USDA RD
ESSENTIALS
of
OCCUPANCY
Karen Crosta
KDC Solutions, LLC
Part 1
Part 2
Part 3
Part 4
Introduction to RD MFH &
Eligibility
Applications &
Waiting List Maintenance
Tenant Selection &
Unit Assignment
Basics of Certifications
2
PART 1
INTRODUCTION TO RD
MFH PROGRAMS
&
ELIGIBILITY
3
INTRODUCTION to RD MFH
•
•
•
•
Finances the property
Reduces the effective interest rate
Provides Rental Assistance
Monitors its investment
4
RD MFH PROGRAMS
• Section 515
o Direct Loan Program
o Interest Credits reduce effective interest rate
of loan to 1% - 3%
• Note Rate Rent vs. Basic Rent
o Must lease to income-eligible HH
5
RD MFH PROGRAMS
• Section 514 Loans & Section 516 Grants
for Off-Farm Labor Housing (LH)
o Direct loans or grants to house farm laborers
o Same general terms as Section 515
o Must lease to income-eligible HH
• Section 514 Loans for On-farm Housing
6
In exchange for favorable financing and
rental subsidies, owners agree to comply
with all of RD’s rules and regulations
regarding all aspects of managing and
maintaining the property.
7
RESOURCES
• HB-2-3560
o MFH Asset Management Handbook
• HUD 4350.3
o Occupancy Requirements of Subsidized
Multifamily Housing Programs
• Chapter 5
• Appendix 3
• Management Plan
8
ELIGIBILITY
9
Name the 4 criteria that an applicant must
meet in order to be determined eligible for
occupancy at an RD MFH property.
10
ELIGIBILITY for OCCUPANCY
1. Must be income eligible for project or be
eligible under another source (i.e. HUD,
LIHTC); and
2. Must meet program definition of an
eligible household; and
3. Must meet owner’s occupancy policies;
and
4. Must meet owners’ screening criteria
11
Name the 3 additional criteria an applicant
must meet in order to be eligible for an offfarm labor housing property
12
ELIGIBILITY for OCCUPANCY
5. Must be a US Citizen or legal alien/resident of
US, Puerto Rico or the Virgin Islands
6. Tenant/Co-tenant must be a domestic farm
laborer
o
Or a retired or disabled domestic farm laborer (or
surviving household of deceased domestic farm
laborer)
7. Must receive a substantial portion of income
from farm labor employment
o Income from farm labor must be at least 65% of the
Federal Regional Income Limits for Hired
Farmworkers (Attachment 6-H)
13
1. Must be Income Eligible
• Use RD published Income Limits (2/12/14)
• Based on locale and household size
• The HH adjusted annual income cannot
exceed the applicable income limit
• Three income levels:
o Moderate = 95% of Median Income
o Low =
80% of Median Income
o Very Low = 50% of Median Income
14
Whose Income Counts When
Applying Income Limits?
• All persons intending to reside in unit, including foster
children/adults
• Children temporarily absent due to placement in a foster
home
• Children in joint custody arrangement (50%)
• Children away at school but home for recesses
• Unborn children
• Children in process of being adopted
• Temporarily absent family members
• Family member in hospital/rehab for limited/fixed time
• Persons permanently confined to hospital/nursing home
Exclude: Live-in Aides & Chore Service Workers
15
2. Must meet program definition of an
eligible household
• Family Housing Units
o May include elderly & non-elderly HH
o Cannot market or prioritize to one group or
the other
• Elderly Housing Units
o Tenant/co-tenant must be 62 or older, or have
a disability
o Cannot exclude children of eligible elderly HH
o Cannot be exclusively for disabled HH
16
3. Must meet Owner’s Occupancy Policies
• RD does not specify
• Must be RD approved
• Allow HH to choose unit size/style/location
within your occupancy policies
• Address reasonable accommodations
• Include both HH members and eligible
non-members
17
4. Must meet Owner’s Screening Criteria
• Found in Management Plan
• Must be applied uniformly
18
SPECIAL
CONSIDERATIONS
19
ELIGIBILITY of STUDENT
as TENANT/CO-TENANT
ALL of the following must apply:
• Must be otherwise eligible; and
• Must be of legal age or otherwise legally able
to enter into a contract per State law; and
• Must have established a HH separate &
distinct from parents/legal guardians; and
• Must no longer be claimed as a dependent by
parents/legal guardians per IRS; and
• Must sign a written statement indicating if
parents/legal guardians provide any financial
assistance
20
INELIGIBILITY
• An applicant is ineligible to move in if they fail to
meet any of the eligibility criteria
• A tenant is considered ineligible when, at
recertification, they fail to meet either the income
or the occupancy requirements for the unit or
property.
• If ineligible and required to vacate, must vacate
within 30 days or at end of lease term,
whichever is longer.
21
CONTINUED OCCUPANCY
of INELIGIBLE TENANTS
• Occupancy Ineligible (Over/Under Housed)
• Must transfer to appropriate unit size within 30 days
of availability
• If no appropriate unit size exists in project, must
vacate
• Exception: May continue occupancy if no 1-bdrm. in
project and it is in owner’s written policies.
• Income Ineligible
• Must vacate
22
REMAINING HH MEMBER
• May continue occupancy regardless of age, if:
o Income eligible; and
o Was a HH member & has legal ability to sign lease;
and
o Occupied unit with original tenant at time of
death/departure; and
o Signs own certification & establishes own tenancy
o If over-housed, must transfer to appropriate unit size
within 30 days of availability
• If no appropriate unit size exists, must vacate
23
SURVIVING HH MEMBER
For elderly HH in elderly project only!
• May continue occupancy, regardless of age, if:
o Same criteria as “remaining HH member”; BUT
o May remain in unit
• Should transfer to appropriate unit size
• May remain in unit if over-housed but appropriate
unit size does not exist
• If unit has accessibility features no longer needed,
must transfer to non-accessible unit within 30 days
of applicant/tenant applying for accessible unit.
24
PART 2
APPLICATIONS
&
WAITING LIST MAINTENANCE
25
1. Are applicants properly informed of where
and when applications may be obtained and
submitted?
2. Does the application provide adequate
information to determine the applicant’s place
on the waiting list?
3. Are applications processed in a timely
manner?
4. Are ineligible applicants adequately notified
of their appeal rights?
5. Is adequate documentation available to
determine compliance with applicant
processing requirements?
26
1. Are applicants properly informed of where and
when applications may be obtained and
submitted?
• Must establish place and time for
accepting applications
• Should be posted in central location at
property
• Must be addressed in the Management
Plan
• Must be addressed in the AFHMP
• Should be communicated in marketing
27
2. Does the application provide adequate
information to determine the applicant’s place
on the waiting list?
•
•
•
•
•
•
•
•
•
•
•
•
Names of all HH members, birthdates & current address
HH Income, Asset & Adjustment data
Consent to Release Wage Matching
Consent to Verify Employment
Indication of need for accessible unit and/or Disability
Assistance adjustment to income
Certification the unit will be primary residence
SSN for all HH members age 6 and older
Citizenship/Eligible Immigration certification – LH only
Signature and date
Race, Ethnicity & Gender disclosure (below signature line)
Fair Housing statement (UL 11/9/12)
Fair Housing & Accessibility logotypes
28
APPLICATION
• Must
o Provide written list of all information
needed to be considered complete
o Advise priority cannot be established
until all information is received
• Verification not necessary to be
considered complete
29
APPLICATIONS
FAIR HOUSING RESTRICTIONS
It is unlawful to inquire of the presence
or severity of a disability, EXCEPT to:
30
APPLICATIONS
FAIR HOUSING RESTRICTIONS
• Determine eligibility for
o Designated units or programs
o Adjustment to income for elderly/disabled
status
o Priority for specific units
• Determine if applicant is a current user of
illegal substances, has prior conviction for
use, manufacture, or distribution of illegal
substances, or has successfully completed
or is currently enrolled in a substance
abuse recovery program.
31
APPLICATIONS
FAIR HOUSING RESTRICTIONS
• Disability related questions must be asked
of ALL applicants
• May verify disability only AFTER
applicant/tenant requests a disability be
considered
32
3.
Are applications processed in a timely
manner?
10 DAYS
Provide written notification to
applicant of disposition of application
33
APPLICATION DISPOSITION
•
•
•
•
Incomplete
Offer a unit
Placed on waiting list
Rejected
34
4. Are ineligible applicants adequately notified of
their appeal rights?
•
•
•
•
Notify in writing
Outline reason for rejection
Include FCRA Summary of Rights
Include Grievance and Appeal Rights &
Procedures
o 5 days informal meeting
o 10 days to request a hearing
• Deliver certified-return receipt or hand deliver
with signed acknowledgement of receipt
35
5.
Is adequate documentation available to
determine compliance with applicant
processing requirements?
•
•
•
•
Application cover letter
Application – Date/Time Stamped
Race/Ethnicity Data form
Authorization to Verify Employment – all
adults
• Consent to Release Wage Matching – all
adults
• Citizenship/Eligible Immigration Status –
LH only
• Application Status/Acceptance
notifications
36
APPLICATION DOCUMENTATION
• Paper
o Date/time stamped upon receipt
o Keep copies of notifications to applicant
• Verbal
o Document and keep with application
• Record on Waiting List
o Ensure dates/times recorded match with the
paper copy date/time stamp
37
APPLICATION RETENTION
• Inactive (withdrawn from wait list)
o The longer of 3 years or to next supervisory
review
• Active
o Until withdrawn + the longer of 3 years or next
supervisory visit; or
o If become tenant, retain in tenant file
38
WAITING LIST MAINTENANCE
• All applications must be placed on the waiting
list
o Regardless of disposition, complete/incomplete or
eligible/ineligible
• Document date/time when completed application
received
• Document any activity and changes to
application with date/time/explanation
• Document final disposition of application
39
WAITING LIST MAINTENANCE
•
•
•
•
•
•
•
•
Date/time when completed application received
Name
Race/Ethnicity (Tenant)
Unit size(s)
Income level (V, L, M)
RA Eligibility
Need for accessible unit
Farm laborer status (LH only)
o Active, Disabled/Retired local, Disabled/Retired nonlocal)
• LOPE or FEMA
• Room for notations
40
PART 3
TENANT SELECTION
&
UNIT ASSIGNMENT
41
TENANT SELECTION
1st
2nd
3rd
Unit Size
Income Level
1st = VL
2nd = L
3rd = M
Category/Priority Level
(Accessible unit, LOPE)
First Come-First Served basis by date/time completed
application was received within a category or priority
(NA Labor Housing)
42
WAITING LIST PRIORITIES
Rank by VL, L then M within each category
• Vacant non-accessible units 1st to in-place
tenant who is over/under-housed
• Vacant accessible units
o 1st to in-place tenant needing features
o 2nd to applicant needing features from any
income, with priority to VL, then L, then M
o May offer unit larger than required
43
WAITING LIST PRIORITIES
Rank by VL, L then M within each category
• LOPE & FEMA have priority over any
other applicants within their income group,
regardless of unit size needed
o May offer unit larger than required
• LIHTC may leave unit vacant for LIHTC
eligible applicant
• HUD Section 8 may use HUD’s priorities
44
SELECTING WHEN RA AVAILABLE
• VL has priority in any list or category
• Low is OK if no RA-eligible tenant in
occupancy and no VL applicant on wait list
• Moderate-income are never RA eligible
45
TENANT SELECTION IN LH
(with or without RA)
• Off-Farm Categories
1st
2nd
3rd
Active Farm Laborer HH
Disabled/Retired domestic farm laborer
who was active in local area at time of
disability/ retirement
Other Disabled/Retired farm laborer who
was not active in the local area at time of
disability/retirement
46
TENANT SELECTION IN LH
• Within each category: VL, then L, then M
• Exhaust one category before going to the
next
• Disabled has priority over Retired in any
given category
47
PART 4
BASICS OF
CERTIFICATIONS
48
BASICS
• Certifications are a requirement of
eligibility for occupancy and for benefits
• A certification must be executed prior to
occupancy and annually thereafter
• Borrowers must verify and document all
income, assets, expenses, deductions,
family characteristics and any other factors
that affect eligibility or level of assistance.
49
BASICS
• Form RD 3560-8, Tenant Certification, is the
means by which these verified factors are
documented
• A certification must be signed by both tenant and
borrower on/before its effective date
o Tenant signature certifies to accuracy of information
provided (names, birthdates, income, assets, etc)
o Borrower certifies that all the information recorded on
RD form 3560-8 has been verified
• Certifications are effective for 12 months
50
Name the three types of certifications.
Initial Certification
Annual Recertification
Interim Recertification
51
TYPES OF CERTIFICATIONS
• Initial Certification
o Completed prior to moving into property
o Must verify all factors affecting eligibility &
level of assistance
o Effective for 12 months
52
TYPES OF CERTIFICATIONS
• Annual Recertification
o Completed annually
o Must verify all factors except those not subject
to change (i.e., name, birthdate, SS#)
o Effective for 12 months
53
TYPES OF CERTIFICATIONS
• Interim Recertification
o Completed prior to expiration of existing
certification
o Must verify all factors except those not subject
to change
o Creates a new 12 month certification period
and changes Annual Recertification date
54
EFFECTIVE DATES
• Initial Certifications (Move-Ins)
o 1st day of month following initial entry to
property
o If MI is on the 1st, effective date is same as
move-in
If MI is June 7, what is the effective date of
the certification?
July 1
55
EFFECTIVE DATES
• Annual Recertification
o Certification expires on the last day of the 12
month period
o AR effective date is the 1st day of month
following expiration
If the current certification was effective
August 1, 2013 what will be the effective date
of the next Annual Recertification?
August 1, 2014
56
EFFECTIVE DATES
• Interim Recertification
o Effective on 1st day of month following
receipt of verifications
o Must complete within 30 days of tenant
notification of change
If tenant reports a change on May 9, and
verifications are received June 3, what will be
the effective date of the Interim Recert?
July 1
57
SUBMISSION TIME FRAMES
• Due on 10th of month following effective
date
• If late, overage is charged
• Tenant at fault = Must attempt to
recapture the monies
• Borrower at fault = Overage must be paid
from non-project funds
58
ANNUAL
RECERTIFICATIONS
59
TENANT RESPONSIBILITIES
• Provide income, asset & household
information
• Authorize borrower to verify information
• If tenant fails to perform responsibilities
o Charge Note Rate rent
o Commence Termination of Tenancy
60
BORROWER RESPONSIBILITIES
• Maintain tracking & monitoring system to ensure
timely initiation and completion of certifications
• Obtain verification of all factors
• Send appropriate notices to tenant
• Notify tenant of new rent in a timely manner
• Submit certifications to RD within 10 days of
effective date
• Retain for 3 years or to next supervisory visit,
whichever is greater
61
AR NOTICES
• Initial Notice
o Send 75-90 days preceding expiration of
current certification
o Hand-delivery or 1st class mail
o Retain copy in tenant file with date mailed or
delivered
62
AR NOTICES
• Final Notice
o Send 30 days preceding expiration of current
certification
o Advise of consequences for failure to comply
• Retain copy of notice in tenant file with
date mailed or delivered
• Recommend send 30-day notice of rent
increase under separate cover
63
FAILURE TO RECERTIFY
TENANT AT FAULT
• Within 10 days of certification expiration,
send to Tenant and RD written notification
that:
o Termination proceedings are being initiated; and
o Tenant to be charged Note Rate rent until lease is
terminated
• Must have documentation that recertification
notices were sent timely (send copies to RD)
64
INTERIM
RECERTIFICATIONS
65
TRUE or FALSE?
• A tenant must report to you if their income
increases by $40 month.
TRUE
66
TRUE or FALSE?
You must perform an Interim Recertification
if you learn a tenant cashed in their Treasury
Bill worth $4,500.
FALSE
67
YES or NO?
Your tenant tells you his brother moved into
his apartment two months ago. This is news
to you. Should you perform an Interim
Recertification to include the brother as a
household member at the time you learn of
this?
NO
68
TENANT RESPONSIBILITIES
• Report any changes in household status
that could affect eligibility or level of
assistance
o Income increases or decreases
o Changes in household size
o Changes to household adjustments (i.e., child
care, medical, disability assistance, etc.)
o Change in household or member status
(member turns 18 or 62, or member becomes
disabled, etc.)
69
BORROWER RESPONSIBILITIES
• Recertify immediately only if tenant reports:
o Income change of $100/month or more (increase
or decrease)
o At tenant request for changes of $50/month or
more (increase or decrease)
• Complete the recertification within 30 days of
notification by tenant
• Submit to RD within 10 days of effective date
70
PENALTIES FOR FAILURE TO REPORT
• Cannot charge Note Rate rent
• Cannot terminate tenancy
• Recertify retroactively as if tenant had
reported timely
• Report failure to RD
• Make every effort to recapture
unauthorized assistance from tenant
71
A FEW TIPS
72
• Maintain a tracking system
o Use Certification/Recertification Checklists
(CARH Model Documents)
• Use a working file until certification is
complete (including signatures)
o Do not place into Tenant File until complete
• On Recertification Notices to tenant, provide:
o A date and time for recert interview
o A list of all potential documents tenant should
bring
o Advise signatures are required to render a
certification complete
• Make copies of recert notices and date stamp
them with date mailed/delivered
73