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HUD RHIIP Training – PH/HCV. Case Study 3 – Champion Family (Housing Choice Voucher). Champion Case Study:. Same process as Alexander and Bennett Topic presentation Students complete case study Using Appendix C, File Review Checklist Worksheets Students review PHA’s HUD 50058

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hud rhiip training ph hcv

HUD RHIIP Training – PH/HCV

Case Study 3 – Champion Family (Housing Choice Voucher)

Chapter 9: Case Study 3-Champion

champion case study
Champion Case Study:
  • Same process as Alexander and Bennett
    • Topic presentation
    • Students complete case study
      • Using Appendix C, File Review Checklist Worksheets
    • Students review PHA’s HUD 50058
    • Students complete Appendix A, Tenant File Review Checklist
    • Review correct checklist and HUD 50058

Chapter 9: Case Study 3-Champion

champion case study topics
Champion Case Study: Topics
  • Assets
      • Actual and imputed asset income
      • Assets disposed of (imputed assets)
  • Annual Income: Periodic Payments
  • Payment Standards
  • Proration for mixed families

Chapter 9: Case Study 3-Champion

champion case study topics4
Champion Case Study: Topics
  • Adjusted Annual Income
    • Disability Assistance Expense
    • Medical Expense
    • Families who qualify for both Disability Assistance and Medical Expenses

Chapter 9: Case Study 3-Champion

assets

Assets

Chapter 9: Case Study 3-Champion

assets6
Assets
  • Value of assets may affect family’s annual income
  • PHA must:
    • Identify assets
    • Verify market value of assets
    • Know how to determine cash value of assets
    • Calculate Asset Income

Chapter 9: Case Study 3-Champion

market vs cash value of assets
Market vs. Cash Value of Assets
  • Market Value – what the asset is “worth”on the market
  • Cash Value – what you would actually get out of the asset if you converted it to cash. (e.g. sold it) (Market value minus expenses to sell or convert to cash)
    • What is the market value of a $4,000 savings account?
    • What is the cash value of the account?

Chapter 9: Case Study 3-Champion

valuing assets
Valuing Assets
  • When calculating cash value, PHA must consider expenses involved in converting assets to cash:
    • Penalties for early withdrawal
    • Broker and legal fees
    • Closing costs for real estate

Chapter 9: Case Study 3-Champion

cash value of asset
Cash Value of Asset
  • Certificate of Deposit
    • Market value $18,000
    • 10% early withdrawal penalty $1,800
    • Cash value of asset $16,200

Chapter 9: Case Study 3-Champion

cash value of asset10
Cash Value of Asset

Home value $99,500

Mortgage balance $40,000

Broker fees $7,000

  • Cash value of property = $52,500

Expenses to convert

Chapter 9: Case Study 3-Champion

assets include some assets people don t actually have
Assets Include Some Assets People DON’T Actually Have
  • Assets disposed of within past two years for less than fair market value
    • This can also be referred to as an imputed asset
  • To determine cash value:
      • Market value of the asset less the expenses and the amount received in compensation

Chapter 9: Case Study 3-Champion

assets disposed of for less than market value
Assets Disposed of for Less than Market Value
  • Applicant sold her home to her son for $10,000
  • The home value was $89,000 with no mortgage balance
  • Selling fees were $1,800

Chapter 9: Case Study 3-Champion

assets disposed of for less than market value13
Assets Disposed of for Less than Market Value

$89,000 Market Value

- 1,800 Fees

$87,200

-10,000 Sales price to son

$77,200 Counted as an asset 2 years from date of sale = Cash Value

Chapter 9: Case Study 3-Champion

assets disposed of for less than market value14
Assets Disposed of for Less than Market Value

Home value $ 99,500

Mortgage balance - 40,000

Family-paid broker fees - 2,700

Amount received - 5,000

Cash value of asset (disposed) $ 51,800

Count $51,800 cash value of asset for 2 years

Chapter 9: Case Study 3-Champion

assets disposed of
Assets Disposed of
  • Generally NOT considered to include those disposed of due to:
    • divorce or separation
    • bankruptcy
    • foreclosure
  • PHA should develop applicant certification form for verification purposes

Chapter 9: Case Study 3-Champion

assets and asset income
Assets and Asset Income
  • We have talked about ASSETS . . .
    • But what about the income they produce?

Chapter 9: Case Study 3-Champion

actual income from assets
Actual Income from Assets
  • Assets can generate income
  • Income from assets is counted in determining annual income

Chapter 9: Case Study 3-Champion

actual income from assets18
Actual Income from Assets
  • Examples of income from assets
    • Interest
    • Dividends
    • Net income from real or personal property
  • Asset income of minors is counted as income (Ex: interest on savings account)

Chapter 9: Case Study 3-Champion

anticipating actual income from assets
Anticipating Actual Income from Assets
  • Market value of asset is used to determine actual anticipated income from asset
  • Question: will the family have any income coming from this asset if they don’t sell it?
    • Formula to determine anticipated income from interest bearing accounts:
      • Market value x interest rate

Chapter 9: Case Study 3-Champion

income from assets
Income from Assets
  • Net cash value of asset
    • is used to determine imputed asset income

Chapter 9: Case Study 3-Champion

income from assets21
Income from Assets
  • When net cash value of all assets is $5000 or less, use the actual income from assets

Chapter 9: Case Study 3-Champion

assets22
Assets
  • If net cash value of assets exceeds $5,000 must use the greater of:
    • actual income from assets
    • imputed income from assets (HUD passbook rate times net cash value of all assets)
      • HUD Field Office has HUD passbook rate for jurisdictions

Chapter 9: Case Study 3-Champion

when net cash value of all assets exceed 5 000
When Net Cash Value of all Assets Exceed $5,000
  • Add cash value of all assets
  • Multiply by the local HUD passbook rate
  • Compare result (imputed income from assets) to actual income from assets
  • Use whichever result is greater as Final Asset Income in rent calculation

Chapter 9: Case Study 3-Champion

annual income

Annual Income

Chapter 9: Case Study 3-Champion

periodic payments
Periodic Payments
  • Include in annual income the full amount of periodic amounts received from
    • Social Security
    • Pensions and Annuities
    • Retirement funds
    • Disability or death benefits
    • Insurance policies

Chapter 9: Case Study 3-Champion

periodic payments26
Periodic Payments
  • Deductions
    • If deductions (for example, Medicare) are taken out of the gross benefit, use the gross amount of the benefit
  • Adjustments
    • With Social Security, if benefits have been reduced to offset a prior overpayment, use the amount actually being received

Chapter 9: Case Study 3-Champion

disability assistance expenses

Disability Assistance Expenses

Chapter 9: Case Study 3-Champion

disability assistance expense
Disability Assistance Expense
  • Deduction allowed for
    • Unreimbursed, anticipated costs for
      • Attendant care
      • Auxiliary apparatus
    • Paid on behalf of any family member who is a person with disabilities

Chapter 9: Case Study 3-Champion

disability assistance expense29
Disability Assistance Expense
  • Expenses must be
    • Reasonable
    • Necessary to enable a family member to be employed
      • This may or may not be the person with disabilities

Chapter 9: Case Study 3-Champion

disability assistance expense30
Disability Assistance Expense
  • Examples of qualifying expenses
    • Payments made on a motorized wheelchair for the adult son of the head of the family to go to work each day on his own
    • Payments to a care attendant to stay with a disabled 16-year-old child to allow the child’s mother to go to work each day

Chapter 9: Case Study 3-Champion

disability assistance expense31
Disability Assistance Expense
  • Cost of maintenance and upkeep of auxiliary apparatus is included
    • Veterinarian costs and food costs of a service animal
    • Cost of maintaining the equipment added to a car but NOT the cost of maintaining the car

Chapter 9: Case Study 3-Champion

disability assistance expense32
Disability Assistance Expense
  • Attendant care includes reasonable expenses for
    • Home medical care
    • Nursing services
    • Housekeeping and errand services
    • Interpreters for hearing-impaired
    • Readers for persons with visual disabilities

Chapter 9: Case Study 3-Champion

disability assistance expense33
Disability Assistance Expense
  • Maximum disability assistance allowance is that which exceeds 3% of the family’s annual income
  • The allowance is capped by the amount the family is enabled to earn as a result of the the disability assistance expenses

Chapter 9: Case Study 3-Champion

disability assistance expense example
Disability Assistance Expense - Example

Head’s earned income: $ 14,500

Spouse’s earned income: 12,700

Total Income: $ 27,200

Son’s attendant care expenses: $ 3,830

3% of Annual Income: $ 816

Chapter 9: Case Study 3-Champion

disability assistance expense example cont
Disability Assistance Expense – Example (cont.)

Son’s attendant care expenses: $ 3,830

Minus 3% threshold - 816

Maximum allowable disabilityassistance expense: = $ 3,014

  • Which is less than the earned income of the person(s) enabled to work

Chapter 9: Case Study 3-Champion

medical expenses

Medical Expenses

Chapter 9: Case Study 3-Champion

medical expense deduction
Medical Expense Deduction
  • Permitted only for elderly or disabled families
    • If family is eligible, unreimbursed medical expenses of all family members are allowed

Chapter 9: Case Study 3-Champion

medical expense deduction38
Medical Expense Deduction
  • Include all unreimbursed expenses the family anticipates incurring during the 12 months following this certification
  • PHA policy determines allowable medical expenses
    • PHAs may use IRS Publication 502 as a tool

Chapter 9: Case Study 3-Champion

medical expense deduction39
Medical Expense Deduction
  • Services of doctors and health care professionals
  • Services of health care facilities
  • Medical insurance premiums
  • Prescription/non-prescription medicines (PHA policy)
  • Transportation to treatment
  • Dental expenses, eyeglasses, hearing aids, batteries

Chapter 9: Case Study 3-Champion

medical expense deduction40
Medical Expense Deduction
  • Live-in or periodic medical assistance
    • Nursing services
    • Costs for assistive animal and its care
  • Long term care insurance premiums

Chapter 9: Case Study 3-Champion

medical expense deduction41
Medical Expense Deduction
  • Regular payments on a past one-time medical expense
    • Any one-time medical expense may be counted only one time
    • If full amount of a medical bill has been allowed, it will not be allowed again, even if it has not yet been paid

Chapter 9: Case Study 3-Champion

families eligible for medical and disability assistance expenses
Families Eligible for Medical and Disability Assistance Expenses
  • 3% threshold applied only once
  • Because deduction for disability assistance expenses is limited by the amount earned by the person enabled to work, it is calculated before the medical deduction

Chapter 9: Case Study 3-Champion

families eligible for both
Families Eligible for Both
  • If disability assistance expense is equal to or more than 3% of annual income
    • deduct 3% from disability assistance expense
    • compare to earnings made possible by assistance
    • add total medical expenses

Chapter 9: Case Study 3-Champion

families eligible for both44
Families Eligible for Both

Disability Expense $2000

- 3% of Annual Income - 500

“Proposed” Expense $1500

Amount Earned $1000

Allowable Disability Expense $1000

All Medical Expense is added $ 300

Total Deduction $1300

Chapter 9: Case Study 3-Champion

families eligible for both45
Families Eligible for Both
  • If disability assistance expense is less than 3% of annual income
    • Earnings is compared to disability assistance expense to get allowable disability assistance
    • Total disability expense is added to the medical expenses
    • 3% threshold is subtracted from the total

Chapter 9: Case Study 3-Champion

families eligible for both disability expense less than 3 of annual income
Families Eligible for Both (Disability Expense Less than 3% of Annual Income)

Disability Expense $ 400

Earnings $ 1000

Disability Expense $ 400

Medical Expense + $ 900

Total of Both Expenses $1300

Less 3% of Annual Income - 500

Allowable for Both $ 800

Chapter 9: Case Study 3-Champion

elderly disability allowance
Elderly/Disability Allowance
  • Tip: If the family qualifies for medical expenses, they also qualify for the $400 Elderly/Disability Allowance.

Chapter 9: Case Study 3-Champion

champion case study topics48
Champion Case Study: Topics
  • Payment Standards
  • Rent Calculation

Chapter 9: Case Study 3-Champion

payment standards definitions
Payment Standards -Definitions
  • Subsidy Standards: PHA established standards to determine the number of bedrooms and amount of subsidy for families of different sizes and composition

Chapter 9: Case Study 3-Champion

payment standards definitions50
Payment Standards - Definitions
  • Family Unit Size: (voucher size) The appropriate number of bedrooms for a family, as determined by the PHA under the PHAs subsidy standards
  • Payment Standard: Established by PHA for each FMR area in PHA jurisdiction by bedroom size

Chapter 9: Case Study 3-Champion

payment standard
Payment Standard
  • Used to calculate total subsidy for the family
  • PHA’s Payment Standard is maximum subsidy amount

Chapter 9: Case Study 3-Champion

payment standards schedule
Payment Standards Schedule
  • HUD publishes Fair Market Rents (FMRs) annually
  • PHA must adopt Payment Standards schedule for each FMR area in jurisdiction
  • PHA must establish Payment Standard for each bedroom size

Chapter 9: Case Study 3-Champion

establishing ps amounts
Establishing PS Amounts
  • 90 to 110% of FMR is basic range
  • HUD approval not needed for basic range
  • HUD must approve Payment Standard higher or lower than basic range
    • HUD Field Office may approve up to 120%
    • Higher than 120% takes HUD Headquarters approval

Chapter 9: Case Study 3-Champion

establishing ps amounts54
Establishing PS Amounts
  • PHA may establish separate PS within basic range for designated part of FMR
  • PHA must use exception PS for any unit selected in exception PS area

Chapter 9: Case Study 3-Champion

what payment standard to use
What Payment Standard to Use
  • PS to be used is lower of:
    • PS for family unit size (Voucher size); or
    • PS for size of unit selected

Chapter 9: Case Study 3-Champion

utility allowance
Utility Allowance
  • Tip: If a family selects a unit that is different from the family unit size (voucher size), which Utility Allowance do you use?
    • Use the Utility Allowance for the size of the dwelling unit actually leased by the family

Chapter 9: Case Study 3-Champion

what payment standard to use57
What Payment Standard to Use
  • During a HAP Contract, Payment Standard for a family is:
    • Payment Standard as determined at most recent regular reexamination after beginning of the HAP Contract unless the PHA has:
    • decreased the Payment Standard amount on their schedule
    • increased the Payment Standard amount on their schedule

Chapter 9: Case Study 3-Champion

what payment standard to use58
What Payment Standard to Use
  • The HUD monitor should examine the PHA’s most recent revision of Payment Standard schedule

Chapter 9: Case Study 3-Champion

what payment standard to use59
What Payment Standard To Use
  • If the PHA has decreased the Payment Standard:
    • At the first regular reexam use higher of old or new payment standard
      • Gives the family a little protection
    • At second regular reexam, use lower (new) payment standard, (unless PHA has increased the PS since last regular reexamination)

Chapter 9: Case Study 3-Champion

example pha decreases ps
Example: PHA decreases PS
  • Old payment standard…………900
  • New decreased PS …………………850
  • 1st regular reexam, use……………..900
  • At 2nd regular reexam use…………. 850

Chapter 9: Case Study 3-Champion

example pha decreases then increases
Example: PHA decreases, then increases
  • Old payment standard…………900
  • New decreased PS …………………850
  • 1st regular reexam, use……………..900
  • PHA raises PS after 1st reexam to…875
  • At 2nd regular reexam use…………..875

Chapter 9: Case Study 3-Champion

what payment standard to use62
What Payment Standard To Use
  • During a HAP Contract, if PHA has increased the PS:
    • Use the new, higher Payment Standard at the first regular reexam after the Payment Standard
      • But not at any interim

Chapter 9: Case Study 3-Champion

example pha increases ps
Example: PHA Increases PS
  • Old payment standard……………….900
  • New payment standard………………950
  • 1st regular reexam, use………………950

Chapter 9: Case Study 3-Champion

change in family size composition
Change in Family Size/ Composition
  • Family qualifies for different size voucher
  • At next regular reexamination use:
    • The PS for the new family unit size, regardless of any increase or decrease in the PS schedule

Chapter 9: Case Study 3-Champion

monitoring review

Monitoring Review

Chapter 9: Case Study 3-Champion

champion case study process overview
Champion Case Study:Process Overview

Ground Rules

  • Objective: complete case study
  • Time: Approximately 1 hour
  • Work individually
  • Trainer and trainer aides will assist if needed
  • Please keep noise volume to a minimum

Chapter 9: Case Study 3-Champion

champion case study process overview67
Champion Case Study:Process Overview

Instructions for Part 1

  • Review PHA file data and complete Appendix C (Tenant file review worksheets)

Chapter 9: Case Study 3-Champion

champion case study process overview68
Champion Case Study:Process Overview
  • Resources for case study
    • Case information begins page 9-17
    • Verifications (pg 9-27)
    • Appendix C, Tenant File Review Checklist Worksheets (You complete)
    • Cubzide PHA Policies/Schedules (pg 6-5)

Chapter 9: Case Study 3-Champion

champion case study process overview69
Champion Case Study:Process Overview

Instructions for Part 2

  • Review PHA’s HUD 50058 (Handout)
  • Complete Appendix A, Tenant File Review Checklist to record discrepancies
    • Page 9-75

Chapter 9: Case Study 3-Champion

cash value of assets answer
Cash Value of Assets Answer

Chapter 9: Case Study 3-Champion

annual income answer
Annual IncomeAnswer

Chapter 9: Case Study 3-Champion

dwelling unit utility allowance worksheet
Dwelling Unit/ Utility AllowanceWorksheet
  • What did you put for the Total Utility Allowance?
    • PHA indicated $56
    • Let’s look at the Admin Plan Utility Allowance Schedule

Chapter 9: Case Study 3-Champion

adjusted annual income answer
Adjusted Annual Income Answer

Chapter 9: Case Study 3-Champion

adjusted annual income answer74
Adjusted Annual Income Answer

Chapter 9: Case Study 3-Champion

adjusted annual income answer75
Adjusted Annual IncomeAnswer

Chapter 9: Case Study 3-Champion

adjusted annual income answer76
Adjusted Annual IncomeAnswer

Chapter 9: Case Study 3-Champion

adjusted annual income answer77
Adjusted Annual Income Answer

Chapter 9: Case Study 3-Champion

appendix a thinking points
Appendix A: Thinking Points
  • Discussion

Chapter 9: Case Study 3-Champion

appendix a thinking points83
Appendix A: Thinking Points
  • Medical Expenses:- Did PHA use same as last year?- Any non-recurring?- Balance of past-due bills reduced by last year’s allowance? 3rd party documentation of balance?
    • Admin plan guidance on medical expenses for staff?

Chapter 9: Case Study 3-Champion

appendix a thinking points84
Appendix A: Thinking Points
  • Do verification forms determine if expenses are reimbursed from another source?

Chapter 9: Case Study 3-Champion

hcv calculation
HCV Calculation
  • Prorated calculation for mixed families

Chapter 9: Case Study 3-Champion

prorated rent calculation hcv
Prorated Rent Calculation (HCV)
  • Step 1: Divide number of eligible family members by total number in family to arrive at proration percentage
  • Step 2: Multiply Total HAP (Total Subsidy) by proration percentage to get prorated Total HAP

Chapter 9: Case Study 3-Champion

prorated rent calculation hcv87
Prorated Rent Calculation (HCV)
  • Step 3: Subtract prorated Total HAP from Gross Rent to get Mixed Family Total Family Contribution
  • Step 4: Subtract Utility Allowance from Mixed Family Total Family Contribution to get Mixed Family Tenant Rent to Owner or Utility Reimbursement Payment

Chapter 9: Case Study 3-Champion

prorated rent calculation hcv88
Prorated Rent Calculation (HCV)
  • Step 5: Subtract Mixed Family Tenant Rent to Owner from Rent to Owner to get Prorated HAP to Owner

Chapter 9: Case Study 3-Champion

prorated rent calculation example hcv
Prorated Rent Calculation: Example (HCV)
  • Jones family has 6 members
    • 4 are eligible citizens
    • 2 are noncontending members
    • Family’s Total HAP is $200
    • Gross Rent is $600
    • Rent to Owner is $550
    • Utility Allowance is $50
  • Calculate prorated HAP and Tenant Rent to Owner

Chapter 9: Case Study 3-Champion

prorated rent calculation hcv90
Prorated Rent Calculation (HCV)
  • Eligible family members divided by total family members (4 divided by 6 = .67 proration percentage)
  • Total HAP $ 200
  • Times proration percentage x .67
  • Equals prorated Total HAP $ 134

Chapter 9: Case Study 3-Champion

prorated rent calculation hcv91
Prorated Rent Calculation (HCV)
  • Gross Rent $ 600
  • Minus Prorated Total HAP - 134
  • Equals Mixed Family Total FamilyContribution (TFC) = 466
  • Mixed Family TFC $ 466
  • Minus Utility Allowance - 50
  • Equals Mixed Family Tenant Rent = 416

Chapter 9: Case Study 3-Champion

prorated rent calculation hcv92
Prorated Rent Calculation (HCV)

Rent to Owner $ 550

Minus Family Tenant Rent - 416

Equals Prorated HAP to Owner = $ 134

  • The Jones family will pay $66 more in Tenant Rent (416-350 – 350 is what the Tenant Rent would have been if not prorated) and the PHA will pay $66 less in HAP to Owner (200-134) due to the presence of two ineligible members

Chapter 9: Case Study 3-Champion

prorated rent calculation hcv93
Prorated Rent Calculation (HCV)
  • Now we will assume that the Champion family had an ineligible relative come to live with them
  • The Champion family now has 4 people living in the unit but only 3 are eligible under the Noncitizens Rule
  • Sections F. 1 – 12 of the RIM worksheet has been completed for you…pg 9-105
  • Complete Lines F. 18 - 23…page 9-107

Chapter 9: Case Study 3-Champion