Best practices in meeting the ever increasing regulatory
demands forced on the affordable housing industry.
Slide 3
Slide 4
100 Unit Development Set-aside Requirement: - 40% of the units
@ 60% of the Area Median Income, adjusted to family size - How many
units must be occupied to meet this requirement? 40% x 100 units =
40
Slide 5
Example Set-Aside for Housing Credit and MMRB Set-Asides
Housing Credit:100% @ 60% MMRB:30% @ 35% and 70% @ 60% 100 Unit
Development 30% @ 35% x 100 units = 30 units 70% @ 60% x 100 units
= 70 units
Slide 6
Requirements in the EUA or LURA Developmental amenities and
unit features Public Policy Criteria Tenant Programs Financial
Programs Computer Labs Health Care Frequency Set-asides
Slide 7
Where would you find the set-aside requirements for your
Development? MMRB Program HOME Program Land Use Restriction
Agreement (LURA)
Slide 8
Extended Use Agreement (EUA) or Extended Low Income Housing
Agreement Housing Credit Program
Slide 9
Qualify the Applicants Fully Completed and Executed List all
Occupants All Sources of Income Child Support Sworn
Declaration
Slide 10
Total Assets and Asset Income Student Status Previous Residence
Roommates Guarantors
Slide 11
Income of Household Members Adults: Head of household, spouse
or co-head, and other adult members of the household. Benefits or
other unearned income of minors is counted. Whose Income is Counted
?
Slide 12
When determining annual household income, all income expected
to be received within the following twelve month period must be
included. Examples of Income: Employment Wages Social Security/
Disability Child Support Regular Contribution and Gifts
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Total amount of income earned prior to any deductions. Overtime
Bonuses Shift Differential Raises Commission
Slide 14
Employment Wages Earned Income Part-Time, Full-Time, or
Self-Employment. Consider Pay Frequency: hourly, weekly, bi-weekly,
semi- monthly, monthly, or annually. Consider Any Potential
Overtime, Bonuses, Commissions, Tips, Shift Differential, or
Anticipated raises. Tips, Shift Differential, or Anticipated
raises. Use Gross Income Amount Except When Self-Employed Project
Income For Next 12 Months Chapter 4, Section 3-HUD 4350.3 Chapter
4, Section 3-HUD 4350.3
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Ron, a public school teacher gets $27,000/ year. Although the
school in in session for only nine months, he receives the
remaining parts of his salary when school breaks for the summer.
His employment verification from the District School Board supports
this figure with the following calculation: 9 months X $2,500
$22,500 3 months X $1,500 $4,500 Annual Household Income=
$27,000
Slide 16
Upon further research it was found that during the summer
months, he tutors and earns on average $2,150 per year. 9 months X
$2,500 = 22,500 3 months X $1,500 = $4,500 Summer months tutoring =
$2,150 Actual Annual Household Income = $29,150
Slide 17
Mary, a sales representative for a pharmaceutical supply firm,
has a third party verification form showing her gross salary as
$32,897 per year. The Verification also shows she is eligible for
bonuses that are capped at 10% of her yearly salary Gross salary
$32,897.00 Bonuses $ 3,289.70 Annual Household Income=
$36,186.70
Slide 18
Rachel works part-time at a department store. The third party
verification states that her pay is $8.48 per hour and she works
15-20 hours per week, 52 weeks per year. Which calculation would
you use?: Gross salary A = $8.48 x 15 x 52 B = $8.48 x 17.5 x 52 C
= $8.48 x 20 x 52
Slide 19
Upon further review it was observed that Rachel has also been
awarded child support in the amount of $200 per month through a
court order. Rachel claims that she hasnt received any in the past
year however she is unable to provide documentation of attempts to
collect. Would you include the amount listed on the court
order?
Slide 20
Yes, you would include the amount as listed on the court order.
New income calculation: Gross Salary from Employment $ 8,819.20
Child Support $ 2,400.00 Annual Household Income= $11,219.20
Slide 21
A Military Professional applies and provides a copy of his LES
statement. It is indicated that in addition to his income, there is
a clothing allowance and hostile fire pay. His earned income is
$25,000 a year. Calculation is as follows: Total earned income
is$25,000 Clothing Allowance$2,000 Hostile Fire Pay($500 a month)
$6,000 Hostile Fire Pay is not included as income ($6,000) Annual
Income appears to total = $27,000
Slide 22
Upon further review, it is determined his housing allowance
(BAH) is not included on his LES statement because he is currently
living on the Military base. When he moves into your unit he will
be receiving the housing allowance. Calculation is as follows:
Total earned income is$25,000 Clothing Allowance$2,000 Hostile Fire
Pay($500 a month) $6,000 Hostile Fire Pay is not included as income
($6,000) Housing allowance ($900 a month)$10,800 Annual Income
totals = $37,800
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Total amount of compensation received prior to any deductions.
Social Security Retirement Social Security Disability Pension
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Annual income is the amount anticipated to be received by a
household during the 12-month period following move-in or
recertification effective date. Requirements for Determining Annual
Household Income Educational Employees Educational Employees Nurses
Nurses Servers & Hair Stylists Servers & Hair Stylists
Slide 25
A school bus driver works 9 months and receives $1100 per
month. During the summer recess, the bus driver works for the YMCA
for $500 per month, in addition he is a personal trainer at $35 per
hour. Calculate annual income based on current income: $9900 ($1100
x 9) $1500 ($500 x 3) 15 Hours a week at $35 per hour personal
training during summer 7.5 Hours a week at $35 per hour personal
training during school year
Slide 26
To ensure compliance with this prospective household there are
a few steps that must be achieved. Begin with listing out some
questions that need a little more clarification Helpful Tips
Slide 27
Is there an anticipated increase in salary over the next 12
months as a bus driver? Is the employee paid over 9 months or 12
months? Does the bus driver receive additional income for driving
during field trips? Is there an anticipated increase in salary from
the YMCA during the summer? Is his income and/or number of hours
going to increase from personal training over the next 12
months?
Slide 28
These are some circumstances that present unusual challenges:
Seasonal work Sporadic work
Slide 29
Seasonal Work Chad is a Landscaper. He does not work when it is
raining. Chads employer is able to provide documentation showing
the number of regular and overtime hours he has worked in the past
two years. Without a statement showing anticipated income for the
upcoming certification year, how would you calculate his
income?
Slide 30
The best practice for calculating Chads anticipated income is
to use the average of the hours provided (which in this case is the
past two years) times his current regular pay rate. Then take the
average overtime hours times his current overtime rate and add that
to the anticipated income.
Slide 31
Sporadic Work The Head of Household is a Farm Worker. He is
paid by the number of pieces of fruit picked daily. The amount of
fruit picked is calculated on a daily basis and the income from
this is paid on a weekly basis. There are a couple of questions to
ask the individuals occupying the unit: Head of Household- Farm
Worker goes to Washington, D.C. to pick fruit in the summer. How
much does he anticipate making in Washington, D.C.? Will all the
other family members stay in the unit? Months when the Farm Worker
is unemployed he receives unemployment benefits and food stamps.
How many months/ weeks is he typically unemployed?
Slide 32
Sporadic Work Son to the Head of Household: is 18 and a
fulltime student. He works as a mechanics assistant at $8 an hour
for 25 hours per week. Mother of the Head of Household: lives in
the unit and receives $600 a month in Social Security Wife of the
Head of Household: babysits two kids per week at $35 per week per
child
Slide 33
Use current circumstances to anticipate annual income Income
may not last a full 12 months; however shall be calculated assuming
current circumstances will last a full 12 months. Example:
unemployment and disability If information regarding changes
expected to occur during the year is available, use that
information to determine the total anticipated income for all known
sources during the year. Example: raises and overtime Methods for
Projecting Annual Household Income Annual Household Income
Slide 34
General Requirements Timeframe Required Verification and
Consent Methods Documenting Effective Term Inconsistent
Information
Slide 35
HOUSING CREDIT Use the most stringent rule! HOME MMRB Qualified
Project Period for Bond Financed Properties Multiple Programs?
