Income Determination What you always wanted to know and didn’t know how to ask... Debbie Davis & Anita Racicot, MFA Ted Swisher, Santa Fe Habitat

Households vs. Family Based on income earned by all adults in household or family Households Used for all housing activities Could be one or more individuals related or unrelated living in same dwelling unit Persons who are members of a family Related by blood, marriage or adoption 2

What is income  Wages and tips  Social Security, SSI  Public assistance (AFDC or unemployment)  Alimony and child support 3

... more Pensions, retirement funds Regular pay to members of Armed Forces Parental support to students VA retirement benefits 4

What is NOT income? Income from kids under 18 years old WINNING BIG AT THE LOTTERY Scholarships Hazardous duty pay Temporary income, including gifts FOOD STAMPS Job Training Partnership Act Earned income credit 5

Acceptable proof of income Independent third party verification of wages (Income Verification form) VA, Social Security award letters Financial statement Divorce decree Unemployment - award notification or checks 6

... more AFDC printout Notarized letter from parents or payee (example: person paying child support, paying for daycare) If no alternative, at least 3 pay stubs 7

Assets - what are they? Must be more than $5,000 Savings accounts Stocks, bonds, money market funds Real property equity Trusts IRA, Keogh, 401k plans LOTTERY WINNINGS, inheritances 8

Assets: what they’re NOT... Necessary personal property (stereos, TVs, cars, furniture, etc.) Interest in Indian trust lands Vehicles equipped for the handicapped 9

Examples Military Pay Stub (what is included) Income Verification (when employed) Section 8 AFDC CSEB printout Unemployment awards 10

How to calculate income Employed 40 hours per week: multiply wage by 2080 $5 x 2080 = $10,400 Less than 40 hours, multiply hours by wage, then by x $5 = $160 $160 x 52 = $8,320 11

More... Monthly: multiply wage x 12 $800 x 12 = $9,600 Paid weekly = 52 pay periods Paid bi-weekly = 26 pay periods Paid semi-monthly = 24 pay periods Add in asset income Total of income sources for ALL MEMBERS OF THE HOUSEHOLD 12

Income Limits All applicants must be at or below applicable income limit Income limits (AMGI) published annually by HUD, then MFA Board approves updates MSA or county where project is located Based on household size at the time of move in  Household member is anyone that will be occupying unit, including unborn children 13

Additional eligibility subjects... Section 8 Live-in care attendants Parents with joint custody Foster children or adults 14

Documentation Application  Every prospective applicant must complete  Collects information about household, including names, ages, social security numbers, gender, relationship to head  Must list all sources of income and assets for household  Ask about status – students, receiving rental assistance, temporarily absent family members?  Release language on application or a separate release form must be in file 15

Verifications FOR ALL HOUSEHOLD INCOME AND ASSETS Third party (SIMPLY THE BEST!)  Written verifications received from a third party source independent from the applicant  Can be faxed to source, then faxed back  Effective for 90 days from date information returned to management (use a date stamp).  Clarification record can extend for 30 days – shows information re-verified by management by phone.  DON’T WRITE ON THE SOURCE DOCUMENT 16

More Verifications Second party only when not possible to get third party Check stubs (at least 3), grant award letters, bank statements or W-2 forms 17 First party or self affidavits Must be notarized Used when no other way to verify information or Negative verification MFA ALLOWS Social Security/VA award letters HSD printouts Unemployment award notices

And don’t forget... Don’t assume there are four weeks in each month If indicated on verification, don’t forget overtime Service industry – TIPS! Child support – must include if ordered but no attempt made to collect Part-time jobs 18

Assets Money held in a lump sum that is accessible to the household, including minors Checking, savings, CD’s are accessible Trust funds are not accessible Asset income is greater of actual income or imputed income Less than $5,000 Affidavit HUD Passbook rate is 2% 19

Tips for success Do not let anyone move in to your unit, project, home, etc. until you have verified their income. 20

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