Calculating Resident Rent Homelessness 101: Managing HUD Continuum of Care Homeless Assistance Grants Calculating Resident Rent Sponsored by the U.S. Department of Housing and Urban Development (HUD), Office of Community Planning and Development (CPD), San Francisco Regional Office Training provided by [Insert Agency Name Here] Materials created by HomeBase/ The Center for Common Concerns, Inc.

Big Picture: What this Training Covers There are specific rules that govern the amount of rent that can be charged of participants in HUD Continuum of Care Homeless Assistance Grant-funded programs. Rental amounts must be calculated correctly THIS TRAINING COVERS TENANT RENTAL CALCULATIONS -- NOT THE AMOUNT PAID TO THE LANDLORD TO LEASE THE PROPERTY AND NOT PROGRAM FEES

Overview: 6 Responsibilities We have organized what you need to know about accurately calculating resident rent into 6 responsibilities: 1. Fix policies 4. Review rental amounts 2. Calculate rent 5. Use/account appropriately 3. Maintain documentation 6. Monitor

Responsibility 1: Rental Calculation Policies, Procedures, & Systems Your agency should have Published written policies and procedures Created systems to ensure compliance with resident rent requirements. Overcharging or Undercharging Rent Has Serious Consequences!

1A. Requirement to Charge Rent Not required, but may charge rent Supportive Housing Programs (SHP) Required Shelter Plus Care (S+C) Section 8 Moderate Rehabilitation SRO

1B: Amount of Rent Tenant rental amounts are the highest of 30% of monthly adjusted income (specifically, 1/12th of annual adjusted income) 10% of monthly gross income Section 8 Moderate Rehabilitation SRO or S+C SRO: a minimum monthly payment (e.g., $25.00 to $50.00 a month) as the Housing Authority specifies, with one exception (refer to the manual for more information) Exception (SHP only): If an SHP recipient charges rent, then the rental amount cannot exceed, but may be less than, the amount calculated above.

1C. Verified Information The amount of rent will be a function of: household composition anticipated income anticipated expenses anticipated “allowances” anticipated household-paid utilities Rental calculations must be based on “verified information” Residents must supply the necessary certifications, releases, information, or other documentation to verify information.

1D. Other PP&S Your agency needs to have policies, procedures and systems supporting these other responsibilities: Calculating Rent (Responsibility 2) Proving Compliance (Responsibility 3) Reviewing Calculations (Responsibility 4) Managing Financial Obligations (Responsibility 5) Monitoring Compliance (Responsibility 6)

Responsibility 2: Calculate Rental Amount The goal – what is the highest of: 30% of monthly adjusted income (specifically, 1/12th of annual adjusted income) 10% of monthly gross income Section 8 Moderate Rehabilitation SRO or S+C SRO: a minimum monthly payment (e.g., $25.00 to $50.00 a month) as the Housing Authority specifies, with one exception (refer to the manual for more information)

Step 1: Determine the Household’s Annual Income Identify household members Categorize income sources as “included” or “excluded” using Appendices C and D Input information into Rent Calculation Worksheet tab: “Included and Excluded Income” Determine whether Mandatory Earned Income Disallowance applies (SHP, Section 8 SRO projects only)

Step 2: Determine the Dependent Allowance $480 per dependent Dependents are minors; household members who are disabled or handicapped; and full-time students But, dependents are NOT head of household or spouse; in SHP and S+C, a person living with the eligible participant because he or she is important for the care of the eligible person; or foster children

Step 3: Determine the Child Care Allowance Anticipated, unreimbursed, reasonable child care costs for children 12 years old and under needed to permit a household member to work; or needed to permit a household member to pursue education. The deduction amount cannot exceed the income received from work.

Step 4: Determine the Disabled (Handicapped) Assistance Allowance The reasonable, unreimbursed expenses for either attendant care for a disabled household member provided by a non-household member; or “auxiliary apparatus” that enables a disabled household member or another household member to work. The amount that is deducted from income is the amount of the unreimbursed expense that exceeds 3% of gross income, up to the amount earned by the adult household member(s) as a result of the Disabled Assistance.

Step 5: Determine Medical Expenses Allowance (Elderly or Disabled) Unreimbursed medical expenses exceeding 3% of annual income Incurred by the household’s head, co-head, spouse, or sole member who is at least 62 years of age; or disabled The amount of this allowance depends on the amount of the Disabled Assistance expenses calculated in Step 4.

Step 6: Determine the Elderly/Disabled Household Allowance Any household with a head, co-head, spouse of sole member who is at least 62 years of age or disabled is entitled to a $400 per household allowance

Step 7: Determine the Amount of Resident Rent What is the rental amount – highest of: 30% of monthly adjusted income 10% of monthly gross income For SHP, your agency’s lesser rental amount For Section 8 Moderate Rehabilitation SRO or S+C SRO, a minimum monthly payment, but . . . hardships 40% of adjusted income

Step 8: Determine Household-paid Utilities Offset/Reimbursement Obtain verified information of the anticipated cost of utilities that the household must pay Assess reasonableness: compare to your public housing authority’s schedule of utility allowances If the cost of utilities is less than the permitted monthly rental amount, the amount of rent is reduced by the cost of utilities If the cost of utilities is more than the permitted monthly rental amount, the household receives a utility reimbursement

Responsibility 3: Maintain a Filing System and Documentation to Prove Compliance Documentation to keep in the tenant’s file All pieces of rent calculations Critical pieces to include Verification of anticipated income Verification of anticipated expenses including those relevant to allowances and utilities offset/reimbursement calculations Rental calculation Notes regarding deviations and special circumstances

Responsibility 4: Review Rental Amounts Review Timing Must occur at least annually. Interim reviews: a tenant may request if changes in family or income occur that would decrease rent. Residents with Increased Income Programs may, but do not need to, increase rent before the next scheduled (at least annual) review Program policies should apply to all tenants equally

Responsibility 5: Use of Program Income & Accounting for Rental Income For SHP programs, rent = “program income.” Program income should be Treated as additional SHP funds subject to all applicable requirements for SHP Used for previously approved eligible activities in the project (although rent can be put into client savings accounts) Used before additional cash withdrawals are made from SHP funds For S+C programs, ensure that each tenant pays rent on time and in the correct amount.  All grantees, ensure that rent is used per the grant agreement (pp. 23-24 of Calculating Resident Rent booklet)

Responsibility 6: Monitor for Compliance and Quality Control HUD requires monitoring all policies and procedures to ensure quality control, including compliance with HUD requirements.

MOST IMPORTANT THINGS TO REMEMBER Your agency must have policies and procedures that comply with HUD’s requirements. Rent calculation errors have serious consequences. Help is available if you have questions. Document, document, document!

Other Resources A list of other resources can be found in your Calculating Resident Rent booklet. Grantees should call their local HUD representative with questions; sponsors should call their grantees. For other support, you can also contact: [Insert Contact Information]

For additional information, contact: [Insert Contact Information] Or visit HomeBase’s webpage to access the Calculating Resident Rent materials at: http://www.homebaseccc.org/pages/Hot_Topics/HUD_TAmaterials.html#HN101RentCalc