New FixedIncome Verification - Effective April 7, 2016

It seems like many owner/agents are not aware of the HUDrule changes that make verification of fixed income much easier.

On March 8, 2016, HUD released a newFederal Register Notice (Final Rule) entitled Streamlining AdministrativeRegulations for Public Housing, Housing Choice Voucher, Multifamily Housing, andCommunity Planning and Development Programs.

Fixed Income Verification

(This provision applies to the HCV/PBV, Section 8 (otherthan Moderate Rehabilitation), 202/811, and PH programs. It does not apply tothe Rent Supplement, Section 236, Sections 221(d)(3) or (d)(5) programs.)

The Streamlining Final Rule provides for a new, streamlinedincome determination (verification) for any fixed source of income. 24 CFR 5.657has been updated to explain the new requirements.For any family memberwhose income is determined pursuant to a streamlined income determination, anowner must obtain third-party verificationof all fixed-income amountsevery 3 years.

We want to provide you with a simple explanation of theprocess.

Social Security Income is the most common fixed incomesource.If you can,always use EIV to verify Social Security Income.

If the Social Security income is not reflected in EIV or ifthe resident disputes the information shown in EIV for Social Security income,you can use the new streamlined method.

In year one (Example: 2016) if information cannot beverified using EIV, obtain a current award letter. The award letter must be nomore than 120 days old when the OA receives the award letter.

In year two (Example: 2017) if information cannot beverified using EIV, apply the COLA increase to the amount verified in theprevious year. You must include, in the tenant file, the document you used toverify the COLA amount. This could be an award letter provided at the end ofthe previous year showing the COLA increase (in year 2, this letter works forthe entire year) or you could go towww.ssa.govand print out the COLA Award announcement.

In year three (Example: 2018) if information cannot beverified using EIV, apply the COLA increase to the amount used the previousyear. You must include, in the tenant file, the document you used to verify theCOLA amount. This could be an award letter provided at the end of the year (inyear 3, this letter works for the entire year) or you could go towww.ssa.govand print out the COLA Award announcement.

In year four (Example: 2019) if information cannot beverified using EIV, obtain a current award letter. The award letter must be nomore than 120 days old when the OA receives the award letter.

The same streamlining rules apply to other federal or stateawards subject to a Cost of Living Adjustment. This includes, but is notlimited to VA Disability, TANF, federal pensions.

HUD also allows you to apply the same rule when a residenthas a fixed income source that is subject to an annual percentage increase. Forexample, a resident may have an annuity arrangement that indicates that themonthly amounts will increase by 5% per year.

The owner/agent will obtain verification in compliance withHH 4350.3 R1, C4, Paragraph 5-13 and Appendix 3 in year one. In year two andthree, the owner/agent will just verify the percentage increase and apply thatpercentage increase to the income amount entered on the 50059 in the previousyear.

In year four, the owner/agent will obtain verification incompliance with HH 4350.3 R1, C4, Paragraph 5-13 and Appendix 3.

Owner/agents are not required to use this new methodology,but it certainly reduces the effort to obtain new verification documents forfixed income sources.

Reviewof the Streamlining Final Rule, to understand this and other changes, isstrongly recommended.


Join Us For Online Training InJune, July & August

(Classes are filling Fast!)

Classes Offered

Schedule

AR / IR &Terminations(Class length 2.5 hours)August 16, 2016

Students who register and attend the entire class will receive a certificate ofcompletion.

For additional information or to register, visit our web site athttp://www.rbdnow.com/onlinetraining.htm

Training materials and sample forms are provided to facilitate instruction. Theclass is delivered online (this is not a conference call). Students must haveworking speakers. Classes are live, interactive classes and students may askquestions during the class.

An email address is available for students who have questions after thetraining.


Instructor-ledTraining From RBD

HUD Management & Occupancy Challenge

SinceHUD has indicated that we should expect an increase in the number of Management& Occupancy Reviews (MOR) conducted in 2016, we have created a class to allowowner/agents and property managers to take a step back and review HUD'smultifamily occupancy requirements. This is not a review of basic requirements,but rather a discussion about best practices designed to help you identifycommon mistakes that may otherwise be revealed during the MOR.

Trainingincludes sample forms, notices and checklists.


Toregister for training, visit our web site atwww.rbdnow.comor contact our Training Coordinator (Larue Marin) atlarue.marin@rbdnow.com.

To sign up for the HUDBlast,visit our web site atwww.rbdnow.com. Just enter your email address in the box in the center ofthe home page.You canview previously posted HUDBlasts from our web site athttp://www.rbdnow.com/hudblasts.htm

We also encourage you to sign-up for theListserv, so you can receive current RHIIP related information from HUDhttp://www.hud.gov/subscribe/mailinglist.cfm.You canview the RHIIP Tips Archives, under "Listserv-Multifamily RHIIP Tips" athttp://www.hud.gov/offices/hsg/mfh/rhiip/mfhrhiip.cfm

RBD does not act as a legal advisor nor as a regulatory governingagency. The recipient should understand that any materials or commentscontained hereinare not designed for, nor should be relied upon as a source oflegal guidance or as a final authority with respect to any particularcircumstance. Ross Business Development, Inc. makes no warranty ofmerchantability or fitness for a particular purpose or any other warranty of anytype. Owners and management should seek competent legal advice in developing andcarrying out policies and procedures. While we have been diligent in ourefforts to provide comprehensive and accurate regulatory information, RossBusiness Development, Inc. shall not be responsible for errors or inaccuracies.