Common Errors and Non-Compliance

Correctly documenting Self Employment Documenting recurring gifts, child support,

alimony Documenting transfers What to count in income Who owns the asset? VOE’s, check stubs and the “work number” Assets less than $5000 – on demand

accounts

Common errors and Non-compliance

Self Employed persons with an existing business must provide:

1. NV-2c2. Provide copies of federal income

tax returns (IRS Form 1040 Schedule C for Business Income ) for the preceding calendar year

3. Provide a current profit and loss statement

Self Employment

Self Employed persons with a new business must provide:1. NV-2c.12. Current Profit and Loss Statement3. Agree to provide tax returns after year

end filingNOTE: Management is responsible for insuring

they request the tax return to document the NV- 2c.1

Self Employment cont.

Acceptable forms for documenting the above◦ Divorce decree;

Please enclose the entire decree and not just the order page, must be able to determine that the decree is for the applicant/resident

◦ Court ordered with papers to show the order; Again must have entire document

◦ Letter from an attorney or mediator;◦ Documentation from District Attorney’s office/support

enforcement;◦ Letter from payor

Letter must have some form of ID attached or may be notarized

Recurring gifts, child support and alimony

Are transfers from building to building allowed?

Well let’s see………………………………

Transfers

Now we have found out the circumstances when we can transfer between buildings, so how do we document it?◦ When a resident transfers from one unit to another the

current paperwork goes with them;◦ They retain the same move-in date they had in the

original unit;◦ The easiest way to handle the lease is to have them

sign an addendum with the new unit number;◦ If they transfer during the year (prior to their move-in

anniversary) you would not complete re-cert (1st annual) or alternative cert until the anniversary of their original move-in to the other unit

Transfers cont.

Paperwork for transfers between units in the same building will be handled exactly the same as ones that are from building to building

Transfers cont.

If the property cannot transfer residents from building to building (based on the selection made by the owner when issued the 8609’s)◦ Perform a move-out on the current unit;◦ Complete a full move-in certification;◦ There is a new move-in date and a full 1st year

annual re-certification is required on the anniversary

Transfers cont.

All sources of income whether earned or unearned that the household is anticipated to receive in the 12 months following move-in (and the 12 months following recert if property is required to perform recertifications)

Are there any exceptions?

YES…………………………

What do we count as income?

1. Earned income of minors

2. Income of Live-in Aides

3. The income of a student that is over the age of 18, not a head or co-head of household, no income is counted after the first $480

4. Income received through a clearly defined job training program that is for a specific limited time period and does not exceed one year for reimbursement of expenses, e.g. childcare, transportation

5. Resident stipend income (cannot exceed $200/month)

.

Cont.

When assets are jointly owned by more than one party it is divided by the amount of owners.

The asset could be real estate, trust accounts, checking or savings accounts, valuable collections such as art etc.

The resident will need to provide third party documentation that they are not the sole owner.

Who owns the asset?

For example:

A checking account with the name of the applicant/resident and another adult that is not a member of the household on it.

What needs to be verified?1. Is this the a/r primary account?2. Is this the account their income is deposited into?3. Is the other adult just an emergency signor? A POD?4. Is the other adult’s income being deposited into this account?

Cont.

Helen Wright is an assisted-housing tenant. Sheand her daughter, Elsie Duncan, have a jointsavings account. Mother and daughter bothcontribute to the account. They have used theaccount for trips together and to cover emergencyneeds for either of them. Assume in this examplethat state law does not specify ownership. Eventhough either Helen Wright or Elsie Duncan couldwithdraw the entire asset for her own use, countHelen's ownership as 50% of the account only.

Cont.

Incomplete VOE’s Not putting the employers name and full

contact information at the top. Signature name and reference name/ name

inserted by employer differs Not providing the property’s contact

information VOE not signed by employer

VOE’s

No way to determine it was sent by employer(No fax header or footer, no return envelope if mailed)

VOE’s cont.

When do we need ‘em?

1. When employer does not return VOE2. When YTD, # of hrs, # of OT hrs, etc. is

not answered on VOE3. To verify commission, bonus, tips etc if

employer states included in pay4. To verify that employer does not track and

report tips for employee. (Must provide if using the Tip Affidavit)

Check/Pay stubs

How many are required?4350.3 HUD Occupancy Handbook Chapter 5 says:

Owners may not accept pay stubs to document employment income unless the applicant or tenant provides the most recent four to six, consecutive pay stubs to illustrate variations in hours worked.

Check/Pay stubs cont.

Internal Revenue Code Sub-section 42 requires that we use the 4350.3 HUD Occupancy Handbook for guidance on calculating income

Check/Pay stubs cont

“Work Number”

Review carefully dates of employment On-site staff should question any

discrepancies and clarify them before an applicant moves in.

Document, document, document

Cont.

On demand accounts are savings or checking accounts that can be withdrawn at anytime with no penalties.

If an applicant/resident has these types of accounts they must be verified even if less than $5,000.

Sooo………. What’s the difference?

Assets – On Demand accounts

1. Documentation can come straight from the applicant/resident you do not have to contact the institution

2. You will not “imput” or “assign” a value to it

What does the 4350.3 say you need?

Cont.

For a checking account:The average balance for the most recent

6mos:This can be in the form of 6 bank statements or many banks show an average balance on the front page of statements. You can accept these from the applicant/resident as long as it clearly shows their info and the institutions info.

Cont.

For a savings account:The actual amount in the account from the most recent statement. Again, may be provided by applicant/resident – you do not need to contact the institution

Cont.