HUD Handbook 4350.3Change 4

• August 22, 2013 Released

• December 10, 2013 Released Revisions to August Release

Change 4 IncorporatedLEP – Issued January 22, 2007http://www.justice.gov/crt/lep/guidance/HUD_guidance_Jan07.pdf

Notices explaining criminal screening requirements in detail – specifically related to Sex Offenders including the original HSG Notice 09-11 Issued September 9, 2009http://www.hud.gov/offices/adm/hudclips/notices/hsg/files/09-11hsgn.doc

HSG Notice 10-08 - Implementation of Refinement of Income and Rent Determination Requirements in Public and Assisted Housing Programs: Implementation of the Enterprise Income Verification System - Amendments; Final Rule Issued April 16, 2010.http://portal.hud.gov/hudportal/documents/huddoc?id=10-08hsgn.pdf

Latest VAWA Final Rule 24 CFR Parts 5, 91, 880, et al. HUD Programs: Violence Against Women Act Conforming Amendments; Final Rule Issued October 27, 2010.http://nhlp.org/files/10.27.10%20VAWA%20final%20rule.pdf

Notice explaining use of HUD Form 92006 including the latest HUD Notice 12-09 issued May 9, 2012http://portal.hud.gov/huddoc/12-09hsgn12-22pihn.pdf

HSG Notice 12-11 Issued June 11, 2012http://portal.hud.gov/huddoc/12-28pihn12-11hsgn.pdf

Current EIV Notice – HSG Notice 13-06http://portal.hud.gov/huddoc/13-06hsgn.pdf

Chapter 1 Introduction of Programs and Background

• Added that HUD Veterans Affairs Supportive Housing and Mainstream Vouchers (VASH) are not covered by this handbook

• Added links for HUD websites

Chapter 2 Civil Rights and Nondiscrimination Requirements

• There are no changes to this Chapter

Figure 3-4 Acceptable DHS Documents

• List of Acceptable DHS Documents for proof of citizenship status

• Removed I-688 Temporary Resident Card andI-688B Employment Authorization Card

• Corrected name of I-551 to read Permanent Resident Card

• New Declaration of Citizenship form has been implemented to incorporate changes, HUD’s updated form is dated 8/13 (Exhibit 3-5)

Paragraph 3-13Determining Eligibility of Students

2. Section 8 assistance shall not be provided to any individual who:

a. Is enrolled as either a part-time or full-time student at an institution of higher education for the purpose of obtaining a degree, certificate, or other program leading to a recognized educational credential; *and*

b. Is under the age of 24; *and* c. Is not married; *and* d. Is not a veteran of the United States Military; *and* e. Does not have a dependent child; *and* f. Is not a person with disabilities, as such term is defined in 3(b)(3)(E) of the United States

Housing Act of 1937 (42 U.S.C. 1437a(b)(3)(E)) and was not receiving section 8 assistance as of November 30, 2005. (See Definition E in Figure 3-6); *and*

g. Is not living with his or her parents who are receiving Section 8 assistance; and h. Is not individually eligible to receive Section 8 assistance *or* has parents (the parents

individually or jointly) who are not income eligible to receive Section 8 assistance. (See paragraph 3-33 for verifying parents eligibility.)

*NOTE: Unless the student can demonstrate his or her independence from parents, the student must be eligible to receive Section 8 assistance and the parents (individually or jointly) must be eligible to receive Section 8 assistance in order for the tenant to receive Section 8 assistance.*

Example of Student who is Not Eligible

Bob’s Criteria Eligibility Criteria

Bob is 18 Bob is not 24 and

Bob is single Bob is not married and

Bob has never served in the military Bob is not a veteran and

Bob doesn’t have any children Bob doesn’t have any children in unit and

Bob is not disabled Bob is not disabled and

Bob lives with his girlfriend Bob is not living with his parents who receive Sect. 8 and

Bob’s parents make $100,000 Bob’s parents do not meet the low income limit

Bob is not eligible because he does not meet ANY of the eligibility criteria under the Student Rule, unless he can demonstrate his independence from his parents.

Example of Student who is Eligible

Al’s Criteria Eligibility Criteria

Al is 22 Al is not 24 and

Al is single Al is not married and

Al has never served in the military Al is not a veteran and

Al has a child living with him Al doesn’t have any children in unit and

Al is not disabled Al is not disabled and

Al lives with his child Al is not living with his parents who receive Sect. 8 and

Al’s parents make $100,000 Al’s parents do not meet the low income limit

Al is eligible since he has a child which is one of the criteria required under the Student Rule.

Chapter 4Waiting List and Tenant Selection

Update Tenant Selection Plan to include:

• Social Security Number Disclosure • Use of EIV Existing Tenant Search• VAWA Protections• State Lifetime Sex Offender Screening• Preferences

Paragraph 5-5-A-3Methods for Projecting and Calculating Annual Income

3. *Using EIV

a. The owner must not use the quarterly wage income reported on the EIV Income Report for calculating the tenant’s annual income from employment. The owner must confirm with the tenant that the information in EIV is correct. If the tenant agrees that the employment information reported in EIV is correct, the owner must:

(1) Use the Income Report as third party verification of the tenant’s employment; and

(2) Use the tenant provided documents for calculating the tenant’s annual income, e.g. 4-6 current, consecutive check stubs.

Paragraph 5-5-A-3 Continued

c. If the tenant agrees with the social security benefit information on the EIV Income Report, the owner must use the EIV Income Report as third party verification, receiving social security benefits and also for calculating the tenant’s annual income.

d. If the tenant disputes the employment and income information in EIV, the owner must obtain third party verification from the source.*

Paragraph 5-6-Q-3Lump Sum Payments Counted as Income

*For Section 8 tenants only, any deferred Department of Veterans Affairs (VA) disability benefits that are received in a lump sum or in prospective monthly amounts are excluded from annual income.*

Example VA Deferred Benefits• Tom applies for VA Disability – VA takes 18 months to process and

approve the claim.• VA awards Tom VA disability benefits of $1,000/month (counted as

income for all programs).• Tom will receive the $1,000/mo. payment retroactive to the date of

the claim, 18 months ago ($1,000 x 18 months = $18,000 deferred disability payments.)

• VA asks Tom if he wants the $18,000 deferred payment as one lump sum or as an addition to his regular payment.

• Tom opts to receive the $18,000 in monthly payments rather than one lump sum.

• VA agrees to pay an additional $500/month for 36 months until the deferred payment is distributed.

• For Section 8 programs, the $1,000 regular VA disability payment is counted as income and the $500 deferred payment is not.

Paragraph 5-7-G-4-b. & d.Balances Held in Retirement Accounts

b) IRA, Keogh, and similar retirement savings accounts are counted as assets, even though withdrawal would result in a penalty, *unless benefits are being received through periodic payments.*

d) Include in annual income any retirement benefits received through periodic payments. *Do not count any remaining amounts in the account as an asset.*

Paragraph 5-10-A-1 Dependent Deduction

1. A family receives a deduction of $480 for each family member *(except foster children and foster adults)* who is:

a. Under 18 years of age; b. A person with disabilities; or c. A full-time student of any age.

*It is not necessary for a member of the family to have legal custody

Paragraph 5-13-A & BAcceptable Verification Methods

Acceptable methods of verification, in order of acceptability:

1) Upfront-income verification (UIV) with use of EIV being mandatory (not available for applicants) and use of non-EIV being optional;

2) Third-party verification from source (written),

3) Third-party verification from source (oral), and

4) Family certification. If third-party verification is not available, owners must document the tenant file to explain why third-party verification was not available.

Paragraph 5-13-B-1-b-2Note: See Paragraph 9-10 for situations when this method of verification must be used prior to verifying through (1) above.*

Paragraph 9-10 Independent Third Party Verification

A. Owners must obtain independent third party verification from the source which is used to complement EIV data when the below occurs. (In these situations, the owner must not use tenant-provided documentation even if generated from a third-party source.)

1. The tenant is unable to provide acceptable and current employment and/or income documentation to support the wage and unemployment income in EIV;

2. The tenant disputes the EIV income information;

3. There is an EIV income discrepancy reported at the time of recertification (annual or interim) or at other times as specified in the owner’s policies and procedures;

4. There is incomplete EIV employment or income data for a tenant and the owner needs additional information.

Paragraph 5-18-EDocumenting Why Third-Party Verification is Not Available

When third-party verification is not available, owners must document in the file efforts made to obtain the required verification and the reason the verification was not obtained. The owner must include the following documents in the applicant’s or tenant’s file:

1. A written note to the file explaining why third-party verification is not possible; or

2. A copy of the date-stamped original request that was sent to the third party;

3. Written notes or documentation indicating follow-up efforts to reach the third party to obtain verification; and

4. A written note to the file indicating that the request has been outstanding without a response from the third party.

Paragraph 5-16-BEffective Term of Verifications

• Verifications are valid for 120 days from the date of receipt by the owner, *not the effective date of the 50059.*

• If verifications are more than 120 days old *from the date of receipt by the owner*,the owner must obtain new verifications.

Example• Annual Recertification date is 8/1/2013

• First AR Notice sent 4/3/13 (120 days prior to AR)

• Cannot accept verifications before 4/3/13 unless for something that will not change e.g. birthdate

• Tenant meets with O/A on 5/1/13 and provides checking account bank statements printed on 2/1/2014.

• These bank statements can be used because they were not more than 120 days old when received by the O/A and the O/A received the documents within 120 days of the effective date of the AR.

Chapter 6Lease Requirements and Leasing Activities

*Figure 6-9*: Summary of Documents for Tenants Documents • Lease, with the HUD-50059 or HUD-50059-A • Move-in inspection form • Consent forms • Lead-Based Paint Disclosure Form (if applicable) • Lead Hazard Information Pamphlet (if applicable) • House Rules (if developed) • Pet Rules (if applicable) • *Police/Security Addendum (if applicable)* • Live-in Aide addendum (if applicable) • *HUD VAWA lease addendum (Section 8 only)* • *EIV & You brochure* • Resident Rights and Responsibilities brochure

Chapter 8Terminations

Changes to Paragraph 8-5 Key Requirements:• HUD updated language to include EIV sources

Changes to Paragraph 8-13 Material Noncompliance with the Lease:

• HUD added language explaining that failure to disclose SSN as required and failure to sign HUD consent forms is a material violation of the lease that results in termination of tenancy.

Chapter 9

• All new chapter that relates to EIV

• Elements related to 50059/50059-A and vouchers are now in the MAT User Guide, Chapter 7

• Special Claims are in the Special Claims Guide

Second Release Remove/Insert List

Pages: • 1-12• 3-82• 4-67• 5-54 to 5-56• 5-81• 6-48• 7-32• 8-32• 9-8 to 9-16• 9-40

• Glossary Page 16• Appendices Table of Contents• All pages of Appendix 3• Remove Appendices 7 through 14• Insert new Appendix 7• The Section 8 Fact Sheet

(now Appendix 7B) is the current September 2010 version of the Fact Sheet

What didn’t HUD include in Change 4

• No revised Handbook Index

• Change 4 does not discuss changes to VAWA introduced through The Violence Against Women Reauthorization Act of 2013.

• Doesn’t include optional preferences for homeless persons that came out in HUD Notice 13-21.

• Doesn’t include new protections for sexual orientation, gender identity, and marital status.

Side Notes• New version of AFHMP Form 935-2A released

– This replaces previous versions– The AFHMP was included as Appendix 1 in

Change 4, but expired 8/31/2013 – New form expires 12/31/2016

• Medical Expense Mileage is 23.5 cents/mile as of January 1, 2014

• A Notice from TRACS stated SSA will no longer issue SSN printouts and field offices will stop providing benefit verifications.

Questions