Slide #1
Verification Techniques
Annie Stevenson
Slide #2
Welcome to Lunch N Learn!
 Upcoming topics for the occupancy series:
•
•
•
•
8/1/08: Factors of Eligibility (PH and HCV)
8/15/08: EIV
9/4/08: PH Denials and Terminations
9/5/08: HCV Reasonable Accommodation
Slide #3
Welcome to Lunch N Learn!
 Today’s topics:
•
•
•
•
Total tenant payment calculation
Minimum rent
Utility allowances
Flat rents
Slide #4
Slide #5
Total Tenant Payment
TTP is highest of:
• 10% total monthly
income
• 30% monthly
adjusted Income
• the welfare rent
• minimum rent
Slide #6
How to Get TTP
 Annual Income
$2000
 4 children x $480
1920
 Adjusted Income
$ 80
 Annual divided by 12 = $167 (mo. Inc)
 Adjusted divided by 12 = $7 (mo adj inc)
Slide #7
How to Get TTP
 10% of $167 = $17
 30% of $7 = $2
 Minimum Rent $25
 Welfare Rent $0 (N/A)
 TTP is ??????
Slide #8
TTP Calculation
 Learning activity 1
 TTP calculation on 50058
• 8a = $15,780
• 8y = $11,392
• Minimum rent = $35
Slide #9
Learning Activity 1 Answers
1,315
132
949
30
285
0
35
285
N
Slide #10
Slide #11
Minimum Rents
 PHAs may establish minimum rents
$0 - $50
 PHAs must adopt minimum rent hardship
exemption policies
Slide #12
Minimum Rent
Hardship Exemptions
 Lost eligibility/awaiting determination for
Federal, State or local assistance program
 Would be evicted as result of requirement
Slide #13
Minimum Rent
Hardship Exemptions
 Family income decrease because of
changed circumstances (unemployed)
 Death in family
 Other circumstances as determined by PHA
or HUD
Slide #14
Minimum Rent Process
 PHA notifies family if TTP = Minimum Rent
 Family requests exemption
 PHA suspends payment beginning of next
month (use next higher TTP)
• Family not required to pay Minimum Rent
during period
• PHA may request reasonable documentation
of hardship
Slide #15
Minimum Rent Process
 PHA must promptly determine
• if hardship exists
• whether temporary (PHA policy)
or long term
Slide #16
Minimum Rent Process
 PHA may not evict the family for
nonpayment of minimum rent for a
90-day period
• Beginning the month following family’s
request for a hardship exemption
Slide #17
Minimum Rent Process
 If PHA determines no hardship under statute,
minimum rent is imposed retroactively
Slide #18
Minimum Rent Process
 If PHA determines the hardship is temporary
• Must reinstate minimum rent retroactively to
beginning of suspension
• Reasonable repayment agreement offered
Slide #19
Minimum Rent Process
 If PHA determines hardship of long-term
duration exists, minimum rent is exempted
retroactively to date of family’s request for
exemption
 Exemption continues until hardship no longer
exists
Slide #20
PHA Procedures
 PHA must have minimum rent hardship
exemption policy
 PHA must notify families
• Of right to request hardship exemption
• Hardship exemptions are subject to PHA’s
informal hearing procedures
Slide #21
TTP Calculation: Minimum
Rent Hardship Exemption
 Learning activity 2
 TTP calculation on 50058
•
•
•
•
8a = $900
8y = $55
Minimum rent = $50
Family requested and was granted exemption
Slide #22
Learning Activity 2 Answers
75
8
5
30
2
0
0
8
Y
Slide #23
Exemption Doesn’t Apply to
Other Factors of TTP
 Financial hardship exemption only applies to the
payment of minimum rent and not to other
elements used to calculate TTP
 Example:
• 30% of AMI
• 10% of MI
• PHA’s Min Rent
$45
$27 
$50
Slide #24
Slide #25
Utility Allowance
 PHAs are required to establish and maintain
utility allowance schedules (see CFR 965.502)
 A utility allowance is that amount approved by
the PHA for reasonable monthly costs of local
utility consumption
Slide #26
Utility Allowance
 Families responsible for utility costs (excluding
telephone) will see a utility allowance applied to
their rent calculation
Slide #27
Slide #28
Definitions for Income-Based
Rent
 Tenant Rent – amount payable by the family
as rent to the PHA
 Utility Reimbursement – amount by which
utility allowance exceeds TTP
 Income Based Rent – rent based upon family
income, allowances and deductions
Slide #29
Calculation of Tenant Rent
and URP
 To get Tenant Rent, subtract the utility
allowance (UA) from TTP
 If UA is greater than the TTP, Tenant Rent is
zero and there is a Utility Reimbursement
Payment (URP)
• The URP is the difference between the TTP and the
Utility Allowance
• (Tenant credit on bottom line 10f of 50058)
Slide #30
Utility Allowances
TTP
- UA
$80
50
Tenant Rent $30
40
50
TTP
- UA
Tenant Rent
URP
$10
0
Slide #31
Rent Calculation
 Learning activity 3
 Income-based rent calculation on 50058
•
•
•
•
8a = $12,312
Minimum rent = $50
Flat Rent = $550
Utility Allowance = $75
8y = $10,020
Slide #32
Learning Activity 3 Answers
1,026
103
835
30
251
0
50
251
N
Slide #33
Learning Activity 3 Answers
251
550
251
75
176
X
Slide #34
Rent Calculation
 Learning activity 4
 Income-based rent calculation on 50058
•
•
•
•
8a = $3,212
8y = $792
Minimum rent = $25
Flat Rent = $425
Utility Allowance = $100
Slide #35
Learning Activity 4 Answers
268
27
66
30
20
0
25
27
N
Slide #36
Learning Activity 4 Answers
27
425
27
100
73
X
Slide #37
Ceiling Rents
 Purpose
• to set a maximum rent families will pay in PH,
regardless of how high their income goes
 Used prior to existence of flat rents
Slide #38
Retaining Ceiling Rents
 As of 10/1/2002, ceiling rents had to be
adjusted to flat rent level
• PH OCC Guidebook says
flat rent + utility allowance = ceiling rent
 No time limit on ceiling rents
Slide #39
Ceiling Rent Calculation
 Calculate TTP as normal
•
•
•
•
30% of monthly adjusted income
10% of monthly income
Welfare Rent (if applicable)
PHA's minimum TTP ($0 - 50 – PHA Policy)
then…
Slide #40
Ceiling Rent Calculation
 Use the lesser of:
• TTP just calculated
• Ceiling rent for the unit
 Formula:
• TTP (ceiling rent) - UA = tenant rent
Slide #41
Rent Calculation
 Learning activity 5
 Income-based ceiling rent calculation
•
•
•
•
TTP = $ 398
Ceiling rent = $ 350
Flat Rent = $ 325
Utility Allowance = $ 25
Slide #42
Learning Activity 5 Answers
398
325
350
350
25
325
X
Slide #43
Flat Rents
 Effective for families admitted or recertified
on/after 10/1/99
 There must be a flat rent established for each
unit
 Flat rent has no formula based limit on what
tenant pays
• Utility allowances are not deducted
• Flat Rent = THE RENT
Slide #44
Flat Rents
 Flat Rent is:
• based on PHA determination of rental
value of the unit
• designed to not create a disincentive for
families to stay in PH as their income
increases
 Recertifications are done not less than
once every 3 years
Slide #45
Flat Rent Methodology
 Market value is rent which would allow the unit
to be successfully rented after preparation for
occupancy
 Acceptable methodology incorporates the
same 9 factors used in Section 8 rent
reasonableness methodology
Slide #46
Flat Rent Methodology
Relevant factors must include:
•
•
•
•
•
Age
Location
Quality
Amenities
Size of unit
Housing services
 Maintenance
 Utilities provided by PHA
 Unit type

Slide #47
Flat Rents: Family Choice
 Families elect annually whether to pay income
based or flat rent
 If family has elected to pay flat rent but
has a hardship and is unable to pay, the PHA
must allow the family to switch to income
based rent
 Income needs to be reviewed only every
3 years
Slide #48
Switching Rent Determination
Methods
 Allowable hardships to switch from flat
to income based rent
• income decreased due to family
circumstances
 loss or reduction of employment or other
income
 death in the family
Slide #49
Switching Rent Determination
Methods
 Allowable hardships to switch from flat
to income based rent
• expenses increased, due to changed
circumstances
 medical costs
 child care
 transportation, education or similar items
 other situations in PHA policy
Slide #50
Rent Calculation
 Learning Activity 6
 Flat rent calculation
• TTP = $ 450
• Flat Rent = $ 400
Slide #51
Learning Activity 6 Answers
450
400
X
Slide #52
Proration of Assistance
 Mixed Families receive prorated assistance
• Must use PHA’s maximum rent schedule to
determine prorated TTP
• DO NOT use ceiling rent in lieu of TTP
• Special rules for Mixed Families requesting
Flat Rent – see 50058 Instruction Booklet,
Appendix 3
Slide #53
Proration of Assistance
 Methodology for calculating PH maximum
rent
• Included in session materials
• Download for reference
Slide #54
Proration Exercise
 Learning activity 7
• 50058 lines 10h through 10s
 2 family members are eligible; 1 is ineligible
 TTP: $174
 PHA maximum rent is $325
 Flat rent: $500
Slide #55
Learning Activity 7 Answers
174
500
X
Slide #56
Learning Activity 7
Prorated Rent Answers
325
151
2
3
101
224
45
179
Slide #57
NMA Lunch ‘n’ Learn Seminar
NEXT TOPIC…
Slide #58
NMA Lunch ‘n’ Learn Seminar