources of income and assets (as applicable).

The PHA will not accept income determinations made under the Earned Income Tax Credit (EITC) program.

© Copyright 2024 Nan McKay & Associates, Inc. Adminplan 4/1/26 Unlimited copies may be made for internal use. Page 7-6 The PHA will not accept other programs’ determinations of income for any new admission or interim reexamination.In order to be acceptable, the income determination must:

Be dated within 12 months of the dates listed above;
State the family size
Be for the entire family (i.e., the family members listed in the documentation must match the family’s composition in the assisted unit, except for household members); and
Must state the amount of the family’s annual income.

The determination need not list each source of income individually. If the PHA does not receive any acceptable income determination documentation or is unable to obtain documentation, then the PHA will revert to third-party verification of income for the family.

When families present multiple verifications from the same or different acceptable Safe Harbor programs, the PHA will use the most recent income determination, unless the family presents acceptable evidence that the PHA should consider an alternative verification from a different Safe Harbor source.

When the PHA uses a Safe Harbor income determination from another program, and the family’s income subsequently changes, the family is required to report the change to the PHA timely. Depending on when the change occurred, the change may or may not impact the PHA’s calculation of the family’s total annual income. Changes that occur between the time the PHA receives the Safe Harbor documentation, and the effective date of the family’s annual reexamination will not be considered. If the family has a change in income that occurs after the annual reexamination effective date, the PHA will conduct an interim reexamination if the change meets the requirements for performing an interim reexamination as outlined in Chapter 11. In this case, the PHA will use third-party verification to verify the change.

HUD’s Verification Hierarchy [Notice PIH 2018-18]
HUD mandates the use of the EIV system and offers administrative guidance on the use of other methods to verify family information and specifies the circumstances in which each method will be used. In general HUD requires the PHA to use the most reliable form of verification that is available and to document the reasons when the PHA uses a lesser form of verification.

PHA Policy
In order of priority, the forms of verification that the PHA will use are:

Up-front Income Verification (UIV) using HUD’s Enterprise Income Verification (EIV) system
Up-front Income Verification (UIV) using a non-HUD system Written Third-Party Verification (may be provided by applicant or participant) Written Third-party Verification Form
© Copyright 2024 Nan McKay & Associates, Inc. Adminplan 4/1/26 Unlimited copies may be made for internal use. Page 7-7 Oral Third-party Verification
Self-Certification
Each of the verification methods is discussed in subsequent sections below.

Requirements for Acceptable Documents [FR Notice 02/14/2023; Notice PIH 2023-27 (J.5.a); HUD Letter 02/23/24; PIH HOTMA FAQs 02/22/24]
PHA Policy
Any documents used for verification must be the original (not photocopies) and generally must be dated within 60 of receipt by the PHA, or up to 120 days if they are the most current verifications available. Statements dated within the appropriate benefit year are acceptable for fixed sources of income. The documents must not be damaged, altered or in any way illegible.

Printouts from Webpages are considered original documents.

The PHA staff member who views the original document must make a photocopy, annotate the copy with the name of the person who provided the document and the date the original was viewed, and sign the copy.

Any family self-certification must be made in a format acceptable to the PHA.

File Documentation
The PHA must document in the file how the figures used in income and rent calculations were determined. All verification attempts, information obtained, and decisions reached during the verification process will be recorded in the family’s file in sufficient detail to demonstrate that the PHA has followed all of the verification policies set forth in this plan. The record should be sufficient to enable a staff member or HUD reviewer to understand the process followed and conclusions reached.

PHA Policy
The PHA will document, in the family file, the following:

Reported family annual income
Value of assets
Expenses related to deductions from annual income
Other factors influencing the adjusted income or income-based rent determination When the PHA is unable to obtain third-party verification, the PHA will document in the family file the reason that third-party verification was not available [24 CFR 982.516(a)(2); Notice PIH 2018-18].

© Copyright 2024 Nan McKay & Associates, Inc. Adminplan 4/1/26 Unlimited copies may be made for internal use. Page 7-8 7-I.C. UP-FRONT INCOME VERIFICATION (UIV)
Up-front income verification (UIV) refers to the PHA’s use of the verification tools available from independent sources that maintain computerized information about earnings and benefits.

UIV will be used to the extent that these systems are available to the PHA.

There may be legitimate differences between the information provided by the family and UIV- generated information. If the family disputes the accuracy of UIV data, no adverse action can be taken until the PHA has independently verified the UIV information and the family has been granted an opportunity to contest any adverse findings through the informal review/hearing process of the PHA.

See Chapter 6 for the PHA’s policy on the use of UIV/EIV to project annual income.

Upfront Income Verification Using HUD’s Enterprise Income Verification (EIV) System (Mandatory)
PHAs must use HUD’s EIV system in its entirety as a third-party source to verify tenant employment and income information during mandatory reexaminations or recertifications of family composition and income in accordance with 24 CFR 5.236 and administrative guidance issued by HUD. However, the PHA is not required to verify income information in EIV at annual reexamination when Safe Harbor verification is used to determine a family’s income [Notice PIH 2023-27]. The EIV system contains data showing earned income, unemployment benefits, social security benefits, and SSI benefits for participant families. The following policies apply to the use of HUD’s EIV system.

The income validation tool (IVT) in EIV provides projections of discrepant income for wages, unemployment compensation, and SSA benefits pursuant to HUD’s data sharing agreements with other departments.

The following policies apply to the use of HUD’s EIV system.

EIV Income Report
The data shown on income reports is updated quarterly. Data may be between 3 and 6 months old at the time reports are generated.

PHA Policy
The PHA will obtain income reports for annual reexaminations on a monthly basis.

Reports will be generated as part of the regular reexamination process.

Income reports will be compared to family-provided information as part of the annual reexamination process. Income reports may be used in the calculation of annual income, as described in Chapter 6-I.C. Income reports may also be used to meet the regulatory requirement for third party verification, as described above. Policies for resolving discrepancies between income reports and family-provided information will be resolved as described in Chapter 6-I.C. and in this chapter.

Income reports will not be used in interim reexaminations to identify any discrepancies between reported income and income shown in the EIV system, and as necessary to © Copyright 2024 Nan McKay & Associates, Inc. Adminplan 4/1/26 Unlimited copies may be made for internal use. Page 7-9 verify and calculate earned income, unemployment benefits, Social Security and/or SSI benefits.

At the PHA’s discretion, EIV may also be used to verify that families claiming zero income are not receiving income from any of these sources.

Income reports will be retained in participant files with the applicable annual or interim reexamination documents.

When the PHA determines through income reports and third-party verification that a family has concealed or under-reported income, corrective action will be taken pursuant to the policies in Chapter 14, Program Integrity.

However, the PHA will not use income information in EIV at annual reexamination when Safe Harbor verification is used to determine a family’s income.

EIV Identity Verification Report
The EIV system verifies tenant identities against SSA records. These records are compared to HUD data for a match on social security number, name, and date of birth.

PHAs are required to use EIV’s Identity Verification Report on a monthly basis to improve the availability of income information in EIV [Notice PIH 2023-27].

When identity verification for a participant fails, a message will be displayed within the EIV system and no income information will be displayed.

PHA Policy
The PHA will identify participants whose identity verification has failed by reviewing EIV’s Identity Verification Report on a monthly basis.

The PHA will attempt to resolve PIC/SSA discrepancies by obtaining appropriate documentation from the participant. When the PHA determines that discrepancies exist due to PHA errors such as spelling errors or incorrect birth dates, the errors will be corrected promptly.

Upfront Income Verification Using Non-HUD Systems (Optional) In addition to mandatory use of the EIV system, HUD encourages PHAs to utilize other upfront verification sources.

PHA Policy
The PHA will inform all applicants and participants of its use of the following UIV resources during the admission and reexamination process:

HUD’s EIV system
The Work Number – an employment verification system
CALWIN – a system of the Department of Social Services. The system provides information on welfare benefits.

© Copyright 2024 Nan McKay & Associates, Inc. Adminplan 4/1/26 Unlimited copies may be made for internal use. Page 7-10 7-I.D. THIRD-PARTY WRITTEN AND ORAL VERIFICATION
HUD’s current verification hierarchy defines two types of written third-party verification. The more preferable form, “written third-party verification,” consists of an original document generated by a third-party source, which may be received directly from a third-party source or provided to the PHA by the family. If written third-party verification is not available, the PHA must attempt to obtain a “written third-party verification form.” This is a standardized form used to collect information from a third party.

Written Third-Party Verification [Notice PIH 2018-18]
Written third-party verification documents must be original and authentic and may be supplied by the family or received from a third-party source.

PHA Policy
The PHA will use, but is not limited to, the following factors to determine a document to be original and authentic: computer generated documents, printouts that include the Web address and date retrieved, documents printed on a company letterhead, documents witnessed by a notary, or checks with a bank stamp showing deposit.

Examples of acceptable tenant-provided documents include, but are not limited to: pay stubs, payroll summary reports, employer notice or letters of hire and termination, SSA benefit verification letters, bank statements, child support payment stubs, welfare benefit letters and/or printouts, and unemployment monetary benefit notices.

The PHA is required to obtain, at minimum, two current and consecutive pay stubs for determining annual income from wages.

PHA Policy
The PHA’s first request for written third-party verifications will grant the household 10 business days to respond. If the verifications are not received by the first due date, the PHA will issue a second and final request granting the household 5 business days to respond. If the family is unable to return the requested verifications within the 15 business days for good cause, the PHA will move to the next level of the hierarchy.

Any third-party documents provided by the family must be dated within 60 days of the PHA request date. However, for fixed-income sources, a statement dated within the appropriate benefit year is acceptable documentation.

The PHA may reject documentation provided by the family if the document is not an original, if the document appears to be forged, or if the document is altered, mutilated, or illegible. If the PHA determines that third-party documents provided by the family are not acceptable, the PHA will explain the reason to the family and request additional documentation from the family or may use a lower form of verification such as a written third-party verification form.

When pay stubs are used,, the PHA will require the family to provide pay stubs covering the 60-day period prior to the PHA’s request. At its discretion, the PHA may request up to 12 consecutive months of additional pay stubs or payroll records if needed to © Copyright 2024 Nan McKay & Associates, Inc. Adminplan 4/1/26 Unlimited copies may be made for internal use. Page 7-11 determine income due to the family's circumstances (e.g., irregular/fluctuating schedule, seasonal employment, inconsistent work hours, etc.) (refer to 7-III.A.) When upfront verification is not available and the family is unable to provide written third-party documents, the PHA must request a written third-party verification form. HUD’s position is that this traditional third-party verification method presents administrative burdens and risks which may be reduced through the use of family-provided third-party documents.

PHAs may mail, fax, or email third-party written verification form requests to third-party sources.

PHA Policy
The PHA will send third-party verification forms directly to the third party.

Third-party verification forms will be sent when third-party verification documents are unavailable or are rejected by the PHA.

The PHA will request the third party verifications be returned within 10 business days. In general, written verification should be requested before moving to accept an oral verification.

The PHA’s request for written third-party verification forms will grant the third-party 10 business days to respond. If the verification forms are not returned within the 10 business days, the PHA will move to the next level of the hierarchy.

Oral Third-Party Verification [Notice PIH 2018-18]
For third-party oral verification, PHAs contact sources, identified by UIV techniques or by the family, by telephone or in person.

Oral third-party verification is mandatory if neither form of written third-party verification is available.

Third-party oral verification may be used when requests for written third-party verification forms have not been returned within a reasonable time—e.g., 10 business days.

PHAs should document in the file the date and time of the telephone call or visit, the name of the person contacted, the telephone number, as well as the information confirmed.

PHA Policy
In collecting third-party oral verification, PHA staff will record in the family’s file the name and title of the person contacted, the date and time of the conversation (or attempt), the telephone number used, and the facts provided.

When any source responds verbally to the initial written request for verification the PHA will accept the verbal response as oral verification but will also request that the source complete and return any verification forms that were provided.

The PHA will make two attempts at oral third party. There must be 2 days between each call. If the PHA is unable to verify information with these attempts, the PHA will move to the next level of the hierarchy.
© Copyright 2024 Nan McKay & Associates, Inc. Adminplan 4/1/26 Unlimited copies may be made for internal use. Page 7-12 When Third-Party Verification is Not Required [Notice PIH 2018-18] Third-party verification may not be available in all situations. HUD has acknowledged that it may not be cost-effective or reasonable to obtain third-party verification of income, assets, or expenses when these items would have a minimal impact on the family’s total tenant payment.

PHA Policy
If the family cannot provide original documents, the PHA will pay the service charge required to obtain third-party verification, unless it is not cost effective in which case a self-certification will be acceptable as the only means of verification. The cost of verification will not be passed on to the family.

The cost of postage and envelopes to obtain third-party verification of income, assets, and expenses is not an unreasonable cost [VG, p. 18]. However, bank fees associated with obtaining original statements on behalf of the family are considered cost prohibitive as the PHA cannot take on these fees uniformly for all assisted families.

Primary Documents
Third-party verification is not required when legal documents are the primary source, such as a birth certificate or other legal documentation of birth.

Imputed Assets
HUD permits PHAs to accept a self-certification from a family as verification of assets disposed of for less than fair market value [HCV GB, p. 5-28].

PHA Policy
The PHA will accept a self-certification from a family as verification of assets disposed of for less than fair market value.
7-I.E. SELF-CERTIFICATION
When HUD requires third-party verification, self-certification or “tenant declaration,” is used as a last resort when the PHA is unable to obtain third-party verification.

When the PHA relies on a tenant declaration for verification of income, assets, or expenses, the family’s file must be documented to explain why third-party verification was not available.

PHA Policy
When information cannot be verified by a third party or by review of documents, family members will be required to submit self-certifications attesting to the accuracy of the information they have provided to the PHA.

The PHA may require a family to certify that a family member does not receive a particular type of income or benefit.

The self-certification must be made in a format acceptable to the PHA and must be signed by the family member whose information or status is being verified. The self- certification may be provided in the annual reexamination packet or on a form provided by the PHA.
© Copyright 2024 Nan McKay & Associates, Inc. Adminplan 4/1/26 Unlimited copies may be made for internal use. Page 7-13 PART II: VERIFYING FAMILY INFORMATION

7-II.A. VERIFICATION OF LEGAL IDENTITY
PHA Policy
The PHA will require families to furnish verification of legal identity for each household member. Generally, the PHA will require a birth Certification for identification purposes.

Document submitted by a family must be legible.

In cases where the requested document is not available, the PHA may accept documents listed below.

Verification of Legal Identity for Adults Verification of Legal Identity for Children
Certificate of birth, naturalization papers
Current, valid driver's license or
Department of Motor Vehicles
identification card
U.S. military discharge (DD 214)
Current U.S. passport
Current government employer
identification card with picture
Certificate of birth
Adoption papers
Custody agreement
Health and Human Services ID
Certified school records
If a document submitted by a family is illegible for any reason or otherwise questionable, more than one of these documents may be required.

If none of these documents can be provided and at the PHA’s discretion, a third party who knows the person may attest to the person’s identity. The certification must be provided in a format acceptable to the PHA and be signed in the presence of a PHA representative or PHA notary public.

Legal identity will be verified for all applicants at the time of eligibility determination and in cases where the PHA has reason to doubt the identity of a person representing themselves to be a participant.
© Copyright 2024 Nan McKay & Associates, Inc. Adminplan 4/1/26 Unlimited copies may be made for internal use. Page 7-14 7-II.B. SOCIAL SECURITY NUMBERS [24 CFR 5.216, NOTICE PIH 2018-24] The family must provide documentation of a valid social security number (SSN) for each member of the household, with the exception of individuals who do not contend eligible immigration status. Exemptions also include existing program participants who were at least 62 years of age as of January 31, 2010, and had not previously disclosed an SSN.

Note that an individual who previously declared to have eligible immigration status may not change their declaration for the purpose of avoiding compliance with the SSN disclosure and documentation requirements or penalties associated with noncompliance with these requirements. Nor may the head of household opt to remove a household member from the family composition for this purpose.

The PHA must accept the following documentation as acceptable evidence of the social security number:
• An original SSN card issued by the Social Security Administration (SSA) • An original SSA-issued document, which contains the name and SSN of the individual (SSA award letter, Medicare card, etc.)
• An original document issued by a federal, state, or local government agency, which contains the name and SSN of the individual (unemployment insurance printout, welfare or Medicaid documents, etc.) along with other identifying information of the individual • Such other evidence of the SSN as HUD may prescribe in administrative instructions The PHA may only reject documentation of an SSN provided by an applicant or participant if the document is not an original document or if the original document has been altered, mutilated, is illegible, or if the document appears to be forged.

PHA Policy
The PHA will explain to the applicant or participant the reasons the document is not acceptable and request that the individual obtain and submit acceptable documentation of the SSN to the PHA within 90 days.

In the case of Moderate Rehabilitation Single Room Occupancy (SRO) individuals, the required documentation must be provided within 90 calendar days from the date of admission into the program. The PHA must grant one additional 90-day extension if it determines that the applicant’s failure to comply was due to circumstances that were beyond the applicant’s control and could not have been reasonably foreseen.

When a participant requests to add a new household member who is at least 6 years of age, or who is under the age of 6 and has an SSN, the participant must provide the complete and accurate SSN assigned to each new member at the time of reexamination or recertification, in addition to the documentation required to verify it. The PHA may not add the new household member until such documentation is provided.

When a participant requests to add a new household member who is under the age of 6 and has not been assigned an SSN, the participant must provide the SSN assigned to each new child and the required documentation within 90 calendar days of the child being added to the household. A 90-day extension will be granted if the PHA determines that the participant’s failure to comply © Copyright 2024 Nan McKay & Associates, Inc. Adminplan 4/1/26 Unlimited copies may be made for internal use. Page 7-15 was due to unforeseen circumstances and was outside of the participant’s control. During the period the PHA is awaiting documentation of the SSN, the child will be counted as part of the assisted household.

PHA Policy
The PHA will grant one additional 90-day extension if needed for reasons beyond the participant’s control such as delayed processing of the SSN application by the SSA, natural disaster, fire, death in the family, or other emergency.

Social security numbers must be verified only once during continuously-assisted occupancy.

PHA Policy
The PHA will verify each disclosed SSN by:

Obtaining documentation from applicants and participants that is acceptable as evidence of social security numbers (for example - a SS/SSI award letter) Making a copy of the original documentation submitted, returning it to the individual, and retaining a copy in the file folder
Once the individual’s verification status is classified as “verified,” the PHA may, at its discretion, remove and destroy the copy of the documentation of SSN [HCV GB, Eligibility Chapter, Nov 2019.PHA Policy
Once an individual’s status is classified as “verified” in HUD’s EIV system, the PHA will retain the documents in the applicant and participant file as evidence of social security numbers.

7-II.C. DOCUMENTATION OF AGE
A birth certificate or other official record of birth is the preferred form of age verification for all family members. For elderly family members an original document that provides evidence of the receipt of social security retirement benefits is acceptable.

PHA Policy
If an official record of birth or evidence of social security retirement benefits cannot be provided, the PHA will require the family to submit other documents that support the reported age of the family member (e.g., school records, driver's license if birth year is recorded) and to provide a self-certification.

Age must be verified only once during continuously assisted occupancy.

© Copyright 2024 Nan McKay & Associates, Inc. Adminplan 4/1/26 Unlimited copies may be made for internal use. Page 7-16 7-II.D. FAMILY RELATIONSHIPS
Applicants and program participants are required to identify the relationship of each household member to the head of household. Definitions of the primary household relationships are provided in the Eligibility chapter.

PHA Policy
Family relationships are verified only to the extent necessary to determine a family’s eligibility and level of assistance. Certification by the head of household normally is sufficient verification of family relationships. However, the PHA reserves the right to request reasonable documentation if a relationship is unclear or has been misrepresented.

Marriage
PHA Policy
A marriage certificate generally is required to verify that a couple is married.

In the case of a common law marriage, the couple must demonstrate that they hold themselves to be married (e.g., by telling the community they are married, calling each other husband and wife, using the same last name, filing joint income tax returns).

Certification by the head of household may be accepted when reasonable attempts have been made to provide requested documentation.

The PHA reserves the right to require documentation when there is reasonable doubt about a marital relationship.

Separation or Divorce
PHA Policy
The PHA will require the family to document a divorce or separation. A certified copy of a divorce decree, signed by a court officer, is required to document that a couple is divorced.

A copy of a court-ordered maintenance or other court record is required to document a separation.

If no court document is available, documentation from a community-based agency will be accepted.

Certification by the head of household may be accepted when other reasonable attempts have been made to provide requested documentation.

The PHA reserves the right to require documentation when there is reasonable doubt about a marital relationship.

© Copyright 2024 Nan McKay & Associates, Inc. Adminplan 4/1/26 Unlimited copies may be made for internal use. Page 7-17 Absence of Adult Member
PHA Policy
If an adult member who was formerly a member of the household is reported to be permanently absent, the family must provide evidence to support that the person is no longer a member of the family (e.g., documentation of another address at which the person resides such as a lease or utility bill).

The PHA will not remove the income of an adult member from the household share calculation until such evidence is provided.

Foster Children and Foster Adults
PHA Policy
Third-party verification from the state or local government agency responsible for the placement of the individual with the family is required.

The PHA may accept verbal confirmation of placement from a representation of the Department of Social Services on an interim basis in order to address emergency placement situations. In such cases, staff will annotate the file with the name of the representative providing the information on contact information and indicating if temporary approval for the placement has been granted.

Written confirmation of placement will be required within 60 days of placement unless the PHA has granted an extension for the documentation. © Copyright 2024 Nan McKay & Associates, Inc. Adminplan 4/1/26 Unlimited copies may be made for internal use. Page 7-18 7-II.E. VERIFICATION OF STUDENT STATUS
General Requirements
PHA Policy
The PHA requires families to provide information about the student status of all students who are 18 years of age or older. This information will be verified only if:

The family reports full-time student status for an adult other than the head, spouse, or cohead.

The family reports childcare expenses to enable a family member to further their education.

The family includes a student enrolled in an institution of higher education.

Restrictions on Assistance to Students Enrolled in Institutions of Higher Education This section applies only to students who are seeking assistance on their own, separately from their parents. It does not apply to students residing with parents who are seeking or receiving HCV assistance.

PHA Policy
In accordance with the verification hierarchy described in Section 7-1.B, the PHA will determine whether the student is exempt from the restrictions in 24 CFR 5.612 by verifying any one of the following exemption criteria:

The student is enrolled at an educational institution that does not meet the definition of institution of higher education in the Higher Education Act of 1965 (see section Exhibit 3-2).

The student is at least 24 years old.

The student is a veteran, as defined in section 3-II.E.

The student is married.

The student has at least one dependent child, as defined in section 3-II.E.

The student is a person with disabilities, as defined in section 3-II.E, and was receiving assistance prior to November 30, 2005.

If the PHA cannot verify at least one of these exemption criteria, the PHA will conclude that the student is subject to the restrictions on assistance at 24 CFR 5.612. In addition to verifying the student’s income eligibility, the PHA will then proceed to verify either the student’s parents’ income eligibility (see Section 7-III.J) or the student’s independence from their parents (see below).
© Copyright 2024 Nan McKay & Associates, Inc. Adminplan 4/1/26 Unlimited copies may be made for internal use. Page 7-19 Independent Student
PHA Policy
The PHA will verify a student’s independence from their parents to determine that the student’s parents’ income is not relevant for determining the student’s eligibility by doing all of the following:

Either reviewing and verifying previous address information to determine whether the student has established a household separate from their parents for at least one year, or reviewing and verifying documentation relevant to determining whether the student meets the U.S. Department of Education’s definition of independent student (see Section 3-II.E)
Reviewing the student’s prior year income tax returns to verify the student is independent or verifying the student meets the U.S. Department of Education’s definition of independent student (see Section 3-II.E)
Requesting and obtaining written certification directly from the student’s parents identifying the amount of support they will be providing to the student, even if the amount of support is $0, except in cases in which the PHA determines that the student is a vulnerable youth (see Section 3-II.E)
© Copyright 2024 Nan McKay & Associates, Inc. Adminplan 4/1/26 Unlimited copies may be made for internal use. Page 7-20 7-II.F. DOCUMENTATION OF DISABILITY
The PHA must verify the existence of a disability in order to allow certain income disallowances and deductions from income. The PHA is not permitted to inquire about the nature or extent of a person’s disability [24 CFR 100.202(c)]. The PHA may not inquire about a person’s diagnosis or details of treatment for a disability or medical condition. If the PHA receives a verification document that provides such information, the PHA will not place this information in the tenant file. Under no circumstances will the PHA request a participant’s medical record(s). For more information on health care privacy laws, see the Department of Health and Human Services’ website at http://www.hhs.gov/ocr/privacy/.

The above cited regulation does not prohibit the following inquiries, provided these inquiries are made of all applicants, whether or not they are persons with disabilities [VG, p. 24]:
• Inquiry into an applicant’s ability to meet the requirements of ownership or tenancy • Inquiry to determine whether an applicant is qualified for a dwelling available only to persons with disabilities or to persons with a particular type of disability • Inquiry to determine whether an applicant for a dwelling is qualified for a priority available to persons with disabilities or to persons with a particular type of disability • Inquiring whether an applicant for a dwelling is a current illegal abuser or addict of a controlled substance
• Inquiring whether an applicant has been convicted of the illegal manufacture or distribution of a controlled substance

Family Members Receiving SSA Disability Benefits
Verification of the receipt of disability benefits from the Social Security Administration (SSA) is sufficient verification of disability for the purpose of qualifying for waiting list preferences (if applicable) or certain income disallowances and deductions [VG, p. 23].

PHA Policy
For family members claiming disability who receive disability benefits from the SSA, the PHA will attempt to obtain information about disability benefits through the HUD Enterprise Income Verification (EIV) system. If documentation from HUD’s EIV System is not available, the PHA will request a current (dated within the appropriate benefit year) SSA benefit verification letter from each family member claiming disability status. If the family is unable to provide the document(s), the PHA will ask the family to request a benefit verification letter by either calling SSA at 1-800-772-1213, or by requesting it from www.ssa.gov. Once the applicant or participant receives the benefit verification letter they will be required to provide it to the PHA.
© Copyright 2024 Nan McKay & Associates, Inc. Adminplan 4/1/26 Unlimited copies may be made for internal use. Page 7-21 Family Members Not Receiving SSA Disability Benefits
Receipt of veteran’s disability benefits, worker’s compensation, or other non-SSA benefits based on the individual’s claimed disability are not sufficient verification that the individual meets HUD’s definition of disability in 24 CFR 5.403.

PHA Policy
For family members claiming disability who do not receive disability benefits from the SSA, a knowledgeable professional must provide third-party verification that the family member meets the HUD definition of disability. See the Eligibility chapter for the HUD definition of disability. The knowledgeable professional will verify whether the family member does or does not meet the HUD definition.

© Copyright 2024 Nan McKay & Associates, Inc. Adminplan 4/1/26 Unlimited copies may be made for internal use. Page 7-22 7-II.G. CITIZENSHIP OR ELIGIBLE IMMIGRATION STATUS [24 CFR 5.508] Overview
Housing assistance is not available to persons who are not citizens, nationals, or eligible immigrants. Prorated assistance is provided for "mixed families" containing both eligible and ineligible persons. A detailed discussion of eligibility requirements is in the Eligibility chapter.

This verifications chapter discusses HUD and PHA verification requirements related to citizenship status.

The family must provide a certification that identifies each family member as a U.S. citizen, a U.S. national, an eligible noncitizen or an ineligible noncitizen and submit the documents discussed below for each family member. Once eligibility to receive assistance has been verified for an individual it need not be collected or verified again during continuously assisted occupancy [24 CFR 5.508(g)(5)].

U.S. Citizens and Nationals
HUD requires a declaration for each family member who claims to be a U.S. citizen or national.

The declaration must be signed personally by any family member 18 or older and by a guardian for minors.

The PHA may request verification of the declaration by requiring presentation of a birth certificate, United States passport or other appropriate documentation.

PHA Policy
Family members who claim U.S. citizenship or national status will not be required to provide additional documentation unless the PHA receives information indicating that an individual’s declaration may not be accurate

© Copyright 2024 Nan McKay & Associates, Inc. Adminplan 4/1/26 Unlimited copies may be made for internal use. Page 7-23 Eligible Immigrants
Documents Required
All family members claiming eligible immigration status must declare their status in the same manner as U.S. citizens and nationals.

The documentation required for eligible noncitizens varies depending upon factors such as the date the person entered the U.S., the conditions under which eligible immigration status has been granted, age, and the date on which the family began receiving HUD-funded assistance. Exhibit 7-1 at the end of this chapter summarizes documents family members must provide.

PHA Verification [HCV GB, pp. 5-3 and 5-7]
For family members age 62 or older who claim to be eligible immigrants, proof of age is required in the manner described in 7-II.C. of this plan. No further verification of eligible immigration status is required.

For family members under the age of 62 who claim to be eligible immigrants, the PHA must verify immigration status with the United States Citizenship and Immigration Services (USCIS).

The PHA will follow all USCIS protocols for verification of eligible immigration status. © Copyright 2024 Nan McKay & Associates, Inc. Adminplan 4/1/26 Unlimited copies may be made for internal use. Page 7-24 7-II.H. VERIFICATION OF PREFERENCE STATUS
The PHA must verify any preferences claimed by an applicant that determined placement on the waiting list.

PHA Policy
Insufficient Funds - The PHA will offer a preference to any family that has been terminated from its HCV program due to insufficient program funding. The PHA will verify this preference using the PHA’s termination records.

Residency Preference - To verify eligibility for a residency preference, the family must provide documentation definitively linking them to a job or place of residency in the City of Anaheim. Applicants living in the unincorporated areas of Anaheim do not qualify for the residency preference. A P.O. Box address cannot be used to establish residency.

Acceptable residency/employment documentation includes but is not limited to: a lease which identifies the applicant(s) as the lease holder, utility bill(s) in the applicant(s) name, an offer of employment on employer’s letterhead or other verifiable employer provided documentation. Applicant’s work site must be located in the City of Anaheim.

Displaced Preference – The PHA will verify this preference through written verification from the City department responsible or involved in the displacement action.

Veteran’s Preference – Applicant must submit a copy of their DD-214 or other official documentation from the armed services or the Veterans Affairs Administration. The applicant must meet the definition of veteran under the California Military and Veterans Code, Section 980. If it is unclear that the applicant meets this definition according to the DD-214, it is the applicant’s responsibility to provide verification from the US Department of Veterans Affairs that he or she is considered a veteran.

To verify eligibility under the veteran’s preference as a surviving spouse, the surviving spouse must submit the Veteran’s DD214 (or other official documentation from the armed services or the Veterans Affairs Administration), a copy of their marriage license, and the Veteran’s death certificate.

Disability Preference (Project-Based Program only) – Preference in admission may be assigned to applicants qualifying for the support services available for a specific disabled population at a given project-based location. Verification will be accepted from a local support service provided or other qualified professional.

Homeless Set-Aside - For verification of homelessness , the PHA will accept appropriate documentation listed under 24 CFR 582.301.

Mainstream Preference – For verification of institutionalization or other segregated settings, the PHA will accept a statement from a medical professional who is familiar with the applicant and who can attest that the individual would be able to live on their own if housing assistance was available. For verification of homelessness, the PHA will accept appropriate documentation listed under 24 CFR 582.301. The PHA will not accept self-certifications. All certifications must be provided by a third-party source. © Copyright 2024 Nan McKay & Associates, Inc. Adminplan 4/1/26 Unlimited copies may be made for internal use. Page 7-25 PART III: VERIFYING INCOME AND ASSETS

Chapter 6, Part I of this plan describes in detail the types of income that are included and excluded and how assets and income from assets are handled. Any assets and income reported by the family must be verified. This part provides PHA policies that supplement the general verification procedures specified in Part I of this chapter.

PHA Policy
The following policies do not apply when the PHA uses a Safe Harbor income determination from a means-tested federal assistance program.

7-III.A. EARNED INCOME
Tips
PHA Policy
Unless tip income is included in a family member’s W-2 by the employer, persons who work in industries where tips are standard will be required to sign a certified estimate of tips received for the prior year and tips anticipated to be received in the coming year.

Wages
PHA Policy
When the PHA requires third-party verification of wages, for wages other than tips, the family must provide original pay stubs covering the consecutive 60-day period prior to the PHA’s request. At its discretion, the PHA may request up to 12 consecutive months of additional pay stubs or payroll records if needed to determine income due to the family's circumstances (e.g., irregular/fluctuating schedule, seasonal employment, inconsistent work hours, etc.) (refer to 7-I.D.).

© Copyright 2024 Nan McKay & Associates, Inc. Adminplan 4/1/26 Unlimited copies may be made for internal use. Page 7-26 7-III.B. BUSINESS AND SELF EMPLOYMENT INCOME
PHA Policy
Business owners and self-employed persons will be required to provide:

An audited financial statement for the previous fiscal year if an audit was conducted. If an audit was not conducted, a statement of income and expenses must be submitted and the business owner or self-employed person must certify to its accuracy; or
Income tax returns with corresponding official tax forms and schedules attached and including third-party receipt of transmission for income tax return filed (i.e., tax preparer’s transmittal receipt, summary of transmittal from online source, etc.) All schedules completed for filing federal and local taxes in the preceding year.

If accelerated depreciation was used on the tax return or financial statement, an accountant's calculation of depreciation expense, computed using straight-line depreciation rules.

The PHA will provide a format for any person who is unable to provide such a statement to record income and expenses for the coming year. The business owner/self-employed person will be required to submit the information requested and to certify to its accuracy at all future reexaminations.

If a family member has been self-employed less than three (3) months, the PHA will accept the family member's certified estimate of income and schedule an interim reexamination in three (3) months. If the family member has been self-employed for three (3) to twelve (12) months the PHA will require the family to provide documentation of income and expenses for this period and use that information to project income.

When the family member performs “gig employment” or is employed as an independent contractor consistently throughout the year, the PHA will calculate income based on the last 2 consecutive months of employment. At its discretion, the PHA may calculate income using up to 6 consecutive months of employment.

For self-employed family members, family members performing gig employment, or independent contractors who claim they do not have to file tax returns, the PHA may request a completed copy of IRS Form 4506-T to verify that no return has been filed.

At any reexamination, the PHA may request documents that support submitted financial statements such as manifests, appointment books, cash books, or bank statements. © Copyright 2024 Nan McKay & Associates, Inc. Adminplan 4/1/26 Unlimited copies may be made for internal use. Page 7-27 7-III.C. PERIODIC PAYMENTS AND PAYMENTS IN LIEU OF EARNINGS For policies governing streamlined income determinations for fixed sources of income, please see Chapter 11.

Social Security/SSI Benefits
Verification requirements for Social Security (SS) and Supplemental Security Income (SSI) benefits differ for applicants and participants.

For applicants, since EIV does not contain SS or SSI benefit information, the PHA must ask applicants to provide a copy of their current SS and/or SSI benefit letter (dated within the appropriate benefit year) for each family member that receives SS and/or SSI benefits. If the family is unable to provide the document or documents, the PHA should help the applicant request a benefit verification letter from SSA’s website at www.ssa.gov or ask the family to request one by calling SSA at 1-800-772-1213. The PHA must obtain the original benefit letter from the applicant, make a photocopy of the document for the file, and return the original to the family.

For participants, the PHA must obtain information through the HUD EIV system and confirm with the participants that the current listed benefit amount is correct. • If the participant agrees with the amount reported in EIV, the PHA must use the EIV- reported gross benefit amount to calculate annual income from Social Security. PHAs are required to use the EIV-reported SS and SSI benefit amounts when calculating income unless the tenant disputes the EIV-reported amount. For example, an SSA benefit letter may list the monthly benefit amount as $450.80 and EIV displays the amount as $450.00. The PHA must use the EIV-reported amount unless the participant disputes the amount. • If the participant disputes the EIV-reported benefit amount, or if benefit information is not available in EIV, the PHA must request a current SSA benefit verification letter (dated within the appropriate benefit year) from each family member that receives SS and/or SSI benefits.

If the family is unable to provide the document or documents, the PHA should help the participant request a benefit verification letter from SSA’s website at www.ssa.gov or ask the family to request one by calling SSA at 1-800-772-1213. The PHA must obtain the original benefit letter from the participant, make a photocopy of the document for the file, and return the original to the family.

Photocopies of social security checks or bank statements are not acceptable forms of verification for SS/SSI benefits.
© Copyright 2024 Nan McKay & Associates, Inc. Adminplan 4/1/26 Unlimited copies may be made for internal use. Page 7-28 7-III.D. ALIMONY CHILD SUPPORT
PHA Policy
The way the PHA will seek verification for alimony and child support differs depending on whether the family declares that it receives regular payments.

If the family declares that it receives regular payments, verification will be sought in the following order.

Copy of the receipts and/or payment stubs for the 60 days prior to PHA request
Third-party verification form from the state or local child support enforcement agency by obtaining a computer generated print out of the past 12 months of their child support disbursement
Third-party verification form from the person paying the support Family's self-certification of amount received and of the likelihood of support payments being received in the future, or that support payments are not being received.

If the family declares that it receives irregular or no payments, in addition to the verification process listed above, the family must provide evidence that it has taken all reasonable efforts to collect amounts due. This may include:

A statement from any agency responsible for enforcing payment that shows the family has requested enforcement and is cooperating with all enforcement efforts
If the family has made independent efforts at collection, a written statement from the attorney or other collection entity that has assisted the family in these efforts
Note: Families are not required to undertake independent enforcement action. © Copyright 2024 Nan McKay & Associates, Inc. Adminplan 4/1/26 Unlimited copies may be made for internal use. Page 7-29 7-III.E. ASSETS AND INCOME FROM ASSETS
The PHA will require verification of the value of assets, as indicated under each asset type. As allowed by HUD, the PHA will accept the self-certification of the family and will not require additional verification if the total value of the family’s net assets is equal to or less than $5,000.

Assets Disposed of for Less than Fair Market Value
The family must certify whether any assets have been disposed of for less than fair market value in the preceding two years. The PHA needs to verify only those certifications that warrant documentation [HCV GB, p. 5-28].

PHA Policy
The PHA will verify the value of assets disposed of only if:

The amount disposed of is greater than $1000,
The PHA does not already have a reasonable estimation of its value from previously collected information, or
The amount reported by the family in the certification appears obviously in error.

Example 1: An elderly participant reported a $10,000 certificate of deposit at the last annual reexamination and the PHA verified this amount. Now the person reports that she has given this $10,000 to her son. The PHA has a reasonable estimate of the value of the asset; therefore, reverification of the value of the asset is not necessary.

Example 2: A family member has disposed of its 1/4 share of real property located in a desirable area and has valued her share at approximately $5,000. Based upon market conditions, this declaration does not seem realistic. Therefore, the PHA will verify the value of this asset.
7-III.F. NET INCOME FROM RENTAL PROPERTY
PHA Policy
The family must provide:

A current executed lease for the property that shows the rental amount or certification from the current tenant
A self-certification from the family members engaged in the rental of property providing an estimate of expenses for the coming year and the most recent IRS Form 1040 with Schedule E (Rental Income).

If schedule E was not prepared, the PHA will require the family members involved in the rental of property to provide a self-certification of income and expenses for the previous year and may request documentation to support the statement including: tax statements, insurance invoices, bills for reasonable maintenance and utilities, and bank statements or amortization schedules showing monthly interest expense.
© Copyright 2024 Nan McKay & Associates, Inc. Adminplan 4/1/26 Unlimited copies may be made for internal use. Page 7-30 7-III.G. RETIREMENT ACCOUNTS
PHA Policy
The PHA will accept written third-party documents supplied by the family as evidence of the status of retirement accounts.

The type of original document that will be accepted depends upon the family member’s retirement status.

Before retirement, the PHA will accept an original document from the entity holding the account with a date that shows it is the most recently scheduled statement for the account but in no case earlier than 6 months from the effective date of the examination.

Upon retirement, the PHA will accept an original document from the entity holding the account that reflects any distributions of the account balance, any lump sums taken and any regular payments.

After retirement, the PHA will accept an original document from the entity holding the account dated no earlier than 12 months before that reflects any distributions of the account balance, any lump sums taken and any regular payments.
© Copyright 2024 Nan McKay & Associates, Inc. Adminplan 4/1/26 Unlimited copies may be made for internal use. Page 7-31 7-III.H. INCOME FROM EXCLUDED SOURCES
A detailed discussion of excluded income is provided in Chapter 6, Part I.

HUD guidance on verification of excluded income draws a distinction between income which is fully excluded and income which is only partially excluded.

For fully excluded income, the PHA is not required to follow the verification hierarchy, document why third-party verification is not available, or report the income on the 50058. Fully excluded income is defined as income that is entirely excluded from the annual income determination (for example, food stamps, earned income of a minor, or foster care funds) [Notice PIH 2013-04].

PHAs may accept a family’s signed application or reexamination form as self-certification of fully excluded income. They do not have to require additional documentation. However, if there is any doubt that a source of income qualifies for full exclusion, PHAs have the option of requiring additional verification.

For partially excluded income, the PHA is required to follow the verification hierarchy and all applicable regulations, and to report the income on the 50058. Partially excluded income is defined as income where only a certain portion of what is reported by the family qualifies to be excluded and the remainder is included in annual income (for example, the income of an adult full-time student).

PHA Policy
The PHA will accept the family’s self-certification as verification of fully excluded income. The PHA may request additional documentation if the PHA deems it necessary to document the income source.

The PHA will verify the source and amount of partially excluded income as described in Part 1 of this chapter.
© Copyright 2024 Nan McKay & Associates, Inc. Adminplan 4/1/26 Unlimited copies may be made for internal use. Page 7-32 7-III.I. ZERO INCOME FAMILIES [NOTICE PIH 2023-27]
PHAs have discretion to establish reasonable procedures to manage the risk of unreported income, such as asking families to complete a zero-income worksheet at admission or periodically after admission to determine if they have any sources of unreported income or searching any UIV sources for unreported income.

In calculating annual income, PHAs must not assign monetary value to nonmonetary in-kind donations from a food bank or similar organization received by the family [24 CFR

5.609(b)(24)(vi)].

PHAs may accept a self-certification of zero income from the family without taking any additional steps to verify zero reported income. HUD does not require such self-certifications be notarized.

PHA Policy
The PHA will check UIV sources and/or may request information from third-party sources to verify that certain forms of income such as unemployment benefits, TANF, SSI, SSI, earned income, child support, etc., are not being received by families claiming to have zero annual income.
© Copyright 2024 Nan McKay & Associates, Inc. Adminplan 4/1/26 Unlimited copies may be made for internal use. Page 7-33 7-III.J. STUDENT FINANCIAL ASSISTANCE [NOTICE PIH 2015-21] Any financial assistance, in excess of amounts received for tuition, fees, and other required charges that a person attending an institution of higher education receives under the Higher Education Act of 1965, from private sources, or from an institution of higher education must be considered income unless the student is over the age of 23 with dependent children or is residing with parents who are seeking or receiving HCV assistance [24 CFR 5.609(b)(9) and FR 4/10/06].

For students over the age of 23 with dependent children or students residing with parents who are seeking or receiving HCV assistance, the full amount of student financial assistance is excluded from annual income [24 CFR 5.609(c)(6)]. The full amount of student financial assistance is also excluded for students attending schools that do not qualify as institutions of higher education (as defined in Exhibit 3-2). Excluded amounts are verified only if, without verification, the PHA would not be able to determine whether or to what extent the income is to be excluded (see Section 7-III.H).

PHA Policy
For a student subject to having a portion of their student financial assistance included in annual income in accordance with 24 CFR 5.609(b)(9), the PHA will request written third-party verification of both the source and the amount. Family-provided documents from the educational institution attended by the student will be requested, as well as documents generated by any other person or entity providing such assistance, as reported by the student.

In addition, the PHA will request written verification of the student’s tuition, fees, and other required charges.

If the PHA is unable to obtain third-party written verification of the requested information, the PHA will pursue other forms of verification following the verification hierarchy in Section 7-I.B.
© Copyright 2024 Nan McKay & Associates, Inc. Adminplan 4/1/26 Unlimited copies may be made for internal use. Page 7-34 7-III.K. PARENTAL INCOME OF STUDENTS SUBJECT TO ELIGIBILITY

RESTRICTIONS
If a student enrolled at an institution of higher education is under the age of 24, is not a veteran, is not married, does not have a dependent child, and is not a person with disabilities receiving HCV assistance as of November 30, 2005, the income of the student’s parents must be considered when determining income eligibility, unless the student is determined independent from their parents or a vulnerable youth in accordance with PHA policy [24 CFR 5.612, FR Notice 4/10/06, p. 18146, and FR Notice 9/21/16].

This provision does not apply to students residing with parents who are seeking or receiving HCV assistance. It is limited to students who are seeking or receiving assistance on their own, separately from their parents.

PHA Policy
If the PHA is required to determine the income eligibility of a student’s parents, the PHA will request an income declaration and certification of income from the appropriate parent(s) (as determined in Section 3-II.E). The PHA will send the request directly to the parents, who will be required to certify to their income under penalty of perjury. The parents will be required to submit the information directly to the PHA. The required information must be submitted (postmarked) within 10 business days of the date of the PHA’s request or within any extended timeframe approved by the PHA.

The PHA reserves the right to request and review supporting documentation at any time if it questions the declaration or certification. Supporting documentation may include, but is not limited to, Internal Revenue Service (IRS) tax returns, consecutive and original pay stubs, bank statements, pension benefit statements, benefit award letters, and other official and authentic documents from a federal, state, or local agency. © Copyright 2024 Nan McKay & Associates, Inc. Adminplan 4/1/26 Unlimited copies may be made for internal use. Page 7-35 PART IV: VERIFYING MANDATORY DEDUCTIONS

7-IV.A. DEPENDENT AND ELDERLY/DISABLED HOUSEHOLD DEDUCTIONS The dependent and elderly/disabled family deductions require only that the PHA verify that the family members identified as dependents or elderly/disabled persons meet the statutory definitions. No further verifications are required.

Dependent Deduction
See Chapter 6 (6-II.B.) for a full discussion of this deduction. The PHA must verify that:
• Any person under the age of 18 for whom the dependent deduction is claimed is not the head, spouse, or cohead of the family and is not a foster child • Any person age 18 or older for whom the dependent deduction is claimed is not a foster adult or live-in aide, and is a person with a disability or a full time student Elderly/Disabled Family Deduction
See Eligibility chapter for a definition of elderly and disabled families and Chapter 6 (6-II.C.) for a discussion of the deduction. The PHA must verify that the head, spouse, or cohead is 62 years of age or older or a person with disabilities.
© Copyright 2024 Nan McKay & Associates, Inc. Adminplan 4/1/26 Unlimited copies may be made for internal use. Page 7-36 7-IV.B. MEDICAL EXPENSE DEDUCTION
Policies related to medical expenses are found in 6-II.D. The amount of the deduction will be verified following the standard verification procedures described in Part I.

Amount of Expense
PHA Policy
Medical expenses will be verified through:

Written third-party documents provided by the family, such as pharmacy printouts or receipts.

The PHA will make a best effort to determine what expenses from the past are likely to continue to occur in the future. The PHA will also accept evidence of monthly payments or total payments that will be due for medical expenses during the upcoming 12 months.

Written third-party verification forms, if the family is unable to provide acceptable documentation.

If third-party or document review is not possible, written family certification as to costs anticipated to be incurred during the upcoming 12 months.

In addition, the PHA must verify that:
• The household is eligible for the deduction.
• The costs to be deducted are qualified medical expenses. • The expenses are not paid for or reimbursed by any other source. • Costs incurred in past years are counted only once.

Eligible Household
The medical expense deduction is permitted only for households in which the head, spouse, or cohead is at least 62, or a person with disabilities. The PHA must verify that the family meets the definition of an elderly or disabled family provided in the Eligibility chapter and as described in Chapter 7 (7-IV.A.) of this plan.

Qualified Expenses
To be eligible for the medical expenses deduction, the costs must qualify as medical expenses.

See Chapter 6 (6-II.D.) for the PHA’s policy on what counts as a medical expense. © Copyright 2024 Nan McKay & Associates, Inc. Adminplan 4/1/26 Unlimited copies may be made for internal use. Page 7-37

Unreimbursed Expenses
To be eligible for the medical expenses deduction, the costs must not be reimbursed by another source.

PHA Policy
The family will be required to certify that the medical expenses are not paid or reimbursed to the family from any source.

Expenses Incurred in Past Years
PHA Policy
When anticipated costs are related to on-going payment of medical bills incurred in past years, the PHA will verify:

The anticipated repayment schedule
The amounts paid in the past, and
Whether the amounts to be repaid have been deducted from the family’s annual income in past years
© Copyright 2024 Nan McKay & Associates, Inc. Adminplan 4/1/26 Unlimited copies may be made for internal use. Page 7-38 7-IV.C. DISABILITY ASSISTANCE EXPENSES
Policies related to disability assistance expenses are found in 6-II.E. The amount of the deduction will be verified following the standard verification procedures described in Part I.

Amount of Expense
Attendant Care
PHA Policy
The PHA will accept written third-party documents provided by the family.

If family-provided documents are not available, the PHA will provide a third-party verification form directly to the care provider requesting the needed information.

Expenses for attendant care will be verified through:

Written third-party documents provided by the family, such as receipts or cancelled checks.

Third-party verification form signed by the provider, if family-provided documents are not available.

If third-party verification is not possible, written family certification as to costs anticipated to be incurred for the upcoming 12 months.

Auxiliary Apparatus
PHA Policy
Expenses for auxiliary apparatus will be verified through:

Written third-party documents provided by the family, such as billing statements for purchase of auxiliary apparatus, or other evidence of monthly payments or total payments that will be due for the apparatus during the upcoming 12 months.

Third-party verification form signed by the provider, if family-provided documents are not available.

If third-party verification is not possible, written family certification of estimated apparatus costs for the upcoming 12 months.

In addition, the PHA must verify that:
• The family member for whom the expense is incurred is a person with disabilities (as described in 7-II.F above).
• The expense permits a family member, or members, to work (as described in 6-II.E.). • The expense is not reimbursed from another source (as described in 6-II.E.).

© Copyright 2024 Nan McKay & Associates, Inc. Adminplan 4/1/26 Unlimited copies may be made for internal use. Page 7-39 Family Member is a Person with Disabilities
To be eligible for the disability assistance expense deduction, the costs must be incurred for attendant care or auxiliary apparatus expense associated with a person with disabilities. The PHA will verify that the expense is incurred for a person with disabilities (See 7-II.F.).

Family Member(s) Permitted to Work
The PHA must verify that the expenses claimed actually enable a family member, or members, (including the person with disabilities) to work.

PHA Policy
The PHA will request third-party verification from a rehabilitation agency or knowledgeable medical professional indicating that the person with disabilities requires attendant care or an auxiliary apparatus to be employed, or that the attendant care or auxiliary apparatus enables another family member, or members, to work (See 6-II.E.).

This documentation may be provided by the family.

If third-party verification has been attempted and is either unavailable or proves unsuccessful, the family must certify that the disability assistance expense frees a family member, or members (possibly including the family member receiving the assistance), to work.

Unreimbursed Expenses
To be eligible for the disability expenses deduction, the costs must not be reimbursed by another source.

PHA Policy
The family will be required to certify that attendant care or auxiliary apparatus expenses are not paid by or reimbursed to the family from any source. © Copyright 2024 Nan McKay & Associates, Inc. Adminplan 4/1/26 Unlimited copies may be made for internal use. Page 7-40 7-IV.D. CHILDCARE EXPENSES
Policies related to childcare expenses are found in Chapter 6 (6-II.F). The amount of the deduction will be verified following the standard verification procedures described in Part I of this chapter. In addition, the PHA must verify that:
• The child is eligible for care (12 or younger).
• The costs claimed are not reimbursed.
• The costs enable a family member to work, actively seek work, or further their education. • The costs are for an allowable type of childcare .
• The costs are reasonable.

Eligible Child
To be eligible for the childcare deduction, the costs must be incurred for the care of a child under the age of 13. The PHA will verify that the child being cared for (including foster children) is under the age of 13 (See 7-II.C.).

Unreimbursed Expense
To be eligible for the childcare deduction, the costs must not be reimbursed by another source.

PHA Policy
The family will be required to certify that the childcare expenses are not paid by or reimbursed to the family from any source.

Pursuing an Eligible Activity
The PHA must verify that the family member(s) that the family has identified as being enabled to seek work, pursue education, or be gainfully employed, are actually pursuing those activities.

PHA Policy
Information to be Gathered
The PHA will verify information about how the schedule for the claimed activity relates to the hours of care provided, the time required for transportation, the time required for study (for students), the relationship of the family member(s) to the child, and any special needs of the child that might help determine which family member is enabled to pursue an eligible activity.

Seeking Work
Whenever possible the PHA will use documentation from a state or local agency that monitors work-related requirements (e.g., welfare or unemployment). In such cases the PHA will request family-provided verification from the agency of the member’s job © Copyright 2024 Nan McKay & Associates, Inc. Adminplan 4/1/26 Unlimited copies may be made for internal use. Page 7-41 seeking efforts to date, and require the family to submit to the PHA any reports provided to the other agency.

In the event third-party verification is not available, the PHA will provide the family with a form on which the family member must record job search efforts. The PHA will review this information at each subsequent reexamination for which this deduction is claimed.

Furthering Education
The PHA will request third-party documentation to verify that the person permitted to further their education by the childcare is enrolled and provide information about the timing of classes for which the person is registered. The documentation may be provided by the family.

Gainful Employment
The PHA will seek third-party verification of the work schedule of the person who is permitted to work by the childcare . In cases in which two or more family members could be permitted to work, the work schedules for all relevant family members may be verified. The documentation may be provided by the family.

Allowable Type of Childcare
The type of care to be provided is determined by the family, but must fall within certain guidelines, as discussed in Chapter 6.

PHA Policy
The PHA will verify that the type of childcare selected by the family is allowable, as described in Chapter 6 (6-II.F).

The PHA will verify that the fees paid to the childcare provider cover only childcare costs (e.g., no housekeeping services or personal services) and are paid only for the care of an eligible child (e.g., prorate costs if some of the care is provided for ineligible family members).

The PHA will verify that the childcare provider is not an assisted family member.

Verification will be made through the head of household’s declaration of family members who are expected to reside in the unit.

Reasonableness of Expenses
Only reasonable childcare costs can be deducted.

PHA Policy
The actual costs the family incurs will be compared with the PHA’s established standards of reasonableness for the type of care in the locality to ensure that the costs are reasonable.

If the family presents a justification for costs that exceed typical costs in the area, the PHA will request additional documentation, as required, to support a determination that the higher cost is appropriate.
© Copyright 2024 Nan McKay & Associates, Inc. Adminplan 4/1/26 Unlimited copies may be made for internal use. Page 7-42 EXHIBIT 7-1: SUMMARY OF DOCUMENTATION REQUIREMENTS
FOR NONCITIZENS [HCV GB, pp. 5-9 and 5-10]
• All noncitizens claiming eligible status must sign a declaration of eligible immigrant status on a form acceptable to the PHA.
• Except for persons 62 or older, all noncitizens must sign a verification consent form • Additional documents are required based upon the person's status.

Elderly Noncitizens
• A person 62 years of age or older who claims eligible immigration status also must provide proof of age such as birth certificate, passport, or documents showing receipt of SS old-age benefits.

All other Noncitizens
• Noncitizens that claim eligible immigration status also must present the applicable USCIS document. Acceptable USCIS documents are listed below.
• Form I-551 Alien Registration Receipt
Card (for permanent resident aliens)
• Form I-94 Arrival-Departure Record
annotated with one of the following:
• “Admitted as a Refugee Pursuant to
Section 207”
• “Section 208” or “Asylum”
• “Section 243(h)” or “Deportation
stayed by Attorney General”
• “Paroled Pursuant to Section 221
(d)(5) of the USCIS”
• Form I-94 Arrival-Departure Record with
no annotation accompanied by:
• A final court decision granting asylum
(but only if no appeal is taken);
• A letter from a USCIS asylum officer
granting asylum (if application is filed
on or after 10/1/90) or from a USCIS
district director granting asylum
(application filed before 10/1/90);
• A court decision granting withholding
of deportation; or
• A letter from an asylum officer granting
withholding or deportation (if
application filed on or after 10/1/90).
• Form I-688 Temporary Resident Card
annotated “Section 245A” or Section 210”.

Form I-688B Employment Authorization Card
annotated “Provision of Law 274a. 12(11)” or
“Provision of Law 274a.12”.
• A receipt issued by the USCIS indicating that an application for issuance of a replacement document in one of the above listed categories has been made and the applicant’s entitlement to the document has been verified; or
• Other acceptable evidence. If other documents are determined by the USCIS to constitute acceptable evidence of eligible immigration status, they will be announced by notice published in the Federal Register

Page 8 ends

Anaheim City CouncilAugust 25, 2026

Anaheim City Council
August 25, 2026