2. Income Targeting and Tenant Selection

2. Income Targeting and Tenant Selection

- Definitions of Annual Income - HOME Income Targeting - Tenant Selection - Comparing Income to HOME Income Limits - HOME Rent Limits - Comparing High and Low HOME Rent Limits - HOME Rent and Utility Allowance Calculation (example) - HOME Rental Housing Rent Determination Chart 2 (UA) - Utility Allowance Sources - HOME Rental Housing Rent Determination Chart 3 (Rents)

Definitions of Annual Income

? PJs must define annual (gross) income method to determine household income eligibility

? PJ can use 1 of 3 methods:

- Annual income as used in HUD programs like Section 8 (Part 5 annual income)

- Adjusted gross income as defined by the IRS Form 1040 (for individual tax reporting)

- Annual income as reported on the Census long form for the most recent census

Definition of Annual Income (cont)

? PJs must select one definition of income for each of their HOME-funded activities to apply to all program applicants of that activity

Examples:

- a PJ may choose the IRS Form 1040 definition for its homeowner rehab program

- All households applying for HOME homeowner rehab program funds must qualify using the IRS Form 1040 definition

- if HOME funded rental project has multiple funding sources (Section 8 and Sec. 42 tax credit in all units),

- All HOME units must use Part 5 income definition

HOME Income Targeting

? HUD HOME funds must be targeted to low and very-low income households, adjusted for family size (same as Section 8 definition):

? Low Income Limit

- 80% of the area median income (AMI)

? Very Low Income Limit

- 50% of the area median income (AMI)

HOME Income Targeting (cont)

HUD may set income ceilings higher or lower than 80% or 50% of the AMI because of

? prevailing levels of construction costs or ? market rents or ? unusually high or low family income

For each annual HOME allocation to a PJ:

? 90% of the all rental and TBRA units must be rented at the 60% AMI

? Remaining must qualify at 50% "Low Income" family level

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