1 S+C Rent Calculation

2 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

3 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

4 Rent Calculation Rent needs to be calculated: –At the time a participant enters the program –At least once a year after the initial calculation

5 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

6 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

7 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

8 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?

9 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?

10 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?

11 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?

12 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?

13 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”

14 S+C Rent Calculation Worksheet Questions 1-8 refer to the income a household expects to receive in the next 12 months

15 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

16 S+C Rent Calculation Worksheet A complete list of what is included/excluded from income can be found in 24 CFR Section 5.09

17 S+C Rent Calculation Worksheet Four mandatory deductions: 1. $480 for each dependent 2.$400 for any disabled family 3.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 4.Unreimbursed child care expenses

18 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

19 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

20 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)

21 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

22 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

23 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

24 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

25 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)

26 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

27 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

28 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 ext Deb: ext Joe: ext Mary: ext Sara: ext Tom: ext. 2108