Agenda packet — Port Hueneme City Council, May 5, 2025 (part 6 of 8)

Other exclusions contained in 24 CFR 5.609(b) that have not been discussed earlier in this chapter include the following:
• Payments received for the care of foster children or foster adults or state or tribal kinship or guardianship care payments [24 CFR 5.609 (b)(4)].
• Insurance payments and settlements for personal or property losses, including but not limited to payments through health insurance, motor vehicle insurance, and worker’s compensation [24 CFR 5.609(b)(5)] However, periodic payments paid at regular intervals (such as weekly, monthly, or yearly) for a period of greater than one year that are received in lieu of wages for workers’ compensation are included in annual income. [Notice PIH 2023-27]. • Amounts received by the family that are specifically for, or in reimbursement of, the cost of health and medical care expenses for any family member [24 CFR 5.609(b)(6)]. • Any amounts recovered in any civil action or settlement based on a claim of malpractice, negligence, or other breach of duty owed to a family member arising out of law, that resulted in a member of the family becoming disabled [24 CFR 5.609(b)(7)]. • Income and distributions form any Coverdell education savings account under Section 530 of the Internal Revenue Code of 1986 or any qualified tuition program under Section 529 of such Code [24 CFR 5.609(b)(10)].
• Income earned by government contributions to, and distributions from, “baby bond” accounts created, authorized, or funded by federal, state, or local government [24 CFR 5.609(b)(10)]. • The special pay to a family member serving in the Armed Forces who is exposed to hostile fire [24 CFR 5.609(b)(11)].
• Payments related to aid and attendance under 38 U.S.C. 1521 to veterans in need of regular aid and attendance [24 CFR 5.609(b)(17)]. This income exclusion applies only to veterans in need of regular aid and attendance and not to other beneficiaries of the payments, such as a surviving spouse [Notice PIH 2023-27].
• Loan proceeds (the net amount disbursed by a lender to or on behalf of a borrower, under the terms of a loan agreement) received by the family or a third party (e.g., proceeds received by the family from a private loan to enable attendance at an educational institution or to finance the purchase of a car) [24 CFR 5.609(b)(20)]. The loan borrower or co-borrower must be a member of the family for this income exclusion to be applicable [Notice PIH 2023-27]. • Payments received by tribal members as a result of claims relating to the mismanagement of assets held in trust by the United States, to the extent such payments are also excluded form gross income under the Internal Revenue Code or other federal law [24 CFR 5.609(b)(21)].

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

However, as explained in Notice PIH 2023-27, payments made under the Cobell Settlement and certain per capita payments under the recent Tribal Trust Settlements, must be excluded from annual income in HUD programs that adopt the definitions of annual income in 24 CFR

5.609, the Census Long Form, and the IRS Form 1040, including the programs affected by Notice PIH 2023-27.

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• Replacement housing “gap” payments made in accordance with 49 CFR Part 24 that offset increased out of pocket costs of displaced persons that move from one federally subsidized housing unit to another federally subsidized housing unit. Such replacement housing “gap” payments are not excluded from annual income if the increased cost of rent and utilities is subsequently reduced or eliminated, and the displaced person retains or continues to receive the replacement housing “gap” payments [24 CFR 5.609(b)(23)]. • Income earned on amounts placed in a family’s Family Self-Sufficiency account [24 CFR 5609(b)(27)].
• Amounts received by participants in other publicly assisted programs which are specifically for or in reimbursement of out-of-pocket expenses incurred (e.g., special equipment, clothing, transportation, child care, etc.) and which are made solely to allow participation in a specific program [24 CFR 5.609(c)(12)(ii)]
• Amounts received by a person with a disability that are disregarded for a limited time for purposes of Supplemental Security Income eligibility and benefits because they are set aside for use under a Plan to Attain Self-Sufficiency (PASS) [(24 CFR 5.609(b)(12)(i)]. • Amounts received under a resident services stipend not to exceed $200 per month. A resident service stipend is a modest amount received by a resident for performing a service for the PHA or owner, on a part-time basis, that enhances the quality of life in the development [24 CFR 5.600(b)(12)(iii)].
• Amounts that HUD is required by federal statute to exclude from consideration as income for purposes of determining eligibility or benefits under a category of assistance programs that includes assistance under any program to which the exclusions set forth in 24 CFR 5.609(b) apply. HUD will publish a notice in the Federal Register to identify the benefits that qualify for this exclusion. Updates will be published when necessary [24 CFR 5.609(b)(22)]. • HUD publishes an update list of these exclusions periodically. The most recent list of exclusions was published in the Federal Register on May 20, 2014. It includes:
a) The value of the allotment provided to an eligible household under the Food Stamp Act of 1977 (7 U.S.C. 2017 (b))
b) Benefits under Section 1780 of the School Lunch Act and Child Nutrition Act of 1966, including WIC
c) Payments to volunteers under the Domestic Volunteer Services Act of 1973 (42 U.S.C. 5044(g), 5058)
d) Payments received under the Alaska Native Claims Settlement Act (43 U.S.C. 1626 (c)) e) income derived from certain submarginal land of the United States that is held in trust for certain Indian tribes (25 U.S.C 459e)
f) Payments or allowances made under the Department of Health and Human Services’ Low-Income Home Energy Assistance Program (42 U.S.C. 8624 (f)) g) Payments received under programs funded in whole or in part under the Workforce Investment Act of 1998 (29 U.S.C. 2931)
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h) Deferred disability benefits from the Department of Veterans Affairs, whether received as a lump sum or in monthly prospective amounts.
i) Income derived from the disposition of funds to the Grand River Band of Ottawa Indians (Pub. L. 94-540, 90 Stat. 2503-04)
j) Payments, funds, or distributions authorized, established, or directed by the Seneca Nation Settlement Act of 1990 (25 U.S.C. 1774f(b))
k) A lump sum or periodic payment received by an individual Indian pursuant to the Class Action Settlement Agreement in the United States District Court case entitled Elouise Cobee et al. v. Ken Salazar et al., for a period of one year from the time of receipt of that payment as provided in the Claims Resolution Act of 2010 l) The first $2,000 of per capita shares received from judgment funds awarded by the Indian Claims Commission or the U.S. Claims Court, the interests of individual Indians in trust or restricted lands, including the first $2,000 per year of income received by individual Indians from funds derived from interests held in such trust or restricted lands (25 U.S.C. 1407-408)
m) Benefits under the Indian Veterans Housing Opportunity Act of 2010 (only applies to Native American housing programs)
• Incremental earnings and benefits to any family member resulting from participation in qualifying training program funded by HUD or in qualifying federal, state, tribal, or local employment training programs (including training programs not affiliated with a local government) and training of a family member as resident management staff are excluded from annual income. Amounts excluded by this provision must be received under employment training programs with clearly defined goals and objectives and are excluded only for the period during which the family member participates in the training program unless those amounts are excluded under 24 CFR 5.609(b)(9)(i) [24 CFR 5.609(b)(12)(iv)].

Port Hueneme Housing Authority Policy
The HA 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 (see Chapter 11).

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• Reparation payments paid by a foreign government pursuant to claims filed under the laws of that government by persons who were persecuted during the Nazi era [24 CFR 5.609(b)(13)] • Adoption assistance payments for a child in excess of the amount of the dependent deduction per adopted child [24 CFR 5.609(b)(15)]
• Refunds or rebates on property taxes paid on the dwelling unit [24 CFR 5.609(b)(20)] • Amounts that HUD is required by federal statute to exclude from consideration as income for purposes of determining eligibility or benefits under a category of assistance programs that includes assistance under my program to which the exclusions set forth in 24 CFR 5.609 (b) apply. HUD will publish a notice in the Federal Register to identify the benefits quality for this exclusion. Updates will be published when necessary [24 CFR 5.609(b)(22)]. • HUD publishes an updated list of these exclusions periodically. The most recent list of exclusions was published in the Federal Register on May 20, 2014. It includes:
(a) The value of the allotment provided to an eligible household under the Food Stamp Act of 1977 (7 U.S.C. 2017 (b))
(b) Benefits under Section 1780 of the School Lunch Act and Child Nutrition Act of 1966, including WIC
(c) Payments to volunteers under the Domestic Volunteer Services Act of 1973 (42 U.S.C. 5044(g), 5058)
(d) Payments received under the Alaska Native Claims Settlement Act (43 U.S.C. 1626(c)) (e) Income derived from certain submarginal land of the United States that is held in trust for certain Indian tribes (25 U.S.C. 459e)
(f) Payments or allowances made under the Department of Health and Human Services’ Low-Income Home Energy Assistance Program (42 U.S.C. 8624(f)) Agenda Item No. 06 Page 658 of 985 HA Agenda 05-05-2025 © Copyright 2023 Nan McKay & Associates, Inc. Port Hueneme HA ACOP 7/1/25 Unlimited copies may be made for internal use.

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(g) Payments received under programs funded in whole or in part under the Workforce Investment Act of 1998 (29 U.S.C. 2931)
(h) Deferred disability benefits from the Department of Veterans Affairs, whether received as a lump sum or in monthly prospective amounts
(i) Income derived from the disposition of funds to the Grand River Band of Ottawa Indians (Pub. L. 94-540, 90 Stat. 2503-04)
(j) Payments, funds, or distributions authorized, established, or directed by the Seneca Nation Settlement Act of 1990 (25 U.S.C. 1774f(b))
(k) A lump sum or periodic payment received by an individual Indian pursuant to the Class Action Settlement Agreement in the United States District Court case entitled Elouise Cobell et al. v. Ken Salazar et al., for a period of one year from the time of receipt of that payment as provided in the Claims Resolution Act of 2010 (l) The first $2,000 of per capita shares received from judgment funds awarded by the Indian Claims Commission or the U. S. Claims Court, the interests of individual Indians in trust or restricted lands, including the first $2,000 per year of income received by individual Indians from funds derived from interests held in such trust or restricted lands (25 U.S.C. 1407-1408)
(m) Benefits under the Indian Veterans Housing Opportunity Act of 2010 (only applies to Native American housing programs)
(n) Payments received from programs funded under Title V of the Older Americans Act of 1985 (42 U.S.C. 3056(f))
(o) Payments received on or after January 1, 1989, from the Agent Orange Settlement Fund or any other fund established pursuant to the settlement in In Re Agent Orange product liability litigation, M.D.L. No. 381 (E.D.N.Y.)
(p) Payments received under 38 U.S.C. 1833(c) to children of Vietnam veterans born with spinal bifida, children of women Vietnam veterans born with certain birth defects, and children of certain Korean service veterans born with spinal bifida (q) Payments received under the Maine Indian Claims Settlement Act of 1980 (25 U.S.C. 1721)
(r) The value of any child care provided or arranged (or any amount received as payment for such care or reimbursement for costs incurred for such care) under the Child Care and Development Block Grant Act of 1990 (42 U.S.C. 9858q) (s) Earned income tax credit (EITC) refund payments received on or after January 1, 1991 (26 U.S.C. 32(j))
(t) Payments by the Indian Claims Commission to the Confederated Tribes and Bands of Yakima Indian Nation or the Apache Tribe of Mescalero Reservation (Pub. L. 95-433) Agenda Item No. 06 Page 659 of 985 HA Agenda 05-05-2025 © Copyright 2023 Nan McKay & Associates, Inc. Port Hueneme HA ACOP 7/1/25 Unlimited copies may be made for internal use.

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(u) Amounts of scholarships funded under Title IV of the Higher Education Act of 1965, including awards under federal work-study programs or under the Bureau of Indian Affairs student assistance programs (20 U.S.C. 1087uu). For Section 8 programs, the exception found in § 237 of Public Law 109–249 applies and requires that the amount of financial assistance in excess of tuition shall be considered income in accordance with the provisions codified at 24 CFR 5.609(b)(9), except for those persons with disabilities as defined by 42 U.S.C. 1437a(b)(3)(E) (Pub. L. 109–249) (See Section 6-I.L. for exceptions)
(v) Allowances, earnings and payments to AmeriCorps participants under the National and Community Service Act of 1990 (42 U.S.C. 12637(d))
(w) Any amount of crime victim compensation (under the Victims of Crime Act) received through crime victim assistance (or payment or reimbursement of the cost of such assistance) as determined under the Victims of Crime Act because of the commission of a crime against the applicant under the Victims of Crime Act (42 U.S.C. 10602) (x) Any amounts in an "individual development account" as provided by the Assets for Independence Act, as amended in 2002
(y) Payments made from the proceeds of Indian tribal trust cases as described in Notice PIH 2013–30, "Exclusion from Income of Payments under Recent Tribal Trust Settlements" (25 U.S.C. 117b(a))
(z) Major disaster and emergency assistance received under the Robert T. Stafford Disaster Relief and Emergency Assistance Act and comparable disaster assistance provided by states, local governments, and disaster assistance organizations (aa) Distributions from an ABLE account, and actual or imputed interest on the ABLE account balance [See also Notice PIH 2019-09]
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PART II: ASSETS
6-II.A. OVERVIEW
Annual income includes all actual anticipated income from assets (unless otherwise excluded by the regulations) even if the asset itself is excluded from net family assets [Notice PIH 2023-27].

The regulation at 24 CFR 5.603(b)(3) provides a list of items that are excluded from the calculation of net family assets. Note, unlike previous versions of the regulations, the current regulations do not list types of assets that are included in annual income. Instead, HUD relies on the definition of items excluded from assets to provide the scope of what is included. Exhibit 6-2 provides the regulatory definition of net family assets.

Optional policies for family self-certification of assets are found in Chapter 7. Policies related to asset limitation may be found in Chapter 3.

Income from assets is always anticipated, irrespective of the income examination type.

Port Hueneme Housing Authority Policy
The PHA generally will use current circumstances to determine both the value of an asset and the anticipated income from the asset. The PHA will 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.

Any time 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. 6-II.B. ASSETS DISPOSED OF FOR LESS THAN FAIR MARKET VALUE [24 CFR

5.603 (b)(2)]
PHAs must include the value of any business or family assets disposed of by an applicant or participant for less than fair market value (including a disposition in trust, but not in a foreclosure or bankruptcy sale) during the two years preceding the date of application or reexamination, as applicable, in excess of the consideration received for the asset.

An asset moved to a retirement account held by a member of the family is not considered to be an asset disposed of for less than fair market value. [Notice PIH 2023-27].

Minimum Threshold
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HUD does not specify a minimum threshold for counting assets disposed of for less than fair market value. A PHA may establish a policy to ignore small amounts such as charitable contributions [New PH OCC GB, Income Determinations, p. 24].

Port Hueneme Housing Authority 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.

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.

Port Hueneme Housing Authority 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 the result of a foreclosure or bankruptcy sale. Negative equity in real property or other investments does not prohibit the owner from selling the property or other investments, so negative equity alone would not justify excluding the property or other investments from family assets.

Asset Owned by a Business Entity
If a business entity (e.g., limited liability company or limited partnership) owns the asset, then the family’s asset is their ownership stake in the business, not some portion of the business’s assets. However, if the family holds the assets in their own name (e.g., they own one third of a restaurant) rather than in the name of business entity, then the percentage value of the asset owned by the family is what is counted toward net family assets (e.g., one-third of the value of the restaurant) [Notice PIH 2023-27].

Family Declaration
Port Hueneme Housing Authority 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 if other information available to the PHA does not appear to agree with the information reported by the family.

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6-II.C. ASSET INCLUSIONS AND EXCLUSIONS
Checking and Savings Accounts [Notice PIH 2023-27]
HUD considers bank accounts as non-necessary items of personal property. Whether or not necessary personal property is counted toward net family assets depends on the combined value of all the family’s assets.
• When the combined value of net family assets is greater than $50,000, as adjusted by inflation, checking and/or savings accounts would be counted toward net family assets. • When the combined value of all non-necessary personal property does not exceed $50,000, as adjusted by inflation, all non-necessary personal property is excluded from net family assets. In this case, the value of the family’s checking and/or savings accounts would not be considered when calculating net family assets.

However, actual income from checking and savings accounts is always included in a family’s annual 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.

ABLE Accounts [24 CFR 5.609(b)(10); Notice PIH 2019-09] An Achieving a Better Life Experience (ABLE) account is a type of tax-advantaged savings account that an eligible individual can use to pay for qualified disability expenses. Section 103 of the ABLE Act mandates that an individual’s ABLE account (specifically, its account balance, contributions to the account, and distributions from the account) is excluded when determining the designated beneficiary’s eligibility and continued occupancy under certain federal meanstested programs. The PHA must exclude the entire value of the individual’s ABLE account from the household’s assets. Distributions from the ABLE account are also not considered income.

However, all wage income received, regardless of which account the money is paid to, is included as income.

Investment Accounts Such as Stocks, Bonds, Saving Certificates, and Money Market Funds [24 CFR 5.603(b)(1)]
HUD considers financial investments such as stocks and bonds non-necessary items of personal property. Whether non-necessary personal property is counted toward net family assets depends on the combined value of all the family’s assets.
• When the combined value of net family assets is greater than $50,000, as adjusted by inflation, financial investments such as stocks and bonds are considered part of net family assets. In this case, the value of the family’s financial investments such as stocks and bonds would be counted toward net family assets.
• When the combined value of all non-necessary personal property does not exceed $50,000, as adjusted by inflation, all non-necessary personal property is excluded from net family Agenda Item No. 06 Page 663 of 985 HA Agenda 05-05-2025 © Copyright 2023 Nan McKay & Associates, Inc. Port Hueneme HA ACOP 7/1/25 Unlimited copies may be made for internal use.

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assets. In this case, the value of the family’s financial investments such as stocks and bonds would not be considered when calculating net family assets.

However, actual income from financial accounts is always included in a family’s annual 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. When a stock issues dividends in some years but not others (e.g., due to market performance), the dividend is counted as the actual return when it is issued, but when no dividend is issued, the actual return is $0.

When the stock never issues dividends, the actual return is $0.

Port Hueneme Housing Authority Policy
The PHA will include interest or dividends earned by investment accounts 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.

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

Necessary and Non-Necessary Personal Property [24 CFR 5.603(b)(3)(i)] All assets are categorized as either real property (e.g., land, a home) or personal property.

Personal property includes tangible items, like boats, as well as intangible items, like bank accounts.

The value of necessary items of personal property is excluded from the calculation of net family assets.

HUD defines necessary personal property as 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 effect (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. Items of personal property that do not qualify as necessary personal property are classified as non-necessary personal property.

The combined value of all non-necessary items of personal property is only included in annual income when the combined total value exceeds $50,000 (adjusted annually). When the combined value of all non-necessary personal property does not exceed $50,000, as adjusted by inflation, all non-necessary personal property is excluded from net family assets.

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While no an exhaustive list, the following table from Notice PIH 2023-27 provides examples of necessary and non-necessary personal property.

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)
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)
Recreational car/vehicle not needed for dayto-day transportation for personal or business use (campers, motorhomes, traveling 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)
Equipment/machinery that is not used to
generate income for a business
Items such as gems/precious metals, antique
cars, artwork, etc.

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Port Hueneme Housing Authority Policy
In determining the value of non-necessary personal property, the PHA will use the family’s estimate of the value. The PHA may obtain an appraisal 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.

Lump-Sum Additions to Net Family Assets [24 CFR 5.609(b)(24)(viii); Notice PIH 2023-27] The regulations exclude income from lump-sum additions to family assets, including lottery or other contest winnings as a type of nonrecurring income.

In addition, lump sums from insurance payments, settlements for personal or property losses, and recoveries from civil actions or settlements based on claims 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 family member with a disability are excluded from income.

Further, deferred periodic amounts from Supplemental Security Income (SSI) 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 are also excluded from income.

However, these amounts may count toward net family assets. The PHA must consider any actual or imputed returns from assets as income at the next applicable income examination. In the case where the lump sum addition to assets would lead to imputed income, which is unearned income, that increases the family’s annual adjusted income by 10 percent or more, then the addition of the lump sum to the family’s assets will trigger an immediate interim reexamination of income in accordance with Chapter 9. This reexamination of income must take place as soon as the lump sum is added to the family’s net family assets unless the addition takes place in the last three months of family’s income certification period and the PHA chooses not to conduct the examination.

For a discussion of lump-sum payments that represent the delayed start of a periodic payment, most of which are counted as income, see section 6-I.H and 6-I.I.

Port Hueneme Housing Authority Policy
Any lump-sum receipts are only counted as assets if they are retained by a family in a form recognizable as an asset. [RHIIP FAQs]. For example, if the family receives a $1,000 lump sum for lottery winnings, and the family immediately spend the entire amount, the lump sum will not be counted toward net family assets.

Jointly Owned Assets [Notice PIH 2023-27]
For assets owned jointly by the family and one or more individuals outside of the assisted family, the PHA must include the total value of the asset in the calculation of net family assets, unless:

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• The asset is otherwise excluded;
• The family can demonstrate that the asset is inaccessible to them; or • The family cannot dispose of any portion of the asset without the consent of another owner who refuses to comply.

If the family demonstrates that they can only access a portion of an asset, then only that portion’s value is included in the calculation of net family assets for the family.

Any income from a jointly owned asset must be included in annual income, unless; • The income is specifically excluded;
• The family demonstrates that they do not have access to the income from that asset; or • The family only has access to a portion of the income from that asset.

Port Hueneme Housing Authority Policy
If the family demonstrates that they can only access a portion of the income from an asset, then only that portion’s value is included in the calculation of income from assets.

If an individual is a beneficiary who is entitled to access the account’s funds only upon the death of the account’s owner, and may not otherwise withdraw funds from an account, then the account is not an asset to the assisted family, and the family should provide proper documentation demonstrating that they are only a beneficiary on the account.

Trust [24 CFR 5609(b)(2) and 5.603 (b)(4)]
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).

The following types of trust distributions are excluded from annual income:
• 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 of a minor.

The basis for determining how to treat trusts relies on information about who has access to either the principal in the account or the income from the account. There are two types of trusts, revocable and irrevocable.

When the creator sets up an irrevocable trust, the creator has no access to the funds in the account. Irrevocable trusts not under the control of any member of the family or household are not assets. Typically, special needs trusts are considered irrevocable. The value of the trust is not Agenda Item No. 06 Page 667 of 985 HA Agenda 05-05-2025 © Copyright 2023 Nan McKay & Associates, Inc. Port Hueneme HA ACOP 7/1/25 Unlimited copies may be made for internal use.

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included in net family assets, so long as the fund continues to be held in a trust that is not revocable by, or under the control of, any member of the family or household [24 CFR

5.603(b)(4)]. Where an irrevocable trust is excluded from net family assets, the PHA must not consider actual income earned by the trust (e.g., interest earned, rental income if property is held in the trust) for so long as the income from the trust is not distributed. If the value of the trust is not considered part of the family’s net assets, then distributions from the trust are treated as follows:
• All distributions from the trust’s principal are excluded from income. • Distributions of income earned by the trust (i.e., interest, dividends, realized gains, or other earnings on the trust’s principal), are included as income unless the distribution is used to pay for the health and medical expenses for a minor.

A revocable trust is a trust that the creator of the trust may amend or end (revoke). When there is a revocable trust, the creator has access to the funds in the trust account.

The value of revocable trusts that are not under the control of the family are excluded from net family assets. This happens when a member of the assisted family is the beneficiary of a revocable trust, but the grantor is not a member of the assisted family. In this case the beneficiary does not “own” the revocable trust, and the value of the trust is excluded from net family assets.

For the revocable trust to be considered excluded from net family assets, no family or household member may be the account’s trustee. If this is the case, then distributions from the trust are treated as follows:
• All distributions from the trust’s principal are excluded from income. • Distributions of income earned by the trust (i.e., interest, dividend, realized gains, or other earnings on the trust’s principal), are included as income unless the distribution is used to pay for the health and medical expenses for a minor.

Revocable trusts under the control of the family or household (e.g., the grantor is a member of the assisted family or household) are considered assets and must be included in net family assets.

If the value of the trust is considered part of the family’s net assets, then distributions from the trust are not considered income to the family. The PHA must count all actual returns (e.g., interest earned) from the trust as income or, if the trust has no actual returns (e.g., if the trust is comprised of farmland that is not in use) and the total value of the combined net family assets exceeds $50,000 (as that amount is updated for inflation), as imputed returns, as applicable.

Life Insurance [FR Notice 2/14/23 and Notice PIH 2023-27] Net family assets do not include the value of term life insurance, which has no cash value to the individual before death.

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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. The cash value is the surrender value. While the cash value of an insurance policy is considered an asset, the face value of any policy is not. If such a policy earns dividends or interest that the family could elect to receive, the amount of dividends or interest is counted as income from the asset whether or not the family actually receives it.

Tax Refunds [24 CFR 5.603(b)(3)(xi) and Notice PIH 2023-27] All amounts received by a family in the form of federal tax refunds or refundable tax credits are excluded from a family’s net family assets for a period of 12 months after receipt by the family.

At the time of an annual or interim reexamination of income, if the federal tax refund was received during the 12 months preceding the effective date of the reexamination, then the amount of the refund that was received by the family is subtracted from the total value of the account in which the federal tax refund or refundable tax credits were deposited. When the subtraction results in a negative number, then the balance of the asset is considered $0.

If the tax refund or refundable tax credit is deposited into another excluded asset, such as a retirement account or a Coverdell Education Savings Account, then the deposit will have no effect on the balance of the asset (i.e., there is no need for the PHA to subtract the amount of the deposit from the value of the excluded asset).

Asset Exclusions [24 CFR 5.603(b)]
The following are excluded from the calculations of net family assets:
• The value of any account under a retirement plan recognized as such by the IRS, including individual retirement arrangements (IRAs), employer retirement plans, and retirement plans for self-employed individuals [24 CFR 5.603(b)(3)(iii)]. • 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 [24 CFR 5.603(b)(3)(iv)]. − Real property as used in this part has the same meaning as that provided under the law of the state in which the property is located [24 CFR 5100]. − Examples of this include but are not limited to co-ownership situations (including situations 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; and inherited property in dispute [Notice PIH 2023-27].
• 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 family member being a person with a disability [24 CFR 5.603(b)(3)(v)]; • The value of any Coverdell education savings account under section 530 of the Internal Revenue Code of 1986 [24 CFR 5.603(b)(3)(vi)];
Agenda Item No. 06 Page 669 of 985 HA Agenda 05-05-2025 © Copyright 2023 Nan McKay & Associates, Inc. Port Hueneme HA ACOP 7/1/25 Unlimited copies may be made for internal use.

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• The value of any qualified tuition program under Section 529 of such Code [24 CFR

5.603(b)(3)(vi)];
• The value of any “baby bond” account created, authorized, or funded by federal, state, or local government [24 CFR 5.603(b)(3)(vii)];
• Interests in Indian trust land [24 CFR 5.603(b)(3)(vii)]; • Equity in a manufactured home where the family receives assistance under 24 CFR part 982 [24 CFR 5.603(b)(3)(viii)];
• Equity in property under the Homeownership Option for which a family receives assistance under 24 CFR part 982 [24 CFR 5.603(b)(3)(ix)];
• Family Self-Sufficiency accounts [24 CFR 5.603(b)(3)(x)]; • Federal tax refunds or refundable tax credits for a period 12 months after receipt by the family [24 CFR 5.603(b)(3)(xi)].
• The full amount of assets held in an irrevocable trust [Notice PIH 2023-27]; and • 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 [Notice PIH 2023-27].
6-II.D. DETERMINING INCOME FROM ASSETS
In some cases, amounts that are excluded from net family assets may be included as annual income when disbursements are made to a family from an asset. In other cases, amounts are excluded from annual income as a lump-sum addition to net family assets, but those funds are then considered a net family asset if held in an account or other investment that is considered part of net family assets [Notice PIH 2023-27].

Net Family Assets
Net family assets are defined as the net cash value of all assets owned by the family, after deducting reasonable costs that would be incurred in disposing real property, savings, stocks, bonds and other forms of capital investment.

Port Hueneme Housing Authority 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 such as settlement costs and transfer taxes [New PH OCC GB, Income Determination, p. 24].

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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.

The cash value of real property or other assets with negative equity would be considered $0 for the purposes of calculating net family assets. Negative equity in real property or other investments does not prohibit the family from selling the property or other investments, so negative equity alone would not justify excluding the property or other investments from family assets [Notice PIH 2023-27].

Actual Income from Assets
Income from assets must be included on the Form HUD-50058 regardless of the amount of income. Actual income form assets is always included in a family’s annual income, regardless of the total value of net family assets or whether the asset 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.

The PHA may determine the net assets of a family based on a self-certification by the family that the net family assets do not exceed $50,000 (adjusted annually by HUD), without taking additional steps to verify the accuracy of the declaration [24 CFR 5.618 (b)]. Policies related to verification of assets are found in Chapter 7 of this policy.

The PHA may not calculate or include any imputed income from assets when net family assets total $50,000 or less [24 CFR 5.609(b)(1)]. The actual income from assets must be included on the Form HUD-50058.

Imputed Income from Assets
When net family assets exceed $50,000 (adjusted annually by HUD), the PHA may not rely on self-certification. If actual returns can be calculated, the PHA must include actual income from the asset on the Form HUD-50058 (for example, a savings account or CD where the rate of return is known). If actual returns cannot be calculated, the PHA must calculate imputed returns using the HUD-determined passbook rate (for example, real property or a non-necessary item of personal property such as a recreational boat). If the PHA can compute actual income from some but not all assets, the PHA must compute actual returns where possible and use the HUDdetermined passbook rate for assets where actual income cannot be calculated [24 CFR 5.609 (a)(2)].

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An asset with an actual return of $0 (such as a non-interest-bearing checking account), is not the same as an asset for which an actual return cannot be computed (such as non-necessary personal property). If the asset is a financial asset and there is no income generated (for example, a bank account with a zero percent interest rate or a stock that does not issue cash dividends), then the asset generates zero actual asset income, and imputed income is not calculated. When a stock issues dividends in some years but not others (e.g., due to market performance), the dividend is counted as the actual return when it is issued, and when no dividend is issued, the actual return is $0. When the stock never issues dividends, the actual return is consistently $0.

PART III: ADJUSTED INCOME6-III.A. INTRODUCTION
Overview
HUD regulations require PHAs to deduct from annual income any of five mandatory deductions for which a family qualifies and allow the PHA to deduct other permissive deductions in accordance with PHA policy. The resulting amount is the family’s adjusted income. Mandatory deductions are found in 24 CFR 5.611.

5.611 Adjusted income means annual income (as determined under &5.609) of the members of the family residing or intending to reside in the dwelling unit, after making the following deductions:
(1) $480 for each dependent (adjusted annually by HUD, rounded to the next lowest multiple of $25);
(2) $525 for any elderly family or disabled family (adjusted annually by HUD, 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; (ii) Unreimbursed reasonable attendant care and auxiliary apparatus expenses for each member of the family who is a person with disabilities, to the extent necessary to enable any member of the family (including the member who is a person with disabilities) to be employed; and (4) Any reasonable child care expenses necessary to enable a member of the family to be employed or to further their education.

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

Anticipating Expenses
Port Hueneme Housing Authority 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., child care during school and non-school periods and cyclical medical expenses), the PHA will estimate costs based on historic data and known future costs.

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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.

When calculating health and medical care expenses, the PHA will include those expenses anticipated to be incurred during the 12 months following the certification date reexam which are not covered by an outside source, such as insurance. The allowance is not intended to give a family an allowance equal to last year’s expenses, but to anticipate regular ongoing and anticipated expenses during the coming year. Since these expenses are anticipated, the PH Occupancy Guidebook states “it is likely that actual expenses will not match what was anticipated. Typically, this would not be considered an underpayment as long as at the time of the annual reexamination, the expenses were calculated based on the appropriate verification” [New PH OCC GB, Income Determinations, p.30]. For annual reexaminations, the PHA will use information for the previous 12-month period.
6-III.B. DEPENDENT DEDUCTION
An allowance of $480 is deducted from annual income for each dependent (which amount will 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 [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-III.C. ELDERLY OR DISABLED FAMILY DEDUCTION
A single deduction of $525 is taken for any elderly 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) [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].

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6-III.D. 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.

Thisdeduction 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 medical expense deduction, the medical expenses of all family members are counted.

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

Although HUD revised the definition of health and medical care expenses to reflect the Internal Revenue Service (IRS) general definition of medical expenses, HUD is not permitting PHAs to specifically align their policies with IRS Publication502 for determining which expenses are included in HUD’s mandatory deduction for health and medical care expenses. PHAs must review each expense to determine whether it is eligible in accordance with HUD’s definition of health and medical care expenses.

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

When expenses anticipated by a family could be defined as either a health and medical care or disability assistance expenses, the PHA will consider them health and medical care expenses unless it is clear that the expenses are incurred exclusively to enable a person with disabilities to work.

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6-III.E. DISABILITY ASSISTANCE EXPENSES DEDUCTION [24 CFR 5.603(b) and 24 CFR 5.611(a)(3)(ii)]
Unreimbursed reasonable expenses for attendant care and auxiliary apparatus for each member of the family who is a person with disabilities may be deducted if they: (1) are necessary to enable a family member 18 years or older to work, (2) are not paid to a family member or reimbursed by an outside source, (3) in combination with any medical expenses, exceed ten percent of annual income, and (4) do not exceed the earned income received by the family member who is enabled to work.

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

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

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

When the PHA determines that the disability assistance expenses enable more than one family member to work, the disability assistance expenses will be capped by the sum of the family members’ incomes [New PH OCC GB, Income Determination, p. 28].

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Eligible Auxiliary Apparatus [Notice PIH 2023-27]
Auxiliary apparatus items may 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.

Eligible Attendant Care [Notice PIH 2023-27]
Examples of 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. The family determines the type of attendant care that is appropriate for the person with disabilities.

Port Hueneme Housing Authority Policy
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.

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Payments to Family Members
No disability expenses may be deducted for payments to a member of a tenant family [23 CFR

5.603(b)]. However, expenses paid to a relative who is not a member of the tenant family may be deducted if they are 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 disability assistance expenses are necessary and are not paid or reimbursed by any other source.

Port Hueneme Housing Authority 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.

When expenses anticipated by a family could be defined as either health and medical care or disability assistance expenses, the PHA will consider them health and medical care expenses unless it is clear that the expenses are incurred exclusively to enable a person with disabilities to work.

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6-III.F. CHILD CARE EXPENSE DEDUCTION
HUD defines child care 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 (including foster children) 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 their education and only to the extent such amounts are not reimbursed. The amount deducted shall reflect reasonable charges for child care. In the case of child care necessary to permit employment, the amount deducted shall not exceed the amount of employment income that is included in annual income.”
Child care expenses do not include child support payments made to another on behalf of a minor who is not living in an assisted family’s household [VG, p. 26]. However, 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.

Qualifying for the Deduction
Determining Who Is Enabled to Pursue an Eligible Activity Port Hueneme Housing Authority 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 child care 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
Port Hueneme Housing Authority Policy
If the child care 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 child care expense being allowed by the PHA.

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Furthering Education
Port Hueneme Housing Authority Policy
If the child care expense being claimed is to enable a family member to further their education, the member must be enrolled in school (academic or vocational) or participating in a formal training program. The family member is not required to be a full-time student, but the time spent in educational activities must be commensurate with the child care claimed.

Being Gainfully Employed
Port Hueneme Housing Authority Policy
If the child care 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 child care is being provided. Gainful employment is any legal work activity (full- or part-time) for which a family member is compensated.

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

However, when child care 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 who receives the earned income disallowance (EID) or a full-time student whose earned income above $480 is excluded, child care 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, child care expenses are limited to $5,000.

The PHA must not limit the deduction to the least expensive type of child care. 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].

Port Hueneme Housing Authority Policy
When the child care 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 child care expenses to the earned income of the lowest-paid member. The family may provide information that supports a request to designate another family member as the person enabled to work.

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Eligible Child Care Expenses
The type of care to be provided is determined by the tenant family. The PHA may not refuse to give a family the child care 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
Port Hueneme Housing Authority 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 child care.

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

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

Port Hueneme Housing Authority Policy
Child care expenses will be considered for the time required for the eligible activity plus reasonable transportation time. For child care 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 child care costs, the PHA will use the schedule of child care costs from a qualified local entity that either subsidizes child care costs or license child care providers. Families may present, and the PHA will consider, justification for costs that exceed typical costs in the area.

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6-III.G. HARDSHIP EXEMPTIONS [24 CFR 5.611(c), (d), and (e)] Health and Medical Care and Disability Assistance Expenses [24 CFR 5.611 (c); Notice PIH 2023-27]
The regulations provide for two types of hardship exemption categories for families that qualify for unreimbursed health and medical care expenses and/or disability assistance expenses. A family will benefit from this hardship exemption only if the family has eligible expenses that can be deducted in excess of five percent of annual income. In order to claim unreimbursed health and medical care expenses, the family must have a head, cohead, or spouse that is elderly or a person with disability. In order to claim unreimbursed reasonable attendant care and auxiliary apparatus expenses, the family must include a person with a disability, and the expenses must enable any member of the family (including the member who is a person with a disability) to be employed.

Families may be eligible for relief under one of two categories; phased-in relief or general relief, as defined below.

Phased-In Relief
The first category is applicable to all families who received a deduction for unreimbursed health and medical care and/or reasonable attendant care or auxiliary apparatus expenses based on their most recent income review prior to January 1, 2024. The family must receive pashed-in relief if they are determined to be eligible as of January 1, 2024. These families will begin receiving a 24-month phased-in relief at their next annual or interim reexamination, whichever occurs first.

For these families, the threshold amount is phased-in as follows:
• The family is eligible for a deduction totaling the sum of expenses that exceeds 5 percent of annual income for the first 12 months.
• At the conclusion of 12 months, the family is eligible for a deduction totaling the sum of their expenses that exceed 7.5 percent of annual income for another 12 months. • At the conclusion of 24 months, the standard threshold amount of 10 percent would be used, unless the family qualifies for relief under the general hardship relief category. − When an eligible family’s phased-in relief begins at an interim reexamination, the PHA will need to process another transaction one year later to move the family along to the next phase. The transaction can be either an interim reexamination if triggered, or a noninterim reexamination transaction.

Prior to the end of the 24-month period, the family may request a hardship exemption under the second category as described below. If the family is found eligible under the second category, the hardship exemption under the first category ends, and the family’s hardship is administered Agenda Item No. 06 Page 683 of 985 HA Agenda 05-05-2025 © Copyright 2023 Nan McKay & Associates, Inc. Port Hueneme HA ACOP 7/1/25 Unlimited copies may be made for internal use.

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in accordance with the requirements listed below. Once a family requests general relief, the family may no longer receive phased-in relief.

PHAs must track the 24-month phase-period for each eligible family, even if a family’s expenses go below the appropriate phase-in percentage, during the first or second 12-month phase-in period. The phase-in must continue for families who move to another public housing unit at the same PHA. When the family is treated as a new admission under a different property/program (e.g., the family moves from public housing to the HCV program), unless the PHA has a written policy to continue the phased-in relief upon admission, the family’s expense deduction will be calculated using the 10-percent threshold unless request for general relief is approved by the PHA.

Port Hueneme Housing Authority
The PHA will not continue the phased-in relief for families who move from the HCV program to public housing. These families will be treated as new admissions and the sum of expenses that exceeds 10 percent of annual income will be used to calculate their adjusted income.

General Relief
The second category is for families that can demonstrate:
• Their health and medical and/or disability assistance expenses increased (other than the transition to the higher threshold); or
• The family’s financial hardship is a result of a change in circumstances (as defined in PHA policy) that would not otherwise trigger an interim reexamination.

The family may request a hardship exemption under the second category regardless of whether the family previously received the health and medical and/or disability assistance deductions or are currently or were previously receiving relief under the phased-in relief category above, HUD requires the PHAs develop policies defining what constitutes a hardship for purposes of this exemption.

The PHA must obtain third-party verification of the hardship or must document in the file the reason third-party verification was not available. PHAs must attempt to obtain third-party verification prior to the end of the 90-day hardship exemption period.

Port Hueneme Housing Authority Policy
To qualify for a hardship exemption, a family must submit a request in writing. The request must show that the family’s health and medical and/or disability assistance expenses have increased (other than the transition to the higher threshold) or that the family’s financial hardship is a result of a change in circumstances. The PHA defines a change in circumstances as a decrease in income or increase in other expenses that has Agenda Item No. 06 Page 684 of 985 HA Agenda 05-05-2025 © Copyright 2023 Nan McKay & Associates, Inc. Port Hueneme HA ACOP 7/1/25 Unlimited copies may be made for internal use.

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resulted in the family’s financial hardship but does not, on its own, trigger an interim reexam in accordance with PHA policies.

Examples of circumstances constituting a financial hardship may include the following situations:

The family is awaiting an eligibility determination for a federal, state, or local assistance program, such as a determination for unemployment compensation or disability benefits;
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; or Other circumstances as determined by the PHA.

The family must provide third-party verification of the hardship with the request. If thirdparty verification is not available, the PHA will document the file with the reason and will attempt to obtain third-party verification prior to the end of the 90-day hardship exemption period.

The PHA must promptly notify the family in writing of the change in the determination of adjusted income and the family’s rent resulting from hardship exemptions. The notice must inform the family of when the hardship exemption will begin and expire [24 CFR 5.611 (e)(2)].

Port Hueneme Housing Authority Policy
The PHA will make a determination of whether the family qualifies within 30 calendar days and will notify the family in writing of the result within 10 business days of the determination.

If the PHA denies the hardship exemption request, the PHA notice will also state that if the family does not agree with the PHA determination, the family may request a hearing.

If the family qualifies for an exemption, the PHA will include the date the hardship exemption will begin and the date it will expire as well as information on how to request a 90-day extension based on family circumstances.

If the family qualifies, the family will receive a deduction for the sum of eligible expenses that exceed five percent of annual income.

The family’s hardship relief ends when the circumstances that made the family eligible for the relief are no longer applicable or after 90 days, whichever is earlier. However, the PHA may, at its discretion, extend the relief for one or more additional 90-day periods while the family’s hardship condition continues. PHAs are not limited to a maximum number of 90-day extensions.

PHAs must establish written policies regarding the types of circumstances that will allow a family to qualify for a financial hardship and when such deductions may be eligible for Agenda Item No. 06 Page 685 of 985 HA Agenda 05-05-2025 © Copyright 2023 Nan McKay & Associates, Inc. Port Hueneme HA ACOP 7/1/25 Unlimited copies may be made for internal use.

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additional 90-day extensions. PHAs must develop policies requiring families to report if the circumstances that made the family eligible for the hardship exemption are no longer applicable.

Child Care Expense Hardship Exemption [24 CFR 5.6011 (d) and Notice PIH 2023-27] A family whose eligibility for the child care expense deduction is ending may request a financial hardship exemption to continue receiving the deduction. If the family demonstrates to the PHA’s satisfaction that the family is unable to pay their rent because of the loss of the child care expense deduction, and that the child care expense is still necessary even though the family member is not working, looking for work, or seeking to further their education, the PHA must recalculate the family’s adjusted income and continue the child care deduction.

The PHA must develop a policy to define what constitutes a hardship, which includes the family’s inability to pay rent. The PHA must obtain third-party verification of the hardship or must document in the file the reason third-party verification was not available. PHAs must attempt to obtain third-party verification prior to the end of the 90-day hardship exemption period.

Port Hueneme Housing Authority Policy
For a family to qualify, they must demonstrate that their inability to pay rent would be as a result of the loss of this deduction. The PHA defines this hardship as a potential decrease in income or increase in other expenses that would result from the loss of the child care expense and such loos would impact the family’s ability to pay their rent.

Some factors to consider when determining if the family is unable to pay rent may include determining that the rent, utility payment, and applicable expenses (child care expenses or health and medical expenses) are more than 40 percent of the family’s adjusted income, or verifying whether the family has experienced unanticipated expenses, such as large medical bills, that have affected their ability to pay their rent.

The family must also demonstrate that the child care expense is still necessary even though the family member is no longer employed or furthering their education. The PHA will consider qualification under this criterion on a case-by case basis (for example, if the Agenda Item No. 06 Page 686 of 985 HA Agenda 05-05-2025 © Copyright 2023 Nan McKay & Associates, Inc. Port Hueneme HA ACOP 7/1/25 Unlimited copies may be made for internal use.

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family member who was employed has left their job in order to provide uncompensated care to an elderly friend or family member who is severely ill and lives across town).

The PHA must promptly notify the family in writing of the change in the determination of adjusted income and the family’s rent resulting from hardship exemptions.

If the PHA denies the request, the notice must specifically state the reason for the denial. PHAs must provide families 30 days’ notice of any increase in rent.

If the PHA approves the request, the notice must inform the family of when the hardship exemption will begin and expire [24 CFR 5.611 (e)(2)]. The notice must also state the requirement for the family to report to the PHA if the circumstances that made the family eligible for relief are no longer applicable and that the family’s adjusted income and tenant rent will be recalculated upon expiration of the hardship exemption [Notice PIH 2023-27].

If the PHA denies the hardship exemption request, the PHA notice will also state that if the family does not agree with the PHA determination, the family may request a grievance hearing.

If the family qualifies for an exemption, the PHA will include all required information listed above as well as information on how to request a 90-day extension based on family circumstances.

If the family qualifies, the hardship exemption and the resulting alternative adjusted income calculation must remain in place for a period of up to 90 days.

The PHA may, at its discretion, extend the hardship exemptions for additional 90-day periods based on family circumstances and as stated in PHA policies. PHAs are not limited to a maximum number of 90-day extensions. PHAs must develop policies requiring families to report if the circumstances that made the family eligible for the hardship exemption are no longer applicable.

PHAs must promptly notify families in writing if they are denied either an initial hardship exemption or an additional 90-day extension of the exemption. If the PHA denies the request, the notice must specifically state the reason for the denial.

PHAs must notify the family if the hardship exemption is no longer necessary and the hardship exemption will be terminated because the circumstances that made the family eligible for the Agenda Item No. 06 Page 687 of 985 HA Agenda 05-05-2025 © Copyright 2023 Nan McKay & Associates, Inc. Port Hueneme HA ACOP 7/1/25 Unlimited copies may be made for internal use.

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exemption are no longer applicable. The notice must state the termination date and provide 30 days’ notice of rent increase, if applicable.

Port Hueneme Housing Authority Policy
The family may request an extension either orally or in writing prior to the end of the hardship exemption period. The PHA will extend relief for an additional 90-days if the family demonstrates to the PHA’s satisfaction that the family continues to qualify for the hardship exemption. The PHA will require updated verification based on the family’s current circumstances. Additional extensions may be granted on a case-by-case basis provided the family continues to request extensions prior to the end of each hardship exemption period. Families must report if the circumstances that made the family eligible for the hardship exemption are no longer applicable. At any time, the PHA may terminate the hardship exemption if the PHA determines that the family no longer qualifies for the exemption.
6-III.H. PERMISSIVE DEDUCTIONS [24 CFR 5.611(b)(1)(i)]
The PHA may adopt additional permissive deductions from annual income if they establish a policy in the ACOP. Permissive deductions are additional, optional deductions that may be applied to annual income. As with mandatory deductions, permissive deductions must be based on need or family circumstance and deductions must be designed to encourage self-sufficiency or other economic purpose. If the PHA offers permissive deductions, they must be granted to all families that qualify for them and should complement existing income exclusions and deductions [PH OCC GB, p. 128]. Permissive deductions may be used to incentivize or encourage selfsufficiency and economic mobility.

If the PHA chooses to adopt permissive deductions, the PHA is not eligible for an increase in Capital Fund and Operating Fund formula grants based on the application of those deductions.

The PHA must establish a written policy for such deductions.

The Form HUD-50058 Instruction Booklet states that the maximum allowable amount for total permissive deductions is less than $90,000 per year.

Port Hueneme Housing Authority Policy
The PHA has opted not to use permissive deductions.

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PART IV: CALCULATING RENT
6-IV.A. OVERVIEW OF INCOME-BASED RENT CALCULATIONS
The first step in calculating income-based rent is to determine each family’s total tenant payment (TTP). Then, if the family is occupying a unit that has tenant-paid utilities, the utility allowance is subtracted from the TTP. The result of this calculation, if a positive number, is the tenant rent.

If the TTP is less than the utility allowance, the result of this calculation is a negative number, and is called the utility reimbursement, which may be paid to the family or directly to the utility company by the PHA.

TTP Formula [24 CFR 5.628]
HUD regulations specify the formula for calculating the total tenant payment (TTP) for a tenant 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-IV.B.

Welfare Rent [24 CFR 5.628]
Port Hueneme Housing Authority Policy
Welfare rent does not apply in this locality.

Minimum Rent [24 CFR 5.630]
Port Hueneme Housing Authority Policy
The minimum rent for this locality is $50.00.

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Optional Changes to Income-Based Rents [24 CFR 960.253(c)(2) and PH Occ GB, pp. 131-134]
PHAs have been given very broad flexibility to establish their own, unique rent calculation systems as long as the rent produced is not higher than that calculated using the TTP and mandatory deductions. At the discretion of the PHA, rent policies may structure a system that uses combinations of permissive deductions, escrow accounts, income-based rents, and the required flat and minimum rents.

The PHA’s minimum rent and rent choice policies still apply to affected families. Utility allowances are applied to PHA designed income-based rents in the same manner as they are applied to the regulatory income-based rents.

The choices are limited only by the requirement that the method used not produce a TTP or tenant rent greater than the TTP or tenant rent produced under the regulatory formula.

Port Hueneme Housing Authority Policy
The PHA chooses not to adopt optional changes to income-based rents.

Ceiling Rents [24 CFR 960.253 (c)(2) and (d)]
Ceiling rents are used to cap income-based rents. They are part of the income-based formula. If the calculated TTP exceeds the ceiling rent for the unit, the ceiling rent is used to calculate tenant rent (ceiling rent/TTP minus utility allowance). Increases in income do not affect the family since the rent is capped. The use of ceiling rents fosters upward mobility and income mixing.

Because of the mandatory use of flat rents, the primary function of ceiling rents now is to assist families who cannot switch back to flat rent between annual reexaminations and would otherwise be paying an income-based tenant rent that is higher than the flat rent.

Ceiling rents must be set to the level required for flat rents (which will require the addition of the utility allowance to the flat rent for properties with tenant-paid utilities) [PH Occ GB, p. 135].

Port Hueneme Housing Authority Policy
The PHA chooses not to use ceiling rents.

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Utility Reimbursement [24 CFR 960.253(c)(4)]
Utility reimbursement occurs when any applicable utility allowance for tenant-paid utilities exceeds the TTP. HUD permits the PHA to pay the reimbursement to the family or directly to the utility provider.

Port Hueneme Housing Authority Policy
The PHA will make utility reimbursements to the family.

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, either prospectively or retroactively, 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. The PHA must issue reimbursements that exceed $15.00 per month on a monthly basis.

Port Hueneme Housing Authority Policy
The PHA will issue all utility reimbursements monthly.

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

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

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

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

For a family waiting for a determination of eligibility, the hardship period will end as of the first of the month following (1) implementation of assistance, if approved, 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.

Port Hueneme Housing Authority Policy
For a family to qualify under this provision, the cause of the potential eviction must be the family’s failure to pay rent or tenant-paid utilities. (3) Family income has decreased because of changed family circumstances, including the loss of employment.

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(4) A death has occurred in the family.

Port Hueneme Housing Authority 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.

Port Hueneme Housing Authority Policy
The PHA has not established any additional hardship criteria.

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

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

Port Hueneme Housing Authority 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.

The PHA may not evict the family for nonpayment of minimum rent during the 90-day period beginning the month following the family’s request for a hardship exemption.

When the minimum rent is suspended, the TTP 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.

TTP – No Hardship TTP – With Hardship
$0
$15
N/A
$35
30% of monthly adjusted income
10% of monthly gross income
Welfare rent
Minimum rent
$0
$15
N/A
$35
30% of monthly adjusted income
10% of monthly gross income
Welfare rent
Minimum rent
Minimum rent applies.

TTP = $35
Hardship exemption granted.

TTP = $15
Port Hueneme Housing Authority 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 within 30 calendar days.

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

For procedures pertaining to grievance hearing requests based upon the PHA’s denial of a hardship exemption, see Chapter 14, Grievances and Appeals.

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

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

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.

For procedures pertaining to grievance hearing requests based upon the PHA’s denial of a hardship exemption, see Chapter 14, Grievances and Appeals.

Port Hueneme Housing Authority Policy
The PHA will enter into a repayment agreement in accordance with the PHA's repayment agreement policy (see Chapter 16).

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

Port Hueneme Housing Authority Policy
The hardship period ends when any of the following circumstances apply:
(1) At an interim or annual reexamination, the family’s calculated TTP is greater than the minimum rent.
(2) For hardship conditions based on loss of income, the hardship condition will continue to be recognized until new sources of income are received that are at least equal to the amount lost. For example, if a hardship is approved because a family no longer receives a $60/month child support payment, the hardship will continue to exist until the family receives at least $60/month in income from another source or once again begins to receive the child support.
(3) For hardship conditions based upon hardship-related expenses, the minimum rent exemption will continue to be recognized until the cumulative amount exempted is equal to the expense incurred.

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6-IV.C. UTILITY ALLOWANCES [24 CFR 965, Subpart E]
Overview
Utility allowances are provided to families paying income-based rents when the cost of utilities is not included in the rent. When determining a family’s income-based rent, the PHA must use the utility allowance applicable to the type of dwelling unit leased by the family.

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

Reasonable Accommodation and Individual Relief
On request from a family, PHAs must approve a utility allowance that is higher than the applicable amount for the dwelling unit if a higher utility allowance is needed as a reasonable accommodation to make the program accessible to and usable by the family with a disability [PH Occ GB, p. 172].

Likewise, residents with disabilities may not be charged for the use of certain resident-supplied appliances if there is a verified need for special equipment because of the disability [PH Occ Gb, p. 172].

See Chapter 2 for policies related to reasonable accommodations.

Further, the PHA may grant requests for relief from charges in excess of the utility allowance on reasonable grounds, such as special needs of the elderly, ill, or residents with disabilities, or special factors not within control of the resident, as the PHA deems appropriate. The family must request the higher allowance and provide the PHA with an explanation about the additional allowance required.

PHAs should develop criteria for granting individual relief, notify residents about the availability of individual relief, and notify participants about the availability of individual relief programs (sometimes referred to as “Medical Baseline discounts”) offered by the local utility company [Utility Allowance GB, p. 19; 24 CFR 965.508].

Port Hueneme Housing Authority Policy
The family must request the higher allowance and provide the PHA with information about the amount of additional allowance required.

The PHA will consider the following criteria as valid reasons for granting individual relief:

The family’s consumption was mistakenly portrayed as excessive due to defects in the meter or errors in the meter reading.

The excessive consumption is caused by a characteristic of the unit or ownersupplied equipment that is beyond the family’s control, such as particularly inefficient refrigerator or inadequate insulation. The allowance should be adjusted to reflect the higher consumption needs associated with the unit until the situation is remedied. The resident should be granted individual relief until the allowance is adjusted.

The excessive consumption is due to special needs of the family that are beyond their control, such as the need for specialized equipment in the case of a family member who is ill, elderly, or who has a disability.

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In determining the amount of the reasonable accommodation or individual relief, the PHA will allow a reasonable measure of additional usage as necessary. To arrive at the amount of additional utility cost of specific equipment, the family may provide information from the manufacturer of the equipment, or the family or PHA may conduct an internet search for an estimate of usage or additional monthly cost.

Information on reasonable accommodation and individual relief for charges in excess of the utility allowance will be provided to all residents at move-in and with any notice of proposed allowances, schedule surcharges, and revisions. The PHA will also provide information on utility relief programs or medical discounts (sometimes referred to as “Medical Baseline discounts”) that may be available through local utility providers.

The family must request the higher allowance and provide the PHA with information about the amount of additional allowance required.

At its discretion, the PHA may reevaluate the need for the increased utility allowance as a reasonable accommodation at any regular reexamination.

If the excessive consumption is caused by a characteristic of the unit or PHA-supplied equipment that is beyond the family’s control, such as a particularly inefficient refrigerator or inadequate insulation, the individual relief to the resident will cease when the situation is remedied.

Utility Allowance Revisions [24 CFR 965.507]
The PHA must review at least annually the basis on which utility allowances have been established and, if reasonably required in order to continue adherence to standards described in 24 CFR 965.505, must establish revised allowances.

The PHA must revise the utility allowance schedule if there is a rate change that by itself or together with prior rate changes not adjusted for, results in a change of 10 percent or more from the rate on which such allowances were based.

Adjustments to resident payments as a result of such changes must be retroactive to the first day of the month following the month in which the last rate change taken into account in such revision became effective. Such rate changes are not subject to the 60-day notice [24 CFR 965.507 (b)].

The tenant rent calculations must reflect any changes in the PHA’s utility allowance schedule [24 CFR 960.253(c)(3)].

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6-IV.D. PRORATED RENT 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 TTP as if all family members were eligible and then prorate the rent based upon the number of family members that actually are eligible. To do this, the PHA must:
(1) Subtract the TTP from the flat rent applicable to the unit. The result is the maximum subsidy for which the family could qualify if all members were eligible. (2) Divide the family maximum subsidy by the number of persons in the family to determine the maximum subsidy per each family member who is eligible (member maximum subsidy). (3) Multiply the member maximum subsidy by the number of eligible family members. (4) Subtract the subsidy calculated in the last step from the flat rent. This is the prorated TTP. (5) Subtract the utility allowance for the unit from the prorated TTP. This is the prorated rent for the mixed family.

Port Hueneme Housing Authority Policy
Revised public housing flat rents will be applied to a mixed family’s rent calculation at the first annual reexamination after the revision is adopted. (6) When the mixed family’s TTP is greater than the applicable flat rent, use the TTP as the prorated TTP. The prorated TTP minus the utility allowance is the prorated rent for the mixed family.

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6-IV.E. FLAT RENTS AND FAMILY CHOICE IN RENTS [24 CFR 960.253] Flat Rents [24 CFR 960.253(b)]
The flat rent is designed to encourage self-sufficiency and to avoid creating disincentives for continued residency by families who are attempting to become economically self-sufficient.

Changes in family income, expenses, or composition will not affect the flat rent amount because it is outside the income-based formula.

Policies related to the reexamination of families paying flat rent are contained in Chapter 9, and policies related to the establishment and review of flat rents are contained in Chapter 16.

Family Choice in Rents [24 CFR 960.253(a) and (e)]
Once each year, the PHA must offer families the choice between a flat rent and an income-based rent. The family may not be offered this choice more than once a year. The PHA must document that flat rents were offered to families under the methods used to determine flat rents for the PHA.

Port Hueneme Housing Authority Policy
The annual PHA offer to a family of the choice between flat and income-based rent will be conducted upon admission and upon each subsequent annual reexamination.

The PHA will require families to submit their choice of flat or income-based rent in writing and will maintain such requests in the tenant file as part of the admission or annual reexamination process.

The PHA must provide sufficient information for families to make an informed choice. This information must include the PHA’s policy on switching from flat rent to income-based rent due to financial hardship and the dollar amount of the rent under each option. However, if the family chose the flat rent for the previous year the PHA is required to provide an income-based rent amount only in the year that a reexamination of income is conducted or if the family specifically requests it and submits updated income information.

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Switching from Flat Rent to Income-Based Rent Due to Hardship [24 CFR 960.253(f)] A family can opt to switch from flat rent to income-based rent at any time if they are unable to pay the flat rent due to financial hardship. If the PHA determines that a financial hardship exists, the PHA must immediately allow the family to switch from flat rent to the income-based rent.

Port Hueneme Housing Authority Policy
Upon determination by the PHA that a financial hardship exists, the PHA will allow a family to switch from flat rent to income-based rent effective the first of the month following the family’s request.

Reasons for financial hardship include:
• The family has experienced a decrease in income because of changed circumstances, including loss or reduction of employment, death in the family, or reduction in or loss of earnings or other assistance
• The family has experienced an increase in expenses, because of changed circumstances, for medical costs, child care, transportation, education, or similar items • Such other situations determined by the PHA to be appropriate Port Hueneme Housing Authority Policy
The PHA considers payment of flat rent to be a financial hardship whenever the switch to income-based rent would be lower than the flat rent [PH Occ GB, p. 137].

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Flat Rents and Earned Income Disallowance [A&O FAQs]
Because the EID is a function of income-based rents, a family paying flat rent cannot qualify for the EID even if a family member experiences an event that would qualify the family for the EID.

If the family later chooses to pay income-based rent, they would only qualify for the EID if a new qualifying event occurred.

Under the EID original calculation method, a family currently paying flat rent that previously qualified for the EID while paying income-based rent and is currently within their exclusion period would have the exclusion period continue while paying flat rent as long as the employment that is the subject of the exclusion continues. A family paying flat rent could therefore see a family member’s exclusion period expire while the family is paying flat rent.

Under the EID revised calculation method, a family currently paying flat rent that previously qualified for the EID while paying income-based rent and is currently within their exclusion period would have the exclusion period continue while paying flat rent regardless whether the employment that is the subject of the exclusion continues. A family paying flat rent could therefore see a family member’s exclusion period expire while the family is paying flat rent.

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EXHIBIT 6-1: ANNUAL INCOME FULL DEFINITION
24 CFR 5.609
(a) Annual income includes, with respect to the
family:
(1) All amounts, not specifically excluded in
paragraph (b) of this section, received from all
sources by each member of the family who is 18
years of age or older or is the head of household or
spouse of the head of household, plus unearned
income by or on behalf of each dependent who is
under 18 years of age, and
(2) When the value of net family assets exceeds
$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.
(b) Annual income does not include that 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 form 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 settlement for personal
or property losses, including but not limited to
payments through health insurance, motor vehicle
insurance, and workers’ compensation.
(6) Amounts received by the family that are
specifically for, or in reimbursement of, the cost of
health and medical care expenses for any family
member.
(7) Any amounts recovered in any civil action or
settlement based on a claim of malpractice,
negligence, or other breach of duty owed to a
family member arising out of law, that resulted in a
member of the family becoming disabled.
(8) Income of a live-in-aide, foster child, or foster
adult as defined in §§ 5.403 and 5.603
respectively.
(9)
(i) Any assistance that section 479B of the Higher
Education Act of 1965, as amended (20 U.S.C.
1087uu), requires be excluded from a family’s
income; and
(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(20U.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 – (
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(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 cost of
the student are the actual costs of tuition,
books and supplies (including supplies and
equipment to support students with learning
disabilities or other disabilities), room and
board, or other fees required and charged to a
student by the education institution, and, for a
student who is not the head of household or
spouse, the reasonable and actual costs of
housing while attending the institution of
higher education and not residing in an assisted
unit. This calculation is described further in
paragraph (b)(9)(ii) € of this section.
(C) Student financial assistance, for purposes of
this paragraph (b)(9)(ii) must be:
(1) Expressly for tuition, books, room and board,
or other fees required and charged to a student
by the education institution;
(2) Expressly to assist a student with the costs of
higher education; or
(3) Expressly to assist a student who is not the
head of household or spouse with the
reasonable and actual costs of housing while
attending the education institution and not
residing in an assisted unit.
(D) Student financial assistance, for purposes of
this paragraph (b)(9)(ii), may be paid directly
to the student or to the educational institution
on the student’s behalf. Student financial
assistance paid to the student must be verified
by the responsible entity as student financial
assistance consistent with this paragraph
(b)(9)(ii).
(E) When the student is also receiving assistance
excluded under paragraph (b)(9)(i) of this
section, the amount of student financial
assistance under this paragraph (b)(9)(ii) is
determined as follows:
(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 form 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) fo 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
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created, authorized, or funded by Federal, State, or
local government.
(11) The special pay to a family member serving in
the Armed Forces who is exposed to hostile fire.
(12)
(i) Amounts received by a person with a disability
that are disregarded for a limited time for purposes
of Supplemental Security Income eligibility and
benefits because they are set aside for use under a
Plan to Attain Self- Sufficiency (PASS);
(ii) Amounts received by a participant in other
publicly assisted programs which are specifically
for or in reimbursement of out-of-pocket expenses
incurred (e.g., special equipment, clothing,
transportation, 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 fulltime students
in excess of the amount of the deduction for a
dependent in § 5.611.
(15) Adoption assistance payments for a child in
excess of the amount of the deduction for a
dependent in § 5.611.
(16) Deferred period 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 an attendance under
38 U.S.C. 1521 to veterans in need of regular aid
and attendance.
(18) Amounts received by the family in the form of
refunds or rebates under State or local law for
property taxes paid on the dwelling unit.
(19) Payments made by or authorized by a State
Medicaid agency (including through a managed
care entity) or other State or Federal agency to a
family to enable a family member who has a
disability to reside in the family’s assisted unit.

Authorized payments may include payments to a
member of the assisted family through the State
Medicaid agency (including through a managed
care entity) or other State or Federal agency for
caregiving services the family member provides to
enable a family member who has a disability to
reside in the family’s assisted unit.
(20) Loan proceeds (the net amount disbursed by a
lender to or on behalf of a borrower, under the
terms of a loan agreement) received by the family
or a third party (e.g., proceeds received by the
family from a private loan to enable attendance at
an educational institution or to finance the
purchase of a car).
(21) Payments received by Tribal members as a
result of claims relating to the mismanagement of
assets held in trust by the United States, to the
extent such payments are also excluded from gross
income under the Internal Revenue Code or other
Federal law.
(22) Amounts that HUD is required by Federal
statute to exclude from consideration as income for
purposes of determining eligibility or benefits
under a category of assistance programs that
includes assistance under any program to which
the exclusions set forth in paragraph (b) of this
section apply. HUD will publish a notice in the
Federal Register to identify the benefits that
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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 displace 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.
(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) Lump-sum additions to net family assets,
including but not limited to lottery or other contest
winnings.
(25) Civil rights settlements or judgements,
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 nay distribution of periodic payments
from such accounts shall be income at the time
they are received by the family.
(27) Income earned on amounts placed in a
family’s Family Self Sufficiency Account.
(28) Gross income a family member receives
through self-employment or operation of a
business; except that the following shall be
considered income to a family member:
(i) Net income from the operation of a business or
profession. Expenditures for business expansion or
amortization of capital indebtedness shall not be
used as deductions in determining net income. An
allowance for depreciation of assets used in a
business or profession may be deducted, based on
straight line depreciation, as provided in Internal
Revenue Service regulations; and
(ii) Any withdrawal of cash or assets from the
operation of a business or profession will be
included in income, except to the extent the
withdrawal is reimbursement of cash or assets
invested in the operation by the family.

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EXHIBIT 6-2: TREATMENT OF FAMILY ASSETS
24 FR 5.603(b) Net Family Assets
(1)Net family assets is the net cash value of all
assets owned by the family, after deducting
reasonable costs that would be incurred in
disposing real property, savings, stocks, bonds, and
other forms of capital investment.
(2)In determining net family assets, PHAs or
owners, as applicable, must include the value of
any business or family assets disposed of by an
applicant or tenant for less than fair market value
(including a disposition in trust, but no in a
foreclosure or bankruptcy sale) during the two
years preceding the date of application for the
program or reexamination, as applicable, in excess
f the consideration received therefor. In the case of
a disposition as part of a separation or divorce
settlement, the disposition will not be considered to
be for less than fair market value if the applicant or
tenant receives consideration not measurable in
dollar terms. Negative equally in real property or
other investments does not prohibit the owner from
selling the property or other investments, so
negative equity alone would not justify excluding
the property or other investments from family
assets.
(3) Excluded from the calculation of net family
assets are: (i) The value of necessary items of
personal property; (ii) The combined value of all
nonnecessary items of personal property if the
combined total value does not exceed $50,000 (
which amount will be adjusted by HUD in
accordance with the Consumer Price Index for
Urban Wage Earners and Clerical Workers); (iii)
The value of any account under a retirement plan
recognized as such by the Internal Revenue
Service, including individual retirement plans, and
retirement plans for self-employed individuals; (iv)
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; (v)
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
family member being a person with a disability;
(vi) 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, the value
of any Achieving a Better Life Experience (ABLE)
account authorized under Section 529A of such
Code, and the value of any “baby bond” account
created, authorized, or funded by Federal, State, or
local government. (vii) Interests in Indian trust
land; (viii) Equity in a manufactured home where
the family receives assistance under 24 CFR Part
982; (ix) Equity in property under the
Homeownership Option for which a family
receives assistance under 24 CFR part 982 (x)
Family Self-Sufficiency Accounts; and (xi) Federal
tax refunds or refundable tax credits for a period of
12 months after receipt by the family.
(4) In cases where a trust fund has been established
and the trust is not revocable by, or under the
control of, any member of the family or household,
the trust fund is not a family asset and the value of
the trust is not included in the calculation of net
family assets, so long as the fund continues to be
held in a trust that is not revocable by, or under the
control of, any member of the family or household.

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EXHIBIT 6-3: THE EFFECT OF WELFARE BENEFIT REDUCTION
24 CFR 5.615
Public housing program and Section 8 tenant-based assistance program: How welfare benefit reduction affects family income.
(a) Applicability. This section applies to covered
families who reside in public housing (part 960 of
this title) or receive Section 8 tenant-based
assistance (part 982 of this title).
(b) Definitions. The following definitions apply for
purposes of this section:

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

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

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

Specified welfare benefit reduction.
(1) A reduction of welfare benefits by the welfare
agency, in whole or in part, for a family member,
as determined by the welfare agency, because of
fraud by a family member in connection with the
welfare program; or because of welfare agency
sanction against a family member for
noncompliance with a welfare agency requirement
to participate in an economic self-sufficiency
program.
(2) "Specified welfare benefit reduction'' does not
include a reduction or termination of welfare
benefits by the welfare agency:
(i) at expiration of a lifetime or other time limit on
the payment of welfare benefits;
(ii) because a family member is not able to obtain
employment, even though the family member has
complied with welfare agency economic selfsufficiency 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).

Page 6 ends

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

VERIFICATION
[24 CFR 960.259, 24 CFR 5.230, Notice PIH 2017-12]

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 2017-12 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 established by the PHA.

PART I: GENERAL VERIFICATION REQUIREMENTS
7-I.A. FAMILY CONSENT TO RELEASE OF INFORMATION
[24 CFR 960.259, 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 960.259(a)(1)].

Consent Forms
It is required that all adult applicants and tenants 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, the PHA will deny admission to applicants and terminate the lease of tenants. The family may request a hearing in accordance with the PHA's grievance procedures.

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HUD’s Verification Hierarchy [Notice PIH 2017-12]
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 resident) • 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
Port Hueneme Housing Authority 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.

Print-outs from web pages are considered original documents.

The PHA staff member who views the original document must make a photocopy Any family self-certifications 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.

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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 ACOP. The record should be sufficient to enable a staff member or HUD reviewer to understand the process followed and conclusions reached.

Port Hueneme Housing Authority Policy
The PHA will document, in the family file, the following:

Reported family annual income
Value of assets
Expenses related to deductions from annual income
Other factors influencing the adjusted income or income-based rent determination When the PHA is unable to obtain third-party verification, the PHA will document in the family file the reason that third-party verification was not available [24 CFR 960.259(c)(1); Notice PIH 2017-12].

Agenda Item No. 06 Page 715 of 985 HA Agenda 05-05-2025 © Copyright 2022 Nan McKay & Associates, Inc. Port Hueneme HA ACOP 7/1/25 Unlimited copies may be made for internal use. Page 7-4 7-I.C. UP-FRONT INCOME VERIFICATION (UIV)
Up-front income verification (UIV) refers to the PHA’s use of the verification tools available from independent sources that maintain computerized information about earnings and benefits.

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

There may be legitimate differences between the information provided by the family and UIVgenerated information. If the family disputes the accuracy of UIV data, no adverse action can be taken until the PHA has independently verified the UIV information and the family has been granted the opportunity to contest any adverse findings through the PHA's informal review/hearing processes. (For more on UIV and income projection, see section 6-I.C.) Upfront Income Verification Using HUD’s Enterprise Income Verification (EIV) System (Mandatory)
PHAs must use HUD’s EIV system in its entirety as a third-party source to verify tenant employment and income information during mandatory reexaminations or recertifications of family composition and income in accordance with 24 CFR 5.236 and administrative guidance issued by HUD. HUD’s 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 Reports
The data shown on income reports is updated quarterly. Data may be between three and six months old at the time reports are generated.

Port Hueneme Housing Authority Policy
The PHA will obtain income reports for annual reexaminations on a monthly basis.

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

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

Income reports will be used in interim reexaminations to identify any discrepancies between reported income and income shown in the EIV system, and as necessary to verify earned income, and to verify and calculate unemployment benefits, Social Security and/or SSI benefits. EIV will also be used to verify that families claiming zero income are not receiving income from any of these sources.

Income and IVT reports will be retained in resident files with the applicable annual or interim reexamination documents for the duration of the tenancy.

When the PHA determines through income reports and third-party verification that a family has concealed or under-reported income, corrective action will be taken pursuant to the policies in Chapter 15, Program Integrity.

Agenda Item No. 06 Page 716 of 985 HA Agenda 05-05-2025 © Copyright 2022 Nan McKay & Associates, Inc. Port Hueneme HA ACOP 7/1/25 Unlimited copies may be made for internal use. Page 7-5 EIV Identity Verification
The EIV system verifies resident identities against Social Security Administration (SSA) records.

These records are compared to Public and Indian Housing Information Center (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 2012-10].

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

Port Hueneme Housing Authority Policy
The PHA will identify residents 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 tenant. When the PHA determines that discrepancies exist as a result of PHA errors, such as spelling errors or incorrect birth dates, it will correct the errors 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.

Port Hueneme Housing Authority Policy
The PHA will inform all applicants and residents of its use of the following UIV resources during the admission and reexamination process:

HUD’s EIV system
The Work Number
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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 2017-12]
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.

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.

Port Hueneme Housing Authority 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 three 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.

Agenda Item No. 06 Page 718 of 985 HA Agenda 05-05-2025 © Copyright 2022 Nan McKay & Associates, Inc. Port Hueneme HA ACOP 7/1/25 Unlimited copies may be made for internal use. Page 7-7 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 e-mail third-party written verification form requests to third-party sources.

Port Hueneme Housing Authority 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 2017-12]
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.

Port Hueneme Housing Authority 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.

Agenda Item No. 06 Page 719 of 985 HA Agenda 05-05-2025 © Copyright 2022 Nan McKay & Associates, Inc. Port Hueneme HA ACOP 7/1/25 Unlimited copies may be made for internal use. Page 7-8 When Third-Party Verification is Not Required [Notice PIH 2017-12] 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.

Port Hueneme Housing Authority 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
The PHA may accept a self-certification from the family as verification of assets disposed of for less than fair market value [HCV GB, p. 5-28].

Port Hueneme Housing Authority Policy
The PHA will accept a self-certification from a family as verification of assets disposed of for less than fair market value [HCV GB, p. 5-28].

Value of Assets and Asset Income [24 CFR 960.259]
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, whenever a family member is added, and at least every three years thereafter.

Port Hueneme Housing Authority Policy
The PHA will verify all assets annually.

Agenda Item No. 06 Page 720 of 985 HA Agenda 05-05-2025 © Copyright 2022 Nan McKay & Associates, Inc. Port Hueneme HA ACOP 7/1/25 Unlimited copies may be made for internal use. Page 7-9 7-I.E. SELF-CERTIFICATION
When HUD requires third-party verification, self-certification, or “tenant declaration,” is used as a last resort when the PHA is unable to obtain third-party verification.

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 9)
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.

Port Hueneme Housing Authority 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.

Agenda Item No. 06 Page 722 of 985

Page 7 ends

HA Agenda 05-05-2025
© Copyright 2022 Nan McKay & Associates, Inc. Port Hueneme HA ACOP 7/1/25 Unlimited copies may be made for internal use. Page 7-11 PART II: VERIFYING FAMILY INFORMATION
7-II.A. VERIFICATION OF LEGAL IDENTITY
Port Hueneme Housing Authority 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 Vehicle
identification card
U.S. military discharge (DD 214)
Current U.S. passport
Current employer identification card
Certificate of birth
Adoption papers
Custody agreement
Health and Human Services ID
Certified school records
If a document submitted by a family is illegible for any reason or otherwise questionable, more than one of these documents may be required.

If none of these documents can be provided and at the PHA’s discretion, a third party who knows the person may attest to the person’s identity. The certification must be provided in a format acceptable to the PHA and be signed by the family member whose information or status is being verified.

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 them to be a tenant or a member of a tenant family.

Agenda Item No. 06 Page 723 of 985 HA Agenda 05-05-2025 © Copyright 2022 Nan McKay & Associates, Inc. Port Hueneme HA ACOP 7/1/25 Unlimited copies may be made for internal use. Page 7-12 7-II.B. SOCIAL SECURITY NUMBERS [24 CFR 5.216 and Notice PIH 2012-10] 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 residents who were at least 62 years of age as of January 31, 2010, and had not previously disclosed an SSN.

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 resident if the document is not an original document, if the original document has been altered, mutilated, is illegible, or if the document appears to be forged.

Port Hueneme Housing Authority Policy
The PHA will explain to the applicant or resident the reasons the document is not acceptable and request that the individual obtain and submit acceptable documentation of the SSN to the PHA within 30 days.

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 program admission, an otherwise eligible family may be admitted and must provide documentation of the child’s SSN within 90 days. A 90-day extension will be granted if the PHA determines that the resident’s failure to comply was due to unforeseen circumstances and was outside of the resident’s control.

Port Hueneme Housing Authority Policy
The PHA will grant one additional 30-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 resident 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 resident 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.

Agenda Item No. 06 Page 724 of 985 HA Agenda 05-05-2025 © Copyright 2022 Nan McKay & Associates, Inc. Port Hueneme HA ACOP 7/1/25 Unlimited copies may be made for internal use. Page 7-13 When a resident requests to add a new household member who is under the age of 6 and has not been assigned an SSN, the resident 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 resident’s failure to comply was due to unforeseen circumstances and was outside of the resident’s control. During the period the PHA is awaiting documentation of the SSN, the child will be counted as part of the assisted household.

Port Hueneme Housing Authority Policy
The PHA will grant one additional 30-day extension if needed for reasons beyond the resident’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.

Port Hueneme Housing Authority Policy
The PHA will verify each disclosed SSN by:

Obtaining documentation from applicants and residents 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
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.

Port Hueneme Housing Authority Policy
Once an individual’s status is classified as “verified” in HUD’s EIV system, the PHA will not 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 family members. For elderly family members an original document that provides evidence of the receipt of social security retirement benefits is acceptable.

Port Hueneme Housing Authority 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.

Agenda Item No. 06 Page 725 of 985 HA Agenda 05-05-2025 © Copyright 2022 Nan McKay & Associates, Inc. Port Hueneme HA ACOP 7/1/25 Unlimited copies may be made for internal use. Page 7-14 7-II.D. FAMILY RELATIONSHIPS
Applicants and tenants 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.

Port Hueneme Housing Authority 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
Port Hueneme Housing Authority 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 with a marriage certificate or other documentation to verify that the couple is married.

Separation or Divorce
Port Hueneme Housing Authority Policy
Certification by the head of household is normally sufficient verification. If the PHA has reasonable doubts about a divorce or separation, the PHA will require the family to provide documentation of the divorce or separation with a certified copy of a divorce decree, signed by a court officer; a copy of a court-ordered maintenance or other court record; or other documentation that shows a couple is divorced or separated.

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

Agenda Item No. 06 Page 726 of 985 HA Agenda 05-05-2025 © Copyright 2022 Nan McKay & Associates, Inc. Port Hueneme HA ACOP 7/1/25 Unlimited copies may be made for internal use. Page 7-15 Absence of Adult Member
Port Hueneme Housing Authority 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 the PHA so requests.

Foster Children and Foster Adults
Port Hueneme Housing Authority Policy
Third-party verification from the state or local government agency responsible for the placement of the individual with the family is required. 7-II.E. VERIFICATION OF STUDENT STATUS
Port Hueneme Housing Authority 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 claims full-time student status for an adult other than the head, spouse, or cohead, or
The family claims a child care deduction to enable a family member to further their education.

Agenda Item No. 06 Page 727 of 985 HA Agenda 05-05-2025 © Copyright 2022 Nan McKay & Associates, Inc. Port Hueneme HA ACOP 7/1/25 Unlimited copies may be made for internal use. Page 7-16 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 resident’s medical record(s). For more information on health care privacy laws, see the Department of Health and Human Services’ Web site at www.os.dhhs.gov.

The PHA may make the following inquiries, provided it makes them 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 • Inquiry about whether an applicant for a dwelling is a current illegal abuser or addict of a controlled substance
• Inquiry about whether an applicant has been convicted of the illegal manufacture or distribution of a controlled substance
Family Members Receiving SSA Disability Benefits
Verification of receipt of disability benefits from the Social Security Administration (SSA) is sufficient for verification of disability for the purpose of qualification for waiting list preferences or certain income disallowances and deductions [VG, p. 23].

Port Hueneme Housing Authority Policy
For family members claiming disability who receive disability payments from the SSA, the PHA will attempt to obtain information about disability benefits through HUD’s Enterprise Income Verification (EIV) system. If documentation is not available through HUD’s EIV system, the PHA will request a current (dated within the last 60 days) SSA benefit verification letter from each family member claiming disability status. If a family member is unable to provide the document, the PHA will ask the family to obtain a benefit verification letter either by calling SSA at 1-800-772-1213 or by requesting one from www.ssa.gov. Once the family receives the benefit verification letter, they will be required to provide the letter to the PHA.

Agenda Item No. 06 Page 728 of 985 HA Agenda 05-05-2025 © Copyright 2022 Nan McKay & Associates, Inc. Port Hueneme HA ACOP 7/1/25 Unlimited copies may be made for internal use. Page 7-17 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, necessary to qualify for waiting list preferences or certain income disallowances and deductions.

Port Hueneme Housing Authority Policy
For family members claiming disability who do not receive SSI or other disability payments 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. See the Eligibility chapter for detailed discussion of eligibility requirements.

This chapter (7) discusses HUD and PHA verification requirements related to citizenship status.

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

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

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

Port Hueneme Housing Authority Policy
Family members who claim U.S. citizenship or national status will be required to provide additional documentation to confirm citizenship.

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 Agenda Item No. 06 Page 729 of 985 HA Agenda 05-05-2025 © Copyright 2022 Nan McKay & Associates, Inc. Port Hueneme HA ACOP 7/1/25 Unlimited copies may be made for internal use. Page 7-18 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 ACOP. 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 U.S. 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 their placement on the waiting list.

Port Hueneme Housing Authority Policy

1. Residency Preference – 1
st Preference – The Port Hueneme Housing Authority will verify residency preference by reviewing:
• Driver’s license or state federal identification card with an address in Port Hueneme, CA
• Utility or other bills with address in Port Hueneme, CA • Letter from employer indicating employment or date hired to work in Port Hueneme, CA (no minimum timeframes will be required)

2. Working Preference -2
nd Preference - The Port Hueneme Housing Authority will verify working preference by reviewing:
• Three consecutive pay stubs showing that the head, co-head or spouse works 30 hours per week or more; or
• Letter from employer indicating that the head, co-head or spouse works 30 hours per week
• Verification that head, co-head or spouse is elderly and/or disabled.

Agenda Item No. 06 Page 730 of 985 HA Agenda 05-05-2025 © Copyright 2022 Nan McKay & Associates, Inc. Port Hueneme HA ACOP 7/1/25 Unlimited copies may be made for internal use. Page 7-19 PART III: VERIFYING INCOME AND ASSETS
Chapter 6, Part I of this ACOP 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
Port Hueneme Housing Authority Policy
Unless tip income is included in a family member’s W-2 by the employer, persons who work in industries where tips are standard will be required to sign a certified estimate of tips received for the prior year and tips anticipated to be received in the coming year.

Wages
Port Hueneme Housing Authority Policy
For wages other than tips, the family must provide originals of the three most current, consecutive pay stubs.
7-III.B. BUSINESS AND SELF EMPLOYMENT INCOME
Port Hueneme Housing Authority 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.

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

Agenda Item No. 06 Page 731 of 985 HA Agenda 05-05-2025 © Copyright 2022 Nan McKay & Associates, Inc. Port Hueneme HA ACOP 7/1/25 Unlimited copies may be made for internal use. Page 7-20 7-III.C. PERIODIC PAYMENTS AND PAYMENTS IN LIEU OF EARNINGS For policies governing streamlined income determinations for fixed sources of income, please see Chapter 9.

Social Security/SSI Benefits
Port Hueneme Housing Authority Policy
Verification requirements for Social Security (SS) and Supplemental Security Income (SSI) benefits differ for applicants and participants.

For applicants, since EIV does not contain SS or SSI benefit information, the PHA must ask applicants to provide a copy of their current SS and/or SSI benefit letter (dated within the last 60 calendar days) for each family member that received SS and/or SSI benefits. If a family member is unable to provide the document, the PHA will help the applicant request a benefit verification letter from SSA’s Web site at www.ssa.gov or ask the family to request one by calling SSA at 1- 800-772-1213. The PHA must obtain the original benefit letter from the applicant, make a photocopy of the document for the file, and return the original to the family.

For participants, the PHA must obtain information through the HUD EIV system and confirm with the participants that the current listed benefit amount is correct. • If the participant agrees with the amount reported in EIV, the PHA must use the EIVreported gross benefit amount to calculate annual income from Social Security. PHAs are required to use the EIV-reported SS and SSI benefit amounts when calculating income unless the tenant disputes the EIV-reported amount. For example, and SSA benefit letter may list the monthly benefit amount as $450.80 and EIV displays the amount as $450.00. the PHA must use the EIV-reported amount unless the participant disputes the amount. • If the participant disputes the EIV-reported benefit amount or if benefit information is not available in EIV, the PHA must request a current SSA benefit verification letter (dated within the last 60 calendar days) from each family member that received SS and/or SSI benefits. If the family is unable to provide the document or documents, the PHA should help the participant request a benefit verification letter from SSA web site at www.ssa.gov or ask the family to request one by calling SSA at 1-800-772-1213. The PHA must obtain the original benefit letter form the participant, make a photocopy of the document for the file, and return the original to the family. • Photocopies of social security checks or bank statements are not acceptable forms of verification for SS/SSI benefits.

Agenda Item No. 06 Page 732 of 985 HA Agenda 05-05-2025 © Copyright 2022 Nan McKay & Associates, Inc. Port Hueneme HA ACOP 7/1/25 Unlimited copies may be made for internal use. Page 7-21 7-III.D. ALIMONY OR CHILD SUPPORT
Port Hueneme Housing Authority Policy
The methods the PHA will use to verify alimony and child support payments differ depending on whether the family declares that it receives regular payments.

If the family declares that it receives regular payments, verification will be obtained in the following order of priority:

Copies of the receipts and/or payment stubs for the 60 days prior to PHA request
Third-party verification form from the state or local child support enforcement agency
Third-party verification form from the person paying the support Family's self-certification of amount received
If the family declares that it receives irregular or no payments, in addition to the verification process listed above, the family must provide evidence that it has taken all reasonable efforts to collect amounts due. This may include:

A statement from any agency responsible for enforcing payment that shows the family has requested enforcement and is cooperating with all enforcement efforts
If the family has made independent efforts at collection, a written statement from the attorney or other collection entity that has assisted the family in these efforts
Note: Families are not required to undertake independent enforcement action.

Agenda Item No. 06 Page 733 of 985 HA Agenda 05-05-2025 © Copyright 2022 Nan McKay & Associates, Inc. Port Hueneme HA ACOP 7/1/25 Unlimited copies may be made for internal use. Page 7-22 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].

Port Hueneme Housing Authority 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 resident 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
Port Hueneme Housing Authority 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.

Agenda Item No. 06 Page 734 of 985 HA Agenda 05-05-2025 © Copyright 2022 Nan McKay & Associates, Inc. Port Hueneme HA ACOP 7/1/25 Unlimited copies may be made for internal use. Page 7-23 7-III.G. RETIREMENT ACCOUNTS
Port Hueneme Housing Authority 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.

Agenda Item No. 06 Page 735 of 985 HA Agenda 05-05-2025 © Copyright 2022 Nan McKay & Associates, Inc. Port Hueneme HA ACOP 7/1/25 Unlimited copies may be made for internal use. Page 7-24 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).

Port Hueneme Housing Authority Policy
The PHA will verify the receipt of food stamps to comply with the community service requirements. The PHA will accept the family’s self-certification as verification of all other fully excluded income. The PHA may request additional documentation if necessary to document the income source.

The PHA will verify the source and amount of partially excluded income as described in Part 1 of this chapter.
7-III.I. ZERO ANNUAL INCOME STATUS
Port Hueneme Housing Authority 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, earned income, etc. are not being received by families claiming to have zero annual income or zero TTP.

Families with monthly income of less than $500 per month are required to have an interim recertification every 60 days.

Agenda Item No. 06 Page 736 of 985 HA Agenda 05-05-2025 © Copyright 2022 Nan McKay & Associates, Inc. Port Hueneme HA ACOP 7/1/25 Unlimited copies may be made for internal use. Page 7-25 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 will 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 the Eligibility chapter for a definition of elderly and disabled families and Chapter 6 (6-II.C.) for a discussion of the deduction. The PHA will verify that the head, spouse, or cohead is 62 years of age or older or a person with disabilities.

Agenda Item No. 06 Page 737 of 985 HA Agenda 05-05-2025 © Copyright 2022 Nan McKay & Associates, Inc. Port Hueneme HA ACOP 7/1/25 Unlimited copies may be made for internal use. Page 7-26 7-IV.B. MEDICAL EXPENSE DEDUCTION
Policies related to medical expenses are found in 6-II.D. The amount of the deduction will be verified following the standard verification procedures described in Part I.

Amount of Expense
Port Hueneme Housing Authority Policy
Medical expenses will be verified through:

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

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

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

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

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

Agenda Item No. 06 Page 738 of 985 HA Agenda 05-05-2025 © Copyright 2022 Nan McKay & Associates, Inc. Port Hueneme HA ACOP 7/1/25 Unlimited copies may be made for internal use. Page 7-27 Eligible Household
The medical expense deduction is permitted only for households in which the head, spouse, or cohead is at least 62 or a person with disabilities. The PHA will verify that the family meets the definition of an elderly or disabled family provided in the Eligibility chapter, and as described in Chapter 7 (7-IV.A) of this plan.

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

See Chapter 6 (6-II.D.) for the PHA’s policy on what counts as a medical expense.

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

Port Hueneme Housing Authority Policy
The family will be required to certify that the medical 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
Port Hueneme Housing Authority 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
Agenda Item No. 06 Page 739 of 985 HA Agenda 05-05-2025 © Copyright 2022 Nan McKay & Associates, Inc. Port Hueneme HA ACOP 7/1/25 Unlimited copies may be made for internal use. Page 7-28 7-IV.C. DISABILITY ASSISTANCE EXPENSES
Policies related to disability assistance expenses are found in 6-II.E. The amount of the deduction will be verified following the standard verification procedures described in Part I.

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

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

Expenses for attendant care will be verified through:

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

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

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

Auxiliary Apparatus
Port Hueneme Housing Authority 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 or document review 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
Agenda Item No. 06 Page 740 of 985 HA Agenda 05-05-2025 © Copyright 2022 Nan McKay & Associates, Inc. Port Hueneme HA ACOP 7/1/25 Unlimited copies may be made for internal use. Page 7-29 The PHA must verify that the expenses claimed actually enable a family member, or members, (including the person with disabilities) to work.

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

This documentation may be provided by the family.

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

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

Port Hueneme Housing Authority 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.

Agenda Item No. 06 Page 741 of 985 HA Agenda 05-05-2025 © Copyright 2022 Nan McKay & Associates, Inc. Port Hueneme HA ACOP 7/1/25 Unlimited copies may be made for internal use. Page 7-30 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. 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 child care.
• The costs are reasonable.

Eligible Child
To be eligible for the child care 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.

Port Hueneme Housing Authority Policy
The family and the care provider will be required to certify that the child care expenses are not paid by or reimbursed to the family from any source.

Agenda Item No. 06 Page 742 of 985 HA Agenda 05-05-2025 © Copyright 2022 Nan McKay & Associates, Inc. Port Hueneme HA ACOP 7/1/25 Unlimited copies may be made for internal use. Page 7-31 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.

Port Hueneme Housing Authority 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 their education by the child care 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 child care. 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.

Agenda Item No. 06 Page 743 of 985 HA Agenda 05-05-2025 © Copyright 2022 Nan McKay & Associates, Inc. Port Hueneme HA ACOP 7/1/25 Unlimited copies may be made for internal use. Page 7-32 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.

Port Hueneme Housing Authority 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 child care 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 child care 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 child care costs can be deducted.

Port Hueneme Housing Authority 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.

Agenda Item No. 06 Page 744 of 985 HA Agenda 05-05-2025 © Copyright 2022 Nan McKay & Associates, Inc. Port Hueneme HA ACOP 7/1/25 Unlimited copies may be made for internal use. Page 7-33 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
Agenda Item No. 06 Page 745 of 985 HA Agenda 05-05-2025 © Copyright 2022 Nan McKay & Associates, Inc. Port Hueneme HA ACOP 7/1/ 25 Unlimited copies may be made for internal use.

Agenda Item No. 06 Page 746 of 985

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HA Agenda 05-05-2025
© Copyright 2023 by Nan McKay & Associates Port Hueneme HA ACOP 7/1/25 Unlimited copies may be made for internal use.

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Chapter 8

LEASING AND INSPECTIONS
[24 CFR 5, Subpart G; 24 CFR 966, Subpart A]

INTRODUCTION
Public housing leases are the contractual basis of the legal relationship between the PHA and the tenant. All units must be occupied pursuant to a dwelling lease agreement that complies with HUD regulations.

HUD regulations require the PHA to inspect each dwelling unit prior to move-in, at move-out, and annually during the period of occupancy. In addition, the PHA may conduct additional inspections in accordance with PHA policy.

This chapter is divided into two parts as follows:

Part I: Leasing. This part describes pre-leasing activities and the PHA’s policies pertaining to lease execution, lease modification, and payments under the lease.

Part II: Inspections. This part describes the PHA’s policies for inspecting dwelling units and notifying families of HUD REAC NSPIRE inspections.

PART I: LEASING
8-I.A. OVERVIEW
An eligible family may occupy a public housing dwelling unit under the terms of a lease. The lease must meet all regulatory requirements, and must also comply with applicable state and local laws and codes.

The term of the lease must be for a period of 12 months. The lease must be renewed automatically for another 12-month term, except that the PHA may not renew the lease if the family has violated the community service requirement [24 CFR 966.4(a)(2)].

PHAs must adopt smoke-free policies, which must be implemented no later than July 30, 2018.

The policy is attached as Exhibit 8-1.

Part I of this chapter contains regulatory information on leasing, where applicable, as well as the PHA’s leasing policies.

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8-I.B. LEASE ORIENTATION
PHA Policy
After unit acceptance but prior to occupancy, a PHA representative will conduct a lease orientation with the family. The head of household or spouse is required to attend.

Orientation Agenda
PHA Policy
When families attend the lease orientation, they will be provided with:

A copy of the lease
A copy of the PHA’s grievance procedure
A copy of the house rules
A copy of the PHA’s schedule of maintenance charges
A copy of “Is Fraud Worth It?” (form HUD-1141-OIG), which explains the types of actions a family must avoid and the penalties for program abuse A copy of “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
A copy of the form HUD-5380, VAWA Notice of Occupancy Rights A copy of form HUD-5382, Certification of Domestic Violence, Dating Violence, Sexual Assault, or Stalking
A copy of the PHA’s smoke free policy
The HUD pamphlet on lead-based paint entitled, “Protect Your Family from Lead in Your Home.”
Topics to be discussed and explained to all families include:

Applicable deposits and all other charges
Review and explanation of lease provisions
Unit maintenance requests and work orders
The PHA’s interim reporting requirements
Review and explanation of occupancy forms
Community service requirements
Family choice of rent
VAWA protections
Smoke-free policies
Agenda Item No. 06 Page 748 of 985 HA Agenda 05-05-2025 © Copyright 2023 by Nan McKay & Associates Port Hueneme HA ACOP 7/1/25 Unlimited copies may be made for internal use.

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8-I.C. EXECUTION OF LEASE
The lease must be executed by the tenant and the PHA, except for automatic renewals of a lease [24 CFR 966.4(a)(3)].

A lease is executed at the time of admission for all new residents. A new lease is also executed at the time of transfer from one PHA unit to another.

The lease must state the composition of the household as approved by the PHA (family members and any PHA-approved live-in aide) [24 CFR 966.4(a)(1)(v)]. See Section 8-I.D. for policies regarding changes in family composition during the lease term.

PHA Policy
The head of household, spouse or cohead, and all other adult members of the household will be required to sign the public housing lease prior to admission. An appointment will be scheduled for the parties to execute the lease. The head of household will be provided a copy of the executed lease and the PHA will retain a copy in the resident’s file.

Files for households that include a live-in aide will contain file documentation signed by the live-in aide, that the live-in aide is not a party to the lease and is not entitled to PHA assistance. The live-in aide is only approved to live in the unit while serving as the care attendant for the family member who requires the care.

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8-I.D. MODIFICATIONS TO THE LEASE
The lease may be modified at any time by written agreement of the tenant and the PHA [24 CFR 966.4(a)(3)].

Modifications to the Lease Form
The PHA may modify its lease from time to time. However, the PHA must give residents at least thirty (30) days advance notice of the proposed changes and an opportunity to comment on the changes. The PHA must also consider any comments before formally adopting a new lease [24 CFR 966.3].

After proposed changes have been incorporated into the lease and approved by the Board, each family must be notified at least 60 days in advance of the effective date of the new lease or lease revision. A resident's refusal to accept permissible and reasonable lease modifications that are made in accordance with HUD requirements, or are required by HUD, is grounds for termination of tenancy [24 CFR 966.4(l)(2)(iii)(E)].

PHA Policy
The family will have 30-days to accept the revised lease. If the family does not accept the offer of the revised lease within that 30-day timeframe, the family’s tenancy will be terminated for other good cause in accordance with the policies in Chapter 13.

Schedules of special charges and rules and regulations are subject to modification or revision.

Because these schedules are incorporated into the lease by reference, residents and resident organizations must be provided at least thirty days written notice of the reason(s) for any proposed modifications or revisions, and must be given an opportunity to present written comments. The notice must be delivered directly or mailed to each tenant; or posted in at least three conspicuous places within each structure or building in which the affected dwelling units are located, as well as in a conspicuous place at the project office, if any, or if none, a similar central business location within the project. Comments must be taken into consideration before any proposed modifications or revisions become effective [24 CFR 966.5].

After the proposed revisions become effective they must be publicly posted in a conspicuous manner in the project office and must be furnished to applicants and tenants on request [24 CFR 966.5].

PHA Policy
When the PHA proposes to modify or revise schedules of special charges or rules and regulations, the PHA will post a copy of the notice in the central office, and will mail a copy of the notice to each resident family. Documentation of proper notice will be included in each resident file.

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Other Modifications
PHA Policy
The lease will be amended to reflect all changes in family composition.

If, for any reason, any member of the household ceases to reside in the unit, the lease will be amended by drawing a line through the person's name. The head of household and PHA will be required to initial and date the change.

If a new household member is approved by the PHA to reside in the unit, the person’s name and birth date will be added to the lease. The head of household and PHA will be required to initial and date the change. If the new member of the household is an adult, s/he will also be required to sign and date the lease.

Policies governing when and how changes in family composition must be reported are contained in Chapter 9, Reexaminations.

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8-I.E. SECURITY DEPOSITS [24 CFR 966.4(b)(5)]
At the option of the PHA, the lease may require security deposits. The amount of the security deposit cannot exceed one month’s rent or a reasonable fixed amount as determined by the PHA.

The PHA may allow for gradual accumulation of the security deposit by the family, or the family may be required to pay the security deposit in full prior to occupancy. Subject to applicable laws, interest earned on security deposits may be refunded to the tenant after vacating the unit, or used for tenant services or activities.

PHA Policy
Residents must pay a security deposit to the PHA at the time of admission. The amount of the security deposit will be will be as follows:
0 BR/Studio $681
1 BR $801
2 BR $970
3 BR $1348
The PHA will accept the security deposit payment in installments not to exceed six (6) months from the date the lease was executed. The PHA will hold the security deposit for the period the family occupies the unit. The PHA will not use the security deposit for rent or other charges while the resident is living in the unit.

Within 21 days of move-out, the PHA will refund to the resident the amount of the security deposit (including interest earned on the security deposit), less any amount needed to pay the cost of unpaid rent, damages listed on the move-out inspection report that exceed normal wear and tear, and other charges due under the lease.

The PHA will provide the resident with a written list of any charges against the security deposit within 10 business days of the move-out inspection. If the resident disagrees with the amount charged, the PHA will provide a meeting to discuss the charges.

If the resident transfers to another unit, the PHA will transfer the security deposit to the new unit. The tenant will be billed for any maintenance or other charges due for the “old” unit.

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8-I.F. PAYMENTS UNDER THE LEASE
Rent Payments [24 CFR 966.4(b)(1)]
Families must pay the amount of the monthly tenant rent determined by the PHA in accordance with HUD regulations and other requirements. The amount of the tenant rent is subject to change in accordance with HUD requirements.

The lease must specify the initial amount of the tenant rent at the beginning of the initial lease term, and the PHA must give written notice stating any change in the amount of tenant rent and when the change is effective.

PHA Policy
The tenant rent is due and payable at the PHA-designated location on the first of every month. If the first falls on a weekend or holiday, the rent is due and payable on the first business day thereafter.

If a family’s tenant rent changes, the PHA will notify the family of the new amount and the effective date by sending a "Notice of Rent Adjustment" which will become an attachment to the lease.

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Late Fees and Nonpayment [24 CFR 966.4 (b) (3); Notice PIH 2021-29] At the option of the PHA, the lease may provide for payment of penalties when the family is late in paying tenant rent [24 CFR 966.4(b)(3)].

The lease must provide that late payment fees are not due and collectible until two weeks after the PHA gives written notice of the charges. The written notice is considered an adverse action, and must meet the requirements governing a notice of adverse action [24 CFR 966.4(b)(4)].

The notice of proposed adverse action must identify the specific grounds for the action and inform the family of their right for a hearing under the PHA grievance procedures. The PHA must not take the proposed action until the time for the tenant to request a grievance hearing has expired, or (if a hearing was requested within the required timeframe,) the grievance process has been completed [24 CFR 966.4(e)(8)].

PHA Policy
If the family fails to pay their rent by the seventh (7th) day of the month, and the PHA has not agreed to accept payment at a later date, a 14-day Notice to Vacate (upon expiration of nationwide emergency orders) will be issued to the resident for failure to pay rent, demanding payment in full or the surrender of the premises.

In addition, if the resident fails to make payment by the end of office hours on the seventh (7th) day of the month, a late fee of $25.00 will be charged. Notices of late fees will be in accordance with requirements regarding notices of adverse action. Charges are due and payable 14 calendar days after billing. If the family requests a grievance hearing within the required timeframe, the PHA may not take action for nonpayment of the fee until the conclusion of the grievance process. If the resident can document financial hardship, the late fee may be waived on a case-by-case basis.

When a check is returned for insufficient funds or is written on a closed account, the rent will be considered unpaid and a 1
st time returned check fee of $25.00 will be charged to the family. The 2nd time a check is returned, a check fee of $35.00 will be charged. The fee will be due and payable 14 days after billing.

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Excess Utility Charges
If the PHA charges the tenant for consumption of excess utilities, the lease must state the basis for the determination of such charges. The imposition of charges for consumption of excess utilities is permissible only if the charges are determined by an individual check meter servicing the leased unit or result from the use of major tenant-supplied appliances [24 CFR 966.4(b)(2)].

Schedules of special charges for utilities that are required to be incorporated in the lease by reference must be publicly posted in a conspicuous manner in the development office and must be furnished to applicants and tenants on request [24 CFR 966.5].

The lease must provide that charges for excess utility consumption are not due and collectible until two weeks after the PHA gives written notice of the charges. The written notice is considered an adverse action, and must meet the requirements governing a notice of adverse action [24 CFR 966.4(b)(4)].

The notice of proposed adverse action must identify the specific grounds for the action and inform the family of their right to a hearing under the PHA grievance procedures. The PHA must not take the proposed action until the time for the tenant to request a grievance hearing has expired, or (if a hearing was requested within the required timeframe,) the grievance process has been completed [24 CFR 966.4(e)(8)].

PHA Policy
The PHA does not charge an excess utility fee.

Maintenance and Damage Charges
If the PHA charges the tenant for maintenance and repair beyond normal wear and tear, the lease must state the basis for the determination of such charges [24 CFR 966.4(b)(2)].

Schedules of special charges for services and repairs which are required to be incorporated in the lease by reference must be publicly posted in a conspicuous manner in the development office and must be furnished to applicants and tenants on request [24 CFR 966.5].

The lease must provide that charges for maintenance and repair beyond normal wear and tear are not due and collectible until two weeks after the PHA gives written notice of the charges. The written notice is considered an adverse action, and must meet the requirements governing a notice of adverse action [24 CFR 966.4(b)(4)].

PHA Policy
When applicable, families will be charged for maintenance and/or damages according to the PHA’s current schedule. Work that is not covered in the schedule will be charged based on the actual cost of labor and materials to make needed repairs (including overtime, if applicable).

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Notices of maintenance and damage charges will be mailed monthly and will be in accordance with requirements regarding notices of adverse actions. Charges are due and payable 14 calendar days after billing. If the family requests a grievance hearing within the required timeframe, the PHA may not take action for nonpayment of the charges until the conclusion of the grievance process.

Nonpayment of maintenance and damage charges is a violation of the lease and is grounds for eviction.

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PART II: INSPECTIONS
8-II.A. OVERVIEW
The PHA is obligated to maintain safe and habitable dwelling units and to make necessary repairs to dwelling units [24 CFR 966.4(e)]. The National Standards for the Inspection Physical Inspection of Real Estate (NSPIRE) are the standard under which HUD housing units, including those under the public housing program, are inspected. NSPIRE ensures that residents of public housing live in safe, habitable dwellings, and the items and components located inside, outside, and within the units are functionally adequate, operable, and free of health and safety hazards [24 CFR 5.703(a)]. Further, units must comply with state and local code requirements (such as fire, mechanical, plumbing, carbon monoxide, property maintenance, and residential code) [24 CFR

5.703(f)] as well as with all requirements related to the evaluation and control of lead-based paint hazards [24 CFR 5.703(e)(w)].

Under NSPIRE, public housing units are subject to three types of inspections: annual selfinspections, NSPIRE Inspections (which are used to assess and score the PHA under the Public Housing Assessment System (PAHA)), and NSPIRE Plus Inspections (which are triggered by poor property conditions). HUD regulations also require the PHA to inspect each public housing unit prior to move-in; and at move-out. The PHA may require additional inspections, in accordance with PHA policy. This part contains the PHA’s policies governing inspections by the PHA and HUD, notification of unit entry, and inspection repair timelines. This section discusses inspections conducted by the PHA (including annual self-inspections) and inspections conducted by HUD REAC.
8-II.B. PHA-CONDUCTED INSPECTIONS
The PHA is obligated to maintain dwelling units and the project in safe and habitable condition and to make necessary repairs to dwelling units [24 CFR 966.4(e)].

Types of PHA-Conducted Inspections
Move-In Inspections [24 CFR 966.4(i)]
The lease must require the PHA and the family to inspect the dwelling unit prior to occupancy in order to determine the condition of the unit and equipment in the unit. A copy of the initial inspection, signed by the PHA and the tenant, must be provided to the tenant and retained in the resident file.

PHA Policy
The head of household must attend the initial inspection and sign the inspection form for the head of household. The PHA encourages the family to take pictures of the unit and maintain for their personal file.

Move-Out Inspections [24 CFR 966.4(i)]
The PHA must inspect the unit at the time the resident vacates the unit and must allow the resident to participate in the inspection if they wishes, unless the tenant vacates without notice to the PHA. The PHA must provide to the tenant a statement of any charges to be made for maintenance and damage beyond normal wear and tear.

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The difference between the condition of the unit at move-in and move-out establishes the basis for any charges against the security deposit so long as the work needed exceeds that for normal wear and tear.

PHA Policy
When applicable, the PHA will provide the tenant with a statement of charges to be made for maintenance and damage beyond normal wear and tear, within 10 business days of conducting the move-out inspection.

Self-Inspections [24 CFR 5.707)]
Annually all PHAs are required to self-inspect their properties, including all units, to ensure units are maintained in accordance with NSPIRE standards in 24 CFR 5.703. as part of the selfinspection process, PHAs must ensure that deficiencies previously cited and repaired as a result of an NSPIRE inspection have not subsequently failed.

The PHA must maintain the results of self-inspections for three years and must provide the results to HUD upon request.

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Quality Control Inspections
The purpose of quality control inspections is to assure that all defects were identified in the original inspection, and that repairs were completed and within an acceptable time frame PHA Policy
Supervisory quality control inspections will be conducted in accordance with the PHA’s maintenance plan.

Special Inspections
PHA Policy
PHA staff may conduct a special inspection for any of the following reasons:

Housekeeping
Unit condition
Suspected lease violation
Preventive maintenance
Routine maintenance
There is reasonable cause to believe an emergency exists Other Inspections
PHA Policy
Building exteriors, grounds, common areas and systems will be inspected according to the PHA’s maintenance plan.

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Notice of Entry
Non-emergency Entries [24 CFR 966.4(j)(1)]
The PHA may enter the unit, with reasonable advance notification to perform routine inspections and maintenance, make improvements and repairs, or to show the unit for re-leasing. A written statement specifying the purpose of the PHA entry delivered to the dwelling unit at least two days before such entry is considered reasonable advance notification.

PHA Policy
The PHA will notify the resident in writing at least 48 hours prior to any non-emergency inspection.

For regular annual self-inspections, the family will receive at least 48 hours written notice of the inspection to allow the family to prepare the unit for the inspection.

Entry for repairs requested by the family will not require prior notice. Resident-requested repairs presume permission for the PHA to enter the unit.

Except for emergencies, management will not enter the dwelling unit to perform inspections where a pet resides unless accompanied for the entire duration of the inspection by the pet owner or responsible person designated by the pet owner in accordance with the pet policies in Section 10-II.D.

Emergency Entries [24 CFR 966.4(j)(2)]
The PHA may enter the dwelling unit at any time without advance notice when there is reasonable cause to believe that an emergency exists. If no adult household member is present at the time of an emergency entry, the PHA must leave a written statement showing the date, time and purpose of the entry prior to leaving the dwelling unit.

Scheduling of PHA-Conducted Inspections
PHA Policy
Inspections will be conducted during business hours. If a family needs to reschedule an inspection, they must notify the PHA at least 24 hours prior to the scheduled inspection.

The PHA will reschedule the inspection no more than once unless the resident has a verifiable good cause to delay the inspection. The PHA may request verification of such cause.

Attendance at Inspections
Residents are required to be present for move-in inspections [24 CFR 966.4(i)]. There is no such requirement for other types of inspections.

PHA Policy
While the resident is required to be present for move-in inspections, the resident is not required to be present for other types of inspections. The resident may attend the inspection if they wish.

If no one is at home, the inspector will enter the unit, conduct the inspection.

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Repairs
Correction timeframes differ depending on whether repairs are considered emergency or nonemergency repairs.Emergency Repairs [24 CFR 966.4(h)] If the unit is damaged to the extent that conditions are created which are hazardous to the life, health, or safety of the occupants, the tenant must immediately notify the PHA of the damage, and the PHA must make repairs within a reasonable time frame. Under NSPIRE, the PHA must correct all Life-Threatening and Severe deficiencies within 24 hours.

If the damage was caused by a household member or guest, the PHA must charge the family for the reasonable cost of repairs. The PHA may also take lease enforcement action against the family.

If the PHA cannot make repairs quickly, the PHA must offer the family standard alternative accommodations. If the PHA can neither repair the defect within a reasonable time frame nor offer alternative housing, rent shall be abated in proportion to the seriousness of the damage and loss in value as a dwelling. Rent shall not be abated if the damage was caused by a household member or guest, or if the resident rejects the alternative accommodations.

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Non-emergency Repairs
PHA Policy
The PHA will correct deficiencies resulting in a non-emergency work order identified during a PHA conducted inspection within 15 business days of the inspection date. If the PHA is unable to make repairs within that period due to circumstances beyond the PHA’s control (e.g. required parts or services are not available, weather conditions, etc.) the PHA will notify the family of an estimated date of completion.

The family must allow the PHA access to the unit to make repairs.

Except for emergencies, management will not enter dwelling unit to perform repairs where a pet resides unless accompanied for the entire duration of the repair by the pet owner or responsible person designated by the pet owner in accordance with the pet policies in Section 10-II.D.

Resident-Caused Damages
PHA Policy
Damages to the unit beyond wear and tear will be billed to the tenant in accordance with the policies in 8-I.G., Maintenance and Damage Charges.

Repeated or excessive damages to the unit beyond normal wear and tear will be considered a serious or repeated violation of the lease.

Housekeeping
PHA Policy
Residents whose housekeeping habits pose a non-emergency health or safety risk, encourage insect or rodent infestation, or cause damage to the unit are in violation of the lease. In these instances, the PHA will provide proper notice of a lease violation.

A reinspection will be conducted within 30 days to confirm that the resident has complied with the requirement to abate the problem. Failure to abate the problem or allow for a reinspection is considered a violation of the lease and may result in termination of tenancy in accordance with Chapter 13.

Notices of lease violation will also be issued to residents who purposely disengage the unit’s smoke detector and/or carbo monoxide alarm. Only one warning will be given. A second incidence will result in lease termination.
8-II.C. NSPIRE INSPECTIONS [24 CFR 5.705(c); Notice PIH 2023-16] During an NSPIRE inspection, REAC inspectors will inspect areas and associated items or components that are listed in the regulations as affirmative requirements and those included within the NSPIRE standards. For most properties, the frequency of NSPIRE inspections is determined by the date of the prior inspection and the score received.

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Notice to Residents [Notice PIH 2023-16]
The PHA must provide notice to all residents as described in 24 CFR 5.711 (h) and the lease.

Port Hueneme Housing Authority Policy
The PHA will provide all residents with at least seven days; notice of an NSPIRE inspection. Notice will be provided through multiple communication methods, including by posted notice on each resident’s door and through email where applicable. All materials, notices, and communications to families regarding the inspection will be clearly communicated and provided in a manner that is effective for persons with hearing, visual, and other communication-related disabilities consistent with Section 504 of the Rehabilitation Act (Section 504) and HUD’s Section 504 regulation, and Titles II or III of the Americans with Disabilities Act (ADA) and implementing regulations. 24-Hour Corrections [24 CFR 5.711(c); Notice PIH 2023-16] At the conclusion of the NSPIRE inspection, or at the end of the day on multi-day inspections, HUD provides the PHA with a list of Life-Threatening and Severe deficiencies. The PHA must correct all Life-Threatening and Severe deficiencies within 24 hours, with certification of correction submitted to HUD within two business days of receipt of notification of the deficiency.

If permanent repair will take longer than the allowable time in the relevant standard for the deficiency, the PHA must provide HUD with timeframe for completing permanent repairs and submit evidence that the repair is in progress. Any extension to the allowable time for rectifying the deficiency is allowed only upon HUD approval for good cause.

Port Hueneme Housing Authority Policy
The PHA will correct all Life-Threatening and Severe deficiencies within 24 hours.

Correcting the deficiency means the PHA will resolve or sufficiently address the deficiency in a manner that is no longer poses a severe health or safety risk to residents or the hazard is blocked until permanent repairs can be completed. A correction could include controlling or blocking access to the hazard by performing a temporary relocation of the resident while repairs are made.

While the PHA will complete all repairs expeditiously, if a permanent repair is not possible within 24-hours, the PHA will correct the deficiency by performing an interim repair to remove the health and safety hazard. If the correction is temporary or professional services or materials are unavailable withing 24 hours, the PHA will provide a reasonable timeframe approved by HUD.

The family must allow the PHA access to the unit to make repairs.

Non-emergency Repairs
Under NSPIRE, the PHA must correct Moderate deficiencies within 30 days and Low deficiencies within 60 days, or as otherwise provided in the NSPIRE standards. Repairs should be permanent fixes, unless otherwise approved by HUD in writing. HUD may also prescribe timelines in Corrective Action Plans as defined in 24 CFR 902.3 or Corrective Action Agreements as described in 24 CFR 902.105.

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Port Hueneme Housing Authority Policy
If the PHA is unable to make repairs withing the periods identified in the NSPIRE standards due to circumstances beyond the PHA’s control (e.g., required parts or services are not available, weather conditions, etc.) the PHA will provide HUD with a timeframe for completing permanent repairs and obtain HUD approval. The PHA will also notify the family of an estimated date of completion.

The family must allow the PHA access to the unit to make repairs.

Except for emergencies, management will not enter the dwelling unit to perform repairs where a pet resides unless accompanied for the entire duration of the repair by the pet owner or responsible person designated by the pet owner in accordance with the pet policies in Section 10-II.D.

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HA Agenda 05-05-2025
© Copyright 2023 by Nan McKay & Associates Port Hueneme HA ACOP 7/1/25 Unlimited copies may be made for internal use.

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EXHIBIT 8-1: SMOKE-FREE POLICY
In accordance with HUD regulations, the Housing Authority has adopted these smoke-free policies. The policies were effective as of April 1, 2016.

Due to the increased risk of fire, increased maintenance costs and the known health effects of second hand tobacco smoke, =smoking is prohibited in any area within 25 feet of the property, both private and common, whether enclosed or outdoors.

The policy applies to all tenants, guests, family members and service persons. Based on federal law, medical and recreational marijuana is also prohibited.

Smoking: The term “smoking” means inhaling, exhaling, burning or carrying any lighted cigar, cigarette, pipe, or other prohibited tobacco product in any manner or in any form. Prohibited tobacco products include water pipes or hookahs.

Violation of the smoke-free policy constitutes a violation of the terms of the pubic housing lease.

Consequences of lease violations include termination of tenancy.

VIOLATION PROCEDURE:

Breaking the Smoke-Free Policy is considered a lease violation with the following procedure:
• 1
st Violation Verbal discussion/warning and cessation materials/referral • 2
nd Violation Notice-to-Vacate with option to remedy
• 3
rd Violation 10-Day Notice without option to remedy
Lease violations will be based upon observable evidence, photographs, air detector evidence, and/or written complaints signed by residents or staff to support the act of noncompliance. When enforcing the lease, the PHA will provide due process and allow residents to exercise their right to an informal settlement and hearing.

Electronic Nicotine Delivery Systems (ENDS)
Electronic nicotine delivery systems (ENDS) include e-cigarettes, nicotine inhalers, and vaping devices.

Use of ENDS is not permitted in public housing units, common areas, or in outdoor areas within 25 feet from housing and administrative buildings.

Effective Date
The PHA’s effective date of this smoke-free policy is as follows:

The smoke-free police is effective for all residents, household members, employees, guests, and service persons as of April 1, 2016.

Residents must execute a smoke-free lease addendum as part of the annual lease renewal process. All residents must have been in compliance with the smoke-free policy as of April 1, 2016.

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Chapter 9

REEXAMINATIONS
[24 CFR 960.257, 960.259, 966.4]

INTRODUCTION
The PHA is required to reexamine each family’s income and composition periodically, and to adjust the family’s rent accordingly. PHAs must adopt policies for conducting annual and interim reexaminations that are consistent with regulatory requirements and must conduct reexaminations in accordance with such policies [24 CFR 960.257(c)].

The frequency with which the PHA must reexamine the income and composition of a family depends on whether the family pays income-based rent or flat rent. HUD requires the PHA to offer all families the choice of paying income-based rent or flat rent at least annually. The PHA’s policies for offering families a choice of rents are located in Chapter 6.

This chapter discusses both annual and interim reexaminations.

Part I: Annual Reexaminations for Families Paying Income Based Rents. This part discusses the requirements for annual reexamination of income and family composition.

Full reexaminations are conducted at least once a year for families paying income-based rents.

Part II: Reexaminations for Families Paying Flat Rents. This part contains the PHA’s policies for conducting full reexaminations of family income and composition for families paying flat rents. These full reexaminations are conducted at least once every 3 years. This part also contains the PHA’s policies for conducting annual updates of family composition for flat rent families.

Part III: Interim Reexaminations. This part includes HUD requirements and PHA policies related to when a family may and must report changes that occur between annual reexaminations.

Part IV: Recalculating Tenant Rent. After gathering and verifying required information for an annual or interim reexamination, the PHA must recalculate the tenant rent. While the basic policies that govern these calculations are provided in Chapter 6, this part describes the policies that affect these calculations during a reexamination.

Part V: Non-Interim Reexamination Transactions. This part describes transactions that do not entail changes to the family’s adjusted income.

Policies governing reasonable accommodation, family privacy, required family cooperation, and program abuse, as described elsewhere in this ACOP, apply to annual and interim reexaminations.

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PART I: ANNUAL REEXAMINATIONS FOR FAMILIES PAYING
INCOME-BASED RENTS [24 CFR 960.257]
9-I.A. OVERVIEW
For those families who choose to pay income-based rent, the PHA must conduct a reexamination of income and family composition at least annually [24 CFR 960.257(a)(1)]. For families who choose flat rents, the PHA must conduct a reexamination of family composition at least annually and must conduct a reexamination of family income at least once every 3 years [24 CFR 960.257(a)(2)]. Policies related to the reexamination process for families paying flat rent are located in Part II of this chapter.

For all residents of public housing, whether those residents are paying income-based or flat rents, the PHA must conduct an annual review of community service requirement compliance. This annual reexamination is also a good time to have residents sign consent forms for criminal background checks in case the criminal history of a resident is needed at some point for the purposes of lease enforcement or eviction.

The PHA is required to obtain all of the information necessary to conduct reexaminations. How that information will be collected is left to the discretion of the PHA. Families are required to provide current and accurate information on income, assets, allowances and deductions, family composition and community service compliance as part of the reexamination process [24 CFR 960.259].

Unlike when performing an interim reexamination or at intake, at annual reexamination, the PHA must determine the income of the family for the previous 12-month period, except where the PHA uses a streamlined income determination. Income from assets, however, is always anticipated, irrespective of the income examination type [Notice PIH 2023-27]. PHAs also have the option of using a “safe harbor” income verification from another federal means-tested program to verify gross annual income. Chapter 7 contains the PHA’s policies related to streamline income determinations and the use of safe harbor income verifications.

This part contains the PHA’s policies for conducting annual reexaminations.

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9-I.B. SCHEDULING ANNUAL REEXAMINATIONS
The PHA must establish a policy to ensure that the annual reexamination for each family paying an income-based rent is completed within a 12-month period [24 CFR 960.257(a)(1)].

Port Hueneme Housing Authority Policy
Generally, the PHA will schedule annual reexaminations to coincide with the family's anniversary date. The PHA will begin the annual reexamination process approximately 120 days in advance of the scheduled effective date.

Anniversary date is defined as 12 months from the effective date of the family’s last annual reexamination or, during a family’s first year in the program, from the effective date of the family’s initial examination (admission).

If the family transfers to a new unit, the PHA will perform a new annual reexamination, and the anniversary date will be changed.

The PHA may also schedule an annual reexamination for completion prior to the anniversary date for administrative purposes.

Notification of and Participation in the Annual Reexamination Process The PHA is required to obtain information needed to conduct annual reexaminations. How that information will be collected is left to the discretion of the PHA. However, PHAs should give tenants who were not provided the opportunity to provide contact information at the time of admission the option to complete Form HUD-92006 at this time. The PHA should provide the Agenda Item No. 06 Page 770 of 985 HA Agenda 05-05-2025 © Copyright 2023 Nan McKay & Associates, Inc. Port Hueneme HA ACOP 7/1/2025 Unlimited copies may be made for internal use.

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family with the opportunity to update, change, or remove information from the HUD-92006 at the time of the annual reexamination [Notice PIH 2009-36].

Port Hueneme Housing Authority Policy
Families generally are required to participate in an annual reexamination interview, which must be attended by the head of household, spouse, or cohead. If participation in an in-person interview poses a hardship because of a family member’s disability, the family should contact the PHA to request a reasonable accommodation (See Chapter 2).

Notification of annual reexamination interviews will be sent by first-class mail and will contain the date, time, and location of the interview. In addition, it will inform the family of the information and documentation that must be brought to the interview.

If the family is unable to attend a scheduled interview, the family should contact the PHA in advance of the interview to schedule a new appointment. In all circumstances, if a family does not attend the scheduled interview the PHA will send a second notification with a new interview appointment time.

If a family fails to attend two scheduled interviews without PHA approval, the family will be in violation of their lease and may be terminated in accordance with the policies in Chapter 13.

An advocate, interpreter, or other assistant may assist the family in the interview process.

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9-I.C. CONDUCTING ANNUAL REEXAMINATIONS
The terms of the public housing lease require the family to furnish information regarding income and family composition as may be necessary for the redetermination of rent, eligibility, and the appropriateness of the housing unit [24 CFR 966.4(c)(2)].

Port Hueneme Housing Authority Policy
Families will be asked to bring all required information (as described in the reexamination notice) to the reexamination appointment. The required information will include a PHA-designated reexamination form, an Authorization for the Release of Information/Privacy Act Notice, as well as supporting documentation related to the family’s income, expenses, and family composition.

Any required documents or information that the family is unable to provide at the time of the interview or any stated deadline must be provided within 10 business days of the interview. If the family is unable to obtain the information or materials within the required time frame, the family may request an extension.

If the family does not provide the required documents or information within the required time frame (plus any extensions), the family will be in violation of their lease and may be terminated in accordance with the policies in Chapter 13.

The information provided by the family generally must be verified in accordance with the policies in Chapter 7. Unless the family reports a change, or the agency has reason to believe a change has occurred in information previously reported by the family, certain types of information that are verified at admission typically do not need to be re-verified on an annual basis. These include:
• Legal identity
• Age
• Social security numbers
• A person’s disability status
• Citizenship or immigration status
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Change in Unit Size
Changes in family or household composition may make it appropriate to consider transferring the family to comply with occupancy standards. The PHA may use the results of the annual reexamination to require the family to move to an appropriate size unit [24 CFR 960.257(a)(4)].

Policies related to such transfers are located in Chapter 12.

Criminal Background Checks
Information obtained through criminal background checks may be used for lease enforcement and eviction [24 CFR 5.903(e)(1)(ii)]. Criminal background checks of residents will be conducted in accordance with the policy in Section 13-IV.B.

Port Hueneme Housing Authority Policy
The PHA does not perform annual criminal background checks.

Additionally, HUD recommends that at annual reexaminations PHAs ask whether the tenant, or any member of the tenant’s household, is subject to a lifetime sex offender registration requirement in any state [Notice PIH 2012-28].

Port Hueneme Housing Authority Policy
At the annual reexamination, the PHA will ask whether the tenant, or any member of the tenant’s household, is subject to a lifetime sex offender registration requirement in any state. The PHA will use the Dru Sjodin National Sex Offender database to verify the information provided by the tenant.

If the PHA proposes to terminate assistance based on lifetime sex offender registration information, the PHA must notify the household of the proposed action and must provide the subject of the record and the tenant a copy of the record and an opportunity to dispute the accuracy and relevance of the information prior to termination. [24 CFR 5.903(f) and 5.905(d)]. (See Chapter 13.)
Compliance with Community Service
For families who include nonexempt individuals, the PHA must determine compliance with community service requirements once each 12 months [24 CFR 960.257(a)(3)].

See Chapter 11 for the PHA’s policies governing compliance with the community service requirement.
9-I.D. CALCULATING ANNUAL INCOME AT ANNUAL REEXAMINATION [24 CFR

5.609(c)(2) and Notice PIH 2023-27]
The PHA must determine the income of the family for the previous 12-month period and use this amount as the family income for annual reexaminations, except where the PHA uses a streamlined income determination as indicated in Chapter 7 of this policy. The PHA may also use Safe harbor income determinations dated withing the last 12 months from a means-tested federal pubic assistance program at annual reexamination as outlined in Chapter 7 of this policy.

Except when using streamlined or safe harbor income determinations, in determining the income of the family for the previous 12-month period, any change of income since the family’s last annual reexamination, including those that did not meet the threshold to process an interim Agenda Item No. 06 Page 773 of 985 HA Agenda 05-05-2025 © Copyright 2023 Nan McKay & Associates, Inc. Port Hueneme HA ACOP 7/1/2025 Unlimited copies may be made for internal use.

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reexamination in accordance with PHA policies and 24 CFR 5.657(c) or 960.527(b) must be considered.

Income from assets is always anticipated, irrespective of the income examination type.

A change in income may be a loss of income or the addition of a new source of income.

Changing to a different employer in the prior year does not necessarily constitute a change if the income earned from either employer is substantially the same. The PHA should look at the entirely of the family’s unearned income and earned income from the prior year in which earned income may have been one constant job or many different jobs that start and stop.

Cost of Living Adjustments (COLA) to Social Security income and Social Security disability income are always considered changes to income because the COLA is an adjustment that automatically occurs annually by law. See Chapter 6 for PHA policies on when the COLA is applied and Chapter 7 on streamlined determination of income for inflationary adjustments.

Notice PIH 2023-27 list the following steps to calculate both earned and unearned income at annual reexamination.

Step 1: The PHA determines annual income for the previous 12-month period by reviewing the following information:
• The EIV Income Report pulled within 120 days of the effective date of the annual reexamination;
• The income reported on the most recent HUD-50058; and • The amount of prior-year income reported by the family on the PHA’s annual reexamination paperwork.

Step 2: the PHA takes into consideration any interim reexamination of family income completed since the last annual reexamination.
• If there was an interim reexamination performed, the PHA must use the annual income from the interim to determine the family’s total annual income, provided there are no additional changes.

If the PHA did not perform an interim or there have been changes since the last reexamination; the PHA moves to Step 3.Step 3: If there were changes in annual income not processed by the PHA since the last reexamination, the PHA must use current income. The family will be required to report their income for the prior year and whether there have been permanent changes.

If there are no reported changes to an income source, the PHA may use documentation of prior year income to calculate the annual income. For example, the PHA may use the following documentation:
• EIV + self-certification (wages, Supplemental Security Income (SSI), Social Security, and unemployment)
• Current written third-party verification from the source verifying prior-year income that is dated within 120 days of receipt by the PHA, for example:
− Year-end statements
− Paycheck with year-to-date amounts
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− Tax forms (Form 1040, W2, 1099, etc.)
If there are reported changes by the family or the PHA notes discrepancies between EIV and what the family reports, the PHA must follow the verification hierarchy (described in Chapter 7) to document and verify income. Exhibit 9-1 provides detailed examples of how the PHA calculates income from different sources at annual reexamination using the above method.

Port Hueneme Housing Authority Policy
When income is calculated using a streamlined income determination or Safe Harbor determination from means-tested federal public assistance program in accordance with PHA policies in Chapter 7, the above is not applicable. However, where the family disagrees with the PHA or other agency’s determination of income or the PHA as other reason to use third-party verification in theses circumstances, then the above will apply. 9-I.E. OTHER CONSIDERATIONS
Change in Unit Size
Changes in family or household composition may make it appropriate to consider transferring the family to comply with occupancy standards. The PHA may use the results of the annual reexamination to require the family to move to an appropriate size unit [24 CFR 960.257(a)(4)].

Policies related to such transfers are located in Chapter 12.

Criminal Background Checks
Information obtained through criminal background checks may be use for lease enforcement and eviction [24 CFR 5.903(e)(1)(ii)]. Criminal background checks of residents will be conducted in accordance with the policy in Section 13-IV.B.

Port Hueneme Housing Authority Policy
Each household member age 18 and over will be required to execute a consent form for a criminal history/sex offender certification form as part of the annual reexamination process.

See Chapter 11 for the PHA’s policies governing compliance with the community service requirement.

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9-I.E. EFFECTIVE DATES
As part of the annual reexamination process, the PHA must make appropriate adjustments in the rent after consultation with the family and upon verification of the information [24 CFR 960.257(a)(1)].

Port Hueneme Housing Authority Policy
In general, an increase in the tenant rent that results from an annual reexamination will take effect on the family’s anniversary date, and the family will be notified at least 30 days in advance.

If less than 30 days remain before the scheduled effective date, the increase will take effect on the first of the month following the end of the 30-day notice period.

If the PHA chooses to schedule an annual reexamination for completion prior to the family’s anniversary date for administrative purposes, the effective date will be determined by the PHA, but will always allow for the 30-day notice period.

If the family causes a delay in processing the annual reexamination, increases in the tenant rent will be applied retroactively, to the scheduled effective date of the annual reexamination. The family will be responsible for any underpaid rent and may be offered a repayment agreement in accordance with the policies in Chapter 16.

In general, a decrease in the tenant rent that results from an annual reexamination will take effect on the family’s anniversary date.

If the PHA chooses to schedule an annual reexamination for completion prior to the family’s anniversary date for administrative purposes, the effective date will be determined by the PHA.

If the family causes a delay in processing the annual reexamination, decreases in the tenant rent will be applied prospectively, from the first day of the month following completion of the reexamination processing.

Delays in reexamination processing are considered to be caused by the family if the family fails to provide information requested by the PHA by the date specified, and this delay prevents the PHA from completing the reexamination as scheduled.

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PART II: REEXAMINATIONS FOR FAMILIES PAYING FLAT RENTS
[24 CFR 960.257(2)]
9-II.A. OVERVIEW
HUD requires that the PHA offer all families the choice of paying income-based rent or flat rent at least annually. The PHA’s policies for offering families a choice of rents are located in Chapter 6.

For families who choose flat rents, the PHA must conduct a reexamination of family composition at least annually and must conduct a reexamination of family income at least once every 3 years [24 CFR 960.257(a)(2)]. The PHA is only required to provide the amount of income-based rent the family might pay in those years that the PHA conducts a full reexamination of income and family composition, or upon request of the family after the family submits updated income information [24 CFR 960.253(e)(2)].

As it does for families that pay income-based rent, the PHA must also review compliance with the community service requirement for families with nonexempt individuals.

This part contains the PHA’s policies for conducting reexaminations of families who choose to pay flat rents.
9-II.B. FULL REEXAMINATION OF FAMILY INCOME AND COMPOSITION Frequency of Reexamination
Port Hueneme Housing Authority Policy
For families paying flat rents, the PHA will conduct a full reexamination of family income and composition every year.

For families that are over-income, the PHA will conduct an annual reexamination at 12 and 24 months to verify the family remains over-income. The family will continue to be given a choice between income-based and flat rent at each annua reexamination during the over-income grace period.

If the family is subsequently determined to no longer be over-income:

If the determination is the result of an annual reexamination, the family will be given a choice between income-based or flat rent reexam.

If determination is as a result of an interim reexamination, the PHA will conduct an annual reexamination for the family at their next scheduled annual date.

Families will only be given the choice between income-based and flat rent at annual reexamination.

Reexamination Policies
Port Hueneme Housing Authority Policy
In conducting full reexaminations for families paying flat rents, the PHA will follow the policies used for the annual reexamination of families paying income-based rent as set forth in Sections 9-I.B through 9-I.D above.

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9-II.C. REEXAMINATION OF FAMILY COMPOSITION (“ANNUAL UPDATE”) As noted above, full reexaminations are conducted every 3 years for families paying flat rents. In the years between full reexaminations, regulations require the PHA to conduct a reexamination of family composition (“annual update”) [24 CFR 960.257(a)(2)].

The annual update process is similar to the annual reexamination process, except that the PHA does not collect information about the family’s income and expenses, and the family’s rent is not recalculated following an annual update.

Scheduling
The PHA must establish a policy to ensure that the reexamination of family composition for families choosing to pay the flat rent is completed at least annually [24 CFR 960.257(a)(2)].

Port Hueneme Housing Authority Policy
For families paying flat rents, annual updates will be conducted at the annual recertification exam.

In scheduling the annual update, the PHA will follow the policy used for scheduling the annual reexamination of families paying income-based rent as set forth in Section 9-I.B. above.

Conducting Annual Updates
The terms of the public housing lease require the family to furnish information necessary for the redetermination of rent and family composition [24 CFR 966.4(c)(2)].

Port Hueneme Housing Authority Policy
Notification of the annual recertification and update will be sent by first-class mail and will inform the family of the information and documentation that must be provided to the PHA. The family will have 10 business days to submit the required information to the PHA. If the family is unable to obtain the information or documents within the required time frame, the family may request an extension. The PHA will accept required documentation by mail, by fax, or in person.

If the family’s submission is incomplete, or the family does not submit the information in the required time frame, the PHA will send a second written notice to the family. The family will have 10 business days from the date of the second notice to provide the missing information or documentation to the PHA.

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Change in Unit Size
Changes in family or household composition may make it appropriate to consider transferring the family to comply with occupancy standards. The PHA may use the results of the annual update to require the family to move to an appropriate size unit [24 CFR 960.257(a)(4)]. Policies related to such transfers are located in Chapter 12.

Criminal Background Checks
Information obtained through criminal background checks may be used for lease enforcement and eviction [24 CFR 5.903(e)]. Criminal background checks of residents will be conducted in accordance with the policy in Section 13-IV.B.

Port Hueneme Housing Authority Policy
The PHA does not perform annual criminal background checks.

Compliance with Community Service
For families who include nonexempt individuals, the PHA must determine compliance with community service requirements once each 12 months [24 CFR 960.257(a)(3)].

See Chapter 11 for the PHA’s policies governing compliance with the community service requirement.

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PART III: INTERIM REEXAMINATIONS [24 CFR 960.257; 24 CFR 966.4] 9-III.A. OVERVIEW
Family circumstances may change during the period between annual reexaminations. HUD and PHA policies define the types of information about changes in family circumstances that must be reported, and under what circumstances the PHA must process interim reexaminations to reflect those changes.

A family may request an interim determination of family income or composition because of any changes since the last determination. The PHA must conduct any interim reexamination within a reasonable period of time after the family request or when the PHA becomes aware of a change in the family’s adjusted income that must be processed in accordance with HUD regulations.

What qualifies as a “reasonable time’ may vary based on the amount of time it takes to very information. dkfjsfj but the PHA generally should conduct the interim reexamination lo longer than 30 days after the PHA becomes aware of changes in income.

Notice PIH 2023-27 changes the conditions under which interim reexaminations must be conducted, codifies when interim reexaminations should be processed and made effective, and requires related changes of annual reexaminations and streamlined income determinations. When the PHA determines that an interim reexamination of income is necessary, they must ask the family to report changes in all aspects of adjusted income. 9-III.B. CHANGES IN FAMILY AND HOUSEHOLD COMPOSITION
The PHA must adopt policies prescribing when and under what conditions the family must report changes in family composition. However, due to provisions of the public housing lease, the PHA has limited discretion in this area.

Changes in family or household composition may make it appropriate to consider transferring the family to comply with occupancy standards. Policies related to such transfers are located in Chapter 12.

Port Hueneme Housing Authority Policy
All families, those paying income-based rent as well as flat rent, must report all changes in family and household composition that occur between annual reexaminations (or annual updates).

The PHA will conduct interim reexaminations to account for any changes in household composition that occur between annual reexaminations.

New Family Members Not Requiring Approval
The addition of a family member as a result of birth, adoption, or court-awarded custody does not require PHA approval. However, the family is required to promptly notify the PHA of the addition [24 CFR 966.4(a)(1)(v)].

Port Hueneme Housing Authority Policy
The family must inform the PHA of the birth, adoption, or court-awarded custody of a child within 10 business days.

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New Family and Household Members Requiring Approval
With the exception of children who join the family as a result of birth, adoption, or courtawarded custody, a family must request PHA approval to add a new family member [24 CFR 966.4(a)(1)(v)] or other household member (live-in aide or foster child) [24 CFR 966.4(d)(3)].

The PHA may adopt reasonable policies concerning residence by a foster child or a live-in aide and defining the circumstances in which PHA consent will be given or denied. Under such policies, the factors considered by the PHA may include [24 CFR 966.4(d)(3)(i)]:
• Whether the addition of a new occupant may necessitate a transfer of the family to another unit, and whether such units are available.
• The PHA’s obligation to make reasonable accommodation for persons with disabilities.

Port Hueneme Housing Authority Policy
Families must request PHA approval to add a new family member, live-in aide, foster child, or foster adult. This includes any person not on the lease who is expected to stay in the unit for more than 14 consecutive days or a total of 30 cumulative calendar days during any 12-month period and therefore no longer qualifies as a “guest.” Requests must be made in writing and approved by the PHA prior to the individual moving into the unit.

If adding a person to a household (other than a child by birth, adoption, or court-awarded custody) will require a transfer to a larger size unit (under the transfer policy in Chapter 12), the PHA will approve the addition only if the family can demonstrate that there are medical needs or other extenuating circumstances, including reasonable accommodation, that should be considered by the PHA. Exceptions will be made on a case-by-case basis.

The PHA will not approve the addition of a new family or household member unless the individual meets the PHA’s eligibility criteria (see Chapter 3) and documentation requirements (See Chapter 7, Part II).

If the PHA determines that an individual does not meet the PHA’s eligibility criteria or documentation requirements, the PHA will notify the family in writing of its decision to deny approval of the new family or household member and the reasons for the denial.

The PHA will make its determination within 10 business days of receiving all information required to verify the individual’s eligibility.

Departure of a Family or Household Member
The family must promptly notify the PHA if any household member (including a live-in-aide, foster child, or foster adult) no longer lives in the unit. The PHA must process an interim for all decreases in adjusted income when a family member permanently moves out of the unit.

Port Hueneme Housing Authority Policy
If a family member ceases to reside in the unit, the family must inform the PHA within 10 business days. This requirement also applies to family members who had been considered temporarily absent, who are now permanently absent.

If a live-in aide, foster child, or foster adult ceases to reside in the unit, the family must inform the PHA within 10 business days.

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The PHA will process an interim if the family’s adjusted income will decrease as a result of a family member permanently moving out of the unit.

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9-III.C. CHANGES AFFECTING INCOME OR EXPENSES
Port Hueneme Housing Authority Policy
This section only applies to families paying income-based rent. Families paying flat rent are not required to report changes in income or expenses.

Interim reexaminations for changes in income or expenses may be scheduled either because the PHA has reason to believe that changes in income or expenses may have occurred, or because the family reports a change.

The PHA must estimate the income of the family for the upcoming 12-month period to determine family income for an interim reexamination [24 CFR 5.609(c)(1)]. Policies for projecting income are found in Chapter 6.

Interim Decreases [24 CFR 960.257(b)(2) and Notice PIH 2023-27] A family may request an interim determination of family income for any change since the last determination. However, the PHA may decline to conduct an interim reexamination if the PHA estimates the family’s adjusted income will decrease by an amount that is less than 10 percent of the family’s adjusted income. The PHA may set a lower threshold in PHA policy such as performing an interim for any decreases in adjusted income, although HUD prohibits the PHA from setting a dollar-figure threshold.

However, while the PHA has some discretion, HUD requires that the PHA perform an interim reexamination for a decrease in adjusted income of any amount in two circumstances:
• When there is a decrease in family size attributed to the death of a family member; or • When a family member permanently moves out of the assisted unit during the period since the family’s last reexamination.

In the above circumstances, the PHA must perform an interim reexamination for any decrease in adjusted income.

If the net effect of the changes in adjusted income due to a decrease in family size results in no change or an increase in annual adjusted income, then PHA must process the removal of the household member(s) as a non-interim reexamination transaction without making changes to the family’s annual adjusted income.

Port Hueneme Housing Authority Policy
The PHA will conduct an interim reexamination any time the family’s adjusted income has decrease by any amount.

Interim Increases [24 CFR 960.257(b)(3) and Notice PIH 2023-27] Increases Less than 10 Percent
PHAs must not process interim reexaminations for income increases that result in less than a 10 percent increase in annual adjusted income.

Increases 10 Percent or Greater
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PHAs must conduct an interim reexaminations of family income when the PHA becomes aware that the family’s adjusted income has changed by an amount that the PHA estimates will result in an increase of 10 percent or more in adjusted income, with the following exceptions:
• PHAs may not consider any increases in earned income when estimating or calculating whether the family’s adjusted income has increased, unless the family has previously received an interim reduction during the same reexamination cycle; and • PHAs may choose not to conduct an interim reexamination during the last three months of a certification period if a family reports an increase in income within three months of the next annual reexamination effective date.

When the family previously received an interim reexamination for a decrease to adjusted income during the same annual reexamination cycle, a PHA has the discretion whether to consider a subsequent increase in earned income.

Port Hueneme Housing Authority Policy
When a family reports an increase in their earned income between annual reexaminations, the PHA will not conduct an interim reexamination, regardless of the amount of the increase, and regardless of whether there was a previous decrease since the family’s last annual reexamination.

The PHA will process an interim reexamination for any increases in unearned income of 10 percent or more in adjusted income.

The PHA will not perform an interim reexamination when a family reports an increase in income (whether earned or unearned income) withing three months of their annual reexamination effective date. However, families who delay reporting income increases until the last three months of their certification period may be subject to retroactive rent increases in accordance with the PHA policies in Chapter 15.

Concurrent Increases in Earned and Unearned Income [Notice PIH 2023-27] When the family reports an increase in both earned and unearned income at the same time, the PHA must look at the earned and unearned income changes independently of each other to determine if an interim reexamination is performed. The PHA will only conduct an interim reexamination when the increase independently meets the 10 percent threshold and all other requirements for performing interim reexaminations. For example, if a family reported increases in both earned and unearned income that overall resulted in a 12 percent increase in their adjusted income, but the change in earned income represented a 7 percent increase and the change in unearned income represented a 5 percent increase, the PHA may not perform an interim for either change since neither change meets the 10 percent threshold amount independently. If the change in unearned income met the 10 percent threshold in this case, the PHA would be required to perform an interim. If the change in earned income met the 10 percent threshold in this case, the PHA would refer to PHA policy to determine whether an interim was required.

Cumulative Increase [Notice PIH 2023-27]
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A series of smaller reported increases in adjusted income may cumulatively meet or exceed the 10-percent increase threshold, at which point the PHA must conduct an interim reexamination in accordance with PHA policy.

Public Housing Over-Income Families [24 CFR 960.507(c); Notice PIH 2020-3; and Notice PIH 2023-27]
Regardless of changes in adjusted income, in some circumstances the PHA is required to conduct an interim reexamination to determine whether a family’s income continues to exceed the public housing over-income limit. PHAs are required to conduct income examinations of pubic housing families who have been determined to exceed the over-income limit at specific intervals. When a PHA makes an initial determination that a family is over-income during an interim reexamination, the PHA must conduct a second interim reexamination 12 months after the overincome determination, and then again 12 months after the second over-income determination, unless the family’s income falls below the over-income limit during the 24-month period. This continued evaluation of the family’s over-income status requires the PHA to notify any family that exceeds the over-income limit that they remain over the income limit, even if the family is paying the flat rent [24 CFR 960.253]. An interim income reexamination to determine if a public housing family remains over-income does not reset the family’s normal annual reexamination date.

Family Reporting
The PHA must adopt policies consistent with HUD regulations prescribing when and under what conditions the family must report a change in family income or composition [24 CFR 960.257(b)(5)].

PHA policy may require families to report only changes that the family estimates meet the threshold for an interim reexamination of the PHA may establish policies requiring that families report all changes in income and household composition, and the PHA will subsequently determine if the change requires an interim reexamination [Notice PIH 2023-27].

When the PHA determines that an interim reexamination of income is necessary, they must ask the family to report changes in all aspects of adjusted income. For example, if the family is reporting a decrease in adjusted income that is more than 10 percent, but the family also had a change in assets that would result in a change in income, the change in assets must also be reviewed [Notice PIH 2023-27].

Port Hueneme Housing Authority Policy
The family will be required to report all changes in income regardless of the amount of the change, whether the change is to earned or unearned income, or if the change occurred during the last three months of the certification period. Families must report changes in income within 10 business days of the date the change takes effect. The family may notify the PHA of changes in writing.

Within 10 business days of the family reporting the change, the PHA will determine whether the change will require an interim reexamination.

If the change will not result in an interim reexamination, the PHA will note the information in the tenant file but will not conduct an interim reexamination. the PHA will send the family written notification within 10 business days of making Agenda Item No. 06 Page 786 of 985 HA Agenda 05-05-2025 © Copyright 2023 Nan McKay & Associates, Inc. Port Hueneme HA ACOP 7/1/2025 Unlimited copies may be made for internal use.

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this determination informing the family that the PHA will not conduct an interim reexamination.

If the change will result in an interim reexamination, the PHA will determine the documentation the family will be required to submit based on the type of change reported and PHA policies in Chapter 7. The PHA will ask the family to report changes in all aspects of adjusted income at this time. The family must submit any required information or documents within 10 business days of receiving a request from the PHA. This time frame may be extended for good cause with PHA approval. The PHA will accept required documentation by mail, email, or in person. The PHA will conduct the interim within a reasonable time period based on the amount of time it takes to verify the information.

Generally, the family will not be required to attend an interview for an interim reexamination. However, if the PHA determines that an interview is warranted, the family may be required to attend.
9-III.D. EFFECTIVE DATES
Changes Reported Timely [24 CFR 960.257(b)(6) and Notice PIH 2023-27] If the family reports a change in family income or composition timely in accordance with PHA policies:
• For rent increases, the PHA must provide the family with 30 days advance written notice.

The rent increase is effective the first of the month after the end of that 30-day notice period. • Rent decreases are effective on the first of the month after the date of the actual change leading to the interim reexamination of family income. This means the decrease will be applied retroactively.

Changes Not Reported Timely [24 CFR 960.257(b)(6)(ii) and (iii) and Notice PIH 2023-27] If the family failed to report a change in family income or composition timely in accordance with PHA policies:
• For rent increases, the PHA must implement any resulting rent increases retroactively to the first of the month following the date of the change leading to the interim reexamination of family income.
• For rent decreases, the PHA must implement the change no later than the first rent period following completion of the interim reexamination.

Port Hueneme Housing Authority Policy
In general, when the family fails to report a change in income or family composition timely, and the change would lead to a rent decrease, the PHA will apply the decrease the first of the month following completion of the interim reexamination.

However, the PHA will apply the results of the interim reexamination retroactively where a family’s ability to report a change in income promptly may have been hampered due to extenuating circumstances such as a natural disaster or disruptions to PHA management operations. The PHA will decide to apply decreases on a case-by-case basis.

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HA Agenda 05-05-2025
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HA Agenda 05-05-2025
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PART IV: RECALCULATING TENANT RENT
9-IV.A. OVERVIEW
For those families paying income-based rent, the PHA must recalculate the rent amount based on the income information received during the reexamination process and notify the family of the changes [24 CFR 966.4, 960.257]. While the basic policies that govern these calculations are provided in Chapter 6, this part lays out policies that affect these calculations during a reexamination.
9-IV.B. CHANGES IN UTILITY ALLOWANCES [24 CFR 965.507, 24 CFR 966.4] The tenant rent calculations must reflect any changes in the PHA’s utility allowance schedule [24 CFR 960.253(c)(3)]. Chapter 16 discusses how utility allowance schedules are established.

Port Hueneme Housing Authority Policy
Unless the PHA is required to revise utility allowances retroactively, revised utility allowances will be applied to a family’s rent calculations at the first annual reexamination after the allowance is adopted.
9-IV.C. NOTIFICATION OF NEW TENANT RENT
The public housing lease requires the PHA to give the tenant written notice stating any change in the amount of tenant rent, and when the change is effective [24 CFR 966.4(b)(1)(ii)].

When the PHA redetermines the amount of rent (Total Tenant Payment or Tenant Rent) payable by the tenant, not including determination of the PHA’s schedule of Utility Allowances for families in the PHA’s Public Housing Program, or determines that the tenant must transfer to another unit based on family composition, the PHA must notify the tenant that the tenant may ask for an explanation stating the specific grounds of the PHA determination, and that if the tenant does not agree with the determination, the tenant shall have the right to request a hearing under the PHA’s grievance procedure [24 CFR 966.4(c)(4)].

Port Hueneme Housing Authority Policy
The notice to the family will include the annual and adjusted income amounts that were used to calculate the tenant rent.

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9-IV.D. DISCREPANCIES
During an annual or interim reexamination, the PHA may discover that information previously reported by the family was in error, or that the family intentionally misrepresented information.

In addition, the PHA may discover errors made by the PHA. When errors resulting in the overpayment or underpayment of rent are discovered, corrections will be made in accordance with the policies in Chapter 15.

PART V: NON-INTERIM REEXAMINATION TRANSACTIONS [Notice PIH 2023-27] Families may experience changes within the household that do not trigger an interim reexamination under PHA policy and HUD regulations but which HUD still requires the PHA to report via form HUD-50058. These are known as non-interim reexamination transactions. In these cases, PHAs will submit a separate, new action code on form HUD-50058. The following is a list of non-interim reexamination transactions:
• Adding or removing a hardship exemption for the child care expense deduction; • Updating or removing the phase-in hardship relief for the health and medical care expense deduction and/or reasonable attendant care and auxiliary apparatus expense deduction (the phased-in relief will begin at an eligible family’s first annual or interim reexamination, whichever is sooner, after January 1, 2024);
• Adding or removing general hardship relief for the health and medical care expense deduction and/or reasonable attendant care and auxiliary apparatus expense deduction; • Adding or removing a minimum rent hardship;
• Adding or removing a non-family member (i.e., live-in aide, foster child, foster adult); • Adding a family member and the increase in adjusted income does not trigger an interim reexamination under the final rule;
• Removing a family member and the increase in adjusted income does not trigger an interim reexamination under the final rule;
• Adding/updating a family or household member’s Social Security number; and • Updating a family member’s citizenship status from eligible to ineligible or vice versa, resulting in a change to the family’s rent and/or utility reimbursement, if applicable (i.e., family begins receiving prorated assistance or previously prorated assistance becomes full assistance), or updating the prorated rent calculation due to the addition or removal of family members in household with an ineligible noncitizen(s).

PHAs must make all other changes to assets, income, and deductions at the next annual or interim reexamination of income, whichever is sooner.

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PETS
[24 CFR 5, Subpart C; 24 CFR 960, Subpart G]

INTRODUCTION
This chapter explains the PHA's policies on the keeping of pets and describes any criteria or standards pertaining to the policies. The rules adopted are reasonably related to the legitimate interest of the PHA to provide a decent, safe and sanitary living environment for all tenants, and to protect and preserve the physical condition of the property, as well as the financial interest of the PHA.

The chapter is organized as follows:

Part I: Assistance Animals. This part explains the difference between assistance animals, including service and support animals, and pets, and contains policies related to the designation of an assistance animal as well as their care and handling.

Part II: Pet policies for all developments. This part includes pet policies that are common to both elderly/disabled developments and general occupancy developments.

Part III: Pet deposits and fees for elderly/disabled developments. This part contains policies for pet deposits and fees that are applicable to elderly/disabled developments.

Part IV: Pet deposits and fees for general occupancy developments. This part contains policies for pet deposits and fees that are applicable to general occupancy developments.

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[Section 504; Fair Housing Act (42 U.S.C.); 24 CFR 5.303; 24 CFR 960.705; Notice FHEO 2020-01]
10-I.A. OVERVIEW
This part discusses situations under which permission for an assistance animal, including service and support animals, may be denied, and also establishes standards for the care of assistance animals.

Notice FHEO 2020 was published January 28, 2020. The notice provides guidance to help PHAs and other housing providers distinguish between a person with a non-obvious disability who has a legitimate need for an assistance animal and a person without a disability who simply wants to have a pet or avoid the costs and limitations imposed by the PHA’s pet policies. FHEO 2021-01 makes clear that the notice is guidance and a tool for PHAs and other housing providers to use at their discretion and provides a set of best practices for addressing requests for assistance animals.

The guidance in FHEO 2020-01 should be read together with HUD’s regulations prohibiting discrimination under the Fair Housing Act (FHA) and the HUD/Department of Justice (DOJ) Joint Statement on Reasonable Accommodation under the Fair Housing Act. Housing providers may also be subject to the Americans with Disabilities Act (ADA) and should therefore refer also to DOJ’s regulations implementing Titles II and III of the ADA at 28 CFR Parts 35 and 36, in addition to DOJ’s other guidance on assistance animals.

There are two types of assistance animals: (1) service animals, and (2) other animals that do work, perform tasks, provide assistance, and/or provide therapeutic emotional support for individuals with disabilities (i.e., support animals).

Assistance animals, including service and support animals, are pets, and thus, are not subject to the PHA’s pet policies described in Parts II through IV of this chapter [24 CFR 5.303; 960.705; Notice FHEO 2020-01].

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Notice FHEO 2020-01 states PHAs should initially follow the Department of Justice (DOJ) analysis to assessing whether an animal is a service animal under the Americans with Disabilities Act (ADA). Under the ADA, a service animal means any dog that is individually trained to do work or perform task for the benefit of an individua with a disability, including a physical, sensory, psychiatric, intellectual, or other mental disability. Other species of animals, whether wild or domestic, trained or untrained, are not service animals for the purposes of this definition.

The work or tasks performed by a service animal must be directly related to the individual’s disability.

As best practice, housing providers may use the following questions to help them determine if an animal is a service animal under the ADA:
• Is the animal a dog? If not, the animal is not a service animal but may be another type of assistance animal for which accommodation is needed (support animal). • Is it readily apparent that the dog is trained to do work or perform tasks for the benefit of the individual with a disability? If yes, further inquiries are inappropriate because the animal is a service animal. If not, it is advisable that the PHA limit its inquiries to the following two questions: (1) Is the animal required because of the disability? And (2) What work or task has the animal been trained to perform?
if the answer to question (1) is “yes” and work or a task is identified in response to questions (2), grant the requested accommodation if otherwise reasonable. If the answer to either question is “no,” the animal does not qualify as a service animal but may be a support animal.

A service animal must be permitted in all areas of the facility where members of the public are allowed.

Support Animals (Assistance Animals other than Service Animals) If the animal does not qualify as a service animal-, the PHA must next determine whether the animal would qualify as a support animal (other type of assistance animal). If the individual has indeed requested a reasonable accommodation to get or keep an animal in connection with a physical or mental impairment or disability, the PHA may use the following questions to help them assess whether to grant the accommodation in accordance with the policies outlined in Chapter 2 (the PHA is not required to grant a reasonable accommodation that has not been requested):
• Does the person have an observable disability or does the PHA already have information giving them reason to believe that the person has a disability? If not, has the person requesting the accommodation provided information that reasonably supports that the person seeking the accommodation has a disability?
• If the person has an observable disability, the PHA already has information giving them reason to believe the person has a disability, or the person has provided information supporting that they have a disability, then has the person provided information that Agenda Item No. 06 Page 796 of 985 HA Agenda 05-05-2025 20© Copyright 2023 Nan McKay & Associates PortHueneme HA ACOP 7/1/25 Unlimited copies may be made for internal use Page 10-5 reasonably support that the animal does work, performs tasks, provides assistance, and/or provides therapeutic emotional support with respect to the individual’s disability? • If yes, is the animal commonly kept in households? An animal commonly kept in households would be a dog, cat, small bird, rabbit, hamster, gerbil, other rodent, fish, turtle, or other small, domesticated animal that is traditionally kept in the home for pleasure rather than for commercial purposes. For purposes of this assessment, reptiles (other than turtles), barnyard animals, monkeys, kangaroos, and other non-domesticated animals are not considered common household animals.

If the individual is requesting to keep a unique animal not commonly kept in households, then the requestor has the substantial burden of demonstrating a disability-related therapeutic need for the specific animal or the specific type of animal. Such individuals are encouraged to submit documentation form a health care professional.

General Consideration
A person with a disability is not automatically entitled to have an assistance animal. Reasonable accommodation requires that there is a relationship between the person’s disability and their need for the animal [PH Occ GB, p. 179].

Before denying a reasonable accommodation request due to lack of information confirming an individual’s disability or disability-related need for an animal, the PHA is encouraged to engage in a good-faith dialog with the requestor called the “interactive process” [FHEO2020-01].

A PHA may not refuse to allow a person with a disability to have an assistance animal merely because the animal does not have formal training. Some, but not all, animals that assist persons with disabilities are professionally trained. Other assistance animals are trained by the owners themselves and, in some cases, no special training is required. The question is whether or not the animal performs the assistance or provides the benefit needed by the person with the disability [PH Occ GB, p. 178].

A PHA’s refusal to permit persons with a disability to use and live with an assistance animal that is needed to assist them, would violate Section 504 of the Rehabilitation Act and the Fair Housing Act unless [PH Occ GB, p. 179]:
• There is reliable objective evidence that the animal poses a direct threat to the health or safety of others that cannot be reduced or eliminated by a reasonable accommodation • There is reliable objective evidence that the animal would cause substantial physical damage to the property of others
The Fair Housing Act does not require a dwelling to be made available to an individual whose tenancy would constitute a direct threat to the health or safety of other individuals or would result in the substantial physical damage to the property of others. A PHA may therefore refuse a reasonable accommodation for an assistance animal if the specific animal poses a direct threat that cannot be eliminated or reduced to an acceptable level through the actions the individual takes to maintain or control the animal (e.g., keeping the animal in a security enclosure).

While more request for reasonable accommodations involve one animal, requests sometimes involve more than one animal (for example, a person as a disability-related need for both animals, or two people living together each have a disability-related need for a separate Agenda Item No. 06 Page 797 of 985 HA Agenda 05-05-2025 20© Copyright 2023 Nan McKay & Associates PortHueneme HA ACOP 7/1/25 Unlimited copies may be made for internal use Page 10-6 assistance animal). The decision-making process in Notice FHEO 2020-01 should be used in accordance with the reasonable accommodation policies in Chapter 2 for all requests for exceptions or modifications to the PHA’s rules, policies, practices, and procedures so that persons with disabilities can have assistance animals in the housing where they reside.

PHAs have the authority to regulate service animals and assistance animals under applicable federal, state, and local law [24 CFR 5.303(b)(3); 960.705(b)(3)].

Port Hueneme HA Policy
For an animal to be excluded from the pet policy and be considered a service animal, it must be a trained dog, and there must be a person with disabilities in the household who requires the dog’s services.

For an animal to be excluded from the pet policy and be considered an support animal, there must be a person with disabilities in the household, there must be a disabilityrelated need for the animal, and the family must request and the PHA approve a reasonable accommodation in accordance with the criteria outlined in Notice FHEO 2020-01 and the policies contained in Chapter 2.
10-I.C. CARE AND HANDLING
HUD regulations do not affect any authority a PHA may have to regulate assistance animals, including services animals, under federal, state, and local law [24 CFR 5.303; 24 CFR 960.705].

Port Hueneme HA Policy
Residents are responsible for feeding, maintaining, providing veterinary care, and controlling their assistance animals. A resident may do this on their own or with the assistance of family, friends, volunteers, or service providers.

Residents must care for assistance animals in a manner that complies with state and local laws, including anti-cruelty laws.

Residents must ensure that assistance animals do not pose a direct threat to the health or safety of others, or cause substantial physical damage to the development, dwelling unit, or property of other residents.

When a resident’s care or handling of an assistance animal violates these policies, the PHA will consider whether the violation could be reduced or eliminated by a reasonable accommodation. If the PHA determines that no such accommodation can be made, the PHA may withdraw the approval of a particular assistance animal.

Agenda Item No. 06 Page 798 of 985 HA Agenda 05-05-2025 20© Copyright 2023 Nan McKay & Associates PortHueneme HA ACOP 7/1/25 Unlimited copies may be made for internal use Page 10-7 PART II: PET POLICIES FOR ALL DEVELOPMENTS
[24 CFR 5, Subpart C; 24 CFR 960, Subpart G]
10-II.A. OVERVIEW
The purpose of a pet policy is to establish clear guidelines for ownership of pets and to ensure that no applicant or resident is discriminated against regarding admission or continued occupancy because of ownership of pets. It also establishes reasonable rules governing the keeping of common household pets. This part contains pet policies that apply to all developments.
10-II.B. MANAGEMENT APPROVAL OF PETS
Registration of Pets
PHAs may require registration of the pet with the PHA [24 CFR 960.707(b)(5)].

Port Hueneme HA Policy
Pets must be registered with the PHA before they are brought onto the premises.

Registration includes documentation signed by a licensed veterinarian or state/local authority that the pet has received all vaccines required by state or local law, and that the pet has no communicable disease(s) and is pest-free. This registration must be renewed annually and will be coordinated with the annual reexamination date.

Pets will not be approved to reside in a unit until completion of the registration requirements.

Agenda Item No. 06 Page 799 of 985 HA Agenda 05-05-2025 20© Copyright 2023 Nan McKay & Associates PortHueneme HA ACOP 7/1/25 Unlimited copies may be made for internal use Page 10-8 Refusal to Register Pets
Port Hueneme HA Policy
The PHA will refuse to register a pet if:

The pet is not a common household pet as defined in Section 10-II.C. below Keeping the pet would violate any pet restrictions listed in this policy The pet owner fails to provide complete pet registration information, or fails to update the registration annually
The applicant has previously been charged with animal cruelty under state or local law; or has been evicted, had to relinquish a pet or been prohibited from future pet ownership due to pet rule violations or a court order
The PHA reasonably determines that the pet owner is unable to keep the pet in compliance with the pet rules and other lease obligations. The pet's temperament and behavior may be considered as a factor in determining the pet owner's ability to comply with provisions of the lease.

If the PHA refuses to register a pet, a written notification will be sent to the pet owner within 10 business days of the PHA’s decision. The notice will state the reason for refusing to register the pet and will inform the family of their right to appeal the decision in accordance with the PHA’s grievance procedures.

Pet Agreement
Port Hueneme HA Policy
Residents who have been approved to have a pet must enter into a pet agreement with the PHA, or the approval of the pet will be withdrawn.

The pet agreement is the resident’s certification that he or she has received a copy of the PHA’s pet policy and applicable house rules, that they have read the policies and/or rules, understands them, and agrees to comply with them.

The resident further certifies by signing the pet agreement that they understand that noncompliance with the PHA’s pet policy and applicable house rules may result in the withdrawal of PHA approval of the pet or termination of tenancy.

Agenda Item No. 06 Page 800 of 985 HA Agenda 05-05-2025 20© Copyright 2023 Nan McKay & Associates PortHueneme HA ACOP 7/1/25 Unlimited copies may be made for internal use Page 10-9 10-II.C. STANDARDS FOR PETS [24 CFR 5.318; 960.707(b)]
PHAs may establish reasonable requirements related to pet ownership including, but not limited to:
• Limitations on the number of animals in a unit, based on unit size • Prohibitions on types of animals that the PHA classifies as dangerous, provided that such classifications are consistent with applicable state and local law • Prohibitions on individual animals, based on certain factors, including the size and weight of the animal
• Requiring pet owners to have their pets spayed or neutered Cat declawing is not a requirement or condition of pet ownership in public housing and HUD encourages PHAs to refrain from engaging in this practice [New PH OCC GB, Pet Ownership, p.9]
PHAs may not require pet owners to have any pet’s vocal cords removed.

PHAs may not require pet owners to obtain or carry liability insurance.

Definition of “Common Household Pet”
There is no regulatory definition of common household pet for public housing programs, although the regulations for pet ownership in both elderly/disabled and general occupancy developments use the term. The regulations for pet ownership in elderly/disabled developments expressly authorize PHAs to define the term [24 CFR 5.306(2)].

Port Hueneme HA Policy
Common household pet means a domesticated animal, such as a dog, cat, bird, or fish that is traditionally recognized as a companion animal and is kept in the home for pleasure rather than commercial purposes.

The following animals are not considered common household pets:

Reptiles
Rodents
Insects
Arachnids
Wild animals or feral animals
Pot-bellied pigs
Animals used for commercial breeding
Pit bulls
Agenda Item No. 06 Page 801 of 985 HA Agenda 05-05-2025 20© Copyright 2023 Nan McKay & Associates PortHueneme HA ACOP 7/1/25 Unlimited copies may be made for internal use Page 10-10 Pet Restrictions
Port Hueneme HA Policy
The following animals are not permitted:

Any animal whose adult weight will exceed 20 pounds
Dogs of the pit bull, rottweiler, chow, or boxer breeds Ferrets or other animals whose natural protective mechanisms pose a risk to small children of serious bites or lacerations
Any animal not permitted under state or local law or code Number of Pets
Port Hueneme HA Policy
Residents may own a maximum of 2 pets, only 1 of which may be a dog.

In the case of fish, residents may keep no more than can be maintained in a safe and healthy manner in a tank holding up to 10 gallons. Such a tank or aquarium will be counted as 1 pet.

Other Requirements
Port Hueneme HA Policy
Pets must be spayed or neutered before being brought on the premises. Pets must be licensed in accordance with state or local law. Residents must provide proof of licensing at the time of registration and annually, in conjunction with the resident’s annual reexamination.

Agenda Item No. 06 Page 802 of 985 HA Agenda 05-05-2025 20© Copyright 2023 Nan McKay & Associates PortHueneme HA ACOP 7/1/25 Unlimited copies may be made for internal use Page 10-11 10-II.D. PET RULES
Pet owners must maintain pets responsibly, in accordance with PHA policies, and in compliance with applicable state and local public health, animal control, and animal cruelty laws and regulations [24 CFR 5.315; 24 CFR 960.707(a)].

Pet Area Restrictions
Port Hueneme HA Policy
Pets must be maintained within the resident's unit. When outside of the unit (within the building or on the grounds) dogs and cats must be kept on a leash or carried. They must be under the control of the resident or other responsible individual at all times.

Pets other than dogs or cats must be kept in a cage or carrier when outside of the unit.

Pets are not permitted in common areas including lobbies, community rooms and laundry areas except for those common areas which are entrances to and exits from the building.

Pet owners are not permitted to exercise pets or permit pets to deposit waste on project premises outside of the areas designated for such purposes.

Designated Pet/No-Pet Areas [24 CFR 5.318(g), PH Occ GB, p. 182] PHAs may designate buildings, floors of buildings, or sections of buildings as no-pet areas where pets generally may not be permitted. Pet rules may also designate buildings, floors of building, or sections of building for residency by pet-owning tenants.

PHAs may direct initial tenant moves as may be necessary to establish pet and no-pet areas. The PHA may not refuse to admit, or delay admission of, an applicant on the grounds that the applicant’s admission would violate a pet or no-pet area. The PHA may adjust the pet and no-pet areas or may direct such additional moves as may be necessary to accommodate such applicants for tenancy or to meet the changing needs of the existing tenants.

PHAs may not designate an entire development as a no-pet area, since regulations permit residents to own pets.

Port Hueneme HA Policy
With the exception of common areas as described in the previous policy, the PHA has not designated any buildings, floors of buildings, or sections of buildings as no-pet areas. In addition, the PHA has not designated any buildings, floors of buildings, or sections of buildings for residency of pet-owning tenants.

Agenda Item No. 06 Page 803 of 985 HA Agenda 05-05-2025 20© Copyright 2023 Nan McKay & Associates PortHueneme HA ACOP 7/1/25 Unlimited copies may be made for internal use Page 10-12 Cleanliness
Port Hueneme HA Policy
The pet owner shall be responsible for the removal of waste from the exercise area by placing it in a sealed plastic bag and disposing of it in a container provided by the PHA.

The pet owner shall take adequate precautions to eliminate any pet odors within or around the unit and to maintain the unit in a sanitary condition at all times.

Litter box requirements:

Pet owners must promptly dispose of waste from litter boxes and must maintain litter boxes in a sanitary manner.

Litter shall not be disposed of by being flushed through a toilet.

Litter boxes shall be kept inside the resident's dwelling unit.

Alterations to Unit
Port Hueneme HA Policy
Pet owners shall not alter their unit, patio, premises or common areas to create an enclosure for any animal.

Installation of pet doors is prohibited.

Noise
Port Hueneme HA Policy
Pet owners must agree to control the noise of pets so that such noise does not constitute a nuisance to other residents or interrupt their peaceful enjoyment of their housing unit or premises. This includes, but is not limited to loud or continuous barking, howling, whining, biting, scratching, chirping, or other such activities.

Pet Care
Port Hueneme HA Policy
Each pet owner shall be responsible for adequate care, nutrition, exercise and medical attention for their pet.

Each pet owner shall be responsible for appropriately training and caring for their pet to ensure that the pet is not a nuisance or danger to other residents and does not damage PHA property.

No animals may be tethered or chained inside or outside the dwelling unit at any time.

Agenda Item No. 06 Page 804 of 985 HA Agenda 05-05-2025 20© Copyright 2023 Nan McKay & Associates PortHueneme HA ACOP 7/1/25 Unlimited copies may be made for internal use Page 10-13 Responsible Parties
Port Hueneme HA Policy
The pet owner will be required to designate at least one responsible person for the care of the pet if the health or safety of the pet is threatened by the death or incapacity of the pet owner, or by other factors that render the pet owner unable to care for the pet. If the designated person is unable to care for the pet, the local animal control agency will be contacted to remove the pet.

A resident who cares for another resident's pet must notify the PHA and sign a statement that they agree to abide by all of the pet rules.

Inspection and Repairs
Port Hueneme HA Policy
Except for emergencies, management may not enter the dwelling unit for performance of repairs or inspections where a pet resides unless accompanied for the entire duration of the inspection or repair by the pet owner or responsible person designated by the pet owner. The pet must be held under physical restrain by the pet owner or responsible person until management has completed its tasks. Any delays or interruptions suffered y management in the inspection, maintenance, and upkeep of the premises due to the presence of a pet may be cause for lease termination.

Pets Temporarily on the Premises
Port Hueneme HA Policy
Pets that are not owned by a tenant are not allowed on the premises. Residents are prohibited from feeding or harboring stray animals.

This rule does not apply to visiting pet programs sponsored by a humane society or other non-profit organizations, and approved by the PHA.

Pet Rule Violations
Port Hueneme HA Policy
All complaints of cruelty and all dog bites will be referred to animal control or an applicable agency for investigation and enforcement.

If a determination is made on objective facts supported by written statements, that a resident/pet owner has violated the pet rules, written notice will be served.

The notice will contain a brief statement of the factual basis for the determination and the pet rule(s) that were violated. The notice will also state:

That the pet owner has 10 business days from the effective date of the service of notice to correct the violation or make written request for a meeting to discuss the violation
That the pet owner is entitled to be accompanied by another person of their choice at the meeting
Agenda Item No. 06 Page 805 of 985 HA Agenda 05-05-2025 20© Copyright 2023 Nan McKay & Associates PortHueneme HA ACOP 7/1/25 Unlimited copies may be made for internal use Page 10-14 That the pet owner's failure to correct the violation, request a meeting, or appear at a requested meeting may result in initiation of procedures to remove the pet, or to terminate the pet owner's tenancy
Agenda Item No. 06 Page 806 of 985 HA Agenda 05-05-2025 20© Copyright 2023 Nan McKay & Associates PortHueneme HA ACOP 7/1/25 Unlimited copies may be made for internal use Page 10-15 Notice for Pet Removal
Port Hueneme HA Policy
If the pet owner and the PHA are unable to resolve the violation at the meeting or the pet owner fails to correct the violation in the time period allotted by the PHA, the PHA may serve notice to remove the pet.

The notice will contain:

A brief statement of the factual basis for the PHA's determination of the pet rule that has been violated
The requirement that the resident /pet owner must remove the pet within 30 calendar days of the notice
A statement that failure to remove the pet may result in the initiation of termination of tenancy procedures
Pet Removal
Port Hueneme HA Policy
If the death or incapacity of the pet owner threatens the health or safety of the pet, or other factors occur that render the owner unable to care for the pet, the situation will be reported to the responsible party designated by the pet owner.

If the responsible party is unwilling or unable to care for the pet, or if the PHA after reasonable efforts cannot contact the responsible party, the PHA may contact the appropriate state or local agency and request the removal of the pet.

Termination of Tenancy
Port Hueneme HA Policy
The PHA may initiate procedures for termination of tenancy based on a pet rule violation if:

The pet owner has failed to remove the pet or correct a pet rule violation within the time period specified
The pet rule violation is sufficient to begin procedures to terminate tenancy under terms of the lease
Agenda Item No. 06 Page 807 of 985 HA Agenda 05-05-2025 20© Copyright 2023 Nan McKay & Associates PortHueneme HA ACOP 7/1/25 Unlimited copies may be made for internal use Page 10-16 Emergencies
Port Hueneme HA Policy
The PHA will take all necessary steps to ensure that pets that become vicious, display symptoms of severe illness, or demonstrate behavior that constitutes an immediate threat to the health or safety of others, are immediately removed from the premises by referring the situation to the appropriate state or local entity authorized to remove such animals.

If it is necessary for the PHA to place the pet in a shelter facility, the cost will be the responsibility of the pet owner.

If the pet is removed as a result of any aggressive act on the part of the pet, the pet will not be allowed back on the premises.

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Agenda Item No. 06 Page 809 of 985 HA Agenda 05-05-2025 20© Copyright 2023 Nan McKay & Associates PortHueneme HA ACOP 7/1/25 Unlimited copies may be made for internal use Page 10-18 PART III: PET DEPOSITS AND FEES IN ELDERLY/DISABLED

DEVELOPMENTS
10-III.A. OVERVIEW
This part describes the PHA’s policies for pet deposits and fees in elderly, disabled and mixed population developments. Policies governing deposits and fees in general occupancy developments are described in Part IV.
10-III.B. PET DEPOSITS
Payment of Deposit
The PHA may require tenants who own or keep pets in their units to pay a refundable pet deposit. This deposit is in addition to any other financial obligation generally imposed on tenants of the project [24 CFR 5.318(d)(1)].

The maximum amount of pet deposit that may be charged by a PHA on a per dwelling unit basis, is the higher of the total tenant payment (TTP) or such reasonable fixed amount as the PHA may require. The PHA may permit gradual accumulation of the pet deposit by the pet owner [24 CFR

5.318(d)(3)].

The pet deposit is not part of the rent payable by the resident [24 CFR 5.318(d)(5)].

Port Hueneme HA Policy
Pet owners are required to pay a pet deposit in addition to any other required deposits.

The amount of the pet deposit is $100.00 and must be paid in full before the pet is brought on the premises.

Refund of Deposit [24 CFR 5.318(d)(1)]
The PHA may use the pet deposit only to pay reasonable expenses directly attributable to the presence of the pet, including (but not limited to) the costs of repairs and replacements to, and fumigation of, the tenant’s dwelling unit. The PHA must refund the unused portion of the pet deposit to the tenant within a reasonable time after the tenant moves from the project or no longer owns or keeps a pet in the unit.

Port Hueneme HA Policy
The PHA will refund the pet deposit to the resident, less the costs of any damages caused by the pet to the dwelling unit, within 21 days of move-out or removal of the pet from the unit.

The resident will be billed for any amount that exceeds the pet deposit.

The PHA will provide the resident with a written list of any charges against the pet deposit within 10 business days of the move-out inspection. If the resident disagrees with the amount charged to the pet deposit, the PHA will provide a meeting to discuss the charges.

Agenda Item No. 06 Page 810 of 985 HA Agenda 05-05-2025 20© Copyright 2023 Nan McKay & Associates PortHueneme HA ACOP 7/1/25 Unlimited copies may be made for internal use Page 10-19 10-III.C. OTHER CHARGES
Pet-Related Damages During Occupancy
Port Hueneme HA Policy
All reasonable expenses incurred by the PHA as a result of damages directly attributable to the presence of the pet in the project will be the responsibility of the resident, including:

The cost of repairs and replacements to the resident's dwelling unit Fumigation of the dwelling unit
Repairs to common areas of the project
The expense of flea elimination shall also be the responsibility of the resident.

If the resident is in occupancy when such costs occur, the resident shall be billed for such costs in accordance with the policies in Section 8-I.G, Maintenance and Damage Charges. Pet deposits will not be applied to the costs of pet-related damages during occupancy.

Charges for pet-related damage are not part of rent payable by the resident.

Pet Waste Removal Charge
The regulations do not address the PHA’s ability to impose charges for house pet rule violations.

However, charges for violation of PHA pet rules may be treated like charges for other violations of the lease and PHA tenancy rules.

Port Hueneme HA Policy
A separate pet waste removal charge of $10.00 per occurrence will be assessed against pet owners who fail to remove pet waste in accordance with this policy.

Notices of pet waste removal charges will be in accordance with requirements regarding notices of adverse action. Charges are due and payable 14 calendar days after billing. If the family requests a grievance hearing within the required timeframe, the PHA may not take action for nonpayment of the charge until the conclusion of the grievance process.

Charges for pet waste removal are not part of rent payable by the resident.

Agenda Item No. 06 Page 811 of 985 HA Agenda 05-05-2025 20© Copyright 2023 Nan McKay & Associates PortHueneme HA ACOP 7/1/25 Unlimited copies may be made for internal use Page 10-20 PART IV: PET DEPOSITS AND FEES IN GENERAL OCCUPANCY

DEVELOPMENTS
10-IV.A. OVERVIEW
This part describes the PHA’s policies for pet deposits and fees for those who reside in general occupancy developments.
10-IV.B. PET DEPOSITS
A PHA may require a refundable pet deposit to cover additional costs attributable to the pet and not otherwise covered [24 CFR 960.707(b)(1)].

A PHA that requires a resident to pay a pet deposit must place the deposit in an account of the type required under applicable State or local law for pet deposits, or if there are no such requirements, for rental security deposits, if applicable. The PHA must comply with such laws as to retention of the deposit, interest, and return of the deposit to the resident, and any other applicable requirements [24 CFR 960.707(d)].

Payment of Deposit
Port Hueneme HA Policy
Pet owners are required to pay a pet deposit of $300 in addition to any other required deposits. The deposit must be paid in full before the pet is brought on the premises.

The pet deposit is not part of rent payable by the resident.

Refund of Deposit
Port Hueneme HA Policy
The PHA will refund the pet deposit to the resident, less the costs of any damages caused by the pet to the dwelling unit, within 21 days of move-out or removal of the pet from the unit.

The resident will be billed for any amount that exceeds the pet deposit.

Agenda Item No. 06 Page 812 of 985 HA Agenda 05-05-2025 20© Copyright 2023 Nan McKay & Associates PortHueneme HA ACOP 7/1/25 Unlimited copies may be made for internal use Page 10-21 10-IV.C. NON-REFUNDABLE NOMINAL PET FEE
PHAs may require payment of a non-refundable nominal pet fee to cover the reasonable operating costs to the development relating to the presence of pets [24 CFR 960.707(b)(1)].

Port Hueneme HA Policy
The PHA requires pet owners to pay a non-refundable nominal pet fee of $5 per month.

This fee is intended to cover the reasonable operating costs to the project relating to the presence of pets. Reasonable operating costs to the project relating to the presence of pets include, but are not limited to:

Landscaping costs
Pest control costs
Insurance costs
Clean-up costs
The pet fee of $5.00 will be billed on a monthly basis, and payment will be due 14 calendar days after billing.

Charges for the non-refundable pet fee are not part of rent payable by the resident. 10-IV.D. OTHER CHARGES
Pet-Related Damages During Occupancy
Port Hueneme HA Policy
All reasonable expenses incurred by the PHA as a result of damages directly attributable to the presence of the pet in the project will be the responsibility of the resident, including:

Charges for pet-related damage are not part of rent payable by the resident.

Pet Waste Removal Charge
The regulations do not address the PHA’s ability to impose charges for house pet rule violations.

However, charges for violation of PHA pet rules may be treated like charges for other violations of the lease and PHA tenancy rules.

Port Hueneme HA Policy
Agenda Item No. 06 Page 813 of 985 HA Agenda 05-05-2025 20© Copyright 2023 Nan McKay & Associates PortHueneme HA ACOP 7/1/25 Unlimited copies may be made for internal use Page 10-22 A separate pet waste removal charge of $10.00 per occurrence will be assessed against pet owners who fail to remove pet waste in accordance with this policy.

Such charges will be due and payable 14 calendar days after billing.

Charges for pet waste removal are not part of rent payable by the resident.

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Agenda Item No. 06 Page 815 of 985 HA Agenda 05-05-2025 © Copyright 2022 by Nan McKay & Associates Port Hueneme HA ACOP 7/1/2025 Unlimited copies may be made for internal use.

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Port Hueneme City CouncilMay 5, 2025

Port Hueneme City Council
May 5, 2025