Rent Calculation • The tenant rent portion must be calculated to be 30% of a household’s monthly adjusted income • Must have copies of the initial and all subsequent rent calculations---MUST BE DATED
Rent Calculation • Must have proper income verification (pay stub, MFIP benefit, etc) for each calculation of rent • When monitoring, HUD finds it helpful if each income verification is attached to the corresponding rent calculation
Rent Calculation • Rent needs to be calculated: • At the time a participant enters the program • At least once a year after the initial calculation
Rent Calculation • If there is a change in family composition---birth of a child, etc., or if the household’s income decreases, the participant may request a new calculation • If a participant’s income increases, his/her rent does not need to be recalculated until the next scheduled (annual) recalculation
Rent Calculation • Grantees may institute mandatory savings programs, but ensure you are aware of how the savings will affect a participant’s eligibility for mainstream resources
Rent Calculation • We recommend that grantees: • develop clear WRITTEN rent calculation policies • communicate the policy to participants • and apply the policy uniformly to all residents
Rent Calculation • Questions to think about when developing a policy: • If your program is in a partnership, which entity is responsible for verifying income/calculating rent? Is this clear in the MOU? • Does the program have other funding sources? Which ones? What are the income verification/rent calculation requirements of those funding sources?
Rent Calculation • Questions to think about when developing a policy: • Are you going to require income verification more than once a year? How often? Under what circumstances? • Will you require that participants inform you if they have an income increase? Income decrease? What will be the increase/decrease threshold for reporting?
Rent Calculation • Questions to think about when developing a policy • If a participant has an unexpected, non-recurring loss in income that prevents him/her from being able to pay rent that month, will you do a one-month only rent re-calculation?
Rent Calculation • Questions to think about when developing a policy • Who will be responsible for income/rent calculations? • What training will s/he receive? • With which resources will s/he be provided?
Rent Calculation • Questions to think about when developing a policy • What supportive interventions will you have in place to help the participant pay his/her rent? • What will you do if a participant does not pay rent on time?
Rent Calculation • Questions to think about when developing a policy • In most cases, failure to pay rent does not qualify a participant for termination • The S+C regulations state that a participant may only be terminated in “the most severe cases” • How does your organization define “most severe”
S+C Rent Calculation Worksheet • Questions 1-8 refer to the income a household expects to receive in the next 12 months
S+C Rent Calculation Worksheet • Sources of funds that DO NOT COUNT as income • Student assistance—loans, grants, etc. • Compensation received from HUD, local and/or state training programs • The monetary value of food stamps
S+C Rent Calculation Worksheet A complete list of what is included/excluded from income can be found in 24 CFR Section 5.09
S+C Rent Calculation Worksheet • Four mandatory deductions: 1. $480 for each dependent • $400 for any disabled family • To the extent that the sum of unreimbursed medical expenses of a disabled or elderly family member AND unreimbursed attendant care and auxiliary apparatus expenses exceeds 3% of income • Unreimbursed child care expenses
S+C Rent Calculation Worksheet • Dependent deduction (line #13) • For each dependent living with the participant, deduct $480 from annual income • Dependents include household members under the age of 18, elderly dependents, full-time students, the handicapped or disabled • Dependents do not include the family head, spouse, or foster children
S+C Rent Calculation Worksheet • Disabled/Elderly family deduction (line #14) • S+C requires that an adult household member qualify as disabled, so this deduction automatically applies to each S+C household • Deduct $400 from the annual income of each S+C household
S+C Rent Calculation Worksheet • Disabled/Elderly family deduction (line #14) • One deduction per qualified family per year (even if three qualifying members of the household are disabled, the household can only deduct $400 per year)
S+C Rent Calculation Worksheet • Child care deduction (line #15) • Deduct the amount of reasonable, non-reimbursed child care expenses expected in the next 12 months for kids 12 and under • The child care must enable a household member to work or go to school • The amount deducted cannot exceed the amount of income received from the work
S+C Rent Calculation Worksheet • Attendant Care and Auxiliary Apparatus Deduction AKA Handicapped Assistance Allowance (line #16a) • The reasonable, anticipated, unreimbursed expenses for attendant care or auxiliary apparatus (wheelchair etc.) that enables that individual or other household member to work
S+C Rent Calculation Worksheet • Attendant Care and Auxiliary Apparatus Deduction AKA Handicapped Assistance Allowance (line #16a) • Amount deducted cannot exceed the amount earned by adult household members as a result of the handicapped assistance
S+C Rent Calculation Worksheet • Medical Expenses of Elderly or Disabled Residents Deduction (line #16b) • Determine amount of out-of-pocket, non-reimbursed medical expenses expected for elderly or disabled residents for the coming year
S+C Rent Calculation Worksheet • The amount of unreimbursed attendant care and auxiliary apparatus expenses AND unreimbursed medical expenses are added together (line#16c) • The combined amount that exceeds 3% of annual income is deducted from annual income (line #16d)
Utility Allowances Lines #22 and #23 • If a participant pays for his/her own utilities, an allowance for utilities must be subtracted from the total rent • PHAs (public housing authorities) have copies of HUD-approved utility allowance charts
Utility Allowances Lines #22 and #23 • If a participant’s rent is calculated to be $40 per month, and PHA utility allowance is $60, then grantee must reimburse the participant $20 each month
Rent Calculation • Common Mistakes • Not giving disability deduction • Not asking about out of pocket medical or daycare expenses • Not having any documentation to show how income/rent was calculated
Questions? Contact your friendly neighborhood CPD Rep: Ben 612.370.3019 ext. 2237 Deb: 612.370.3019 ext. 2215 Joe: 612.370.3019 ext. 2157 Mary: 612.370.3019 ext. 2102 Sara: 612.370.3019 ext. 2103 Tom: 612.370.3019 ext. 2108