Management Handbook



Form TC-59hr INCOME & RENT CALCULATION WORKSHEET

This form will be used at HUD and USDA-RD properties for all types of Resident Certifications to correctly determine income and rent calculations before they are entered into the computer system for the finalized certifications.

Please calculate all income and expenses (deductions) separately by using a calculator tape fastened (taped, not stapled) to the actual form; or, to a separate sheet of paper placed “on top” of the form if the tape would cover any data on the form itself. Be sure to label the calculator tapes “if using a separate sheet”: Name of person, type of income, asset, allowance or expense.

NOTE: If a person gets Social Security and Supplemental Security Income (dual benefits) calculate them separately on different calculator tapes. Please enter separately into the computer system, as well. Entering just the total income can cause fatal error in TRACS and MINC.

To assist in determining income from all sources, deductions and allowances needed to determine rent and eligibility, please refer to the following government handbooks: HUD – 4350.3, REV 1, Change 4; USDA-RD – 3560-6, Chapter 6.

Please complete each section of the form completely as follows:

PAGE 1 – INCOME CALCULATION WORKSHEET:

1. Enter the property name, unit #, and Head of Household’s name.

2. Mark the appropriate subsidy program you are assigning and/or that applies to the household. More than one may apply.

3. Effective Date:

HUD: The effective date for a Move-in certification will be the actual date the move in occurs. For example:

Move-In effective date: June 10, 2014 for a move-in that occurred June 10, 2014.

The effective date for an Annual certification will always be the 1st day of the “anniversary” month for which the move-in occurred. For example:

Annual Recertification effective date: June 1, 2015 for first annual and subsequent recertifications – the “anniversary” month for a June 10, 2014 move-in.

The effective date of an Interim certification will always be on the first of the month following the reported change “unless” the resident will have a rent increase. In this case the resident will be given a full thirty-day advance notice after the increase in rent has been determined. However, if the resident failed to report the change OR if the rent is going to be reduced, a thirty-day advance notice of the rent change is not required. For example:

• Interim effective date: July 1, 2015 for a change reported on any day from June 2, 2015 through June 30, 2015 where an advance 30-day notice is not required;

• Interim effective date: August 1, 2015 for a change reported on any day from June 2, 2015 through June 30, 2015 where an advance 30-day notice is required.

USDA-RD: The effective date of the certification will always be the first of the relevant month: M/I – June 10, 2014; Certification date – July 1, 2014. (The actual move in date will be reflected on the 3560-8 at the bottom of page 1.)

If there are “no” unscheduled recertifications during the year, then the “anniversary” date of the next recertification would be “July 1, 2015”. If an unscheduled certification is required, the USDA-RD annual date will change - because every USDA-RD certification is good for a full 12 months.

4. Mark the appropriate action type for the certification being prepared – the type of certification that is being processed: Move-In, Program Change, etc.

5. INCOME CALCULATION SECTION:

Income and Assets:

Gross Income: Insert the “total” sum of all annual income for all household members (earned and unearned). Remember, that if there is “exempt” income you will “not” add it to this total. However, there will be a labeled calculator tape reflecting this exempt income source and amount (i.e. food stamps). Exempt income is used to show how the household will sustain itself, and, will not be entered into the computer program or be reflected on the HUD 50059 or the USDA-RD 3560-8 certification forms.

Pay Period Examples:

$$ paid hourly x number of hours x 52 weeks = weekly

$$$ paid every 2 weeks = 26 pay periods or bi-weekly

$$$ paid 2 times per month = 24 pay periods or semi-monthly

$$$ paid 1 time per month = 12 pay periods or monthly

Total Cash Value of All Assets: Insert the “total” cash value of ALL assets for all household members, including children, on the line provided. There will be calculator tapes reflecting these values in the resident’s file. NOTE: Some assets like Direct Deposit Debit Cards, Cash on Hand, Term Life Insurance and non-interest bearing Savings accounts will not need a calculator tape because interest is not received.

Total Actual Income from All Assets: Insert the “total” interest, dividends, and/or rental income earned from the assets on the line provided. NOTE: For Certificates of deposit, stocks/bonds, etc. that may have penalties for early withdrawal, the interest rate is applied to the “full” market value of the asset. Also, Real Estate may have outstanding mortgages or liens that can affect the rental income amounts. (Please use form TC-16a to calculate this value.)

Imputed Asset Income: Calculate and insert this imputed income ONLY if the total cash value of ALL assets totals $ 5000 or more, or, if the household has divested of assets for “less” than fair market value. HUD and USDA-RD use an imputed interest rate of .06% effective as of February 1, 2015.

Asset Income: Insert the greater of “actual” or “imputed” income on the line provided.

Total Gross Annual Income (GAI): Add Gross Income and Asset Income together and insert into the space provided on the form.

Deductions Section:

Total Medical Expenses for the household: Insert the “total” medical expenses from all sources listed on the calculator tapes on the line provided for households whose Head, Co-head or Spouse is age 62 or older; OR age 18 or older and disabled. This includes the medical expenses of non-elderly and/or non-disabled persons living in the household, as well.

Handicap Care Expenses: Insert the “total” handicap care expenses from all sources. These are expenses incurred to allow a person in the household to “work” when there is a disabled person in the household who needs attendant care; or the disabled member needs specially designed vehicle apparatus to allow him/her to get to and from work, etc. Please call your Compliance Specialist for assistance if the household has this type of expense.

Less 3% of Gross Annual Income (GAI): Take the total GAI above and multiply it by 3%. (For example: GAI of $ 8,900 x 3% = $ 267.)

Once 3% of GAI is determined for the household please enter that “total” on the line provided.

Total Allowable Deductions: To determine the total deductions allowable, please do the following:

1. Add the Medical and Handicap Care expenses together.

2. Subtract the 3% of GAI amount from the above total.

For example: Total Medical $ 450 + Total Handicap Care $ 500 = $950 total.

$ 950 – 3% GAI $ 267 = $ 683 “the total deduction allowed toward calculating resident rent.

Now insert the “total” allowable deductions amount on the line provided. In this case, $ 683 (see above).

Allowances Section:

Dependents: Enter the “total” number of dependents living in the household and then multiply by $480. Now enter that total in the right-hand column on the line provided. NOTE: A $480 allowance is also given for persons age 18 and older who are NOT the Head, Co-head or Spouse of the household if they are disabled (like an elderly parent) or are a full-time student living with a parent also living in the household.

Childcare Expense: Enter the “total” amount of the childcare expense on the line provided for children “under” 13 years of age to allow a parent to work, look for work, or attend school. The childcare allowance cannot exceed the GAI.

Elderly Household: Only “one” $400.00 allowance per household is given when the Head, Co-head, or Spouse is elderly or disabled. Please insert the $ 400 on the line provided for eligible households.

ADJUSTED GROSS INCOME (AGI): AGI is determined by subtracting the total allowable deductions and allowances from the GAI (Gross Annual Income). Refer to mathematical signs to the left of the column to complete this section.

For example: GAI $ 8,900 – Total Allowable Deductions $683 – Elderly Household Allowance $ 400 = $ 7,817 AGI.

6. RENT CALCULATION:

HUD ONLY: Please be sure to indicate “yes” or “no” for prorated rent if indicated by the 214 Review for Citizenship circumstances. Prorated rent sheets will be available through the 50059 processing in the computer program.

Also, if the household’s gross rent (before utility allowance is deducted) is $25 or less, we must offer them a minimum rent exception. Check the appropriate boxes that apply. Use form TC-50 to determine the minimum rent hardship eligibility.

Both the prorated rent calculation sheet and the minimum rent hardship forms must be attached to this Income Calculation Worksheet.

Total Tenant Payment: The Total Tenant Payment is determined by the Adjusted Gross Income (AGI) divided by 12 multiplied by 30%. Example: AGI $7817 (from above) divided by 12 times 30% = $ 195.42 (round to $ 195).

Less Utility Allowance: Enter the current Utility Allowance, if applicable, for the property. Some sites have utilities paid by the Property.

Tenant Rent: Subtract the Utility Allowance from the TTP to get the net tenant rent, if applicable. Example: $ 195 - $ 25 UA = $ 175 net tenant rent (TR).

If there is not a utility allowance, transfer TTP to this section as the net tenant rent.

Assistance Payment: The difference between the Contract/Basic/Market Rent and the Tenant Net Rent will be the assistance payment.

Example with UA: Contract Rent = $ 600 - $ 175 (TR) = $ 425 assistance payment.

Example without UA: $ 600 – 195 = $ 405 assistance payment. This is what HUD/MINC will pay on the resident’s behalf.

Contract/Basic/Market Rent: HUD/USDA/RD: The Contract/Basic/Market Rent from the Property’s Rent Schedule. Be sure to list the bedroom size in this section on the line provided.

Note: Choose the column(s) that will apply to the property then follow the step by step mathematical calculation (signs to the left of the boxes) to complete the rental calculation.

7. PHA SECTION 8 VOUCHER HOLDERS: (If applicable)

For Public Housing Authority Section 8 Housing Choice Voucher residents, you will need to complete the “Rent Calculation” section AND the “PHA Section”.

To complete this section, you will need the PHA Contract/Addenda so that you know the tenant’s portion of the rent and subsidy portion determined by the Agency. Be sure to “always” list the effective date of the Agency’s information.

The contract/basic/Market rent and utility allowances are determined by the property’s rent schedules.

8. INCOME LIMITS:

Once the household’s income and rent has been determined then the proper income limits must be entered as appropriate to the property and program type to determine if the household is eligible to move into the property.

Some properties will have more than one income limit. “ALL” relevant income limits must be entered. EXAMPLE: HUD with Tax Credit, HUD with USDA-RD and Tax Credit, USDA-RD with Tax Credit, and some of these properties could also have Market units.

**NOTE: Remember to include unborn children in household size to determine the proper income limit and bedroom size to use to determine program eligibility.

HUD:

HUD 30% Ex Low Limit: The 30% or Extremely Low Limit will only apply at move-in. This rate is used to adhere to the “Income Targeting” method required by HUD. See the “HUD Resident Selection Plan, Electronic Waiting List policy”.

HUD Income Limit: Enter the most restrictive HUD Income Limit from the appropriate HUD Income Limit Chart for the household size (Very Low or Low) as required by the original HUD HAP contract (or universe).

Compare the Income Limit entered to the gross income (GAI) from the “Income Calculation” section. If the GAI is at or below the income limit the household qualifies and is eligible for housing. If they are “over” the gross income limit at move in – they will not qualify unless there are Market units available.

USDA-RD:

USDA-RD Income Limit: Compare the adjusted gross income (AGI) from the “Income Calculation” section to the USDA-RD Income Limit Chart. If the AGI is at or below the Very Low, Low or Moderate income limit the household qualifies and is eligible for housing. If they are “over” the Moderate income limit they do not qualify at move-in or recertification unless there are Market units available.

Also, if the rent calculation determines that the household would pay NOTE rate rent – the household will not qualify at move-in or recertification. At recertification, if this is determined, the household will have to move out at the end of their lease term “unless” their household has had a reduction in income and rent at that time.

NOTE: HUD Properties that are USDA-RD 515/8 follow the Income Limit directions under HUD and USDA-RD above. You will need to enter HUD Income Limits and USDA Income Limits.

HOUSING TAX CREDIT:

This section is used for properties that are HUD and/or USDA-RD that are also Housing Tax Credit (HTC) Properties.

Be sure to mark the additional boxes as applicable to the property for Household per the Land Use Restrictive Agreements: Risk Share, HOME, Special Needs and/or Families with Children.

HTC Income Limit: Fill in the appropriate HTC Income Limit amount from the Income Ranges Chart for the household size, unit size and set-aside percentage (30% 40%, 50% or 60% limit). Compare this income limit to the GAI for the household as listed in the “Income Calculation” section.

The household’s gross income “must” be under the income limit for the relevant set-aside at move-in. It may be necessary to move the household to a higher income level once their gross income is calculated.

If a household’s income is at or above the 60% income level at move in, they do not qualify for a tax credit unit. They can qualify for a market unit if available.

HTC 140% Income Limit: Move-ins cannot qualify under the 140% limit.

At annual recertification, if the GAI is at or below the 140% limit, the household is still eligible.

If the household income is OVER the 140% Income Limit, STOP! Then, please call the Compliance Specialist for assistance. We have to be careful that we do not violate the “Next Available Unit” or “Unit Vacancy” rules per IRS Section 42 code that governs Housing Credit sites.

HTC Maximum Gross Rent: This rent is determined by the state agency annually. From the “Income Ranges” chart fill in the HTC Maximum Gross Rent for bedroom size. Remember that the household cannot pay more than this Maximum Gross Rent amount for their rent and utilities combined.

For questions and concerns regarding these form instructions, please contact the Property’s Compliance Specialist for assistance.

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