Fairfield City Council
December 17, 2024

Administrative Plan-HCV Program 4-9 Revised 10/31/2024 Removal from the Waiting List
PHA Policy
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 as well as to any alternate address provided on the initial application. The notice will state the reasons the family was removed from the 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)].

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 public 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.

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. In order to assist families within a targeted funding category, the PHA may skip families that do not qualify within the targeted funding 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:

Administrative Plan-HCV Program 4-10 Revised 10/31/2024 Veterans Affairs Supportive Housing (VASH) Vouchers
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. 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 will use the following local preferences:

1. The PHA will offer a preference to any family that has been terminated from its HCV program due to insufficient program funding.

This preference will be worth 25 points.

2. The PHA will offer a preference to applicant families who participated in the City of Fairfield Temporary Tenant-Based Rental Assistance (TBRA) Program for persons experiencing homelessness that was administered by the City of Fairfield and substantially completed the required self-sufficiency component and/or are elderly or disabled. Families and individuals meeting the criteria may apply whether the HCV waiting list is open or closed. In order to apply for the waiting list during a period when it is closed to the general population, the TBRA participant must submit an application to the FHA, and the FHA must receive it, within 45 days of the last day the applicant was assisted under TBRA
This preference will be worth 25 points.

3. The PHA will offer a preference for applicant families who live within the city limits of Fairfield, or whose head, spouse, or co-head of household works (verifiable, paid employment) or have been notified that they are hired to work within the city limits of Fairfield.

This preference will be worth 20 points.

4. The PHA will offer a preference for families whose head of household, co-head of household, or spouse is a veteran.

This preference will be worth 10 points.

5. The PHA will offer a preference for homeless families and individuals.

Administrative Plan-HCV Program 4-11 Revised 10/31/2024 This preference will be worth 7 points.

6. The PHA will offer a preference for families whose head of household, co-head of household, or spouse is elderly or disabled.

This preference will be worth 6 points.

7. The PHA will offer a preference to families that include victims of domestic violence, dating violence, sexual assault, or stalking who have either been referred by a partnering service agency or consortia.

The applicant must certify that the abuser will not reside with the applicant unless the PHA gives prior written approval.

This preference will be worth 4 points.

8. Rent Burden: The PHA will offer a preference to families that are paying over 50% of their income towards rent and utilities.

This preference will be worth 3 points.

Income Targeting Requirement [24 CFR 982.201(b)(2)]
HUD requires that extremely low-income (ELI) families make up at least 75 percent of the families admitted to the HCV program during the PHA’s fiscal year. ELI families are those with annual incomes at or below the federal poverty level or 30 percent of the area median income, whichever number is higher. 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 income targeting 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.

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)].

Administrative Plan-HCV Program 4-12 Revised 10/31/2024 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. 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 the family by first class mail when it is selected from the waiting list. The PHA may also send this notification through the online applicant portal. The notice will inform the family of the following:

Date, time, and location of the scheduled application interview, including any procedures for rescheduling the interview,
Who is required to attend the interview; and
All documents that must be provided at the interview, including information about what constitutes acceptable documentation.

If a notification letter is returned to the PHA with no forwarding address, the family will be removed from the waiting list. A notice of denial (see Chapter 3) will be sent to the family’s address of record, as well as to any known alternate address.

The PHA may require application interviews to be conducted virtually in extreme situations. 4-III.E. THE APPLICATION INTERVIEW
HUD recommends that the PHA obtain the information and documentation needed to make an eligibility determination though 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.

Administrative Plan-HCV Program 4-13 Revised 10/31/2024 PHA Policy
Families selected from the waiting list are required to participate in an eligibility interview.

All adult household members are required to attend the interview. If all adults do not attend the first scheduled appointment, a second application interview will be scheduled. If all adults do not attend the second scheduled interview, the application will be denied for failure to update required information.

All adult members of the household must provide acceptable documentation of legal identity. (Chapter 7 provides a discussion of proper documentation of legal identity.) If the family does not provide the required documentation at the time of the interview, he or she will be required to provide it within 10 business days.

Pending disclosure and documentation of social security numbers, the PHA will allow the family to retain its place on the waiting list for 90 days. If all household members have not 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, and 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 (Chapter 7 provides details about longer submission deadlines for particular items, including documentation of eligible noncitizen status).

If the family is unable to obtain the information or materials within the required time frame, the 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 does not attend the appointment, either the initial or any rescheduled appointment, and does not contact the FHA before the appointment date to reschedule (if applicable), the FHA will reject the application and drop the family from the waiting list without further written notification. If the family contacts the FHA within 5 business days of the scheduled appointment and can provide acceptable documentation to the FHA that an emergency situation prevented them from rescheduling or attending the appointment, the FHA may allow the family to reschedule the appointment. Requests to reschedule received on the same day of the appointment will be considered contact within 5 business days of the scheduled appointment and the family will be required to provide acceptable documentation to the FHA that an emergency

Administrative Plan-HCV Program 4-14 Revised 10/31/2024 situation prevented them from rescheduling prior to the appointment or from attending the appointment.
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 the waiting list. The PHA will notify the family in writing that it has been returned to the waiting list, will specify the reasons for it, and will inform the family of its right to request an informal review (Chapter 16).

If applicants are returned to the wait list, they will not have the right to an informal review.

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.

Administrative Plan-HCV Program 5-1 Revised 10/30/2024 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. T
his 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.

Administrative Plan-HCV Program 5-2 Revised 10/31/2024 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.
5-I.B. BRIEFING [24 CFR 982.301]
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 a briefing. The notice will be sent by first class mail and/or will be sent via the online applicant portal
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 addressed in relevant policy elsewhere in this section.

If the notice is returned by the post office with no forwarding address, the applicant will be denied and their name will not be placed back on the waiting list. If the notice is returned by the post office with a forwarding address, the notice will be resent to the address indicated.

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.

PHA Policy
In-person briefings will generally be conducted in group meetings. At the family’s written request, the PHA may provide an individual briefing.

All adult household members are required to attend the briefing.

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

Administrative Plan-HCV Program 5-3 Revised 10/31/2024 Briefings will be conducted in English. For limited English proficient (LEP) applicants, the PHA will provide interpretation services in accordance with the PHA’s LEP plan (See Chapter 2).

Attendance
PHA Policy
Applicants who fail to attend a scheduled in-person briefing will be scheduled for another briefing automatically. 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 prior PHA approval, will be denied assistance (see Chapter 3).

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 in case of local, state, or national physical distancing orders, and in cases of inclement weather or natural disaster. 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.

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 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 his or her 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.

Administrative Plan-HCV Program 5-4 Revised 10/31/2024 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.

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
At least 10 business days prior to scheduling the remote briefing, the PHA will provide written notification via first class mail, via email, and/or via the online applicant portal to families participating in the briefing to advise of technological requirements and to request the family notify the PHA of any known barriers. If any family does not respond within five business days, or if the written notification is returned by the post office or the email is rejected, the PHA will contact the family by telephone 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 will 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, or via the online applicant portal at least five business days before the briefing. 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.

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.

Administrative Plan-HCV Program 5-5 Revised 10/31/2024 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; • An explanation of how portability works. The PHA may not discourage the family from choosing to live anywhere in the PHA jurisdiction or outside the PHA jurisdiction under portability, unless otherwise expressly authorized by statute, regulation, PIH Notice, or court order; • 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;
• The advantages of areas that do not have a high concentration of low-income families; and • For families receiving welfare-to-work vouchers, a description of any local obligations of a welfare- to-work family and an explanation that failure to meet the obligations is grounds for denial of admission or termination of assistance.

Administrative Plan-HCV Program 5-6 Revised 10/31/2024 Briefing Packet [24 CFR 982.301(b)]
Documents and information provided in the briefing packet must include the following:
• The term of the voucher, voucher suspensions, and the PHA’s policies on any extensions 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, how the PHA determines total tenant payment for a family, and information on the payment standard and utility allowance schedule. • 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 a description of the procedure for requesting approval for a tenancy.
• A statement of the PHA policy on providing information about families to prospective owners. • The PHA subsidy standards including when and how exceptions are made. • Materials (e.g., brochures) on how to select a unit and any additional information on selecting a unit that HUD provides.
• Information on federal, state, and local equal opportunity laws and a copy of the housing discrimination complaint form.
• 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 family may request a list of available accessible units known to the PHA.
• The family obligations under the program, including any obligations of a welfare-to-work family. • The grounds on which the PHA may terminate assistance for a participant family because of family action or failure to act.
• 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. • An explanation of the advantages of moving to an area that does not have a high concentration of low-income families.

Administrative Plan-HCV Program 5-7 Revised 10/31/2024 If the PHA is located in a metropolitan 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:

The HUD pamphlet on lead-based paint entitled Protect Your Family from Lead in Your Home
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 contains 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

Administrative Plan-HCV Program 5-8 Revised 10/31/2024 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. • 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 is responsible for any Housing Quality Standards (HQS) breach by the family caused by 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 which could be assessed against the security deposit are considered damages beyond normal wear.
• 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.

Administrative Plan-HCV Program 5-9 Revised 10/31/2024 • 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, police reports, and affidavits from the owner, neighbors, or other credible parties with direct knowledge.

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 the fault of the tenant or guests. Any incidents of, or criminal activity related to, domestic violence, dating violence, sexual assault, or stalking will not be construed as serious or repeated lease violations by the victim [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 family member as an occupant of the unit.

PHA Policy
The request to add a family member must be submitted in writing and approved prior to the person moving into the unit. The PHA will consider approving the addition of the following:
o The minor child of an existing household member through birth, adoption, or court- awarded custody.
o A parent or adult child of the head of household, co-head, or spouse who is elderly or disabled and whose essential care is being provided by the head of household, co-head, or spouse.
o A spouse or domestic partner of the head of household and their minor custodial children.

Administrative Plan-HCV Program 5-10 Revised 10/31/2024 o Foster children or foster adults only if it is expected to be a long-term arrangement. A long-term arrangement is one that is expected to be six months or longer.  Emergency care will only be eligible if adding the foster child or foster adult will not increase the occupancy standard or violate HQS space standards as no additional bedrooms will be granted.

The PHA will determine eligibility of the new member in accordance with the policies in Chapter 3.
• The family must promptly notify the PHA in writing if any family member no longer lives in the unit.
• 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 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 an extended period. An extended period is defined as any period greater than 14 calendar days. Written notice must be provided to the PHA at the start of the extended absence. • 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

Administrative Plan-HCV Program 5-11 Revised 10/31/2024 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]

Administrative Plan-HCV Program 5-12 Revised 10/31/2024 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 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 the housing quality standards.
• 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; • 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 to the head of household and spouse/partner, and one bedroom for each additional two persons (including co-head), except in the following circumstances:

Live-in aides and their family will be allocated a separate bedroom.

Single person families will be allocated one bedroom.

Administrative Plan-HCV Program 5-13 Revised 10/31/2024 Foster children of the opposite sex will not be required to share a bedroom unless both children are under the age of five and will not be required to share a bedroom with an adult.

The PHA will reference the following chart in determining the appropriate bedroom size for Housing Quality Standards:

Unit Size Persons in Household
(Minimum – Maximum)
1 Bedroom 1-3
2 Bedrooms 2-5
3 Bedrooms 4-7
4 Bedrooms 6-9
5 Bedrooms 8-11

Administrative Plan-HCV Program 5-14 Revised 10/31/2024 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 any of the reasons specified in the regulation:
the age, sex, health, handicap, or relationship of family members or other personal circumstances.

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 request for accommodation is readily apparent or otherwise known. The family’s continued need for an additional bedroom due to special medical equipment must be re-verified at annual reexamination.

The PHA will notify the family of its determination within 10 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.
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]

Administrative Plan-HCV Program 5-15 Revised 10/31/2024 A voucher can be issued to an applicant family only after the PHA has determined that the family is eligible for the program based on verification of information received within the 60 days prior to issuance [24 CFR 982.201(e)] and after the family has attended an oral briefing [HCV 8-3].

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. 8-5].

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. 5-II.E. VOUCHER TERM AND EXTENSIONS
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 90 calendar days.

The family must submit a Request for Tenancy Approval and proposed lease within the 90-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)].

Administrative Plan-HCV Program 5-16 Revised 10/31/2024 PHA Policy
The PHA will approve one 30-day extension upon written request from the family.

The PHA will approve additional extensions up to 60 days for a total of 180 days only if it is necessary as a reasonable accommodation for a person with disabilities.

Any request for an additional extension must include the reason(s) an additional extension is necessary. The PHA may require the family to provide documentation to support the 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 10 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)]
The PHA must provide for suspension of the initial or any extended term of the voucher from the date the family submits a request for PHA approval of the tenancy until the date the PHA notifies the family in writing whether the request has been approved or denied.

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. 8-18].

PHA Policy
If an applicant family’s voucher term or extension expires before the family has turned in a Request for Tenancy Approval for a unit for which they qualify, the PHA will require the family to reapply for assistance

Administrative Plan-HCV Program 6-17 Revised 10/31/2024 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.
• P art 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.
• P
art 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.

Administrative Plan-HCV Program 6-18 Revised 10/31/2024 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 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) Imputed returns of the asset based on the current passbook savings rate, as determined by HUD, when the value of net family assets exceeds $51,600 (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. .

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)
Earned Income Disallowance for Persons with Disabilities (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(a) and 24 CFR 5.609(b)]. 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.

Administrative Plan-HCV Program 6-19 Revised 10/31/2024 6-I.B. HOUSEHOLD COMPOSITION AND INCOME
Income received by all family members must be counted unless specifically excluded by the regulations. 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.

Summary of Income Included and Excluded by Person
Live-in aides Annual income of a live-in aide is excluded [24 CFR

5.609(b)(8)].

Foster child or foster adult Annual income of a foster child or foster adult is excluded [24 CFR 5.609(b)(8)].

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 Earned income is excluded [24 CFR 5.609(b)(3)].

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)
Earned income above the amount of the deduction for a
dependent is excluded [24 CFR 5.609(b)(14)].

All other sources of income, except those specifically
excluded by the regulations, are included.

Administrative Plan-HCV Program 6-20 Revised 10/31/2024 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 60 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 60 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 and is living outside of the assisted unit, the person will no longer be considered a family member and will be removed from the assisted voucher.

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 consider the child to be permanently removed after six months unless the family can provide a Family Reunification Plan detailing when the child will be returned to the home.

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
An individual confined to a nursing home or hospital on a permanent basis is not considered a family member.

Administrative Plan-HCV Program 6-21 Revised 10/31/2024 The PHA will request verification of the family member’s permanent absence from a responsible medical professional. If the responsible medical professional cannot provide a determination, the person will be considered temporarily absent up to 180 days. After 180 days, the family member will be considered permanently absent. If the family certifies that the family member is confined on a permanent basis, they may present, and the PHA will consider, any additional documentation or evidence.

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 51 percent or more of the time, which is defined as 183 days of the year or more.

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, school records, or an IRS return showing which family has claimed the child for income tax purposes.

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 has 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.

Administrative Plan-HCV Program 6-22 Revised 10/31/2024 (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. (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.
6-I.C. ANTICIPATING ANNUAL INCOME
When calculating a household’s income, including asset income, at the time of admission to the program or during interim examinations, PHAs must use anticipated income (current income) (i.e., the family’s estimated income for the upcoming 12-month period). [PIH 2023-27]. Policies related to anticipating annual income are provided below.

Basis of Annual Income Projection
The PHA generally will use current circumstances to determine anticipated income for the coming 12-month period.

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 tenant-provided documents (pay stubs) 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.

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.

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

Administrative Plan-HCV Program 6-23 Revised 10/31/2024 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.

6-I.D. EARNED INCOME
Types of Earned Income Included in Annual Income
Annual income includes but is not limited to the following types of earned income.

Wages and Related Compensation
The full amount, before any payroll deductions, of wages and salaries, overtime pay, commissions, fees, tips and bonuses, and other compensation for personal services is included in annual income.

Administrative Plan-HCV Program 6-24 Revised 10/31/2024 PHA Policy
For persons who regularly receive bonuses or commissions, the PHA will verify and then average amounts received for the two years preceding admission or reexamination. If only a one-year history is available, the PHA will use the prior year amounts. 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 except for the special pay to a family member serving in the Armed Forces who is exposed to hostile fire [24 CFR 5.609(b)(11)].

Day Laborer
A day laborer is 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 and must be included. [24 CFR 5.609(b)(24)] Independent Contractor
An independent contractor is 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. Individuals considered “gig workers,” such as babysitters, landscapers, rideshare drivers, and house cleaners are typically considered independent contractors. [24 CFR 5.603(b)
Income earned as a day laborer is not considered nonrecurring income and must be included. [24 CFR 5.609(b)(24)]
Seasonal Worker
A seasonal worker is an individual who is hired into a short-term position and the employment begins about the same time each year. This includes holiday employment, agricultural season jobs, and employment as a lifeguard or ballpark vendor.

Income earned as a seasonal worker is not considered nonrecurring income and must be included. [24 CFR 5.609(b)(24)]

Administrative Plan-HCV Program 6-25 Revised 10/31/2024 Types of Earned Income Not Counted in Annual Income
Nonrecurring Income [24 CFR 5.609(b)(24)]
Nonrecurring income 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, even if the source, date, or amount of the income varies. Nonrecurring income includes payments from the U.S. Census Bureau for employment; direct federal or state payments intended for economic stimulus or recovery; refundable tax credits or tax refunds at the time they are received; gifts for significant life events or milestones; non-monetary in-kind donations from a food bank or similar organization; or lump-sum additions to net family assets including but not limited to lottery or other contest winnings.

To be considered nonrecurring, the income must have a distinct end date and not be repeated beyond the coming year. This does not include unemployment income and other types of periodic payments that are received at regular intervals (such as weekly, monthly, or yearly) for a period of greater than one year and can be extended.

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(b)(3)]. (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(b)(14)]. 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].

Payments Received for the Care of Foster Children or Foster Adults or State or Tribal Kinship or Guardianship Care Payments
Payments received for the care of foster children or foster adults, or state or Tribal kinship or guardianship care payments, are excluded from annual income. This also applies to Kinship Guardianship Assistance Payments (Kin-GAP), kinship care payments, and other state-based kinship or guardianship payments that are alternatives to traditional foster care programs.[24 CFR 5.609(b)(4)
Insurance Payments or Settlements
Insurance payments and settlements for personal or property losses are excluded from annual income. 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 for workers’ compensation are included in annual income. [24 CFR 5.609(b)(5)

Administrative Plan-HCV Program 6-26 Revised 10/31/2024 Civil Action Recoveries or Settlements
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 a person with disabilities are excluded from annual income. Any amounts recovered are excluded irrespective of whether they are received periodically or in a lump sum payment. [24 CFR 5.609(b)(7)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(b)(8)]. (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)
• 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)

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(b)(12)(iii)].

State and Local Employment Training Programs
Incremental earnings and benefits to any family member resulting from participation 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 [24 CFR 5.609(b)(12)(iv)].

Administrative Plan-HCV Program 6-27 Revised 10/31/2024 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].

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.

HUD-Funded Training Programs
Amounts received under training programs funded in whole or in part by HUD [24 CFR

5.609(b)(12)(iv)] 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(b)(24)(iii)(iv)]. 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.

Earned Income Disallowance
The earned income disallowance for persons with disabilities is discussed in section 6-I.E below.

Administrative Plan-HCV Program 6-28 Revised 10/31/2024 Veterans Regular Aid and Attendance
Aid and Attendance income from the VA to veterans are excluded. This applies only to veterans in need of regular aid and attendance and does not apply to other beneficiaries of the payments, such as a surviving spouse. [24 CFR 5.609(b)(17)]
Home-Based Care Payments for a Family Member with a Disability Payments made or authorized by a state Medicaid agency 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 are excluded from the calculation of the family’s annual income. 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. [24 CFR 5.609(b)(19)]
Certain Payments Received by Tribal Members
Payments received by Tribal members, to the extent that such payments are excluded from gross income under the Internal Revenue Code (IRC), must be excluded from annual income.

Examples include the Cobell Settlement or Tribal Trust Settlements. [24 CFR 5.609(b)(21)]

6-I.E. EARNED INCOME DISALLOWANCE FOR PERSONS WITH DISABILITIES [24 CFR 5.617]
Effective January 1, 2025, only families currently participating in EID may continue to receive benefits up to 2 years from this date.

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 his or her “baseline income.” The family member’s baseline income is his or her income immediately prior to qualifying for the EID. The family member’s baseline income remains constant throughout the period that he or she is 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.

Administrative Plan-HCV Program 6-29 Revised 10/31/2024 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.

Second 12-Month Exclusion
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 50 percent of any increase in income attributable to new employment or increased earnings.

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.

Administrative Plan-HCV Program 6-30 Revised 10/31/2024 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 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.

Administrative Plan-HCV Program 6-31 Revised 10/31/2024 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.

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. 6-I.G. ASSETS [24 CFR 5.603(b)(3); 24 CFR 5.603(b)(4)]
Overview
There is no asset limitation for participation in the HCV program. This section discusses assets and how the income from the various types of assets are determined. The PHA must determine if assets are included or excluded from the calculations. If they are included, the PHA must then determine the value of the asset in order to compute income from the asset. Therefore, this section discusses:
• Excluded assets
• For included assets,
• 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.

Administrative Plan-HCV Program 6-32 Revised 10/31/2024

The following assets are excluded:
• The value of necessary items of personal property
• The value of all non-necessary items of personal property with a total value of $51,600 or less
• The value of any account under a retirement plan recognized as such by the IRS, including IRAs, employer retirement plans (e.g., 401(k), 403(b)), and retirement plans for self-employed individuals.
• The value of real property that the family does not have the effective legal authority to sell in the jurisdiction in which the property is located. Examples include but are not limited to: co-ownership situations (including where one owner is a victim of domestic violence), where one party cannot unilaterally sell the real property; property that is tied up in litigation, inherited property in dispute.
• 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 being a person with disabilities. • The value of any Coverdell education savings account under section 530 of the Internal Revenue Code of 1986; the value of any qualified tuition program under section 529 of such Code; and the amounts in, contributions to, and distributions from any Achieving a Better Life Experience (ABLE) account authorized under section 529A of such code. • The value of any “baby bond” account created, authorized, or funded by the federal, state, or local government (money held in trust by the government for children until they are adults).
• Interests in Indian trust land.
• Equity in a manufactured home where the family receives assistance under 24 CFR Part 982.
• Equity in property under the Homeownership Option for which a family receives assistance under 24 CFR Part 982.
• Federal Tax refunds or refundable tax credits for a period of 12 months after receipt by the family.
• The full amount of assets held in an irrevocable trust. (See page 6-43)

Administrative Plan-HCV Program 6-33 Revised 10/31/2024 • The full amount of assets held in a revocable trust where a member of the family is the beneficiary, but the grantor/owner and trustee of the trust is not a member of the participant family or household.

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.

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 in the market (e.g., the amount a buyer would pay for real estate or the total value of 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].

Administrative Plan-HCV Program 6-34 Revised 10/31/2024 Categories of Assets
All assets are categorized as either real property such as land or a home, or personal property.

Personal property includes tangible items, like boats, as well as intangible items, like bank accounts. Personal properties are categorized as either necessary items of personal property, or non-necessary items of personal property. [24 CFR 5.603] Necessary Items of Personal Property
Necessary items of personal property are excluded from net family assets. Necessary personal property are items essential to the family for the maintenance, use, and occupancy of the premises as a home; or they are necessary for employment, education, or health and wellness.

Necessary personal property includes more than merely items that are indispensable to the bare existence of the family. It may include personal effects such as items that are ordinarily worn or utilized by the individual, items that are convenient or useful to a reasonable existence, and items that support and facilitate daily life within the family’s home. Necessary personal property also includes items that assist a household member with a disability, including any items related to disability-related needs, or that may be required for a reasonable accommodation for a person with a disability. Necessary personal property does not include bank accounts, other financial investments, or luxury items. [24 CFR 5.603]
Non-Necessary Items of Personal Property
Items of personal property that do not qualify as necessary personal property are classified as non-necessary personal property and are included in net family assets when the total value of all non-necessary personal property is over $51,600. [24 CFR 5.603] The following table lists examples of necessary and non-necessary personal property. This is not an exhaustive list.

Necessary Personal Property Non-Necessary Personal Property • Car(s)/vehicle(s) that a family relies on for
transportation for personal or business use (e.g.,
bike, motorcycle, skateboard, scooter)
• Furniture, carpets, linens, kitchenware
• Common appliances
• Common electronics (e.g., radio, television,
DVD player, gaming system)
• Clothing
• Personal effects that are not luxury items (e.g.,
toys, books)
• Recreational car/vehicle not needed for day-
today transportation (campers, motorhomes,
travel trailers, all-terrain vehicles (ATVs))
• Bank accounts or other financial investments
(e.g., checking account, savings account,
stocks/bonds)
• Recreational boat/watercraft
• Expensive jewelry without religious or
cultural value, or which does not hold family
significance
• Collectibles (e.g., coins/stamps)

Administrative Plan-HCV Program 6-35 Revised 10/31/2024 • Wedding and engagement rings
• Jewelry used in religious/cultural celebrations
and ceremonies
• Religious and cultural items
• Medical equipment and supplies
• Health care–related supplies
• Musical instruments used by the family
Personal computers, phones, tablets, and related
equipment
• Professional tools of trade of the family, for
example professional books
• Educational materials and equipment used by
the family, including equipment to
accommodate persons with disabilities
• Equipment used for exercising (e.g., treadmill,
stationary bike, kayak, paddleboard, ski
equipment)
• Equipment/machinery that is not used to
generate income for a business
• Items such as gems/precious metals, antique
cars, artwork, etc.

PHA Policy:
• The housing authority will follow up on 2 or
more deposits (via cash, check, Zelle, Venmo,
Cash App, etc.,) totaling $1,000 or more in a
one-month time period to identify possible
income sources(s).

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.

Administrative Plan-HCV Program 6-36 Revised 10/31/2024

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.) Actual and Imputed Income from Assets [24 CFR 5.609(a)(2), Notice PIH 2024-27] Actual income from assets is always included in a family’s income, regardless of the total value of net family assets or whether the asset itself is included or excluded from net family assets, unless that income is specifically excluded by 24 CFR 5.609(b). Income or returns from assets are generally considered to be interest, dividend payments, and other actual income earned on the asset, and not the increase in market value of the asset. The increase in market value is relevant to the cash value of the asset for the purpose of determining total net family assets and imputing income.

When the following three conditions are met, imputed asset income must be calculated for specific assets:
• The value of net family assets exceeds $51,600
• The specific asset is included in net family assets; and • Actual asset income cannot be calculated for the specific asset. . Imputed income from assets is calculated by multiplying the total cash value of the family asset in question by an average passbook savings rate as determined by HUD.

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 investment plan is

Administrative Plan-HCV Program 6-37 Revised 10/31/2024 not counted as income until the family has received payments equal to the amount the family member deposited into the retirement investment plan.

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 he or she 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.

Administrative Plan-HCV Program 6-38 Revised 10/31/2024 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.

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.

Types of Assets
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. Checking and savings accounts are non-necessary personal property.

PHA Policy
In determining the value of checking account and savings accounts, 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.

Administrative Plan-HCV Program 6-39 Revised 10/31/2024 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. Investment accounts are non-necessary personal property.

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.

Administrative Plan-HCV Program 6-40 Revised 10/31/2024 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].

PHA Policy
In determining the equity, the PHA will determine market value by examining recent sales of at least three properties in the surrounding or similar neighborhood that possess comparable factors that affect market value.

The PHA will first use the payoff amount for the loan (mortgage) as the unpaid balance to calculate equity. If the payoff amount is not available, the PHA will use the basic loan balance information to deduct from the market value in the equity calculation.

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]
The PHA must also deduct from the equity the reasonable costs for converting the asset to cash.

Using the formula for calculating equity specified above, the net cash value of real property is the market value minus the balance of the loan (mortgage) minus the expenses to convert to cash [Notice PIH 2012-3].

PHA Policy
For the purposes of calculating expenses to convert to cash for real property, the PHA will use ten percent of the market value of the home.

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

Administrative Plan-HCV Program 6-41 Revised 10/31/2024 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.

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). A trust is non-necessary personal property.

Revocable Trusts
A revocable trust that is under the control of the family or household is included in the family’s assets [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.

Irrevocable 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. Distributions of the principal or corpus of the trust, and distributions of income from the trust when the distributions are used to pay the costs of health and medical care expenses for a minor are excluded[24 CFR 5.603(b)(2)]. (Periodic payments are covered in section 6-I.H. Lump-sum receipts are discussed earlier in this section.)

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 number of dividends or interest is counted as income from the asset whether or not the family actually receives it. Term life insurance policies are excluded from net family assets. Life insurance policies are considered non-necessary personal property.

Administrative Plan-HCV Program 6-42 Revised 10/31/2024 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)]. • D isability 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 his or her 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]. The PHA must track when the overpayment withholding will stop and process an interim reexamination.

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

Administrative Plan-HCV Program 6-43 Revised 10/31/2024

5.609(b)(4)]. 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].
• 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 (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. [24 CFR

5.609(b)(19)].
• Amounts received under the Low-Income Home Energy Assistance Program (42 U.S.C. 1626(c)) [24 CFR 5.609(c)(17)].
• A mounts received under the Child Care and Development Block Grant Act of 1990 (42 U.S.C. 9858q) [24 CFR 5.609(c)(17)].
• E arned Income Tax Credit (EITC) refund payments (26 U.S.C. 32(j)) [24 CFR

5.609(b)(24)(iii)(iv)]. Note: EITC may be paid periodically if the family elects to receive the amount due as part of payroll payments from an employer.

Lump-sum additions to net family assets, including but not limited to lottery or other contest winnings. [24 CFR 5.609(b)(24)(vii)]

Administrative Plan-HCV Program 6-44 Revised 10/31/2024 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 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(b)(24)(vii)]. (See also the discussion of periodic payments in section 6-I.H and the discussion of lump-sum receipts in section 6-I.G.)
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.

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

Administrative Plan-HCV Program 6-45 Revised 10/31/2024 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]. 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 thatthe payments are not being made.

Families who do not have court-awarded alimony and child support awards are not required to seek a court award and are not required to take independent legal action to obtain collection.

Regular Contributions or Gifts
The PHA must count all amounts 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, and Unearned income by or on behalf of each dependent who is under 18 years of age that are not specifically excluded [24 CFR 5.609(a)(1)].

Regular monetary and nonmonetary contributions or gifts from persons not residing with an assisted family are included as income. Nonrecurring income and gifts are not counted [24 CFR

5.609(b)(24)].

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

Administrative Plan-HCV Program 6-46 Revised 10/31/2024 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. 6-I.L. STUDENT FINANCIAL ASSISTANCE [24 CFR 5.609(b)(9); Notice PIH 2023-27] In 2023, HUD released an update to the treatment of student financial assistance.

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, will be included in annual income based on the formulas below under Calculation of Student Financial Assistance.

Amounts Received Under Section 479B of the Higher Education Act (HEA) of 1965, as amended, include the following (20 U.S.C 1087uu) [24 CFR 5.609(b)(9), Notice PIH 2023- 27]: Federal Pell Grants
Teach Grants
Federal Work Study Programs
Federal Perkins Loans
Student financial assistance received under the Bureau of Indian Education Higher Education Tribal Grant
Tribally Controlled Colleges or Universities Grant Program Employment training program under section 134 of the Workforce Innovation and Opportunity Act (WIOA).
•

Administrative Plan-HCV Program 6-47 Revised 10/31/2024

“Other student financial assistance” includes grants or scholarships received from the following sources [24 CFR 5.609(b)(9), Notice PIH 2023-27]:

The Federal government
A state (including U.S. Territories), Tribe, or local government A private foundation registered as a nonprofit under 26 U.S.C 501(c)(3) A business entity (such as a corporation, general partnership, limited liability company, limited partnership, joint venture, business trust, public benefit corporation, or nonprofit entity)
An institution of higher education
The following are not considered student financial assistance:

Financial support provided to the student in the form of a fee for services performed (for example, a work study or teaching fellowship that is not excluded under section 479B of the HEA)
Gifts, including gifts from family or friends.

Calculation of Student Financial Assistance
The definition of “covered costs” include tuition, books, supplies (including supplies and equipment to support students with learning disabilities or other disabilities), room and board, and fees required and charged to a student by an institution of higher education. For a student who is not the head of household, co-head, or spouse, actual covered costs also include the reasonable and actual costs of housing while attending the institution of higher education and not residing in an assisted unit. [24 CFR 5.609(b)(9)(ii)]
The formula for students that meet all three conditions and have children is as follows: financial assistance received under 479B of HEA is excluded; then the total cost of tuition and required fees and charges is subtracted from the remaining student financial assistance. Any remaining amount is included as income.

The formula for students that meet all three conditions and do not have children is as follows: all student financial assistance from all sources will be totaled; then the total cost of tuition and required fees and charges is subtracted from the total. Any remaining amount is included as income.

Administrative Plan-HCV Program 6-48 Revised 10/31/2024 6-I.M. ADDITIONAL EXCLUSIONS FROM ANNUAL INCOME
See Exhibit 6-2 for all exclusions from annual income.

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, which amount will be adjusted by HUD annually in accordance with the Consumer Price Index for Urban Wage Earners and Clerical Workers, rounded to the next lowest multiple of $25;
(2) $525 for any elderly family or disabled family, which amount will be adjusted by HUD annually in accordance with the Consumer Price Index for Urban Wage Earners and Clerical Workers, rounded to the next lowest multiple of $25;
(3) The sum of the following, to the extent the sum exceeds ten percent of annual income:
(i) Unreimbursed health and medical care expenses of any elderly family or disabled family; and (ii) Unreimbursed reasonable attendant care and auxiliary apparatus expenses for each member of the family who is a person with a disability, to the extent necessary to enable any member of the family (including the member who is a person with a disability) to be employed. This deduction may not exceed the combined 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

Administrative Plan-HCV Program 6-49 Revised 10/31/2024 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.
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 $525 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. UNREIMBURSED HEALTH AND MEDICAL CARE EXPENSES DEDUCTION [24 CFR 5.611(a)(3)(i)]
Unreimbursed health and medical care expenses may be deducted to the extent that, in combination with any disability assistance expenses, they exceed ten percent of annual income.

The health and medical care 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 eligible for a health and medical care expense deduction, the health and medical care expenses of all family members are counted [VG, p. 28].

Definition of Health and Medical Care Expenses
HUD regulations define health and medical care expenses at 24 CFR 5.603(b) to mean “health and medical care expenses are 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.”

Administrative Plan-HCV Program 6-50 Revised 10/31/2024

PHA Policy
.

Summary of Certain Allowable Medical Expenses
Services of medical professionals
Surgery and medical procedures that are
necessary, legal, noncosmetic
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)
Substance abuse treatment programs
Psychiatric treatment
Ambulance services and some costs of
transportation related to medical
expenses
The cost and care of necessary
equipment related to a medical
condition (e.g., eyeglasses/lenses,
hearing aids, crutches, and artificial
teeth)
Cost and continuing care of necessary
service animals
Medical insurance premiums or the cost
of a health maintenance organization
(HMO)
Note: This chart provides a summary of certain eligible medical expenses. Medical expenses are considered only to the extent they are not reimbursed by insurance or some other source.

Families That Qualify for Both 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 health or medical care or reasonable attendant care and auxiliary apparatus 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.
6-II.E. UNREIMBURSED REASONABLE ATTENDANT CARE AND AUXILIARY APPARATUS 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: (1) the family includes a person with a disability, (2) are necessary to enable a family member 18 years or older to work, (3) are not paid to a family member or reimbursed by

Administrative Plan-HCV Program 6-51 Revised 10/31/2024 an outside source, (4) in combination with any medical expenses, exceed ten percent of annual income, and (5) do not exceed the earned income received by the family member who is enabled to work.

Auxiliary apparatus items can include expenses for wheelchairs, ramps, adaptations to vehicles, guide dogs, assistance animals, or special equipment to enable a person who is blind or has low vision to read, or type or special equipment to assist a person who is deaf or hard of hearing.

Examples of attendant care expenses include teaching a person with disabilities how to perform day-to-day tasks independently like cleaning, bathing, doing laundry, and cooking. Attendant care can be 24-hour care, or care during sporadic periods throughout the day.

Earned Income Limit on the Reasonable Attendant Care and Auxiliary Expense Deduction A family can qualify for the reasonable attendant care and auxiliary apparatus 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 reasonable attendant care and auxiliary 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 reasonable attendant care and auxiliary 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 reasonable attendant care and auxiliary expenses enable more than one family member to work, the expenses will be capped by the sum of the family members’ incomes.

Administrative Plan-HCV Program 6-52 Revised 10/31/2024 Eligible Auxiliary Apparatus Expenses
Examples of auxiliary apparatus are provided in the HCV Guidebook as follows:
“Auxiliary apparatus are items such as wheelchairs, ramps, adaptations to vehicles, guide dogs, assistance animals, or special equipment to enable a person who is blind or has low vision to read or type or special equipment to assist a person who is deaf or hard of hearing.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 Reasonable Attendant Care Expenses
Examples of reasonable attendant care expenses can include teaching a person with disabilities how to perform day-to-day tasks independently like cleaning, bathing, doing laundry, and cooking. Reasonable attendant care can be 24-hour care, or care during sporadic periods throughout the day. The family determines the type of reasonable attendant care that is appropriate for the person with disabilities.

PHA Policy
Reasonable 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.

Reasonable 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.

Administrative Plan-HCV Program 6-53 Revised 10/31/2024 Payments to Family Members
No reasonable attendant care and auxiliary apparatus 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.

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 reasonable attendant care and auxiliary apparatus 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 Health and Medical Care, and Reasonable Attendant Care and Auxiliary Apparatus 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 health and medical care expenses or reasonable attendant care 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.

Phased-In Relief for Families that receive Health and Medical Care Expenses All families who received a deduction for unreimbursed health and medical care and/or reasonable attendant care or auxiliary apparatus expenses in 2024 will begin receiving a 24- month phased-in relief at their next annual or interim reexamination in 2025. • At their first annual or interim reexamination in 2025, families that received these deductions in 2024 will receive a phased-in expense deduction for 2025 for Health and Medical Care Expenses and Reasonable Attendant Care and Auxiliary Apparatus Expenses that exceed a 5% threshold percentage for the next 12 months.

Administrative Plan-HCV Program 6-54 Revised 10/31/2024 • 12 months after their 5% phase-in began, the threshold percentage will increase to 7.5% for a second phase-in for the next 12 months.
• 12 months after the 7.5% phase-in began, the threshold percentage will increase to 10%.

General Relief due to Financial Hardship
If a family experiences financial hardship related to the health and medical care expense and reasonable attendant care and auxiliary apparatus expenses, they may request General Relief for up to 90 days.

To be eligible for General Relief due to Financial Hardship, a family must:
• Demonstrate that the family’s unreimbursed health and medical care expenses or unreimbursed reasonable attendant care and auxiliary apparatus expenses increased, or • The family’s financial hardship is a result of a change in circumstances that would not otherwise trigger an interim reexamination.

Examples of circumstances constituting a financial hardship may include the following situations:
• The family is awaiting eligibility determination for a federal, state, or local assistance program, such as a determination for unemployment compensation or disability benefits, or
• The family’s income decreased because of a loss of employment, death of a family member, or due to a natural or federal/state declared disaster.

If the family qualifies for General Relief due to Financial Hardship, the family will receive a deduction for the sum of the eligible expenses that exceed 5% of the family’s gross annual income. The family’s hardship relief ends when (1) the circumstances that made the family eligible for relief are no longer applicable, or (2) after 90 days, whichever comes first.

The PHA will make the determination of hardship and notify the family within 30 calendar days.

Once a family chooses to obtain General Relief due to Financial Hardship, the family may no longer receive the phased-in relief.

PHA POLICY
The PHA will not issue extensions of General Relief due to Financial Hardship.

If the circumstances that made the family eligible for relief are no longer applicable, the family must report the change within ten (10) days.

Administrative Plan-HCV Program 6-55 Revised 10/31/2024 6-II.F. UNREIMBURSED CHILD CARE 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]. Child care expenses for foster children that are living in the assisted family’s household are included when determining the family’s child care expenses, if it enables a family member to work, look for work, or go to school. [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.

Administrative Plan-HCV Program 6-56 Revised 10/31/2024

Furthering Education
PHA Policy
If the childcare expense being claimed is to enable a family member to further his or her 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 Child Care Expense Deduction
When a family member looks for work or furthers his or her 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 earned income disallowances or income exclusions are applied.

When the person who is enabled to work is a person with disabilities who receives the earned income disallowance (EID) or 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. For example, if a family member who qualifies for the EID makes $15,000 but because of the EID only $5,000 is included in annual income, childcare expenses are limited to $5,000.

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

Administrative Plan-HCV Program 6-57 Revised 10/31/2024 family may provide information that supports a request to designate another family member as the person enabled to work.

Eligible Child Care 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 child care [VG, p. 26].

Allowable Child Care 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.

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 his or her 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 a qualified local entity that either subsidizes childcare costs or licenses childcare providers. Families may present, and the PHA will consider, justification for costs that exceed typical costs in the area.

Administrative Plan-HCV Program 6-58 Revised 10/31/2024

HARDSHIP EXEMPTION DUE TO CHILD CARE EXPENSES
A family whose eligibility for the child care expense deduction is ending may request a Hardship Exemption to continue receiving the child care expense deduction for up to 90 days if the family is able to demonstrate that:
• The family no longer has a family member that is working, looking for work, or seeking to further their education, and
• The deduction is necessary because the family is unable to pay their rent because of the loss of the child care expense deduction.

If the family qualifies for a Hardship Exemption, the family will continue to receive the child care expense deduction for up to 90 days. The family’s hardship relief ends when (1) the circumstances that made the family eligible for the hardship exemption are no longer applicable, or (2) after 90 days, whichever comes first.

The PHA will make the determination of hardship and notify the family within 30 calendar days.

If the circumstances that made the family eligible for relief are no longer applicable, the family must report the change within ten (10) days.

PHA Policy
The PHA will not issue extensions to the hardship exemption due to child care expenses.

Administrative Plan-HCV Program 6-59 Revised 10/31/2024 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. The income used for this determination must have been verified no earlier than 60 days before the family’s voucher was issued. (For a discussion of the application of payment standards, see section 6-III.C.)

Administrative Plan-HCV Program 6-60 Revised 10/31/2024 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 utility provider.

The PHA may make all utility reimbursement payments to qualifying families on a monthly basis or may make quarterly payments when the monthly reimbursement amount is $15.00 or less. Reimbursements must be made once per calendar-year quarter and must be prorated if the family leaves the program in advance of its next quarterly reimbursement. The PHA must also adopt hardship policies for families for whom receiving quarterly reimbursement would create a financial hardship.

PHA Policy
The PHA will issue all utility reimbursements monthly.
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.

This 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 for Minimum Rent Exemption Financial hardship for Minimum Rent Exemption 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

Administrative Plan-HCV Program 6-61 Revised 10/31/2024 would be entitled to public benefits but for Title IV of the Personal Responsibility and Work Opportunity Act of 1996.

PHA Policy
A financial hardship for Minimum Rent Exemption 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, or (2) the decision to deny assistance. 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., because of funeral-related expenses or the loss of the family member’s income).
(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 for Minimum Rent
Determination of Hardship for Minimum Rent
When a family requests a financial hardship exemption for Minimum Rent, 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.

Administrative Plan-HCV Program 6-62 Revised 10/31/2024 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.

The PHA will make the determination of hardship and notify the family within 30 calendar days.

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 for minimum rent has not been granted.

Administrative Plan-HCV Program 6-63 Revised 10/31/2024 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 not issue any extensions to Temporary Financial Hardship for Minimum Rent.

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 for Minimum Rent
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.

Administrative Plan-HCV Program 6-64 Revised 10/31/2024 6-III.C. APPLYING PAYMENT STANDARDS [24 CFR 982.505; 982.503(b)] Overview
The PHA’s schedule of payment standards is used to calculate housing assistance payments 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 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.

If the PHA has established an exception payment standard for a designated part of a zip code area or FMR area and a family’s unit is located in the exception area, the PHA must use the appropriate payment standard for the exception area.

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
When the PHA revises its payment standards during the term of the HAP contract for a family’s unit, it will apply the new payment standards in accordance with HUD regulations.

Decreases
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 [FR Notice 11/16/16].

However, 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 the effective date of the family’s second regular reexamination following the effective date of the decrease in the payment standard amount. At that point, the PHA may either reduce the payment standard to the current amount in effect on the PHA’s payment standard schedule, or may reduce the payment standard to another amount that is higher than the normally applicable amount on

Administrative Plan-HCV Program 6-65 Revised 10/31/2024 the schedule. The PHA may also establish different policies for designated areas within their jurisdiction (e.g., different zip code areas).

In any case, 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. 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
When the payment standard schedule is decreased during the term of the HAP contract, the PHA will determine the payment standard for families currently under a HAP contract 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.

Increases
If the payment standard is increased during the term of the HAP contract, the increased payment standard will be used to calculate the monthly housing assistance payment for the family beginning on the effective date of the family’s first regular reexamination on or after the effective date of the increase in the payment standard.

Families requiring or requesting interim reexaminations will not have their HAP payments calculated using the higher payment standard until their next annual reexamination [HCV GB, p. 7-8].

Administrative Plan-HCV Program 6-66 Revised 10/31/2024 Changes in Family Unit Size (Voucher Size)
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 for the family beginning at the family’s first regular reexamination following the change in family unit size.

Reasonable Accommodation
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. 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.

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 current utility allowance schedule [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.

Administrative Plan-HCV Program 6-67 Revised 10/31/2024 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.

Administrative Plan-HCV Program 6-68 Revised 10/31/2024 EXHIBIT 6-1: ANNUAL INCOME INCLUSIONS
24 CFR 5.609(a) Annual income means all amounts, monetary or not, which:
(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 $50,000 (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.

Administrative Plan-HCV Program 6-69 Revised 10/31/2024 EXHIBIT 6-2: ANNUAL INCOME EXCLUSIONS
24 CFR 5.609(b)
(b) Annual income does not include the following:
(1) Any imputed return on an asset when net family assets total $50,000 or less (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.

Administrative Plan-HCV Program 6-70 Revised 10/31/2024 (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 (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)(E) of this section.

Administrative Plan-HCV Program 6-71 Revised 10/31/2024 (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:
(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.

Administrative Plan-HCV Program 6-72 Revised 10/31/2024 (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, child care, 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 full-time 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.
(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.

Administrative Plan-HCV Program 6-73 Revised 10/31/2024 (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.

Administrative Plan-HCV Program 6-74 Revised 10/31/2024 (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.

Administrative Plan-HCV Program 6-75 Revised 10/31/2024 EXHIBIT 6-3: EARNED INCOME DISALLOWANCE FOR PERSONS WITH

DISABILITIES
24 CFR 5.617 Self-sufficiency incentives for persons with disabilities–Disallowance of increase in annual income.
(a) Applicable programs. The disallowance of
earned income provided by this section is
applicable only to the following programs:

HOME Investment Partnerships Program (24
CFR part 92); Housing Opportunities for
Persons with AIDS (24 CFR part 574);
Supportive Housing Program (24 CFR part
583); and the Housing Choice Voucher
Program (24 CFR part 982).
(b) Definitions. The following definitions
apply for purposes of this section.

Baseline income. The annual income
immediately prior to implementation of the
disallowance described in paragraph (c)(1) of
this section of a person with disabilities (who
is a member of a qualified family).

Disallowance. Exclusion from annual income.

Previously unemployed includes a person with
disabilities who has earned, in the twelve
months previous to employment, no more than
would be received for 10 hours of work per
week for 50 weeks at the established minimum
wage.

Qualified family. A family residing in housing
assisted under one of the programs listed in
paragraph (a) of this section or receiving
tenant-based rental assistance under one of the
programs listed in paragraph (a) of this
section.
(1) Whose annual income increases as a result
of employment of a family member who is a
person with disabilities and who was
previously unemployed for one or more years
prior to employment;
(2) Whose annual income increases as a result
of increased earnings by a family member who
is a person with disabilities during
participation in any economic self-sufficiency
or other job training program; or
(3) Whose annual income increases, as a
result of new employment or increased
earnings of a family member who is a person
with disabilities, during or within six months
after receiving assistance, benefits or services
under any state program for temporary
assistance for needy families funded under
Part A of Title IV of the Social Security Act,
as determined by the responsible entity in
consultation with the local agencies
administering temporary assistance for needy
families (TANF) and Welfare-to-Work
(WTW) programs. The TANF program is not
limited to monthly income maintenance, but
also includes such benefits and services as
one-time payments, wage subsidies and
transportation assistance-- provided that the
total amount over a six-month period is at least
$500.

Administrative Plan-HCV Program 6-76 Revised 10/31/2024 (c) Disallowance of increase in annual
income—
(1) Initial twelve month exclusion. During the
12-month period beginning on the date a
member who is a person with disabilities of a
qualified family is first employed or the family
first experiences an increase in annual income
attributable to employment, the responsible
entity must exclude from annual income (as
defined in the regulations governing the
applicable program listed in paragraph (a) of
this section) of a qualified family any increase
in income of the family member who is a
person with disabilities as a result of
employment over prior income of that family
member.
(2) Second twelve month exclusion and phase-
in. Upon expiration of the 12-month period
defined in paragraph (c)(1) of this section and
for the subsequent 12-month period, the
responsible entity must exclude from annual
income of a qualified family at least 50 percent
of any increase in income of such family
member as a result of employment over the
family member’s baseline income.
(3) Maximum 2-year disallowance. The
disallowance of increased income of an
individual family member who is a person
with disabilities as provided in paragraph
(c)(1) or (c)(2) of this section is limited to a
lifetime 24-month period. The disallowance
applies for a maximum of 12 months for
disallowance under paragraph (c)(1) of this
section and a maximum of 12 months for
disallowance under paragraph (c)(2) of this
section, during the 24- month period starting
from the initial exclusion under paragraph
(c)(1) of this section.
(4) Effect of changes on currently
participating families. Families eligible for
and participating in the disallowance of earned
income under this section prior to May 9, 2016
will continue to be governed by this section in
effect as it existed immediately prior to that
date (see 24 CFR parts 0 to 199, revised as of
April 1, 2016).
(d) Inapplicability to admission. The
disallowance of increases in income as a result
of employment of persons with disabilities
under this section does not apply for purposes
of admission to the program (including the
determination of income eligibility or any
income targeting that may be applicable).

EXHIBIT 6-4: 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

Administrative Plan-HCV Program 6-77 Revised 10/31/2024 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).
(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.

Administrative Plan-HCV Program 6-78 Revised 10/31/2024 (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.

Administrative Plan-HCV Program 7-1 Revised 10/31/2024

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.

Administrative Plan-HCV Program 7-2 Revised 10/30/2024 PART I: GENERAL VERIFICATION REQUIREMENTS
7-I.A. FAMILY CONSENT TO RELEASE OF INFORMATION [24 CFR 982.516 AND 982.551, 24 CFR 5.230]
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].

Consent Forms
It is required that all adult applicants and participants sign form HUD-9886, Authorization for Release of Information. The purpose of form HUD-9886 is to facilitate automated data collection and computer matching from specific sources and provides 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). Adult family members must sign other consent forms as needed to collect information relevant to the family’s eligibility and level of assistance.

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

PHA Policy
If any family member who is required to sign a consent form fails to do so, or revokes their consent, the PHA will deny admission to the applicants and terminate assistance of the participants. This includes but is not limited to the HUD 9886 and the HUD 52675. The family may request an informal review (applicants) or informal hearing (participants) in accordance with PHA procedures.
7-I.B. OVERVIEW OF VERIFICATION REQUIREMENTS
HUD’s Verification Hierarchy [Notice PIH 2023-27]
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.

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)

HCV Administrative Plan

Administrative Plan-HCV Program 7-3 Revised 10/31/2024 • EIV + Self-Certification
• Written Third-party Verification Form
• Oral Third-party Verification
• Self-Certification
Each of the verification methods is discussed in subsequent sections below.

Requirements for Acceptable Documents
PHA Policy
Any documents used for verification must be the original (not photocopies) and generally must be dated within 60 days of the PHA request. 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.

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 adjusted income
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]. 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.

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

HCV Administrative Plan

Administrative Plan-HCV Program 7-4 Revised 10/31/2024 any adverse findings through the informal review/hearing process of the PHA.

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 annual reexaminations in accordance with 24 CFR 5.236 and administrative guidance issued by HUD. 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.

EIV Income and IVT Reports
The data shown on income and income validation tool (IVT) 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 and IVT reports for annual reexaminations on a monthly basis.

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

Income and IVT 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 and IVT reports will be used in interim reexaminations if needed as determined by the PHA.[PIH 2023-27]Income and IVT reports will be retained in participant files with the applicable annual or interim reexamination documents.

When the PHA determines through EIV 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.

EIV Identity Verification
The EIV system verifies tenant identities against SSA records. These records are compared to PIC 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 2018-18].

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

HCV Administrative Plan

Administrative Plan-HCV Program 7-5 Revised 10/31/2024 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

7-I.D. EIV + Self-Certification
The EIV Income Report may be used to verify and calculate income if the family self-certifies that the amount is accurate and representative of current income. If the family disputes the EIV-reported employment and income information, third-party verification must be obtained.

7-I.E. 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.

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.

HCV Administrative Plan

Administrative Plan-HCV Program 7-6 Revised 10/31/2024 The PHA is required to obtain, at minimum, two current and consecutive pay stubs for determining annual income from wages.

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.

PHA Policy
Third-party documents provided by the family must be dated within 60 days of the PHA request date.

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.

As verification of earned income, the PHA will require the family to provide the two most current, consecutive pay stubs. At the PHA’s discretion, if additional paystubs are needed due to the family’s circumstances (e.g., sporadic income, fluctuating schedule, etc.), the PHA may request additional paystubs or a payroll record.

As verification of child support income, the PHA will require the family to provide a 12-month record of payments received.

Written Third-Party Verification Form
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.

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.

HCV Administrative Plan

Administrative Plan-HCV Program 7-7 Revised 10/31/2024

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.

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].

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.

Value of Assets and Asset Income [24 CFR 982.516(a)]
For families with net assets totaling $5,000 or less, the PHA may accept the family’s declaration of asset value and anticipated asset income. However, the PHA is required to obtain third-party verification of all assets regardless of the amount during the intake process and at least every three years thereafter.

HCV Administrative Plan

Administrative Plan-HCV Program 7-8 Revised 10/31/2024 PHA Policy
For families with net assets totaling $5,000 or less, the PHA will accept the family’s self- certification of the value of family assets and anticipated asset income when applicable. The family’s declaration must show each asset and the amount of income expected from that asset.

All family members 18 years of age and older must sign the family’s declaration.

The PHA will use third-party documentation for assets as part of the intake process, whenever a family member is added to verify the individual’s assets, and every three years thereafter. 7-I.F. 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.

Self-certification, however, is an acceptable form of verification when:
• A source of income is fully excluded
• Net family assets total $5,000 or less and the PHA has adopted a policy to accept self certification at annual recertification, when applicable
• The PHA has adopted a policy to implement streamlined annual recertifications for fixed sources of income (See Chapter 11)
When the PHA was required to obtain third-party verification but instead 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.

7-I.G. SAFE HARBOR
PHAs has the option determine a family’s annual income, prior to the application of any deductions based on income determinations made within the previous 12-month period, using income determinations from Temporary Assistance for Needy Families (TANF), Medicaid, Supplemental Nutrition Assistance Program (SNAP), Earned Income Tax Credit, Low Income Housing Tax Credit, Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), Supplemental Security Income (SSI), and other means-tested forms of federal public assistance.

HCV Administrative Plan

Administrative Plan-HCV Program 7-9 Revised 10/31/2024 PHA Policy
The PHA will not use Safe Harbor verification to determine a family’s annual income.

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.

Verification of Legal Identity for Adults Verification of Legal Identity for Children
Certificate of birth, naturalization papers
Church issued baptismal certificate
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.

All adult household members will be required to provide a valid state-issued identification or a valid US Passport.

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 him or herself to be a participant.
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.

HCV Administrative Plan

Administrative Plan-HCV Program 7-10 Revised 10/31/2024 Note that an individual who previously declared to have eligible immigration status may not change his or her 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 • An original document issued by a federal, state, or local government agency, which contains the name and SSN of the individual
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 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.

If the PHA has exhausted all other attempts to obtain a valid SSN card issued by the SSA or an original document issued by a federal or state government agency that contains the name of the individual and the SSN of the individual, along with other identifying information of the individual, self-certification of SSN and at least one third-party document, such as a bank statement, utility or cell phone bill, benefit letter, etc., that contains the name of the individual can be used as the lowest level of verification of the applicant’s social security number, provided the PHA documents why the other SSN documentation was not available.

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.

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. If the individual fails to comply with SSN disclosure and documentation requirements upon expiration of the provided time period, the PHA will terminate the individual’s assistance.

HCV Administrative Plan

Administrative Plan-HCV Program 7-11 Revised 10/31/2024 If an applicant family includes a child under 6 years of age who joined the household within the 6 months prior to the date of voucher issuance, an otherwise eligible family may be admitted to the program and the family must provide documentation of the child’s SSN within 90 days of the effective date of the initial HAP contract. A 90-day extension will be granted if the PHA determines that the participant’s failure to comply was due to unforeseen circumstances and was outside of the participant’s control.

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

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 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
Making a copy of the original documentation submitted, returning it to the individual, and retaining a copy in the file folder

HCV Administrative Plan

Administrative Plan-HCV Program 7-12 Revised 10/31/2024 Once the individual’s verification status is classified as “verified,” the PHA may, at its discretion, remove and destroy copies of documentation accepted as evidence of social security numbers. The retention of the EIV Summary Report or Income Report is adequate documentation of an individual’s SSN.

PHA Policy
Once an individual’s status is classified as “verified” in HUD’s EIV system, the PHA may remove and destroy copies of documentation accepted 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 dependents under 18 years of age. A government issued photo ID is the preferred form of age verification for all adult household members and emancipated minors. 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. 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.

Marriage
PHA Policy
Certification by the head of household is normally sufficient verification. If the PHA has reasonable doubts about a marital relationship, the PHA will require the family to document the marriage.

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

HCV Administrative Plan

Administrative Plan-HCV Program 7-13 Revised 10/31/2024 Separation or Divorce
PHA Policy
Certification by the head of household is normally sufficient verification. If the PHA has reasonable doubts about a separation or divorce, the PHA will require the family to provide documentation of the 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.

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).

If documentation of the new address is not available, the PHA will make every effort to contact the absent family member. If the PHA is unsuccessful in reaching the absent family member, the PHA will accept a self-certification from the head of household.

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.

HCV Administrative Plan

Administrative Plan-HCV Program 7-14 Revised 10/31/2024 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 his or her 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 his/her parents (see below).

HCV Administrative Plan

Administrative Plan-HCV Program 7-15 Revised 10/31/2024 Independent Student
PHA Policy
The PHA will verify a student’s independence from his/her 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 his/her 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)
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

HCV Administrative Plan

Administrative Plan-HCV Program 7-16 Revised 10/31/2024 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 last 60 days) 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.

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.
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)]

HCV Administrative Plan

Administrative Plan-HCV Program 7-17 Revised 10/31/2024 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.

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. 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
o 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. o The PHA will offer a preference to applicant families who participated in the City of Fairfield Temporary Tenant-Based Rental Assistance (TBRA) Program for persons experiencing

HCV Administrative Plan

Administrative Plan-HCV Program 7-18 Revised 10/31/2024 homelessness that was administered by the City of Fairfield and substantially completed the required self-sufficiency component and/or are elderly or disabled. In order to apply for the waiting list during a period when it is closed to the general population, the TBRA participant must submit an application to the FHA, and the FHA must receive it, within 45 days of the last day the applicant was assisted under TBRA.
• The PHA will verify this preference using the PHA’s TBRA participant records. o The PHA will offer a preference for applicant families who live within the city limits of Fairfield, or whose head, spouse, or co-head of household works (verifiable, paid employment) or have been notified that they are hired to work within the city limits of Fairfield. • Adequate documentation to support this preference may include, but is not limited to, a current lease in the applicant’s name, a utility bill, or mail of an official nature (personal letters, etc. will not be accepted). If the applicant is meeting the Local Resident preference through employment, the employment must be reported to all applicable sources (i.e., the IRS, CalWORKs, etc.) to be eligible for this preference. If an applicant is on temporary disability from the job that is qualification for this preference, the applicant must still be employed by the company and eligible to return to work upon medical reinstatement. A Post Office Box address is not considered proof of Fairfield Residency. A family who claims to be homeless in Fairfield must provide verification of services received in Fairfield or any other business documentation that ties that person to Fairfield. Handwritten letters from friends, relatives or other private individuals will not be acceptable as proof of residence. As permitted by HUD (see Section 4-II.C. of this Chapter), the FHA may choose to open its waiting list for categories of families that meet particular preferences. The FHA retains the right to open its waiting list for any length of time only to applicants who meet the Local Resident preference. o The PHA will offer a preference to families that include victims of domestic violence, dating violence, sexual assault, or stalking who have either been referred by a partnering service agency or consortia.
• The applicant must certify that the abuser will not reside with the applicant unless the PHA gives prior written approval.
• To verify this preference, the PHA will follow documentation requirements outlined in Section 16-IX.D.
o The PHA will offer a preference for homeless families and individuals. • To verify this preference the applicant family must be referred by a community partner or homeless service provider.
o The PHA will offer a preference for families whose head of household, co-head of household, or spouse is elderly or disabled.
• The PHA will verify this preference in accordance with policy outlined elsewhere in this chapter.
o The PHA will offer a preference for families whose head of household, co-head of household, or spouse is a veteran.
• The PHA will verify this preference by requiring the family to provide a DD214 for the family member claiming the preference.

HCV Administrative Plan

Administrative Plan-HCV Program 7-19 Revised 10/31/2024 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.
7-III.A. EARNED INCOME
Tips
PHA Policy
Unless tip income is included in a family member’s pay stubs, 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
For wages other than tips, the family must provide originals of the two most current, consecutive pay stubs.
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.

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.

At any reexamination the PHA may request documents that support submitted financial statements such as manifests, appointment books, cash books, or bank statements. 7-III.C. PERIODIC PAYMENTS AND PAYMENTS IN LIEU OF EARNINGS

HCV Administrative Plan

Administrative Plan-HCV Program 7-20 Revised 10/31/2024 For policies governing streamlined income determinations for fixed sources of income, please see Chapter 11.

Social Security/SSI Benefits
PHA Policy
To verify the SS/SSI benefits of applicants, the PHA will request a current (dated within the last 60 days) SSA benefit verification letter from each family member that receives social security benefits. If the family is unable to provide the document(s), the PHA will 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. Once the applicant has received the benefit verification letter they will be required to provide it to the PHA.

To verify the SS/SSI benefits of participants, the PHA will obtain information about social security/SSI benefits through the HUD EIV System, and confirm with the participant(s) that the current listed benefit amount is correct. If the participant disputes the EIV-reported benefit amount, or if benefit information is not available in HUD systems, the PHA will request a current SSA benefit verification letter from each family member that receives social security benefits. If the family is unable to provide the document(s) the PHA will 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. Once the participant has received the benefit verification letter they will be required to provide it to the PHA. 7-III.D. ALIMONY OR CHILD SUPPORT
PHA Policy
Verification of child support income, whether regular or irregular, will be obtained in the following order of priority:

Copies of the receipts and/or payment stubs for the 12 months prior to PHA request Third-party verification form from the state or local child support enforcement agency Third-party verification form from the person paying the support Family's self-certification of amount received
If the family declares that it does not receivechild support or alimony,the family must provide verification. This may include:

A statement from the agency responsible for enforcing payment that shows the payment has stopped or that the family is not receiving payment.

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.

HCV Administrative Plan

Administrative Plan-HCV Program 7-21 Revised 10/31/2024 7-III.E. ASSETS AND INCOME FROM ASSETS
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 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.

HCV Administrative Plan

Administrative Plan-HCV Program 7-22 Revised 10/31/2024 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. 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, or income excluded under the earned income disallowance).

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

HCV Administrative Plan

Administrative Plan-HCV Program 7-23 Revised 10/31/2024 The PHA will verify the source and amount of partially excluded income as described in Part 1 of this chapter.
7-III.I. ZERO ANNUAL INCOME STATUS
PHA Policy
The PHA will check UIV sources and/or request information from third-party sources to verify that certain forms of income such as unemployment benefits, TANF, SS, SSI, and earnings are not being received by families claiming to have zero annual income. 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 his/her 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. 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 his or her 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].

HCV Administrative Plan

Administrative Plan-HCV Program 7-24 Revised 10/31/2024 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.

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.

HCV Administrative Plan

Administrative Plan-HCV Program 7-25 Revised 10/31/2024 7-IV.B. HEALTH AND MEDICAL CARE EXPENSE DEDUCTION
Policies related to health and medical care 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
Health and medical care expenses that occurred or will occur from the previous annual recertification to the current recertification 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 health and medical care 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 health and medical care 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 health and medical care expenses deduction, the costs must qualify as health and medical care expenses. See Chapter 6 (6-II.D.) for the PHA’s policy on what counts as a health and medical care expense.

HCV Administrative Plan

Administrative Plan-HCV Program 7-26 Revised 10/31/2024 Unreimbursed Expenses
To be eligible for the health and medical care expenses deduction, the costs must not be reimbursed by another source.

PHA Policy
The family will be required to certify that the health and medical care expenses are not paid or reimbursed to the family from any source. If expenses are verified through a third party, the third party must certify that the expenses are not paid or reimbursed from any other 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
7-IV.C. REASONABLE ATTENDANT CARE AND AUXILIARY APPARATUS EXPENSES Policies related to reasonable attendant care and auxiliary apparatus 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.

HCV Administrative Plan

Administrative Plan-HCV Program 7-27 Revised 10/31/2024 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.).

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.

HCV Administrative Plan

Administrative Plan-HCV Program 7-28 Revised 10/31/2024 Unreimbursed Expenses
To be eligible for the reasonable attendant care and auxiliary apparatus 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.
7-IV.D. CHILD CARE EXPENSES
Policies related to child care 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 child care deduction, the costs must not be reimbursed by another source.

PHA Policy
The family (and the care provider) will be required to certify that the childcare expenses are not paid or reimbursed to the family from any source.

HCV Administrative Plan

Administrative Plan-HCV Program 7-29 Revised 10/31/2024 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 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 his or her 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.

HCV Administrative Plan

Administrative Plan-HCV Program 7-30 Revised 10/31/2024 Allowable Type of Child Care
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 child care 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 child care 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.

HCV Administrative Plan

Administrative Plan-HCV Program 7-31 Revised 10/31/2024 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

Administrative Plan-HCV Program 8-1 Revised 10/30/2024 CHAPTER 8

HOUSING QUALITY STANDARDS AND RENT REASONABLENESS

DETERMINATIONS
[24 CFR 982 Subpart I and 24 CFR 982.507]

INTRODUCTION
HUD requires that all units occupied by families receiving Housing Choice Voucher (HCV) assistance meet HUD's Housing Quality Standards (HQS) and permits the PHA to establish additional requirements. The use of the term "HQS" in this plan refers to the combination of both HUD and PHA- established requirements.

All units must pass an HQS inspection prior to the approval of a lease and at least once every 24 months during the term of the contract, and at other times as needed, to determine that the unit meets HQS.

HUD also requires PHAs to determine that rents for units under the program are reasonable when compared to comparable unassisted units in the market area.

This chapter explains HUD and PHA requirements related to housing quality and rent reasonableness as follows:

Part I. Physical Standards. This part discusses the physical standards required of units occupied by HCV-assisted families and identifies decisions about the acceptability of the unit that may be made by the family based upon the family's preference. It also identifies life- threatening conditions that must be addressed on an expedited basis.

Part II. The Inspection Process.

This part describes the types of inspections the PHA will make and the steps that will be taken when units do not meet HQS.

Part III. Rent Reasonableness Determinations.

This part discusses the policies the PHA will
use to make rent reasonableness determinations.

Special HQS requirements for homeownership, manufactured homes, and other special housing types are discussed in Chapter 15 to the extent that they apply in this jurisdiction.

HCV Administrative Plan

Administrative Plan-HCV Program 8-2 Revised 10/31/2024 PART I: PHYSICAL STANDARDS
8-I.A. GENERAL HUD REQUIREMENTS
HUD Performance and Acceptability Standards
HUD's performance and acceptability standards for HCV-assisted housing are provided in 24 CFR 982.401. These standards cover the following areas:
• Sanitary facilities
• Food preparation and refuse disposal
• Space and Security
• Thermal Environment
• Illumination and electricity
• Structure and materials
• Interior Air Quality
• Water Supply
• Lead-based paint
• Access
• Site and neighborhood
• Sanitary condition
• Smoke Detectors
A summary of HUD performance criteria is provided in Exhibit 8-1. Additional guidance on these requirements is found in the following HUD resources:
• Housing Choice Voucher Guidebook, Chapter 10.
• HUD Housing Inspection Manual for Section 8 Housing
• HUD Inspection Form, form HUD-52580 (3/01) and Inspection Checklist, form HUD-52580-A (9/00)
• HUD Notice 2003-31, Accessibility Notice: Section 504 of the Rehabilitation Act of 1973; the Americans with Disabilities Act of 1990; the Architectural Barriers Act of 1968 and the Fair Housing Act of 1988.

Tenant Preference Items
HUD requires the PHA to enforce minimum HQS but also recognizes that certain judgments about the acceptability of the unit are left to the family. For example, the PHA must ensure that the unit contains the required sanitary facilities, but the family decides whether the cosmetic appearance of the facilities is acceptable. Exhibit 8-2 summarizes those items that are considered tenant preferences.

HCV Administrative Plan

Administrative Plan-HCV Program 8-3 Revised 10/31/2024 Modifications to Provide Accessibility
Under the Fair Housing Act of 1988 an owner must not refuse the request of a family that contains a person with a disability to make necessary and reasonable modifications to the unit. Such modifications are at the family's expense. The owner may require restoration of the unit to its original condition if the modification would interfere with the owner or next occupant's full enjoyment of the premises. The owner may not increase a customarily required security deposit. However, the landlord may negotiate a restoration agreement that requires the family to restore the unit and, if necessary to ensure the likelihood of restoration, may require the tenant to pay a reasonable amount into an interest bearing escrow account over a reasonable period of time. The interest in any such account accrues to the benefit of the tenant. The owner may also require reasonable assurances that the quality of the work will be acceptable and that any required building permits will be obtained. [24 CFR 100.203; Notice 2003-31].

Modifications to units to provide access for a person with a disability must meet all applicable HQS requirements and conform to the design, construction, or alteration of facilities contained in the UFAS and the ADA Accessibility Guidelines (ADAAG) [28 CFR 35.151(c) and Notice 2003-31] See Chapter 2 of this plan for additional information on reasonable accommodations for persons with disabilities.

PHA Policy
Any owner that intends to negotiate a restoration agreement or require an escrow account must submit the agreement(s) to the PHA for review.
8-I.B. ADDITIONAL LOCAL REQUIREMENTS
The PHA may impose variations to the HQS as long as the additional criteria are not likely to adversely affect the health or safety of participant families or severely restrict housing choices for families. HUD approval is required for variations to the HQS. HUD approval is not required if the variations are clarifications of HUD's acceptability criteria or performance standards [24 CFR 982.401(a)(4)].

Thermal Environment [HCV GB p.10-7]
The PHA must define a “healthy living environment” for the local climate. This may be done by establishing a temperature that the heating system must be capable of maintaining, that is appropriate for the local climate.

PHA Policy
The heating system must be capable of maintaining an interior temperature of 65 degrees Fahrenheit between October 1 and May 1.

HCV Administrative Plan

Administrative Plan-HCV Program 8-4 Revised 10/31/2024 Clarifications of HUD Requirements
PHA Policy
As permitted by HUD, the PHA has adopted the following specific requirements that elaborate on HUD standards.

Walls
In areas where plaster or drywall is sagging, severely cracked, or otherwise damaged, it must be repaired or replaced.

Windows
Window sashes must be in good condition, solid and intact, and properly fitted to the window frame. Damaged or deteriorated sashes must be replaced.

Windows must be weather-stripped as needed to ensure a weather-tight seal.

Window screens must be in good condition (applies only if screens are present).

Doors
All exterior doors must be weather-tight to avoid any air or water infiltration, be lockable, have no holes, have all trim intact, and have a threshold.

All interior doors must have no holes, have all trim intact, and be openable without the use of a key.

Floors
All wood floors must be sanded to a smooth surface and sealed. Any loose or warped boards must be resecured and made level. If they cannot be leveled, they must be replaced.

All floors must be in a finished state. Raw wood or unsealed concrete is not permitted.

All floors should have some type of base shoe, trim, or sealing for a "finished look." Vinyl base shoe is permitted.

Sinks
All sinks and commode water lines must have shut off valves, unless faucets are wall mounted.

All sinks must have functioning stoppers.

Toilets
All worn or cracked toilet seats and tank lids must be replaced and toilet tank lid must fit properly.

HCV Administrative Plan

Administrative Plan-HCV Program 8-5 Revised 10/31/2024 Security
If window security bars or security screens are present on emergency exit windows, they must be equipped with a quick release system. The owner is responsible for ensuring that the family is instructed on the use of the quick release system. 8-I.C. LIFE-THREATENING CONDITIONS [24 CFR 982.404(a); FR Notice 1/18/17] HUD requires the PHA to define life-threatening conditions and to notify the owner or the family (whichever is responsible) of the corrections required. The responsible party must correct life- threatening conditions within 24 hours of PHA notification.

PHA Policy
The following are considered life-threatening conditions:

Any condition that jeopardizes the security of the unit Major plumbing leaks or flooding, waterlogged ceiling, or floor in imminent danger of falling
Natural or LP gas or fuel oil leaks
A fuel storage vessel, fluid line, valve, or connection that supplies fuel to a HVAC unit is leaking or a strong odor is detected with potential for explosion or fire or that results in a health risk if inhaled
Any electrical problem or condition that could result in shock or fire A light fixture is readily accessible, is not securely mounted to the ceiling or wall, and electrical connections or wires are exposed
A light fixture is hanging by its wires
A light fixture has a missing or broken bulb, and the open socket is readily accessible to the tenant during the day-to-day use of the unit A receptacle (outlet) or switch is missing or broken and electrical connections or wires are exposed
An open circuit breaker position is not appropriately blanked off in a panel board, main panel board, or other electrical box that contains circuit breakers or fuses A cover is missing from any electrical device box, panel box, switch gear box, control panel, etc., and there are exposed electrical connections Any nicks, abrasions, or fraying of the insulation that exposes conducting wire Exposed bare wires or electrical connections
Any condition that results in openings in electrical panels or electrical control device enclosures

HCV Administrative Plan

Administrative Plan-HCV Program 8-6 Revised 10/31/2024 Water leaking or ponding near any electrical device
Any condition that poses a serious risk of electrocution or fire and poses an immediate life-threatening condition
Absence of a working heating system when outside temperature is below 60 degrees Fahrenheit.

Utilities not in service, including no running hot water Conditions that present the imminent possibility of injury Obstacles that prevent safe entrance or exit from the unit Any components that affect the function of the fire escape are missing or damaged
Stored items or other barriers restrict or prevent the use of the fire escape in the event of an emergency
The building’s emergency exit is blocked or impeded, thus limiting the ability of occupants to exit in a fire or other emergency
Absence of a functioning toilet in the unit
Inoperable or missing smoke detectors
Missing or inoperable carbon monoxide detector
Missing, damaged, discharged, overcharged, or expired fire extinguisher (where required) Gas/oil-fired water heater or heating, ventilation, or cooling system with missing, damaged, improper, or misaligned chimney venting
The chimney or venting system on a fuel-fired water heater is misaligned, negatively pitched, or damaged, which may cause improper or dangerous venting or gases
A gas dryer vent is missing, damaged, or is visually determined to be inoperable, or the dryer exhaust is not vented to the outside
A fuel-fired space heater is not properly vented or lacks available combustion air A non-vented space heater is present
Safety devices on a fuel-fired space heater are missing or damaged The chimney or venting system on a fuel-fired heating, ventilation, or cooling system is misaligned, negatively pitched, or damaged, which may cause improper or dangerous venting of gas

HCV Administrative Plan

Administrative Plan-HCV Program 8-7 Revised 10/31/2024 Deteriorating paint as defined at 24 CFR 35.110 in a unit built before 1978 that is to be occupied by a family with a child under six years of age if it would prevent the family from moving into the unit
If an owner fails to correct life-threatening conditions as required by the PHA, the PHA will enforce the HQS in accordance with HUD requirements. See 8-II-G.

If a family fails to correct a family-caused life-threatening condition as required by the PHA, the PHA will enforce the family obligations. See 8-II.H.

The owner will be required to repair an inoperable smoke detector unless the PHA determines that the family has intentionally disconnected it (by removing batteries or other means). In this case, the family will be required to repair the smoke detector within 24 hours. 8-I.D. OWNER AND FAMILY RESPONSIBILITIES [24 CFR 982.404] Family Responsibilities
The family is responsible for correcting the following HQS deficiencies:
• Tenant-paid utilities not in service
• Failure to provide or maintain appliances owned by the family • Damage to the unit or premises caused by a household member or guest beyond normal wear and tear that results in a breach of the HQS. "Normal wear and tear" is defined as items which could not be charged against the tenant's security deposit under state law or court practice.

Owner Responsibilities
The owner is responsible for all HQS violations not listed as a family responsibility above, even if the violation is caused by the family's living habits (e.g., vermin infestation). However, if the family's actions constitute a serious or repeated lease violation the owner may take legal action to evict the family.
8-I.E. SPECIAL REQUIREMENTS FOR CHILDREN WITH ELEVATED BLOOD LEAD LEVEL [24 CFR 35.1225; FR Notice 1/13/17; Notice PIH 2017-13] If a PHA is notified by a public health department or other medical health care provider, or verifies information from a source other than a public health department or medical health care provider, that a child of less than six years of age, living in an HCV-assisted unit has been identified as having an elevated blood lead level, the PHA must complete an environmental investigation of the dwelling unit within 15 calendar days after being notified by a public health department or other medical health care provider. The environmental investigation must be completed in accordance with program requirements, and the result of the environmental investigation must be immediately provided to the owner of the dwelling unit. In cases where the public health department has already completed an evaluation of the unit, this information must be provided to the owner.

Within 30 days after receiving the environmental investigation report from the PHA, or the evaluation from the public health department, the owner is required to complete the reduction of identified lead- based paint hazards in accordance with the lead-based paint regulations [24 CFR 35.1325 and 35.1330;

HCV Administrative Plan

Administrative Plan-HCV Program 8-8 Revised 10/31/2024 40 CFR 745.227]. If the owner does not complete the “hazard reduction” as required, the dwelling unit is in violation of HQS and the PHA will take action in accordance with Section 8-II.G.

PHA reporting requirements, and data collection and record keeping responsibilities related to children with an elevated blood lead level are discussed in Chapter 16. 8-I.F. VIOLATION OF HQS SPACE STANDARDS [24 CFR 982.401, 24 CFR 982.403] A dwelling unit must:
• Provide adequate space and security for the family
• Have at least one bedroom or living/sleeping room for each two persons A unit that does not meet these HQS space standards is defined as overcrowded.

A living room may be used as sleeping (bedroom) space, but no more than two persons may occupy the space [HCV GB p. 10-6]. A bedroom or living/sleeping room must have at least:
• One window
• Two electrical outlets in proper operating condition (permanent overhead or wall-mounted light fixtures may count as one of the required electrical outlets) If the PHA determines that a unit is overcrowded because of an increase in family size or a change in family composition, the PHA must issue the family a new voucher, and the family and PHA must try to find an acceptable unit as soon as possible. If an acceptable unit is available for rental by the family, the PHA must terminate the HAP contract in accordance with its terms.

PART II: THE INSPECTION PROCESS
8-II.A. OVERVIEW [24 CFR 982.405]
Types of Inspections
The PHA conducts the following types of inspections as needed. Each type of inspection is discussed in the paragraphs that follow.
• Initial Inspections. The PHA conducts initial inspections in response to a request from the family to approve a unit for participation in the HCV program.
• Annual/Biennial Inspections. HUD requires the PHA to inspect each unit under lease at least annually or biennially, depending on PHA policy, to confirm that the unit still meets HQS. The inspection may be conducted in conjunction with the family's annual reexamination but also may be conducted separately.
• Special Inspections. A special inspection may be requested by the owner, the family, or a third party as a result of problems identified with a unit between annual inspections. • Quality Control Inspections. HUD requires that a sample of units be inspected by a supervisor or other qualified individual to evaluate the work of the inspector(s) and to ensure that inspections are performed in compliance with the HQS.

Inspection of PHA-Owned Units [24 CFR 982.352(b)]

HCV Administrative Plan

Administrative Plan-HCV Program 8-9 Revised 10/31/2024 The PHA must obtain the services of an independent entity to perform all HQS inspections in cases where an HCV family is receiving assistance in a PHA-owned unit. A PHA-owned unit is defined as a unit that is owned by the PHA that administers the assistance under the consolidated ACC (including a unit owned by an entity substantially controlled by the PHA). The independent agency must communicate the results of each inspection to the family and the PHA. The independent agency must be approved by HUD and may be the unit of general local government for the PHA jurisdiction (unless the PHA is itself the unit of general local government or an agency of such government).

Inspection Costs [Notice PIH 2016-05]
The PHA may not charge the family for unit inspections or reinspections [24 CFR 982.405(e)]. In the case of inspections of PHA-owned units, the PHA may compensate the independent agency from ongoing administrative fee for inspections performed. The PHA and the independent agency may not charge the family any fee or charge for the inspection [24 CFR.982.352(b)].

The PHA may not charge the owner for the inspection of the unit prior to the initial term of the lease or for a first inspection during assisted occupancy of the unit. However, the PHA may charge a reasonable fee to owners for reinspections in two situations: when the owner notifies the PHA that a repair has been made but the deficiency has not been corrected, and when the time for repairs has elapsed and the deficiency has not been corrected. Fees may not be imposed for tenant-caused damages, for cases in which the inspector could not gain access to the unit, or for new deficiencies discovered during a reinspection.

The owner may not pass the cost of a reinspection fee to the family. Reinspection fees must be added to the PHA’s administrative fee reserves and may only be used for activities related to the provision of tenant-based assistance.

PHA Policy
The PHA will not charge a fee for failed reinspections.

Remote Video Inspections (RVIs) [Notice PIH 2020-31]
As an alternative to some or all on-site inspections, the PHA may, but is not required to, perform HQS inspections from a remote location using video streaming technology and a proxy at the inspection site.

Since there may be some circumstances in which the application of technology provides insufficient information or evidence to allow the PHA to make appropriate determinations about whether a condition violates HQS, Notice PIH 2020-31 requires that if a PHA chooses to implement RVIs, the PHA should have policies and procedures in place to address such limitations.

PHA Policy
The PHA will not conduct any HQS inspection using RVI.

Notice and Scheduling
The family must allow the PHA to inspect the unit at reasonable times with reasonable notice [24 CFR 982.551(d)].

PHA Policy
Both the family and the owner will be given reasonable notice of all inspections. Except in the case of a life-threatening emergency, reasonable notice is considered to be not less than 48 hours.

Inspections may be scheduled between 8:00 a.m. and 5:00 p.m. Generally, inspections will be

HCV Administrative Plan

Administrative Plan-HCV Program 8-10 Revised 10/31/2024 conducted on business days only. In the case of a life-threatening emergency, the PHA will give as much notice as possible, given the nature of the emergency.

Owner and Family Inspection Attendance
HUD permits the PHA to set policy regarding family and owner presence at the time of inspection [HCV GB p. 10-27].

PHA Policy
When a family occupies the unit at the time of inspection an authorized adult must be present for the inspection. The presence of the owner or the owner's representative is encouraged but is not required.

At initial inspection of a vacant unit, the PHA will inspect the unit in the presence of the owner or owner’s representative. The presence of a family representative is permitted but is not required.
8-II.B. INITIAL HQS INSPECTION [24 CFR 982.401(a)]
Initial Inspections [FR Notice 1/18/17]
The PHA may, but is not required to, approve assisted tenancy, and start HAP if the unit fails HQS inspection, but only if the deficiencies identified are non-life-threatening. Further, the PHA may, but is not required to, authorize occupancy if a unit passed an alternative inspection in the last 24 months.

PHA Policy
The unit must pass the HQS inspection on or before the effective date of the HAP contract.

The PHA will not rely on alternative inspections and will conduct an HQS inspection for each unit prior to executing a HAP contract with the owner.

Timing of Initial Inspections
HUD requires PHAs with fewer than 1,250 budgeted units to complete the initial inspection, determine whether the unit satisfies HQS, and notify the owner and the family of the determination within 15 days of submission of the Request for Tenancy Approval (RTA). For PHAs with 1,250 or more budgeted units, to the extent practicable such inspection and determination must be completed within 15 days. The 15-day period is suspended for any period during which the unit is not available for inspection [982.305(b)(2)].

PHA Policy
The PHA will complete the initial inspection, determine whether the unit satisfies HQS, and notify the owner and the family of the determination within 15 days of submission of the Request for Tenancy Approval (RTA).

HCV Administrative Plan

Administrative Plan-HCV Program 8-11 Revised 10/31/2024 Inspection Results and Reinspections
PHA Policy
If any HQS violations are identified, the owner will be notified of the deficiencies and be given a time frame to correct them. If requested by the owner, the time frame for correcting the deficiencies may be extended by the PHA for good cause. The PHA will reinspect the unit within five business days of the date the owner notifies the PHA that the required corrections have been made.

If the time period for correcting the deficiencies (or any PHA-approved extension) has elapsed, or the unit fails HQS at the time of the reinspection, the PHA will notify the owner and the family that the unit has been rejected and that the family must search for another unit. The PHA may agree to conduct a second reinspection, for good cause, at the request of the family and owner.

Following a failed reinspection, the family may submit a new Request for Tenancy Approval for the same unit after the owner has made repairs, if they are unable to locate another suitable unit.

Utilities
Generally, at initial lease-up the owner is responsible for demonstrating that all utilities are in working order including those utilities that the family will be responsible for paying.

PHA Policy
If utility service is not available for testing at the time of the initial inspection, the PHA will allow the utilities to be placed in service after the unit has met all other HQS requirements. The PHA will reinspect the unit to confirm that utilities are operational before the HAP contract is executed by the PHA.

Appliances [Form HUD-52580]
PHA Policy
If the family is responsible for supplying the stove and/or refrigerator, the PHA will allow the stove and refrigerator to be placed in the unit after the unit has met all other HQS requirements.

The required appliances must be in place before the HAP contract is executed by the PHA. The PHA will execute the HAP contract based upon a certification from the family that the appliances have been installed and are working. A confirmatory inspection will be scheduled within 30 days of HAP contract approval. Page 308 of 977 HCV Administrative Plan

Administrative Plan-HCV Program 8-12 Revised 10/31/2024 8-II.C. ANNUAL/BIENNIAL HQS INSPECTIONS [24 CFR 982.405 and 982.406; Notice PIH 2016-05]
PHA Policy
Each unit under HAP contract must be inspected biennially within 24 months of the last full HQS inspection. The PHA reserves the right to require annual inspections of any unit or owner at any time.

The PHA will not rely on alternative inspection standards.

Scheduling the Inspection
PHA Policy
If an adult cannot be present on the scheduled date, the family should request that the PHA reschedule the inspection. The PHA and family will agree on a new inspection date that generally should take place within five business days of the originally scheduled date. The PHA may schedule an inspection more than five business days after the original date for good cause.

If the family misses the first scheduled appointment without requesting a new inspection date, the PHA will automatically schedule a second inspection. If the family misses two scheduled inspections without PHA approval, the PHA will consider the family to have violated its obligation to make the unit available for inspection. This may result in termination of the family’s assistance in accordance with Chapter 12.

Upon a second missed inspection, the PHA will propose termination of assistance. A Mandatory Tenant Conference (MTC) will not be scheduled.
8-II.D. SPECIAL INSPECTIONS [24 CFR 982.405(g)]
If a participant or government official reports a life-threatening condition which the owner would be required to repair within 24 hours, the PHA must inspect the unit within 24 hours of notification. If the reported condition is not life-threatening, the PHA must inspect the unit within 15 days of notification.

PHA Policy
During a special inspection, the PHA generally will inspect only those deficiencies that were reported. However, the inspector will record any additional HQS deficiencies that are observed and will require the responsible party to make the necessary repairs.

If the annual/biennial inspection has been scheduled or is due within 90 days of the date the special inspection is scheduled the PHA may elect to conduct a full annual/biennial inspection.

HCV Administrative Plan

Administrative Plan-HCV Program 8-13 Revised 10/31/2024 8-II.E. QUALITY CONTROL INSPECTIONS [24 CFR 982.405(b); 24 CFR 985.3(e); HCV GB, p. 10-32]
HUD requires a PHA supervisor or other qualified person to conduct quality control inspections of a sample of units to ensure that each inspector is conducting accurate and complete inspections and that there is consistency in the application of the HQS.

The unit sample must include only units that have been inspected within the preceding three months.

The selected sample should be drawn to represent a cross section of neighborhoods and the work of a cross section of inspectors.
8-II.F. INSPECTION RESULTS AND REINSPECTIONS FOR UNITS UNDER HAP

CONTRACT
Notification of Corrective Actions
The owner and the family will be notified in writing of the results of all inspections. When an inspection identifies HQS failures, the PHA will determine (1) whether or not the failure is a life-threatening condition and (2) whether the family or owner is responsible.

PHA Policy
When life-threatening conditions are identified, the PHA will immediately notify both parties by telephone or email. The notice will specify who is responsible for correcting the violation. The corrective actions must be taken within 24 hours of the PHA’s notice.

When failures that are not life-threatening are identified, the PHA will send the owner and the family a written notification of the inspection results within two business days of the inspection.

The written notice will specify who is responsible for correcting the violation, and the time frame within which the failure must be corrected. Failed items will be required to be corrected within 30 days.

The notice of inspection results will inform the owner that if life-threatening conditions are not corrected within 24 hours, and non-life-threatening conditions are not corrected within 30 days (or any PHA-approved extension), the owner’s HAP will be abated in accordance with PHA policy (see 8-II.G.).

Likewise, in the case of family caused deficiencies, the notice will inform the family that if corrections are not made within the specified time frame (or any PHA-approved extension, if applicable) the family’s assistance will be terminated in accordance with PHA policy (see Chapter 12).

HCV Administrative Plan

Administrative Plan-HCV Program 8-14 Revised 10/31/2024 Extensions
For conditions that are life-threatening, the PHA cannot grant an extension to the 24-hour corrective action period. For conditions that are not life-threatening, the PHA may grant an exception to the required time frames for correcting the violation, if the PHA determines that an extension is appropriate [24 CFR 982.404].

PHA Policy
Extensions will be granted in cases where the PHA has determined that the owner has made a good faith effort to correct the deficiencies and is unable to for reasons beyond the owner’s control. Reasons may include, but are not limited to:

A repair cannot be completed because required parts or services are not available.

A repair cannot be completed because of weather conditions.

A reasonable accommodation is needed because the family includes a person with disabilities.

The length of the extension will be determined on a case-by-case basis, but will not exceed 60 days, except in the case of delays caused by weather conditions. In the case of weather conditions, extensions may be continued until the weather has improved sufficiently to make repairs possible. The necessary repairs must be made within 15 calendar days once the weather conditions have subsided.

Reinspections
PHA Policy
For life-threatening deficiencies, the PHA will conduct a reinspection immediately following the end of the corrective period. For non-life-threatening deficiencies, at the PHA’s discretion, the PHA may conduct a physical reinspection. The PHA may also accept the owner or tenant’s verbal or written self-certification that deficiencies have been corrected. Physical reinspections will typically be conducted if the owner or family have a history of noncompliance, or if the same deficiency has been noted on previous inspections.

The family and owner will be given reasonable notice of the reinspection appointment. If the deficiencies have not been corrected by the time of the reinspection, the PHA will send a notice of abatement to the owner, or in the case of family caused violations, a notice of termination to the family, in accordance with PHA policies. If the PHA is unable to gain entry to the unit in order to conduct the scheduled reinspection, the PHA will consider the family to have violated its obligation to make the unit available for inspection. This may result in termination of the family’s assistance in accordance with Chapter 12.