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Section 8 Admin Plan 2011 (2)
CALIFORNIA NATIONAUCx a.&.(3v nvcoRponATED „0 Community Development Commission of National City Section 8 Rental Assistance Division SECTION 8 ADMINISTRATIVE PLAN FY 2011 - 12 140 E. 12th Street, Suite B National City CA 91950-3312 (619) 336-4254— Telephone (619) 477-3747— Facsimile www. nationalcityca.gov SECTION 8 ADMINISTRATIVE PLAN FY 2011 - 2012 TABLE OF CONTENTS CHAPTER 1 STATEMENT OF POLICIES AND OBJECTIONS Jurisdiction 1-1 Mission Statement 1-1 HUD Mission Statement 1-1 Core Values and Ethical Standards 1-2 Local Goals 1-2 Purpose of the Plan 1-3 Administrative Fee Reserve 1-4 Rules and Regulations 1-4 Fair Housing Policy 1-5 Reasonable Accommodations Policy 1-6 Applying for admission 1-8 Privacy Rights 1-11 Family Outreach 1-11 Owner Outreach 1-12 Issuance of Vouchers 1-12 Payment Standards 1-13 Adjustment to Payment Standards 1-13 Subsidy Standards 1-15 Utility Allowance and Utility Reimbursement Payments 1-15 CHAPTER 2 WAITING LIST Introduction 2-1 Local Preferences 2-1 General Waiting List Management 2-2 Cooperative Agreement 2-3 Applications for Program Admission 2-3 Special Admissions 2-3 Taking Applications to the Waiting List 2-4 Pulling Applicants from the Waiting List 2-5 Return to the Waiting List 2-5 Change of Household While on the Waiting List 2-6 Other Housing Assistance 2-8 Purging 2-9 Opening / Closing the Waiting List 2-9 i SECTION 8 ADMINISTRATIVE PLAN FY 2011 - 2012 TABLE OF CONTENTS CHAPTER 3 ELIGIBILITY FOR ADMISSION AND PARTICIPATION Introduction 3-1 Form and Format for Denial/Termination 3-2 Purpose of Screening Applicants and Participants 3-3 New Admissions 3-3 Current Residents 3-3 Screening Process 3-4 Eligibility Factors 3-4 Unique Admission Eligibility Factors 3-4 Homeless 3-7 Criminal Activity 3-7 Admission and Participation Eligibility Factors 3-8 SSN Disclosure 3-10 SSN Documentation 3-12 Rejection of Documentation 3-13 Individuals Without an Assigned SSN 3-16 Termination of Assistance or Termination of Tenancy Of Participants 3-17 CHAPTER 4 VERIFICATION PROCEDURES Introduction 4-1 Data Quality 4-1 Methods of Verification and Time Allowed 4-2 Mandated Use of HUD'S Enterprise Income Verification (EIV) System 4-2 Procedures for Independent Verification 4-4 Enterprise Income Verification 4-5 Penalties for Non -Compliance 4-5 Documents Accepted as Verification 4-7 Self -Certification / Self -Declaration 4-7 Release of Information 4-7 Failing to Disclose and Verify SSN and EIN 4-8 Criminal Records 4-8 Computer Matching 4-9 Items to be verified 4-11 Required Documentation 4-11 Disclosure and Verification 4-12 Penalties for Failing to Disclose and Verify SSN and EIN 4-14 Verification of Waiting List Preferences 4-14 Verification of Non -Financial Factors 4-16 Verification of Legal Identity 4-16 Verification of Age 4-17 ii SECTION 8 ADMINISTRATIVE PLAN FY 2011 - 2012 TABLE OF CONTENTS CHAPTER 4 VERIFICATION PROCEDURES (continued) Verification of Marital Status 4-17 Foster Children/Adults 4-18 Familial Relationships 4-18 Verification of Permanent Absence of Family member 4-18 Verification of Disability 4-19 Verification of Citizenship/Eligible Immigrant Status 4-19 Time of Verification 4-20 Extensions of Time to Provide Documents 4-21 Disclosure and Verification of Social Security Numbers 4-22 Medical Need for Larger Unit 4-23 Verification of Income 4-24 Excluded Income 4-27 Bonuses and/or Commission 4-29 Income Changes Resulting from Welfare Program Requirements 4-30 Cooperation Agreements 4-32 Alimony or Child Support Payments 4-32 Net Income from Self-Employment/Business Ownership 4-33 Child Care Business 4-34 Recurring Gifts/Contributions 4-34 Zero or Minimal Income 4-35 Participation in a State or Federally -Funded Training Program 4-36 Full -Time Student Status 4-36 Verification of Assets 4-37 Retirement Accounts 4-39 Verification of Allowable Deductions from Income 4-40 Childcare Expenses 4-40 Medical Expenses 4-40 Prescription Drug Benefit 4-42 Ineligible Expenses 4-44 Assistance to Persons with Disabilities 4-44 Auxiliary Apparatus 4-45 CHAPTER 5 VOUCHER TERM, SUBSIDY STANDARDS, HOUSEHOLD COMPOST ION Introduction 5-1 Term of Voucher 5-1 Expirations 5-1 Assistance to Voucher Holders 5-2 Voucher Issuance Determination for Split Households 5-3 iii SECTION 8 ADMINISTRATIVE PLAN FY 2011 - 2012 TABLE OF CONTENTS CHAPTER 5 VOUCHER TERM, SUBSIDY STANDARDS, HOUSEHOLD COMPOST ION (continued) Determining Initial Family Unit (Voucher) Size 5-3 Exceptions to Subsidy Standards 5-5 Determination of Household Status and Composition 5-6 Qualifying Family Units 5-8 Live -In Aides 5-10 Remaining Member of the Family 5-12 Visitors 5-13 Mixed Families 5-13 Temporarily/Permanently Absent Family Members 5-14 Absence Due to Medical Reasons / Confined to Nursing Home 5-14 Absence Due to Full -Time Student Status 5-15 Absence Due to Incarceration 5-15 Absence of Entire Family 5-16 Court -Ordered Temporary Absence 5-17 Joint Custody of Children 5-17 CHAPTER 6 CALCULATION OF T T P AND FAMILY RENT Introduction 6-1 Income 6-1 Penalties for Noncompliance 6-1 Annual Income 6-2 Averaging Income 6-3 Minimal or Zero Income 6-4 Regular Contributions and Gifts 6-4 Alimony and Child Support 6-5 Business Income 6-5 Welfare Assistance Payments 6-6 Income Changes Resulting From Welfare Program Requirements 6-6 Specified Welfare Benefit Reduction 6-7 Verification Before Denying a Request to Reduce Family Rent 6-8 Lump Sum Receipts Considered Income Under The Regulations 6-9 Self -Sufficiency Incentives for Persons with Diabilities - Disallowance of Increase in Annual Income 6-10 Disallowance of Income Resulting From Participation In A Local, State or HUD -Funded Training Program 6-12 Assets 6-13 Periodic Amounts 6-14 Assets Disposed of For Less Than Fair Market Value 6-14 Annual Income (Not Included) 6-15 iv SECTION 8 ADMINISTRATIVE PLAN FY 2011 - 2012 TABLE OF CONTENTS CHAPTER 6 CALCULATION OF T T P AND FAMILY RENT (continued) Allowances 6-17 Mandatory Deductions 6-17 Childcare Expenses 6-17 Medical Expenses 6-19 Disability Assistance Expense 6-21 Total Tenant Payment and Tenant Rent 6-22 Proration of Assistance for "Mixed" families 6-22 Minimum Rent 6-22 Utility Reimbursement Payment 6-23 CHAPTER 7 INITIAL APPROVAL AND BRIEFING Introduction 7-1 Initial Eligibility Approval 7-1 Requirement to Attend Interview 7-2 Verification 7-3 Prior to the Briefing 7-3 The Briefing 7-4 Briefing Packet 7-5 After the Briefing and Before Lease -Up 7-7 CHAPTER 8 REQUEST FOR APPROVAL OF THE TENANCY, OWNER APPROVAL, LEASES AND CONTRACTS Introduction 8-1 Request for Approval of the Tenancy 8-2 Disapproval of RFAT 8-3 Unit Size Selected 8-3 HQS Guidelines for Maximum Occupants 8-4 Rent Limitations 8-4 Disapproval of Proposed Rent 8-5 Eligible Types of Housing 8-5 Security Deposit Requirements 8-6 Tenant Screening for Suitability 8-7 Information to Owners 8-7 Owner Disapproval 8-8 Lease Requirements 8-10 Tenancy Addendum 8-11 v SECTION 8 ADMINISTRATIVE PLAN FY 2011 - 2012 TABLE OF CONTENTS CHAPTER 8 REQUEST FOR APPROVAL OF THE TENANCY, OWNER APPROVAL, LEASES AND CONTRACTS (continued) Changes in Lease or Rent 8-12 Contract Execution Process 8-14 Change in Ownership 8-14 CHAPTER 9 HOUSING QUALITY STANDARDS AND INSPECTIONS Introduction 9-1 Inspection Types and Guidelines 9-2 Initial HQS Inspection 9-2 Annual HQS Inspections 9-3 Performance and Acceptability Requirements 9-4 Time Standards for Repairs 9-4 HQS Breach 9-5 Special / Complaint Inspection 9-5 Quality Control Inspection 9-5 Additional CDC HQS Criteria 9-6 Local Codes 9-6 Emergency Repair Items 9-7 Non -Emergency Repair Items 9-7 Smoke Detectors 9-7 Determination of Responsibility 9-8 Consequences if Owner is Responsible 9-9 Abatement 9-9 Extension in Lieu of Abatement 9-9 Consequences if Family is Responsible 9-10 Chapter 10 OWNER PAYMENTS, RENT LIMITS AND RENT REASONABLENESS Introduction 10-1 Rent Limitations 10-1 Rent Reasonableness Determinations 10-2 Owner Payments 10-3 Excess Payments 10-4 vi SECTION 8 ADMINISTRATIVE PLAN FY 2011 - 2012 TABLE OF CONTENTS CHAPTER 11 RECERTIFICATIONS, INTERIMS, CITIZENSHIP AND OTHER REGULAR ACTIVITIES Introduction 11-1 Appointments 11-1 Misrepresentation of Family Circumstances 11-2 Annual Activities 11-2 Annual Recertification 11-3 Evidence of Citizenship or Eligible Immigration Status 11-3 Declaration 11-3 Verification Consent Form 11-4 When Notice is to be Issued 11-5 General Provisions 11-7 Moves Between Reexaminations 11-7 Collection of Information 11-8 Failure to Respond to Notification to Recertify 11-10 Interim Changes 11-11 Procedures When the Change is Reported in a Timely Manner 11-11 Procedures When the CDC Processes the Change in an Untimely Manner 11-12 Reporting Additions to Owner and the CDC 11-12 Reporting Absences to the CDC 11-14 Interim Reexamination Policy 11-15 CDC Errors 11-16 Household Composition Changes that require a change in the subsidy standards 11-16 Notification of Results of Recertification / Interim 11-16 CHAPTER 12 MOVES WITH CONTINUED ASSISTANCE/PORTABILITY Introduction 12-1 Allowable Moves 12-1 Restrictions on Moves 12-2 Procedure for Transfers 12-2 Notice of Requirements 12-3 Portability 12-3 Outgoing Portability 12-3 Restrictions on Portability 12-4 Incoming Portability 12-5 Income and Total Tenant Payment of Incoming Portables 12-6 Regular Program Functions 12-7 Terminations 12-8 Required Documents 12-8 vii SECTION 8 ADMINISTRATIVE PLAN FY 2011 - 2012 TABLE OF CONTENTS CHAPTER 13 PROGRAM REVIEW AND PROGRAM INTEGRITY Introduction 13-1 Public Housing Agency Section 8 Fraud Recoveries 13-1 State of California 13-1 Complaints to the CDC 13-2 Categories of Complaints 13-2 Criteria for Investigation of Suspected Program Abuse and Fraud 13-3 Prevention of Program Abuse and Fraud 13-4 Other Program Integrity Activities 13-4 Detection of Program Abuse and Fraud 13-5 Quality Control File Reviews 13-5 Allegations of Program Abuse and Fraud 13-6 Investigation of Allegations of Program Abuse and Fraud 13-6 Overpayments to Owners 13-7 Evaluation of the Findings 13-8 Procedures for Documented Violations 13-8 Procedures for Documented Domestic Violence 13-8 Verification of a Victim of Domestic Violence, Dating Violence, Or Stalking 13-9 Procedural Non -Compliance 13-10 Intentional Misrepresentations 13-11 Disposition of Cases Involving Misrepresentations 13-12 The Case Conference for Serious Violations and Misrepresentations 13-12 Applicability 13-13 Recordkeeping and Reporting 13-13 Notification to Participant of Proposed Action 13-14 CHAPTER 14 TERMINATIONS, DENIAL, HEARINGS AND REVIEWS Introduction 14-1 Denial or Termination of Program Participation 14-1 Notification of Eviction 14-3 Authority to Deny Admission or Terminate Assistance 14-3 Zero ($0) Assistance Tenancies 14-4 Option Not To Terminate for Misrepresentation 14-4 Misrepresentation in Collusion with Owner 14-4 Missed Appointments and Deadlines 14-5 Procedure when Appointments are Missed or Information Not Provided 14-5 Procedures for Non -Citizens 14-6 Restriction on Delay, Denial, Reduction or Termination of Assistance 14-6 False or Incomplete Information 14-7 Notice of Termination of Assistance 14-7 viii SECTION 8 ADMINISTRATIVE PLAN FY 2011 - 2012 TABLE OF CONTENTS CHAPTER 14 TERMINATIONS, DENIAL, HEARINGS AND REVIEWS (continued) New Admissions 14-8 Current Residents 14-8 Reasonable Accommodation 14-8 Format for Denial/Termination Notices 14-8 Required Evidence 14-9 Termination of Contract or Lease 14-9 Termination by the Family: Moves 14-9 Termination of Tenancy by the Owner: Evictions 14-10 Evidence of Criminal Activity 14-10 Release of Sex Offender Registration Information or Criminal History Information to the Owner 14-11 Termination of Tenancy Decision 14-11 Termination of the Contract by the CDC 14-13 Informal Meetings and Reviews 14-13 Informal Review Procedures 14-13 When Informal Review is Not Required 14-14 Notification of Review 14-15 Procedure for Informal Review 14-15 Informal Hearings 14-16 Procedure for Informal Hearing 14-18 Hearing and Appeal Provisions for "Restrictions on Assistance to Non -Citizens" 14-21 Evidence of Citizenship or Eligible Immigration Status 14-21 Mitigating Circumstances for Applicants/Participants with Disabilities 14-23 CHAPTER 15 OWNER OR FAMILY DEBTS TO THE CDC Introduction 15-1 Payment Agreements for Participating Families 15-2 Debts Owed for Claims 15-2 Debts Due to Misrepresentations / Non -Reporting Information 15-3 Family Error/Late Reporting 15-3 Program Fraud 15-3 Violation of Family Obligations 15-3 Guidelines for Payment Agreements 15-4 Owner Debts to the CDC 15-5 Writing Off Debts 15-5 ix SECTION 8 ADMINISTRATIVE PLAN FY 2011 - 2012 TABLE OF CONTENTS CHAPTER 16 SPECIAL HOUSING TYPES, HOMEOWNERSHIP, PROJECT -BASED AND SPECIAL CLAIMS Introduction 16-1 Single Room Occupancy 16-2 SRO Rent and Housing Assistance Payment 16-2 Congregate Housing 16-2 Congregate Housing Lease and HAP Contract 16-3 Group Homes 16-3 Group Home Lease 16-4 Group Home Rent 16-4 Maximum Subsidy 16-5 Payment Standard 16-5 Housing Quality Standards 16-5 Additional Performance Requirements 16-5 Shared Housing 16-7 Rent and HAP Contract 16-8 Cooperative Housing 16-10 Housing Quality Standards 16-12 Manufactured Home Space Rental 16-13 Utility Allowance Schedule for Manufactured Home Space Rental 16-14 Homeownership 16-14 Eligibility Requirements 16-15 Homeownership Counseling Requirements 16-17 Eligible Units 16-17 CDC Search and Purchase Requirements 16-20 Inspection and Contract 16-20 Contract of Sale 16-21 Financing 16-22 Downpayment Assistance Grants 16-23 Continued Assistance 16-24 Maximum Term of Homeownership Assistance 16-26 Homeownership Assistance Payments and Homeownership Expenses 16-27 Automatic Termination of Homeownership Assistance 16-29 Portability 16-29 Moving with Continued Assistance 16-30 Denial or Termination of Assistance 16-30 Project -Based Housing Choice Vouchers 16-31 Program Administration 16-33 Inspection of the Projects and Units 16-33 Maintenance of Projects 16-34 Initial, Annual and Ongoing Activities 16-35 Special Claims 16-36 Move -Out and Close -Out Inspections 16-38 Other Requirements for Claims Processing 16-39 x SECTION 8 ADMINISTRATIVE PLAN FY 2011 - 2012 TABLE OF CONTENTS GLOSSARY G-1 to G-32 xi 1 STATEMENT OF POLICIES AND OBJECTIVES INTRODUCTION The Section 8 Program was enacted as part of the Housing and Community Development Act (Act) of 1974, which re -codified the U.S. Housing Act of 1937. The Act has been amended from time to time, and its requirements, as they apply to the Section 8 Tenant -Based and Project -Based Assistance Programs, are described, as implemented, throughout this Administrative Plan. The Section 8 rental assistance programs are federally funded and administered for the Community Development Commission of National City (CDC) through the Section 8 Rental Assistance Division. Administration of the Section 8 Program and the functions and responsibilities of the housing staff shall be in compliance with the City of National City's personnel policy and the Department of Housing and Urban Development's (HUD) Section 8 regulations as well as all federal, state and local fair housing laws and regulations. JURISDICTION The jurisdiction of the CDC is the City of National City. MISSION STATEMENT The CDC Mission Statement: "Building Better Neighborhoods" HUD Mission Statement "To promote adequate and affordable housing, economic opportunity and a suitable living environment free from discrimination to the low-income households in the City of National City." 1- 1 1 CORE VALUES AND ETHICAL STANDARDS All officers or employees of the CDC will comply with the Code of Ethics of the City of National City as well as those mandated under the Housing Choice Voucher Program. This includes compliance with the conflict of interest requirements of the Housing Choice Voucher Program under 24 CFR 982.161. The conflict of interest provision prohibits the PHA or any of its contractors or subcontractors entering into any contract or arrangement in connection with the tenant -based programs in which any of the following classes or persons has any interest, direct or indirect, during tenure or for one year thereafter. The classes or persons include: (1) Any present or former member or officer of the PHA (except a participant commissioner); (2) Any employee of the PHA, or any contractor or subcontractor or agent of the PHA, who formulates policy or who influences decisions with respect to the programs; (3) Any public official, member of a governing body, or State or local legislator, who exercises functions or responsibilities with respect to the programs; and, (4) Any member of the Congress of the United States. Any members of the classes described in this section must disclose their interest or prospective interest to the PHA and HUD. The HUD field office may waive for good cause the conflict of interest prohibition under this section. All CDC officers, employees, contractors, subcontractors or agents will comply with all requirements that prohibit the solicitation or acceptance of gifts or gratuities, in excess of a nominal value. All CDC officers, employees, contractors, subcontractors or agents will conduct business with integrity and in an honest and professional manner. Any violations of code of ethics, core values and ethical standards policies will result in disciplinary action ranging from letter(s) of warning to termination of employment and/or contract. Opportunity may be offered, on a case -by -case basis, to correct a conflict of interest. Code of ethics, core values and ethical standards policies will be communicated to the above groups upon initial employment, prior to execution of a contract, and at least annually. 1- 2 1 LOCAL GOALS [24 CFR 982.1] o To expand the supply of assisted housing, and support the efforts of housing development agencies, as well as, to increase the inventory of affordable housing for families in need as identified in local consolidated plans. o To assist the local economy by increasing the occupancy rate and the amount of money flowing into the community. o To encourage self-sufficiency of participant families and assist in the expansion of family opportunities, which address educational, socio-economic, recreational and other human service needs. o To create positive public awareness and expand the level of family, owner, and community support in accomplishing the CDC's mission. o To attain and maintain a high level of standards and professionalism in the day- to-day management of all program components. o To administer an efficient, high -performing agency through continuous improvement of the CDC's support systems and commitment to its employees. o To provide decent, safe, and sanitary housing for very low-income families while maintaining rent payments at an affordable level. o To ensure that all units meet Housing Quality Standards and families pay fair and reasonable rents. o To promote fair housing and the opportunity for very low-income families of all ethnic backgrounds to experience freedom of housing choice. o To promote a housing program which maintains quality service and integrity while providing an incentive to private property owners to rent to very low- income families. o To promote a market -driven housing program that will help qualified low- income families be successful in obtaining affordable housing and increase the supply of housing choices for such families. PURPOSE OF THE PLAN [24 CFR 982.54] The purpose of this Administrative Plan (Plan) is to establish policies for carrying out the programs in a manner consistent with HUD requirements, and in a manner consistent with local goals and objectives outlined in the agency plan. All pre -merger regular tenancy contracts, Housing Voucher contracts, and over fair market rent tenancy contracts have been transitioned to the Housing Choice Voucher Program as of October 1, 2001. 1- 3 1 The CDC is responsible for complying with all changes in HUD regulations pertaining to the HUD programs it administers. If such changes conflict with this Plan, HUD regulations will have precedence. The CDC Board of Commissioners must approve the original Plan, and any significant changes. The pertinent sections must be included in the agency plan with a copy provided to HUD. Applicable regulations include: 24 CFR Part 5: General Program Requirements 24 CFR Part 8: Nondiscrimination 24 CFR Part 908: Electronic Transmission of Required Family Data for the Section 8 Rental Voucher 24 CFR Part 982: Section 8 Tenant -Based Assistance: Housing Choice Voucher Program 24 CFR Part 983: Section 8 Project -Based Assistance: Housing Choice Voucher Program at Kimball Tower for Seniors, 62 years and older 24 CFR 984: Self Sufficiency Program 24 CFR 985: Management Assessment Program Local rules incorporated in this Plan are intended to promote local housing objectives consistent with the intent of federal housing legislation. ADMINISTRATIVE ERROR If the CDC discovers an administrative error that resulted in an underpayment of housing assistance payments, it will correct the error back to the previous action taken, and issue a payment to the owner or participant, if appropriate. If the CDC discovers an administrative error resulted in an overpayment of assistance, the error will be corrected with a 30-day advance notice. ADMINISTRATIVE FEE RESERVE [24 CFR 982.54(d)(22)] The Board of Commissioners must approve all expenditures of the administrative reserves (operating reserve) for other housing purposes. 1- 4 1 RULES AND REGULATIONS [24 CFR 982.52] This Plan defines the CDC's local policies for operation of the housing programs in the context of federal laws and regulations. Generally, Federal regulations, HUD memos, notices, guidelines, or other applicable law governs section 8 issues not addressed in this document. If any issue is not found in this plan or in the resources named above, the CDC may address the issue with a policy notice to CDC staff unless the new policy is a significant program change as defined in the Agency Plan. The policies in this Plan have been designed to ensure compliance with the consolidated annual contributions contract (ACC) and all HUD -approved applications for program funding. TERMINOLOGY The CDC Section 8 Rental Assistance Division is referred to as the "CDC" or "PHA" or "Housing Authority" throughout this document. "Family" is used interchangeably with "Applicant" or "Participant" or "Tenant" or "Household" and can refer to a single person family. "Tenant" is usually used to refer to participants in terms of their relation to landlords. "Landlord" and 'owner" are used interchangeably. "Disability" is used where "handicap" was formerly used. "Non -citizen Rule" refers to the regulation effective June 19, 1995 restricting assistance to U.S. citizens and eligible immigrants. "HQS" means the Housing Quality Standards required by regulations as enhanced by the PHA. "Failure to Provide" refers to all requirements of the Family Obligations of the program as outlined elsewhere in the Plan. "Merger date" refers to October 1, 1999, which is the effective date of the merging of the Section 8 Certificate and Voucher programs into the Housing Choice Voucher Program. See Glossary for other terminology. FAIR HOUSING POLICY [24 CFR 982.54(d)(6)] The Housing Authority will fully comply with all federal, state and local nondiscrimination laws, rules and regulations governing fair housing and equal opportunity in housing and employment. 1- 5 1 The CDC will not deny any family or individual the equal opportunity to apply for or receive assistance under the Section 8 programs on the basis of race, color, sex, religion, creed, national or ethnic origin, age, familial or marital status, disability, income source, or sexual orientation. To further the CDC commitment to full compliance with applicable civil rights laws, at the family briefing, the CDC will provide federal/state/local information regarding unlawful discrimination, and any recourse to those who believe they are victims of a discriminatory act. All applicable fair housing information and discrimination complaint forms will be included in the voucher holder's briefing packet, and will be available upon request. All CDC staff members may be required to attend fair housing training. These employees, in the overall commitment to quality customer service, are informed of the importance of affirmatively furthering fair housing, providing equal opportunity to all families, and providing reasonable accommodations to persons with disabilities. Fair housing posters may be displayed throughout the Housing Authority office, including in the lobby and interview rooms, and in such a manner as to be readable from a wheelchair. The equal opportunity logo will be used on all outreach materials. To keep current with new developments, staff may attend local fair housing update training sponsored by HUD, or other organizations. Except as otherwise provided in 8.21(c)(1), 8.24 (a), 8.25, and 8.31 of the regulations, no individual with disabilities shall be denied the benefits of, or be excluded from participation in programs, or otherwise be subjected to discrimination because the CDC's facilities are inaccessible to, or unusable by persons with disabilities. The Section 8 Rental Assistance Division is accessible to persons with disabilities. The California Relay Service provides accessibility for the hearing impaired. REASONABLE ACCOMMODATIONS POLICY [24 CFR 8.4(b)(i), 8.24 and 8.33] When a family member requires an accessible feature(s) or policy modification to accommodate a disability, PHAs must provide such feature(s) or policy modification unless doing so would result in a fundamental alteration in the nature of the program, or an undue financial and administrative burden. It is the policy of the CDC to be service oriented, and to exercise and demonstrate a high level of professionalism. The CDC shall make reasonable accommodation, upon request, to the reported physical or mental limitations of an otherwise qualified person with disabilities. A participant with a disability must ask for a specific change to a policy or practice as an accommodation of his or her disability before the CDC will treat him or her differently than anyone else. The CDC's policies and practices are designed to, upon request, provide reasonable accommodations to persons with disabilities, so they may 1- 6 1 fully access and utilize the housing program and related services. The availability of reasonable accommodation is made known by including the information on the Housing Authority's forms and letters. This policy will afford persons with disabilities an equal opportunity to obtain the same result, gain the same benefit, or reach the same level of achievement as those who do not have disabilities. This policy is applicable to all situations described in this Plan, including when a family initiates contact with the CDC, or when the CDC initiates contact with a family. This policy is applicable when a family applies for assistance, as well as when the CDC schedules or reschedules appointments of any kind. To be eligible to request a reasonable accommodation, the requester must make the request at least seven days in advance and may be required to certify (if apparent) or verify (if not apparent) to be an individual with a disability under the following definition: A physical or mental impairment that substantially limits one or more of the major life activities of an individual a record of such impairment; or being regarded as having such an impairment. This does not include any individual who is an alcoholic or drug abuser whose current use of alcohol or drugs prevents the individual from participating in the program. Note: This is not the same as the HUD definition used for purposes of determining allowances. Rehabilitated former drug users and alcoholics are covered under the Americans with Disabilities Act (ADA). However, a current drug user is not covered. In accordance with 24 CFR Part 8.3, individuals are not considered disabled for eligibility purposes solely on the basis of any drug or alcohol dependence. Individuals whose drug or alcohol addiction is a material factor to their disability are excluded from the definition. Individuals are considered disabled if disabling mental and physical limitations would persist if drug or alcohol abuse discontinued. The CDC will require, at least annually, that a professional third party competent to make the assessment of disability provide written verification that the individuals need a specific accommodation due to their disability, exactly what accommodation is recommended, exactly how this accommodation will allow them to fully access the program, and that the change is required for them to have equal access to the housing program. If the CDC finds that the requested accommodation creates an undue administrative or financial burden, then it will either deny the request and/or present an alternate accommodation that will still meet the need of the person. An undue administrative burden is one that requires a fundamental alteration of the essential functions of the CDC (i.e., waiving a family obligation or criminal history prohibition). 1- 7 1 An undue financial burden is one that when considering the available resources of the agency as a whole, the requested accommodation would pose a severe financial hardship on the CDC. The CDC will provide a written decision to the person requesting the accommodation within a reasonable time. If a person is denied the accommodation, or feels that the alternative suggestions are inadequate, s/he may request an informal meeting with a supervisor to discuss the CDC's decision. Reasonable accommodation will be made for persons with a disability who require an advocate or accessible offices. In addition, a designee may represent the individual with a disability, but only with written permission from the disabled person. VERIFICATION OF DISABILITY The CDC will verify disabilities under definitions in the Fair Housing Amendments Act of 1988, Section 504 of the 1973 Rehabilitation Act, and Americans with Disabilities Act. LIMITED ENGLISH PROFICIENCY (LEP) The CDC has low frequency of contact with LEP clients regarding its program. The "nature" of the Section 8 program in providing housing assistance to the needy is "important" enough to have "serious or even life -threatening implications for the LEP individual," which is the very reason the CDC monitors any "denial or delay of access" to its program, and provides language services when requested. The CDC provides appropriate assistance to its clients at a reasonable expense due to the recruitment of multi-lingual staff and availability of outside resources to provide a mixture of LEP services for interpretation and translation. TRANSLATION OF DOCUMENTS In determining whether it is feasible to provide translation of documents written in English into other languages, the CDC will consider the following factors: • Availability of local organizations to provide translation services to non-English speaking families. • Availability of bilingual staff to provide translation for non-English speaking families. • The need of clientele for translated documents. 1- 8 1 APPLYING FOR ADMISSION All persons who wish to apply for any of the CDC's programs must submit pre - applications. Applications will be made accessible upon request from a person with a disability. To provide specific reasonable accommodation to persons with disabilities, the applicant may: (1) Request the application be mailed to the applicant for completion then returned to our office, or (2) Obtain one by walking into our office during normal business hours and (a) complete the application there for immediate submission; or (b) take the application home to be completed by a designee, or any other specified reasonable accommodation. (3) The application can be downloaded, printed and completed for mailing back to our office or walked in. The full application is to be completed in the applicant's own handwriting, unless the applicant is a disabled person who requests assistance or other accommodation. The CDC staff may interview applicants to review the information on the full application form. Verification of disability as it relates to 504, Fair Housing, or ADA reasonable accommodation may be requested at that time, or mailed to the applicant. All applicants are advised that reasonable accommodations are available. MANAGEMENT ASSESSMENT OBJECTIVES The CDC can demonstrate to HUD auditors that it applies resources in a manner that reflects its commitment to quality and service. The CDC policies and practices are consistent with following HUD and SEMAP requirements: ■ Selection from the waiting list ■ Reasonable rent ■ Determination of adjusted income ■ Utility allowance schedule ■ HQS quality control inspections ■ HQS enforcement ■ Expanding housing opportunities ■ FMR/exception rent and payment standards ■ Annual Reexaminations 1- 9 1 • Correct tenant rent calculations • Pre -contract HQS inspections • Annual HQS inspections • Lease rate • Family self-sufficiency enrollment and escrow account balances • De -concentration of families A supervisor, or other qualified person, other than the person who performed the work, will perform supervisory quality control reviews, as required by HUD, on the following SEMAP factors: • Selection from the waiting list • Rent reasonableness Determination of adjusted income HQS enforcement HQS quality control The annual sample of files and records is drawn randomly from computer -generated lists or other reports, such a field logs, which leave a clear audit trail. The SEMAP required minimum sample size is reviewed for all SEMAP indicators that require a random sample. RECORDS FOR MONITORING PERFORMANCE In order to demonstrate compliance with HUD and other pertinent regulations, the CDC will maintain and retain records, reports and other documentation in accordance with HUD requirements. These records will be maintained in a manner that will allow an auditor, housing professional, or other interested party, to follow, monitor and or assess the CDC's operational procedures objectively, with accuracy, and in accordance with SEMAP requirements, and internal management controls. In addition to the required SEMAP documentation, supervisory staff will monitor the following functions: • All annual recertifications will be monitored for completion at least 30 days before the re -exam due date. 1- 10 1 • All annual inspections will be monitored for completion at least 30 days before the due date. • All new applications will be monitored for compliance with the regulations. PRIVACY RIGHTS [24 CFR 982.551 and CFR 5.212] Applicants and participants, including all adults in their households, are required to sign the HUD 9886 Authorization for Release of Information. This document incorporates the Federal Privacy Act Statement and describes the conditions under which HUD/CDC will release family information. The CDC's policy regarding release of information is in accordance with state and local laws that restrict the release of family information. The CDC will not request specific information regarding a person's disability. The CDC will ask that a health professional to confirm that a person's disability indicates a need for specified services or accommodation. If specific information is received regarding the disabled person's disability, the information will be kept confidential, and be destroyed in a confidential manner after a determination has been made. The CDC practices and procedures are designed to safeguard the privacy of applicants and program participants. All applicant and participant files are stored in a secure location, only accessible to authorized staff. CDC staff will not discuss family information contained in files except for a business reason. Inappropriate discussion of family information or improper disclosure of family information by staff will result in disciplinary action. Unauthorized persons may not remove files from secure storage areas. FAMILY OUTREACH [24 CFR 982.206] The CDC will, on a regular basis, publicize and disseminate information to make known the availability of housing assistance, and related services for very low-income families. If the CDC's waiting list is closed and then reopened, the CDC will publicize the availability and nature of housing assistance for very low-income families in a newspaper of general circulation, minority media, or by other suitable means. To reach persons who cannot read newspapers, the CDC will distribute fact sheets to the broadcasting media, and may initiate personal contacts with members of the news 1 media and community service personnel. The CDC may also utilize public service announcements. The CDC will communicate the status of housing assistance availability to other service providers in the community, and advise them of housing eligibility factors and guidelines so they can make proper referrals to those in need of housing assistance. OWNER OUTREACH [24 CFR 982.54(d)(5)] The CDC makes a concerted effort to keep private owners informed of applicable legislative changes in program requirements. The CDC encourages owners of decent, safe and sanitary housing units to lease to Section 8 families. The CDC encourages participation by owners of suitable units located outside areas of high poverty or minority concentration. The CDC encourages participation by owners of suitable units located outside areas of high poverty or minority concentration. The CDC conducts periodic meetings with owners, upon request, to improve owner relations and to recruit new owners. The staff of the CDC initiates personal contact with private property owners and managers by telephone, or, upon request, at informal discussions and meetings. Printed material is offered to acquaint owners and managers with the opportunities available under the program. The CDC actively participates in community -based organizations comprised of private property and apartment owners and managers. The CDC may periodically: • Develop working relationships with owners and real estate broker associations. • Establish contact with civic, charitable and neighborhood organizations, and public agencies which have an interest in housing for low-income. 1- 12 1 ISSUANCE OF VOUCHERS [24 CFR 982.204(d), 982.54(d)(2)] When funding is available, the CDC issues vouchers to eligible applicants. The CDC strives to issue enough vouchers to maintain a 100 percent lease -up rate, while managing within the available funding. The CDC performs a monthly calculation to determine whether applications should be processed, the number of vouchers that can be issued, and to what extent vouchers can be over -issued (issue more vouchers than the budget allows to achieve maximum lease -up rate). The CDC may over issue vouchers to the extent necessary to meet leasing goals, if funding is available. All over -issued vouchers will be honored, unless the CDC has insufficient funds to support the voucher, in which case the voucher will be suspended until there is sufficient funding. If the CDC finds it is over -leased, it must adjust its future issuance of vouchers so as not to exceed the Annual Contributions Contract (ACC) fiscal year budget limitations. PAYMENT STANDARDS [24 CFR 982.503] The payment standard is the basis for calculating the housing assistance payment for a family. In accordance with HUD regulation, and at the CDC's discretion, the voucher payment standard amount is between 90 percent and 110 percent of the HUD published FMR. This is considered the basic range. The CDC reviews the appropriateness of the payment standard annually upon publication of the new FMRs. The CDC may at any time make the administrative decision to adopt a payment standard that is from 90 percent to 110 percent of the most recently published FMR, unless HUD approves an exception payment standard. The CDC will establish a single voucher payment standard amount for rental assistance, unless HUD has published more than one FMR area for its jurisdiction. For each FMR area, the CDC will establish payment standard amounts for each unit size. The CDC may, subject to available funding, adopt a FMR of up to 110 percent of FMR, if needed to expand housing opportunities outside areas of minority or poverty concentration. The CDC may request an exception payment standard or adopt a higher payment standard for its Section 8 Homeownership participants. The CDC may, if funding is available, also approve a higher payment standard up to 110 percent if FMR, if required as a reasonable accommodation for a family that includes a person with disabilities. 1- 13 1 ADJUSTMENTS TO PAYMENT STANDARDS [24 CFR 982.503] Payment standards may be adjusted, depending on available funding, within HUD regulatory and financial limitations, to increase housing assistance payments to keep family rents affordable. The CDC will not raise payment standards solely to make "high end" units available to voucher holders. The CDC may use some or all of the measures below in making its determination of whether an adjustment should be made to the payment standards. ASSISTED FAMILIES' RENT BURDENS The CDC may review its voucher payment standard amounts at least annually to determine whether more than 40 percent of families in a particular unit size are paying more than 30 percent of their annual adjusted income for rent. If it is determined that the rents of particular unit sizes in the CDC's jurisdiction are creating rent burdens for families, the CDC may modify its payment standards for those particular unit sizes. The CDC may establish a separate voucher payment standard, within the basic range, for designated parts of its jurisdiction, if it determines that a higher payment standard is needed in these designated areas to provide families with quality housing choices, and to give families an opportunity to move outside areas of high poverty and low income. QUALITY OF UNITS SELECTED The CDC may review the quality of units selected by participant families when making the determination of the percent of income families are paying for housing, to ensure that payment standard increases are needed to reach the mid -range of the market. FAMILIES RENT BURDEN ANALYSIS The CDC may review the average percent of income that families on the program are paying for rent. If more than 40 percent of families are paying more than 30 percent of monthly adjusted income for a particular unit size, the CDC may evaluate the number of families renting units larger than their voucher size, or luxury or high -end units, as well as, any additional standards added by the CDC in this Administrative Plan. If families are paying more than 30 percent of their income for rent due to the selection of larger bedroom size units or luxury units, the CDC will decline to increase the payment standard. If this is not the primary reason for families' rent burden, the CDC will continue increasing the payment standard within HUD regulatory limitations. RENT TO OWNER INCREASES The CDC may review a sample of the units to determine how often owners are increasing rents and the average percent of increase by bedroom size. 1- 14 1 TIME TO LOCATE HOUSING The CDC may consider the average time period for families to lease up under the voucher program. If voucher holders are unable to locate suitable housing within their voucher term due to unaffordable rents, the payment standard may be adjusted. LOWERING OF THE PAYMENT STANDARD Lowering of the FMR may require an adjustment of the payment standard. Additionally, statistical analysis may reveal that the payment standard should be lowered. In any case, the payment standard will not be set below 90 percent of the FMR, without authorization from HUD. FINANCIAL FEASIBILITY Before increasing the payment standard, the CDC may review its budget to determine the impact of projected subsidy increases on funding available for the program, and the number of families served. For this purpose, the CDC will compare the number of families served under higher payment standards, to the number assisted under current payment standards. EXCEPTION PAYMENT STANDARDS If the dwelling unit is located in an exception area, the CDC must use the appropriate payment standard amount established for the exception area in accordance with regulation 24 CFR 982.503(c). SUBSIDY STANDARDS [24 CFR 982.402 (a) (b)] The CDC may take administrative action at any time, if warranted by HUD funding limitations and/or reductions, to reduce its subsidy standards to two people per bedroom and living area with no exceptions. The CDC may take the administrative action at any time to increase its subsidy standards, if funding allows and if necessary to improve or maintain the viability of the program. UTILITY ALLOWANCE AND UTILITY REIMBURSEMENT PAYMENTS [CFR 5.632, 982.517] The same utility allowance schedule is used for all tenant and project -based programs. The utility allowance is intended to cover the cost of essential utilities not included in the rent, including, refrigerators, ranges, trash collection, or other tenant -paid services. The allowance is based on the typical cost of utilities and services paid by energy -conservative households that occupy housing of similar size and type in the same locality. Allowances are not based on an individual family's actual energy consumption. 1- 15 1 The utility allowance schedule must include the utilities and services that are necessary in the locality to provide housing that complies with the housing quality standards. However, the CDC may not include allowances for non -essential utility costs such as, cable, satellite television, telephone, or Internet connection. The CDC must classify utilities in the utility allowance schedule according to the following general categories: space heating, cooking, air conditioning, water heating, water, sewer, trash collection, other electric, refrigerator (for tenant supplied refrigerator), range (for tenant -supplied range); and other specified services. An allowance for tenant -paid air conditioning will be provided in those cases where the majority of housing units in the market have central air conditioning, or are wired for tenant installed air conditioners [24 CFR 982.517]. Given the lower amount of these utilities than for other dwelling types, separate "flat rate" utility allowances for certain utilities may be allowed for mobilehomes in parks, and/or or for apartment complexes that charge a flat fee for certain utilities. Flat rate utilities are utility expenses charged to a tenant by an apartment complex of five or more units or a mobilehome park based on either sub metering, or total complex/park costs divided amongst the residents by a set formula. However, owners of houses, townhouses, duplexes, three-plexes, or four-plexes are not allowed to charge the tenants for shared -meter utilities. The CDC will review the utility allowance schedule annually. If the review finds a utility rate has changed by ten percent (10%) or more since the last revision of the utility allowance schedule, the schedule will be revised to reflect the new rate. Revised utility allowances will be applied in a participant family's rent calculation at the next reexamination. The approved utility allowance schedule is given to families along with their voucher. The utility allowances are based on the actual unit size selected. When families, including mobilehome owners and Section 8 Homeownership participants, provide their own range and refrigerator, the CDC will establish an allowance adequate for the family to purchase or rent a range or refrigerator, even if the family already owns either appliance. Allowances for ranges and refrigerators will be based on the lesser of the cost of leasing or purchasing the appropriate new or used appliance over a twelve-month period. Utility allowances for family -provided stove/and or refrigerator will not be given if the owner has available a stove and/or refrigerator, but it is the family's preference to provide their own appliances. When the calculation on the HUD 50058 results in a utility reimbursement payment due the family [24 CFR 5.632], the CDC will provide a utility reimbursement payment for the family each month. The check will be issued to the family. 1- 16 2 WAITING LIST [24 CFR Part 5, Subpart D, F, 982.54(d)(1); 982.204, 982.205, 982.206] INTRODUCTION The CDC's objective is to ensure that families are placed in the proper order on the waiting list and selected from the waiting list for admission in accordance with the policies in this Administrative Plan. This chapter explains the local preferences that the CDC has adopted to meet local housing needs, defines the eligibility criteria for the preferences, and explains the CDC's system of applying them. By maintaining an accurate waiting list, the CDC is able to perform the activities in a manner that ensures an adequate pool of qualified applicants is available for the timely use of program funds. The policy of the CDC is to ensure that all families interested in housing assistance are given an equal opportunity to apply, and are treated in a fair and consistent manner. This chapter describes the policies and procedures for completing an initial application for assistance, the placement and denial of placement on the waiting list, and limitations on who may apply. The primary purpose of the intake function is to gather information about the family, but the CDC will also utilize this process to provide information to the family so that an accurate and timely decision of eligibility can be made. Applicants will be placed on the waiting list in accordance with this Plan. LOCAL PREFERENCES [24 CFR 5 Subpart F] The CDC uses the following Local preference system: CATEGORY 1 (highest weight) Applicants who LIVE OR WORK or has been hired to work in the jurisdiction of the CDC SECTION 8 RENTAL ASSISTANCE DIVISION and is at least one of the following: Families with children Elderly families Disabled families 2- 1 2 Veterans are given priority within this category other than dishonorable discharge. Independent student (as defined by the Department of Education) CATEGORY 2 (2nd highest weight) All other applicants who LIVE OR WORK or has been hired to work in the jurisdiction of the CDC SECTION 8 RENTAL ASSISTANCE DIVISION. CATEGORY 3 (3rd highest weight) Applicants who DO NOT LIVE OR WORK in the jurisdiction of the CDC SECTION 8 RENTAL ASSISTANCE DIVISION and is at least one of the following: Families with children Elderly families Disabled families Veterans are given priority within this category other than dishonorable discharge. Independent student (as defined by the Department of Education) CATEGORY 4 (4th highest weight) ALL OTHER APPLICANTS GENERAL WAITING LIST MANAGEMENT [24 CFR 982.204] The CDC uses two waiting lists. • Section 8 Tenant -Based Rental Assistance program, and • Section 8 Project -Based Rental Assistance program for seniors at Kimball Tower. A family who lives in the jurisdiction of another cooperative housing authority named below will be advised of the benefit of being placed on the appropriate housing authority's waiting list, and the information will be forwarded to the appropriate housing authority upon written permission of the family. 2- 2 2 COOPERATIVE AGREEMENT The CDC, along with the County of San Diego and the cities of San Diego, Oceanside, Encinitas, and Carlsbad, have a cooperative agreement to honor the application status of applicants who move into their jurisdiction from the jurisdiction of one of the other cooperating agencies. Each PHA will exchange waiting list applicants, preserving the original time and date of application, for applicants residing in the jurisdiction of the other agency, provided the PHA has an open waiting list during that time period. If not, the applicant will be given the earliest date that the waiting list is reopened. In addition, applicants will not be accepted on the waiting list of the second PHA if the applicants do not live and/or work in the second PHAs jurisdiction. Upon receipt of applicant information, each housing agency will integrate such applicants into their current waiting list, using the original time and date of application, providing the applicants live and/or work in that PHA's jurisdiction. Upon applicant's written request, if the applicant lives and/or works in the other PHA's jurisdiction, his/her waiting list application will be forwarded to the housing agencies of the following jurisdictions: • County of San Diego • City of San Diego • Oceanside • Encinitas (which includes Leucadia and Cardiff) • Carlsbad The applicant who moves out of the jurisdiction of the CDC may remain on the CDC waiting list with the appropriate preference as long as applicant maintains all information current. APPLICATIONS FOR PROGRAM ADMISSION All applicants will be selected from the waiting list in accordance with policies and preferences and income targeting requirements defined in this Administrative Plan. SPECIAL ADMISSIONS The CDC may admit up to ten percent of its annual admissions as special admissions [24 CFR 982.54(d)(3), 982.203]. However, these special admissions must be funded by special HUD - targeted funding. Examples of this special funding follow: • A family displaced because of demolition or disposition of a public housing project. 2- 3 2 • A family residing in a multifamily rental housing project when HUD sells, forecloses or demolishes the project. • For housing covered under the Low Income Housing Preservation and Resident Homeownership Act of 1990 (41 U.S.C. 4101 et seq). • A non -purchasing family residing in a project subject to a homeownership program (under 24 CFR 248.173). • A family displaced because of mortgage prepayment or voluntary termination of a mortgage insurance contract (as provided in 24 CFR 248.165). • A family residing in a project covered by a project -based Section 8 HAP contract at or near the end of the HAP contract term. • A non -purchasing family residing in a HOPE 1 or HOPE 2 project. TAKING APPLICATIONS TO THE WAITING LIST The CDC, at the time of preliminary application, will collect the following information necessary for proper selection from the waiting list: • Applicant name. • Family unit size (number of bedrooms family qualifies for under CDC subsidy standards). • Date and time of application. • Qualification for any local preference. • Gross annual income. • Disabled household. • Racial or ethnic designation of the head of household. • Other targeted program qualifications. The application for placement on the CDC Waiting List may be mailed to the applicant, or picked up in person when they visit our office, or download and print the document from our website at www.nationalcityca.gov. The CDC will also accept applications by fax. We will accept all completed applications and place them on the waiting list on the date and time we receive them. All incomplete applications will be returned and not added to the waiting list until the application is returned completed. All possible reasonable accommodation will be provided to families with persons with disabilities, if requested seven days in advance per the reasonable accommodation policy. This application will not require an interview and the information may not be verified, and 2- 4 2 eligibility may not be determined, until the applicant's name has reached the top of the waiting list. Preferences may not be verified until final selection from the waiting list [24 CFR 982.207]. The waiting list supervisor may request documentation of eligibility status at anytime. All applicants, including single applicants, will be treated equally on the waiting list. An applicant to the waiting list may be, at the discretion of the waiting list supervisor, required to provide verification of eligibility, such as proof of residence or proof of income before placement on the waiting list. Applicants known to have been previously terminated from the Section 8 Rental Assistance program for violent or drug related criminal activities that involve sales or production cannot apply for five (5) years from the date of termination. For all other violations, applicants are ineligible to apply for three (3) years from the date of termination. Applicants who owe money to a housing authority cannot be assisted until the debt is paid. Applicants are required to inform the CDC, in writing, of any change in circumstances or changes in address, household composition and income as soon as possible. A Change of Information can be obtained from our office, mailed out or they can download and print the document from our website at www.nationalcityca.gov. They are also required to respond to requests from the CDC to update information on their application, or to determine their continued interest in assistance. Changes in an applicant's circumstances while on the waiting list may affect the family's entitlement to a preference. When an applicant claims an additional preference, s/he will be placed on the waiting list in the appropriate order determined by the newly claimed preference. Applicants in the waiting list with equal preference status will be organized by date and time. PULLING APPLICANTS FROM THE WAITING LIST Applicants will not be pulled from the waiting list for eligibility processing unless funding is available. Applicants will be pulled by preference group and income targeting guidelines, once funding is available, in proper order, as determined by the date and time of placement on the waiting list. The method of selection off the waiting list will be clearly documented [24 CFR 982.207(e)]. RETURN TO THE WAITING LIST APPLICANTS WHO MUST REAPPLY Applicants who reapply to be placed back on the waiting list will be positioned on the waiting list as of the date and time they reapply. If the family declines the offer of a voucher, the family will not be eligible to be returned to the waiting list. The family must reapply to the waiting list. 2- 5 2 A family whose application is denied for failure to provide information must reapply to be placed back on the waiting list. A family found ineligible for assistance must reapply to be placed back on the waiting list. Applicants found ineligible for assistance because they exceed the current HUD published Section 8 income limits must reapply to be placed back on the waiting list. APPLICANTS REINSTATED AT ORIGINAL DATE AND TIME OF APPLICATION Applicants removed from the waiting list will be given the benefit of the doubt if there is a possibility they were removed from the waiting list through no fault of their own. These applicants may be reinstated on the waiting list if there is a possibility they were not notified, such as in the case of only one notice being issued. In order to be reinstated, applicants must submit a statement under penalty of perjury requesting reinstatement and stating that they had either submitted changes of address to the CDC in a timely manner, that they had not changed their address, or that they should be reinstated as a reasonable accommodation. APPLICANTS RETURNED TO THE WAITING LIST AT ORIGINAL DATE AND TIME OF APPLICATION The family can not request its name be returned to the waiting list at its original date and time of application prior to the completion of the eligibility process. Otherwise eligible applicants pulled from the waiting list and found not to meet preference or income -targeting requirements will be returned to the waiting list at original date/time of application. CHANGE OF HOUSEHOLD WHILE ON THE WAITING LIST While the applicant is on the waiting list the CDC will not change the head of household unless it receives either: • Notarized statement from the head of household requesting the head of household be changed; • Death certificate, if head of household died and proof that the person requesting to become head of household was a significant other who resided with that person at the time of that person's death (utility bills and lease agreement reflecting address on record, marriage certificate, joint bank account statements, jointly owned property, etc.). However, once the applicant is selected from the waiting list, the listed head of household must be included in the eligibility determination. An estranged significant other may be allowed to take the place of the head of household if s/he can provide documentation indicating s/he resided with the head of household at the address reflected on the waiting list records and was part of 2- 6 2 the head of household's family unit (lease agreement, notarized statement from property owner, joint bank account or other property). Before this change is made, a letter must be mailed to the head of household advising him/her that a request has been made to change his/her status on the waiting list. S/he will be advised that s/he will be dropped from the waiting list if s/he does not respond within 10 days. If there is no response by the deadline, a phone call will be attempted and documented. After that, providing the requester provides adequate documentation, the head of household may be changed to the remaining significant other. All documentation of this action must be retained for five years. REQUEST FOR WAITING LIST APPLICATION STATUS Information regarding a person's waiting list status may only be provided to the applicant. The CDC must receive a written release of information from the applicant before information will be provided to a third party. The release will be placed with the original application and third -party information will also be noted on HAPPY. POINT IN TIME THAT FAMILY MUST BE ELIGIBLE FOR PROCESSING A family selected off the waiting list is determined eligible or not eligible for eligibility processing based on the information provided on the eligibility declaration, the supporting documents submitted and independent verification by the CDC. The family must be eligible for the preferences it has claimed, income limits and targeting, and jurisdiction priority as of the time it was pulled off the waiting list. A family change in circumstances after the date the family was pulled off the waiting list for eligibility processing will not be evaluated for a possible change in preference status, jurisdiction, income limits and targeting, unless the family change in circumstances, prior to voucher issuance, results in the family's income exceeding 50% of area median income, in which case, the family must be denied program admission. If the family is determined to be ineligible as of the date the family was pulled from the waiting list, the family will be required to reapply to the waiting list. The following scenarios are handled as follows: SCENARIO NUMBER ONE A family met admission preferences and income targeting requirements as of the point of time of being pulled from the waiting list, but during the full application process, the family moved outside of the CDC's jurisdiction. The family will not be continued to be processed for admission. SCENARIO NUMBER TWO A family was over income at the time it was pulled from the waiting list, but then the income was reduced as a result of termination of employment. The family must be denied as being over income at the time it was pulled off the waiting list and must reapply. SCENARIO NUMBER THREE A family was at or below 30% of area median income at the time it was pulled from the waiting list, and then its income increased to over 30% of AMI (Area Median Income) but below 50% of AMI prior to completion of the full 2- 7 2 application and issuance of the voucher. The family met the income targeting requirements when it was pulled off the waiting list and is still income -eligible at completion of the full application and issuance of the voucher, so the family may be processed for admission. SCENARIO NUMBER FOUR The family was income -eligible at the time it was pulled from the waiting list, but started working prior to the completion of the full application, which resulted in the family's income exceeding 50% of the AMI. The family must be denied as over -income and future changes in the family's circumstances cannot be considered, e.g., the family member quits his/her job. The family must reapply to the waiting list. SCENARIO NUMBER FIVE The family's income increases after it was issued a voucher. The income increase, in accordance with the CDC interim policy, may not be processed until the family's next annual reexamination after the family leases into an assisted unit. INCOME TARGETING In accordance with the Quality Housing and Work Responsibility Act of 1998, each fiscal year the CDC will reserve a minimum of seventy-five percent (75%) of its Section 8 new admissions for families whose income does not exceed thirty percent (30%) of the area median income. HUD refers to these families as extremely low-income families. The CDC will admit families who meet the CDC preferences and who qualify under the extremely low-income limit to meet the income -targeting requirement. The CDC's income -targeting requirement does not apply to low-income families continuously assisted as provided for under the 1937 Housing Act. OTHER HOUSING ASSISTANCE [24 CFR 982.205(b)] Other housing assistance means: a federal, state, or local housing subsidy, as determined by HUD, including public housing. If an applicant has applied for, received, or refused other housing, the CDC will not: [24 CFR 982.205(b)] • Refuse to list the applicant on the CDC waiting list for tenant -based rental assistance • Deny appropriate admission preferences to a qualified applicant • Change the applicant's appropriate ranking order on the waiting list • Remove the applicant from the waiting list 2- 8 2 However, the CDC may remove the applicant from the waiting list for tenant -based rental assistance and project -based rental assistance, if the applicant has refused voucher program assistance. PURGING The waiting list will be purged periodically to ensure that it is current and accurate. In order to purge the waiting list, a notice will be mailed asking applicants for confirmation of continued interest. All notices requiring a response will state that failure to respond within ten days will result in the applicant's name being inactivated on the waiting list. If the applicant provides information that s/he did not respond to the notice because of a family member's disability, the CDC will reinstate the applicant at the original date and time of application. The family will also be reinstated if it can provide documentation it was at the purge address at the time of the purge and resided there continuously until an address change was reported, and if records reflect the family reported all subsequent address changes in a timely manner. Applicants who have been dropped due to "No Response" and later claim they never received the Update Letter and claim to still reside at the same address on record will not be reinstated unless they provide proof of problems with delivery of mail at that address within the time in question, from the US Post Office. Otherwise, the applicant will have to reapply. OPENING/CLOSING THE WAITING LIST [24 CFR 982.206, 982.54(d)(1)] It is generally the policy of the CDC to not close the waiting list. However, the CDC may stop accepting applications, if the waiting list contains enough applicants to fill anticipated openings for the next 24 months. The CDC will give at least 30 days' notice prior to closing the list. The waiting list will not be closed if it has a discriminatory effect inconsistent with applicable civil rights laws. If the CDC closes its waiting list, it will advertise its reopening through public notice in the following newspapers, minority publications and media entities, location(s), and program(s) for which applications are being accepted: The notice will contain: • The dates, times, and the locations where families may apply • The programs for which applications will be taken • A brief description of the program • A statement that public housing residents must submit a separate application if they want to apply for section 8 • Limitations, if any, on who may apply 2- 9 2 The notices will be provided in an accessible form, including radio and/or television broadcasts, presentations to organizations that provide assistance to special population groups, such as the elderly, or the disabled, as well as published notices. The notices will provide potential applicants with information that includes the CDC address and telephone number, how to submit an application, information on eligibility requirements, and the availability of local preferences. Upon request from a person with a disability, additional time will be given as a reasonable accommodation for submission of an application after the closing deadline. This reasonable accommodation is to allow persons with disabilities the greatest possible opportunity to submit an application. 2- 10 3 ELIGIBILITY FOR ADMISSION AND PARTICIPATION [24 CFR Part 5, Subparts B, D Et E; Part 982, Subpart E] INTRODUCTION This chapter defines both HUD and the CDC'S criteria for admission and ongoing participation to the program. The policy of the CDC is to strive for objectivity and consistency in applying the criteria to evaluate the eligibility of families who apply. Applicants and program participants must provide true and complete information to the CDC whenever information is requested, and must supply any information that the CDC determines is necessary in the administration of the program, including consenting to the CDC's verification of that information. The CDC's verification requirements are designed to maintain program integrity. This chapter explains CDC's procedures and standards for verification of preferences, income, assets, allowable deductions, family status, and changes in family composition. The CDC will obtain proper authorization from the family before requesting information from independent sources. The CDC staff will review all information provided by the family carefully and without regard to factors other than those defined in this chapter. Families will be provided the opportunity to explain their circumstances, to furnish additional information, if needed, and to receive an explanation of the basis for any decision by the CDC regarding eligibility. The CDC may deny or terminate assistance for a family because of the family's action or failure to act. The CDC will provide families with a written description of the family obligations under the program, the grounds under which the CDC can deny or terminate assistance, and the CDC'S informal hearing or informal review procedures. This chapter describes when the CDC is required to deny or terminate assistance, the policies for the denial of a new commitment of assistance, and the grounds for termination of assistance under an outstanding HAP contract. Effective September 14, 2009, PHAs will have the ability to enter the following information into EIV: 1. Amount of debt owed by a former tenant to a PHA; 2. If applicable, indication of executed repayment agreement; 3. If applicable, indication of bankruptcy filing; 4. If applicable, the reason for any adverse termination of the family from a federally assisted housing program. 3- 1 3 This information will be used by HUD to create a national repository of families that owe a debt to a PHA and/or have been terminated from a federally assisted housing program. This national repository will be available within the EIV system for all PHAs to access during the time of application for rental assistance. PHAs will be able to access this information to determine a family's suitability for rental assistance, and avoid providing limited Federal housing assistance to families who either: (1) Owe a debt to a PHA; or (2) have previously been unable to comply with HUD program requirements. DENIAL/TERMINATION [24 CFR 982.552, 982.555] If denial of admission, or termination of assistance, is based on behavior due to a disability, the CDC may delay the denial or termination in order to determine if the problem could be corrected by reasonable accommodation. For example, a visually impaired person who fails to return information because the request for information was in writing may be determined to need a reasonable accommodation in order to comply with the requirements of the program. In this scenario, the CDC will make a reasonable accommodation, upon request, to call the person to tell him/her of the information that is needed. However, a reasonable accommodation will not be provided to families who have violated the regulations or program policies, including engaging in criminal activities except: (I) when an applicant or participant is or has been a victim of domestic violence, dating violence, or stalking, and has completed form HUD-50066 (Certification of Domestic Violence, Dating Violence, or Stalking). Domestic Violence is not an appropriate basis for denial of admission if the applicant otherwise qualifies for assistance or admission." FORM AND FORMAT FOR DENIAL/TERMINATION Denial of assistance for an applicant may include any or all of the following: • Denial for placement on the waiting list • Denying a voucher or withdrawing a voucher • Refusing to enter into a HAP contract or approve a tenancy • Refusing to process or provide assistance under portability procedures • Refusing to provide applicable SSN disclosure, documentation and verification requirements specified in § 5.216 Termination of assistance for a participant may include any or all of the following: • Refusing to enter into a HAP contract or approve a tenancy • Terminating housing assistance payments under an outstanding HAP contract • Refusing to process or provide assistance under transfer or portability procedures. • Refusing to provide applicable SSN disclosure, documentation and verification requirements specified in § 5.216 3- 2 3 The CDC will screen all incoming portability admissions and participants for criminal history and registered sex offender status and all portability new admissions will be evaluated for income eligibility and must be at or below 50% of area median income for the CDC jurisdiction. All portability admissions criminal history may be verified through the Department of Justice and may be required to provide fingerprints. The CDC may screen all program participants and live-in aides for criminal activities on a regular basis. Applicants and participants will be notified of denial or termination of assistance in writing on CDC approved notices and advised they will have 10 days from the date of the notice to request an informal review or hearing. The notices will contain a full explanation of the reason(s) for termination/denial, including a full description of crimes or actions of the family, and the sections of the Code of Federal Regulations that provide authority for the denial or termination of assistance. A request form will be provided for applicants or participants to request informal reviews or hearings. All requests for an informal hearing or review must be in writing and must be received by the CDC within 10 days of the date of the denial or termination notice. PURPOSE OF SCREENING APPLICANTS AND PARTICIPANTS All federally assisted housing is intended to provide a place to live and raise families, not a place to commit crime, to use or sell a controlled substance illegally, or terrorize neighbors. It is the intention of the CDC to fully endorse and implement a policy designed to: • Help create and maintain a safe and drug -free community • Keep program participants and their families free from threats to their personal safety • Support parental efforts to instill values of personal responsibility and hard work • Help maintain an environment where children can live safely, learn and grow up to be productive citizens • Assist families in their vocational/educational goals in the pursuit of self- sufficiency NEW ADMISSIONS Based on federal law, new admissions of medical marijuana users are prohibited into the PH and HCV programs. The Quality Housing and Work Responsibility Act (QHWRA) of 1998 (42 U.S.C. 513661) requires that PHAs administering the Department's rental assistance programs based on the illegal use of controlled substances, including state legalized medical marijuana. State laws that legalize medical marijuana directly conflict with the admission requirements set forth in QHWRA and are thus subject to federal preemption. CDC will deny admission for any families under this penalty. 3- 3 3 CURRENT RESIDENTS For existing residents, QHWRA requires PHAs to establish occupancy standards and lease provisions that will allow the PHA to terminate assistance for use of a controlled substance. CDC will deny assistance to or terminate individual medical marijuana users. The family may choose to remove the member who uses medical marijuana rather than deny or terminate the entire household, for both applicant and existing residents when appropriate. The FDA has approved drugs for medical uses which are comprised of marijuana synthetics, such as Marinol and Cesamet. These drugs are not medical marijuana and are legal under federal laws. These products have been through the FDA's rigorous approval process and have been determined to be safe and effective for their indications. They are therefore allowed in the public housing and voucher programs. SCREENING PROCESS All screening and termination of assistance procedures shall be administered fairly, and in such a way as not to violate rights to privacy or discriminate on the basis of race, color, nationality, religion, familial status, disability, gender, or other legally protected groups. To the maximum extent possible, the CDC will involve other community and governmental entities in the promotion and enforcement of this policy. The CDC must screen live-in aides as they screen other household members. The CDC must exclude a live-in aide income when calculating the household's share of rent. This policy will be provided to applicants and participants upon request. ELIGIBILITY FACTORS [982.201(B); 5.214] UNIQUE ADMISSION ELIGIBILITY FACTORS To be eligible for participation, an applicant must meet HUD's criteria, as well as any permissible additional criteria established by the CDC. In an effort to prevent future illegal drug related and other criminal activity, as well as other patterns of behavior that pose a threat to the health, safety or right to peaceful enjoyment of the premises by other residents, and as required by 24 CFR 982, Subpart L and CFR Part 5, Subpart J. The CDC will screen applicants as thoroughly and fairly as possible for illegal drug - related activities, alcohol abuse activities, sex offender registration requirement, and violent criminal behavior. 3- 4 3 Such screening will apply to any member of the household who is 18 years of age or older; however, evidence of prohibited criminal activities conducted by minors in the household will also be cause for denial or termination of assistance. Admission to the program is never based on [982.202(b)]: • Where a family lives prior to admission to the program • Where the family will live with assistance under the program • Discrimination of a family, because it includes unwed parents, recipients of public assistance, or children born out of wedlock • Discrimination of a family, because it includes children • A family's participation in a family self-sufficiency program • Other reasons as listed in under the "Fair Housing and Reasonable Accommodations" sections Eligibility criteria include: • An applicant must be a "family. The CDC definition of a family is one or more individuals sharing a household. • The applicant's income [24 CFR 982.201(b), 982.353] must be within the appropriate income limits. To be eligible for assistance, an applicant must: o Have an annual income at the time of admission that does not exceed the income limits for occupancy established by HUD. • An unborn child is not considered when determining the income limit. For example, a pregnant single is considered a one -person household when determining the income limits. • A pregnant single person is no different than any other single applicant and is not considered a family with dependent children for admission preference purposes. • To be income eligible, the applicant's family income cannot exceed the very low-income category, which is income that does not exceed 50 percent of the area median income. • The CDC will not admit families whose income exceeds 50 percent of the area median income, except those families included in 24 CFR 982.201(b). • To be income -eligible, the applicant must be a family in any of the following categories: [24 CFR 982.201(b)(1)(2)] o A "very low-income" family; 3- 5 3 o A low-income family that is "continuously assisted" under the 1937 Housing Act..-; o A low-income family that meets additional eligibility criteria specified in the CDC administrative plan. Such additional PHA criteria must be consistent with the CDC plan and with the consolidated plans for local governments in the CDC's jurisdiction. • A low-income family that qualifies for voucher assistance as a non -purchasing family residing in a HOPE 1 (HOPE for public housing homeownership) or HOPE 2 (HOPE for homeownership of multifamily units) project. (Section 8(o)(4) (D) if the 1937 Act (42 U.S.C. 1437f (o) (4) (D)). • A low-income family or moderate -income family that is displaced as a result of the prepayment of a mortgage, or voluntary termination of an insurance contract on eligible low-income housing as defined in Sec. 248.101 of this title; • A low-income family that qualifies for voucher assistance as a non -purchasing family residing in a project subject to a resident homeownership program under Sec. 248.173 of this title. Income -targeting: (i) not less than 75 percent of the families admitted to the CDC's tenant -based voucher program during the PHA fiscal year from the CDC waiting list shall be extremely low income families. Annual income of such families shall be verified within the period described in paragraph (e) of this section. To determine if the family is income -eligible, the CDC compares the annual income of the family to the applicable income limit for the family's size. Families, whose annual income exceeds the income limit, will be denied admission, removed from the waiting list, and offered an informal review. Annual income does not include the income of a live-in aide, as defined in 24 CFR 5. 403; • The CDC will screen live-in aides as they screen other household members. Portability: Newly admitted families who exercise portability prior to receiving initial assistance must be within the applicable income limit of the receiving PHAs. This requirement does not include those who had been participants with the initial PHA. The CDC accepts applications only from families whose head or spouse is at least 18 years of age, or emancipated minors under state law. The family, at program admission, must be taken from the waiting list in order of preference and income targeting guidelines. A family found to not meet the current preference or income targeting requirements will be offered an informal review and returned to the waiting list. 3- 6 3 Homeless An applicant is considered homeless if the applicant lacks a fixed, regular and adequate nighttime residence and can provide verification that their nighttime residence is: 1. A supervised publicly or privately operated shelter designed to provide temporary living accommodations; or 2. A public or private place that provides temporary residence for individuals intended to be institutionalized (not incarcerated); or 3. A public or private place not designed for, or ordinarily used as, regular sleeping accommodations for human beings. Homeless applicants who meet the criteria described above must provide proof of homelessness. Examples of such proof include certification of homeless status from a public or private facility, including Transitional Housing, that provides shelter for such households; a copy of an arrest record for vagrancy or illegal lodging from the local police department; or other documentation that can be obtained from any social service agency that provides services to the homeless. CRIMINAL ACTIVITY Persons evicted from federally assisted housing because of drug -related criminal activity, for personal use, are ineligible for admission to the Section 8 program for a three-year period beginning on the later of the date of the arrest, or eviction, or termination from a federal assistance program, and ending on the date of the eligibility interview. Persons involved in illegal drug sales and illegal drug trafficking related drug activities of any kind are ineligible for admission to the Section 8 program for a five-year period beginning on the later of the date of the arrest, or eviction, or termination from a federally assisted program, and ending on the date of the eligibility interview. However, the household may be admitted if, after considering the individual circumstances of the household, the CDC determines that: • The evicted household member who engaged in drug -related criminal activity for personal drug use has successfully completed a supervised drug rehabilitation program approved by the CDC. • The circumstances leading to eviction no longer exist because: • The criminal household member has died. • The criminal household member is no longer in the household and is unlikely to return to visit the family. Applicants will be denied assistance and not admitted to the program: 3- 7 3 • If they have been arrested, convicted, or evicted from federally assisted housing for violent criminal activities within the last five years prior to the date of the eligibility interview. • If any member of the family has been evicted from federally assisted housing for serious violations of the lease, or drug related criminal activities for personal use, within the past three years prior to the current eligibility interview [982.552(b)]. • If any member is subject to a lifetime registration requirement under a state sex offender registration program [982.552(b)]. • If any member has been convicted of production or manufacture of methamphetamine on federally assisted property [982.552(b)]. • If they fail to meet the preference and income targeting requirements at the time of selection. • If they exceed the income limits. • If, as a past Section 8 program participant, any member violated an important family obligation, other than for illegal drug or criminal activities, within the past three years prior to the current eligibility interview. The CDC may make an exception, if the family member who violated the family obligation is no longer in the household. • Other criteria as outlined in the next section. The family must, within seven days of notice, pay any outstanding debt owed the CDC, or another PHA as a result of prior participation in any federal housing program. The family must be in compliance with any payment agreement made with a PHA for a previous debt incurred. ADMISSION AND PARTICIPATION ELIGIBILITY FACTORS [24 CFR 982.551, 982.552, 982.553] The CDC will deny participation in the program to applicants and terminate assistance to participants in cases where the CDC determines there is reasonable cause to believe that a household member or, when applicable, a live-in aide, has or is illegally using a controlled substance, committing violent criminal acts, or if the person abuses alcohol in a way that may interfere with the health, safety or right to peaceful enjoyment of the premises by other residents, including cases where the CDC determines that there is a pattern of alcohol abuse. The CDC will determine the use of alcohol to reflect a pattern of abuse, if there are two or more incidents during the previous twelve months. Applicants or participants who have been found to engage in violence, or illegal drug activities that involve, sales, trafficking, manufacture, or possession for sales, are 3- 8 3 prohibited from program participation for five years from the date of the act or conviction, or eviction or termination from federally assisted housing, whichever is later. (see chart in page 3-11) Applicants or participants involved in the personal use of illegal drugs are prohibited from the program for one year from the later of either the act or the conviction, unless documentation is provided of successful rehabilitation. Those evicted from federally assisted housing for personal drug use are ineligible for assistance for three years from latter of the date of the conviction, eviction or termination of assistance. Participants found to be subject to sex offender registration requirements under a state sex offender registration program are prohibited from program participation for life. This lifetime prohibition applies to admissions and program participants, and it is the discretionary policy of the CDC to not "grandfather" program participants found to be subject to state sex offender registration requirements. Given the serious nature of the crime(s) committed by those subject to the sex offender registration requirement, the CDC will terminate the assistance of participants found to be subject to this requirement and will not consider extenuating circumstances. All applicants subject to state sex offender registration requirements will be denied. Live-in aides or foster children who are found to be subject to a state sex offender registration requirement of a state sex offender registration program will ALWAYS be disapproved for occupancy of the assisted unit, as will all additions to the household and all new admissions to the program. The existence of prohibited behavior by any household member, including live-in aides when applicable, regardless of the applicant or participant's knowledge of the behavior, shall be grounds for denial or termination of assistance. The CDC will research criminal history for all adults in the household, including live-in aides. PHAs may reject a particular individual as a live-in aide based on criminal acts and drug -related activity as well as owing any monies to any PHA. The criminal history will be used to determine whether any member of the family has violated any of the prohibited behaviors such as: • During the participation prohibition period or while currently assisted, a family member has violated any family obligation under 24 CFR 982.551 -- not to engage in any drug -related criminal activity. • During the participation prohibition period or while currently assisted, a family member has violated any family obligation under 24 CFR 982.551 -- not to engage in any violent criminal activity. Criminal activity directly relating to domestic violence, dating violence, or stalking, engaged in by a member of a tenant's control shall not be cause for termination of assistance, tenancy, or occupancy rights if the tenant or an immediate member of the tenant's family is the victim or threatened victim of that domestic violence, dating violence, or stalking. It is not an appropriate basis for denial of program assistance or for denial of admission if the applicant otherwise qualifies for assistance or admission unless the applicant, participant fails to provide the required 3- 9 3 Certification of Domestic Violence, Dating Violence, or Stalking form within the required timeframe of 14 days. "Upon determination of each individual case, and as needed, the CDC Section 8 Rental Assistance Division (CDC) will make certain that a referral is made to the San Diego County Mental Health Services, Child Protective Services, Adult Protective Services agencies, and any other service providers to ensure the family's safety. The CDC will cooperate with the social services agencies to make sure that the family is able to maintain their housing assistance." During the participation prohibition period or while currently assisted, any member of the family engages in, or has engaged in, illegal drug or alcohol abuse that interferes with the health, safety or peaceful enjoyment of other residents. For participants, "currently engaging," means anytime while the participant was on the program he/she was involved in illegal drug activities. The CDC must permanently deny assistance to applicants, and terminate the assistance of program participants convicted of manufacturing or producing methamphetamine on the premises of federally assisted housing. Admission will be denied if the following occurred within the last five years, or assistance will be terminated if any member of the family has engaged in threatening, abusive or violent behavior toward CDC personnel or have had a pattern of two or more separate incidents observed by two or more staff (e.g., one staff person observed one incident and a different staff person observed the second incident) or other witnesses of abusive, vulgar, demeaning, or hostile language and/or gestures and body movement that denotes an implied threat, excessive hostility, or intimidation. "Abusive or violent behavior towards PHA personnel" includes verbal as well as physical abuse or violence. Use of expletives that are generally considered insulting, racial epithets, or other language, written or oral, that is customarily used to insult or intimidate, or aggressive or hostile gestures and body movement are cause for termination or denial. "Threatening" refers to oral or written threats or physical gestures that communicate the intent to abuse or commit violence. The CDC may waive the requirement for termination or denial for drug -related criminal activity, if it was for personal use, and if: o For admissions only, the person demonstrates successful completion of a credible rehabilitation program approved by the CDC, and the violation did not occur while the family was being assisted. If a family member is engaged in this activity while being assisted, assistance will always be terminated. o The circumstances leading to the violation no longer exist because the person who engaged in drug -related criminal activity is no longer in the household due 3- 10 3 to death or incarceration. The person is unlikely to return to visit or live with the family. o The evidence of the act occurred is weak, such as an arrest report that indicates the family member was detained and released. In this case, the CDC may request additional evidence, such as a police report. The CDC may waive the requirement regarding denial or termination for drug -related, alcohol abuse, or violent criminal activities if: o The circumstances leading to the violation no longer exist because the person who engaged in drug -related criminal activity is no longer in the household due to death or incarceration. The person is unlikely to return to visit or live with the family; or where if violent criminal activity the applicant or participant is or has been a victim of domestic violence, dating violence, or stalking provides the CDC with a completed Certification of Domestic Violence, Dating Violence, or Stalking form. o The evidence the act occurred is weak, such as an arrest report that indicates the family member was detained and released. In this case, the CDC may request additional evidence, such as a police report. SSN DISCLOSURE (24 CFR 5.216) In accordance with 24 CFR 5.216, applicants and participants (including each member of the household) are required to disclose his/her assigned SSN, with the exception of the following individuals: a. Those individuals who do not contend to have eligible immigration status (individuals who may be unlawfully present in the United States). These individuals in most instances would not be eligible for a SSN. 1. A family that consists of a single household member (including a pregnant individual) who does not have eligible immigration status is not eligible for housing assistance and cannot be housed. 2. A family that consists of two or more household members and at least one household member that has eligible immigration status, is classified as a mixed family, and is eligible for prorated assistance in accordance with 24 CFR 5.520. The PHA may not deny assistance to mixed families due to nondisclosure of an SSN by an individual who does not contend to have eligible immigration status. 3- 11 3 Prohibition Periods for Some Offenses for Applicants and Participants Lifetime Five Years One Year Program participants and applicants subject to lifetime sex offender registration under the state sex offender registration program. Exceptions are current CDC Section 8 Participants who were on the program prior to 05/24/2001 who were registered sex offenders prior to 05/24/2001 Program participants and applicants convicted of the manufacture or production of methamphetamine. Owes money or rent to any PHA. Program Participant and/or applicant terminated or denied from the Section 8 Program for committing fraud. SSN DISCLOSURE (CONTINUED) (24 CFR 5.216) Previous violent criminal activity which had occurred within the last five years. Previous and/or currently engaging in illegal drug - related criminal activity that involves: sales, transportation, manufacture, or possession for sale. Violent or hostile behavior towards PHA personnel. Illegal drug use, or possession for personal use, unless a family obligation was violated at the same time. (One year does not apply, if proof of completing rehabilitation program is provided or currently completing rehab program.) b. Existing program participants as of January 31, 2010, who have previously disclosed their SSN and HUD has determined the SSN to be valid. PHAs may confirm HUD's validation of the participant's SSN by viewing the household's Summary Report or the Identity Verification Report in the EIV system. c. Existing program participants as of January 31, 2010, who are 62 years of age or older, and had not previously disclosed a valid SSN. This exemption continues even if the individual moves to a new assisted unit. Disclosure of SSNs is 3- 12 3 considered information subject to the Federal Privacy Act (5 USC 552a, as amended). In accordance with 24 CFR 5.212, the collection, maintenance, use, and dissemination of SSNs, any information derived from SSNs and income information must be conducted, to the extent applicable, in compliance with that Act and all other provisions of Federal, State, and local law. Note: There is no provision under HUD regulations which prohibit an individual (head of household with other eligible household members) with ineligible immigration status from executing a lease or other legally binding contract. However, some state laws prohibit an individual with ineligible immigration status from executing a contract (i.e. lease or other legal binding documents). If this is the case in your state, the family must not be admitted into the program. SSN DOCUMENTATION: The PHA must request the applicant and participant (including each member of the household), who are not exempt under Section 5 of this Notice, to provide documentation of each disclosed SSN. Acceptable evidence of the SSN consists of: a. An original SSN card issued by SSA; b. An original SSA -issued document, which contains the name and SSN of the individual; or c. An original document issued by a federal, state, or local government agency, which contains the name and SSN of the individual It should be noted that most (if not all) individuals who are lawfully present in the U.S. have been assigned a SSN. Many existing laws require the disclosure of the SSN for various purposes. All applicants and participants, including each member of the household (with the exception of those individuals noted in Section 5 of this Notice) are required to disclose his/her assigned SSN. The SSA issues three types of Social Security cards depending on an individual's citizen or noncitizen status and whether or not a noncitizen is authorized by the Department of Homeland Security (DHS) to work in the United States. They include: FIRST TYPE SECOND TYPE "NOT VALID FOR EMPLOYMENT" THIRD TYPE "VALID FOR WORK ONLY WITH DHS AUTHORIZATION ■ U.S. citizens; or SSA issues this card to SSA issues this card to people ■ Noncitizens lawfully lawful noncitizens who do with DHS permission to work admitted to the United not have DHS permission temporarily in the United States for permanent to work, but are required States. residence and noncitizens by law to provide a SSN to with DHS permission to obtain general assistance work permanently in the benefits that they already United States (i.e. refugees and asylees). have qualified for. 3- 13 3 SSA verifies all noncitizens' documents with DHS before a SSN card is issued to a noncitizen. REJECTION OF DOCUMENTATION: The PHA may reject documentation of the SSN provided by the applicant or participant for only the following reasons: 1. The document is not an original document; or 2. The original document has been altered, mutilated, or not legible; or 3. The document appears to be a forged document (i.e. does not appear to be authentic). The PHA should explain to the applicant or participant, the reason(s) the document is not acceptable and request the individual to obtain acceptable documentation of the SSN and submit it to the PHA within a specified time frame. VERIFICATION OF THE SSN: The PHA shall verify each disclosed SSN by: 1. Obtaining the documentation listed under Section 6 of this Notice from applicants and participants (including each member of the household); 2. Making a copy of the original documentation submitted, returning it to the individual, and retaining the copy in the file folder; and 3. Recording the SSN on line 3n of the form HUD-50058, and transmitting the form HUD-50058 to HUD within a timely manner. PHAs are encouraged to transmit the form HUD-50058 within 30 calendar days of completing the form, to enable HUD to initiate its computer matching efforts. Note: not applicable to applicants. HUD, via its computer matching program with the SSA, will validate the SSN (along with the individual's name and date of birth) against the SSA's database. EIV will report the status of the identity verification process as Verified, Failed, Not Verified, or Deceased on the household Summary Report. Below is a summary of the action the PHA should take for each identity verification status. a. Verified. If the information matches the SSA database, the individual's identity verification status will be verified (See Exhibit 1 below). No action is required by the PHA. b. Failed. If the information does not match the SSA database, the identity verification status will be failed (see Exhibit 2 below). See Section 16 of this Notice for guidance on how to correct personal identifiers of individuals whose identity verification status is failed. c. Not Verified. If an individual's identity verification status is Not Verified (see Exhibit 3 below), this means that HUD has not yet sent the tenant's personal identifiers to SSA for validation. No action is required by the PHA. d. Deceased. If an individual's identity verification status is deceased (see Exhibit 4 below), this means that SSA's records indicate the person is 3- 14 3 deceased. The PHA should confirm the death with the family's head of household or listed emergency 6 contact people. If the individual is deceased and the only household member (single member household), the PHA should complete an End of Participation (EOP) action on form HUD-50058, and discontinue assistance and/or tenancy. If there are remaining household members, update the family composition accordingly, complete an Interim Reexamination action on form HUD-50058, and take any other action in accordance with HUD guidance and PHA -established policies. See the Computer Matching Schedule in Section 14 of this Notice to determine when your state's data will be matched. The PHA is required to retain the EIV Summary Report or Income Report in each family file as confirmation of compliance with the SSN disclosure, documentation and verification requirements. Once the individual's verification status is classified as verified, the PHA should remove and destroy, by no later than the next reexam of family income or composition, the copy of the documentation referenced in Section 6 of this Notice. Paper documentation should be destroyed by either shredding or burning. Electronic documentation should be destroyed by erasing or permanently deleting the file. Additional guidance related to destruction of records is available in HUD Handbook 2400.25, Rev. 2: HUD Information Technology Security Policy, dated October 1, 2008. The handbook is available online at: http: / /www. hud.gov/offices/adm/hudclips/handbooks/admh/2400.25/index.cfm. The retention of the aforementioned EIV report in the tenant file is adequate. PHAs are permitted to maintain EIV reports in the tenant file for the duration of tenancy, and no longer than three years from the end of participation date. This will minimize the risk of exposing the individual's SSN. PHAs are encouraged to minimize the number of tenant records that contain documents which display the full nine -digit SSN. Please refer to Exhibits shown on PIH Report 2010-3 (HA) 3- 15 3 HUD VERIFICATION OF OF SOCIAL SECURITY CARD NUMBERS ON E.I.V. SSN submitted on form HUD-50058, and transmitted to enable HUD to initiate its computer matching efforts. VERIFIED FAILED NOT VERIFIED DECEASED If the information If the information If an individual's If an individual's matches the SSA does not match the identity verification identity verification database, the SSA database, the status is Not status is deceased, this individual's identity identity verification Verified, this means that SSA's verification status will status will be means that HUD records indicate the be verified. No failed. See Section has not yet sent the person is deceased. The action is required by 16 of this Notice for tenant's personal PHA should confirm the the PHA. guidance on how to identifiers to SSA death with the family's correct personal for validation. No head of household or identifiers of action is required listed emergency individuals whose identity verification status is failed. by the PHA. contact people. If the individual is deceased and the only household member (single member house -hold), the PHA should complete an End of Participation (EOP) action on form HUD- 50058, and discontinue assistance and/or tenancy. If there are remaining household members, update the family composition accordingly, complete an Interim Reexamina- tion action on form HUD-50058, and take any other action in accordance with HUD guidance and PHA - established policies. INDIVIDUALS WITHOUT AN ASSIGNED SSN: It is not uncommon for certain individuals to not have a SSA -assigned SSN. Below is a listing of such individuals, which is not all- inclusive: a) Newborn children (these individuals will be issued a SSN upon SSA confirmation of birth) 3- 16 3 b) Noncitizens lawfully present in the U.S. (these individuals will be issued a SSN upon SSA confirmation of the individual's DHS documentation or confirmation that the individual is required by law to provide a Social Security number to receive general assistance benefits that they already have qualified for) c) Noncitizens unlawfully present in the U.S. (these individuals cannot be assigned a SSN) Citizens and lawfully present noncitizens who state that they have not been assigned a SSN by the SSA, should make such declaration in writing and under penalties of perjury to the PHA. The PHA should maintain the declaration in the tenant file. PHAs may use the Alternate ID (ALTD ID) generator within the Public and Indian Housing information Center (PIC) to generate a unique identifier for those individuals who do not have or unable to disclose a SSN. Contact the PIC Coach in your local HUD office if you need assistance with PIC. Once an individual discloses a SSN, the PHA should delete the ALT ID, enter the SSN on line 3n of the form HUD-50058, and transmit the form HUD-50058 to HUD within 30 calendar days of receipt of the SSN. Note: An individual who has never been issued a SSN card or has lost their SSN card, may complete Form SS-5 - Application for a Social Security Card to request an original or replacement SSN card, or change information on his/her SSA record. The form is available online at www.socialsecurity.gov, or can be obtained at the local SSA office. TERMINATION OF ASSISTANCE OR TERMINATION OF TENANCY OF PARTICIPANTS (24 CFR 5.218) Denial of eligibility of applicant, participant The CDC must deny the eligibility of an applicant or participant and participant household in accordance with the provisions governing the program involved; if: 1. The applicant or participant and participant family does not meet the applicable SSN disclosure, documentation and verification requirements as specified. 2. The CDC may defer termination and provide the participant with an additional 90 calendar days to disclose a SSN, but only if the CDC, in its discretion, determines that: ■ The failure to meet these requirements was due to circumstances that could not have reasonably been foreseen and were outside the control of the participant; and ■ There is a reasonable likelihood that the participant will be able to disclose a SSN by the deadline. Failure of the participant to disclose a SSN by the deadline specified in paragraph (c) (2) of this section will result in termination of the assistance or tenancy, or both, of the participant and the participant's household. 3- 17 3 SUMMARY OF DOCUMENTATION REQUIREMENTS FOR NONCITIZENS [HCV GB, pp. 5-9 AND 5-10] o All noncitizens claiming eligible status must sign a declaration of eligible immigrant status on a form acceptable to the CDC. o Except for persons 62 or older, all noncitizens must sign a verification consent form. o Additional documents are required based upon the person's status. ELDERLY NONCITIZENS o A person 62 years of age or older who claims eligible immigration status also must provide proof of age such as birth certificate, passport, or documents showing receipt of SS old -age benefits. ALL OTHER NONCITIZENS o Noncitizens that claim eligible immigration status also must present the applicable USCIS document. Acceptable USCIS documents are listed below. o Form 1-551 Alien Registration Receipt Card (for permanent residents aliens) o Form 1-94 Arrival -Departure Record annotated with one of the following: o "Admitted as a Refugee Pursuant to Section 207" o "Section 208" or "Asylum" o "Section 243(h)" or "Deportation stayed by Attorney General" o "Paroled Pursuant to Section 221 (d)(5) of the USCIS o Form 1-94 Arrival -Departure Record with no annotation accompanied by: o A final court decision granting asylum (but only if no appeal is taken); o A letter from a USCIS asylum officer granting asylum (if application is filed on or after 10/01/90) or from a USCIS district director granting asylum (application filed before 10/01 /90)l o A court decision granting withholding of deportation; or o A letter from an asylum officer granting withholding or deportation (if application filed on or after (10/01/90). o Form 1-688 Temporary Resident Card annotated "Section 245A" or "Section 210". o Form I-688B Employment Authorization Card annotated "Provision of Law 274a 12(11)" or "Provision of Law 274a". o A receipt issued by the USCIS indicating that an application for issuance of a replacement document in one of the above listed categories has been made and the applicant's entitlement to the document has been verified; or o Other acceptable evidence. If other documents are determined by the USCIS to constitute acceptable evidence of eligible immigration status, they will be announced by notice published in the Federal Register. 3- 18 3 3- 19 3 3- 20 4 VERIFICATION PROCEDURES [24 CFR Part 5, Subparts B, D, E and F; 24 CFR 982.158; 24 CFR 5.617; 24 CFR 5.216, 5.218, 5.233, 5.236] INTRODUCTION The CDC must verify eligibility, total tenant payment, and family share in accordance with HUD regulations. The CDC staff is mandated to use HUD's Enterprise Income Verification (EIV) system in its entirety and will also obtain income information about applicants and participants in the covered programs through computer matches with State Wage Information Collection Agencies (SWICA) and Federal agencies, in order to verify an applicant's or participant's eligibility for or level of assistance. This purpose is to enable HUD and the CDC to decrease the incidence of fraud, waste, and abuse in the covered programs. The CDC will also use written documentation from independent sources whenever possible, and whenever third party verifications are not obtained, will attempt to obtain oral third party verifications, and will always document why third party verifications were not used. DATA QUALITY PHAs and 0/As submit management, building, unit, and family information into IMS and TRACS. Family information includes the families' names, SSNs, and dates of birth. When a PHA or O/A submits family data to IMS, or TRACS, the EIV system will validate each household member's identity. HUD will only transmit to the Department of Health and Human Services (HHS) for computer matching those tenant personal identifiers (i.e., full name, SSN, and date of birth) of individuals age 18 and older that have been validated by the Social Security Administration (SSA). If a household member's identity cannot be validated, EIV will (1) flag the household member record; (2) provide an error message to the PHA or 0/A, informing the PHA or O/A to verify the household member's SSN, name, and/or date of birth; and (3) request the PHA or O/A to submit a corrected record (Form HUD-50058 or Form HUD-50059) into IMS, or TRACS. EIV will remove the invalidated household member record from computer matching request files. This household member identity verification feature was established to help HUD maintain data quality and integrity and to support one of its strategic objectives to prevent fraud and abuse. This identity verification feature will (1) help confirm that those families entitled to benefits receive benefits, (2) ensure that income information is obtained of only validated individuals, (3) assist in limiting the 4- 1 4 duplication of benefits, and (4) help prevent the false application for benefits, thereby ensuring data quality. Debt owed and termination information entered by PHAs may be challenged by the former program participant. If the PHA determines that an error has been made in entering the data, the designated users who have the ability to enter data into EIV, will update and delete erroneous information as necessary. EIV will receive new hires (W-4), wage, employment, and unemployment benefit data from HHS' National Directory of New Hires (NDNH) database; and Social Security (SS) and Supplemental Security Income (SSI) benefit data from the Social Security Administration (SSA). This will allow PHAs, 0/As, CAs to verify the income of tenants at the time of mandatory annual and/or interim reexaminations. METHODS OF VERIFICATION AND TIME ALLOWED [24 CFR 982.516, 24 CFR 5.216, 5.218, 5.233, 5.236] The CDC will verify information through the six methods of verification, acceptable to HUD, in the following ranking order: • Enterprise Income Verification (EIV) • State Wage Information Collection Agencies (SWICA) • Third -party written (must be received directly from the third party) • Third -party oral (in person or via telephone directly from the third party) • Documents provided by family (e.g., pay stubs, bank statements, or social security award letters) • Certification/self-declaration MANDATED USE OF HUD'S ENTERPRISE INCOME VERIFICATION (EIV) SYSTEM (24 CFR 5.233) The CDC's first choice is Enterprise Income Verification (EIV) which includes sources of information taken directly from on -line -systems, such as from the Tenant Assessment Subsystem (WASS). Effective January 31, 2010, the CDC is required to use the EIV system as a (primary) third -party source to verify tenant income information during all mandatory annual and interim reexaminations. o Disclosure of assigned SSNs is required of all members of applicant and participant households except the following: • Individuals in mixed families who do not contend to have eligible immigration status • Existing participants whose SSNs have already been confirmed valid by the EIV system 4- 2 4 • Existing participants as of January 31, 2010 who are 62 or older and have not previously disclosed a valid SSN o Three forms of documentation of an SSN are acceptable to HUD and the CDC: • An original SSN card issued by the Social Security Administration (SSA) (See section 6 of today's notice for a description of the three types of SS cards that SSA issues.) • An original SSA -issued document with an individual's name and SSN • An original document issued by a federal, state, or local government agency with an individual's name and SSN o The CDC may not reject documentation of an SSN unless it is not original, it does not appear to be authentic, it is not legible, or it has been altered or mutilated. In such cases staff will explain the reason for the rejection and request that acceptable documentation be provided within a specified time frame. o After the CDC has obtained acceptable documentation of an individual's SSN, the CDC must make a copy of it for the tenant file, record the SSN on line 3 of form HUD-50058, and transmit the form to HUD in a timely manner, preferably within 30 days. o The CDC may retain EIV reports in tenant files "for the duration of tenancy" and up to three years after program participation ends plus seven years under local City policy. o HUD encourages the CDC to minimize the risk of exposing an individual's SSN to theft or misuse by minimizing the number of records that display the individual's full nine -digit SSN. o "Citizens and lawfully present noncitizens who state that they have not been assigned an SSN by the SSA should make such declaration in writing and under penalties of perjury to the CDC. The CDC should maintain the declaration in the tenant file." o The CDC may not admit applicant families until all members of the household have met the new SSN disclosure and documentation requirements. The CDC must prescribe in its Administrative Plan policies, the maximum time that a family may remain on the CDC Section 8 waiting list without meeting the requirements. o If a program participant who is required to meet the new requirements fails to meet them within a specified time frame (including any extension), the CDC must terminate the assistance and/or tenancy of the participant's entire household. (Editor's note: The notice does not seem to allow the option of excluding a noncompliant individual from a household and continuing to assist the remaining members, but this point needs to be confirmed.) 4- 3 4 o It is HUD's position that a current SSA benefit verification letter provided by an individual or an EIV income report that displays the individual's current SSN benefit amount is third -party verification. No additional verification is required. o The CDC is required to use EIV's identity verification report on a monthly basis. State Wage Information Collection Agencies (SWICA): Used in conjunction with HUD's EIV and other Federal agencies, in order to verify an applicant's or participant's eligibility for or level of assistance. If EIV or third party verification is not possible to obtain directly from the source, CDC staff will document the file as to why third party verification was impossible to obtain and attempt to obtain an oral third party, and document this attempt, before another method is used (such as reviewing documents families provide. (See Chapter 2 on Eligibility for Admission and Participation.) The PHA will not delay the processing of an application beyond ten days because a third party information provider does not return the verification in a timely manner. For applicants, verifications may not be more than 120 days old at the time of a unit offer. For participants, verifications are valid for 120 days from the date of receipt. The CDC will accept documents dated within the last 12 months, if they are the most recent scheduled report from a given source (e.g., last quarter's quarterly money market account statement). PROCEDURES FOR INDEPENDENT VERIFICATION When the income information reveals an employer or other income source that was not disclosed by the assistance applicant or participant, or when the income information differs substantially from the information received from the assistance applicant or participant or from his or her employer: HUD or, as applicable or directed by HUD, the CDC shall request the undisclosed employer or other income source to furnish any information necessary to establish an assistance applicants or participant's eligibility for or level of assistance in a covered program. This information shall be furnished in writing, as directed to: o When the CDC cannot readily anticipate income (e.g., in cases of seasonal employment, unstable working hours, suspected fraud) the CDC will review historical income data for patterns of employment, paid benefits, and receipt of other income. o The CDC will analyze all EIV, SWICA, third -party, and family -provided data and attempt to resolve the income discrepancy. 4- 4 4 o The CDC will use the most current income data and, if appropriate, historical income data to calculate the anticipated annual income. The CDC must verify eligibility, total tenant payment, and family share in accordance with HUD regulations. The CDC staff will obtain written documentation from independent sources whenever possible, and whenever third party verifications are not obtained, will attempt to obtain oral third party verifications, and will always document why third party verifications were not used. ENTERPRISE INCOME VERIFICATION Enterprise Income Verification (EIV) is information provided directly from a central information collection point, which includes the HUD Tenant Assessment Subsystem (WASS) for social security and supplementary security (SSI) income, the WorkNumber for wage income information, the local public assistance provider on-line informational link for CalWorks or TANIF income, etc. If this income information is received from this source and is reliable, no other verification is required. Effective January 31, 2010, The CDC Section 8 Rental Assistance Program will also be applying the following (24 CFR 5.233, 5.216, 5.218, 5.233): The CDC must use HUD's EIV system in its entirety: (i) As a third party source to verify tenant employment and income information during mandatory reexaminations or recertifications of family composition and income, in accordance with Sec. 5.236-, and administrative guidance issued by HUD; and (ii) To reduce administrative and subsidy payment errors in accordance with HUD administrative guidance. PENALTIES FOR NONCOMPLIANCE Failure to use the EIV system in its entirety may result in the imposition of Sanctions and/or the assessment of disallowed costs associated with any resulting incorrect subsidy or tenant rent calculations, or both. The CDC may not reject documentation of an SSN unless it is not original, it does not appear to be authentic, it is not legible, or it has been altered or mutilated. In such cases staff should explain the reason for the rejection and request that acceptable documentation be provided within a specified time frame. If the EIV income information is less than the family's income figure, the PHA will use the family information. If the EIV income information is more than the family's income figure, the PHA will use the EIV, unless the family provides documentation of a change in circumstances to explain the discrepancy (e.g., a reduction in work hours). Upon receipt of acceptable 4- 5 4 family -provided documentation of a change in circumstances, the PHA will use the family -provided information. If the EIV information for a particular income source differs from the information provided by the family by $200 or more per month, the PHA will follow these guidelines: o Request a written third party verification from the discrepant income source in accordance with (24 CFR 45.236(b) (3) (i). o When the PHA cannot readily anticipate income (e.g., in cases of seasonal employment, unstable working hours, suspected fraud) the PHA will review historical income data for patterns of employment, paid benefits, and receipt of other income. o The PHA will analyze all EIV, third -party, and family -provided data and attempt to resolve the income discrepancy. o The PHA will use the most current income data and, if appropriate, historical income data to calculate the anticipated annual income. THIRD -PARTY WRITTEN VERIFICATION The CDC's second choice is a written third -party verification. Third -party written verifications must be received directly from the third parties. The family will be required to sign an authorization for release of information to allow the third parties to release the requested information. The first attempt to obtain third -party verification will be written. Verifications received from the third party electronically via computer e-mail, by fax machine, via an on-line database system, or directly from the source, are considered written third party verifications. THIRD -PARTY ORAL VERIFICATION The CDC's third choice is Third -party Oral verification. Third -party oral verifications will be used when written third party verifications are delayed or not possible. The CDC will allow ten days for the return of written third -party verifications before going to the next method, which is oral verification. The second attempt to obtain third party verification will be orally. When a third -party oral verification is used, CDC staff will be required to notate in the file: the name of the person contacted, the date of the conversation, and the facts provided. If the third -party oral verification is provided by telephone, the CDC must originate the call. If it is not possible to contact the third party by telephone due to either the agency's documented policy of not releasing information over the telephone, or unavailability of a telephone number for the third party, the CDC will notate on the appropriate form and move to the next ranking verification source. The CDC will not delay the processing of an application beyond ten days because a third party information provider does not return the verification in a timely manner. 4- 6 4 DOCUMENTS ACCEPTED AS VERIFICATION The CDC's fourth choice is to review documents, when relevant, to substantiate the claim of an applicant or resident if neither written nor oral third party verifications are received within ten days of the request, the CDC will accept verifications in the form of documents, letters, or computerized printouts delivered by the family. Clear and legible documents from the following agencies are acceptable: Social Security Administration EDD Veterans Administration Law Enforcement Agencies Welfare Assistance Retirement Agencies Unemployment Compensation Board Investment Companies City or County Courts Banks Employers Life Insurance Companies Investment Groups Other documents from source SELF-CERTIFICATION/SELF-DECLARATION A [notarized] family certification will be accepted when no other form of verification is available. When verification cannot be made by third -party verification or documents provided by the family, families are required to submit a notarized self - certification. A notarized self -certification means a family signed and dated affidavit/certification/ statement under penalty of perjury in the presence of a notary public. The CDC will allow ten days for the return of written third -party verifications before going to the next method, which is oral verification. The CDC will document the file as to why third party written verifications were not used. For applicants, verifications may not be more than 60 days old at the time of voucher issuance. For participants, verifications are valid for 120 days from date of receipt. The family may be required to certify that they do not have a particular type of income or benefit, or asset. If this is required, the certification must be notarized. RELEASE OF INFORMATION [24 CFR 5.214, 5.230] The CDC of National City, Section 8 Rental Assistance Division will be required to use information covered by consent forms used during the eligibility process, EIV, SWICAs, 4- 7 4 and wages, net earnings from self-employment, payments of retirement income, and unearned income as referenced at 26 U.S.C. 6103. In addition, consent forms may authorize the collection of other information from applicants and participants to determine eligibility or level of benefits. All required releases must be completed "as is" by all adult family members. Family members are not allowed to cross out, amend, add, or in anyway alter the forms. To do so is a program violation. Adult family members must sign the HUD 9886 Release of Information/Privacy Act form. Adult family members are those who are expected to be 18 years of age or older at the time of annual recertification, transfer, or final eligibility determination. In addition, adult family members must sign additional release of information authorization forms, not covered by the above HUD required form. All adult family members, required to sign release of specific information forms, will be provided copies of the forms for their review and signature when requested. FAILING TO DISCLOSE AND VERIFY SSN AND EIN [24 CFR 5.218] A family's refusal to cooperate with the HUD prescribed verification requirement will result in denial of admission or termination of assistance, for violation of the family obligation to supply any information, and to sign consent forms requested by the CDC or HUD. CRIMINAL RECORDS The CDC verifies the criminal history of all adults at the time of program admission, adults admitted to the assisted household, including live-in aides if applicable, adult family members who port into the jurisdiction of the CDC, all adult family members transferring to another assisted unit and may verify the criminal history of all adult program participants on a regular basis. The verification is conducted by researching criminal history, including status of a family member subject to a sex offender registration requirement of a state sex offender registration program. The CDC will ensure that any criminal record received is maintained confidentially, not misused or improperly disseminated, and destroyed once the purpose for which it was requested is accomplished. All criminal reports, while needed, will be housed in a secure area with access limited to individuals responsible for screening and determining eligibility for initial and continued assistance, as well as management. The CDC will document in the family's file the circumstances of the criminal activities. 4- 8 4 The CDC will accept and document a completed Certification of Domestic Violence, Dating Violence or Stalking form or "In Lieu" of this form, the applicant/ participant may provide "A federal, state, tribal, or local police record or court record; Documentation signed and attested to by an employee, agent, or volunteer of a victim service provider, an attorney, or a medical professional from whom the victim has sought assistance in addressing domestic violence, dating violence or stalking or the affects of abuse, in which the professional attests under penalty of perjury (28 U.S.C. 1746) to the professional's belief that the incident or incidents in question are bona fide incidents of abuse, and the victim of domestic violence, or stalking has signed or attested to the documentation." COMPUTER MATCHING The purpose of this part is to require all Public Housing Agencies (PHAs), including Moving -to -Work (MTW) PHAs, that operate Public Housing, Indian Housing, or Section 8 Rental Certificate, Housing Choice Voucher (HCV), Rental Voucher, and Moderate Rehabilitation programs to electronically submit certain data to HUD for those programs. These electronically submitted data are required for HUD forms: HUD- 50058, including the Family Self -Sufficiency (FSS) Addendum. Applicable program entities must retain at a minimum of 3 years of the form HUD-50058, and supporting documentation, during the term of each assisted lease, and for a period of at least 3 years from the end of participation (EOP) date, to support billings to HUD and to permit an effective audit. Electronic retention of form HUD-50058 and HUD-50058-FSS and supporting documentation fulfills the record retention requirement under this section. HUD will conduct a computer matching initiative to independently verify resident income. HUD can access income information, and compare it to information submitted by the CDC on the 50058 forms. HUD can disclose social security information to PHAs, but is precluded by law from disclosing federal tax return data to PHAs. If HUD receives information from federal tax return data indicating a discrepancy in the income reported by the family, HUD will notify the family of the discrepancy. The family is required to disclose the information to the PHA (24 CFR 5.240). HUD's letter to the family will also notify the family that HUD has notified the PHA in writing that the family has been advised to contact the PHA. HUD will send the PHA a list of families who have received "income discrepancy" letters. When the CDC receives notification from HUD that a family has been sent an "income discrepancy" letter, the CDC will: • Wait 40 days after the date of notification before contacting the tenant. • After 40 days, the CDC will contact the tenant by mail, requesting the letter or other notice from HUD concerning the amount or verification of family income. • The CDC will place a copy of the letter to the family in the tenant file When CDC receives the required information, it will verify the accuracy of the income information provided by the family, review the CDC interim recertification policy, 4- 9 4 identify unreported income, charge retroactive rent, as appropriate, change the rent, or terminate assistance, as appropriate. If the amount of rent owed to the CDC exceeds $1000, the CDC may seek to terminate assistance. If the participant fails to respond to the CDC: • The CDC will ask HUD to send a second letter with a verified tenant address. • After an additional 40 days, the CDC will ask HUD to send a third letter. • After an additional 40 days, the CDC will send a warning letter, advising the family of the action to be taken if it does not contact the CDC within two weeks. If the participant claims a letter from HUD was not received: • The CDC will ask HUD to send a second letter with a verified tenant address. • After 40 days, the CDC will contact the family. • If the family claims it has not received a HUD letter, the CDC will ask HUD to send a third letter. • After an additional 40 days, the CDC will set up a meeting with the family to complete IRS forms 4506 and 8821. If the family fails to meet with the CDC, or refuses to sign the IRS forms, it will be issued a warning letter indicating that termination proceedings will begin in one week, if the family fails to meet with the CDC and/or sign IRS forms. If the participant does receive a discrepancy letter from HUD: • The CDC will schedule a family meeting. • If the family fails to attend the meeting, the CDC will reschedule the meeting. • If the family fails to attend the second meeting, the CDC will send a termination warning. • The family must bring the original HUD discrepancy letter to the CDC. If tenant disagrees with the federal tax data in the HUD discrepancy letter, the family must provide documented proof of incorrect tax data. If the family does not provide document proof of incorrect tax data, the CDC will obtain proof of tax data using third party verifications. 4- 10 4 ITEMS TO BE VERIFIED [24 CFR 982.516] Reported family annual income. Expenses related to deductions from annual income. Full-time student status for students, including high school students, who are or who will be eighteen years of age or over at the time of final initial or annual eligibility determination Full-time college students need to provide verification of sources of income (e.g., financial aid, scholarships, financial support from parents or guardians for food, clothing, or personal items, any income from an outside source?) Current assets, including assets disposed of for less than fair market value in proceeding two years. Childcare expenses if it allows an adult family member to be employed or go to school or actively seeking employment. Total medical expenses of all family members in households whose head or spouse is elderly or disabled. Disability assistance expenses to include only those costs associated with attendant care or auxiliary apparatus for a disabled member of the family, which allow an adult family member to be employed. Disability for determination of preferences, allowances or deductions. Evidence of citizenship or eligible immigration status. "Preference" status. Marital status when needed for head or spouse definition. Verification of reduction in benefits for noncompliance, such as GAIN sanctions of CalWorks benefits. The CDC will obtain written verification from the welfare agency stating that the family's benefits have been reduced for fraud or noncompliance before denying the family's request for rent reduction. REQUIRED DOCUMENTATION All members of applicant and participant households, regardless of age, must disclose and provide documentation verifying their Social Security Numbers (SSNs). There is no exception for household members who have not been assigned an SSN. 4- 11 4 SSN (Social Security Number) The documentation necessary to verify the SSN of an individual who is required to disclose his or her SSN under paragraphs (a) through (e) of this section is: - A valid SSN card issued by the SSA; • An original document issued by a federal or state government agency, which contains the name of the individual and the SSN of the individual, along with other identifying information of the individual; or - Such other evidence of the SSN as HUD may prescribe in administrative instructions. EFFECT ON ASSISTANCE APPLICANTS: Except as provided in paragraph (h)(2) of this section, if the CDC determines that the assistance applicant is otherwise eligible to participate in a program, the assistance applicant may retain its place on the waiting list for the program but cannot become a participant until it can: • The complete and accurate SSN assigned to each member of the household; and • The documentation referred to in paragraph (g)(1) of this section to verify the SSN of each such member. DISCLOSURE AND VERIFICATION [24 CFR 5.216] ASSISTANCE APPLICANTS: Each assistance applicant must submit the following information to the CDC when the assistant applicant's eligibility under the program involved is being determined: (1) The complete and accurate SSN assigned to the assistant applicant and to each member of the assistant applicant's household; and (2) The documentation referred to in paragraph (g)(1) of this section to verify each such SSN. Disclosure required of individual owner applicants. Each individual owner applicant must submit the following information to the processing entity when the individual owner applicant's eligibility under the program involved is being determined: PARTICIPANTS: Initial disclosure. Each participant, except those age 62 or older as of January 31, 2010, whose initial determination of eligibility under the program involved was begun before January 31, 2010, must submit the information described in paragraph (e)(1)(ii) of this section, if the participant has: o Not previously disclosed a SSN; o Previously disclosed a SSN that HUD or the SSA determined was invalid; or o Been issued a new SSN. 4- 12 4 Each participant subject to the disclosure requirements under paragraph (e)(1)(i) of 5 5.216 must submit the following information to the CDC at the next interim or regularly scheduled reexamination or recertification of family composition or income, or other reexamination or recertification for the program involved: Addition of a new household member who is at least six years of age or under the age of six and has an assigned SSN: When the participant requests to add a new household member who is at least six years of age, or is under the age of six and has an assigned SSN, the participant must provide the following to the processing entity at the time of the request, or at the time of processing the interim reexamination or recertification of family composition that includes the new member(s): ■ The complete and accurate SSNs assigned to each new member; and the documentation referred to in paragraph (g)(1) of this section to verify the SSN for each new member. ■ Addition of new household member who is under the age of six and has no assigned SSN. ■ When a participant requests to add a new household member who is under the age of six and has not been assigned a SSN, the participant shall be required to provide the complete and accurate SSN assigned to each new child and the documentation referred to in paragraph (g)(1) of this section to verify the SSN for each new child within 90 calendar days of the child being added to the household. The CDC shall grant an extension of one additional 90-day period if the processing entity, in its discretion, determines that the participant's failure to comply was due to circumstances that could not have reasonably been foreseen and were outside the control of the participant. During the period that the processing entity is awaiting documentation of a SSN, the processing entity shall include the child as part of the assisted household and the child shall be entitled to all the benefits of being a household member. If, upon expiration of the provided time period, the participant fails to produce a SSN, the processing entity shall follow the provisions of 5 5.218. Assignment of new SSN: If the participant or any member of the participant's household has been assigned a new SSN, the participant must submit the following to the processing entity at either the time of receipt of the new SSN; at the next interim or regularly scheduled reexamination or recertification of family composition or income, or other reexamination or recertification; or at such earlier time specified by the processing entity: ■ The complete and accurate SSN assigned to the participant or household member involved; and ■ The documentation referred to in paragraph (f)(g)(1) of this section to verify the SSN of each individual. 4- 13 4 PENALTIES FOR FAILING TO DISCLOSE AND VERIFY SOCIAL SECURITY AND EMPLOYER IDENTIFICATION NUMBERS (24 CFR 5.18) Denial of eligibility of assistance applicants. The CDC must deny the eligibility of an assistance applicant in accordance with the provisions governing the program involved, if the assistance applicant does not meet the applicable SSN disclosure, documentation, and verification requirements as specified in Sec. 5.216. Termination of assistance or termination of tenancy of participants The processing entity must terminate the assistance or terminate the tenancy, or both, of a participant, in accordance with the provisions governing the program involved, if the participant does not meet the applicable SSN disclosure, documentation, and verification requirements specified in Sec. 5.216. VERIFICATION OF WAITING LIST PREFERENCES [24 CFR 982.207] RESIDENCY PREFERENCE: This preference applies to families who live, work or has been hired and paid to work, in the jurisdiction of the CDC. Voluntary work is not counted as an acceptable preference. Acceptable documentation includes two or more of the following documents that indicate the current reported resident or employment address: • Copy of Lease Agreement and three most recent rent receipts, cancelled checks or money order receipts • A California driver's license or California ID in conjunction with copies of recent bills sent to the address. • Families who claim to work in the jurisdiction of the CDC must provide copy of paycheck stubs that indicate the location of the place of employment or third party verification that indicates the place of employment. FAMILIES WITH DEPENDANT CHILDREN PREFERENCE: To be eligible for this preference, the family must provide documentation that there are dependant children in the household or dependant children will be in the household once assistance is approved. In most instances, self -certification is acceptable, unless there is reasonable doubt, in which case the CDC will ask for further documentation of the placement of the children. This documentation of residence of the children may include: School records Leases Medical records Court custody documents Welfare agency information 4- 14 4 VETERANS PREFERENCE: This preference is available to current members of the U.S. military armed forces, veterans, or surviving spouses of veterans. The CDC will require U.S. government documents that indicate that the applicant qualifies under the above definition. DISABILITY PREFERENCE: This preference is available to families with a head of household or spouse who is a person with disabilities as defined by HUD. The CDC will require appropriate documentation from a knowledgeable professional. The CDC will not inquire as to the nature of the disability, but may ask a knowledgeable health professional to confirm that a certain unit size is necessary due to the person's disability. The CDC will require appropriate documentation from a knowledgeable professional. The CDC will not inquire as to the nature of the disability, but may ask a knowledgeable health professional to confirm that a certain unit size is necessary due to the person's disability. Another acceptable documentation of disability is either an award letter, or other proof of eligibility for social security disability or supplemental security income. ELDERLY PREFERENCE: This preference is available to families with a head of household or spouse who is age 62 years or older. The CDC will require appropriate proof of age as verified by submittal of one or more of the following documents: Birth Certificate Passport Drivers License Resident Alien Card HOMELESS PREFERENCE: An applicant is considered homeless if the applicant lacks a fixed, regular and adequate nighttime residence and can provide verification that their nighttime residence is: o A supervised publicly or privately operated shelter designed to provide temporary living accommodations; or o An institution that provides temporary residence for individuals intended to be institutionalized (not incarcerated); or o A public or private place not designed for, or ordinarily used as, a regular place for human beings. Homeless applicants who meet the criteria described above must provide certification of homeless status from a public or private facility that provides shelter for such 4- 15 4 households, or from the local police department, or any social service agency that provides services for homeless people. Applicants who are homeless due to residing in a transitional housing program must provide a letter from the transitional program's sponsoring agency documenting the applicant's participation and readiness to maintain an independent tenancy. VERIFICATION OF NON -FINANCIAL FACTORS [24 CFR 5.617(b) (2)] VERIFICATION OF LEGAL IDENTITY In order to prevent program abuse, the CDC will require applicants to furnish verification of legal identity for all family members. Family members who turn 18 years of age must provide picture identification as of the next annual reexamination. Copies of the birth certificates for all family members must be on file, and only when that cannot be provided, will the following documents be temporarily accepted as proof of identify, birth, and residency: OR Picture ID will be required of all adult household members, including live-in aides. Verification for adults includes one of these forms: Naturalization papers (cannot be copied - use document viewed statement) Dept. of Motor Vehicles ID card U.S. military discharge (DD 214) Current, valid driver's license U.S. passport Company/agency ID Legal driver's license Health and Human Services ID Social Security Card Certificate of Birth If a minor cannot provide a birth certificate, one of the following may be substituted temporarily: Acceptable INS documentation Adoption papers Custody agreement Health and Human Services ID School records U. S. passport If none of these documents can be provided, a third party who knows the person may, at the CDC's discretion, provide verification. The family must take steps to order a birth certificate, provide proof that these steps were taken, and be given a deadline to provide a birth certificate. If the birth certificate cannot be obtained, the family must provide documentation as evidence as to why the birth certificate cannot be obtained, in which case the secondary documents will be accepted permanently. 4- 16 4 If a document submitted by a family is illegible or otherwise questionable, more than one of the above documents may be required. VERIFICATION OF AGE [24 CFR 982.516(a) (2) (iv)] It may be necessary to verify age in order to determine eligibility for program admission, as well as to determine income and deductions. The CDC will accept any official document that indicates age including: Birth certificate Proof of social security retirement benefits School records Driver's license VERIFICATION OF MARITAL STATUS Marital status could affect the determination of total or adjusted income. For example, a working person under age 18 designated the spouse of the head would not have exempt wage income, or if a non -elderly or disabled head of household has a elderly or disabled spouse, that family would be designated an elderly or disabled household. Generally, certification by the family is sufficient verification. However, if there are reasonable doubts about a marital relationship, the CDC will require the following documentation: • Verification of divorce status will be a certified copy of the divorce decree, signed by a court officer. • Verification of a court ordered separation, may be a copy of court -ordered maintenance, or other records. • Verification of marriage status may include a marriage certificate, marriage license, or on-line data confirmation from public records. Generally, certification by the family is sufficient verification. However, if there are reasonable doubts about a marital relationship, the CDC will require the following documentation: • Verification of divorce status will be a certified copy of the divorce decree, signed by a court officer. • Verification of a court ordered separation, may be a copy of court -ordered maintenance, or other records. • Verification of marriage status may include a marriage certificate, marriage license, or on-line data confirmation from public records. 4- 17 4 SAME SEX MARRIAGES Public Law 104-199 5 3(a) prohibits the recognition of same -sex marriage for any federal program, even if state law recognizes such a union. The Defense of Marriage Act (DOMA) provides for no exceptions. Accordingly, same sex marriage couples cannot be regarded as "spouses" under any housing program under the United States Housing Act of 1937. FOSTER CHILDREN/ADULTS The CDC will verify the status and placement of foster children in the household by obtaining the following document: Third party verification from the state or local government agency responsible for the placement of the individual with the family FAMILIAL RELATIONSHIPS [24 CFR 982.516(a) (2) (iv] The relationship of household members may affect the determination of adjusted income and must be verified. A family certification will normally be considered sufficient verification of family relationships. In cases where reasonable doubt exists, the family may be asked to provide verification. The following verifications will always be required, if applicable: Verification of Relationship: Verification of Guardianship: Official identification showing names Court -ordered assignment Birth certificates Affidavit of parent Baptismal certificates Verification from social services agency School records VERIFICATION OF PERMANENT ABSENCE OF FAMILY MEMBER If an adult member, formerly a member of the household, is reported permanently absent by the family, the CDC will generally accept certification by the family of that family member's absence. If the CDC has reasonable doubts about the absence of the family member, one or more of the following documents will be required as verification: 4- 18 4 • Documentation of legal separation • Order of protection/restraining order obtained by one family member against another • Proof of another home address, such as utility bills, canceled checks for rent, drivers license, lease, rental agreement, automobile registration, mail at new address, or credit report reflecting new address, if available • Statements from other agencies, such as social services, or a written statement from the landlord or manager, that the adult family member is no longer living at that location If a family member is incarcerated, a document from the court or correctional facility stating how long s/he will be incarcerated The CDC will accept a self -certification, signed under penalty of perjury, from the head of household, or the spouse or co-head, if the head is the absent member. VERIFICATION OF CHANGE IN FAMILY COMPOSITION The CDC may verify changes in family composition, either reported or unreported, through letters, telephone calls, utility records, inspections, landlords, neighbors, credit data, school or Department of Motor Vehicles (DMV) records, and other sources. VERIFICATION OF DISABILITY Verification of disability must be obtained from documentation of SSI or SSA disability payments under Section 223 of the Social Security Act or 102(7) of the Developmental Disabilities Assistance and Bill of Rights Act (42 U.S.C. 6001(7), or verified by the appropriate diagnostician, such as, physician, psychiatrist, psychologist, nurse, therapist, rehab specialist, or licensed social worker, using the appropriate HUD definition of disability. VERIFICATION OF CITIZENSHIP/ELIGIBLE IMMIGRANT STATUS [24 CFR 5.508, 5.510, 5.512, 5.514] To be eligible for assistance, individuals must be U.S. citizens or eligible immigrants. Individuals who are neither (non -citizens) may elect not to contend their status. Eligible immigrants must verify the declaration by providing a permanent resident card, or other appropriate documentation, as provided by Section 214" of the Housing and Community Development Act of 1980, as amended (42 U.S.C. 1436a). CITIZENS OR NATIONALS OF THE UNITED STATES claiming eligible immigration status are required to disclose an SSN. PHAs may not accept a signed declaration as evidence of U.S. citizenship or nationality, as they may under the current regulations. Instead, they must verify the declaration by requiring "presentation of a U.S. passport, U.S. 4- 19 4 birth certificate, employment authorization card, temporary resident card, or other appropriate documentation, as provided by Section 214" of the Housing and Community Development Act of 1980, as amended (42 U.S.C. 1436 A). The CDC will require citizens to provide documentation of citizenship, such as a birth certificate, passport, or naturalization papers. ELIGIBLE IMMIGRANTS (NONCITIZENS) AGED 62 OR OLDER must provide the same documentation of eligible immigration status as younger noncitizens: they must provide an official document from the U.S. Bureau of Citizenship and Immigration Services (USCIS) as well as a signed declaration of eligible immigration status. NON -CITIZENS WITH ELIGIBLE IMMIGRATION STATUS must provide an official document from the U.S. Bureau of Citizenship and Immigration Services (USCIS) as well as a signed declaration of eligible immigration status. INELIGIBLE FAMILY MEMBERS, who do not claim to be citizens or eligible immigrants, must be listed on a statement of ineligible family members signed by the head of household or spouse. NON -CITIZEN STUDENTS ON STUDENT VISAS are ineligible members, even though in the country lawfully. They must provide their student visa, but their status will not be verified. They do sign a declaration, but they are listed on the statement of ineligible members. FAILURE TO PROVIDE If an applicant or participant family member fails to sign required declarations and consent forms, or provide documents, as required, s/he must be listed as an ineligible member. If the entire family fails to provide and sign documents as required, the family may be denied or terminated for failure to provide required information. Under the final rule, assistance to any participant who does not disclose a valid SSN must be terminated. TIME OF VERIFICATION For applicants, verification of U.S. citizenship/eligible immigrant status occurs at the same time as verification of other eligibility factors. The CDC will not provide assistance to any family prior to the affirmative establishment and verification of the eligibility of the individual, or at least one member of the family. The CDC will verify the U.S. citizenship/eligible immigration status of all participants, no later than the date of the family's first annual reexamination following the enactment of the Quality Housing and Work Responsibility Act of 1998. 4- 20 4 For family members added after other members have been verified, the verification must take place prior to the new member's addition to the household. Once verification of eligible immigration status has been completed for any program participants, it need not be repeated, except for port -in families, if the initial PHA does not supply the documents. EXTENSIONS OF TIME TO PROVIDE DOCUMENTS The CDC will grant an extension of 60 days for families, or, if elderly, up to 120 days to produce the necessary documentation. ACCEPTABLE DOCUMENTS OF ELIGIBLE IMMIGRATION The regulations stipulate only the following documents are acceptable, unless changes are published in the Federal Register: Resident Alien Card Alien Registration Receipt Card (1-551) Arrival -Departure Record (1-94) Temporary Resident Card (1-688) Employment Authorization Card (I-688B) Receipt issued by the INS for issuance of replacement of any of the above documents that shows individual's entitlement has been verified. A birth certificate is not an acceptable verification of status. All documents in connection with U.S. citizenship/eligible immigrant status must be kept five years. The CDC will verify the eligibility of a family member at any time such eligibility is in question, without regard to the position of the family on the waiting list. If the CDC determines that a family member has knowingly permitted an individual, who is not eligible for assistance, to reside permanently in the family's unit, the family's assistance will be terminated for 24 months, unless the family's assistance was already being prorated due to the ineligible family member. 4- 21 4 DISCLOSURE AND VERIFICATION OF SOCIAL SECURITY NUMBERS AND EMPLOYER IDENTIFICATION NUMBERS [24 CFR 5.216, 5.218] All members of applicant and participant households, must disclose and provide the complete and accurate SSN assigned to the assistant applicant and to each member of the assistant applicant's household; and If the assistance applicant or any member of the assistance applicant's household has not been assigned a SSN, a certification executed by the individual involved that meets the requirements of paragraph 24 CFR 5.216 (g)(1) of this section to verify each SSN. Required documentation -- (1) SSN. The documentation necessary to verify the SSN of an individual who is required to disclose his or her SSN under paragraphs (a) through (e) of this section is: (i) A valid SSN card issued by the SSA; (ii) An original document issued by a federal or state government agency, which contains the name of the individual and the SSN of the individual, along with other identifying information of the individual; or (ii) Such other evidence of the SSN as HUD may prescribe in administrative instructions. Social Security Numbers The documentation necessary to verify the SSN of an individual or applicant/participant family who is required to disclose his or her SSN under paragraphs (a) through (d) of this section is an original, valid SSN card issued by the SSA, or such other original documentation issued by a federal, state or local government agency with the individual's name and SSN. There is no exception for household members who have not been assigned an SSN. The only acceptable documentation of an SSN is "a valid SSN card issued by the Social Security Administration (SSA), or such other evidence of the SSN as HUD may prescribe in administrative instructions. The rule requires applicants to disclose and verify the SSNs of all household members at the time their eligibility is being determined. Applicants determined to be "otherwise eligible" for admission may retain their position on the waiting list while they are fulfilling this requirement, but they may not be admitted until they do. When a participant requests to add a new household member, the participant must disclose and verify the new member's SSN either at the time of the request or at the time the PHA processes the interim reexamination that includes the new member. If an applicant or participant is able to disclose the social security number, but cannot meet the documentation requirements, the applicant or participant must sign a certification of being unable to provide required documentation. The applicant/participant or family member will have an additional 60 days, or if elderly, up to 120 days to produce the necessary documentation to provide proof of his/her 4- 22 4 social security number. If s/he fails to provide this documentation, the family's assistance will be terminated. Participants who were determined eligible and processed before March 30, 2009, and advised to disclose and verify the SSNs of all household members at their "next interim or regularly scheduled reexamination of family composition or income". The rule allows no exceptions for household members who have not been assigned an SSN. Under the rule, assistance to any participant who does not disclose a valid SSN must be terminated. MEDICAL NEED FOR LARGER UNIT The family may request a larger voucher than indicated by the CDC subsidy standards as a reasonable accommodation for a family member with disabilities. Refer to the glossary for the definition of person with disabilities. The family request for a larger voucher must be in writing and must clearly explain a strong and compelling need or justification for a larger voucher and what about the additional bedroom will allow the person with disabilities better access to the program. The additional bedroom must be needed to accommodate the person with disabilities - not the family members without disabilities. The CDC will not consider a request for a larger voucher until all sleeping areas available to the non - disabled family members have been utilized. For example, the non -disabled family members could choose to use the living room and dining room as sleeping rooms, thus, freeing up a bedroom for the disabled family member. The CDC will require, at least annually, medical documentation, on CDC forms, verifying the need or justification for a larger unit. A state of California licensed doctor, or other state of California licensed medical professional, such as a nurse, psychiatrist, psychologist, or a social service professional must provide a certification of the need for additional bedrooms and/or a live-in aide as a reasonable accommodation for a family member with disabilities, or for a live-in aide to provide supportive services for a person with disabilities. For an additional bedroom, the health professional must explain a clear and compelling reason why the extra bedroom is needed to provide a reasonable accommodation for the serious medical condition of the family member. For a live-in aide, the health professional must clearly indicate why the live-in aide is necessary to provide vital care to the household member with disabilities that cannot be performed any other way (e.g., by day caregiver, etc), or why the live-in aide is necessary as a reasonable accommodation to make the program usable and accessible to the family member with disabilities. The CDC will require only that information necessary to determine the clear and compelling need for an additional bedroom and not to determine the nature of the disability. 4- 23 4 VERIFICATION OF INCOME j24 CFR 5.609, 982.516] This section defines the methods the CDC will use to verify various types of income. Annual income means all amounts, monetary or not, which: o Go to, or on behalf of, the family head or spouse (even if temporarily absent) or to any other family member; or o Are anticipated to be received from a source outside the family during the 12- month period following admission or annual reexamination effective date; and o Which are not specifically excluded in paragraph (c) of this section. Annual income also means amounts derived (during the 12-month period) from assets to which any member of the family has access. ANNUAL INCOME INCLUDES, but is not limited to: o The full amount, before any payroll deductions, of wages and salaries, overtime pay, commissions, fees, tips and bonuses, and other compensation for personal services; o The net income from the operation of a business or profession. Expenditures for business expansion or amortization of capital indebtedness shall not be used as deductions in determining net income. An allowance for depreciation of assets used in a business or profession may be deducted, based on straight line depreciation, as provided in Internal Revenue Service regulations. Any withdrawal of cash or assets from the operation of a business or profession will be included in income, except to the extent the withdrawal is reimbursement of cash or assets invested in the operation by the family; o Interest, dividends, and other net income of any kind from real or personal property. Expenditures for amortization of capital indebtedness shall not be used as deductions in determining net income. An allowance for depreciation is permitted only as authorized in paragraph (b)(2) of this section. Any withdrawal of cash or assets from an investment will be included in income, except to the extent the withdrawal is reimbursement of cash or assets invested by the family. Where the family has net family assets in excess of $5,000, annual income shall include the greater of the actual income derived from all net family assets or a percentage of the value of such assets based on the current passbook savings rate, as determined by HUD; o The full amount of periodic amounts received from Social Security, annuities, insurance policies, retirement funds, pensions, disability or death benefits, and other similar types of periodic receipts, including a lump -sum amount or prospective monthly amounts for the delayed start of a periodic amount (except as provided in paragraph (c)(14) of this section); 4- 24 4 o Payments in lieu of earnings, such as unemployment and disability compensation, worker's compensation and severance pay (except as provided in paragraph (c)(3) of this section); o Welfare assistance payments made under the Temporary Assistance for Needy Families (TANF) program are included in annual income only to the extent such payments: ■ Qualify as assistance under the TANF program definition at 45 CFR 260.31; and ■ Are not otherwise excluded under this section. o If the welfare assistance payment includes an amount specifically designated for shelter and utilities that is subject to adjustment by the welfare assistance agency in accordance with the actual cost of shelter and utilities, the amount of welfare assistance income to be included as income shall consist of: ■ The amount of the allowance or grant exclusive of the amount specifically designated for shelter or utilities; plus ■ The maximum amount that the welfare assistance agency could in fact allow the family for shelter and utilities. If the family's welfare assistance is ratably reduced from the standard of need by applying a percentage, the amount calculated under this paragraph shall be the amount resulting from one application of the percentage. o Periodic and determinable allowances, such as alimony and child support payments, and regular contributions or gifts received from organizations or from persons not residing in the dwelling; o All regular pay, special pay and allowances of a member of the Armed Forces (except as provided in paragraph (c)(7) of this section). o For section 8 programs only and as provided in 24 CFR 5.612, any financial assistance, in excess of amounts received for tuition, that an individual receives under the Higher Education Act of 1965 (20 U.S.C. 1001 et seq.), from private sources, or from an institution of higher education (as defined under the Higher Education Act of 1965 (20 U.S.C. 1002)), shall be considered income to that individual, except that financial assistance described in this paragraph is not considered annual income for persons over the age of 23 with dependent children. For purposes of this paragraph, "financial assistance" does not include loan proceeds for the purpose of determining income. ANNUAL INCOME DOES NOT INCLUDE THE FOLLOWING: o Income from employment of children (including foster children) under the age of 18 years; 4- 25 4 o Payments received for the care of foster children or foster adults (usually persons with disabilities, unrelated to the tenant family, who are unable to live alone); o Lump -sum additions to family assets, such as inheritances, insurance payments (including payments under health and accident insurance and worker's compensation), capital gains and settlement for personal or property losses (except as provided in paragraph (b)(5) of this section); o Amounts received by the family that are specifically for, or in reimbursement of, the cost of medical expenses for any family member; o Income of a live-in aide, as defined in Sec. 5.403; o Subject to paragraph (b)(9) of this section, the full amount of student financial assistance paid directly to the student or to the educational institution; o The special pay to a family member serving in the Armed Forces who is exposed to hostile fire; ■ Amounts received under training programs funded by HUD; ■ Amounts received by a person with a disability that are disregarded for a limited time for purposes of Supplemental Security Income eligibility and benefits because they are set aside for use under a Plan to Attain Self -Sufficiency (PASS); ■ Amounts received by a participant in other publicly assisted programs which are specifically for or in reimbursement of out-of-pocket expenses incurred (special equipment, clothing, transportation, child care, etc.) and which are made solely to allow participation in a specific program; ■ Amounts received under a resident service stipend. A resident service stipend is a modest amount (not to exceed $200 per month) received by a resident for performing a service for the PHA or owner, on a part-time basis, that enhances the quality of life in the development. Such services may include, but are not limited to, fire patrol, hall monitoring, lawn maintenance, resident initiatives coordination, and serving as a member of the PHA's governing board. No resident may receive more than one such stipend during the same period of time; ■ Incremental earnings and benefits resulting to any family member from participation in qualifying State or local employment training programs (including training programs not affiliated with a local government) and training of a family member as resident management staff. Amounts excluded by this provision must be received under employment training programs with clearly defined goals and objectives, and are excluded only for the period during which the family member participates in the employment training program; o Temporary, nonrecurring or sporadic income (including gifts); 4- 26 4 o Reparation payments paid by a foreign government pursuant to claims filed under the laws of that government by persons who were persecuted during the Nazi era; o Earnings in excess of $480 for each full-time student 18 years old or older (excluding the head of household and spouse); o Adoption assistance payments in excess of $480 per adopted child; o [Reserved] o Deferred periodic amounts from supplemental security income and social security benefits that are received in a lump sum amount or in prospective monthly amounts. o Amounts received by the family in the form of refunds or rebates under State or local law for property taxes paid on the dwelling unit; o Amounts paid by a State agency to a family with a member who has a developmental disability and is living at home to offset the cost of services and equipment needed to keep the developmentally disabled family member at home; or o Amounts specifically excluded by any other Federal statute from consideration as income for purposes of determining eligibility or benefits under a category of assistance programs that includes assistance under any program to which the exclusions set forth in 24 CFR 5.609(c) apply. A notice will be published in the Federal Register and distributed to PHAs and housing owners identifying the benefits that qualify for this exclusion. Updates will be published and distributed when necessary. ANNUALIZATION OF INCOME If it is not feasible to anticipate a level of income over a 12-month period (e.g., seasonal or cyclic income), or the PHA believes that past income is the best available indicator of expected future income, the PHA may annualize the income anticipated for a shorter period, subject to a redetermination at the end of the shorter period. EXCLUDED INCOME Excluded income need only be verified to the extent necessary to determine whether the income is to be excluded, such as in the case of an employed 16-year old family member, or a full-time student. In this case, the amount of excluded income is based on information provided by the family. However, earned income disallowance income must be verified because it is only partially excluded and the income amount must be correct to determine the amount of the incremental income increase. INCOME EXCLUSION UNDER TEMPORARY EMPLOYMENT BY U.S. CENSUS BUREAU Pursuant to Section 24 CFR 5.609 (c)(9), PHAs are to exclude temporary income 4- 27 4 payments from the U.S. Census Bureau, defined as employment lasting no longer than 180 days and not culminating in permanent employment. Employer verification of both the employment dates and income amount is to be maintained in the tenant file. INCOME EXCLUSION OF KINSHIP CARE PAYMENTS Payments made on behalf of a related child when foster children are placed with relatives (the tenant household) are excluded from income certifications pursuant to 24 CFR 5.609(c)(2). Kinship payments are foster care subsidies for children living with a related legal guardian. Kinship Guardian Assistance Payments (Kin -GAP) will be treated the same as foster care payments. EMPLOYMENT INCOME Verification forms may request the employer specify the: • Dates of employment. • Amount and frequency of earnings. • Date of last pay increase. • Earning history. • Year to date earnings. • Expected change in employment status. • Effective date of any anticipated wage increase during next twelve months • Estimated income from overtime, tips, and bonus pay expected during next twelve months. • Anticipated unpaid time off. • Acceptable methods of verification include: • Employment verification form completed by the employer. • Check stubs or earning statements, which indicate the employee's gross pay, frequency of pay or year to date earnings. • W-2 forms or 1099 forms, plus income tax return forms. Self -certifications or income tax returns signed by the family may be used for verifying self-employment income, or income from tips and other gratuities. 4- 28 4 Applicants and program participants may be requested to sign an authorization for release of information from the Internal Revenue Service (IRS) for verification of income. In cases with questions about the validity of information provided by the family, the CDC may require the most recent federal income tax statements. Where doubt regarding income exists, a referral to the IRS will be made on a case -by - case basis. BONUSES AND/OR COMMISSION For regularly received bonuses and/or commission, the CDC will verify and then average amount received for the one-year preceding admission or reexamination, unless the family can provide credible documentation indicating the historical information is incorrect. Social Security, Pensions, Supplementary Security Income (SSI), Disability Income Social Security and Supplemental Security Income In compliance with PIH 2O04-18 (HA) issued on September 17, 2004, the CDC will no longer request third party benefit income for the Social Security Administration. The CDC will verify income in the following ranking order: EIV, WASS Systems SWICA Systems Benefit notice dated within the last 60 days Other Benefit Income Acceptable methods of verification include: • Benefit verification form completed by agency providing the benefits • Award or benefit notification letters prepared and signed by the providing agency notice dated within the last 60 days • Computer report electronically obtained or in hard copy • Pay stubs • Bank statements that reflect direct deposits • Unemployment Compensation 4- 29 4 Acceptable methods of verification include: • Unemployment compensation agency verification form. • Unemployment office computer report e-mailed, faxed, or in hard copy. • Payment stubs. • Agency award letter. • Welfare Payments or General Assistance Acceptable methods of verification include: • CDC verification form completed by payment provider; or • Written statement from payment provider indicating the amount of grant/payment, start date of payments, and anticipated changes in payment in the next twelve months; or • Computer -generated, faxed, or hard copy notice of action • Computer -generated list of recipients from welfare department. • Direct on-line access to welfare department database. INCOME CHANGES RESULTING FROM WELFARE PROGRAM REQUIREMENTS [24 CFR 5.615] The CDC, for program participants, will impute (count) welfare income or not increase the rental assistance when determining the family share of rent for families whose welfare assistance is reduced specifically because of: • Fraud by a family member in connection with a welfare program; or • Noncompliance with a welfare agency requirement to participate in an economic self-sufficiency program; or • Noncompliance with a work activities requirement However, the CDC will not impute (count) the income and will increase the rental assistance benefit if the welfare assistance reduction is a result of: • The expiration of a lifetime time limit on receiving benefits; or 4- 30 4 • A situation where the family has complied with welfare program requirements but cannot or has not obtained employment; or • A family member has not complied with other welfare agency requirements. DEFINITION OF COVERED FAMILY A household that receives benefits for welfare or public assistance from a state or public agency program which requires, as a condition of eligibility to receive assistance, the participation of a family member in an economic self-sufficiency program. DEFINITION OF "IMPUTED WELFARE INCOME" The amount of annual income, not actually received by a family, as a result of a specified welfare benefit reduction, that is included in the family's income for purposes of determining rent. The amount of imputed welfare income is determined by the CDC, based on written or verbal information supplied to the CDC by the welfare agency, including: • The amount of the benefit reduction • The term of the benefit reduction • The reason for the reduction • Subsequent changes in the term or amount of the benefit reduction The family's annual income will include the imputed welfare income, as determined at the family's annual or interim reexamination, during the term of the welfare benefits reduction (as specified by the welfare agency). The amount of imputed welfare income will be offset by the amount of additional income the family receives that commences after the sanction was imposed. When additional income from other sources is at least equal to the imputed welfare income, the imputed welfare income will be reduced to zero. If the family was not an assisted resident when the welfare sanction began, imputed welfare income will not be included in annual income. If the family claims the amount of imputed welfare income has been calculated incorrectly, the housing specialist will review the calculation for accuracy. If the imputed welfare income amount is correct, the CDC will provide a written notice to the family that includes: 4- 31 4 • A brief explanation of how the amount of imputed welfare income was determined • A statement that the family may request an informal hearing if it does not agree with the CDC determination. VERIFICATION BEFORE DENYING A REQUEST TO REDUCE RENT The CDC will obtain written or verbal verification from the welfare agency stating that the family's benefits have been reduced due to fraud or noncompliance with welfare agency economic self-sufficiency or work activities requirements before denying the family's request for rent reduction. The CDC will rely on the welfare agency's written or verbal notice regarding welfare sanctions. COOPERATION AGREEMENTS [24 CFR 5.613] The CDC has executed a cooperation agreement with the local welfare agency to ensure timely and accurate verification of noncompliance. The CDC and the local welfare agency have mutually agreed to exchange information regarding any economic self-sufficiency and/or other appropriate programs or services that would benefit Section 8 tenant -based assistance families. ALIMONY OR CHILD SUPPORT PAYMENTS Acceptable methods of verification include: • Copy of a separation, or settlement agreement, or a divorce decree, stating amounts and types of support and payment schedules. • A signed and dated letter from the person paying the support. • Copy of latest check and/or payment stubs from court trustee. CDC must record the date, amount, and number of the check. • Family's self -certification of amount received and of the likelihood of support payments being received in the future, or that support payments are not being received. If payments are irregular, the family must provide: • A copy of the separation, or settlement agreement, or divorce decree, stating the amount, type, and payment schedule of the settlement 4- 32 4 • A statement from the agency responsible for enforcing payments to show that the family has filed for enforcement • An affidavit from the family, signed under penalty of perjury, indicating the amount(s) received • A welfare notice of action showing amounts received by the welfare agency for child support NET INCOME FROM SELF-EMPLOYMENT/BUSINESS OWNERSHIP [24 CFR.5.609 (b) (2)] In order to verify the net income from self-employment/business ownership, the CDC will view the IRS federal income tax return, and financial documents from prior years, and use this information to anticipate the income for the next twelve months. Acceptable methods of verification include: • IRS Form 1040, including: • Schedule C (Small Business). • Schedule E (Rental Property Income). • Schedule F (Farm Income). • If accelerated depreciation was used on the tax return or financial statement, an accountant's calculation of depreciation expense is computed using a straight-line depreciation method. • Financial statement(s), either audited or not audited, of the business. • Credit report or loan application. • Business Ledgers • Family's self -certification as to net income realized from the business during previous years. • The CDC may also request documents to support submitted financial statements, such as completed manifests, appointment books, cashbooks, or bank statements. If the business is co -owned with someone outside the family, the family must provide documentation demonstrating its share of the business as a percentage and documentation of the business partnership agreement. 4- 33 4 It is the family's responsibility to provide documentation of income in a completed format with all information organized, recorded and totaled. The CDC will reject documentation that has not been organized and totaled, e.g., an unorganized bundle of receipts. CHILD CARE BUSINESS If an applicant/participant is operating a licensed day care business, income will be verified the same as for any other type of (self-employed) business. If the applicant/participant is operating a "cash and carry" operation, which may or may not be licensed, the CDC will require that the applicant/participant complete a form for each customer. The form must indicate the name of person(s) whose child (children) is/are being cared for, phone number, number of hours the child is being cared for, method of payment (check/cash), amount paid, and signature of person who receives the services. The family must provide a copy of its federal income tax return, if it was filed. If none of the above documents are available, the family may provide a self - certification, signed under penalty of perjury, as to gross income received the previous year, as well as anticipated gross income for the next year. RECURRING GIFTS/CONTRIBUTIONS The family must furnish a self -certification with the following information: • The person who provides the gifts • The value of the gifts • The regularity (dates) of the gifts • The purpose of the gifts • Contributions called "loans" from any party other than an institution will be considered income. Repayments back of a loan paid out by the assisted household must be documented as follows in order to not count the payments as regular contributions to the family: • Bank statement withdrawals indicating the assisted household made the loan. • Cancelled checks indicating the amount of the loan and to whom the loan was paid. 4- 34 4 • Notarized loan repayment agreement executed around the time the loan was made, with the terms and amount of the loan. ZERO OR MINIMAL INCOME Families claiming to have no or little income, may be required to provide documentation to prove that income, such as unemployment benefits, TANF, SSI, etc., are not being received. The CDC will request information from the state employment development department. The CDC will run a credit report on the family. The CDC will require a family's self -certification, signed under penalty of perjury, stating that it has no income, and explaining how it expects to meet its needs. The CDC will require the family to provide documentation of its expenses such as, grocery receipts, utility bills, gasoline receipts, or other documentation of expenses. EMPLOYER MILEAGE REIMBURSEMENT Employment reimbursement for mileage expenses for use of personal vehicle will not be counted as income as long as the amount is: • Reasonable in comparison with the IRS or other standard reimbursement schedule. • Can be documented with mileage logs. • Mileage reimbursement that exceeds the standard rate will be counted as income. EMPLOYER CONTRIBUTION TO MEDICAL/CHILD CARE FLEXIBLE BENEFIT ACCOUNT Employer contribution to a medical or childcare account will not be counted as income as long as the funds are only distributed as payment or reimbursement for medical or childcare expenses/payments. Documentation regarding the requirements of the account may be required. Participants are not eligible for medical or childcare deductions if reimbursement for these expenses is provided by this employer contribution account. 4- 35 4 PARTICIPATION IN A STATE OR FEDERALLY -FUNDED TRAINING PROGRAM [24 CFR 5.609(c) (8) (i)] Amounts received under training programs funded by HUD are excluded. The incremental increase in earnings and benefits is exempt if they result from any family member participating in a qualifying State or local employment -training program with clear -defined goals and objectives. Documentation to verify these exclusions include third party verification or documentation describing the program and the funding source. FULL-TIME STUDENT STATUS For Eligibility/Continued participation of Full -Time college students of Non- Parental/Guardian Households: • In accordance with the Appropriations Act of 2005, HUD is required to consider in the determination of family adjusted income, the portion of any athletic scholarship assistance available for housing costs; and second, the Act provides that HUD establish by NOTICE criteria under which persons who receive athletic scholarship assistance may be denied housing assistance under the United States Housing Act of 1937. • The CDC may deny housing assistance to persons receiving athletic scholarship assistance. However, they may only do so for those persons receiving an athletic scholarship with a specified amount available for housing costs or one that allows for a portion of the scholarship to be used towards housing costs. • With the exception of the head, co-head, or spouse, the first $480 of earned income of each household member, 18 years of age or older, who is a full time student, will be counted towards family income. All earned income of a full- time student who is the head, spouse, and co-head will be counted as family income unless it is exempt income for some other reason. • The family can claim childcare expenses if the childcare is necessary to allow a family member to further his/her education. School financial assistance, scholarships, work-study, and grants received by students, including the head, spouse, or co-head, are not counted as family income. School expenses or, including mileage are not allowable deductions. Verification of full time student status includes: • Written verification from the registrar's office or other school official. • School records indicating enrollment for sufficient number of credits to be considered a full-time student by the educational institution. • Copy of student's registration information, indicating the semester, and the number of credits taken. 4- 36 4 • Student's full-time status will be monitored every semester; the student will provide the CDC verification of completion at the end of every semester. VERIFICATION OF ASSETS [24 CFR 982.516] VERIFICATION OF THE VALUE OF THE ASSETS FAMILY ASSETS The CDC will require the information necessary to determine the current cash value of the family's assets, if the total value of those assets exceeds $5,000. "Cash value" is the net amount the family would receive if the assets were converted to cash. Assets totaling $5,000.00 or less will not be verified because of the negligible impact on the HAP amount and family rent, although that asset, as reflected on family provided documentation, will be reflected in the family's rent calculations. Due to the added administrative cost, the CDC will not attempt a third party verification of any asset in which the source collects a service charge of $1.00 or more and the family has available original documents, such as bank statements. If the family cannot provide original documents, the CDC will pay the service charge for the third party verifications. Acceptable verification may include any of the following: • Verification forms, letters, or documents from a financial institution or broker. • Passbooks, bank account statements, certificates of deposit, copies of bonds, or financial statements completed by a financial institution or broker. • Quotes from a stockbroker or realty agent as to net amount family would receive if they liquidated securities or real estate • Real estate taxes statements, if the approximate current market value can be deduced from assessment • Financial statements for business assets • Copies of closing documents showing the selling price, and the distribution of the sales proceeds • Appraisals of personal property held as an investment • Family's self -certification describing assets or cash held at the family's home or in safe deposit boxes 4- 37 4 CHECKING/SAVINGS ACCOUNT INTEREST INCOME AND DIVIDENDS Third party verification is required only if the account balance is above $5,000. Any balances under that amount can be verified by using the bank statements provided by the participant. Acceptable methods of verification include: • Written third party verification from the institution handling the asset. • Account bank statements, passbooks, certificates of deposit, or CDC verification forms completed by the financial institution. • Broker's statements showing value of stocks or bonds and the earnings credited the family, or copies of bonds. Earnings can be obtained from current newspaper quotations, bank, or oral broker's verification. • IRS Form 1099 from the financial institution provided that the CDC must adjust the information to project earnings expected for the next twelve months. INTEREST INCOME FROM MORTGAGES OR SIMILAR ARRANGEMENTS Acceptable methods of verification include: • A letter from an accountant, attorney, real estate broker, the buyer, or a financial institution stating interest due for next twelve months. (A copy of the check paid by the buyer to the family is not sufficient unless a breakdown of interest and principal is shown). • Amortization schedule showing interest for the twelve months following the effective date of the certification or recertification. • Copies of the deed of trust and note that indicate the beginning principal, interest rate, term of loan, payment schedule, and principal and interest payment. • Copy of ledger reflecting the posting of payments and application of interest and principal. • Copy of year's end statement to borrower. • Copies of the escrow papers and contract. • Net Rental Income from Property Owned by Family • The family must provide adequate documentation for the CDC to anticipate net rental income. 4- 38 4 Acceptable methods of verification include: • IRS Form 1040 with Schedule E (Rental Income). • Copies of latest rent receipts, leases, or other documentation of rent amounts. • Documentation of allowable operating expenses of the property including: tax statements, insurance invoices, and bills for reasonable maintenance and utilities, and bank statements or amortization schedules showing monthly interest expense. • Lessee's written statement verifying rent payments to the family and family's self -certification as to net income realized. • Copies of ledgers indicating rent payments. ASSETS DISPOSED OF FOR LESS THAN FAIR MARKET VALUE (FMV) DURING TWO YEARS PRECEDING EFFECTIVE DATE OF CERTIFICATION OR RECERTIFICATION At certification and recertification, the CDC will obtain the family's self -certification as to whether any member has disposed assets for $10,000 or more under fair market value during the two years preceding the effective date of the certification or re- certification. Assets disposed as a result of foreclosure or bankruptcy, are not considered to be assets disposed of for less than fair market value. Assets disposed as a result of a divorce or separation are not considered to be assets disposed of for less than fair market value, providing some monetary consideration was received, and there is a separation or divorce settlement agreement established through arbitration, mediation, or court order. If the family certifies it has disposed of assets for $10,000 or more under fair market value, documentation is required that shows: (a) the assets disposed of for $10,000 or more under FMV, (b) the date they were disposed of, (c) the amount the family received, and (d) the FMV of the assets at the time of disposition. Third party verifications will be obtained wherever possible. RETIREMENT ACCOUNTS Before retirement: The CDC will accept a current original document from the entity holding the account. Upon retirement: The CDC will accept a current original document from the entity holding the account that reflect any distributions of the account balance, any lump sums taken and any regular payments. After retirement: The CDC will accept a current original document from the entity holding the account that reflects any distributions of the account balance, including lump sum distributions and regular payments. 4- 39 4 VERIFICATION OF ALLOWABLE DEDUCTIONS FROM INCOME [24 CFR 982.516] PREGNANT APPLICANT/PARTICIPANT No allowances for an unborn child. An unborn child is not considered when determining the income limit. For example, a pregnant single is considered a one - person household when determining the income limits. CHILDCARE EXPENSES Written verification from the recipient of the childcare payments is required. If the childcare provider is an individual, s/he must provide a statement of the amount charged the family for the services. Verifications must specify the childcare provider's name, address, telephone number, social security number or tax identification number, the names of the children cared for, the number of hours the child care occurs, the rate of pay, and the typical yearly amount paid, including adjusted figures for school and vacation periods. The CDC will not provide a deduction for non -child care services provided by the child care provider such as housekeeping, shopping, or cooking, nor for child care services provided by a family member residing in the assisted unit. In addition, the CDC will not allow excessive childcare costs that are not reasonable when compared to an average of child care fees charged by comparable child care providers. The family must certify if any childcare expenses have been, or will be, paid or reimbursed by outside sources. The CDC will compare the hours of child care with the activities engaged in by the adult household member requiring the child care in order to actively seek work, pursue education or be gainfully employed. A copy of the schedule of classes, employer verification of work hours, or log indicating job -seeking activities may be requested in order to verify the need for child care. MEDICAL EXPENSES Medical expenses are allowed only for elderly or disabled families, with a head of household or spouse who is elderly, disabled, or both. The IRS Publication 502 may be used as a guide to assist in determining allowable medical expenses in instances when the regulations or the Section 8 Administrative Plan are unclear. Medical expenses are expenses anticipated for the 12 months following certification or recertification, which are not covered by an outside source such as insurance, and which exceed three percent of the gross annual income of the family. Families, who claim medical expenses, must submit a certification indicating if medical expenses have been, or will be, reimbursed by an outside source. It is the responsibility of the family to provide documentation of expenses in the format required by the CDC. Expenses supported by confusing, unclear, or non -descriptive 4- 40 4 documentation will be disallowed. All medical expense claims will be verified by one or more of the methods listed below: • Written verification by a doctor, hospital, clinic personnel, dentist, pharmacist, of (a) the anticipated medical costs to be incurred by the family and regular payments due on medical bills; and (b) the expenses to be reimbursed by an insurance or a government agency. • Written confirmation by the insurance company, or employer, of health insurance premiums to be paid by the family. • Written confirmation from the Social Security Administration on Medicare premiums to be paid by the family over the next twelve months. A computer printout, or copy of award letter indicating Medicare deductions, will be accepted. FOR ATTENDANT CARE: A reliable, knowledgeable, professional's certification that the assistance of an attendant is necessary as a medical expense with a projection of the number of hours the care is needed. An attendant's written confirmation of the hours of care provided, and the amount and frequency of payments received from the family or agency (or copies of canceled checks the family used to make those payments) or pay stubs or written verification from the agency providing the services. Receipts, canceled checks, or pay stubs that clearly reflect and describe medical costs and insurance expenses likely to be incurred in the next twelve months will be accepted. Copies of payment agreements or most recent invoices to verify payments made on outstanding medical bills will continue over all or part of the next twelve months. Receipts or other records of medical expenses incurred during the past twelve months that can be used to anticipate future medical expenses may be accepted. The CDC may use this approach for "general medical expenses," such as non- prescription drugs, and regular visits to doctors or dentists, but not for one time, nonrecurring expenses from the previous year. Prescribed medicines and drugs: Must be prescribed by a doctor. The family must provide legible pharmacy receipts that clearly indicate the expense amount in U.S. dollars, date, and the type of medicine purchased. Nonprescription medicines: To be allowed, the family must provide a current medical professional's written recommendation for the necessity of their use as a form of treatment for a specific medical condition, the name of the medicine, and the quantity recommended. The family must also provide legible receipts that clearly indicate the amount in U.S. dollars, date, type and quantity of medicine purchased. 4- 41 4 Herbal medicines: To be allowed, the family must provide a medical professional's written recommendation for the necessity of their use as a necessary treatment for a specific medical condition, the name of the herbal medicine, and the quantity recommended. The family must also provide legible receipts that clearly indicate the amount in U.S. dollars, date, type and quantity of herbal medicine purchased. Vitamins: To be allowed, the vitamins must be prescribed, purchased from a pharmacy, and accompanied by a medical professional's written recommendation for the necessity of their use as a necessary treatment for a specific medical condition. The family must also provide legible pharmacy receipts that clearly indicate the amount in U.S. dollars, date and type of vitamins purchased. Mileage for San Diego County medical appointments: The CDC will provide allowances for mileage expenses for medical appointments within San Diego County at the current IRS or departmental standard mileage rate, as long as copies of mileage logs are provided. The mileage logs must indicate the date of the trip, beginning and ending odometer readings, and the purpose of the trip. Only standard mileage, bus, cab, or trolley expenses will be allowed. Mileage must be documented with starting address and destination address, odometer readings with beginning and ending mileage, and purpose and date of visit. Bus, trolley, or cab fare must be documented with legible receipts that provide the date and cost of the trip along with an explanation of the destination and purpose of the trip. Transportation expenses for medical appointments outside of San Diego County are not allowed. Medical services: To be allowed, the family must provide legible receipts that clearly indicate the medical services, the amount in U.S. dollars, dates of the services, the names and addresses of the medical providers, and if the providers are physicians, surgeons, specialists, or other medical practitioners. Medical supplements in solid or liquid form: To be allowed, the supplements must be prescribed, purchased from a pharmacy, and accompany a medical professional's written recommendation for the necessity of their use as a treatment for a specific medical condition. The family must also provide legible pharmacy receipts that clearly indicate the amount in U.S. dollars, the date and type of supplements purchased. Medical Insurance premiums: Must provide receipts or official documentation of current monthly premiums. PRESCRIPTION DRUG BENEFIT The Medicare Prescription Drug Improvement and Modernization Act signed into law on December 8, 2003 provides Medicare beneficiaries, until the new Medicare drug benefit becomes available in 2006, with access to discounted prescription drug prices. There is also a $600 credit for the purchase of prescription drugs to Medicare beneficiaries whose incomes do not exceed 135 percent of the poverty line and who do not have certain other drug benefits. That portion of $600 credit from 2004 that is not used will roll over to 2005 and added to the 2005 $600 subsidy. 4- 42 4 The Act requires that participants not lose housing benefits as a result of this assistance. Generally, family members are eligible for Medicare if they or their spouse worked for at least 10 years in Medicare -covered employment, are 65 years old, and are a citizen or permanent resident of the United States. Someone under age 65 may also qualify if s/he has a disability or has end -stage renal disease. In determining the prescription deduction for the discounted prescriptions, the full amount of the before -discount cost must be counted as a prescription expense deduction. For example, it is determined that the pre -discount cost of a medication is $85.00. The Family receives a $15.00 discount and, thus, pays $70.00 for the medication. The CDC will count the full $85.00 as a prescription expense for the purpose of anticipating annual medical expenses that exceed three percent of the family's gross annual income. The $600 prescription expense subsidy is considered excluded income. Therefore, the $600 will be counted as annual income and then the full $600 is excluded from annual income. The prescription drug discount card may, for some families, have an enrollment fee. This enrollment fee will be counted as a medical expense. To verify the family has a Medicare -approved drug discount card and a $600 credit for the purchase of prescription drugs, the CDC will: Request a copy of the discount card that has a seal with the words "Medicare Approved." The seal can be viewed at www.medicare.gov in publication 11060 The following documents obtained by the CDC to verify the prescription discount and $600 credit for prescription drugs satisfy HUD's third party verification regulatory requirement (PIH-2004-24): • Information on the pharmacy receipt received by the family. • A comparison of family receipts that were received prior to the issuance of the discount drug benefit with the receipts received after the family enrolled. If the beneficiary cannot obtain a receipt with the pre -discount drug cost, the CDC may call the pharmacy to obtain the pre -discount cost. The information provided on the Medicare website at www.medicare.gov may be used to determine the pre -discount drug cost. When the pre -discount drug cost cannot be determined, use an imputed value of $48.17 per prescription as a substitute for the actual pre -discount drug cost. This amount represents a national average cost per prescription in 2003. The $48.17 would then be multiplied by the number of times the prescription is filled annually to obtain the annual medical deduction for this drug. 4- 43 4 INELIGIBLE EXPENSES Non-prescription medicines are limited to only those items found in the medicine aisle of a pharmacy and are only those items recommended for the treatment of a specific medical condition. Non-prescription medicines that are not for the treatment of a specific medical condition, but recommended to maintain general health, or as a preventative treatment, are not eligible expenses. Personal use items are not an eligible expense. ASSISTANCE TO PERSONS WITH DISABILITIES [24 CFR 5.611(c)] The family must identify the family members enabled to work as a result of disability assistance expenses. In evaluating the family's request, the CDC will consider factors such as how the work schedule of the relevant family members relates to the hours of care provided, the time required for transportation, the relationship of the family members to the person with disabilities, and any special needs of the person with the disabilities. In all cases, required documentation includes: • A written certification from a reliable, knowledgeable professional, stating that the person with disabilities requires the services of an attendant and/or the use of auxiliary apparatus, to permit him/her to be employed, or to enable another family member to be employed. • The family must certify whether it receives reimbursement for any of the expenses of disability assistance, and the amount of any reimbursement received. ELIGIBLE ATTENDANT CARE Attendant care includes, but is not limited to, reasonable costs for home medical care, nursing services, in -home or center -based care services, interpreters for persons with hearing impairments, and readers for persons with visual disabilities. Attendant care expenses will be allowed for the period that person enabled to work is employed plus reasonable transportation time. The cost of general housekeeping and person services are not eligible expenses. However, if the person enabled to work is the person with disabilities, personal services necessary to enable the person to work are eligible. The CDC will allow a prorated expense deduction of the attendant provides other services not related to disability assistance, such as housekeeping or childcare. The proration will be based on the number of hours spent on eligible activities as compared with the total hours worked. Attendant care verifications include: 4- 44 4 • An attendant's written certification of amount received from the family, frequency of receipt, and hours of care provided • Certification of family and attendant and/or copies of canceled checks the family used to make payments AUXILIARY APPARATUS Expenses incurred for maintaining or repairing an auxiliary apparatus is eligible. In the case of an apparatus that is specially adapted to accommodate a person with disabilities (e.g., a vehicle or computer), the cost to maintain the special adaptations, but not the cost of the apparatus itself, is an eligible expense. In order for the cost of a service animal to be an eligible expense, the family must provide documentation from the agency that trained the service animal that describes the type of animal and the animal's unique skills and abilities, as well as a verification from a medical professional regarding the need for the service animal to provide disability assistance services. The cost of an approved service animal, including the cost of acquiring the animal, veterinary care, food, grooming, and other continuing costs of care will be eligible disability expenses. Auxiliary Apparatus expense verifications include: • Receipts for purchases, or proof of monthly payments, and maintenance expenses for auxiliary apparatus • In the case where the person with disabilities is employed, required documentation includes a statement from the employer stating that the auxiliary apparatus is necessary for employment. In the case where the auxiliary apparatus allows another adult to work, required documentation includes a statement from the family that the apparatus is necessary to allow an adult family member to work 4- 45 4 4- 46 5 VOUCHER TERM, SUBSIDY STANDARDS, HOUSEHOLD COMPOSITION [24 CFR Part 982.303, 982.402, 982.551, 982.54(d)(2)(9)(11)] INTRODUCTION HUD guidelines require PHAs to establish a term for issued vouchers. In addition, a PHA must establish subsidy standards for the determination of family unit size that provide for a minimum commitment of subsidy while avoiding overcrowding. The standards used for the unit size must be within the minimum unit size requirements of HUD's Housing Quality Standards (HQS). This chapter explains the established term for voucher utilization, subsidy standards that the CDC will use to determine the voucher size (family unit size) for families when they are selected from the waiting list, the CDC's procedures for a family size change, and for family selection of a unit of a different size than the voucher size. TERM OF VOUCHER [24 CFR 982.303, 982.54(d)(2)] During the briefing session and upon approval of participant's transfer of unit, a household will be issued a voucher. The voucher represents a contractual agreement between the CDC and the family specifying the rights and responsibilities of each party. It does not, by itself, constitute admission to the program, which occurs after a family is selected off the Section 8 waiting list, found eligible, attends a briefing, the initial unit passes inspection, and the initial lease and contract become effective. EXPIRATIONS The voucher is valid for a period of 60 calendar days from the date of issuance. The family must submit a RFAT within the 60-day period. An extension may or may not be granted, depending on departmental policy. 5- 1 5 If the voucher has expired, the family will be denied assistance. The family will not be entitled to a review or hearing. The family must reapply to be placed back on the waiting list. SUSPENSIONS When a RFAT is received, the CDC will add the number of days taken to process the RFAT to the term of the voucher. This is called "tolling." EXTENSIONS If the CDC is allowing extensions, a family may request, in writing prior to voucher expiration, an extension to the term of the voucher. The program manager or designee must approve all voucher extensions beyond the initial 60 days. An extension will be for a period of no more than 60 days (given in two (2) 30 day extensions). Extensions are permissible only if funding is available and at the discretion of the CDC, in the following circumstances: • Extenuating circumstances such as hospitalization or a family emergency for an extended period of time, which has affected the family's ability to find a unit within the initial 60 day period, a large hard to house family, or the need for reasonable accommodation for a disabled family member. Verification is required. • The CDC must be satisfied that the family has made a reasonable effort to locate a unit, including seeking the assistance of the CDC, throughout the initial 60 day period. A written family search record may be required. • The CDC Program Manager has the discretion to authorize voucher extensions at any time. ASSISTANCE TO VOUCHER HOLDERS Families who require additional assistance during their search may call the CDC to request assistance. The CDC will assist families on lease negotiations with owners, and provide other assistance related to the families' search for housing. After the first 30 days of the search, the family should maintain a search record. The search record may be required for any voucher extension requests. The search record must include a list of the units visited. This list must include the dates the units were examined, the landlords' names and telephone numbers, the unit addresses, the rents, and why the voucher holder was not able to rent the unit. 5- 2 5 VOUCHER ISSUANCE DETERMINATION FOR SPLIT HOUSEHOLDS [24 CFR 982.54 (d)(11), 982.315] When an assisted family or a family who has been issued a voucher divides into two otherwise eligible families, and cannot agree as to which new family unit should retain the assistance and/or the voucher, and there is no determination by a court, the CDC will determine which family will receive the voucher, will consider the following factors, in ranking order of importance, with one (1) of the greatest importance, and six (6) of the least importance: • Whether domestic violence was involved in the breakup • Which of the two new family units has custody of dependent children? • The composition of the new family units, and which unit contains elderly or disabled members • Recommendations of social service professionals • Which family member was the head of household when the voucher was initially issued, as indicated on the initial application • Which family members are remaining in the assisted unit Documentation of these factors will be the responsibility of the requesting parties. If a court determines the disposition of property between members of the assisted family in a divorce or separation under a settlement or judicial decree, the PHA is bound by the court's determination of which family members continue to receive assistance in the program. DETERMINING INITIAL FAMILY UNIT (VOUCHER) SIZE [24 CFR 982.402] Upon initial issuance of the voucher, the CDC does not concern itself with who shares a bedroom/sleeping room, but requires at least one person per bedroom when determining the voucher unit size. The CDC will not approve an additional bedroom for non -living purposes, such as the placement of equipment. The CDC's subsidy standards for determining voucher size shall be applied in a manner consistent with fair housing guidelines. The CDC may make the administrative decision to change its subsidy standards at any time, without prior notice to its participants, should the circumstances warrant it, such as in the case of funding reductions. 5- 3 5 All subsidy standards in this section relate to the number of bedrooms on the voucher, not the family's actual living arrangements. The voucher unit size remains the same, as long as the family composition remains the same, regardless of the actual unit rented, unless applicable subsidy standards change. Upon initial voucher issuance, one bedroom is assigned for the head of household and/or spouse or co-head, and one bedroom is awarded to each two family members, regardless of sex, age or relationship. Exceptions may occasionally be made for serious medical reasons if the need for a reasonable accommodation is clear, compelling and well documented, or for a live-in aide, if it is verified there is a need that cannot be met another way. However, extra bedrooms will not be granted if there are alternate sleeping areas for other household members that if utilized would free a bedroom for either the live-in aide or the person needing the reasonable accommodation. These subsidy standards are subject to change. Generally, upon initial issuance, the CDC will issue a voucher within the following guidelines: • Foster children will be included in determining unit size upon program admission. • A live-in attendant may be provided a separate bedroom, but only if there are no sleeping areas, such as the living room, available to other family members that if utilized would free up a separate bedroom for the live-in attendant. No additional voucher bedrooms are provided for the attendant's family. Also, a family member may have only one live-in attendant. Live-in attendants cannot have an ownership or other interest in the rental unit. • Space will not be provided for a family member, other than a spouse, who will be absent most of the time, such as a member absent due to military service. • A single pregnant woman, with no other family members, is treated as a two - person family for subsidy standards purposes, but is only eligible for a one - bedroom voucher. INCREASES IN VOUCHER SIZE FOR PARTICIPANTS After initial voucher issuance, the CDC will not, except for live-in aides and a reasonable accommodation, increase the voucher size until the family is overcrowded. The CDC will reexamine the subsidy standards annually, upon transfer, and upon changes in household composition for a reduction in the voucher size. 5- 4 5 EXCEPTIONS TO SUBSIDY STANDARDS [24 CFR 982.402] The CDC may grant exceptions to the subsidy standards, upon request, providing the CDC determines the exceptions are clearly justified in a compelling manner as a reasonable accommodation for family members with disabilities. However, a reasonable accommodation request will not be considered if there are alternate sleeping areas available to other family members, such as a shared bedroom or living room that if utilized, would free up a separate bedroom for the disabled family member. The disability must meet the HUD definition of disability that requires a reasonable accommodation. Refer to the glossary for the HUD definition of a person with disabilities. In addition, a larger subsidy standard, the equal of no more than one bedroom, will be allowed for a live-in aide that performs vital assistance, essential to the care and well being of an elderly, near elderly or disabled family member, that cannot be provided in any other way. However, this larger subsidy standard will not be granted if there are alternate sleeping areas available to other family members that if utilized, would free up a separate bedroom for the live-in aide. If the family must transfer to a larger unit to accommodate a live-in aide, the CDC will assist the family with the transfer. A live-in attendant's family members may reside in the unit as long as the unit is not over -crowded according to HQS. REQUEST FOR EXCEPTIONS TO SUBSIDY STANDARDS The family must request, in writing, a larger size voucher than indicated by the CDC subsidy standards as a reasonable accommodation for a family member with disabilities. The family's request for a larger voucher must clearly explain the compelling need or justification for a larger voucher and describe fully what about the additional bedroom will allow the person with disabilities better access to the program. The additional bedroom must be needed to accommodate the person with disabilities - not the family member without disabilities. In addition, the request will not be considered if there are alternate sleeping areas available to other family members that if utilized, would free up a bedroom for the disabled family member's sole use. A state of California licensed doctor, or other state of California licensed medical professional, such as a nurse, psychiatrist, psychologist, or a social service professional must provide a certification initially and annually of the need for additional bedrooms as a reasonable accommodation for a family member with disabilities, or the need for a live-in aide. In addition, the health professional must explain why the extra bedroom is needed to provide a reasonable accommodation for that family member and/or why the live-in aide is necessary to provide vital care to the elderly or near -elderly household member or a household member with disabilities that cannot be performed any other way (e.g., by day 5- 5 5 caregiver, etc). The CDC will require only that information necessary to determine those needs posed by the disability that warrant an additional bedroom or live-in aide, and not to determine the type of disability (see chart on next page). CHANGES IN VOUCHER SIZE The voucher size is determined prior to the briefing by comparing the family composition to the CDC subsidy standards. The definition of overcrowded for in -place participants is if there are more than two people per bedroom and sleeping area(s) in the unit the family is residing in. The definition of overcrowded for issuance of a voucher for a transfer is if the family's current voucher size is inadequate for the size of the family based on two people per bedroom plus two. With the exception of a live-in aide or reasonable accommodation, the voucher size will not be increased due to additions to the household until the family is overcrowded. The voucher size may be increased for a live-in aide or for reasonable accommodation providing there are no alternate sleeping areas available to the family that, if utilized, would free a bedroom for the disabled person or live-in aide's sole use. A family who transfers will receive a larger voucher size if the family is overcrowded or, if necessary, for a live-in aide or reasonable accommodation. See the following table for criteria used to increase voucher size and the admission of family members. If a family member leaves the household, the voucher size will be reviewed and may be reduced at the next family recertification, or as soon as possible thereafter. The family must receive at least 60-days advance notification of a reduction in voucher size. If a household member that was part of the original household returns, the voucher size will be reviewed and may increase if it results in overcrowding. DETERMINAION OF HOUSEHOLD STATUS AND COMPOSITION FAMILY COMPOSITION [24 CFR 982.201] The family must obtain CDC approval of any additional family member prior to that person moving into the assisted unit, unless the addition is by birth, adoption, return of disabled or minor children to the family, or court -awarded custody. 5- 6 5 ADMISSIONS TO THE HOUSEHOLD AND APPROVAL OF EXTRA BEDROOMS AFTER INITIAL VOUCHER ISSUANCE Type of Admission? Pre -approval Needed? Criteria to allow admission? Eligible for Extra Bedroom? Children born to the assisted family No None Not unless family is overcrowded and then only to the point the family is no longer overcrowded Court -Awarded Custody No If found to have engaged in prohibited activities, the family must take action to exclude from the household Not unless family is overcrowded and then only to the point the family is no longer overcrowded Return of Minor or Disabled Children to the Family (must have been a part of the family at one time) No If found to have engaged in prohibited activities, the family must take action to exclude from the household Not unless family is overcrowded and then only to the point the family is no longer overcrowded Adoption No If found to have engaged in prohibited activities, the family must take action to exclude from the household Not unless family is overcrowded and then only to the point the family is no longer overcrowded Other Adults Yes Must either be currently employed and have a work history of at least 32 hours per week for the last 12 months or must have another permanent source of income; No prohibited activities, including criminal history; Landlord must approve in writing in advance; May not be added if family will be overcrowded; Subject to the limitation of no more than one (1) addition every 12 months of one Other Adult/Child No Other Children Yes No prohibited activities, including criminal history; Landlord must approve in writing in advance; May not be added if family will be overcrowded; Subject to the limitation of no more than one addition every 12 months of one Other Adult/Child No Foster Children Yes No prohibited activities, including criminal history; Landlord must approve in writing in advance; May not be added if unit will be overcrowded but family may transfer to add permanent foster children For permanently placed foster children, the voucher size will not be increased unless the family is overcrowded, and then only to the point the family is no longer overcrowded The voucher size will not be increased for temporarily placed foster children who cannot be added if the family is overcrowded Live-in Aide Yes No prohibited activities, including criminal history; Landlord must approve in writing in advance; May not be added if unit will be overcrowded but family may transfer to add; May not be added if they may negatively impact the family The live-in aide is entitled to a separate bedroom, but the voucher will not be increased or there are other sleeping areas available, including the living room, to the family that if utilized would free a bedroom for the live-in aide 5- 7 5 UNRESTRICTED ADMISSIONS Additions through birth, adoption, court -awarded custody and the return of disabled or minor children to the household do not require prior approval, but the family is still required to report these additions in writing within 10 days of the change, and these additions are still subject to family eligibility requirements, such as criminal history prohibitions. In addition, the voucher size is not increased due to these additions until the family is overcrowded. If the family must transfer, the CDC will only increase the voucher size if the family is overcrowded and only to the extent the family is no longer overcrowded. PARTIALLY RESTRICTED ADMISSIONS The addition of foster children is allowed with prior CDC approval. They may not be added if the family will be overcrowded. The family may receive a larger voucher to add permanent foster children, but only to the extent the family is not overcrowded. PARTIALLY RESTRICTED ADMISSIONS The addition of foster children is allowed with prior CDC approval. They may not be added if the family will be overcrowded. The family may receive a larger voucher to add permanent foster children, but only to the extent the family is not overcrowded. The addition of a live-in aide is allowed with prior CDC approval. Live-in aides may not be added if the family will be overcrowded, but the family may transfer to accommodate the live-in aide. Also, the voucher size will not be increased if there are sleeping areas available to other family members that if utilized would free a separate bedroom for the live-in aide. RESTRICTED ADMISSIONS All admissions to the household not categorized above are limited to one person in 12 months. These restricted admissions must have a permanent source of income and if the income is from employment, they are required to be employed a minimum of 32 hours per week for the previous 12 months. They may not be added if the unit is overcrowded, and they will not be approved without the owner's permission. Exceptions to the income requirement for siblings, children or parents of the head of household or spouse may be occasionally be granted based on documented extreme hardship or serious medical reasons, providing the family will not be overcrowded. QUALIFYING FAMILY UNITS A qualifying family may be a single person or a group of persons. A family may or may not include a child or children. A family may consist of one or more elderly or disabled persons living together, or one or more elderly or disabled persons living with one or more live-in aides. The CDC determines if any other group of persons qualifies as a family. 5- 8 5 A single person family may be: • An elderly person. • A person with a disability (Individuals may not be considered disabled for eligibility purposes solely on the basis of any drug or alcohol dependence). • Any other single person. A child who is temporarily away from home because of temporary placement in foster care is considered a member of the family. A family also includes: • Two or more persons residing together using their combined income and resources to meet their needs. • Two or more elderly or disabled persons residing together sharing income and resources. • One or more elderly, near elderly or disabled persons residing together, with one or more live-in aides. HEAD OF HOUSEHOLD The head of household is the adult member of the household designated by the family as the person wholly or partly responsible for paying the rent with the legal capacity to enter into a lease under state/local law. Emancipated minors who qualify under state law may be recognized as head of household. SPOUSE OF HEAD OF HOUSEHOLD Spouse means the husband or wife of the head of household. For proper application of the non -citizen rule, the definition of spouse is: the marriage partner for whom, in order to dissolve the relationship, must be legally divorced. In addition, the partner in a common law marriage is also considered a "spouse." The term "spouse" does not apply to boyfriends, girlfriends, significant others, or co -heads. CO-HEAD A co-head is an individual in the household who is equally responsible for the lease with the head of household. A family may have a spouse or co-head, but not both. A co-head never qualifies as a dependent. FOSTER CHILDREN A family may include foster children. Documentation must be submitted to verify the identity of the foster children, to confirm they are foster children, and the benefits 5- 9 5 paid on behalf of the foster children. A streamlined documentation process is acceptable for foster children expected to be in the household for a short period of time. Foster children expected to be in the household at least one year are considered a part of the family in determining the subsidy standards. Foster children are treated differently than family members: • The income paid on behalf of foster children is not counted in determining the rental subsidy. • No dependent allowances for foster children • No childcare expense deductions for foster children • Foster children are not subject to non -citizen rule requirements. • Foster children may not be considered remaining members of the tenant family. LIVE-IN AIDES [24 CFR 982.316, 982.551(h)(4)] USE AND OCCUPANCY OF UNIT If the CDC has given approval, a foster child or a live -in -aide may reside in the unit. The CDC has the discretion to adopt reasonable policies concerning residence by a foster child or a live -in -aide, and defining when CDC consent may be given or denied. A family may include a live-in aide provided that such live-in aide: • Is determined by the CDC to be essential to the care and well being of a near elderly (at least 50 years of age) or elderly person or a person with disabilities and will provide services that cannot be provided any other way. • Is not obligated for the support of the person(s). • Would not be living in the unit except to provide care for the person(s). • Was not a member of the assisted household as a family member for at least one year prior to being admitted as a live-in aide. • Is the only live-in aide providing services to that family member. • Will not overcrowd the unit 5- 10 5 A live-in aide is treated differently than family members: • Income of the live-in aide will not be counted for purposes of determining eligibility or level of benefits. • Live-in aides are not subject to non -citizen rule requirements. • Live-in aides will not be considered a remaining member of the tenant family. • A live-in aide must be out of the assisted household for at least one year before s/he is eligible to be admitted to the assisted unit as a family member. • A household member must be out of the assisted household for at least one year before s/he is eligible to be admitted to the assisted unit as a live-in aide. • A live-in aide must be available to the family member the required number of hours prescribed on the medical professional's verification. Relatives are not automatically excluded from being live-in aides, but they must meet the elements of the live-in aide definition described above. A live-in aide may only reside in the unit with the approval of the CDC. Written verification will be required from a state of California licensed professional, such as a doctor, social worker, or caseworker. The verification must certify that a live-in aide is needed for the care of the family member who is near elderly, elderly, or disabled, the number of hours of daily care necessary, and that the services provided by the live-in aide cannot be provided any other way. A participating family's voucher size will not be increased to accommodate a live-in aide until a live-in aide has been identified and approved and only if there are no alternate sleeping areas available to the family members that if utilized would free a separate bedroom for the live-in aide. A participating family whose live-in aide has left the household has 30 days from the date the live-in aide left to obtain another eligible live-in aide. After 30 days, a notice of action will be issued reducing the voucher size in no less than sixty days and no later than the first of the third month following the month of the notice. The notice of action will be rescinded if an eligible live-in aide is approved prior to the effective date of the notice of action. An applicant or transferring family must identify an eligible live-in aide prior to execution of the HAP contract. Per Title 24 CFR 982.316, the CDC may refuse to approve a particular person as a live- in aide, or may withdraw such approval if: • The person commits or has committed fraud, bribery, or any other corrupt or criminal act in connection with any federal housing program; • The person commits or has committed drug -related criminal activity or violent criminal activity; or 5- 11 5 • The person is subject to the sex offender registration requirement of a state sex offender registration program, or • The person is obviously not capable or not available to fully meet the needs of the person requiring a live -in -aide, or • The person is not approved by the landlord, or • The person has a history of disturbance or other occupancy problems, or • The person is unwilling to provide proof of identification or unwilling to sign the necessary releases of information, or • The person currently owes rent or other amounts to the CDC or to another PHA in connection with Section 8 or public housing assistance under the 1937 Act. The CDC will deny the admission of a live-in aide as outlined in 24 CFR Part 982.553 in accordance with the prohibition period outlined in Chapter 3. In particular, the CDC will deny admission of a live-in aide for criteria outlined under 24 CFR Part 982.553 (a) (ii) (3) for permissive prohibitions to prohibit program admission for "other criminal activity which may threaten the health, safety, or right to peaceful enjoyment of the premises by other residents or persons residing in the immediate vicinity." REMAINING MEMBER OF THE FAMILY [24 CFR 982.315] A remaining member of the tenant family is the person remaining in the household when the head of household, spouse, and co-head are absent. Authorized family members are eligible for remaining member status and the family's voucher. A live-in attendant or foster children are not eligible for remaining member status. In order for a minor child to continue to receive assistance as a remaining family member: • The court has awarded emancipated minor status to the minor, or • The CDC has verified that social services and/or the juvenile court has arranged for another adult to be brought into the assisted unit to care for the child for an indefinite period. • A reduction in family size may require a reduction in the voucher size. 5- 12 5 VISITORS A visitor, except as noted below, who is in the unit more than fourteen consecutive days without CDC approval, or a total of 30 days in a twelve-month period, will be considered to be living 'in' the unit as an unauthorized household member. Statements from neighbors and/or the landlord will be considered in making the determination. Use of the unit address as the visitor's current residence for any purpose that is not explicitly temporary shall be construed as permanent residence. Absence of evidence of any other permanent address will be considered verification that the visitor is a member of the household. The burden of proof that the individual is a visitor rests on the family. In the absence of such proof, the individual will be considered an unauthorized member of the household, and the CDC will terminate assistance. The limitation on visitors is not applicable to minors and college students who were once part of the household and adult caretakers, not included on the HUD 50058. Minors and college students who were part of the family, but who now live away from home during the school year and are no longer on the lease, may visit, with the owner's and the CDC's permission, for up to 120 days per year without being considered a member of the household. An adult caretaker may remain in the unit as a visitor for up to 180 days. MIXED FAMILIES [24 CFR 5.518] Under the non -citizens rule, "mixed" families are families that include at least one citizen or eligible immigrant and any number of ineligible member(s). The non -citizens rule was implemented prior to November 29, 1996, and "mixed" families who were participants as of June 19, 1995, shall continue receiving full assistance if they meet all of the following criteria: • The head of household or spouse is a U.S. citizen or has eligible immigrant status; and • All members of the family other than the head, the spouse, parents of the head or the spouse, and children of the head or spouse, are citizens or eligible immigrants. The family may change the head of household to qualify for this provision. 5- 13 5 TEMPORARILY/PERMANENTLY ABSENT FAMILY MEMBERS [CFR 982.54(d)(10), 982.551] The CDC must count all applicable income of every family member who is on the lease, including those who are temporarily absent. In addition, the CDC must count the income of the spouse, or the head of the household, if that person is temporarily absent, even if that person is not on the lease. "Temporarily absent" is defined as: away from the unit for up to 180 consecutive days, or less than six months. Income of persons permanently absent will not be counted. If the spouse is temporarily absent and in the military, all military pay and allowances (except hazardous duty pay when exposed to hostile fire and any other HUD -defined exceptions to military pay) are counted as income. It is the responsibility of the head of household to report in writing changes in family composition. The CDC will evaluate absences from the unit using this policy. ABSENCE OF ANY MEMBER A member of the household is considered permanently absent if s/he is away from the unit for six consecutive months or more in a twelve-month period, except as otherwise provided in this chapter. If a member of the household is subject to a court order that restricts him/her from the home for more than six months, the person will be considered permanently absent. ABSENCE DUE TO MEDICAL REASONS/CONFINED TO NURSING HOME [CFR 982.54(d)(10)] If a family member leaves the household to enter a facility such as a hospital, nursing home, or rehabilitation center, the CDC will require verification from a reliable, qualified source as to the likelihood of his/her return, and the anticipated length of his/her absence. SOLE FAMILY MEMBER If the verification indicates the sole family member is permanently confined to a nursing home, s/he will be considered permanently absent and assistance will be terminated. If the verification indicates the sole family member may return in less than 180 consecutive days, or is unsure when the sole family member will return, the family member may be considered temporarily absent. 5- 14 5 REMAINING HOUSEHOLD MEMBER If a family member is confined to a hospital or nursing home for an indefinite duration, and there is a family member left in the household, the CDC will calculate the lower family rent by comparing the following methods: Exclude the income of the person confined to the nursing home, give the family no deductions for the medical expenses of the confined family member, and review and reduce the family's subsidy standards, if appropriate. OR Include the income of the person confined to the nursing home and give the family the medical deductions allowable on behalf of the person in the nursing home. ABSENCE DUE TO FULL-TIME STUDENT STATUS Full time students who attend school away from the home will be treated in the following manner: A student (other than head of household or spouse) who attends school away from home, but lives with the family during school recesses may, depending on the circumstances, be considered either temporarily or permanently absent. Except as indicated below, the family may choose whether the family member is temporarily or permanently absent. If the family member is considered permanently absent, the income of that member will not be included in total household income, the member will not be included on the lease, and the member will not be included for determination of voucher size. Students going to a public/private elementary or high school and/or living with family or friends (refer to shared custody) or students whom have established separate households as indicated by one-year lease agreements must be considered permanently absent. ABSENCE DUE TO INCARCERATION If a household member, including the sole member, is incarcerated for more than 180 consecutive days, s/he will be considered permanently absent. The CDC will request documentation necessary to determine if the reason for incarceration is for prohibited activities, and take the appropriate action. ABSENCE OF CHILDREN DUE TO PLACEMENT IN FOSTER CARE The CDC will verify with the appropriate agency when a child or children, temporarily absent from the home due to placement in foster care will return. In addition, the CDC will determine why the children were placed in foster care for purposes of determining if a family member had engaged in violent or drug -related criminal activities that may be cause for denial or termination of assistance. 5- 15 5 If the time period in foster care is to be greater than six months from the date of removal of the children, or the children have been removed permanently, the voucher size will be reviewed and reduced, if appropriate. ABSENCE OF ENTIRE FAMILY In cases where the family has moved out of the unit, the CDC will terminate assistance in accordance with appropriate termination procedures contained in this Plan. Families are required to notify the CDC before they move, or are absent more than 30 consecutive days from a unit. If the entire family is absent from the assisted unit for more than 30 consecutive days, the unit will be considered vacated, and the assistance will be terminated. However, the CDC may grant an extension for absences of up to 180 consecutive days when the illness of a family member requires all family members to be absent from the unit. HUD regulations require the CDC terminate assistance when the entire family is absent from the unit for a period of more than 180 consecutive calendar days. "Absence" means that no family member is residing in the unit. In order to determine if the family is absent from the unit, the CDC may: • Write letters to the family at the unit • Telephone the family at the unit • Interview neighbors • Verify if utilities are in service • Check with the post office ABSENCE OF PARENTS AND ASSIGNMENT OF CARETAKER FOR CHILDREN When an appropriate agency has determined that another adult is to be brought into the assisted unit to care for the children for an indefinite period, in instances when the parents have vacated, the CDC will treat that adult as a visitor for the first 180 days. During the time the caretaker is considered a visitor, the caretaker's income will not be counted, or deductions allowed. After 180 days, if the court awards custody or legal guardianship to the caretaker, the voucher will be transferred to the caretaker, providing the caretaker meets all eligibility criteria for household additions. The CDC will, until receipt of confirmation from an appropriate agency, review the guardianship status of the caretaker at six month intervals. 5- 16 5 If court action to award custody or legal guardianship is in process, the CDC will secure verification of the status of the case from a social service agency, or an attorney. The CDC will transfer the voucher to the caretaker, in the absence of a court order, if the caretaker has been in the unit for more than twelve months, and it is reasonable to expect custody to be granted. If custody is awarded for a limited time, the CDC will state in writing that the transfer of the voucher is for a limited time, and as long as the caretaker has the custody of the children. Once the caretaker is approved by the CDC and no longer considered a visitor, the income of the caretaker will be counted and deductions will be allowed. COURT -ORDERED TEMPORARY ABSENCE When a court order restricts someone who has been considered a family member from living in the home, the PHA must determine whether the member is temporarily or permanently absent. This policy applies to circumstances such as temporary restraining orders, but not jail or prison incarceration, which are covered separately. If the court order permanently restricts the return of the absent family member for more than 180 days, that family member will be considered permanently absent. There must also be a review for prohibited activities, such as domestic violence, that may disqualify the family or the absent family member from program participation. JOINT CUSTODY OF CHILDREN Children, who are subject to a joint custody agreement but live with the applicant/participant at least 51 percent of the time, will be considered members of the household. The definition of "51 percent of the time" is 183 cumulative days of the year. When both parents are on the waiting list or on the program, and both are trying to claim the child as a member of the household, the parent whose address is listed in the school records will be allowed to claim the school -age child as a dependent. In a joint custody arrangement, if the minor is in the household less than six months per year, the minor will be considered to be an eligible visitor and not a family member. 5- 17 5 5- 18 6 CALCULATION OF TTP AND FAMILY RENT [24 CFR Part 5, Subparts E and F; 982.153, 982.54, 982.516, 982.551] INTRODUCTION HUD requires accurate calculation of the family's total tenant payment (TTP) and rent amount. This chapter reviews key guidelines for the correct determination of the family's portion of the rent, including the determination of allowances and expenses off of income, countable, imputed and exempt income, assets and their actual and imputed income. INCOME The CDC will anticipate income as accurately as possible by reviewing all verifications and using the most accurate reflection of income for the next 12 months. Processing entities must use HUD's EIV system as a third -party source to verify tenant employment and income information during mandatory reexaminations or recertifications of family composition and income, in accordance with Sec. 5.236. PENALTIES FOR NONCOMPLIANCE: Failure to use the EIV system may result in the imposition of remedial actions as outlined in 24 CFR 84.62, except as provided in paragraph (b) of this section. For multifamily owners and management agents, failure to use the EIV system may result in the imposition of sanctions and/or the assessment of disallowed costs associated with any resulting incorrect subsidy or tenant rent calculations, or both. 6- 1 6 ANNUAL INCOME [24 CFR 5.609(a)(b); 982.516] Annual income means all amounts, monetary or not, which: ■ Go to, or on behalf of, the family head or spouse (even if temporarily absent) or to any other family member; or ■ Are anticipated to be received from a source outside the family during the 12- month period following admission or annual reexamination effective date; and ▪ Which are not specifically excluded in § 5.609(c). ■ Annual income also means amounts derived (during the 12-month period) from assets to which any member of the family has access. Annual income includes, but is not limited to payments in lieu of earnings, such as unemployment and disability compensation, worker's compensation and severance pay (except as provided in §5.609(c)(3)); Annual income includes income of all family members, including any family member who has not established eligible immigration status. FAMILY MEMBER INCOME Family income must include income of all family members, including family members not related by blood or marriage. If any new family member is added, family income must include any income of the additional family member. The PHA must conduct a reexamination to determine such additional income, and must make appropriate adjustments in the housing assistance payment. ACCURACY OF FAMILY INCOME DATA The PHA must establish procedures that are appropriate and necessary to assure that income data provided by applicant or participant families is complete and accurate. EXECUTION OF RELEASE AND CONSENT As a condition of admission to or continued assistance under the program, the CDC shall require the family head, and such other family members as the CDC designates, to execute a HUD -approved release and consent form (including any release and consent as required under Sec. 5.230 of this title) authorizing any depository or private source of income, or any Federal, State or local agency, to furnish or release to the CDC or HUD such information as the CDC or HUD determines to be necessary. The CDC and HUD must limit the use or disclosure of information obtained from a family or from another source pursuant to this release and consent to purposes directly in connection with administration of the program. 6- 2 6 Annual income is defined as the gross amount of income anticipated to be received by the family during the twelve months after certification or recertification. Gross income is the amount of income prior to any HUD allowable expenses or deductions, and does not include income excluded by HUD. Annual income is used to determine whether or not applicants are within the applicable income limits. Wages for full-time employment are anticipated for a full 52 weeks unless documentation is provided that wages will not be earned for the full year. Annual income may be anticipated using the previous year's income, rather than current income, if that is the most accurate reflection of the next year's income. A clear rationale must be documented to support the methodology used for the calculation of income. AMOUNTS THE CDC HAS DETERMINED DO NOT MEET THE DEFINITION OF INCOME Employer reimbursement for mileage expenses is not considered income as long as the reimbursement is reasonable as compared to the Internal Revenue Service mileage allowance. Mileage logs may be requested. Loans to a participant/applicant from an institution are not considered income. However, "loans" from private parties are considered income. Repayment of a loan back to the applicant/participant is not considered income if documentation can be presented that the loan was made by the applicant/participant. If no documentation is provided, the "repayments" are considered income. Employer contributions to a flexible medical or childcare expense account are not considered income as long as the money is only accessible by the family as reimbursement for out-of-pocket medical or childcare expenses. However, childcare or medical expenses will not be allowed as deduction if they are reimbursable through a flexible employer contribution account. AVERAGING INCOME When annual income cannot be anticipated for a full twelve months, the CDC may use one of the following methods to calculate annual income: • Average known sources of income that vary to eliminate interim adjustments • Annualize current income and conduct an interim adjustment when it goes down • Use prior year's income information to anticipate the following year • Average employer's year-to-date income information 6- 3 6 • For regularly received bonuses and/or commission, the CDC will verify and then average amount received for the previous year, unless the family can provide credible documentation indicating the historical information is incorrect. The method used depends on the regularity, source and type of income. MINIMAL OR ZERO INCOME There is no minimum income requirement. However, families who report zero or minimal income are required to complete a written certification every 30 days, and provide copies of expense receipts for the 30-day period. The CDC will conduct an interim to increase the family's rent share upon reinstatement of income. REGULAR CONTRIBUTIONS AND GIFTS [24 CFR 5.609(b)(7-9)] Regular contributions and gifts received from organizations or persons not residing in the dwelling are counted as income. This includes all regular pay, special pay and allowances of a member of the Armed Forces (except as provided in paragraph (c)(7) of this section). For section 8 programs only and as provided in 24 CFR 5.612, any financial assistance, in excess of amounts received for tuition, that an individual receives under the Higher Education Act of 1965 (20 U.S.C. 1001 et seq.), from private sources, or from an institution of higher education (as defined under the Higher Education Act of 1965 (20 U.S.C. 1002)), shall be considered income to that individual, except that financial assistance described in this paragraph is not considered annual income for persons over the age of 23 with dependent children. For purposes of this paragraph, "financial assistance" does not include loan proceeds for the purpose of determining income. Any contribution, gift or other benefit received every twelve months or more frequently will be considered a "regular" contribution or gift. This includes rent and utility payments made on behalf of the family, and other cash or non -cash contributions provided on a regular basis. A family benefit that is used exclusively by the family, but not titled to the family (i.e., automobile, storage unit), will be counted as income. If an employer provides an automobile that is used for both personal and business purposes, a proration of the vehicle expense payments (insurance, registration, car payments, etc.) will be counted as income based on the percentage of time the vehicle is used for personal purposes. Evidence of a business vehicle used for personal purposes may include the vehicle being stored overnight at the family's residence and/or the lack of a personal vehicle for that family member. If the family's expenses exceed its known income, the CDC will inquire of the family regarding contributions and gifts. 6- 4 6 SOCIAL SECURITY INCOME If the social security statement indicates a reduced social security benefit due to rounding, count the rounded amount. If the social security statement indicates a deduction for Medicare, add the Medicare payment amount to the net benefit for the countable income. ALIMONY AND CHILD SUPPORT [24 CFR 5.609(b)(7)] Regular alimony and child support payments are counted as income. If the amount of child support or alimony received is less than the amount awarded by the court, the CDC will use the amount awarded by the court, unless the family can verify it is not receiving the full amount. The CDC will accept verification that the family is receiving an amount less than the award if: • A notarized family certification in writing, under penalty of perjury, that states it is not receiving the full amount of alimony or child support, and explains why it cannot provide the documentation outlined in the previous paragraph. • It is the family's responsibility to supply a certified copy of the divorce decree. BUSINESS INCOME [24 CFR.5.609 (b) (2)] Net income from the operation of a business or profession: Expenditures for business expansion or amortization of capital indebtedness shall not be used as deductions in determining net income. An allowance for depreciation of assets used in a business or profession may be deducted, based on straight line depreciation, as provided in Internal Revenue Service regulations. Any withdrawal of cash or assets from the operation of a business or profession will be included in income, except to the extent the withdrawal is reimbursement of cash or assets invested in the operation by the family. If the business is co -owed with someone outside the family, the family must provide documentation demonstrating its share of the business as a percentage and documentation of the business partnership agreement. 6- 5 6 WELFARE ASSISTANCE PAYMENTS Welfare assistance payments made under the Temporary Assistance for Needy Families (TANF) program is included in annual income only to the extent such payments: • Qualify as assistance under the TANF program definition at 45 CFR 260.31; and • Are not otherwise excluded under paragraph (c) of this section. • If the welfare assistance payment includes an amount specifically designated for shelter and utilities that is subject to adjustment by the welfare assistance agency in accordance with the actual cost of shelter and utilities, the amount of welfare assistance income to be included as income shall consist of: o The amount of the allowance or grant exclusive of the amount specifically designated for shelter or utilities; plus o The maximum amount that the welfare assistance agency could in fact allow the family for shelter and utilities. If the family's welfare assistance is ratably reduced from the standard of need by applying a percentage, the amount calculated under this paragraph shall be the amount resulting from one application of the percentage. INCOME CHANGES RESULTING FROM WELFARE PROGRAM REQUIREMENTS [CFR 5.615] This section applies to covered families who receive Section 8 tenant -based assistance. IMPUTED WELFARE INCOME The amount of annual income not actually received by a family, as a result of a specified welfare benefit reduction, that is nonetheless included in the family's annual income for purposes of determining rent. (1) A family's annual income includes the amount of imputed welfare income (because of a specified welfare benefits reduction, as specified in notice to the PHA by the welfare agency), plus the total amount of other annual income as determined in accordance with Sec. 5.609. (2) At the request of the PHA, the welfare agency will inform the PHA in writing of the amount and term of any specified welfare benefit reduction for a family member, and the reason for such reduction, and will also inform the PHA of any subsequent changes in the term or amount of such specified welfare benefit reduction. The PHA will use this information to determine the amount of imputed welfare income for a family. 6- 6 6 (3) A family's annual income includes imputed welfare income in family annual income, as determined at the PHA's interim or regular reexamination of family income and composition, during the term of the welfare benefits reduction (as specified in information provided to the PHA by the welfare agency). (4) The amount of the imputed welfare income is offset by the amount of additional income a family receives that commences after the time the sanction was imposed. When such additional income from other sources is at least equal to the imputed welfare income, the imputed welfare income is reduced to zero. (5) The PHA may not include imputed welfare income in annual income if the family was not an assisted resident at the time of sanction. SPECIFIED WELFARE BENEFIT REDUCTION (1) A reduction of welfare benefits by the welfare agency, in whole or in part, for a family member, as determined by the welfare agency, because of fraud by a family member in connection with the welfare program; or because of welfare agency sanction against a family member for noncompliance with a welfare agency requirement to participate in an economic self-sufficiency program. (2) "Specified welfare benefit reduction" does not include a reduction or termination of welfare benefits by the welfare agency: ■ at expiration of a lifetime or other time limit on the payment of welfare benefits; • because a family member is not able to obtain employment, even though the family member has complied with welfare agency economic self- sufficiency or work activities requirements; or ■ because a family member has not complied with other welfare agency requirements. The CDC will not impute welfare income, if the welfare assistance reduction is the result of: • The expiration of a lifetime time limit on receiving benefits • The family has not complied with other welfare agency requirements not outlined above • The family member has complied with welfare agency economic self- sufficiency requirements, or work activities requirements, but cannot, or has not, obtained employment. For example, the family member has complied with welfare program requirements, but the family has exceeded the 6- 7 6 maximum time it is allowed to receive benefits, resulting in a loss of benefits. VERIFICATION BEFORE DENYING A REQUEST TO REDUCE FAMILY RENT The CDC will obtain a written, faxed, computer, or telephone verification from the welfare agency stating that the family's benefits have been reduced for fraud or noncompliance with economic self-sufficiency/work activities requirements, before denying a family's request for reduction of family rent. The requested verification from the welfare agency must state the amount, term, and reason for the benefit reduction. The welfare agency must, upon request, also inform the CDC of changes. COOPERATION AGREEMENTS The CDC has a cooperation agreement in place with the local welfare agency. The CDC has a verbal cooperation agreement with the local welfare agency for verbal confirmation of a family's sanction status. The PHA must ask welfare agencies to inform the PHA of any specified welfare benefits reduction for a family member, the reason for such reduction, the term of any such reduction, and any subsequent welfare agency determination affecting the amount or term of a specified welfare benefits reduction. If the welfare agency determines a specified welfare benefits reduction for a family member, and gives the PHA written notice of such reduction, the family's annual incomes shall include the imputed welfare income because of the specified welfare benefits reduction. The PHA is responsible for determining the amount of imputed welfare income that is included in the family's annual income as a result of a specified welfare benefits reduction as determined by the welfare agency, and specified in the notice by the welfare agency to the PHA. However, the PHA is not responsible for determining whether a reduction of welfare benefits by the welfare agency was correctly determined by the welfare agency in accordance with welfare program requirements and procedures, or for providing the opportunity for review or hearing on such welfare agency determinations. Such welfare agency determinations are the responsibility of the welfare agency, and the family may seek appeal of such determinations through the welfare agency's normal due process procedures. The PHA shall be entitled to rely on the welfare agency notice to the PHA of the welfare agency's determination of a specified welfare benefits reduction. REVIEW OF PHA DECISION A participant in the Section 8 tenant -based assistance program may request an informal hearing, in accordance with Sec. 982.555 of this title, to review the PHA determination of the amount of imputed welfare income that must be included in the family's annual income in accordance with this section. If the family claims that such amount is not correctly calculated in accordance with HUD requirements, and if the 6- 8 6 HA denies the family's request to modify such amount, the PHA shall give the family written notice of such denial, with a brief explanation of the basis for the PHA determination of the amount of imputed welfare income. Such notice shall also state that if the family does not agree with the PHA determination, the family may request an informal hearing on the determination under the PHA hearing procedure. FAMILY DISPUTE OF AMOUNT OF IMPUTED WELFARE INCOME If the family disputes the amount of imputed income and the CDC denies the family's request to modify the amount, the CDC will provide the tenant with a notice of denial, which will include: • An explanation for the CDC's determination of the amount of imputed welfare income • Opportunity to request an informal hearing LUMP SUM RECEIPTS CONSIDERED INCOME UNDER THE REGULATIONS [24 CFR 5.609] Lump -sum payments caused by delays in processing periodic payments, such as unemployment or welfare assistance, are counted as income; however, the CDC generally (except for zero/minimal income families) evaluates income increases at annual reexamination, and any lump sum income received prior to the annual reexamination would probably not be counted. The remaining balance would be counted as an asset. Lump sum payments from Social Security or Supplemental Security Income (SSI) are excluded from income, but any amount remaining will be considered an asset. Deferred periodic payments, which have accumulated due to a dispute, will be treated the same as periodic payments, which are deferred due to delays in processing. The policy of the CDC is to not calculate retroactive tenant rent the family owes as a result of the lump sum receipt, as long as the family reported the income in a timely manner. If the family fails to report the income, the CDC may calculate an overpayment, and/or hold a tenant integrity conference to advise the family of possible repercussions if it fails to abide by the CDC program obligations. ATTORNEY FEES The family's attorney fees may be deducted from lump sum payments, when computing annual income, if the attorney's efforts have recovered the compensation, and the recovery paid to the family does not include an additional amount to cover attorney fees. 6- 9 6 SELF-SUFFICIENCY INCENTIVES FOR PERSONS WITH DISABILITIES — DISALLOWANCE OF INCREASE IN ANNUAL INCOME [24 CFR 5.617; 982.201(b)(3)] In determining annual income of a participant family which includes persons with disabilities, the determination must include the disallowance of increase in annual income as provided in 24 CFR 5.617, if applicable. APPLICABLE PROGRAMS The disallowance of increase in annual income provided by this section is applicable only to the following programs: HOME Investment partnerships Program (24 CFR part 92); Housing Opportunities for Persons with AIDS (24 CFR part 574); Supportive Housing Program (24 CFR part 583); and the Housing Choice Voucher Program (24 CFR part 982). INITIAL TWELVE-MONTH EXCLUSION Disallowance of increase in annual income--(1) Initial twelve month exclusion. During the cumulative twelve month period beginning on the date a member who is a person with disabilities of a qualified family is first employed or the family first experiences an increase in annual income attributable to employment, the responsible entity must exclude from annual income (as defined in the regulations governing the applicable program listed in paragraph (a) of this section) of a qualified family any increase in income of the family member who is a person with disabilities as a result of employment over prior income of that family member. SECOND TWELVE-MONTH EXCLUSION AND PHASE -IN During the second cumulative twelve month period after the date a member who is a person with disabilities of a qualified family is first employed or the family first experiences an increase in annual income attributable to employment, the responsible entity must exclude from annual income of a qualified family fifty percent of any increase in income of such family member as a result of employment over income of that family member prior to the beginning of such employment. MAXIMUM FOUR-YEAR DISALLOWANCE The disallowance of increased income of an individual family member who is a person with disabilities as provided in paragraph (c)(1) or (c)(2) is limited to a lifetime 48 month period. The disallowance only applies for a maximum of twelve months for disallowance under paragraph (c)(1) and a maximum of twelve months for disallowance under paragraph (c)(2), during the 48 month period starting from the initial exclusion under paragraph (c)(1) of this section. 6- 10 6 INAPPLICABILITY TO ADMISSION The disallowance of increases in income as a result of employment of persons with disabilities under this section does not apply for purposes of admission to the program (including the determination of income eligibility or any income targeting that may be applicable). APPLICABILITY TO CHILD CARE EXPENSE DEDUCTIONS The amount deducted for childcare necessary to permit employment shall not exceed the amount of employment income included in annual income. Therefore, for qualifying families entitled to the earned income disallowance, the amounts of the full and phase -in exclusions from income shall not be used in determining the cap for childcare deductions. TRACKING THE EARNED INCOME EXCLUSION The earned income exclusion will be reported on the HUD 50058 form. Documentation will be included in the family's file to show the reason for the reduced increase in rent. Interims will be performed if necessary to accurately calculate full, phase -in, and end of exclusion periods. A form in the tenant file will track: • The date the increase in earned income was reported by the family • The effective date the income was first excluded from annual income for the initial cumulative twelve-month period of exclusion • The name of the family member whose earned income increased • The reason (new employment, participation in job training program, within six months after receiving TANF) for the increase in earned income • The amount of the increase in earned income (amount to be excluded) • The date(s) earned income ended and resumed during the initial cumulative twelve-month period of exclusion (if any) • The date the family member has received a total of twelve months of the initial exclusion • The date the second twelve-month phase -in period began • The date(s) earned income ended and resumed during the second cumulative twelve-month period (phase -in) of exclusion (if any) • The date the family member has received a total of twelve -months of the second phase -in exclusion 6- 11 6 • The ending date of the maximum 48-month (four year) disallowance period (48 months from the date of the initial earned income disallowance) • The earned income disallowance is only applied to determine the annual income of family members with disabilities in families who are participants in the Housing Choice Voucher Program, and therefore does not apply for purposes of admission to the program (including the determination of income eligibility or any income targeting that may be applicable). DISALLOWANCE OF INCOME RESULTING FROM PARTICIPATION IN A LOCAL, STATE OR HUD -FUNDED TRAINING PROGRAM [24 CFR 5.609(c)(8)(i)] AMOUNTS RECEIVED UNDER TRAINING PROGRAMS FUNDED BY HUD Amounts received by a person with a disability that are disregarded for a limited time for purposes of Supplemental Security Income eligibility and benefits because they are set aside for use under a Plan to Attain Self -Sufficiency (PASS). Amounts received by a participant in other publicly assisted programs which are specifically for or in reimbursement of out-of-pocket expenses incurred (special equipment, clothing, transportation, child care, etc.) and which are made solely to allow participation in a specific program. All amounts received under training programs funded by HUD are excluded, as are amounts received by a family member for resident manager training. The incremental increase in earnings and benefits is exempt if they result from any family member participating in a qualifying State or local employment -training program with clear - defined goals and objectives. A training program (for HUD -funded, state or local programs) is defined as "a learning process with goals and objectives generally having a variety of components, and taking place in a series of sessions over a period of time. It is designed to lead to a higher level of proficiency, and it enhances the individual's ability to obtain employment. It may have performance standards to measure proficiency. It will also include on-the- job training programs that provide participants "real life" job experiences. Training may include, but is not limited to: • Classroom training in a specific occupational skill; • On-the-job training with wages subsidized by the program; or, • Basic education." • Incremental earnings and benefits are defined as, "the difference between (1) the total amount of welfare assistance and earnings of a family member prior to enrollment in a training program and (2) the total amount of welfare assistance and earnings after and as a result of enrollment in the program." • Documentation to verify these exclusions include third party verification or documentation describing the program and the funding source. 6-12 6 • Pre -enrollment income will be the income received prior to receipt of income from the training program. ASSETS [24 CFR 5.609(a)(4),(b)(3)] Annual income also means amounts derived (during the 12-month period) from assets to which any member of the family has access. Annual income includes, but is not limited to interest, dividends, and other net income of any kind from real or personal property. Expenditures for amortization of capital indebtedness shall not be used as deductions in determining net income. An allowance for depreciation is permitted only as authorized in paragraph (b)(2) of this section. Any withdrawal of cash or assets from an investment will be included in income, except to the extent the withdrawal is reimbursement of cash or assets invested by the family. Where the family has net family assets in excess of $5,000, annual income shall include the greater of the actual income derived from all net family assets or a percentage of the value of such assets based on the current passbook savings rate, as determined by HUD Due to the added administrative cost, the CDC will not attempt a third party verification of any asset in which the source collects a service charge of $1.00 or more and the family has available original documents, such as bank statements. If the family cannot provide original documents, the CDC will pay the service charge for the third party verifications. The CDC will generally use current circumstances to determine both the value of an asset and the anticipated income from the asset. If current circumstances are not used to determine the asset income, a clear rationale for the decision will be documented in the file. The family may present information and documentation to show why the asset income determination does not represent the family's anticipated asset income. Total assets will be counted, even if jointly owned by someone not part of the family, providing a family member has unlimited access to those assets. If the family has restricted access to those assets, the CDC will prorate the family's asset share based on percentage of ownership. If there is no percentage of ownership, the CDC will prorate the family's asset share evenly among all owners. Assets not controlled by or accessible to the family, such as assets held in trust by an outside trustee, will not be counted or considered. If there are disbursements to the family from these assets, depending of their regularity, they may either be counted as income or lump sum additions to family assets. Personal property, such as clothing, automobiles, and furniture will not be counted as assets, unless the personal property is an investment, such as a stamp collection, in which case the family's declaration of the investment's value will be used to determine the asset amount. 6-13 6 If the capital investment is owned jointly with others not in the household, a prorated share of the property's cash value will be counted as an asset. Checking and Savings Accounts, Stocks, Bonds, Certificates of Deposit, and Money Market Funds The CDC will count as assets amounts in the family's checking, savings, certificate of deposit (CD), and money market accounts, including those accounts held by children. The CDC will count the current value, unless there is evidence provided by the family that an average of the balance for the last 2-6 months is a better reflection of anticipated assets. The CDC will calculate interest income based on the interest rate reflected on the most current statement, or on the CD set rate, unless third party verification reflects a higher interest rate. For stocks, the CDC will calculate asset income based on the earnings for the most recent reporting period, and may average the earnings for the prior 2-6 months. LUMP SUM Annual income includes, but is not limited to payments in lieu of earnings, such as unemployment and disability compensation, worker's compensation and severance pay (except as provided in §5.609(c)(3) of this section); Lump sum payments from Social Security or Supplemental Security Income (SSI) are excluded from income, but any amount remaining will be considered an asset. Deferred periodic payments, which have accumulated due to a dispute, will be treated the same as periodic payments, which are deferred due to delays in processing. Refer to page 5-25 on the HUD Housing Choice Voucher guidebook for excluded and included assets. PERIODIC AMOUNTS [609(b)(4)]] The full amount of periodic amounts received from Social Security, annuities, insurance policies, retirement funds, pensions, disability or death benefits, and other similar types of periodic receipts, including a lump -sum amount or prospective monthly amounts for the delayed start of a periodic amount (except as provided in paragraph (c)(14) of this section); ASSETS DISPOSED OF FOR LESS THAN FAIR MARKET VALUE [24CFR 5.609(b)(3)] Interest, dividends, and other net income of any kind from real or personal property. Expenditures for amortization of capital indebtedness shall not be used as deductions in determining net income. An allowance for depreciation is permitted only as 6- 14 6 authorized in paragraph (b)(2) of this section. Any withdrawal of cash or assets from an investment will be included in income, except to the extent the withdrawal is reimbursement of cash or assets invested by the family. Where the family has net family assets in excess of $5,000, annual income shall include the greater of the actual income derived from all net family assets or a percentage of the value of such assets based on the current passbook savings rate, as determined by HUD; In determining net family assets, PHAs or owners, as applicable, shall include the value of any business or family assets disposed of by an applicant or tenant for less than fair market value (including a disposition in trust, but not in a foreclosure or bankruptcy sale) during the two years preceding the date of application for the program or reexamination, as applicable, in excess of the consideration received therefore. In the case of a disposition as part of a separation or divorce settlement, the disposition will not be considered to be for less than fair market value if the applicant or tenant receives important consideration not measurable in dollar terms. Assets disposed as a result of foreclosure or bankruptcy, are not considered to be assets disposed of for less than fair market value. Assets disposed as a result of a divorce or separation are not considered to be assets disposed of for less than fair market value, providing some monetary consideration was received, and there is a separation or divorce settlement agreement established through arbitration, mediation, or court order. Assets to be considered include: real property, savings, stocks, bonds, and other forms of capital investments. Excluded assets are: the value of personal property such as furniture and automobiles, as well as a trust fund or asset not under the control of any member of the family or household. ANNUAL INCOME [24 CFR 5.609 (c)] DOES NOT INCLUDE THE FOLLOWING (1) Income from employment of children (including foster children) under the age of 18 years; (2) Payments received for the care of foster children or foster adults (usually persons with disabilities, unrelated to the tenant family, who are unable to live alone); (3) Lump -sum additions to family assets, such as inheritances, insurance payments (including payments under health and accident insurance and worker's compensation), capital gains and settlement for personal or property losses (except as provided in paragraph (b)(5) of this section); (4) Amounts received by the family that are specifically for, or in reimbursement of, the cost of medical expenses for any family member; (5) Income of a live-in aide, as defined in Sec. 5.403; (6) Subject to paragraph (b)(9) of this section, the full amount of student financial assistance paid directly to the student or to the educational institution; 6-15 6 (7) The special pay to a family member serving in the Armed Forces who is exposed to hostile fire; (8)(i) Amounts received under training programs funded by HUD; (ii) Amounts received by a person with a disability that are disregarded for a limited time for purposes of Supplemental Security Income eligibility and benefits because they are set aside for use under a Plan to Attain Self - Sufficiency (PASS); (iii) Amounts received by a participant in other publicly assisted programs which are specifically for or in reimbursement of out-of-pocket expenses incurred (special equipment, clothing, transportation, child care, etc.) and which are made solely to allow participation in a specific program; (iv) Incremental earnings and benefits resulting to any family member from participation in qualifying State or local employment training programs (including training programs not affiliated with a local government) and training of a family member as resident management staff. Amounts excluded by this provision must be received under employment training programs with clearly defined goals and objectives, and are excluded only for the period during which the family member participates in the employment training program; (9) Temporary, nonrecurring or sporadic income (including gifts); (10) Reparation payments paid by a foreign government pursuant to claims filed under the laws of that government by persons who were persecuted during the Nazi era; (11) Earnings in excess of $480 for each full-time student 18 years old or older (excluding the head of household and spouse); (12) Adoption assistance payments in excess of $480 per adopted child; (13) [Reserved] (14) Deferred periodic amounts from supplemental security income and social security benefits that are received in a lump sum amount or in prospective monthly amounts. (15) Amounts received by the family in the form of refunds or rebates under State or local law for property taxes paid on the dwelling unit; (16) Amounts paid by a State agency to a family with a member who has a developmental disability and is living at home to offset the cost of services and equipment needed to keep the developmentally disabled family member at home; or (17) Amounts specifically excluded by any other Federal statute from consideration as income for purposes of determining eligibility or benefits under a category of assistance programs that includes assistance under any program to which the exclusions set forth in 24 CFR 5.609(c) apply. A notice will be published in the Federal Register and distributed to PHAs and housing owners identifying the benefits that qualify for this exclusion. Updates will be published and distributed when necessary. (d) Annualization of income. If it is not feasible to anticipate a level of income over a 12-month period (e.g., seasonal or cyclic income), or the PHA believes that past income is the best available indicator of expected future income, the PHA may annualize the income anticipated for a shorter period, subject to a redetermination at the end of the shorter period. (i) Amounts received under a resident service stipend. A resident service stipend is a modest amount (not to exceed $200 per month) received by a resident for performing a service for the PHA or owner, on a part-time basis, that enhances the quality of life in the development. Such services may include, but are not limited to, 6-16 6 fire patrol, hall monitoring, lawn maintenance, resident initiatives coordination, and serving as a member of the PHA's governing board. No resident may receive more than one such stipend during the same period of time; ALLOWANCES [24 CFR 5.611] Adjusted Income: means annual income (as determined by the responsible entity, defined in Sec. 5.100 and Sec. 5.603) of the members of the family residing or intending to reside in the dwelling unit, after making the following deductions: MANDATORY DEDUCTIONS. In determining adjusted income, the responsible entity must deduct the following amounts from annual income: (1) $480 for each dependent; (2) $400 for any elderly family or disabled family; (3) The sum of the following, to the extent the sum exceeds three percent of annual income: (i) Unreimbursed medical expenses of any elderly family or disabled family; and (ii) Unreimbursed reasonable attendant care and auxiliary apparatus expenses for each member of the family who is a person with disabilities, to the extent necessary to enable any member of the family (including the member who is a person with disabilities) to be employed. This deduction may not exceed the earned income received by family members who are 18 years of age or older and who are able to work because of such attendant care or auxiliary apparatus; and Any reasonable child care expenses necessary to enable a member of the family to be employed or to further his or her education. ADDITIONAL DEDUCTIONS: For public housing, a PHA may adopt additional deductions from annual income. The PHA must establish a written policy for such deductions. For the HUD programs listed in Sec. 5.601(d), the responsible entity shall calculate such other deductions as required and permitted by the applicable program regulations. EXPRENSES DEDUCTED OFF OF ANNUAL INCOME CHILDCARE EXPENSES [24 CFR 5.603] Amounts anticipated to be paid by the family for the care of children under thirteen years of age during the period for which annual income is computed, but only where 6- 17 6 such care is necessary to enable a family member to actively seek employment, be gainfully employed, or to further his or her education and only to the extent such amounts are not reimbursed. The amount deducted shall reflect reasonable charges for child care. In the case of child care necessary to permit employment, the amount deducted shall not exceed the amount of employment income that is included in annual income. In the case of a child attending private school, only after-hours care will be counted as childcare expenses. Childcare expense deductions are allowed based on the following guidelines: • Childcare to work: The maximum childcare expense allowed cannot exceed the amount earned by the person enabled to work whose income is included in the family's annual income. The "person enabled to work" will generally be the adult member of the household who earns the least amount of income from working, unless the family provides compelling information to designate another family member as the person enabled to work. The number of hours of allowable childcare cannot exceed the number of hours worked, plus reasonable transportation time, of the person enabled to go to work. • Childcare for school: The number of hours claimed for childcare may not exceed the number of hours the family member is attending school, plus reasonable transportation time. To be eligible for the deduction, the family member must provide proof of enrollment in an academic or vocational school or a formal training program and the hours of classes or training. • Childcare to actively seek employment: The number of hours claimed for childcare may not exceed the time taken to actively seek employment as indicated on the family member's written log. • Amount of Expense: The CDC will only allow reasonable childcare expenses and only those expenses attributed directly for childcare. If only a portion of the expenses is for childcare, the CDC will prorate the allowable expenses based on the number of hours spent on childcare compared with the total number of hours services are provided. The CDC may survey local childcare providers in the community for information on average childcare costs. If the childcare expense information submitted by the participant materially exceeds comparable reasonable childcare cost, the CDC will calculate childcare expenses using an average of the reasonable comparable childcare cost, and not the amount submitted by the participant. • A Childcare/Dependent Person(s) Care Statement must completed and notarized if the Child/Dependent Care Provider is an individual rather than a licensed provider Reasonable expenses that are anticipated, during the period for which annual income is computed, for attendant care and auxiliary apparatus for a disabled family member and that are necessary to enable a family member (including 6-18 6 the disabled member) to be employed, provided that the expenses are neither paid to a member of the family nor reimbursed by an outside source. MEDICAL EXPENSES [24 CFR 5.603, 5.609(a)(2)] Medical expenses, including medical insurance premiums that are anticipated during the period for which annual income is computed, and that are not covered by insurance. Amounts received by the family that are specifically for, or in reimbursement of, the cost of medical expenses for any family member; o Income of a live-in aide, as defined in Sec. 5.403; o Amounts received by a person with a disability that are disregarded for a limited time for purposes of Supplemental Security Income eligibility and benefits because they are set aside for use under a Plan to Attain Self - Sufficiency (PASS); o Amounts received by a participant in other publicly assisted programs which are specifically for or in reimbursement of out-of-pocket expenses incurred (special equipment, clothing, transportation, child care, etc.) and which are made solely to allow participation in a specific program; o Amounts paid by a State agency to a family with a member who has a developmental disability and is living at home to offset the cost of services and equipment needed to keep the developmentally disabled family member at home Medical expenses are allowed only for elderly or disabled families, with a head of household or spouse who is elderly, disabled, or both. The IRS Publication 502 will be used as a guide to assist in determining allowable medical expenses in instances when the regulations or CDC policies are clear. If an expense is eligible as both a medical and a disability assistance expense, the expense will be considered a medical expense. In order for nonprescription medicines to be considered allowable medical expenses, a doctor's written recommendation must be provided, as well as legible receipts that clearly indicate the type of medicine purchased. Acupressure, acupuncture, and chiropractic services are considered allowable medical expenses. Herbal medicines will be allowed, with a medical professional's written recommendation, and legible receipts that clearly indicate the type of medicines purchased. Under the Medicare Prescription Drug Improvement and Modernization Act, the full amount of the before -discount drug cost must be counted as a prescription expense deduction. In addition, the $600 prescription expense subsidy is excluded from annual income. The prescription drug discount card may, for some families, have an enrollment fee. This enrollment fee will be counted as a medical expense. 6- 19 6 Prescribed medicines and drugs: Must be prescribed by a doctor. The family must provide legible pharmacy receipts that clearly indicate the expense amount in U.S. dollars, date, and the type of medicine purchased. Nonprescription medicines: To be allowed, the family must provide a current medical professional's written recommendation for the necessity of their use as a form of treatment for a specific medical condition, the name of the medicine, and the quantity recommended. The family must also provide legible receipts that clearly indicate the amount in U.S. dollars, date, type and quantity of medicine purchased. Herbal medicines: To be allowed, the family must provide a medical professional's written recommendation for the necessity of their use as a necessary treatment for a specific medical condition, the name of the herbal medicine, and the quantity recommended. The family must also provide legible receipts that clearly indicate the amount in U.S. dollars, date, type and quantity of herbal medicine purchased. Vitamins: To be allowed, the vitamins must be prescribed, purchased from a pharmacy, and accompanied by a medical professional's written recommendation for the necessity of their use as a necessary treatment for a specific medical condition. The family must also provide legible pharmacy receipts that clearly indicate the amount in U.S. dollars, date and type of vitamins purchased. Mileage for San Diego County medical appointments: The CDC will provide allowances for mileage expenses for medical appointments within San Diego County at the lower of the current IRS or departmental standard mileage rate, as long as copies of mileage logs are provided. Mileage logs must be documented with starting address and destination address, odometer readings with beginning and ending mileage, and purpose and date of visit. Bus, trolley, or cab fare must be documented with legible receipts that provide the date and cost of the trip along with destination address and purpose of the trip. Transportation expenses for medical appointments outside of San Diego County are not allowed. Medical services: To be allowed, the family must provide legible receipts that clearly indicate the medical services, the amount in U.S. dollars, dates of the services, the names and addresses of the medical providers, and if the providers are physicians, surgeons, specialists, or other medical practitioners. Medical supplements in solid or liquid form: To be allowed, the supplements must be prescribed, purchased from a pharmacy, and accompany a medical professional's written recommendation for the necessity of their use as a treatment for a specific medical condition. The family must also provide legible pharmacy receipts that clearly indicate the amount in U.S. dollars, the date and type of supplements purchased. Medical Insurance premiums: Must provide receipts or official documentation of current monthly premiums. Please refer to Chapter 4 for more information on the limitations for eligible medical expenses. 6- 20 6 DISABILITY ASSISTANCE EXPENSE [24 CFR 5.603(b) and 5.611 (a)(3)(ii)] Reasonable expenses that are anticipated, during the period for which annual income is computed, for attendant care and auxiliary apparatus for a disabled family member and that are necessary to enable a family member (including the disabled member) to be employed, provided that the expenses are neither paid to a member of the family nor reimbursed by an outside source. The family must identify the family members enabled to work as a result of disability assistance expenses. In evaluating the family's request, the CDC will consider factors such as how the work schedule of the relevant family members relates to the hours of care provided, the time required for transportation, the relationship of the family members to the person with disabilities, and any special needs of the person with the disabilities. If the disability assistance expenses allow multiple family members to work, the expenses will be capped by the combined gross employment income of those family members. ELIGIBLE DISABILITY EXPENSES AUXILIARY APPARATUS Expenses incurred for maintaining or repairing an auxiliary apparatus are eligible. In the case of an apparatus that is specially adapted to accommodate a person with disabilities (e.g., a vehicle or computer), the cost to maintain the special adaptations, but not the cost of the apparatus itself, is an eligible expense. In order for the cost of a service animal to be an eligible expense, the family must provide documentation from the agency that trained the service animal that describes the type of animal and the animal's unique skills and abilities, as well as a verification from a medical professional regarding the need for the service animal to provide disability assistance services. The cost of an approved service animal, including the cost of acquiring the animal, veterinary care, food, grooming, and other continuing costs of care will be eligible disability assistance expenses. ELIGIBLE ATTENDANT CARE Attendant care includes, but is not limited to, reasonable costs for home medical care, nursing services, in -home or center -based care services, interpreters for persons with hearing impairments, and readers for persons with visual disabilities. Attendant care expenses will be allowed for the period that person enabled to work is employed plus reasonable transportation time. The cost of general housekeeping and personal services are not eligible expenses. However, if the person enabled to work is the person with disabilities, personal services necessary to enable the person to work are eligible. The CDC will allow a prorated expense deduction if the attendant provides other services not related to disability assistance, such as housekeeping or childcare. The 6- 21 6 proration will be based on the number of hours spent on eligible activities as compared with the total hours worked. NECESSARY AND REASONABLE EXPENSES The CDC will only allow reasonable disability expenses and may verify the reasonableness of those expenses by obtaining information from organizations that provide services to persons with disabilities. TOTAL TENANT PAYMENT AND TENANT RENT PRORATION OF ASSISTANCE FOR "MIXED" FAMILIES [24 CFR 5.520] APPLICABILITY Proration of assistance for mixed families must be offered to any "mixed" applicant or participant family. A "mixed" family includes at least one U.S. citizen or eligible immigrant, and any number of ineligible members. PRORATED ASSISTANCE CALCULATION Prorated assistance is calculated by determining the amount of assistance payable if all family members were eligible and multiplying by the percent of the family members who actually are eligible. Calculations are performed on the HUD 50058 form. MINIMUM RENT [24 CFR 5.630] MINIMUM RENT AMOUNT The CDC "Minimum rent" is $50.00. Minimum rent refers to the total tenant payment and includes the combined minimum amount a family must pay towards rent and/or utilities. "Subject to minimum rent" means the minimum rent was the greatest of either 30 percent of the monthly -adjusted income, 10 percent of the monthly gross income, or the minimum rent. Hardship Requests for an Exception to Minimum Rent, Criteria for Hardship Exception, Families, Right to Hardship Exception, Suspension of Minimum Rent, Temporary Hardship, Long -Term Duration Hardships, and Retroactive Determination All above minimum rent activities that fall under 24 CFR 5.630 and under the October 21, 1998 Quality Housing and Work Responsibility Act are not applicable as long as the CDC has zero minimum rent. 6- 22 6 ZERO HAP A family determined to be ineligible for assistance because its TTP exceeds the lower of the gross rent or payment standard will continue on the program for 180 days after the determination of zero pay. A notice of intended action will be issued to the family effective the initial date of the zero pay status. If the family moves during the 180 days while in zero pay status, the CDC may not enter into a HAP contract if the family is ineligible for assistance at the new location. However, if the family is eligible for assistance at the new location, the CDC may enter into a HAP contract to provide assistance so long as the family has an active voucher. UTILITY REIMBURSEMEN T PAYMENT [24 CFR 982.514(b)] The utility reimbursement payment will be issued directly to the family. 6- 23 6 6- 24 7 INITIAL APPROVAL AND BRIEFING [24 CFR 982.301, 982.302] INTRODUCTION The CDC provides the selected families all the tools necessary to locate an acceptable housing unit. The CDC provides families the necessary information regarding the program and how they can achieve maximum program benefits, while complying with program requirements. When eligibility has been determined, the CDC conducts a mandatory briefing designed to ensure that families know how the program works. The briefing provides a broad description of owner and family responsibilities, the CDC procedures, and the steps the families must take to lease a unit. In addition, families receive briefing packets, which provide more detailed information about the program, including the benefits of moving outside areas of poverty and minority concentration. This chapter describes how briefings will be conducted, the information that will be provided to families, and the policies for changes in family composition. INITIAL ELIGIBILITY APPROVAL All preferences claimed on the pre -application, or while the family is on the waiting list, will be verified as follows: After the family is selected from the waiting list the families' preference should exist at the time the preference is claimed, and must exist at the time of selection from the waiting list, because the claim of a preference determines the families' placement on the waiting list. The families' preference will be determined at the time the full application is completed, but the family must meet the preference at the date of selection from the waiting list. After a family is selected from the waiting list, applicants will be required to: Complete a full Personal Declaration in his or her own handwriting, unless a disabled person requests assistance, as reasonable accommodation. The CDC staff will interview the applicant to clarify and review the information on the completed Personal Declaration. The applicant must provide all requested documentation and information. 7- 1 7 REQUIREMENT TO ATTEND INTERVIEW The CDC may require a full application interview attended by all adult family members. The purpose of the interview is to discuss the family's circumstances in greater detail, to clarify information that has been provided by the family, and to ensure that the information is true and complete. All adult family members must sign all appropriate areas of the Personal Declaration. It is the applicant's responsibility to reschedule the interview if s/he misses the appointment. If the applicant does not reschedule or misses two scheduled meetings, the CDC may reject the application. The interview may be held in the office, by telephone, or at the applicant's home, upon request by a family with a member with disabilities, as a reasonable accommodation. Applicants who fail to appear and want to reschedule a missed appointment must make the request to reschedule no later than seven days after the original appointment date. The request must be made to the staff person who scheduled the appointment. The request may be in writing or by telephone if the staff person answers the telephone. A recorded telephone message is not a valid request. Reasonable accommodation, such as accessible offices, inclusion of an advocate, or a home visit, will be provided to a disabled family upon request. The disabled family's designee will be allowed to participate in the interview process at the family's request. If an application is denied due to a failure to attend the full application interview, the applicant will be notified in writing and offered an opportunity to request an informal review. All adult members must sign the HUD Form 9886, Release of Information, the application form, all CDC required supplemental documents, the declarations and consents related to citizenship/immigration status, a consent form to release criminal conviction records and to allow CDC to receive and use records in accordance with HUD regulations, as well as any other documents required by the CDC. Applicants may be required to sign additional release of information forms for information not covered by the HUD form 9886. Applicants may not amend these documents or write notes of disclaimers on them. A family who alters any CDC documents invalidates the documents and the family's application will be denied. Failure to complete required forms, or provide requested information, will be cause for denial of the application for failure to provide necessary certifications, releases, and documents, as required by HUD or the CDC. The CDC will request additional documents or information in writing, if it determines at or after the interview, that they are needed. 7- 2 7 If the requested information is not supplied by the due date, the CDC will provide the family a notification of denial for assistance. VERIFICATION [24 CFR 982.201(e)] Information provided by the applicant is verified using the verification procedures outlined in this Plan. Family composition, income, allowances and deductions, assets, full-time student status, eligibility and rent calculation factors, eligible citizenship, criminal history, and other pertinent information will be verified. Verifications may not be more than 60 days old at the time of issuance of the voucher. PRIOR TO THE BRIEFING When CDC staff verifies that applicant is eligible. The PHA must receive information verifying that an applicant is eligible within the period of 60 days before the PHA issues a voucher to the applicant. Families determined to be ineligible will be notified in writing of the reason for denial, and given an opportunity to request an informal review or an informal hearing if denied due to a determination of legal residency. If the CDC denies the applicant a preference [24 CFR 982.207] or for not meeting income targeting, it will notify the applicant in writing, indicating why, and advising him/her of the opportunity to request an informal review with a departmental representative. If the preference or income targeting denial is upheld, as a result of the review, or the applicant does not request a review, the applicant will be returned to the waiting list without benefit of the preference or income category. Applicants may exercise other rights if they believe they have been discriminated against. Applicants who falsify documents, or make false statements in order to qualify for any preference or income requirements, will be removed from the waiting list permanently. MULTIPLE FAMILIES IN THE SAME HOUSEHOLD Applicants consisting of two families living together who apply together, (such as a mother and father with a daughter and her husband and/or children) will be treated as a family unit and are eligible for one voucher. DETERMINATION OF ELIGIBILITY After the verification process is completed, the CDC will make a final determination of eligibility. This decision is based on information provided by the family, third party documents, CDC research, and the current eligibility criteria in effect. If the family is determined to be eligible, the CDC will mail a notification of a scheduled briefing. 7- 3 7 The purpose of the briefing is to issue the voucher, and orient the family to the program. SPLIT HOUSEHOLDS PRIOR TO VOUCHER ISSUANCE When an applicant family divides into two otherwise eligible families, and they cannot agree as to which new family unit should be processed for eligibility, and there is no determination by a court, the CDC, to determine which family will be processed for assistance, will consider the following factors, in ranking order of importance, with one (1) of the greatest importance, and five (5) of the least importance: • Whether domestic violence was involved in the break-up • Which of the two new family units has custody of dependent children? • The composition of the new family units, and which unit contains elderly or disabled members • Recommendations of social service professionals • Which household member's name was on the initial waiting list application Documentation of these factors is the responsibility of the applicant families. The CDC will make a determination based on the documentation supplied. Any false or misleading documentation or failure to provide requested information is cause for denial. The household found not eligible to be processed for assistance will be mailed a notice explaining why, and the right to request an informal review within 10 days. THE BRIEFING [24 CFR 982.301, 982.302] INITIAL APPLICANT BRIEFING A full briefing will be conducted for applicant families determined to be eligible for assistance. The briefings will be conducted in group meetings. If the family includes a person with disabilities, the CDC will make every reasonable effort to accommodate that person to ensure effective communication. A family needing language services must provide a written request at least seven days in advance of the scheduled briefing. The purpose of the briefing is to explain how the program works, and to explain the briefing documents to families so that they are fully informed about the program. In addition, information on desirable areas of the community, how the family may file a 7- 4 7 discrimination complaint and some important legal resources will be provided. The briefing will enable families to utilize the program to their advantage, and it will prepare them to discuss the program with potential owners and property managers. The CDC will not issue a voucher to a family, unless the household representative and all adult household members has attended a briefing, and signed the voucher. REQUIREMENT TO ATTEND BRIEFING The head of household, spouse and all adult household members are required to attend a briefing after initial approval of eligibility. At the briefing, the head of household must sign the voucher and other required paperwork. It is the applicant's responsibility to reschedule the briefing if s/he is unable to attend. If the applicant does not reschedule or misses two scheduled briefings, the CDC may deny admission. The briefing may be held in the office, by telephone, or at the applicant's home, upon request by a disabled family, as a reasonable accommodation. Also, reasonable accommodation may include accessible offices, inclusion of an advocate, or a home visit. The disabled family's designee will be allowed to participate in the briefing at the family's request. Applicants who fail to attend the briefing and want to reschedule the briefing must make the request to reschedule no later than seven days after the original briefing date. The request must be made to the staff person who scheduled the briefing. The request may be in writing or by telephone if the staff person answers the telephone. A recorded telephone message is not a valid request. Applicants will be offered no more than two opportunities to attend a briefing unless a request is made for reasonable accommodation or documentation of a serious emergency was submitted. If an application is denied due to a failure to attend the briefing, the applicant will be notified in writing and offered an opportunity to request an informal review. BRIEFING PACKET [24 CFR 982.301(b)] The documents and information provided in the briefing packet for the voucher program will comply with all HUD requirements. The CDC may include other information and/or materials not required by HUD. The following information and materials are provided to the family at the briefing: • The CDC's policy for requesting extensions or suspensions of the voucher (referred to as tolling), and the term of the voucher. • A description of the method used to calculate the housing assistance payment for a family, how the family tenant payment is calculated, and information on the payment standard and utility allowance schedule. Also included is information on how the maximum allowable rent for an assisted unit is 7- 5 7 determined and the rent reasonableness standard where the family may lease a unit. For a family that qualifies to lease a unit outside the CDC jurisdiction under portability procedures, information on how portability works. • The HUD required tenancy addendum, to be included in the lease. • The Request for Approval of the Tenancy (RFAT) form, and a description of the procedure for requesting approval of a unit. • A statement of the CDC policy on providing information about families to prospective owners. • The subsidy standards, including when and how exceptions are made, and how the voucher size relates to the unit size selected. • The HUD brochure "A Good Place to Live". • The HUD brochure on lead -based paint entitled, "Protect Your Family from Lead in your Home". • Information on federal, state and local equal opportunity laws and a copy of the housing discrimination complaint form. In addition, the pamphlet "Fair Housing: It's Your Right," other information about fair housing laws and guidelines, and the phone numbers of the local fair housing agency, and the HUD enforcement office. • A copy of HUD form 903 so family may file a discrimination complaint. • Information on the availability of lists of landlords or other parties willing to lease to assisted families or agencies that help in the search for units. The list may include, if available, those willing to lease units, or agencies able to help families find units outside areas of poverty or minority concentration. • If available, a current listing of accessible units. • The family obligations under the program. • The reasons a family may have its assistance terminated. • The informal hearing/review procedures including when the family must be offered the opportunity for an informal hearing/review. • A map or description of areas representing various income levels of the jurisdiction and surrounding areas for the purpose of expanding housing opportunities for families. • A list of properties or property management organizations that own or operate housing units, are located on the Posting Board located in the main lobby. • Sample leases for owners who do not use a lease for their unassisted tenants. 7- 6 7 • Family Handbook. • The family's rights as a tenant and a program participant. • Requirements for reporting changes between annual recertifications. ENCOURAGING PARTICIPATION IN AREAS WITHOUT LOW INCOME OR MINORITY CONCENTRATION At the briefing families are encouraged to search for housing in non -impacted areas and the CDC will provide assistance to families who wish to do so. The assistance provided to such families includes: • Direct contact with landlords • Counseling with the family • Providing information about services in various non -impacted areas • Meeting with neighborhood groups to promote understanding • Formal or informal discussions with landlord groups • Formal or informal discussions with social service agencies • Meeting with rental referral companies or agencies • Meeting with fair housing groups or agencies AFTER THE BRIEFING AND BEFORE LEASE -UP CHANGE IN TOTAL TENANT PAYMENT (UP) PRIOR TO HAP EFFECTIVE DATE INCOME DECREASE When the family properly reports changes in factors that will reduce the total family share prior to the effective date of the HAP contract at admission, the information will be verified and the reduction in family share will be recalculated. Prior to submission of the RFAT, the intake unit will recalculate the reduction in family share. After submission of the RFAT, case management will recalculate the reduction in family share. 7- 7 7 INCOME INCREASE If the family's income increases after it was issued a voucher, the income increase, per the CDC interim policy, will be processed prior to lease -up. ADDITIONS TO FAMILY Additions to the household will not be permitted until the family has been assisted for at least 12 months and then in accordance with the CDC's interim policy, unless the additions are due to birth, adoption, court awarded custody, or return of minor or disabled children to the household. FAMILY REPORTING REQUIREMENTS Families must report changes in income, assets, and family composition in writing within 10 days of the change. Families, prior to execution of a HAP Contract, discovered to have provided false, misleading, incomplete or untrue information in order to be found eligible for assistance will have their vouchers rescinded and will not be eligible for return to the waiting list at original date/time of application. These families will be offered an opportunity to request an informal review. 7- 8 8 REQUEST FOR APPROVAL OF THE TENANCY, OWNER APPROVAL, LEASES AND CONTRACTS [24 CFR 982,302,982.54, 982.453, 982.306] INTRODUCTION [24 CFR 982.305(a)] The CDC's program is designed to utilize available resources efficiently, and maximize HUD funds by quickly providing assistance to as many eligible families as the budget allows. The portability provision of the program allows families issued vouchers to search for units within the jurisdiction of the CDC, as well as outside the CDC's jurisdiction, if they qualify for portability. The family must find an eligible unit, with an owner/landlord willing to enter into a housing assistance payments (HAP) contract with the CDC. This chapter defines eligible housing, and the CDC policies on initial inspections, lease requirements, the HAP Contract, owner disapproval, and the processing of Request for Approval of the Tenancy (RFAT). The CDC is committed to maintaining a neutral position in issues between owners and program participants and its policy is to strive to recruit new owners to the program, as well as maintain a good relationship with participating owners. The CDC requires staff to provide owners with prompt and professional service in an effort to maintain an adequate supply of available housing within its jurisdiction. The regulations define when the CDC must disallow owner participation in the program, as well as the circumstances when the CDC may use its discretion to disapprove or otherwise restrict owner participation. 8- 1 8 REQUEST FOR APPROVAL OF THE TENANCY [24 CFR 982.302, 982.305(b)(2)(i)(A) ] During the term of the voucher, the family must submit the RFAT and a copy of the proposed lease, including the HUD prescribed tenancy addendum. If the owner's lease is not submitted, the CDC may use the HUD model lease. The family must submit the RFAT in the form and manner required by the CDC. The owner and the voucher holder must both sign the RFAT. If families are approved to lease properties owned by relatives, the owner's current address will be compared to the subsidized unit's address. Owners must provide an employer identification number or social security number, as well as a validation document supporting the number. Ownership will be verified through the Assessor's office records or a review of the grant deed. The CDC will request a copy of the management agreement for owners being represented by a management company. The CDC may request documentation of ownership such as a grant deed, copy of the current tax bill, or other documentation. The CDC will not permit the family to submit more than one RFAT at a time. The CDC will review the proposed lease and the RFAT documents to determine if they are approvable. The RFAT will be approved if: • The unit is an eligible type of housing • The unit meets HUD's housing quality standards (HQS), and any additional criteria identified in this Plan. • The rent is reasonable. • The proposed lease complies with HUD requirements. • The owner is approvable, and there is no owner conflict of interest. • The owner has not been debarred by HUD or the CDC • There are no shared utilities with the exception of some special housing types, "flat rate" apartment complexes, and mobilehome parks. • The family is not leasing a property owned by a parent, child, grandparent, grandchild, sister or brother of any family member. ■ The CDC will waive this restriction as a reasonable accommodation for a family member with disabilities who provides documentation demonstrating a clear and compelling need for accommodation. • The owner's address is not the same as the assisted unit except for some special housing types and Section 8 Homeownership. 8- 2 8 In addition to the above, at the time a family initially receives assistance in the unit (new admissions and moves), the family share of rent may not exceed 40 percent of the family monthly -adjusted income. Exempt income is included in the 40 percent calculation to enable families with a large amount of exempt income, such as families with foster children, to qualify for adequately sized housing. DISAPPROVAL OF THE RFAT If the RFAT cannot be approved for any reason, the landlord and the family are notified in writing. The owner and family are advised of the steps necessary for approval of the RFAT, and the family is issued another RFAT to continue to search for an eligible unit. An RFAT must be disapproved if the family would be in zero HAP status. The owner may be given the opportunity to, either provide another RFAT, or to verbally change the information on the submitted RFAT to make it acceptable to the CDC. UNIT SIZE SELECTED [24 CFR 982.402(c)] The family may select a different size dwelling unit than that listed on the voucher. There are three criteria to consider: Subsidy Limitation: The payment standard for a family shall be the lower of: • The CDC payment standard amount for the family voucher size; or • The CDC payment standard amount for the unit size rented by the family; or • The contract rent and utilities (gross rent). UTILITY ALLOWANCE: The utility allowance used to calculate the gross rent is based on the actual size of the unit the family selects, regardless of the size authorized on the family's voucher. HOUSING QUALITY STANDARDS: The standards allow a maximum occupancy of two persons per sleeping area as shown in the table below. Sleeping area would include: living room, bedroom, den, dining room, library, or other rooms that may be used for sleeping. A sleeping room will only be considered a bedroom for payment standard and utility allowance purposes if it was designed to be used as a bedroom or to be converted to a bedroom, including the requirements that it is private with a 8- 3 8 door that closes and it has a window that opens to the outside for light and ventilation. The room will not be considered a bedroom for payment standard or utility allowance purposes if the room is designed for another purpose, used as a corridor to access another room, or if it has something installed that indicates it has another use, such as a water heater, washer/dryer hookups, gas line for a stove, etc., or if it is not accessible from inside the main dwelling unit, such as an outbuilding. HQS GUIDELINES FOR MAXIMUM OCCUPANTS Unit Size Maximum Number Allowed in Household* 0 Bedroom 2 1 Bedroom 4 2 Bedrooms 6 3 Bedrooms 8 4 Bedrooms 10 5 Bedrooms 12 6 Bedrooms 14 * These guidelines are for an average unit. If there is a den, library or dining room or other room that may be used for sleeping, in addition to the living room, these standards may be increased. For example, a two - bedroom house with a living room and a den may have room for up to eight persons without violating HQS space limitations. RENT LIMITATIONS [24 CFR 982.507] The CDC will make a determination as to the reasonableness of the proposed rent in relation to comparable unassisted units available for lease. Rent reasonableness for standard dwelling units will be determined: upon approval of a new lease, prior to an owner rent increase, and if the annual HUD published fair market rents are reduced by five percent or more 60 days prior to the HAP contract anniversary. Rent reasonableness determinations must be conducted on mobilehome pads annually. All active participant files must contain a copy of the most current rent reasonableness determination. An owner will be given a 30-day notice of contract termination, if it is found the unit is no longer rent reasonable. However, the owner will be given the option of reducing the rent prior to contract termination. By accepting a monthly housing assistance payment from the CDC the owner certifies that the rent to owner is not more than rent charged by the owner for comparable 8- 4 8 unassisted units on the premises. Units in a tax credit or other types of rent -restricted property are considered assisted units and are not subject to this requirement. The owner may be required to provide the CDC with information requested on rents charged elsewhere. At all times during the tenancy, the rent to owner may not be more than the most current reasonable rent as determined by the CDC. DISAPPROVAL OF PROPOSED RENT [24 CFR 982.507] The PHA must redetermine the reasonable rent: o Before any increase in the rent to owner; or o At all times during the assisted tenancy, the rent to owner may not exceed the reasonable rent as most recently determined or redetermined by the PHA. Comparability: The PHA must determine whether the rent to owner is a reasonable rent in comparison to rent for other comparable unassisted units. To make this determination, the PHA must consider: o Any amenities, housing services, maintenance and utilities to be provided by the owner in accordance with the lease. ELIGIBLE TYPES OF HOUSING [24 CFR 982.601, 982.620] The CDC will approve the following types of housing: • All eligible structure types that meet HQS • Manufactured homes where the tenant leases the mobile home and the pad • Manufactured homes where the tenant owns the mobile home and leases the pad. • Congregate facilities (only the shelter rent is assisted). • Single Room Occupancy (SRO). • Shared housing that meets HQS. • Group homes that meet HQS. 8- 5 8 Travel trailers, motor homes, or other structures designed to be mobile are not eligible for Section 8 rental assistance. If the unit is registered with the Department of Motor Vehicles rather than the state Department of Housing and Community Development, the unit is not an eligible housing type. An eligible housing type must be a "dwelling unit" that is designed and used exclusively for permanent residential occupancy. A mobilehome that is designed to be set-up permanently in one location is eligible for Section 8 rental assistance. A family can own a rental unit but cannot reside in it while being assisted, except in the cases of the family owning the mobilehome and leasing the pad, a Section 8 Homeownership participant, or the owner of a cooperative. The owner of the assisted unit, except in the case of a mobilehome owner leasing the pad, a Section 8 Homeownership participant, or the owner of a cooperative, may never benefit from the assistance. The owner of the assisted unit may never be a live-in aide for the family. In shared housing, the family may never, in any circumstances, reside with a resident owner who is a relative and there are no exceptions for reasonable accommodation in this instance. The CDC may not permit a voucher holder to lease a unit that is receiving project - based Section 8 assistance or any other duplicative rental subsidies. SECURITY DEPOSIT REQUIREMENTS [24 CFR 982.313] The CDC may prohibit security deposits in excess of private market practice, or in excess of amounts charged by the owner to unassisted tenants. When the tenant moves out of the dwelling unit, the owner, subject to State or local law, may use the security deposit, including any interest on the deposit, in accordance with the lease, as reimbursement for any unpaid rent payable by the tenant, damages to the unit or for other amounts the tenant owes under the lease. The owner must give the tenant a written list of all items charged against the security deposit, and the amount of each item. After deducting the amount, if any, used to reimburse the owner, the owner must refund promptly the full amount of the unused balance to the tenant. If the security deposit is not sufficient to cover amounts the tenant owes under the lease, the owner may seek to collect the balance from the tenant. 8- 6 8 TENANT SCREENING FOR SUITABILITY [24 CFR 982.307)] The CDC will take into consideration any of the criteria for admission described in the chapter on eligibility factors. The CDC will not screen family behavior or suitability for tenancy. The CDC will not be liable or responsible to the owner or other persons for the family's behavior or the family's conduct in tenancy. The owner is responsible for screening and selection of the family s/he approves for tenancy. At or before CDC approval of the tenancy, the CDC will inform the owner that screening and selection for tenancy is the responsibility of the owner. The owner is responsible for screening families based on their tenancy histories, including such factors as: [24 CFR 982.307(a)(3)] • Payment of rent and utility bills • Caring for a unit and premises • Respecting the rights of other residents to the peaceful enjoyment of their housing • Drug -related criminal activity or other criminal activity that is a threat to the health, safety or property of others. • Compliance with other essential conditions of tenancy INFORMATION TO OWNERS [24 CFR 982.307, 982.54(d)(7)] In accordance with HUD requirements, the CDC will furnish prospective owners upon written or verbal permission from the family, the family's current address as shown in its records and, if known to the CDC, the name and address of the landlords for the family's current and prior addresses. CDC OPTION AND OWNER RESPONSIBILITY The CDC has no liability or responsibility to the owner or other persons for the family's behavior or suitability for tenancy. However, the CDC may opt to screen applicants for family behavior or suitability for tenancy. The CDC must conduct any such screening of applicants in accordance with policies stated in the CDC administrative plan. The owner is responsible for screening and selection of the family to occupy the owner's unit. At or before CDC approval of the tenancy, the CDC must inform the owner that screening and selection for tenancy is the responsibility of the owner. 8- 7 8 The owner is responsible for screening of families on the basis of their tenancy histories. An owner may consider a family's background with respect to such factors as: ■ Payment of rent and utility bills; ■ Caring for a unit and premises; ■ Respecting the rights of other residents to the peaceful enjoyment of their housing; ■ Drug -related criminal activity or other criminal activity that is a threat to the health, safety or property of others; and • Compliance with other essential conditions of tenancy. The CDC will provide the following information: • The family's current and prior address (as shown in the CDC's records); and ■ The name and address (if known to the CDC) of the landlord at the family's current and prior address. When a family wants to lease a dwelling unit, the CDC may offer the owner other information in the CDC's possession, about the family, including information about the tenancy history of family members, or about drug -trafficking by family members. The CDC must give the family a statement of the CDC policy on providing information to owners. The statement must be included in the information packet that is given to a family selected to participate in the program. The CDC policy must provide that the CDC will give the same types of information to all families and to all owners. A statement of the CDC's policy on release of information to prospective landlords is applied uniformly to all families, and will be included in the family's briefing packet. The CDC must NEVER release specific personal information to owners regarding their former Section 8 tenants. OWNER DISAPPROVAL [24 CFR 982.306, 982.54(d)(8)] The owner does not have a right to participate in the program. For purposes of this section, "owner" includes a principal or other interested party. The CDC will disapprove the owner for the following reasons: The CDC must not approve an assisted tenancy if the CDC has been informed (by HUD or otherwise) that the [[Page 594]] owner is debarred, suspended, or subject to a limited denial of participation under 2 CFR part 2424. When directed by HUD, the CDC must not approve an assisted tenancy if: 8- 8 8 o The federal government has instituted an administrative or judicial action against the owner for violation of the Fair Housing Act or other federal equal opportunity requirements, and such action is pending; or o A court or administrative agency has determined that the owner violated the Fair Housing Act or other federal equal opportunity requirements. In its administrative discretion, the CDC may deny approval of an assisted tenancy for any of the following reasons: o The owner has violated obligations under a HAP contract under Section 8 of the 1937 Act (42 U.S.C. 1437f); o The owner has committed fraud, bribery or any other corrupt or criminal act in connection with any federal housing program; o The owner has engaged in any drug -related criminal activity or any violent criminal activity; o The owner has a history or practice of non-compliance with the HQS for units leased under the tenant -based programs, or with applicable housing standards for units leased with project -based Section 8 assistance or leased under any other federal housing program; o The owner has a history or practice of failing to terminate tenancy of tenants of units assisted under Section 8 or any other federally assisted housing program for activity engaged in by the tenant, any member of the household, a guest or another person under the control of any member of the household that: (i) Threatens the right to peaceful enjoyment of the premises by other residents; (ii) Threatens the health or safety of other residents, of employees of the CDC, or of owner employees or other persons engaged in management of the housing; (iii) Threatens the health or safety of, or the right to peaceful enjoyment of their residences, by persons residing in the immediate vicinity of the premises; or (iv) Is drug -related criminal activity or violent criminal activity; or o The owner has a history or practice of renting units that fail to meet State or local housing codes; or o The owner has not paid State or local real estate taxes, fines or assessments. The CDC must not approve a unit if the owner is the parent, child, grandparent, grandchild, sister, or brother of any member of the family unless the CDC determines that approving the unit would provide reasonable accommodation for a family member who is a person with disabilities. This restriction against CDC approval of a unit only applies at the time a family initially receives tenant -based assistance for occupancy of a particular unit, but does not apply to CDC approval of a new tenancy with continued tenant -based assistance in the same unit. 8- 9 8 Nothing in this rule is intended to give any owner any right to participate in the program. In cases where the owner and tenant bear the same last name, the CDC may, at its discretion, require the family and/or owner to certify whether they are related to each other in any way. The CDC will never issue a payment to the owner at the participant's address with the exception of some special housing types. In cases where the payment is mailed to a post office box, and there is a question regarding the relationship between the owner and the tenant, the CDC may submit a post office request to confirm the owner's physical address. LEASE REQUIREMENTS [24 CFR 982.308] The CDC will review the lease for HUD required lease provisions. The tenant must have legal capacity to enter a lease under state and local law. Responsibility for utilities, appliances and optional services must correspond to those provided on the RFAT. "Legal capacity" means that the tenant is bound by the terms of the lease and may enforce the terms of the lease against the owner. Unless the lease was effective prior to June 17, 1998, the family may not lease properties owned by a parent, child, grandparent, grandchild, sister or brother of any family member. The CDC will waive this restriction upon verification of the need for reasonable accommodation for a family member who is a person with a disability. FORM OF LEASE The tenant and the owner must enter a written lease for the unit. The lease must be executed by the owner and the tenant. If the owner uses a standard lease form for rental to unassisted tenants in the locality or the premises, the lease must be in such standard form (plus the HUD -prescribed tenancy addendum). If the owner does not use a standard lease form for rental to unassisted tenants, the owner may use another form of lease, such as a CDC model lease (including the HUD -prescribed tenancy addendum). The HAP contract prescribed by HUD will contain the owner's certification that if the owner uses a standard lease form for rental to unassisted tenants, the lease is in such standard form. STATE AND LOCAL LAW The CDC may review the lease to determine if the lease complies with State and local law. The CDC may decline to approve the tenancy if the CDC determines that the lease does not comply with State or local law. 8- 10 8 REQUIRED INFORMATION The lease must specify all of the following: The names of the owner and tenant; The unit rented (address, apartment number, and any other information needed to identify the contract unit); The term of lease (initial term and provisions for renewal); The amount of the monthly rent to owner; and A specification of what utilities and appliances are to be supplied by the owner, and what utilities and appliances are to be supplied by the family. Reasonable rent. The rent to owner must be reasonable (See § 982.507). TENANCY ADDENDUM The HAP contract form required by HUD shall include an addendum (the "tenancy addendum"), that sets forth: o The tenancy requirements for the program (in accordance with this section and Sec. Sec. 982.309 and 982.310); and o The composition of the household as approved by the CDC (family members and any CDC -approved live-in aide). All provisions in the HUD -required tenancy addendum must be added word-for- word to the owner's standard form lease that is used by the owner for unassisted tenants. The tenant shall have the right to enforce the tenancy addendum against the owner, and the terms of the tenancy addendum shall prevail over any other provisions of the lease. The owner's lease must include the lead warning statement, and disclosure information required by 24 CFR 35.92(b). The lease must state that drug -related criminal activity engaged in by the tenant, any household member, any guest on or near the premises, or any person under the tenant's control on the premises, is grounds for termination of tenancy. The lease must state that the family may be evicted if the owner determines: o Any household member is illegally using a drug o A pattern of illegal use of drugs by any household member interferes with the health, safety, or right to peaceful enjoyment of the premises by other residents 8- 11 8 The lease must state that the following types of criminal activities by a "covered person" are grounds for termination of tenancy. o Any criminal activity that threatens the health, safety, or right to peaceful enjoyment of the premises by other residents (including property management staff residing on the premises) o Any criminal activity that threatens the health, safety, or right to peaceful enjoyment of the residences by people residing in the immediate vicinity of the premises o Any violent criminal activity on or near the premises by a tenant, household member, or guest o Any violent criminal activity on the premises by any other person under the tenant's control The lease must state that the owner may terminate tenancy if a tenant is: o Fleeing to avoid prosecution, custody, or confinement for a felony (high misdemeanor in New Jersey) after conviction for a crime, or attempt to commit a crime o Violating a condition of probation or parole imposed under state or federal law CHANGES IN LEASE OR RENT If the tenant and the owner agree to any changes in the lease, such changes must be in writing, and the owner must immediately give the CDC a copy of such changes. The lease, including any changes, must be in accordance with the requirements of this section. In the following cases, tenant -based assistance shall not be continued unless the CDC has approved a new tenancy in accordance with program requirements and has executed a new HAP contract with the owner: o If there are any changes in lease requirements governing tenant or owner responsibilities for utilities or appliances; o If there are any changes in lease provisions governing the term of the lease; o If the family moves to a new unit, even if the unit is in the same building or complex. CDC approval of the tenancy, and execution of a new HAP contract, are not required for changes in the lease other than as specified in paragraph (g)(2) of this section. The owner must notify the CDC of any changes in the amount of the rent to owner at least sixty days before any such changes go into effect, and any such changes shall be subject to rent reasonableness requirements (see Sec. 982.507). 8- 12 8 ACTIONS BEFORE LEASE TERM All of the following must always be completed before the beginning of the initial term of the lease for a unit: The CDC has inspected the unit and has determined that the unit satisfies HQS The CDC has determined that the rent charged by the owner is reasonable The landlord and the tenant have executed the lease, including the HUD - prescribed tenancy addendum The CDC has approved the lease in accordance with program requirements For the initial lease for the unit, the family share (total family contribution) is not more than 40% of the family's monthly -adjusted income (including exempt income). A determination has been made the family is eligible for a HAP payment. SEPARATE AGREEMENTS Separate agreements are not necessarily illegal side agreements. However, the CDC must be informed in advance of all separate agreements and must approve or disapprove of separate agreements. Owners are prohibited from collecting or paying, and tenants are prohibited from paying or receiving, additional rent or other credits not authorized by the CDC. Owners are prohibited from charging for items normally included in the rent of unassisted units. Owners and families may execute separate agreements for services, appliances, and other items not included in the lease, as well as special purpose charges, such as recycling fees. Any appliances, services or other items, routinely provided to unassisted families as part of the lease (such as air conditioning, dishwasher or garage) or are permanently installed in the unit, cannot be put under separate agreement and must be included in the lease. The family must pay a minimum of 30 percent of its monthly -adjusted income for rent and utilities and is not allowed to receive rent credits, such as in the case of a move - in special. If there is a temporary rent reduction/credit, the CDC will compute the reduced contract rent along with the appropriate adjustment in the HAP and notify the owner and family in writing. The family may accept a credit for security deposit. 8- 13 8 CONTRACT EXECUTION PROCESS [24 CFR 982.305(c)] The CDC cannot enter into a HAP contract if a family is in zero HAP status. In that case, the CDC must deny the RFAT. However, if the family is eligible for assistance during the term of its voucher, an RFAT may be processed. The CDC prepares the HAP contract for execution. The family and the owner will execute the lease agreement, and the owner and the CDC will execute the HAP Contract. Copies of the documents will be furnished to the parties who signed the respective documents. The CDC will retain copies of all signed documents. The beginning and ending date of the lease and the contract MUST match. The CDC may change the amount of its assistance or contract rent with a contract amendment. Changes in lease term and utilities require a new contract. The CDC makes every effort to execute the HAP contract before the commencement of the lease term. The HAP contract may not be executed (signed and dated) more than 60 days after commencement of the lease term, and no payments will be made until the contract is executed. However, regardless of the execution date of the contract, the beginning and ending dates of the contract must always match the beginning and ending dates of the lease. The following CDC representatives are authorized to execute a contract on behalf of the CDC: Housing Specialist or above. The CDC must confirm verbally with the tenant the date the tenant received the keys for the unit. If the tenant fails to receive the keys for the unit as of the beginning date of the contract, the CDC may abate or collect HAPs from the owner and/or terminate the contract. The owner or owner's representative must provide a telephone number. CHANGE IN OWNERSHIP A change in ownership does not require execution of a new contract and lease. The CDC will process a change of ownership only upon the written request of the new owner, accompanied by a copy of the escrow statement, or other document showing the transfer of title, such as a recorded deed, the employee identification number or social security number of the new owner, and validation documents to verify employee identification or social security number. The CDC, upon approval of assignment of the contract to the new owner, may notify the new owner in writing that the contract assignment was approved, and the new owner assumes the conditions and obligations of the existing contract. The new owner will be mailed a copy of the contract, upon request. 8- 14 8 If the new owner does not want an assignment of the contract, the CDC will terminate the HAP contract with the old owner, since s/he is no longer the owner. The new owner may offer the family a new assisted lease. The family may elect to enter into the new lease or move to another unit. If the family enters into a new lease, the owner must enter into a new HAP contract with the CDC. 8- 15 8 8- 16 9 HOUSING QUALITY STANDARDS AND INSPECTIONS [24 CFR 982.401] INTRODUCTION Housing Quality Standards (HQS) are the HUD minimum standards for assisted rental units for Tenant -based and Project -based programs. HQS standards are required both at initial occupancy and during the term of the lease. HQS standards apply to the building and premises, out buildings, as well as the unit. Newly leased units must pass an HQS inspection before the beginning of the housing assistance payment. The CDC must inspect the unit leased to a family prior to the initial term of the lease, at least annually during assisted occupancy, and at other times as needed, to determine if the unit meets the HQS. (See Sec. 982.305(b)(2) concerning timing of initial inspection by the CDC). The CDC will also have a supervisor or other qualified person perform, throughout the year, more than the statistically significant SEMAP required random sample of quality control (QC) inspections. The QC inspections will ensure program consistency, and that the CDC's required standards are being met. This chapter describes the CDC procedures for performing HQS and other types of inspections, as well as the standards for the timeliness of repairs. In addition, this chapter explains the responsibilities of the owner and family, and the consequences of non-compliance with HQS requirements. The use of the term "HQS" in this Administrative Plan refers to the combination of both HUD and CDC requirements. In scheduling inspections, the CDC must consider complaints and any other information brought to the attention of the CDC. The CDC must notify the owner of defects shown by the inspection. The CDC may not charge the family or owner for initial inspection or reinspection of the unit. 9-1 9 INSPECTION TYPES AND GUIDELINES [24 CFR 982.401(a), 982.405] The CDC may adopt local requirements of acceptability in addition to those mandated by the HUD Regulations. Efforts may be made to encourage owners to provide housing above HQS minimum standards. In addition, the CDC will not promote any additional criteria likely to adversely affect the health or safety of participant families, or severely restrict housing choice. All utilities must be in service when the unit is inspected. If the tenant is responsible for supplying the stove and/or the refrigerator, the CDC will allow the stove and refrigerator to be placed in the unit after the unit has passed all other HQS. The family must then certify, by telephone, the date the appliances are in the unit and working. The CDC will not conduct a re -inspection. The term of the lease and HAP contract will not begin until the confirmed date of the stove and/or refrigerator in -place and working. There are five types of inspections the CDC performs: 1. Initial/move-in: Conducted after receipt of the RFAT. 2. Annual: Must be conducted within twelve months of the last annual inspection. 3. Move-out/vacate: May be conducted, upon request, to observe and document reported excessive tenant damage in order to make a determination of tenant violations of the lease. 4. Special/complaint: At request of owner, family, an agency, or another third party. 5. Quality Control (QC): This inspection involves a required minimum random sample of previously completed inspections. INITIAL HQS INSPECTION [24 CFR 982.401(a), 982.305(b)(2)] TIMELY INITIAL HQS INSPECTION The CDC will attempt to make telephone contact within five business days after receiving an RFAT. The CDC will inspect the unit, determine whether the unit satisfies the HQS, and notify the family and owner of the determination within ten calendar days after the family and the owner have submitted a RFAT, and the unit is ready for inspection. 9-2 9 The ten-day inspection and notification requirement does not apply in instances when the unit is not available for inspection, or when the owner or tenant could not be reached or if the owner or tenant were unavailable for scheduled inspection(s). The CDC will make every reasonable effort to conduct timely initial HQS inspections for the family. The initial inspection will: • Determine if the unit and property meet HQS as defined in this Plan • Document the information to be used for determination of rent -reasonableness • If the unit fails the initial HQS inspection, the owner and/or the tenant will be advised to notify the CDC once repairs are completed. • On an initial inspection, the owner will be given a reasonable amount of time to correct the items noted as fail, depending on the amount of fail items, and the complexity of work to be done. • The owner will be allowed up to three re -inspections for repair work to be completed. • If the time period given by the inspector to correct the repairs has elapsed, or the maximum number of failed re -inspections has occurred, the family must select another unit. The CDC will issue written notification to the family and owner of the RFAT denial, and will send a RFAT packet to the family. ANNUAL HQS INSPECTIONS [24 CFR 982.405(a)] The CDC conducts an inspection in accordance with HQS at least annually as required by SEMAP and no more than 120 days prior to the current annual recertification. Special inspections may be scheduled, upon request, between anniversary dates. The landlord must correct HQS deficiencies that cause a unit to fail, unless the fail is the tenant's responsibility. The family must allow the CDC to inspect the unit at reasonable times after reasonable notice. [24 CFR 982.551 (d)] Inspections and re -inspections will be conducted on business days only or on weekends as a reasonable accommodation for the disabled. The CDC will notify the family in writing, or by telephone, at least five days prior to the inspection. The CDC five-day advance notification requirement is not necessary, if 9-3 9 the family agrees to an inspection with less than five days notice; however, the family will not be penalized for not being available. If the family does not contact the CDC to reschedule a scheduled inspection, or if the family misses two inspection appointments, the CDC may consider the family to have violated a family obligation, and the family's assistance may be terminated in accordance with the termination procedures in the Plan. PERFORMANCE AND ACCEPTABILITY REQUIREMENTS This section states the housing quality standards (HQS) for housing assisted in the programs. The HQS consist of: (A) Performance requirements; and (B) Acceptability criteria or HUD approved variations in the acceptability criteria. This section states performance and acceptability criteria for these key aspects of housing quality: (A) Sanitary facilities; (C) Space and security; (E) Illumination and electricity (G) Interior air quality (I) Lead -based paint (K) Site and neighborhood (M) Smoke detectors TIME STANDARDS FOR REPAIRS (B) Food preparation and refuse disposal; (D) Thermal environment; (F) Structure and materials; (H) Water supply; (J) Access (L) Sanitary condition; and The owner or family must correct emergency items that endanger the family's health or safety within 24 hours of notification. For non -emergency items, repairs must be made within 30 days. For major repairs, the housing specialist may approve an extension beyond 30 days. RENT INCREASES OR EXTENSIONS ON 30-DAY MOVE -OUT NOTICES Rent to owner increases or extensions on 30-day move -out notices may not be approved if the unit is in a failed condition. 9-4 9 HQS BREACH FAMILY OBLIGATION The family is responsible for a breach of the HQS that is caused by any of the following: o The family fails to pay for any utilities that the owner is not required to pay for, but which are to be paid by the tenant; o The family faits to provide and maintain any appliances that the owner is not required to provide, but which are to be provided by the tenant; or o Any member of the household or guest damages the dwelling unit or premises (damages beyond ordinary wear and tear). If an HQS breach caused by the family is life threatening, the family must correct the defect within no more than 24 hours. For other family -caused defects, the family must correct the defect within no more than 30 calendar days (or any CDC -approved extension). If the family has caused a breach of the HQS, the CDC must take prompt and vigorous action to enforce the family obligations. The CDC may terminate assistance for the family in accordance with Sec. 982.552. MOVE OUT/VACATE INSPECTION A move out inspection may be performed, upon landlord request, to observe and document possible tenant lease violations. SPECIAL/COMPLAINT INSPECTION [24 CFR 982.404(b), 982.405(c)] The CDC will conduct a complaint inspection when it receives landlord or tenant notice that the unit does not meet HQS. The CDC may conduct a special inspection based on information from third parties, such as neighbors or public officials. The CDC will inspect only the items that were reported, but if the inspector notices additional deficiencies that would cause the unit to fail HQS, the responsible party will be required to make the necessary repairs. QUALITY CONTROL INSPECTION [24 CFR 982.405(b)] Housing supervisors or other qualified personnel must conduct the SEMAP required minimum number of quality control (QC) inspections. The purpose of QC inspections is 9-5 9 to ascertain that each inspector is conducting accurate and complete inspections, and to ensure consistency among inspectors in the application of HQS. The sampling of files will include recently completed inspections (within the three prior months) reflecting a representative sample of neighborhoods, types of inspections (initial, transfer and new lease), and inspectors. ADDITONAL CDC HQS CRITERIA [24 CFR 982.401 (a)] In addition to meeting HQS performance requirements, the CDC must meet the acceptability criteria stated in section 982.401(a)(4), unless variations are approved by HUD. LOCAL CODES [24 CFR 982.401(a)(4)] Variations which apply standards in local housing codes or other codes adopted by the CDC; or Variations because of local climatic or geographic conditions. Acceptability criteria variations may only be approved by HUD pursuant to paragraph (a)(4)(ii) of this section if such variations either: o Meet or exceed the performance requirements; or o (B) Significantly expand affordable housing opportunities for families assisted under the program. HUD will not approve any acceptability criteria variation if HUD believes that such variation is likely to adversely affect the health or safety of participant families, or severely restrict housing choice. No interior door double cylinder deadbolt locks or interior door locks that unlock only from the outside of the room. No double cylinder deadbolt locks allowed on an exterior door unless the unit has another exterior door without said lock. If bedrooms have security bars, at least one window in each bedroom must have no security bars or security bars with a quick release device usable and accessible to a small child. 9-6 9 EMERGENCY REPAIR ITEMS [24 CFR 982.404(a)] The following items are considered of an emergency nature and must be corrected by the owner or tenant (whoever is responsible) within 24 hours of notice by the Inspector: Waterlogged ceiling in imminent danger of falling Major plumbing leaks or flooding Strong smelling natural gas leak or fumes Electrical problem likely to cause shock or fire Jagged, broken glass where someone could be injured Other immediate observable danger to the health and safety of the family The CDC may give a short extension of not more than 24 additional hours whenever the responsible party cannot be notified, or it is impossible to complete the repair within the 24-hour period. In those cases where there is leaking gas or potential of fire or other threat to public safety, and the responsible party cannot be notified, or it is impossible to make the repair, the proper authorities will be notified by the CDC. The CDC will take the necessary steps to advise and assist the family on relocation. If the emergency repair item(s) are not corrected in the time period required by the CDC, and the owner is responsible, the housing assistance payment will be abated and the HAP contract may be terminated. If the emergency repair item(s) are not corrected in the time period required by the CDC, and it is an HQS breach that is a family obligation, the CDC will terminate the assistance to the family with a 30-day termination notice. NON -EMERGENCY REPAIR ITEMS All repair items not described above are considered non -emergency, 30-day repair items. SMOKE DETECTORS The CDC will treat inoperable smoke detectors as 30-day fail items. 9-7 9 The owner must install working batteries in the smoke detectors upon initial lease. After that, the family must replace the batteries, when the need arises. If the CDC determines that the family has purposely disconnected the smoke detector (by removing batteries or other means), the family will be required to repair the smoke detector within 30-days. The CDC will issue a verbal warning to any family determined to have purposely disconnected the unit smoke detector. The warning will state that deliberate disconnection of the unit smoke detector is considered a violation of the HQS. The family's assistance may be terminated for multiple violations of this requirement. DETERMINATION OF RESPONSIBILITY [24 CFR 982.404. 982.54(d)(22)] Certain HQS deficiencies are considered the responsibility of the family: • Tenant -paid utilities not in service • Failure to provide or maintain family -supplied appliances • Failure to allow the owner access to the premises to make repairs after reasonable notice was given • Damage to the unit or premises caused by a household member or guest beyond normal wear and tear • "Normal wear and tear" is defined as items that could not be charged against the tenant's security deposit under state law or court practice. The CDC will attempt to make a determination of family or owner responsibility. The owner or tenant may appeal the CDC determination by phone, or in writing and must provide documentation from an industry expert, such as a plumber or electrician, to substantiate the appeal. The owner is responsible for all other HQS violations. The owner is responsible for vermin infestation even if caused by the family's living habits. However, if such infestation is serious and repeated, it may be considered a lease violation and the owner may evict the family for serious or repeated violations of the lease. The CDC may terminate the family's assistance on that basis. 9-8 9 If the family is responsible, but the owner carries out the repairs, the owner will be encouraged to bill the family for the cost of the repairs and the family's file will be notated regarding the family violations. CONSEQUENCES IF OWNER IS RESPONSIBLE [CFR 982.405, 982.453] When it has been determined that a unit on the program fails to meet HQS for items that are the owner's responsibility, the owner must complete the necessary repair(s) in the time period specified by the CDC. If the necessary repairs are not made within the required time period, the assistance payment to the owner will be abated on the first of the following month. ABATEMENT A notice of abatement will be sent to the owner, and the abatement will be effective the first of the month following the deadline for correction. The CDC will inspect abated units within five days of the owner's notification that the work has been completed. If the owner makes repairs during the abatement period, payment will resume on the day the unit passes inspection. No retroactive payments will be made to the owner for the period of time the rent was abated and the unit did not comply with HQS. EXTENSION IN LIEU OF ABATEMENT The CDC will grant an extension in lieu of abatement in the following cases: • The owner has a good history of HQS compliance. • The failed items are minor in nature. • There is an unavoidable delay in completing repairs due to difficulties in obtaining parts or contracting for services. • The owner makes a good faith effort to make the repairs. • The repairs are delayed due to climate conditions. The extension will be made for a period of time not to exceed 30 additional days. At the end of that time, at the CDC's discretion, if the work is not completed, or substantially completed, the CDC will terminate assistance. 9-9 9 TERMINATION OF CONTRACT If the owner is responsible for repairs, and fails to correct all the deficiencies cited prior to the end of the abatement period, the owner will be sent a contract termination notice. Prior to the effective date of the termination, the abatement will remain in effect. If repairs are completed before the effective termination date, the CDC may rescind the termination if the tenant chooses to remain in the unit. Only one HQS inspection will be conducted after the termination notice is issued. CONSEQUENCES IF FAMILY IS RESPONSIBLE [24 CFR 982.404(b)] If an HQS breach caused by the family is life threatening, the family must correct the defect within no more than 24 hours. For other family -caused defects, the family must correct the defect within no more than 30 calendar days (or any CDC -approved extension). If the repair(s) or correction(s) are not made by the deadline, the CDC will issue a notice to terminate assistance to the family, along with an opportunity to request an informal hearing, and an owner notice to terminate the HAP contract on the same date. If the family requests an informal hearing, the housing assistance payments must continue until a decision is rendered. In addition, the owner must be notified that the housing assistance payments will continue until a hearing decision is rendered. If the family has caused a breach of the HQS, the CDC must take prompt and vigorous action to enforce the family obligations. The CDC may terminate assistance for the family in accordance with Sec. 982.552. 9-10 10 OWNER PAYMENTS, RENT LIMITS AND RENT REASONABLENESS [24 CFR 982.502, 982.503, 982.504, 982.505, 982.507] INTRODUCTION This chapter discusses the CDC processes and procedures for Housing Choice Voucher rent reasonableness determinations, payments to owners, and rent adjustments. It is the CDC's responsibility to ensure that the rents charged by owners are reasonable based upon unassisted comparables in the rental market, as specified in 24 CFR 982. 507(b): ■ The location, quality, size, unit type, and age of the contract unit; and ■ Any amenities, housing services, maintenance and utilities to be provided by the owner in accordance with the lease. RENT LIMITATIONS The rent to owner is limited by rent reasonableness, the maximum rent allowed at initial occupancy (24 CFR 982.508), and the lease. The CDC must demonstrate that the rent to owner is reasonable in comparison to rent for other comparable unassisted units. A unit cannot be approved if the family will be in zero HAP status. At the time a family initially receives tenant -based assistance for occupancy of a dwelling unit, whether it is a new admission or a move to a different unit, the family's rent share may not exceed 40 percent of the family's monthly -adjusted income [24 CFR 982.508], which may include exempt income. 10- 1 10 During the initial term of the lease, the owner may not raise the rent to the family. After the initial lease term, the owner may request a rent adjustment with a sixty-day written notice to the family and the CDC [24 CFR 982.308(g)]. A rent adjustment is subject to the approval of the CDC for rent reasonableness. An owner that collects a rent increase from the family without the CDC's permission is in breach of the contract and subject to collection of HAPs paid during the period of time the owner was collecting the increased rent. RENT REASONABLENESS DETERMINATIONS [24 CFR 982.507] The CDC will determine and document, on a case -by -case basis, that the approved rent is reasonable in comparison to rent for other comparable unassisted units in the market. This applies to all programs. The CDC will not approve a lease until reasonable initial rent has been determined. The CDC must determine the reasonable rent on or before any increase in the rent to the owner, and if there is a five percent decrease in the published fair market rent (FMR) in effect 60 days before the contract anniversary (for the unit size rented by the family), as compared with the FMR in effect one year before the contract anniversary. However, rent reasonableness determinations must be conducted annually for mobilehome space rents. All CDC active participant files will contain documentation of the last applicable reasonable rent determination. The CDC must redetermine rent reasonableness, if directed by HUD or based on a need identified by the CDC's auditing system. The CDC may elect to redetermine rent reasonableness at any other time. At all times during the assisted tenancy, the rent to owner may not exceed the reasonable rent as most recently determined or redetermined by the CDC. The owner will be advised that upon acceptance of each monthly payment, s/he is certifying that the rent to owner is not more than rent charged by the owner for comparable unassisted units in the area. If requested, the owner must give the CDC information on rents charged by the owner for other units on the premises or elsewhere. Units of a density bonus or tax credit property are not considered comparable because they are considered assisted. The CDC may request additional information, such as owner rent rolls, if it appears the owner has a tendency to charge higher rents to program participants, or if needed for rent reasonableness comparables. The data for other unassisted units will be gathered from newspapers, realtors, professional associations, owners, market surveys, MarketPoint Advisors, and other available sources. 10- 2 10 The market areas for rent reasonableness determinations are the nearby neighborhoods or communities of the subject unit. Subject units within a defined housing market area will be compared to similar units within the same area. Generally, bedroom size and location of units are the most important rent reasonableness criteria. The following items may be used for rent reasonableness documentation: • Size (number of Bedrooms/square footage) • Location • Quality • Amenities (bathrooms, dishwasher, air conditioning, etc.) • Housing Services • Unit Age • Unit Type • Maintenance • Utilities provided by the owner RENT REASONABLENESS METHODOLOGY The CDC uses an "appraisal" method to evaluate the subject unit against selected units in the same area with similar characteristics. Adjustments are made for favorable and unfavorable differences between the subject unit and the comparables. The CDC uses an automated database of unassisted units that provides detail reports for placement in the participant file. The data will be updated on an ongoing basis and purged periodically. OWNER PAYMENTS [24 CFR 982.451] Once the HAP contract is executed, the CDC begins forwarding payments to the landlord by mail or electronic deposit. Each month, around the first working day of the month, the CDC will direct deposit or disburse housing assistance payments to the landlords. 10- 3 10 Payments not received by the 10th working day of the month, will be replaced upon request from the payee, and a stop payment will be put on the check. The owner must notify the CDC of a missing or incorrect payment within six months of the payment due date. EXCESS PAYMENTS The total of rent paid by the tenant, plus the housing assistance payment to the owner may not exceed the contract rent. The owner must immediately return any excess payments to the CDC the CDC may deduct the monies owed from future payments to the landlord. Owners who do not return excess payments may be subject to penalties, as outlined in the "Owner or Family Debts to the CDC" chapter of this Plan. LATE PAYMENTS TO OWNERS In keeping with generally accepted practices in the local housing market, the CDC must make housing assistance payments to the owner promptly, and in accordance with the HAP contract. The CDC will, upon owner request, pay a reasonable late fee for housing assistance payments not mailed to the owner by the first working day of the month. The late fee will conform to the late fee for the tenant on the owner's lease, or a reasonable late fee, as determined by the CDC. Proof of date of mailing is: • Date the HAP register was run • Proof of date owner received is: • Five calendar days after date of mailing by the CDC In the case of payments electronically deposited into the owner's designated bank account, the date the bank shows as the deposit date will be the official date of record and will be the determining factor in cases involving late payment penalties. The CDC will not be obligated to pay any late payment penalty if HUD determines that late payment is due to factors beyond the CDC's control, such as a delay in the receipt of program funds from HUD, or a post office delay. The CDC will use only administrative fee income or the administrative fee reserve as its source of late payment penalty payments. 10- 4 11 RECERT IFICA T IONS, INT ERIMS, CITIZENSHIP AND OTHER REGULAR ACTIVITIES [24 CFR 5 Subpart E, 982.516] INTRODUCTION In accordance with HUD requirements, the CDC will reexamine the income and household composition of families at least annually. Families will be provided accurate annual and interim rent adjustments, and will be given reasonable notice of rent increases. All annual activities are coordinated in accordance with HUD regulations. It is a HUD requirement that families report all changes in household composition. This chapter defines the CDC's policy for conducting annual recertifications and coordinating annual activities. It also explains the interim reporting requirements for families, and the standards for timely reporting. APPOINTMENTS Under the program, families are required to be available for various reasons, including eligibility interviews, program review conferences, inspection appointments, or overpayment conferences. Families scheduled for an appointment must attend that appointment, or call to reschedule the appointment. The appointment will be rescheduled one final time, upon request of the family. If the family fails to attend a scheduled appointment, and fails to call to reschedule, the CDC may either: ■ Reschedule the appointment one final time, or ■ Send a notification of termination of assistance, and opportunity for an informal hearing. 11 The family will not be offered a third appointment, unless it can provide documentation of an emergency situation that prevented it from attending the appointment, or if requested as a reasonable accommodation for a person with a disability. PERSONS WITH DISABILITIES Persons with disabilities unable to come to the CDC office will be granted an accommodation by conducting the interview at the person's home, upon confirmation that the accommodation is appropriate for the disability. MISREPRESENTATION OF FAMILY CIRCUMSTANCES If any participant deliberately misrepresents the information on which eligibility or tenant rent is established, the CDC may terminate assistance, request repayment of housing assistance, and refer the family file/record to the proper authorities for appropriate disposition, including prosecution. 5 792.102(b) and California Penal Code, Chapter 5, Larceny: 5 487 (i) in Chapter 13] ZERO PAY STATUS Participants in zero pay status will remain on the program for six months, eligible for reinstatement of benefits if their circumstances change. After six months, if the family continues to be ineligible for benefits, the family will be dropped from the program. The family may be transferred to another unit if it is determined the family will be eligible for assistance at another unit, but the family must lease -up within the voucher term. ANNUAL ACTIVITIES [24 CFR 982.516, 982.405] There are two activities the CDC must conduct every 12 months. 1. Recertification of family income, assets, and composition 2. The CDC must conduct supervisory quality control HQS inspection: ■ In scheduling inspections, the CDC must consider complaints and any other information brought to the attention of the CDC. ■ The CDC must notify the owner of defects shown by the inspection. ■ The CDC may not charge the family or owner for initial inspection or reinspection of the unit. 11- 2 11 The CDC conducts these activities together. The CDC produces a monthly listing of units under contract scheduled for annual review. The participants on this listing are scheduled for housing quality standards inspections, and eligibility reviews through the case management unit. This review complies with the HUD requirement for an annual review of family income, assets, and composition, and HQS inspections. ANNUAL RECERTIFICATION [24 CFR 5 Subpart E, 982.516] Families must be recertified at least annually. Family members must report and CDC must verify the U.S. citizenship/eligible immigrant status of family members. Eligibility for assistance or continued assistance under a Section 214 covered program is contingent upon a family's submission to the CDC (CDC) of the documents described in paragraph (b) of this section for each family member. If one or more family members do not have citizenship or eligible immigration status, the family members may exercise the election not to contend to have eligible immigration status as provided in paragraph (e) of section 5.508, and the provisions of Sec. Sec. 5.516 and 5.518 shall apply. Annual income includes income of all family members, including any family member who has not established eligible immigration status. EVIDENCE OF CITIZENSHIP OR ELIGIBLE IMMIGRATION STATUS Each family member, regardless of age, must submit the following evidence to the CDC. For U.S. citizens or U.S. nationals, the evidence consists of a signed declaration of U.S. citizenship or U.S. nationality. The CDC must obtain verification of the declaration by requiring presentation of a U.S. passport, U.S. birth certificate, Employment Authorization card, Temporary Resident card, or other appropriate documentation, as provided by section 214. For noncitizens, adequate evidence consists of: • A signed declaration of eligible immigration status; and - One of the Section 214 documents listed in Sec. 5.508(b)(1) and referred to in Sec. 5.510. DECLARATION For each family member who contends that he or she is a U.S. citizen or a noncitizen with eligible immigration status, the family must submit to the CDC a written declaration, signed under penalty of perjury, by which the family member declares whether he or she is a U.S. citizen or a noncitizen with eligible immigration status. 11- 3 11 o For each adult, the declaration must be signed by the adult. o For each child, the declaration must be signed by an adult residing in the assisted dwelling unit who is responsible for the child. For Housing covered programs: The written declaration may be incorporated as part of the application for housing assistance or may constitute a separate document. VERIFICATION CONSENT FORM WHO SIGNS Each noncitizen who declares eligible immigration status (except certain noncitizens who are 62 years of age or older as described in paragraph (b)(2) of this section) must sign a verification consent form as follows. o For each adult, the form must be signed by the adult. o For each child, the form must be signed by an adult residing in the assisted dwelling unit who is responsible for the child. NOTICE OF RELEASE OF EVIDENCE BY CDC The verification consent form shall provide that evidence of eligible immigration status may be released by the CDC without responsibility for the further use or transmission of the evidence by the entity receiving it, to: (i) HUD, as required by HUD; and (ii) The INS for purposes of verification of the immigration status of the individual. The verification consent form also shall notify the individual of the possible release of evidence of eligible immigration status by HUD. Evidence of eligible immigration status shall only be released to the INS for purposes of establishing eligibility for financial assistance and not for any other purpose. HUD is not responsible for the further use or transmission of the evidence or other information by the INS. INDIVIDUALS WHO DO NOT CONTEND THAT THEY HAVE ELIGIBLE STATUS If one or more members of a family elect not to contend that they have eligible immigration status, and other members of the family establish their citizenship or eligible immigration status, the family may be eligible for assistance under Sec. Sec. 5.516 and 5.518, or Sec. 5.520, despite the fact that no declaration or documentation of eligible status is submitted for one or more members of the family. The family, however, must identify in writing to the CDC (CDC), the family member (or members) who will elect not to contend that he or she has eligible immigration status. 11- 4 11 NOTIFICATION OF REQUIREMENTS OF SECTION 214 Section 214 prohibits HUD from making financial assistance available to persons who are not in eligible status with respect to citizenship or noncitizen immigration status. WHEN NOTICE IS TO BE ISSUED (24 CFR 5.508) Notification of the requirement to submit evidence of citizenship or eligible immigration status, as required by this section, or to elect not to contend that one has eligible status as provided by paragraph (e) of this section, shall be given by the CDC as follows: (i) Applicant's notice. The notification described in paragraph (f)(1) of this section shall be given to each applicant at the time of application for assistance or eligibility intake appointment. Applicants whose applications are pending on June 19, 1995, shall be notified of the requirement to submit evidence of eligible status as soon as possible after June 19, 1995. (ii) Notice to tenants. The notification described in paragraph (f)(1) of this section shall be given to each tenant at the time of, and together with, the CDC's notice of regular reexamination of income, but not later than one year following June 19, 1995. WHEN EVIDENCE OF ELIGIBLE STATUS IS REQUIRED TO BE SUBMITTED The CDC shall require evidence of eligible status to be submitted at the times specified in paragraph (g) of this section, subject to any extension granted in accordance with paragraph (h) of this section. For applicants, the CDC must ensure that evidence of eligible status is submitted not later than the date the CDC anticipates or has knowledge that verification of other aspects of eligibility for assistance will occur (see Sec. 5.512(a)). For any new occupant of an assisted unit (e.g., a new family member comes to reside in the assisted unit), the required evidence shall be submitted at the first interim or regular reexamination following the person's occupancy. CHANGING PARTICIPATION IN A HUD PROGRAM Whenever a family applies for admission to a Section 214 covered program, evidence of eligible status is required to be submitted in accordance with the requirements of this subpart unless the family already has submitted the evidence to the CDC for a Section 214 covered program. 11- 5 11 ONE-TIME EVIDENCE REQUIREMENT FOR CONTINUOUS OCCUPANCY For each family member, the family is required to submit evidence of eligible status only one time during continuously assisted occupancy under any Section 214 covered program. Extensions of time to submit evidence of eligible status when extension must be granted. The CDC shall extend the time, provided in paragraph (g) of this section, to submit evidence of eligible immigration status if the family member: Submits the declaration required under Sec. 5.508(a) certifying that any person for whom required evidence has not been submitted is a noncitizen with eligible immigration status; and Certifies that the evidence needed to support a claim of eligible immigration status is temporarily unavailable, additional time is needed to obtain and submit the evidence, and prompt and diligent efforts will be undertaken to obtain the evidence. Thirty -day extension period Any extension of time, if granted, shall not exceed thirty (30) days. The additional time provided should be sufficient to allow the individual the time to obtain the evidence needed. The CDC's determination of the length of the extension needed shall be based on the circumstances of the individual case. Grant or denial of extension to be in writing The CDC's decision to grant or deny an extension as provided in paragraph (h)(1) of this section shall be issued to the family by written notice. If the extension is granted, the notice shall specify the extension period granted (which shall not exceed thirty (30) days). If the extension is denied, the notice shall explain the reasons for denial of the extension. Failure to submit evidence or to establish eligible status If the family fails to submit required evidence of eligible immigration status within the time period specified in the notice, or any extension granted in accordance with paragraph (h) of this section, or if the evidence is timely submitted but fails to establish eligible immigration status, the CDC shall proceed to deny, prorate or terminate assistance, or provide continued assistance or temporary deferral of termination of assistance, as appropriate, in accordance with the provisions of Sec. Sec. 5.514, 5.516, and 5.518. For U.S. citizens or U.S. nationals, the evidence consists of a signed declaration of U.S. citizenship or U.S. nationality. The CDC must obtain verification of the declaration by requiring presentation of a U.S. passport, U.S. birth certificate, Employment Authorization card, Temporary Resident card, or other appropriate documentation, as provided by section 214. For noncitizens, adequate evidence consists of: 11- 6 11 (i) A signed declaration of eligible immigration status; and (ii) One of the Section 214 documents listed in Sec. 5.508(b)(1) and referred to in Sec. 5.510. GENERAL PROVISIONS (24 CFR 5.506) RESTRICTIONS ON ASSISTANCE Financial assistance under a Section 214 covered program is restricted to: (1) Citizens; or (2) Noncitizens who have eligible immigration status under one of the categories set forth in Section 214 (see 42 U.S.C. 1436a(a)). FAMILY ELIGIBILITY FOR ASSISTANCE A family shall not be eligible for assistance unless every member of the family residing in the unit is determined to have eligible status, as described in paragraph (a) of this section, or unless the family meets the conditions set forth in paragraph (b)(2) of this section. Despite the ineligibility of one or more family members, a mixed family may be eligible for one of the three types of assistance provided in Sec. Sec. 5.516 and 5.518. A family without any eligible members and receiving assistance on June 19, 1995 may be eligible for temporary deferral of termination of assistance as provided in Sec. Sec. 5.516 and 5.518. Preferences: Citizens of the Republic of Marshall Islands, the Federated States of Micronesia, and the Republic of Palau who are eligible for assistance under paragraph (a)(2) of this section are entitled to receive local preferences for housing assistance, except that, within Guam, such citizens who have such local preference will not be entitled to housing assistance in preference to any United States citizen or national resident therein who is otherwise eligible for such assistance MOVES BETWEEN REEXAMINATIONS When families move to another dwelling unit, a reexamination will be scheduled unless the eligibility booklet was signed within 60 days of the execution of the new HAP contract for the new unit. The anniversary date will always be changed to the month of the execution of the new HAP contract. Income limits are used only upon initial admission to the program, and are not applicable upon reexamination or transfer. However, the 40% limitation rule does apply to a transfer. 11- 7 11 Families may not transfer their assistance more than once every 12 months, unless there are special circumstances. REEXAMINATION NOTICE TO THE FAMILY The CDC maintains a reexamination tracking system. The household will be notified, in advance of the anniversary date, by mail or telephone, of the date and time for the interview and inspection. If requested as an accommodation for a person with a disability, the CDC will contact the person by telephone, through a relay service for the hearing impaired, or in another appropriate manner. The CDC will also mail the notice to a third party, if requested, as reasonable accommodation for a person with disabilities. These accommodations will be granted upon verification of the need presented by the disability. PROCEDURE The CDC's procedure for conducting annual recertifications will be: • Schedule the date and time of appointments, and mail an advance notification to the family. • Contact the family by telephone, but if less than five days advance notice is given, the family will not be penalized for declining the appointment. • Conduct the inspection and issue appropriate notices. If family does not make the unit available, notices of action terminating assistance must be mailed to both the family and the landlord at least 30 days in advance of the recertification date. COMPLETION OF ANNUAL RECERTIFICATION The CDC will complete all recertifications at least 30 days prior to the family's anniversary date, unless a delay is caused by a family action or inaction. The CDC will issue, a reasonable time in advance, a family rent change notice, unless the delay in notification was the result of a family action or inaction. COLLECTION OF INFORMATION [24 CFR 982.516(f)] ACCURACY OF FAMILY INCOME DATA The CDC must establish procedures that are appropriate and necessary to assure that income data provided by applicant or participant families is complete and accurate. The CDC will use HUD's EIV system as a third -party source in its entirety to verify tenant employment and income information during mandatory reexaminations or recertifications of family composition and income, in accordance with Sec. 5.236, and 11- 8 11 administrative guidance issued by HUD; and to reduce administrative and subsidy payment errors in accordance with HUD administrative guidance. The CDC will obtain proper authorization from the family before requesting information from independent sources for verification of preferences, income, assets, and allowable deductions to ensure that the income data provided by families is complete and accurate. Participant families must provide true and complete information to the CDC whenever information is requested, and must supply any information that the CDC determines is necessary in the administration of the program, including consenting to the CDC's verification of that information. The CDC's verification requirements are designed to maintain program integrity. This information will be used by HUD to create a national repository of families that owe a debt to a CDC and/or have been terminated from a federally assisted housing program. This national repository will be available within the EIV system for all PHAs to access during the time of application for rental assistance. CDC will be able to access this information to determine a family's suitability for rental assistance, and avoid providing limited Federal housing assistance to families who either: (1) Owe a debt to a PHA; or (2) have previously been unable to comply with HUD program requirements. HUD requires applicants and participants in covered HUD programs to disclose, and submit documentation to verify, their Social Security Numbers (SSNs). HUD regulations enables the CDC to obtain income information about applicants and participants in the covered programs through computer matches with State Wage Information Collection Agencies (SWICAs) and Federal agencies, in order to verify an applicant's or participant's eligibility for or level of assistance. The purpose of these regulations is to enable HUD to decrease the incidence of fraud, waste, and abuse in the covered programs. The family must complete the recertification forms. The CDC requires the family to complete a personal declaration form prior to the recertification interview. The CDC representative may, upon request for reasonable accommodation for a person with a disability, and if appropriate for the disability, interview the family at home, enter the information provided by the family on the recertification forms, review the information with the family, and have the adults sign the forms. The CDC may conduct the recertification interview at the HQS inspection appointment. The CDC must request written third party verification of income, assets that exceed $1000, allowances and deductions. 11- 9 11 REQUIREMENTS TO ATTEND The following family members are required to attend a recertification interview, show picture identification, and sign a certification in the presence of a housing representative: • The head of household or spouse or co-head • All adult household members 18 years or older If the head, spouse or co-head is unavailable for an interview at the time of the inspection, s/he will be provided an office appointment for an interview. Exceptions may be given as a reasonable accommodation, or in emergency circumstances, such as hospitalization. FAILURE TO RESPOND TO NOTIFICATION TO RECERTIFY DOCUMENTS REQUIRED FROM THE FAMILY In the notification letter to the family, the CDC will include instructions for the family to provide the following: • Documentation of income • All forms and releases completed and/or signed and dated by the family • Documentation of assets • Documentation of deductions/allowances • Personal declaration form completed by head of household • Other information, as requested Releases and certifications altered or amended by the family are unacceptable and would be considered "failure to provide." VERIFICATION OF INFORMATION The CDC will follow the verification procedures and guidelines described in this Plan. Verifications for reexaminations must be less than 120 days old as of the effective recertification date. TENANT RENT INCREASES A reasonable advance notice of a tenant rent increase is mailed to the family prior to the scheduled effective date of the increase, unless the delay in notification was caused by an action or inaction of the family. If a reasonable advance notice cannot be issued, the tenant rent increase will be effective on the first of the second month after notification, unless the delay in notification was caused by an action or inaction of the family. 11- 10 11 If there has been a misrepresentation or a material omission by the family or if the family causes a delay in the reexamination processing, there may be a retroactive increase in rent back to the scheduled effective date of the annual recertification along with a family repayment agreement. An approved contract rent increase in which the landlord provided proper notices to both the CDC and the family will be processed effective the date of the rent increase. A contract rent increase will not be approved if the landlord failed to provide proper advance notice to both the CDC and the family. TENANT RENT DECREASES A decrease in tenant rent will be processed in a timely manner. If the family causes a delay, so that the processing of the reexamination is not complete by the anniversary date, the rent change will be effective on the first day of the month following completion of the reexamination processed by the CDC. The family must provide a special written request and appropriate documentation for a rent decrease to be processed on a date other than the reexamination date. If the CDC is responsible for a delay in processing the tenant rent decrease, the tenant rent decrease may be processed retroactive to the date the decrease should have been effective, and a supplemental payment would be issued to the owner. INTERIM CHANGES [24 CFR 982.516] Program participants must report, in writing, all changes in household composition and changes in income or assets to the CDC within ten (10) days of the change. The family must obtain prior CDC approval for all household additions except those due to birth, return of disabled or minor children to the household, adoption or court -awarded custody. Please refer to the chapter on family composition for restrictions on admissions to the household and when a family may be allocated a larger voucher size. The owner must approve additions to the household in writing, with the exception of additions due to birth, adoption, return of minor or disabled children to the household or court -awarded custody. The CDC must conduct an interim examination, upon reporting, to reflect any changes that impact family rent. In conducting an interim, all family information must be reviewed to ensure the increase or reduction in family rent is correct and reflects all changes in family income and deductions that have taken place since the last examination. PROCEDURES WHEN THE CHANGE IS REPORTED IN A TIMELY MANNER The CDC will notify the family and the owner of any change in the housing assistance payment according to the following guidelines: 11 Increases in the Tenant Rent: An interim is necessary if an increase will result in an increase of $25.00 in tenant's rent, the increase will be effective on the first of the month following a reasonable advance notice, unless the notification delay was the result of a family action or inaction. Decreases in the Tenant Rent: Are effective the first of the month following the month the change was effective, unless the delay was caused by family action or inaction. Also, no rent reductions will be processed until all the facts have been verified, even if a retroactive adjustment results. The change is implemented based on documentation provided by the family. PROCEDURES WHEN CHANGE IS REPORTED IN AN UNTIMELY MANNER If the family does not report the change as described under timely reporting, the family will have caused an unreasonable delay in the interim reexamination processing, and the following guidelines will apply: Increase in Tenant Rent: If it is determined an interim is necessary to increase the tenant rent, the increase will be effective retroactive to the date it would have been effective, had it been reported in a timely manner and a repayment agreement will be offered to the family. Decrease in Tenant Rent: will be effective on the first of the month following the month that the family request was received. PROCEDURES WHEN THE CDC PROCESSES THE CHANGE IN AN UNTIMELY MANNER "Processed in a timely manner," means that the change goes into effect on the date it should when the family reports the change in a timely manner. If the change cannot be made effective on that date due to a CDC action or inaction, the CDC has processed the change in an untimely manner. In this case, a family rent increase will be effective after the required reasonable advance notice, and after completion of processing by the CDC. If the change resulted in a family rent decrease, and the family requested the decrease in a timely manner, the rent decrease for the family will be calculated retroactively to the date it should have been effective, and the owner will be mailed a supplemental payment for that amount. However, it is the responsibility of the family to report rent calculation errors to the CDC in a timely manner therefore, the CDC will not process retroactive adjustments previous to the last annual reexamination. REPORTING ADDITIONS TO OWNER AND THE CDC Reporting changes in household composition to the CDC is both a HUD and a CDC requirement. 11- 12 11 If any new family member is added, family income must include any income of the additional family member. The CDC must conduct a reexamination to determine such additional income, and must make appropriate adjustments in the housing assistance payment The CDC will deny a family's request to add additional family members who are prohibited from program participation for the time period indicated elsewhere in this Plan. In instances where a participation prohibition period is not indicated elsewhere in this Plan, the prohibition period is three years, unless the CDC determines extenuating factors. The CDC will deny a family's request to add more than one person in a 12-month period, unless the addition is due to birth, adoption, court -awarded custody, return of disabled or minor children to the household, a live-in aide or foster children. Except for birth, adoption, court -awarded custody, return of disabled or minor children to the household, foster children, and live-in aides, persons added to the household must have a permanent source of income, and if employed, are required to be employed at least 32 hours per week for the past 12 months. An exception to the income requirement may occasionally be granted for serious medical or hardship reasons to parents, children or siblings of the head of household or spouse. However, they cannot be added if the unit is overcrowded. Participation is always denied to: • Persons who have been evicted from public housing. • Persons who have previously violated a family obligation listed in 24 CFR 982.51 of the HUD regulations. • Persons who were part of a family whose assistance was terminated under the certificate or voucher program for program violations. (Determination will be made on a case -by -case basis depending on the termination reason.) • Persons who commit, or have committed, drug -related criminal activity or violent criminal activity as outlined in this plan. • Persons who commit, or have committed, fraud, bribery or any other corrupt or criminal act in connection with any federal housing program, or state or local fraud involving public funds. • Persons who currently owe rent or other amounts to the CDC, or to another CDC in connection with Section 8 or public housing assistance under the 1937 Act. • Persons who have engaged in, threatening, abusive or violent behavior toward CDC personnel or have had a pattern of two or more instances observed by two or more staff or other witnesses of abusive, vulgar, demeaning, or hostile written or oral language and/or gestures and body movement that denotes an implied threat, excessive hostility, or intimidation. 11- 13 11 • Persons who have been involved in any criminal activity which may threaten the health, safety, or right to peaceful enjoyment of the premises by other residents or persons residing in the immediate vicinity. • Persons who have been involved in any criminal activity which may threaten the health or safety of the owner, property management staff, or persons performing a contract administration function or responsibility on behalf of the CDC. • Persons who will overcrowd the unit. • Persons who commit fraud, bribery or any other corrupt or criminal act in connection with any federal housing program. The income of the additional member will be included in the family income as applicable under the HUD regulations, once the CDC and the owner approve the person. The CDC will conduct a reexamination to determine such additional income and will make the appropriate adjustments in the housing assistance payment. If the family does not obtain prior written approval from the CDC, with the exceptions noted elsewhere, any person the family permitted to move in will be considered an unauthorized household member. The family is responsible for full rent for the duration of time the unauthorized person was residing in the unit. Families are required to report within 10 calendar days, family additions through court awarded custody, birth, adoption, or minor or disabled children returning to the family. A full interim reexamination will be conducted for any additions to the household, except for additions due to birth. In addition, the family must obtain prior written approval from the owner for additions to the household other than by birth, adoption, a minor or disabled child returning to the family, or court awarded custody. However, the owner may disapprove any additions to the household unless to do so would be a violation of law. REPORTING ABSENCES TO THE CDC Reporting changes in household composition is both a HUD and a CDC requirement. If a family member leaves the household, the family must report this change to the CDC, in writing, within ten days of the change, and certify as to whether the member is temporarily absent or permanently absent. The CDC will conduct an interim evaluation for changes that affect the total tenant payment in accordance with the interim policy. When the family notifies the CDC, it must furnish the following information: • The date the family member moved out. 11- 14 11 • The new address of that family member, if known. • A notarized statement as to whether the family member is temporarily or permanently absent. OTHER INTERIM REPORTING ISSUES An interim reexamination does not affect the date of the annual recertification. Families with zero or minimal income must submit a statement of income and expenses along with receipts every 30 days. Any changes reported by participants, other than those listed in this section, will be noted in the file by the staff person, or will be indicated by documents provided by the family. INTERIM REEXAMINATION POLICY INCREASES IN INCOME The CDC will conduct interim reexaminations when families have an increase in income in certain circumstances and families are required to report all changes in income/assets within 10 days. The CDC may, at its discretion, conduct interim reexaminations in the following instances: • When the family had previously been receiving zero or minimal income. • When it appears the family is manipulating the program by a pattern of reducing income just prior to the annual recertification and increasing its income right after. • When it is discovered a family has a welfare sanction and the rent should not have been reduced. • When the family requests an interim. • When the family's portion of rent will increase $25.00 or more. • Decreases in Income Participants are required to submit a written request for review of their rent calculations because of a decrease in income and other changes that would reduce the amount of tenant rent, such as an increase in allowances or deductions, before the CDC will process the reduction in family rent, providing appropriate documentation of the changes is submitted. The CDC will review all family income and deductions to ensure the interim rent reduction is correct and based on all current family information. 11- 15 11 CDC ERRORS If the CDC makes a calculation error at admission to the program or at an annual reexamination, an interim reexamination will be conducted, if necessary, to correct the error, but the family will not be charged retroactively. A CDC error that resulted in underpaid HAP will be corrected retroactive to when the decrease would have been effective if calculated correctly. However, since it is the family's responsibility to notify the CDC of a calculation error, the CDC will not adjust the family's rent beyond the last annual examination. A supplemental payment will be issued to the owner for the HAP underpayment if the family still has the same owner. If the family has a new owner, the underpayment will be issued directly to the family. HOUSEHOLD COMPOSITION CHANGES THAT REQUIRE A CHANGE IN THE SUBSIDSY STANDARDS When an addition occurs due to birth, addition of disabled or minor children of the assisted family, adoption, or court awarded custody and the unit is overcrowded, the family must give notice to move or the assistance must be terminated within 60 days of the change in household composition. The family must be assisted in transferring to an adequately sized unit, but the voucher size will only be increased as necessary so that the family will not be overcrowded. In every other case, the family may not add anyone if the family will be overcrowded. For a reduction in the subsidy standards, the family must be given notice as of the later of the next annual reexamination or sixty days from the date of the notice. If an error is discovered that resulted in subsidy standards not being reduced at the appropriate time, the subsidy standards will be reduced with a 60-day notice. NOTIFICATION OF RESULTS OF RECERTIFICATIONS/INTERIMS [HUD Notice PIH 98-6] The HUD form 50058 will be completed and transmitted as required by HUD. The notice of rent change is mailed to the owner and the tenant. The CDC does not require signatures. If the family disagrees with the rent adjustment, it may request an informal hearing. 11- 16 12 MOVES WITH CONTINUED ASSISTANCE/PORTABILITY [24 CFR 982.314, 982.353, 982.355(a)] INTRODUCTION HUD regulations permit families to move with continued assistance to another unit within the CDC jurisdiction, or to a unit outside of the CDC jurisdiction under portability procedures. The regulations also allow the CDC the discretion to develop policies to define any limitations or restrictions on moves. This chapter describes the procedures for moves within and outside the CDC jurisdiction, and the policies for restrictions and limitations on moves. ALLOWABLE MOVES A family may move to a new unit with continued assistance if: • The assisted lease for the old unit has terminated because the CDC has terminated the HAP contract for owner breach, or the lease was terminated by mutual agreement of the owner and the family. • The owner has given the family a notice to vacate, or has commenced an action to evict the tenant, or has obtained a court judgment or other process allowing the owner to evict the family (unless assistance to the family will be terminated). • The family has given proper notice of lease termination (and if the family has a month -to -month rental agreement a right to terminate the lease on notice to owner). • The owner and tenant agree to early termination of tenancy by executing and returning a CDC waiver form. 12- 1 12 RESTRICTIONS ON MOVES [24 CFR 982.314, 982.552(a)] Families will not be permitted to move within the CDC jurisdiction during the initial term of the lease. Families will not be permitted to move more than once in a twelve-month period, unless they can demonstrate a compelling reason for the move, such as a medical emergency or the landlord issuing a termination of tenancy notice. Families will not be eligible to move with continued program participation if they are in zero pay status at the new unit. The CDC will deny the family permission to move if there is insufficient funding for continued assistance. The CDC will deny the family permission to move if: • The family has violated a family obligation. • The family owes the CDC or another PHA money. The housing supervisor may make exceptions to these restrictions if there is an emergency reason for the move over which the participant has no control and the participant is current on his/her repayment agreement. • The family is ineligible because of criminal history or criminal activities. PROCEDURE FOR TRANSFERS [24 CFR 982.314] ISSUANCE OF HOUSING CHOICE VOUCHER Subject to the restrictions on moves, if the family's initial signature on the eligibility booklet for the family's last examination will be over 120 days old as of the anticipated initial date of the new HAP contract, the CDC will conduct a recertification prior to the family's transfer. The family's criminal history must always be verified for a transfer. If the family does not locate a new unit, it may remain in the current unit if the owner allows the family to stay, the unit meets housing quality standards, and the family and owner submit a written confirmation to the CDC. When a family transfers to a new unit, the annual recertification date will be changed to coincide with the new lease and contract dates. 12- 2 12 NOTICE REQUIREMENTS The initial briefing session will emphasize the family's responsibility to give the owner and the CDC proper 30-day written notice of any intent to move. The family must give the owner the legally required advance written notice of its intent to vacate, and must forward a copy to the CDC at the same time. The family will be advised that a transfer is not allowed within the initial term of the lease and that family will not be transferred more than once in a 12-month period. A notice issued by the family within these time frames is invalid. TIME OF CONTRACT CHANGE A move within the same building or project, or between buildings owned by the same owner, will be processed like any other move, and there will be no overlapping assistance. ASSISTANCE TERMINATION AND OVERLAPPING ASSISTANCE In a move, assistance stops at the old unit on the date the participant has notified the CDC s/he will be vacating the unit, unless the participant and owner request an extension of the lease termination date in writing. Unless the CDC determines extenuating circumstances, assistance on the old and new units may not overlap. The CDC may never pay assistance on a unit beyond the end of the month the family moves. PORTABILITY [24 CFR 982.353] Portability applies to families moving out of or into the CDC's jurisdiction within the United States and its territories. OUTGOING PORTABILITY [24 CFR 982.353, 982.355] Within the limitations of the regulations and this policy, a participant family has the right to tenant -based voucher assistance outside the CDC's jurisdiction, anywhere in the United States that has an administering PHA. When a family provides a written request to move outside of the CDC's jurisdiction, the request must specify the area to which the family wants to move, as well as the name and address of the appropriate PHA. Subsidy standards and income limits vary from PHA to PHA, and the CDC will advise the family to contact the receiving PHA regarding its policies and procedures and the CDC will make contact with the receiving PHA by telephone, fax, or e-mail. 12- 3 12 The CDC will choose the receiving PHA in instances of more than one PHA in the area the family has chosen. The CDC may, if warranted by funding constraints, and if permitted under the regulations, deny a family's portability to a higher cost area. The CDC will make its billing payments to the receiving PHA within 30 days of receiving Part II of form HUD-52665 from the receiving PHA and subsequent payments must be received by the receiving PHA no later than the fifth working day of each month. If the CDC does not receive a billing from the receiving PHA within 60 days of the initial expiration date of the voucher, the CDC will contact the receiving PHA to ascertain the status of the family. If the family is not under lease, the CDC may, based on available vouchers, advise the receiving PHA that it will not accept subsequent billings on behalf of the family. If subsequent billings are received after contact with the receiving PHA, the CDC will return them and advise the receiving PHA to absorb the family. However, if the CDC is advised, at first contact, that the family is under a HAP contract and the receiving PHA cannot absorb the family, the CDC is required to accept the subsequent late billing. RESTRICTIONS ON PORTABILITY APPLICANTS If neither the head nor spouse had a domicile (legal residence) in the CDC's jurisdiction at the date of initial application for assistance, the family may not be permitted to exercise portability upon initial issuance of a voucher, unless the CDC approves the move. For a portable family not yet receiving assistance in the CDC's jurisdiction, the CDC must determine whether the family is eligible for admission under the receiving PHA's program. In order to make this determination, CDC will advise the family regarding the receiving PHA's income limits. PARTICIPANTS After an applicant has leased in the jurisdiction of the initial housing agency, s/he cannot exercise portability during the initial term of the lease, except in the following circumstances: • The receiving PHA and the CDC agree to allow the move. • The family's move relates to an opportunity for education, job training or employment. • The CDC will not permit families to exercise portability if: 12- 4 12 • The family is in violation of a family obligation. • The family owes money to any PHA. • The family is ineligible due to its criminal history. • The family has moved out of its assisted unit in violation of the lease. If the receiving PHA denies a family's move into its jurisdiction, the PHA must offer the family an opportunity for an informal hearing, for participants, and informal review for new admissions, and submit its hearing/review determination to the CDC with sixty days of the hearing/review decision. INCOMING PORTABILITY [24 CFR 982 subpart H] ABSORPTION OR ADMINISTRATION The CDC will accept a family with a valid active voucher from another jurisdiction, and administer or absorb the voucher. The family will be issued a "portable" voucher by the CDC, if • If funding is available under the consolidated ACC for the receiving PHA voucher program when the portable family is received, the receiving PHA may absorb the family into the receiving PHA voucher program. After absorption, the family is assisted with funds available under the consolidated ACC for the receiving PHA tenant -based program. • HUD may require that the receiving PHA absorb all or a portion of the portable families. • it is administering the voucher. The term of the voucher will not expire before the expiration date of any initial PHA voucher. • The family must submit a RFTA for an eligible unit to the CDC during the term of the voucher. The CDC may extend the voucher in conformance with its policies, but the CDC must inform the initial PHA of the extension. The CDC will not extend the voucher if the extension makes it impossible to bill by the billing deadline. • If the family decides not to lease in the CDC's jurisdiction, or moves out of the CDC's jurisdiction, the CDC must refer the family back to the initial PHA. Extensions on the voucher granted by the CDC are no longer valid when a family decides not to lease in the CDC's jurisdiction. 12- 5 12 The CDC must process the incoming portability and issue a voucher within two -weeks unless: • The voucher has expired. If this happens, the CDC will refer the family back to the initial PHA • The family has not contacted the CDC • The CDC must conduct an eligibility determination for an applicant family to determine the family's income eligibility • The documents provided by the initial PHA are not in order • The family fails to comply with the receiving PHA's procedures - for example, refuses to complete disclosure forms or certifications • The CDC may not delay processing the incoming portability by requiring: • The family to attend a briefing not scheduled for three or more weeks • A background check or income reexamination that will take more than two weeks Although the CDC may not delay processing and issuance of the voucher more than two weeks, it may take action against a family, including termination of the family's participation in the program, based on the results of a background check or income reexamination, as well as for any other program violations. The CDC may absorb incoming vouchers, if the initial PHA absorbs an equal number of the CDC's incoming vouchers, to further program goals, regulations, or rules. When the CDC does not absorb the incoming voucher, it will administer the initial PHA's voucher and the CDC's policies will prevail. For an admission to the program, a family must be income eligible in the area it initially receives assistance. The CDC will issue a "portability voucher" according to its own subsidy standards. The family may receive a smaller or larger voucher size, if the subsidy standards of the CDC differ from those of the initial PHA. INCOME AND TOTAL TENANT PAYMENT OF INCOMING PORTABLES 1982.353(d)] INCOME ELIGIBILITY: For admission to the program, a family must be income eligible in the area where the family initially leases a unit with assistance under the program. 12- 6 12 If a portable family is a participant in the initial PHA Section 8 tenant -based program, income eligibility is not redetermined when the family moves to the receiving PHA program under portability procedures. Except as provided in paragraph (d)(2) of this section, a portable family must be income eligible for admission to the voucher program in the area where the family leases a unit under portability procedures. As the receiving PHA, the CDC may conduct a reexamination interview, but only verify information when the documents are missing, are over 120 days old, or if the family circumstances have changed. The CDC will request all necessary third party verifications. In addition, the CDC must determine the income eligibility for the 50% of area median income limit for families who had not received assistance in their original jurisdiction. The CDC interview will not cause a delay in the issuance of a voucher. If the family's income calculates to a zero subsidy amount prior to lease -up, the CDC will refuse to enter into a contract on behalf of the family. A notice of action and opportunity for an informal hearing/review will be issued. REQUESTS FOR APPROVAL FOR THE TENANCY When the family submits a RFAT, the RFAT will be processed using the CDC's policies. If the family does not submit a RFAT, or does not execute a lease, the CDC will notify the initial PHA within ten days after the voucher expiration date. If the family leases successfully, the CDC will notify the initial PHA within 10 working days of the execution of the HAP contract and no later than 60 days after the initial voucher expiration date and the billing process will commence. If the CDC denies assistance to the family, it will notify the initial PHA within 10 days of the effective date of the termination, and if the family requests an informal hearing/review, within 10 working days of the hearing decision. The CDC will notify the family of its responsibility to contact the initial PHA, if the family wishes to move outside the CDC jurisdiction under continued portability. REGULAR PROGRAM FUNCTIONS The CDC will administer the family's assistance on behalf of the initial agency in accordance with its Plan and HUD regulations, including performing the following activities: • Annual reexaminations of family income, assets, and composition 12- 7 12 • Annual inspection of the unit • Interim examinations, as necessary • Family transfers from one unit to another, within the CDC jurisdiction The CDC will notify the initial PHA within 10 working days of the effective date of the following changes: • Change in billing amount • A decision to absorb the family • Termination of housing assistance payments TERMINATIONS The CDC will notify the initial PHA in writing of any termination of assistance within ten working days of the termination effective date. If an informal hearing/review is required and requested by the family, the CDC will conduct the hearing/review using the regular hearing/review procedures in this Plan. A copy of the hearing decision will be furnished to the initial PHA within ten working days. If a family owed money prior to porting, the initial PHA will be responsible for collecting amounts owed by the family for claims and for monitoring repayment. If the initial PHA notifies the CDC that the family is in arrears, or the family has refused to sign a payment agreement, either the initial or the receiving PHA will terminate assistance to the family, and either the initial or the receiving PHA will conduct an informal hearing, if requested. The initial PHA must forward to the CDC the documents listed on the HUD portability billing form. REQUIRED DOCUMENTS BILLING PROCEDURES As receiving PHA, the CDC will bill the initial PHA monthly for housing assistance payments, administrative fees, and special claims. The CDC will bill 100% of the housing assistance payment, 100% of special claims, and 80% of the administrative fee (at the initial PHA's rate) for each "portability" voucher leased on the first day of the month. If administering the portability voucher, the CDC must issue its initial billing notice to the initial PHA no later than 60 days following the original expiration date of the voucher and within 10 working days of the date it executes the HAP contract. 12- 8 12 The CDC must complete the HUD-52665 and 50058 form and return to the initial PHA by the initial billing deadline. The CDC will notify the initial PHA of changes in subsidy amounts, and will expect the initial PHA to notify the CDC of changes in its administrative fee. The CDC must send the initial PHA an updated HUD-50058 each year regardless of whether there is a change in the billing amount. The CDC will promptly notify the initial PHA in writing of late payments and must send a copy of the notification to the local Office of Public Housing. If the payments are late the following month, the CDC may petition HUD to transfer the units to the receiving PHA. 12- 9 12 12- 10 13 PROGRAM REVIEW AND PROGRAM INTEGRITY [24 CFR 792.101 to 792.204, 982.54] INTRODUCTION The United States Department of Housing and Urban Development (HUD) conservatively estimates that 600 million dollars are paid annually to program participants who falsify, provide, or omit material facts in order to gain more rental assistance than they are entitled to under the law. HUD further estimates that twelve percent (12%) of all HUD -assisted families are either totally ineligible, or are receiving benefits which exceed their legal entitlement. PUBLIC HOUSING AGENCY SECTION 8 FRAUD RECOVERIES 24 CFR Ch. VII (04-01/08 Edition) Part 792 -, Subpart A - General Provisions § 792.102 (b): This part applies only to those instances when a tenant or owner committed fraud, and the fraud recoveries are obtained through litigation brought by the PHA (including settlement of the lawsuit), a court -ordered restitution pursuant to a criminal proceeding, or an administrative repayment agreement with the family or owner as a result of a PHA administrative grievance procedure pursuant to or incorporating the requirements of, 5 982.555 of this title. STATE OF CALIFORNIA Due to the growing amount of Section 8 housing fraud that merits a separate grand theft section to "make it easier for authorities to track the extent and prevalence of housing fraud" the State of California passed Assembly Bill 2827 which now amends the California Penal Code, Title 13, Chapter 5, Larceny: Section 487: Grand theft is theft committed in any of the following cases: (i) any person who defrauds a housing program of a public housing authority of more than four hundred dollars ($400) is guilty of grand theft. 13- 1 13 AB 2827 will allow District Attorney's offices to track incidents of Section 8 Housing fraud in each county. This data will provide substantial evidence on the severity of this fraud, as there is no uniform tracking system within the state. The CDC is committed to assuring that the proper level of benefits is paid to all participating families, and that housing resources reach only income -eligible families. The CDC will take all steps necessary to prevent fraud, waste, and mismanagement, so that program resources are utilized judiciously. This chapter outlines the CDC's policies for the prevention, detection and investigation of program abuse and fraud. In addition, this chapter discusses quality control procedures taken to ensure the program is operated in conformance with the regulations, as well as industry standards. COMPLAINTS TO THE CDC The CDC will respond promptly to complaints from families, owners, employees, and members of the public. All complaints will be documented. The CDC may request complaints be submitted in writing. HQS complaints may be reported by telephone. The CDC hearing procedures are provided to families in the family handbook. The Family Handbook is presented to families at briefings, transfers, upon request, and frequently at recertifications. CATEGORIES OF COMPLAINTS Complaints from families: A family disagrees with an action or inaction of the CDC, or owner. The housing specialist will make every effort to resolve complaints from families. If the complaints are not resolved, they will be referred to the senior housing specialist. The senior housing specialist will make every effort to resolve the complaints. If the complaints are not resolved, they will be referred to the Housing Program Manager. Complaints from owners: An owner disagrees with a family, or CDC action or inaction. The housing specialist will make every effort to resolve owner complaints. If the owner complaints are not resolved, they will be referred to the senior housing specialist. The senior housing supervisor will make every effort to resolve the complaints. If the complaints are not resolved, they will be referred to the Housing Program Manager. Complaints from staff: A staff person reports an owner or family either violating or not complying with program rules. The complaint will be referred to the senior housing specialist. 13- 2 13 Complaints from the general public: Someone from the public complains about staff, participants, owners, or other matters. Complaints or referrals from persons in the community in regard to the CDC, a family, or an owner will be referred to the senior housing specialist. If the complaints are not resolved, they will be referred to the Housing Program Manager. Complaints from the press, politicians, supervisors or other high profile individuals: High profile complaints will be referred to the Housing Program Manager. CRITERIA FOR INVESTIGATION OF SUSPECTED PROGRAM ABUSE AND FRAUD The CDC expects participating families to comply with HUD requirements, provisions of the Housing Choice Voucher, and other program rules. CDC staff will make every effort (formally and informally) to orient and educate all families to avoid unintentional violations. However, the CDC has a responsibility to HUD, to the community, to the taxpayer, and to eligible families in need of housing assistance to monitor participants and owners for compliance and, when indicators of possible abuse come to the CDC's attention, to vigorously investigate such claims. The CDC will initiate an investigation of a participating family in the event of one or more of the following circumstances: Referrals, Complaints, or Tips: The CDC will follow up on written, telephoned, or in - person referrals from other agencies, companies or persons, which allege that a family is in non-compliance with the program, or otherwise violating family obligations or any other program rules. Such follow-up will be conducted providing the referral contains at least one item of information that is independently verifiable. A copy of the allegation will be retained in the family's file. Internal File Review: A follow-up is made when the CDC staff discovers (as a function of a certification or recertification, an interim determination, or a quality control review), information or facts which conflict with previous file data, the CDC's knowledge of the family, or is contrary to statements made by the family. Verification of Documentation: A follow-up is made if the CDC receives independent verification or documentation, which conflicts with representations in the family's file (such as public record information, credit bureau reports, or reports from other agencies). Routine Program Review Activities: The CDC may routinely conduct criminal history verification on program participants on a regular basis. If the investigation is beyond the scope of the housing specialist, a referral is given to the Senior Housing Specialist. 13- 3 13 PREVENTION OF PROGRAM ABUSE AND FRAUD The CDC management and staff will employ various methods and practices (listed below) to prevent program abuse, non-compliance, and willful violations of program rules by applicants and participating families. The CDC policy objective is to minimize family and owner non-compliance by providing clear and concise program education to eliminate violations that occur as a result of a misunderstanding of the program rules and requirements. Participant Orientation Session: All prospective program participants will attend a mandatory orientation session provided by CDC staff either prior to, or upon issuance, of a voucher. At the conclusion of all program orientation sessions, the family representative will be required to sign a confirmation that all rules and pertinent regulations were explained to them. Owner Orientation Session: Owners may attend informational workshops held periodically to orient owners on program rules and requirements. Participant Counseling: The CDC will routinely provide information to participants, upon request, to clarify any confusion regarding program rules and requirements. Review and Explanation of Forms: Staff will explain all required forms, upon request, and review the contents of all (re)certification documents prior to the participant signature to affirm that all information provided is true, complete, and correct. Use of Instructive Signs and Warnings: Information may be posted in the CDC common areas and interview areas to reinforce compliance with program rules and to warn about penalties for fraud and abuse. Participant Certification: All adult family representatives are required to complete and sign an eligibility declaration that discloses important eligibility information such as family members, income, assets, criminal history and other eligibility information. OTHER PROGRAM INTEGRITY ACTIVITIES All adults are required to: • sign an authorization for release of information • sign "An Important Points to Remember" listing of things they should know • Know that: Credit report and Department of Motor Vehicles (DMV) inquiries may be conducted A Family Handbook is given to all participant families The Family Handbook advises the family of the CDC policy of zero tolerance for property damage. 13- 4 13 DETECTION OF PROGRAM ABUSE AND FRAUD The CDC staff maintains a high level of awareness to indicators of possible abuse and fraud by assisted families. QUALITY CONTROL FILE REVIEWS Prior to initial certification, and at the completion of annual recertifications, the minimum number of files required by SEMAP will be reviewed. Such reviews shall include, but are not limited to: • Assurance that verification of all income and deductions is present • Changes in reported social security numbers or dates of birth • Authenticity of file documents • Review of signatures for consistency with previously signed file documents • Forms are correctly dated and signed • Rent reasonableness documentation, if applicable • Unit passed HQS inspections prior to execution of HAP contract OBSERVATION The CDC staff, including HQS inspectors, will maintain high awareness of circumstances that may indicate program abuse or fraud, such as unauthorized persons residing in the household and unreported income. Observations will be documented in the family's file. Management and staff may review public record bulletins. STATE WAGE DATA RECORDS Inquiries to state wage and employment record keeping agencies as authorized under Public Law 100-628, the Stewart B. McKinley Homeless Assistance Amendments Act of 1988, may be made on a case -by -case basis, in order to detect unreported wages or unemployment compensation benefits. CREDIT BUREAU INQUIRIES Credit bureau inquiries may be made (with proper authorization by the participant) in the following circumstances: • At the time of final eligibility determination • Upon transfer from one unit to another 13- 5 13 • When a participant's expenditures exceed his/her reported income, and no plausible explanation is given as to how the participant is meeting his/her expenses • Upon allegations of unreported income, or the family living above its apparent means • Upon an inspection that indicates the family's unexplained acquisition of expensive items such as, furniture, electronics, vehicles, or boats ALLEGATIONS OF PROGRAM ABUSE AND FRAUD The CDC staff will encourage all participating families to report suspected abuse to the Program Manager. All such referrals, as well as referrals from community members and other agencies, will be thoroughly investigated, documented, and placed in the participant's file. All allegations, complaints and tips will be carefully evaluated in order to determine if they warrant a follow-up. Program Review will not follow up on vague or non-specific allegations. It will only review allegations that contain one or more independently verifiable facts. FILE REVIEW An internal file review will be conducted to determine: • A program participant is involved and, if so, if the information reported has been previously disclosed by the family • The CDC will then determine the appropriate authority to follow-up (e.g., police or social services). Any file • Documentation of past behavior, as well as corroborating complaints, will be evaluated. CONCLUSION OF PRELIMINARY REVIEW If at the conclusion of the preliminary file review there is/are fact(s) contained in the allegation which conflict with file data, and the fact(s) are independently verifiable, the housing specialist will initiate an investigation to determine if the allegation is true or false. INVESTIGATION OF ALLEGATIONS OF PROGRAM ABUSE AND FRAUD When the CDC determines that an allegation or referral warrants a follow-up, either the staff person who is responsible for the file, or a person designated by the executive director to monitor program compliance, will conduct the investigation. The steps taken will depend upon the nature of the allegation and may include, but 13- 6 13 are not limited to, the items listed below. In all cases, the CDC will secure the written authorization from the program participant for the release of information. CREDIT BUREAU INQUIRIES In cases involving previously unreported income sources, a credit bureau inquiry may be made to determine if there is financial activity that conflicts with the reported income of the family. VERIFICATION OF CREDIT In cases where the financial activity conflicts with file data, a verification of credit form may be mailed to the creditor in order to determine the unreported income source. EMPLOYERS AND EX -EMPLOYERS Employers or ex -employers may be contacted to verify wages that may have not been previously disclosed or previously misreported. NEIGHBORS/WITNESSES Neighbors and/or other witnesses may be interviewed regarding facts pertaining to the CDC's review. OTHER AGENCIES Investigators, caseworkers or representatives of other benefit agencies may be contacted. PUBLIC RECORDS If relevant, the CDC will review public records. Examples of public records which may be checked are: real estate, marriage, divorce, uniform commercial code financing statements, voter registration, judgments, court or police records, state wage records, utility records, postal records, school records, or other types of records. INTERVIEWS WITH HEAD OF HOUSEHOLD OR FAMILY MEMBERS The CDC may discuss the allegation (or details thereof) with the head of household or family member by telephone, or by scheduling an appointment for the family to come to the CDC office. The CDC staff members will conduct interviews with a high standard of courtesy and professionalism. The CDC staff members will, under no circumstances, use inflammatory language, accusations, or any unprofessional conduct or language in the course of doing business. If possible, more than one staff person will attend the interviews. OVERPAYMENTS TO OWNERS When the landlord has been overpaid as a result of fraud, misrepresentation or violation of the HAP contract, the CDC may terminate the HAP contract, and arrange 13- 7 13 for restitution to the CDC and/or family, as appropriate. In addition, depending on the seriousness of the offense, the landlord may be debarred from future program participation for a limited or an unlimited period of time. The CDC will attempt to recover overpayments resulting from landlord fraud or abuse. Payments due from the owner may be debited in order to repay the CDC or the tenant, as applicable. A more thorough discussion of owner debts is found in Chapter 15. In instances where it is found the family rented from a relative without the required CDC permission, or if the family was approved to rent from a relative based on a misrepresentation of material facts, an overpayment will be collected from both the owner and the participant - each party responsible for repayment of 50% of the HAPs paid. DOCUMENT AND/OR EVIDENCE HANDLING Documents and other evidence obtained by the CDC during the course of an investigation will be considered "work products" and will be kept in the participant's file. The participant's file shall be kept in a secure location. The cases under review will not be discussed among CDC staff members, unless they are involved in the process, or have information that may assist in the investigation. CONCLUSION OF THE CDC'S INVESTIGATIVE REVIEW At the conclusion of the investigative review, the reviewer will place the findings in the participant's file. The findings in the participant's file will narrate if a violation has or has not occurred, or if the facts are inconclusive. EVALUATION OF THE FINDINGS When it is determined that a program violation has occurred, the CDC will review the facts to determine: • The type of violation (procedural, non-compliance, fraud) • Whether the violation was intentional or unintentional • The amount of money (if any) owed by the family • The family's eligibility for continued assistance PROCEDURES FOR DOCUMENTED VIOLATIONS When a program violation has been documented, the CDC will propose the most appropriate remedy based upon the type and severity of the violation. PROCEDURES FOR DOCUMENTED DOMESTIC VIOLENCE VAWA (VIOLENCE AGAINST WOMEN ACT) prohibits the eviction of, and removal of assistance from, certain persons living in public or Section 8-assisted housing if the asserted ground for such action is an instance of domestic violence, dating violence, 13- 8 13 sexual assault, or stalking, as those terms are defined in Section 3 of the United States Housing Act of 1937 as amended by VAWA (42 U.S.C. 13925). "Upon determination of each individual case, and as needed, the CDC Section 8 Rental Assistance Division (CDC) will make certain that a referral is made to the San Diego County Mental Health Services, Child Protective Services, Adult Protective Services agencies, and any other service providers to ensure the family's safety. The CDC will cooperate with the social services agencies to make sure that the family is able to maintain their housing assistance." VERIFICATION OF A VICTIM OF DOMESTIC VIOLENCE, DATING VIOLENCE, OR STALKING The Violence Against Women Reauthorization Act of 2005 (VAWA) provides that "innocent" family members cannot be denied admission or terminated from the program for criminal activity, lease violations, or other good cause if the violations were as a direct result of a family member being the victim of domestic violence, dating violence, or stalking, unless the housing agency can demonstrate an actual and imminent threat to other tenants or those employed at or providing service to the property. VAWA gives PHAs the authority to terminate assistance to any individual who is a participant or lawful occupant who engages in criminal acts of physical violence against family members or others without evicting, removing, terminating assistance or otherwise penalizing the victim of such violence who is also a participant or lawful occupant. The PHA will, upon appropriate verification, terminate or deny the offender's program eligibility while allowing the victim to continue to be eligible for assistance. - The victim must agree in writing to exclude the offender from the assisted unit and certify that the perpetrator will not be permitted to visit or to stay as a guest in the assisted unit To verify the party is a victim in one of the above categories, the CDC must receive a completed certification form and third party documentation to support the certification. The certification and documentation must be received by the CDC within 14 calendar days of receipt of the CDC's request. The following supporting documentation is acceptable as long as it includes the period of time the violent act(s) occurred and if the act(s) were directly related to the violations: o Police reports or court records documenting the domestic violence, dating violence, or stalking o Statement from a professional with expertise in working with victims of domestic violence who was working with the program participant o A certification from the victim by itself is not sufficient documentation but must accompany one of the above sources of documentation. 13- 9 13 The deadline for return of documentation of victim status will be 14 days from the date the request is received by the family. All information provided to the CDC regarding domestic violence, dating violence, or stalking, including the fact that an individual is a victim of such violence or stalking, must be retained in confidence and may neither be entered into any shared database nor provided to any related entity, except to the extent that the disclosure is: • requested or consented to by the individual in writing, required for use in an eviction proceeding, or is otherwise required by applicable law. To verify that the acts pose an actual and imminent threat to other tenants or those employed at or providing service to the property, the CDC would collect any one of the following: • A statement under penalty of perjury • A restraining order • An arrest record PROCEDURAL NON-COMPLIANCE This category applies to a family "failure" to observe a procedure or requirement of the CDC, but the family did not misrepresent a material fact, and there is no retroactive assistance payments owed by the family. EXAMPLES OF PROCEDURAL NON-COMPLIANCE VIOLATIONS ARE: • Failure to appear at a pre -scheduled appointment • Failure to return verifications in the time period specified by the CDC WARNING NOTICE TO THE FAMILY: In such cases a notice may be sent to the family that contains the following: • A description of the non-compliance and the procedure, policy or obligations violated • The date by which the violation must be corrected • The action that will be taken by the CDC, if the violations are not corrected by the deadline • The consequences of repeated (similar) violations. OVERPAID ASSISTANCE When the family owes money to the CDC for failure to report changes in income, assets, family composition, or if the family has an unauthorized person in the 13- 10 13 household, the CDC will issue a notification of overpayment of assistance. This notice will contain the following: • A description of the violation and the date(s) • Any amounts owed to the CDC • A ten-day response period • The right to disagree and to request an informal hearing with instructions for the request of such hearing PARTICIPANT FAILS TO COMPLY WITH THE CDC NOTICE: If the participant fails to comply with the CDC notice, and a family obligation has been violated, the CDC will initiate termination of assistance. PARTICIPANT COMPLIES WITH THE CDC NOTICE: When a participant complies with the CDC notice, the staff person responsible may meet with him/her, or telephone, to discuss and explain the family obligation or program rule that was violated. The staff person will narrate in the tenant record, and may ask the family to write a statement of understanding of the requirement that was violated for the family's file. INTENTIONAL MISREPRESENTATIONS When a participant falsifies, misstates, omits or otherwise misrepresents a material fact, the CDC will evaluate whether or not: • The participant had knowledge that his/her actions were wrong, and • The participant willfully violated the family obligations or the law. KNOWLEDGE THAT THE ACTION OR INACTION WAS WRONG: The facts will be evaluated by determining if the participant was made aware of program requirements and prohibitions. The participant's signature on various certifications, briefing certifications, personal declaration, and other documents that reflect the participant's knowledge of program rules, are adequate to establish knowledge of wrongdoing. THE PARTICIPANT WILLFULLY VIOLATED THE LAW: Any of the following circumstances will be considered adequate to demonstrate willful intent: • An admission by the participant of the misrepresentation. • The act was done repeatedly. 13 • A false name or social security number was used. • There were admissions to others of the illegal action or omission. • The participant omitted material facts, which were known to him/her (e.g., employment of self or other household member). • The participant falsified, forged or altered documents. • The participant uttered and certified to statements at an interim or annual (re)determination which were later independently verified to be false. DISPOSITION OF CASES INVOLVING MISREPRESENTATIONS In all cases of misrepresentations involving efforts to recover monies owed, the CDC may pursue, depending upon its evaluation of the criteria stated above, one or more of the following actions: CRIMINAL PROSECUTION: If the CDC has established criminal intent, and the case meets the criteria for prosecution, the CDC will: Refer the case to the local state or district attorney, notify HUD, and terminate rental assistance. ADMINISTRATIVE REMEDIES: The CDC will: Terminate assistance and demand payment/restitution in full. THE CASE CONFERENCE FOR SERIOUS VIOLATIONS AND MISREPRESENTATIONS When the CDC has established that material misrepresentation(s) have occurred, a case conference may be scheduled with the family representative and the CDC staff person who is most knowledgeable about the circumstances of the case. This conference may be held if there is some indication of extenuating circumstances, or upon family request. This conference may take place prior to any proposed action by the CDC. The purpose of such conference is to review the information and evidence obtained by the CDC with the participant, and to provide the participant an opportunity to explain any document findings which conflict with representations in the family's file. The CDC may take any documents or mitigating circumstances presented by the family into consideration. A secondary purpose of the participant conference is to assist the CDC in determining the course of action most appropriate for the case. Prior to the final determination of the proposed action, the CDC may consider: • The duration of the violation and number of false statements 13- 12 13 • An admission by the participant of the misrepresentations • Repetition of the misrepresentation • The family's ability to understand the rules • The family's willingness to cooperate, and to accept responsibility for its actions • The amount of money involved • The family's past history • Whether or not criminal intent has been established • The number of false statements APPLICABILITY (24 CFR 792.102) This part applies to a PHA acting as a contract administrator under an annual contributions contract with HUD in any Section 8 housing assistance payments program. To be eligible to retain Section 8 tenant or owner fraud recoveries, the CDC must be the principal party initiating or sustaining an action to recover amounts from families. This part applies only to those instances when a tenant or owner committed fraud, and the fraud recoveries are obtained through litigation brought by the CDC (including settlement of the lawsuit), a court -ordered restitution pursuant to a criminal proceeding, or an administrative repayment agreement with the family or owner as a result of a CDC administrative grievance procedure pursuant to, or incorporating the requirements of, Sec. 982.555 of this title. This part does not apply to cases of owner fraud in CDC -owned or controlled units, or where incorrect payments were made or benefits received because of calculation errors instead of willful fraudulent activities. This part applies to all tenant and owner fraud recoveries resulting from litigation brought by the CDC (including settlement of the lawsuit), or a court -ordered restitution pursuant to a criminal proceeding obtained on or after October 8, 1986, and to all tenant and owner fraud recoveries obtained through administrative repayment agreements signed on or after October 28, 1992. RECORDKEEPING AND REPORTING To permit HUD to audit amounts retained under this part, a PHA must maintain all records required by HUD, including: (a) Amounts recovered on any judgment or repayment agreement; (b) The nature of the judgment or repayment agreement; and 13- 13 13 (c) The amount of the legal fees and expenses incurred in obtaining the judgment or repayment agreement and recovery NOTIFICATION TO PARTICIPANT OF PROPOSED ACTION The CDC will notify the family of the proposed action no later than 30 days after the case conference, if one is held. 13- 14 14 TERMINATIONS, DENIALS, HEARINGS AND REVIEWS [24 CFR 982.552, 982.553, 982.311, 982.314] INTRODUCTION The Section 8 Program operates through a relationship between the public housing agency, the owner and the participant. These parties enter into agreements with each other in the form of the lease between the owner and the participant, the contract between the owner and the public housing agency, and the Housing Choice Voucher between the public housing agency and the participant. Each party to these agreements is obligated to comply with certain requirements of the program and the agreements may be terminated under program guidelines. This chapter describes the process for termination or denial of assistance, as well as the process for termination of the HAP Contract and the policies and procedures for such terminations. The CDC may deny or terminate assistance for a family because of the family's action or failure to act. The CDC will provide families with a written description of the family obligations under the program, the grounds under which the CDC can deny or terminate assistance, and the CDC's informal hearing or informal review procedures. For more information on family eligibility, please refer to Chapter Three. The informal hearing or informal review requirements defined in HUD regulations apply to participant or applicant families who disagree with an action, decision, or inaction of the CDC. This chapter describes the policies, procedures and standards used when families disagree with a CDC decision. It is the policy of the CDC to ensure that all families have the benefit of all protections due to them under HUD rules and regulations governing the Section 8 program. DENIAL OR TERMINATION OF PROGRAM PARTICIPATION EXTENUATING CIRCUMSTANCES Extenuating circumstances may be considered by the Program Manager if the responsible family member has no prior history of program violations and/or complaints, the violations did not involve violent or drug related criminal activities, and only if s/he provides compelling medical documentation indicating s/he was incapacitated during the time the program violations occurred to such a degree s/he was clearly incapable of understanding program requirements. Furthermore, the means of violation detection and subsequent family truthfulness and cooperation will be taken into consideration. 14- 1 14 In the case of lease violations, the family must make full restitution to the landlord as demonstrated by a landlord's full release and proof of payment. In addition, if the violations resulted in overpaid housing assistance payments, the family may be allowed to remain on the program if the family enters into a repayment agreement and the payments are kept current. To be affordable, the monthly payment for the repayment agreement will be an amount to be determined by the CDC, but the monthly amount of the repayments will not exceed 15% of the family's total gross monthly income, including excluded income, such as food stamps. The following criteria will be used to decide if serious or repeated violations of the lease will result in termination of assistance: • If the owner terminates tenancy through court action for serious or repeated violations of the lease. • If it is found the family violated the lease as determined by the following evidence: Court judgment or settlement between the family and the owner in which the family agrees to vacate the unit and/or pay a settlement amount, or; Police reports, neighborhood complaints, pictures, a CDC inspection, or other verified third party information that confirms serious or repeated lease violations, or; ■ Nonpayment of rent is always considered a serious violation of the lease. The participant cannot withhold rent under the program for un-inhabitability without permission of the CDC, as the CDC must be notified along with the owner of conditions needing repair in the unit, the owner must be given an opportunity to remedy the problems, and the CDC must be given the opportunity to conduct a special inspection to determine if the unit fails HQS. If the participant fails to pay rent without permission of the CDC, the participant's non-payment of rent will be considered a serious lease violation. The family may not move during the term of the lease without the owner's and the CDC's permission. The participant cannot move during the term of the lease, even if the participant claims uninhabitability, as the CDC must be notified along with the owner of the problems in the unit, the owner must be given an opportunity to remedy the problems, and the CDC must be given the opportunity to conduct a special inspection to determine if the unit fails HQS. If the participant abandons the unit during the term of the lease without permission of the CDC, the participant's action will be considered a serious lease violation. 14- 2 14 NOTIFICATION OF EVICTION If the family requests assistance to move, but has not notified the CDC of an eviction within 10 days of receiving the notice of lease termination, the move will be denied. AUTHORITY TO DENY ADMISSION OR TERMINATE ASSISTANCE (24 CFR 982.552) The CDC must deny or terminate assistance if any family member fails to meet the eligibility requirements concerning individuals enrolled at an institution of higher education as specified in 24 CFR 5.612. Authority to deny admission or terminate assistance--(1) Grounds for denial or termination of assistance. The CDC may at any time deny program assistance for an applicant, or terminate program assistance for a participant, for any of the following grounds: (i) If the family violates any family obligations under the program (see Sec. 982.551). See Sec. 982.553 concerning denial or termination of assistance for crime by family members. (ii) If any member of the family has been evicted from federally assisted housing in the last five years; (iii) If a CDC has ever terminated assistance under the program for any member of the family. (iv) If any member of the family has committed fraud, bribery, or any other corrupt or criminal act in connection with any Federal housing program (see also Sec. 982.553(a)(1)); (v) If the family currently owes rent or other amounts to the CDC or to another CDC in connection with Section 8 or public housing assistance under the 1937 Act. (vi) If the family has not reimbursed any CDC for amounts paid to an owner under a HAP contract for rent, damages to the unit, or other amounts owed by the family under the lease. (vii) If the family breaches an agreement with the CDC to pay amounts owed to a CDC, or amounts paid to an owner by a CDC. (The CDC, at its discretion, may offer a family the opportunity to enter an agreement to pay amounts owed to a CDC or amounts paid to an owner by a CDC. The CDC may prescribe the terms of the agreement.) (viii) If a family participating in the FSS program fails to comply, without good cause, with the family's FSS contract of participation. 14- 3 14 (ix) If the family has engaged in or threatened abusive or violent behavior toward CDC personnel. (x) If a welfare -to -work (WTW) family fails, willfully and persistently, to fulfill its obligations under the welfare -to -work voucher program. (xi) If the family has been engaged in criminal activity or alcohol abuse as described in Sec. 982.553. ZERO ($0) ASSISTANCE TENANCIES [24 CFR 982.455 (a)] The CDC has no liability for unpaid rent or damages, and the family may remain in the unit at zero assistance for up to six months after the last HAP payment. If the family is still in the unit after six months, program participation will end. If, within the six- month timeframe, an owner rent increase or a decrease in the total tenant payment causes the family to be eligible for assistance, the CDC will resume assistance payments for the family upon documentation of the change. If the family moves from the unit during the six-month period, and the family is eligible to move, the family will be issued a voucher. If the family becomes eligible for assistance during the term of the voucher, the family will be leased into a new unit. However, the family cannot be leased in a new unit, if the family is in zero HAP. Also, a family in zero HAP is ineligible for voucher extensions. A family that requests portability during the six-month period may be issued a voucher to port, but the receiving CDC will be advised that the family is in zero HAP. OPTION NOT TO TERMINATE FOR MISREPRESENTATON [24 CFR 982.551, 982.552(c)] If the family has misrepresented information so that an overpayment of assistance was disbursed, the CDC may choose to allow the family to continue participation, if the family executes a repayment agreement for overpaid assistance, and makes payments in accordance with the agreement. The determination to not terminate family participation depends on the seriousness of the misrepresentation and the family's history of complying with the program and the lease. MISREPRESENTATION IN COLLUSION WITH OWNER [24 CFR 982.551, 982.552 (c)] If the family intentionally, willingly, and knowingly commits fraud, or is involved in an illegal scheme with the owner, the CDC will usually deny or terminate assistance. The CDC may consider extenuating circumstances in making its determination. 14- 4 14 MISSED APPOINTMENTS AND DEADLINES [24 CFR 982.551, 982.552 (c)] It is a family obligation to supply information, documentation, and certification as needed for the CDC to fulfill its responsibilities. The CDC schedules appointments and sets deadlines in order to obtain the required information. The family obligations require that the families allow the CDC to inspect the unit with a reasonable advance notice. The CDC will issue a notice to deny or terminate assistance, when an applicant or participant fails to keep an appointment, supply information by the deadline, or fails to allow a scheduled CDC inspection. The family will be informed of the requirement to keep appointments. Appointments or deadlines may be required in the following circumstances: • Eligibility for admissions • Verification procedures • Voucher issuance and briefings • Housing quality standards and inspections • Recertifications • Appeals • Conferences The following documented extenuating circumstances may be considered for missed appointments or deadlines: • Medical emergency • Incarceration • Family emergency PROCEDURE WHEN APPOINTMENTS ARE MISSED OR INFORMATION NOT PROVIDED In most instances, the family will be given two opportunities before a notice of termination of assistance or denial of participation is issued. The family must call to reschedule a missed appointment, and if not, a termination of assistance or denial of participation may be issued. The CDC may rescind the notice, if the family then calls to reschedule the appointment. The CDC will not reschedule a missed appointment more than once, unless it determines extenuating circumstances. 14- 5 14 The CDC may rescind a notice, if the family offers to correct a breach in program requirements within the 10-day informal hearing/review request deadline. The notice may not be rescinded, if the family has a history of non-compliance. PROCEDURES FOR NON -CITIZENS [24 CFR 5.514, 5.516, 5.518] DENIAL OR TERMINATION DUE TO INELIGIBLE IMMIGRANT STATUS Applicant or participant families with neither U.S. citizens nor eligible immigrants are not eligible for assistance and must have their assistance terminated. The CDC must offer the family an opportunity for a hearing. GENERAL Assistance to a family may not be delayed, denied, reduced or terminated because of the immigration status of a family member except as provided in this section. Assistance may not be terminated while verification of the participant family's eligible immigration status is pending. RESTRICTIONS ON DELAY, DENIAL, REDUCTION OR TERMINATION OF ASSISTANCE Restrictions on reduction, denial or termination of assistance for applicants and tenants. Assistance to an applicant or tenant shall not be delayed, denied, reduced, or terminated, on the basis of ineligible immigration status of a family member if: (i) The primary and secondary verification of any immigration documents that were timely submitted has not been completed; (ii) The family member for whom required evidence has not been submitted has moved from the assisted dwelling unit; (iii) The family member who is determined not to be in an eligible immigration status following INS verification has moved from the assisted dwelling unit; (iv) The INS appeals process under Sec. 5.514(e) has not been concluded; (v) Assistance is prorated in accordance with Sec. 5.520; or (vi) Assistance for a mixed family is continued in accordance with Sec. 5.516 and 5.518; or (vii) Deferral of termination of assistance is granted in accordance with Sec. 5.516 and 5.518. 14- 6 14 FALSE OR INCOMPLETE INFORMATION When the CDC has clear, concrete, or substantial documentation, such as a permanent resident card or information from another agency, that contradicts the declaration of citizenship made by an applicant or participant, an investigation will be conducted, and the individual will be given an opportunity to present relevant information. If the individual is unable to verify his/her citizenship, the CDC will offer an opportunity to provide a new declaration as an eligible immigrant or an opportunity to elect not to contend his/her status. The CDC will then verify the eligible status, deny, terminate, or prorate as applicable. The CDC may deny or terminate the family's assistance, if it is apparent that the applicant or participant deliberately provided incomplete, false, or incorrect information. PROCEDURE FOR DENIAL OR TERMINATION If the family (or any member) claimed eligible immigrant status, and the INS primary and secondary verifications failed to document the status, the family may make an appeal to the INS and request a hearing with the CDC, either after the INS appeal or in lieu of the appeal with the INS. After the CDC has made a determination of ineligibility, the family will be notified of the determination, the reasons and informed of the option for prorated assistance (if applicable). The CDC may deny or terminate the family's assistance, if it is apparent that the applicant or participant deliberately provided incomplete, false, or incorrect information. NOTICE OF TERMINATION OF ASSISTANCE Upon CDC termination of assistance to the family, the CDC must give the family a written notice that states: • The reason(s) for the proposed termination • The effective date of the proposed termination, • The family's right to request an informal hearing to be held before termination of assistance • The deadline for the family's informal hearing request If the CDC proposes to terminate assistance for criminal activity based on a criminal record, the CDC will allow the family to make an appointment to review a copy of the criminal record. The CDC will provide written notice of the contract termination to the owner to coincide with the termination of assistance. The notice to the owner will not include any details regarding the reason for termination of assistance. 14- 7 14 NEW ADMISSIONS Based on federal law, new admissions of medical marijuana users are prohibited into the PH and HCV programs. The Quality Housing and Work Responsibility Act (QHWRA) of 1998 (42 U.S.C. 513661) requires that PHAs administering the Department's rental assistance programs based on the illegal use of controlled substances, including state legalized medical marijuana. State laws that legalize medical marijuana directly conflict with the admission requirements set forth in QHWRA and are thus subject to federal preemption. CDC will deny admission for any families under this penalty. CURRENT RESIDENTS For existing residents, QHWRA requires PHAs to establish occupancy standards and lease provisions that will allow the PHA to terminate assistance for use of a controlled substance. CDC will deny assistance to or terminate individual medical marijuana users. The family may choose to remove the member who uses medical marijuana rather than deny or terminate the entire household, for both applicant and existing residents when appropriate. The FDA has approved drugs for medical uses which are comprised of marijuana synthetics, such as Marinol and Cesamet. These drugs are not medical marijuana and are legal under federal laws. These products have been through the FDA's rigorous approval process and have been determined to be safe and effective for their indications. They are therefore allowed in the public housing and voucher programs. REASONABLE ACCOMMODATION [24 CFR 982.552, 982.553] If denial of admission, or termination of assistance, is based on behavior due to a disability, the CDC will delay the denial or termination in order to determine if the problem could be corrected by reasonable accommodation. For example, a visually impaired person fails to return information because the request for information was in writing. The CDC then makes a reasonable accommodation, upon request, to call the person to tell him/her of the information that is needed. However, a reasonable accommodation will not be granted, if to do so would alter an important component of the program, such as the prohibition on criminal acts, and the requirement to comply with the lease and the program's family obligations. Nor will a reasonable accommodation be granted if the disabled person's action negatively impacted others. FORMAT FOR DENIAL/TERMINATION NOTICES Applicants and participants will be notified of denial or termination of assistance in writing on CDC approved notices and advised they will have 10 days from the date of the notice to request an informal review or hearing. The notices will contain a full explanation of the reason(s) for termination/denial, including a full description of crimes or actions of the family, and the sections of the Code of Federal Regulations that provide authority for the denial or termination of assistance. A request form will be provided for applicants or participants to request informal reviews or hearings. 14- 8 14 REQUIRED EVIDENCE Preponderance of evidence is defined as evidence which is of greater weight or more convincing than the evidence which is offered in opposition to it; that is, evidence which as a whole shows that the fact sought to be proved is more probable than not. The intent is not to prove criminal liability, but to establish that the act(s) occurred. Preponderance of evidence may not be determined by the number of witnesses, but by the greater weight of all evidence. Credible evidence may be obtained from police and/or court records. Testimony from neighbors, when combined with other factual evidence can be considered credible evidence. Other credible evidence includes documentation of drug raids or arrest warrants. If the CDC determines, based on a preponderance of the evidence, that a household member, or guest, has engaged in prohibited criminal activity, regardless of whether the household member or guest has been arrested or convicted for the activity, the CDC will terminate assistance. The CDC will pursue fact-finding efforts as needed to obtain credible evidence. TERMINATION OF CONTRACT OR LEASE [24 CFR 982.311, 982.314] The term of the HAP contract between the CDC and the owner is the same as the term of the lease. The CDC or the owner may terminate the contract, or the contract terminates upon owner or tenant termination of the lease. The CDC will terminate payments, on behalf of the family to the owner, upon contract termination. The owner must reimburse the CDC for any subsidies paid after the contract termination. If the family continues to occupy the unit after the contract is terminated, the family is responsible for the total amount of rent due to the owner. After contract termination, if the family meets the criteria for a move with continued assistance, the family may lease in another unit. TERMINATION BY THE FAMILY: MOVES [24 CFR 982.314(c)(2)] Family termination of the lease must be in accordance with the terms of the lease. The family may not be eligible to transfer its assistance to another unit, depending on the circumstances of the termination of the lease. 14- 9 14 TERMINATION OF TENANCY BY THE OWNER: EVICTIONS [24 CFR 982.310, 982.455] The owner is required by law, and under the lease, to provide a proper termination notice. During the term of the lease, the owner may not terminate the tenancy, except for the grounds stated in the HUD regulations. During the initial term of the lease the owner may terminate the lease for: Serious or repeated violations of the lease, including but not limited to, failure to pay rent or other amounts due under the lease, or repeated violation of the terms and conditions of the lease Violations of federal, state or local law that imposes obligations on the tenant in connection with the occupancy or use of the premises, or criminal activity by the tenant, any member of the household, a guest or another person under the tenant's control that threatens the health, safety or right to peaceful enjoyment of the premises by other residents or persons residing in the immediate vicinity of the premises or any drug -related criminal activity on or near the premises Other good cause: During the initial term of the lease, the owner may not terminate the tenancy for "other good cause" unless the owner is terminating the tenancy because of something the family did or failed to do (see CFR 982.310). It is understood by the CDC and participating owners that an incident or incidents of actual or threatened domestic violence, dating violence, or stalking will not be construed as a serious or repeated violation of the lease by the victim or threatened victim of that violence and will not be good cause for terminating tenancy or occupancy rights of the victim of such violence. The CDC will not be involved in termination of the lease, nor will advise the landlord or the tenant regarding the legal process. If the family is eligible to transfer, the CDC staff will immediately issue transfer papers to the participant and act to expedite the transfer process. EVIDENCE OF CRIMINAL ACTIVITY The Violence Against Women and Justice Department Reauthorization Act protects qualified tenants and family members of tenants who are victims of domestic violence, dating violence, or stalking from being evicted or terminated from housing assistance based on acts of such violence against them (refer to Chapter 13, page 13- 9). The owner may terminate family tenancy and evict by judicial action for criminal activity by a covered person, if the owner determines s/he has engaged in criminal activity: 14- 10 14 Regardless of arrest or conviction Without satisfying the standard proof used for criminal conviction RELEASE OF SEX OFFENDER REGISTRATION INFORMATION OR CRIMINAL HISTORY INFORMATION TO THE OWNER The owner may request that the CDC obtain and review criminal or sex offender registration records for grounds to deny a tenant application, or evict a tenant. The CDC will charge the owner a fee based on the costs incurred by the CDC, including the costs charged by the law enforcement agency, the CDC staff time and administrative costs. The owner may not charge the tenant for this fee. The CDC must not release any criminal information or sex offender information to the owner, but a housing supervisor will review the information, and if no information relevant to application or eviction is found, will notify the owner. If information relevant to the application or eviction is found, the housing supervisor will present his/her findings in writing to the program manager who will authorize the findings and sign the letter issued to the owner. The letter will not specify the criminal or sex offender history, but will merely state that there may be cause for denial or eviction of the tenant. If the owner sends documentation that supports the need for specific information for an eviction, the program manager must approve the release of any information in accordance with the regulations. [24 CFR 5.903, 24 CFR 5.905] TERMINATION OF TENANCY DECISION The owner can decide whether to take an action against a tenant, if the law and the regulations permit. The circumstances to be considered by the owner include: • The seriousness of the offense • The effect on the community • The extent of participation by household members • The demand for assisted housing by families who will adhere to responsibilities • The extent the tenant has taken personal responsibility • The extent the tenant has taken all reasonable steps to mitigate the offending action(s) • The effect on the integrity of the program 14- 11 14 EXCLUSION OF CULPABLE HOUSEHOLD MEMBER The owner may require the tenant to remove a household member, in order to continue to reside in the assisted unit. CONSIDERATION OF REHABILITATION When determining whether to terminate the tenancy for illegal drug use, or alcohol abuse, the owner may consider whether the member: • Is no longer engaged in the offending activities • Has successfully completed a supervised drug or alcohol rehabilitation program • Has otherwise been rehabilitated. The owner may require the tenant to submit evidence of rehabilitation. Actions of termination must be consistent with fair housing and equal opportunity laws as stated in 24 CFR 5.105. The owner must provide the tenant a written notice specifying the grounds for termination of tenancy, at or before the commencement of the eviction action. The notice may be included in, or may be combined with, any owner eviction notice to the tenant. The owner eviction notice means a notice to vacate, or a complaint, or other initial pleading used under state or local law to commence an eviction action. The owner should specify lease violations and cite some, or all of the ways the tenant has violated the lease, as documentation for the CDC's decision regarding termination of assistance. Housing assistance payments are paid to the owner under the terms of the HAP contract. If the owner has begun eviction and the family continues to reside in the unit, if the family is eligible for assistance, the CDC must continue to make housing assistance payments to the owner until the tenant has moved, the owner has obtained a court judgment, or otherwise evicted the tenant. By endorsing the monthly check from the CDC, the owner certifies that the tenant is still in the unit, the rent is reasonable, and s/he is in compliance with the contract. Rental assistance cannot be paid if the unit has an HQS violation that is the owner's responsibility. If the action is finalized in court, the owner will be asked to provide the CDC with the documentation, including notice of the lockout date. The CDC may issue a new voucher to the family and process its transfer, if the family is found to have been in compliance with the lease, and all program requirements. 14- 12 14 TERMINATION OF THE CONTRACT BY THE CDC [24 CFR 982.404(a), 982.453, 982.454, 982.552(a)(3)] The HAP contract terminates when the lease terminates, the CDC terminates program assistance for the family, or when the owner has breached the HAP contract. The CDC may also terminate the contract if: o Funding is no longer available under the ACC o The contract will terminate automatically 180 days after the last housing o The CDC received notice that the assisted person is deceased. NOTICE OF TERMINATION In most instances, the CDC will terminate the contract the end of the month following the month the owner is issued a termination notice. However, the contract will terminate the end of the month the family vacates the unit and may terminate the end of the month that serious, life -threatening conditions are noted. When the CDC terminates a contract, transfer papers will be forwarded to an eligible family. INFORMAL MEETINGS AND REVIEWS PREFERENCE DENIALS When the CDC denies a preference to an applicant, the family will be notified in writing of the specific reason for the denial and offered the opportunity for a meeting with the CDC staff to discuss the reasons for the denial and to dispute the CDC's decision. The person who conducts the meeting will be: • The Program Manager or designee • An employee of the CDC, who is at or above the level of Housing Specialist, but not the employee who made the decision INFORMAL REVIEW PROCEDURES [24 CFR 982.54(d)(12)(13), 982.554] Informal reviews, with one exception, are provided for applicants who are denied assistance before the effective date of the HAP contract. Informal hearings are provided to applicants denied for citizenship or eligible immigrant status. 14- 13 14 Upon CDC determination of applicant ineligibility, the applicant must be notified in writing. The notice must contain: • A brief statement of the reason(s) for the CDC decision • The procedure for requesting a review, if the applicant does not agree with the decision • The deadline to request a review WHEN INFORMAL REVIEW IS NOT REQUIRED The CDC is not required to provide the applicant an opportunity for an informal review for any of the following: (1) Discretionary administrative determinations by the CDC. (2) General policy issues or class grievances. (3) A determination of the family unit size under the CDC subsidy standards. (4) A CDC determination not to approve an extension or suspension of a voucher term. (5) A CDC determination not to grant approval of the tenancy. (6) A CDC determination that a unit selected by the applicant is not in compliance with HQS. (7) A CDC determination that the unit is not in accordance with HQS because of the family size or composition. When denying admission for criminal activity as shown by a criminal record, the CDC will allow the family to review the criminal record at the CDC office upon family request. The CDC must provide applicants the opportunity for an informal review when they are denied for the following reasons: • Qualification for preference • Listing on the CDC's waiting list • Issuance of a voucher • Participation in the program 14- 14 14 • Assistance under the portability procedures Informal reviews for applicants are not required for established policies and procedures, and CDC determinations such as: • Discretionary administrative determinations by the CDC • General policy issues or class grievances • A determination of the family unit size under the CDC subsidy standards • Refusal to extend or suspend a voucher • Refusal to grant approval of the tenancy • Determination that unit is not in compliance with HQS • Determination that unit is not in accordance with HQS due to family size or composition NOTIFICATION OF REVIEW The CDC will ensure applicants receive all the rights afforded by laws and regulations. When the CDC receives a request for an informal review, the informal review shall be scheduled within 30 days of receipt. The informal review may be conducted by telephone, or in person. The applicants will be advised of the time and date of the informal review, and the right to submit oral or written objections to the CDC decision. PROCEDURE FOR INFORMAL REVIEW A written request for an informal review must be received at the CDC office by the close of the business day, no later than ten days from the date of the CDC's notification of denial of admission. The informal review will be scheduled within 30 days of the date the request is received. Those involved in the decision under review, or their subordinates, may not conduct the informal review. The review may be conducted by: • A staff person of Housing Specialist or above • An individual from outside the CDC 14- 15 14 The applicant will be given the option of presenting oral or written objections to the decision. The CDC and the family may present evidence and witnesses. An attorney or other representative may, at its own expense, accompany the family. The review may be conducted by mail and/or telephone if acceptable to both parties. A notice of the review findings will be provided in writing to the applicant within twenty days after the review. It shall include the decision of the review officer, and an explanation of the reasons for the decision. All requests for a review, supporting documentation and a copy of the final decision will be retained in the family's file. INFORMAL HEARINGS [24 CFR 982.555(a-f), 982.54(d)(13)] When hearing is required The CDC must give a participants family, and applicants (for citizenship or eligible immigration issues), an opportunity for an informal hearing to consider whether the following CDC decisions relating to the individual circumstances of a participant family are in accordance with the law, HUD regulations and CDC policies: (i) A determination of the family's annual or adjusted income, and the use of such income to compute the housing assistance payment. (ii) A determination of the appropriate utility allowance (if any) for tenant - paid utilities from the CDC utility allowance schedule. (ii) A determination of the family unit size under the CDC subsidy standards. (iv) A determination that a program family is residing in a unit with a larger number of bedrooms than appropriate for the family unit size under the CDC subsidy standards, or the CDC determination to deny the family's request for an exception from the standards. (v) A determination to terminate assistance for a participant family because of the family's action or failure to act (see Sec. 982.552). (vi) A determination to terminate assistance because the participant family has been absent from the assisted unit for longer than the maximum period permitted under CDC policy and HUD rules. The CDC will give the family prompt notice of such determinations, which will include: • The proposed action or decision of the CDC • The date the proposed action or decision will take place 14- 16 14 • The family right to an explanation of the CDC decision • The procedures to request a hearing, if the family disputes the action or decision • The deadline to request the hearing • Where the hearing request must be submitted When terminating assistance for criminal activity as shown by a criminal record, the CDC will allow the participant to come into the office to view the alleged offender copies of the relevant criminal record(s). In addition, the termination notice will provide specific information on the criminal history discovered. The CDC must provide participants the opportunity for an informal hearing for decisions related to any of the following: • Determination of the family's annual or adjusted income • The computation of the housing assistance payment • The utility allowance schedule used • Family unit size determination under CDC subsidy standards • Termination of assistance for any reason Informal hearings are not required for established policies and procedures and CDC determinations such as: • Discretionary administrative determinations by the CDC • General policy issues or class grievances • Establishment of the schedule of utility allowances for families on the program • Determination not to approve an extension or suspension of a voucher term • Determination not to approve a unit or lease • Determination not to grant an increase in Voucher size • Determination not to grant a reasonable accommodation • Determination not to approve additions to the household, including a live-in aide 14- 17 14 • Determination of owner violation of HQS (CDC must provide a hearing for termination of assistance for a family breach of HQS) • Determination that the unit is not in accordance with HQS because of the family size • Determination to exercise, or not exercise, any right or remedy against the owner under a HAP contract NOTIFICATION OF HEARING It is the CDC's objective to resolve disputes at the lowest level possible to avoid the most severe remedies. However, if this is not possible, the CDC will ensure that applicants and participants receive all of the protections and rights afforded by the law and the regulations. When the CDC receives a request for an informal hearing, a hearing will be scheduled within 30 days. The notification of hearing will contain: • The date and time of the hearing • The location of the hearing • The family's right to bring evidence, witnesses, legal or other representation at the family's expense • The family's right to view any documents or evidence in the possession of the CDC upon which the proposed action was based • A notice to the family stating the CDC requires copies of any documents or evidence the family will use at the hearing PROCEDURE FOR INFORMAL HEARING A written request for an informal hearing must be received at the CDC office by the close of the business day, no later than ten days from the date of the notification of denial or termination of assistance. The informal hearing will be scheduled within 30 days of the date the request is received. After a hearing date is scheduled, the family may request to reschedule only upon showing "good cause," defined as: an unavoidable conflict that seriously affects the health, safety or welfare of the family. Families may, during or before the hearing: • Present written or oral objections to the CDC's determination. 14- 18 14 • At least seven (7) days from the date of the Notice of Informal hearing, examine, and request copies at the family's expense *, any unprivileged documents in the file that are directly relevant, as determined by the CDC, to the issues to be considered at the hearing which form the basis for the CDC's action, and all documents submitted to the hearing officer. • Present any information or witnesses pertinent to the issue of the hearing. • Request that CDC staff be available to answer questions pertinent to the case. • Be represented by legal counsel, advocate, or other designated representative at his or her own expense. In addition to other rights contained in this chapter, the CDC has a right to: • Present evidence and any information pertinent to the issue of the hearing • Be notified if the family intends to be represented by legal counsel, advocate, or another party • Examine and copy any documents to be used by the family at least seven days prior to the hearing • Have staff persons and other witnesses familiar with the case present. (* copy fee: $1.00 for first page, $0.15 for each additional page) • With the exception of informal hearings regarding disputes concerning rent calculations, utility allowances, and subsidy standard determinations, the informal hearing officer may be appointed by the CDC to provide the service. Informal hearings regarding rent calculations, utility allowances, and subsidy standard determinations, due to the specificity and/or complexity of these determinations, will be heard by an employee of the CDC who was not involved in making the original determination or a subordinate of that person, but who is familiar with the relevant regulations. This employee must be classified a Housing Specialist or higher. For all other hearing matters, the CDC may appoint hearing officers who are: • Professional mediators or arbitrators • Managers from other departments in the City of National City • Managers from other CDCs • The CDC management 14- 19 14 Hearing officers will never be anyone who was involved in making the original determination or that person's subordinate. The informal hearing shall only concern relevant issues. Evidence presented will be considered without regard to admissibility under the rules of evidence applicable to judicial proceedings. Documents not provided to both parties in advance may not be admitted without permission of the opposing party. "Documents" includes records or regulations. The family may request an audio recording of the informal hearing, if desired, within 90 days of the hearing. The hearing officer may request additional information, or may reconvene the hearing for a later date before reaching a decision. If the family misses an appointment or deadline ordered by the hearing officer, the action of the CDC shall take effect, and another hearing will not be granted. The hearing officer will determine, based on the evidence and testimony, if the action, inaction, or decision of the CDC is in accordance with HUD regulations and this Plan. Factual determinations will be based on a preponderance of the evidence presented at the hearing. A notice of the hearing findings provided in writing to the CDC and the family within twenty days shall include: • A clear summary of the decision and reasons for the decision • The effective date of the decision • A statement that the tenant may seek judicial review by filing a petition with the San Diego Superior Court pursuant to section 1094.6 of the California Code of Civil Procedure. The petition must be filed within ninety (90) days of the date of this decision. The CDC is not bound by hearing decisions that: Do not require an informal hearing Conflict or contradict HUD requirements or regulations Exceed the hearing officer's authority Are overturned by the CDC Executive Director 14- 20 14 The CDC shall, within 30 days, send a letter to the participant, if it determines it is not bound by the hearing officer's determination. The letter shall include the CDC decision. All requests for an informal hearing, supporting documentation, and a copy of the final decision will be retained in the family's file. HEARING AND APPEAL PROVISIONS FOR "RESTRICTIONS ON ASSISTANCE TO NON- CITIZENS" [24 CFR Part 5, Subpart E] Assistance to the family may not be delayed, denied or terminated on the basis of immigration status at any time prior to the receipt of the decision on the INS appeal. Assistance to a family may not be terminated or denied while the CDC hearing is pending, but assistance to an applicant may be delayed pending the CDC hearing. INS DETERMINATION OF INELIGIBILITY EVIDENCE OF CITIZENSHIP OR ELIGIBLE IMMIGRATION STATUS Each family member, regardless of age, must submit the following evidence to the responsible entity. For U.S. citizens or U.S. nationals, the evidence consists of a signed declaration of U.S. citizenship or U.S. nationality. The responsible entity must obtain verification of the declaration by requiring presentation of a U.S. passport, U.S. birth certificate, Employment Authorization card, Temporary Resident card, or other appropriate documentation, as provided by section 214. For noncitizens, adequate evidence consists of: (i) A signed declaration of eligible immigration status; and (ii) One of the Section 214 documents listed in Sec. 5.508(b)(1) and referred to in Sec. 5.510. DECLARATION For each family member who contends that he or she is a U.S. citizen or a noncitizen with eligible immigration status, the family must submit to the responsible entity a written declaration, signed under penalty of perjury, by which the family member declares whether he or she is a U.S. citizen or a noncitizen with eligible immigration status. (i) For each adult, the declaration must be signed by the adult. 14- 21 14 (ii) For each child, the declaration must be signed by an adult residing in the assisted dwelling unit who is responsible for the child. For Housing covered programs: The written declaration may be incorporated as part of the application for housing assistance or may constitute a separate document. If a family member claims to be an eligible immigrant and the INS SAVE system and manual search do not verify the claim, the CDC must notify the applicant or participant, within ten days of his/her right to appeal to the INS within thirty days, or to request an informal hearing with the CDC either in lieu of or subsequent to the INS appeal. If the family appeals to the INS, it must give the CDC a copy of the appeal and proof of mailing, or the CDC may proceed to deny or terminate. The time period to request an appeal may be extended by the CDC for good cause. The request for a CDC hearing must be made within ten days of the date of the notice offering the hearing or, if an appeal was made to the INS, within ten days of receipt of that notice. After receipt of a request for an informal hearing, the hearing is conducted as described in this chapter for both applicants and participants. If the hearing officer decides that the individual is not eligible, and there are no other eligible family members, the CDC will: • Deny the applicant family • Defer termination of a participating family that qualifies for deferral • Terminate the participant, if the family does not qualify for deferral If there are eligible members in the family, the CDC will offer to prorate assistance or give the family the option to remove the ineligible members. Other matters related to eligible citizen/immigrant status are: If any family member fails to provide documentation or certification as required by the regulation, that member is treated as ineligible. If all family members fail to provide documentation or certifications, the family will be denied or terminated for failure to provide. Participants whose termination is carried out after temporary deferral, may not request a hearing, since they had an opportunity for a hearing prior to the deferral of termination. 14- 22 14 Participants whose assistance is prorated (either based on their statement that some members are ineligible or due to failure to verify eligible immigration status for some members after exercising their appeal and hearing rights described above) are entitled to a hearing based on the right to a hearing regarding determinations of tenant rent and total tenant payment. Families denied or terminated for fraud in connection with the non -citizens rule are entitled to a review or hearing in the same way as terminations for any other type of fraud. MITIGATING CIRCUMSTANCES FOR APPLICANTS/PARTICIPANTS WITH DISABILITIES [24 CFR 982.204, 982.552(c)] When applicants are denied placement on the waiting list, or the CDC is terminating assistance, the family will be informed that the presence of a disability may be considered as a mitigating circumstance during the informal review or informal hearing process. However, the presence of a disability is never considered as a mitigating circumstance for violations of the regulations, criminal activities, violations of the lease, or for violations of the requirements of agency. 14- 23 14 14- 24 15 OWNER OR FAMILY DEBTS TO THE CDC [24 CFR 982.552] INTRODUCTION This chapter describes the CDC's policies for the recovery of monies overpaid to families and owners. In addition, this chapter outlines the collection methods and guidelines for the handling and collection of different types of debts. The CDC's policy is to communicate program guidelines to owners and families so as to minimize CDC overpayments. The CDC clearly documents, in the tenant file, the amount and nature of owner or family debts, as well as the method of calculation. Owners and families may receive copies of all relevant documentation regarding their debts, upon request. The CDC will make every effort to collect delinquent family or owner debts. The CDC will use a variety of collection tools to recover debts including, but not limited to: • Request for lump sum payments • Small claim or civil court actions • Payment agreements • Termination of family program participation • Reductions in HAP to owner • Abatements • Collection agencies 15- 1 15 PAYMENT AGREEMENTS FOR PARTICIPATING FAMILIES [24 CFR 982.552 (c)(v-ii, 982.551)] A payment agreement or repayment agreement, as used in this Plan, is a document entered into between the CDC and a person who owes a debt to the CDC. It is similar to a promissory note, but contains more details regarding the nature of the debt, the terms of payment, any special provisions of the agreement, and the remedies available to the CDC upon default of the agreement. If the CDC offers a payment agreement, it will determine the terms. The CDC may not offer a payment agreement in all circumstances. The maximum length of time the CDC will enter into a payment agreement with a family may be as little as 120 days, but a longer period of up to one year may be approved when family circumstances make it difficult to honor a repayment agreement of a shorter duration. The Housing Programs Manager may approve a repayment period of more than one year. PAYMENT AGREEMENTS FOR FAMILIES NO LONGER ON THE PROGRAM A family whose program participation has been terminated will be offered a repayment agreement. The repayment agreement will ask the family to repay its debt within 120 days, but a longer period of up to one year may be approved, upon request, when family circumstances make it difficult to honor a repayment agreement of a shorter duration. The Housing Programs Manager may approve a repayment period of more than one year. A calculation of the estimated participant debt will be issued after assistance is terminated. DEBTS OWED FOR CLAIMS [24 CFR 792.103, 982.552 (c)(v-vii)] DELINQUENT PAYMENTS A payment will be considered to be in arrears if: • The payment has not been received by the close of the business day on which the payment was due. If the due date is on a weekend or holiday, the due date will be at the close of the next business day. • If the family's payment agreement is in arrears, and the family has not contacted or made arrangements with the CDC, the CDC will: • Require the family to pay the balance in full • Pursue civil collection of the balance due 15- 2 15 • Terminate the housing assistance A transferring family, delinquent on its payment agreement, is required to pay the balance in full prior to the issuance of a voucher. DEBTS DUE TO MISREPRESENTATIONS / NON -REPORTING OF INFORMATION [24 CFR 982.163] HUD's definition of program fraud and abuse is a single act, or pattern of actions that: Constitutes false statement, omission, or concealment of a substantive fact, made with intent to deceive or mislead, and that results in payment of Section 8 program funds in violation of Section 8 program requirements. Under 24 CFR Part 792, the PHA may retain a portion of program fraud losses that the PHA recovers from a family or owner by litigation, court -order or a repayment agreement. FAMILY ERROR/LATE REPORTING Families who owe money to the CDC due to the family's failure to report increases in income or fail to report any information which will cause an incorrect HAP to be paid to the owner, will be required to repay in accordance with the guidelines in the payment agreement section of this chapter. PROGRAM FRAUD If a family owes money as a result of program fraud, the case may be referred for prosecution. The family's program participation will be terminated. The CDC will set up a collection for the family for the full amount of housing assistance payments issued from the time the family first committed fraud to the time the family's assistance was terminated. UNAUTHORIZED PERSONS A family found to have unauthorized persons residing in the subsidized unit will be required to repay all housing assistance payments issued during the time the unauthorized person(s) was/were residing in the subsidized unit. VIOLATION OF FAMILY OBLIGATIONS A family found to have violated its family obligations may be required to repay all housing assistance payments issued during the time the family was violating its family obligations. 15- 3 15 RENTING FROM A RELATIVE In instances where it is found the family rented from a relative without the required CDC permission, or due to approval based on misrepresentation, an overpayment will be collected from both the owner and the participant - each party responsible for repayment of 50% of the HAPs paid. DEBTS DUE TO MINIMUM RENT TEMPORARY HARDSHIP The CDC's minimum rent is $50.00; therefore, this section is not applicable, unless the minimum rent is increased. If the family owes the CDC money for rent arrears incurred during the minimum rent period, the CDC will calculate the total amount owed and divide it by three to arrive at a reasonable payback amount that the family will be required to pay to the CDC monthly. The family will be required to pay the increased amount until the arrears are paid in full. If the family goes into default on the repayment agreement for back rent incurred during a minimum rent period, the CDC will reevaluate the family's financial situation to determine if the family has the ability to pay the increased rent amount. If not, the existing repayment agreement will be restructured. GUIDELINES FOR PAYMENT AGREEMENTS [24 CFR 982.552(c)(v-vii)] Payment agreements will be executed between the CDC and the head of household and spouse. Monthly payments may be decreased in cases of family hardship, and if requested with reasonable notice from the family, upon verification of the hardship, and the approval of the Housing Programs Manager. A family current on its repayments may transfer. No transfer will be approved until a delinquent debt is paid in full. If the family already has a payment agreement in place and incurs an additional debt to the CDC: • The CDC will not enter into more than one payment agreement with the family. • The family may be allowed 30 days to pay the second debt in full. 15- 4 15 OWNER DEBTS TO THE CDC [24 CFR 982.453(b)] If the CDC determines that the owner has retained housing assistance or claim payments the owner is not entitled to, the CDC may reclaim the amounts from future housing assistance or claim payments owed the owner for any units under contract. When the landlord has been overpaid as a result of fraud, misrepresentation or violation of the HAP contract, the CDC may terminate the HAP contract, and arrange for restitution to the CDC and/or family, as appropriate. In instances where it is found the family rented from a relative without the required CDC permission, or approval was based on misrepresentation, an overpayment will be collected from both the owner and the participant - each party responsible for repayment of 50% of the HAPs paid. If future housing assistance or claim payments are insufficient to reclaim the amounts owed, the CDC will seek one or more of the following remedies: • Require the owner to pay the amount in full within 30 days • Pursue collections through collection agencies and/or the local court system • Restrict the owner from future participation WRITING OFF DEBTS The director may write off uncollectable debts. In determining whether a debt is uncollectable, the lack of success in collecting, along with the following factors will be considered: • The debtor's whereabouts is unknown • The debt is more than one year old • The debtor is judgment proof • The debtor is deceased • The amount is less than $250.00 The writing off of a debt does not remove the debtor's responsibility to repay, or the CDC's ability to collect the monies owed. The CDC will always deny program admission to an applicant who has failed to repay monies owed. 15- 5 15 15- 6 16 SPECIAL HOUSING TYPES, HOMEOWNERSHIP, PROJECT - BASED AND SPECIAL CLAIMS [24 CFR 982.601, 24 CFR 982.625] INTRODUCTION The Section 8 regulations allow assistance to be paid on behalf of special housing types. It is the intent of the CDC to provide as great an opportunity as possible for affordable housing and wherever possible will allow assistance to be paid on behalf of permissible special housing types. This chapter describes the special housing types recognized by the CDC and how these special housing types are handled. In addition, this chapter explains how the CDC handles the homeownership, and project -based assistance options of the Housing Choice Voucher Program, as well as special claims allowed under its special programs. The CDC will not set aside any program funding for any special housing type. A family may choose to rent housing that qualifies as a special housing type, or to rent other eligible housing in accordance with requirements of the program. SPECIAL HOUSING TYPES TO EXPAND AFFORDABLE HOUSING OPPORTUNITIES The CDC will consider requests for special housing types on a case -by -case basis. The CDC is open to special housing types for all families, if their use will expand affordable housing opportunities. In all cases, the CDC will authorize the use of special housing types as a reasonable accommodation to those with a disability, so that the program is readily accessible and usable. The requested housing type must be approvable by all other HUD standards and HQS requirements in accordance with 24 CFR 982 Section M - Special Housing Types. 16- 1 16 SINGLE ROOM OCCUPANCY [24 CFR 982.602] A single person may reside in an SRO housing unit. The CDC will use a separate lease and housing assistance payment contract for each assisted person residing in a Single Room Occupancy (SRO) unit [24 CFR 982.603]. SRO RENT AND HOUSING ASSISTANCE PAYMENT [24 CFR 982.604] PAYMENT STANDARDS For a person residing in CDC SRO housing, the CDC SRO payment standard is seventy five percent (75%) of the zero -bedroom payment standard amount on the PHA payment standard schedule. For a person residing in SRO housing in an exception area, the payment standard is 75 percent of the HUD -approved zero bedroom exception payment standard amount. RENT REASONABLE The rent must be rent reasonable in accordance with the rent reasonableness policies in this Plan. UTILITY ALLOWANCE The utility allowance for an assisted person residing in SRO housing is seventy five percent (75%) of the zero bedroom utility allowance. HOUSING QUALITY STANDARDS The CDC will ensure that all SRO units approved for the program are in compliance with all of the HQS for SROs as regulated in 24 CFR 982.605. CONGREGATE HOUSING [24 CFR 982.606] Only elderly person(s), or a person(s) with disabilities, may reside in a congregate housing unit. Other families are not eligible for this special housing type. If approved by the CDC, a family member or live-in aide may reside with the elderly person or person with disabilities. The CDC must approve a live-in aide if needed as a reasonable accommodation so that the program is readily accessible to and usable by persons with disabilities in accordance with 24 CFR part 8. See Sec. 982.316 concerning occupancy by a live-in aide. 16- 2 16 CONGREGATE HOUSING LEASE AND HAP CONTRACT [24 CFR 982.607] Congregate housing requires a separate lease and HAP contract for each assisted family. The payment standard for a family that resides in a congregate housing unit is the zero -bedroom payment standard on the CDC payment standard schedule, unless the participant has a live-in aide. However, if there are two or more rooms in the unit (not including kitchen or sanitary facilities), the payment standard for a family that resides in a congregate housing unit is the one bedroom payment standard amount. The CDC will approve applications for congregate housing on a case -by -case basis. The CDC may require the names of the unassisted household members, and may not approve the application for congregate housing if it is determined the living arrangement may result in a circumvention of the program regulations, such as in the case of unassisted household members who were barred from program participation. If there is a live-in aide, the live-in aide will be counted in determining the family unit size. RENT REASONABLE The rent must be rent reasonable in accordance with the rent reasonableness policies in this Plan. HOUSING QUALITY STANDARDS The CDC will ensure that all congregate housing units approved for the program are in compliance with all of the Housing Quality Standards for congregate housing as regulated in 24 CFR 982.609. GROUP HOMES [24 CFR 982.610, 983.611, 982.612] For assistance in a group home, there is a separate HAP contract and lease for each assisted person. A group home must be licensed, certified, or otherwise approved in writing by the state, (e.g., Department of Human Resources, Mental Health, Retardation, or Social Services) as a group home is for elderly persons or persons with disabilities. 16- 3 16 Elderly person(s) or a person(s) with disabilities may reside in a state -approved group home. If approved by the CDC, a live-in aide may reside with a person with disabilities. Other persons are not eligible to reside in the group homes. The CDC must approve a live-in aide, if needed as a reasonable accommodation, so that the program is readily accessible to and usable by persons with disabilities. Except for live-in aides, all residents of a group home must be elderly persons or persons with disabilities. The CDC will not approve assistance for a person to live in a group home if documentation indicates that the person is in need of continual medical or nursing care. No more than twelve persons may reside in a group home. This limit covers all persons who reside in the unit, including assisted and unassisted residents and any live-in aides. GROUP HOME LEASE [24 CFR 982.611] A separate HAP contract and lease is required for each assisted person living in a group home. For a group home, the term "pro-rata portion" means the ratio derived by dividing the number of persons in the assisted household by the total number of residents (assisted and unassisted) residing in the group home. The number of persons in the assisted household equals one assisted person plus any CDC -approved live-in aide. GROUP HOME RENT [24 CFR 982.613] Rent to owner: Reasonable rent limit. The rent to owner for an assisted person may not exceed the pro-rata portion of the reasonable rent for the group home. RENT REASONABLE The rent must be rent reasonable in accordance with the rent reasonableness policies in this Plan. The reasonable rent for a group home is determined in accordance with CFR 982.507. In determining reasonable rent, the CDC must consider whether sanitary facilities, and facilities for food preparation and service, are common facilities or private facilities. 16- 4 16 MAXIMUM SUBSIDY PAYMENT STANDARD Family unit size: (i) Unless there is a live-in aide, the family unit size is zero or one bedroom. (ii) If there is a live-in aide, the live-in aide must be counted in determining the family unit size. The payment standard for a person who resides in a group home is the lower of: (i) The payment standard amount on the PHA payment standard schedule for the family unit size; or (ii) The pro-rata portion of the payment standard amount on the CDC payment standard schedule for the group home size. (iii) If there is a live-in aide, the live-in aide must be counted in determining the family unit size. UTILITY ALLOWANCE The utility allowance for each assisted person residing in a group home is the pro-rata portion of the utility allowance for the group home unit size. HOUSING QUALITY STANDARDS The CDC will ensure that all group home units approved for the program are in compliance with all of the Housing Quality Standards for group homes as regulated in 24 CFR 982.614. COMPLIANCE WITH HQS The PHA may not give approval to reside in a group home unless the unit, including the portion of the unit available for use by the assisted person under the lease, meets the housing quality standards. APPLICABLE HQS STANDARDS The HQS in Sec. 982.401 apply to assistance in a group home. However, the standards in this section apply in place of Sec. 982.401(b) (sanitary facilities), Sec. 982.401(c) (food preparation and refuse disposal), Sec. 982.401(d) (space and security), Sec. 982.401(g) (structure and materials) and Sec. 982.401(1) (site and neighborhood); the entire unit must comply with the HQS. ADDITIONAL PERFORMANCE REQUIREMENTS The following additional performance requirements apply to a group home: 16- 5 16 (1) Sanitary facilities. (i) There must be a bathroom in the unit. The unit must contain, and an assisted resident must have ready access to: (A) A flush toilet that can be used in privacy; (B) A fixed basin with hot and cold running water; and (C) A shower or bathtub with hot and cold running water. (ii) All of these facilities must be in proper operating condition, and must be adequate for personal cleanliness and the disposal of human waste. The facilities must utilize an approvable public or private disposal system. (iii) The unit may contain private or common sanitary facilities. However, the facilities must be sufficient in number so that they need not be shared by more than four residents of the group home. (iv) Sanitary facilities in the group home must be readily accessible to and usable by residents, including persons with disabilities. (2) Food preparation and service. (i) The unit must contain a kitchen and a dining area. There must be adequate space to store, prepare, and serve foods in a sanitary manner. (ii) Food preparation and service equipment must be in proper operating condition. The equipment must be adequate for the number of residents in the group home. The unit must contain the following equipment: (A) A stove or range, and oven; (B) A refrigerator; and (C) A kitchen sink with hot and cold running water. The sink must drain into an approvable public or private disposal system. (iii) There must be adequate facilities and services for the sanitary disposal of food waste and refuse, including facilities for temporary storage where necessary. (iv) The unit may contain private or common facilities for food preparation and service. (3) Space and security. (i) The unit must provide adequate space and security for the assisted person. (ii) The unit must contain a living room, kitchen, dining area, bathroom, and other appropriate social, recreational or community space. The unit must contain at least one bedroom of appropriate size for each two persons. 16- 6 16 (iii) Doors and windows that are accessible from outside the unit must be lockable. (4) Structure and material. (5) (i) The unit must be structurally sound to avoid any threat to the health and safety of the residents, and to protect the residents from the environment. (ii) Ceilings, walls, and floors must not have any serious defects such as severe bulging or leaning, loose surface materials, severe buckling or noticeable movement under walking stress, missing parts or other significant damage. The roof structure must be firm, and the roof must be weather tight. The exterior or wall structure and exterior wall surface may not have any serious defects such as serious leaning, buckling, sagging, cracks or large holes, loose siding, or other serious damage. The condition and equipment of interior and exterior stairways, halls, porches, walkways, etc., must not present a danger of tripping or falling. Elevators must be maintained in safe operating condition. (iii) The group home must be accessible to and usable by a resident with disabilities. Site and neighborhood. The site and neighborhood must be reasonably free from disturbing noises and reverberations and other hazards to the health, safety, and general welfare of the residents. The site and neighborhood may not be subject to serious adverse environmental conditions, natural or manmade, such as dangerous walks or steps, instability, flooding, poor drainage, septic tank back-ups, sewage hazards or mud slides, abnormal air pollution, smoke or dust, excessive noise, vibrations or vehicular traffic, excessive accumulations of trash, vermin or rodent infestation, or fire hazards. The unit must be located in a residential setting. SHARED HOUSING [24 CFR 982.615] OCCUPANCY An assisted family may reside in shared housing. In shared housing, an assisted family may share a unit with another resident or residents of the unit. The unit may be a house or an apartment. The CDC may approve a live-in aide to reside with the family to care for a person with disabilities. The CDC must approve a live-in aide, if needed as a reasonable accommodation so that the program is readily accessible to and usable by persons with 16- 7 16 disabilities in accordance with 24 CFR part 8. See Sec. 982.316 concerning occupancy by a live-in aide. Other persons who are assisted under the tenant -based program, or other persons who are not assisted under the tenant -based program, may reside in a shared housing unit. The owner of a shared housing unit may reside in the unit. A resident owner may enter into a HAP contract with the PHA. However, housing assistance may not be paid on behalf of an owner. An assisted person may not be related by blood or marriage to a resident owner. The CDC will approve applications for shared housing on a case -by -case basis. The CDC may require the names of the unassisted household members, and will not approve the application for shared housing if it is determined the living arrangement may result in a circumvention of the program regulations, such as in the case of unassisted household members who were barred from program participation. A resident owner may enter into a HAP contract with the CDC. However, housing assistance may not be paid on behalf of an owner. A live-in aide may not be an owner. There will be a separate housing assistance payment contract and lease for each assisted family residing in a shared housing unit. RENT AND HAP CONTRACT For shared housing, the term "pro-rata portion" means the ratio derived by dividing the number of bedrooms in the private space available for occupancy by a family by the total number of bedrooms in the unit. For example, for a family entitled to occupy three bedrooms in a five -bedroom unit, the ratio would be 3/5. In this case, suppose the owner rents a five -bedroom house for $1500. The assisted family's contract rent is $900 (3/5 of the total rent). The rent to owner for the family may not exceed the pro-rata portion of the reasonable rent for the shared housing dwelling unit. The reasonable rent must be in accordance with the standard Section 8 regulations in this Plan. If the family is renting a room or rooms from a resident owner, the rent for the rooms must be rent reasonable. The rents on comparable rooms for rent must be reviewed, as well as the pro -rated reasonable rent for a like unit. MAXIMUM SUBSIDY For a family that resides in a shared housing unit, the payment standard is the lower of the payment standard amount on the CDC payment standard schedule, or the pro- rata portion of the payment standard amount on the CDC payment standard for the actual shared housing unit size. For example, if the family is in three bedrooms of a five -bedroom unit, a comparison will be made of the three -bedroom payment standard vs. 3/5 of the five -bedroom payment standard. The CDC will use as a payment standard the lower of the two. 16- 8 16 If the CDC approves a live-in aide, the live-in aide will be counted in determining the family unit size. The live in aide may never be the owner of the assisted unit. UTILITY ALLOWANCE The utility allowance for an assisted family living in shared housing is the pro-rata portion of the utility allowance for the shared housing unit. For example, there are five bedrooms in the unit, the family occupies three of the five bedrooms and pays for its share of the total utilities. In this case, 3/5 of the total five -bedroom utilities would be given to the family as a utility allowance deduction. HOUSING QUALITY STANDARDS The CDC will ensure that all shared housing units approved for the program are in compliance with all of the housing quality standards for shared housing as regulated in 24 CFR 982.618. A zero or one -bedroom unit is ineligible for shared housing. The housing unit must have an adequate number of bedrooms to house both the assisted and unassisted family and the assisted family must have an adequate number of bedrooms so it is not overcrowded. Alternate sleeping areas will not be considered in shared housing. COMPLIANCE WITH HQS The PHA may not give approval to reside in shared housing unless the entire unit, including the portion of the unit available for use by the assisted family under its lease, meets the housing quality standards. APPLICABLE HQS STANDARDS The HQS in Sec. 982.401 apply to assistance in shared housing. However, the HQS standards in this section apply in place of Sec. 982.401(d) (space and security). FACILITIES AVAILABLE FOR FAMILY The facilities available for the use of an assisted family in shared housing under the family's lease must include (whether in the family's private space or in the common space) a living room, sanitary facilities in accordance with Sec. 982.401(b), and food preparation and refuse disposal facilities in accordance with Sec. 982.401(c). SPACE AND SECURITY Performance requirements: (1) The entire unit must provide adequate space and security for all its residents (whether assisted or unassisted). 16- 9 16 (2) (i) Each unit must contain private space for each assisted family, plus common space for shared use by the residents of the unit. Common space must be appropriate for shared use by the residents. (ii) The private space for each assisted family must contain at least one bedroom for each two persons in the family. The number of bedrooms in the private space of an assisted family may not be less than the family unit size. (iii) A zero or one bedroom unit may not be used for shared housing. COOPERATIVE HOUSING [24 CFR 982.619, 982.624] The CDC will approve a family living in cooperative housing if it is determined that assistance under the program will help maintain affordability of the cooperative unit for low-income families. The CDC will not approve assistance for a family in cooperative housing until the CDC has also determined that the cooperative has adopted requirements to maintain continued affordability for low-income families after transfer of a cooperative member's interest in a cooperative unit (such as a sale of the resident's share in a cooperative corporation). The reasonable rent for a cooperative unit is determined in accordance with Sec. 982.507. For cooperative housing, the rent to owner is the monthly carrying charge under the occupancy agreement/lease between the member and the cooperative. The carrying charge consists of the amount assessed to the member by the cooperative for occupancy of the housing. The carrying charge includes the member's share of the cooperative debt service, operating expenses, and necessary payments to cooperative reserve funds. However, the carrying charge does not include down -payments or other payments to purchase the cooperative unit, or to amortize a loan to the family for this purpose. Gross rent is the carrying charge plus any utility. For a cooperative, rent adjustments are applied to the carrying charge similarly to regular Section 8 rent adjustments described in the rent reasonableness section of this Plan. The lease and other appropriate documents will stipulate that the monthly carrying charge is subject to Section 8 limitations on rent to owner. The housing assistance payment will be determined in accordance with the standard Section 8 guidelines in this Plan. The CDC may approve a live-in aide to reside with the family to care for a person with disabilities. The CDC will approve a live-in aide if needed as a reasonable accommodation so that the program is readily accessible to and usable by persons with disabilities. If the CDC approves a live-in aide, the live-in aide will be counted when determining the family unit size. 16- 10 16 HOUSING QUALITY STANDARDS MAINTENANCE During the term of the HAP contract between the CDC and the cooperative, the dwelling unit and premises must be maintained in accordance with the HQS. If the dwelling unit and premises are not maintained in accordance with the HQS, the CDC may exercise all available remedies, regardless of whether the family or the cooperative is responsible for such breach of the HQS. CDC remedies for breach of the HQS include recovery of overpayments, abatement or other reduction of housing assistance payments, termination of housing assistance payments and termination of the HAP contract. The CDC may not make any housing assistance payments if the contract unit does not meet the HQS, unless any defect is corrected within the period specified by the CDC and the CDC verifies the correction. If a defect is life -threatening, the defect must be corrected within no more than 24 hours. For other defects, the defect must be corrected within the period specified by the CDC. The family is responsible for a breach of the HQS that is caused by any of the following: The family fails to perform any maintenance for which the family is responsible in accordance with the terms of the cooperative occupancy agreement between the cooperative member and the cooperative; (ii) The family fails to pay for any utilities that the cooperative is not required to pay for, but which are to be paid by the cooperative member; (iii) The family fails to provide and maintain any appliances that the cooperative is not required to provide, but which are to be provided by the cooperative member; or (iv) Any member of the household or guest damages the dwelling unit or premises (damages beyond ordinary wear and tear). If the family has caused a breach of the HQS for which the family is responsible, the CDC must take prompt and vigorous action to enforce such family obligations. The CDC may terminate assistance for violation of family obligations in accordance with Sec. 982.552. MANUFACTURED HOMES [24 CFR 982.620] ASSISTANCE FOR RESIDENT OF MANUFACTURED HOME A family may reside in a manufactured home with assistance under the program. 16- 11 16 The PHA must permit a family to lease a manufactured home and space with assistance under the program. The PHA may provide assistance for a family that owns the manufactured home and leases only the space. The PHA is not required to provide such assistance under the program. APPLICABILITY The HQS in Sec. 982.621 always apply when assistance is provided to a family occupying a manufactured home (under paragraph (a)(2) or (a)(3) of this section). Sections 982.622 to 982.624 only apply when assistance is provided to a manufactured home owner to lease a manufactured home space. LIVE-IN AIDE If approved by the PHA, a live-in aide may reside with the family to care for a person with disabilities. The PHA must approve a live-in aide if needed as a reasonable accommodation so that the program is readily accessible to and usable by persons with disabilities in accordance with 24 CFR part 8. See Sec. 982.316 concerning occupancy by a live-in aide. If there is a live-in aide, the live-in aide must be counted in determining the family unit size. HOUSING QUALITY STANDARDS [24 CFR 982.621, 982.624] A manufactured home must meet all the HQS requirements and acceptability criteria in Sec. 982.401. A manufactured home also must meet the following requirements: • Performance requirement: A manufactured home must be placed on the site in a stable manner, and must be free from hazards such as sliding or wind damage. • The CDC has a HUD waiver of the tie -down requirement for manufactured homes. • Acceptability criteria: A manufactured home must be securely anchored by a tie -down device that distributes and transfers the loads imposed by the unit to appropriate ground anchors to resist wind overturning and sliding. 16- 12 16 MANUFACTURED HOME SPACE RENTAL [24 CFR 982.622] What is included: Rent to owner for rental of a manufactured home space includes payment for maintenance and services that the owner must provide to the tenant under the lease for the space. Rent to owner does not include the cost of utilities and trash collection for the manufactured home. However, the owner may charge the family a separate fee for the cost of utilities or trash collection provided by the owner. REASONABLE RENT During the assisted tenancy, the rent to owner for the manufactured home space may not exceed a reasonable rent as determined by the CDC in accordance with this section. Section 982.503 is not applicable. The CDC may not approve a lease for a manufactured home space until the CDC determines that the initial rent to owner for the space is a reasonable rent. At least annually during the assisted tenancy, the CDC will re -determine that the current rent to owner is a reasonable rent. The CDC must determine whether the rent to owner for the manufactured home space is a reasonable rent in comparison to rents for other comparable manufactured home spaces. To make this determination the CDC will consider the location and size of the space and any services and maintenance to be provided by the owner in accordance with the lease (without a fee in addition to the rent). By accepting each monthly housing assistance payment from the CDC, the owner of the manufactured home space certifies that the rent to owner for the space is not more than rent charged by the owner for unassisted rental of comparable spaces in the same manufactured home park, or elsewhere. If requested by the CDC, the owner must provide the CDC information on rents for other manufactured home spaces. PAYMENT STANDARD There is a separate fair market rent (FMR) for a family renting a manufactured home space. The payment standard, based on the FMR, is used to calculate the monthly housing assistance payment for a family. While the FMR for a manufactured home space rent is generally 40 percent of the published two -bedroom FMR, historically, the San Diego County region has been awarded a higher FMR for space rent than the standard formula. SUBSIDY CALCULATION During the term of a voucher tenancy, the amount of the monthly housing assistance payment for a family will equal the lesser of: • The payment standard minus the total tenant payment; or 16- 13 16 • The gross rent for rental of the real property on which the manufactured home owned by the family is located (the space rent) minus the total tenant payment. The space rent is the sum of the following as determined by the CDC: • Rent to owner for the manufactured home space; • Owner maintenance and management charges for the space; • The utility allowance for tenant paid utilities. UTILITY ALLOWANCE SCHEDULE FOR MANUFACTURED HOME SPACE RENTAL [24 CFR 982.624] The CDC will establish utility allowances for manufactured home space rental. For the first twelve months of the initial lease term only, the allowances will include a reasonable amount for utility hook-up charges payable by the family, if the family actually incurs the expenses because of a move. Allowances for utility hook-up charges do not apply to a family that leases a manufactured home space in place. Utility allowances for manufactured home space must not costs payable by a family to cover the digging of a well or installation of a septic system. HOMEOWNERSHIP [24 CFR 982.625] GENERAL The homeownership option is used to assist a family residing in a home purchased and owned by one or more members of the family. The CDC has adopted the homeownership option although it may not be readily workable given the high cost of housing within the CDC jurisdiction. The homeownership program will be administered as follows: • The CDC must approve a live-in aide if needed as a reasonable accommodation so that the program is readily accessible to and usable by persons with disabilities. • The CDC may limit homeownership to a maximum of ten families at any given time. 16- 14 16 • The CDC may provide homeownership assistance in the form of monthly payments, or as a downpayment assistance grant. The CDC will offer the form of assistance it determines to be the most beneficial to the family. A family may receive only one form of homeownership assistance. • A family that includes a person who was an adult member of a family that previously received either form of homeownership assistance may not receive the other form of assistance from the CDC. • The CDC will offer homeownership assistance only to those families who qualify under the guidelines and policies in this chapter and the regulations. ELIGIBILITY REQUIREMENTS [24 CFR 982.627, 982.633] DETERMINATION WHETHER FAMILY IS QUALIFIED The PHA may not provide homeownership assistance for a family unless the PHA determines that the family satisfies all of the following initial requirements at commencement of homeownership assistance for the family: • The family has been admitted to the Section 8 Housing Choice Voucher program, in accordance with subpart E of this part. • The family satisfies any first-time homeowner requirements (described in paragraph (b) of this section). • The family satisfies the minimum income requirement (described in paragraph (c) of this section). The family must have a gross annual income equal to the federal minimum wage multiplied by 2000, based on the income of adult family members who will own the home. Unless the family is elderly or disabled, income from welfare assistance will not be counted toward this requirement. • The family satisfies the employment requirements (described in paragraph (d) of this section). • The family has not defaulted on a mortgage securing debt to purchase a home under the homeownership option (see paragraph (e) of this section). • Except for cooperative members who have acquired cooperative membership shares prior to commencement of homeownership assistance, no family member has a present ownership interest in a residence at the commencement of homeownership assistance for the purchase of any home. • Except for cooperative members who have acquired cooperative membership shares prior to the commencement of homeownership assistance, the family has entered a contract of sale in accordance with Sec. 982.631(c). 16- 15 16 • The family also satisfies any other initial requirements established by the PHA (see Sec. 982.626(b)). Any such additional requirements must be described in the PHA administrative plan. The CDC will impose the following additional initial requirements: • The family has no family -caused violations of HUD's housing quality standards within the last year. • The family is not within the initial term of the lease. • The family does not owe money to the CDC. • The family has not committed any serious or repeated violations of a CDC - assisted lease within five years. • The family has not had any arrests for violent or drug -related criminal activities over the last five years. RANKING PREFERENCES Applications will be offered to eligible candidates in the following priority order with date and time of application the deciding factor among priority groups: • Upon request, Section 8 program participants displaced from an assisted rental unit that is undergoing a condominium conversion who meet the Homeownership Program requirements is eligible for participation. • Upon request, Portability Homeownership participants who were found eligible for the Section 8 Homeownership program at the initial agency and the initial agency certifies they are porting as Homeownership participants and not porting for rental assistance. • Upon request, a family with a person with disabilities that has been pre - qualified or pre -approved for a loan and identified a property in the jurisdiction of the CDC that the family has sufficient resources to purchase. Housing Choice Voucher program participants who will graduate from a training or educational course within the next six months and expect their annual earnings to increase within the next year. Candidates who receive top ranking will be those who have the largest amount of money to apply to downpayment and closing costs, and then by those who have the highest annual income. Other Housing Choice Voucher program participants who are found to qualify for the purchase of a residence. 16- 16 16 HOMEOWNERSHIP COUNSELING REQUIREMENTS [24 CFR 982.630, 982.633] When the family has been determined eligible, it must attend and complete homeownership counseling sessions. CDC staff or another counseling service will hold the counseling sessions. Such counseling shall be consistent with HUD -approved housing counseling. The following topics will be included in the homeownership counseling sessions: • Home maintenance (including care of the grounds) • Budgeting and money management • Credit counseling • How to negotiate the purchase price of a home • How to obtain homeownership financing and loan approvals, including a description of types of financing that may be available, and the pros and cons of different types of financing • How to find a home, including information about homeownership opportunities, schools, and transportation in the CDC jurisdiction • The advantages to purchasing a home in an area that does not have a high concentration of low-income families, and how to locate homes in such areas • How to identify and avoid loans with oppressive terms and conditions ELIGIBLE UNITS [24 CFR 982.628] The PHA must determine that the unit satisfies all of the following requirements: 1) The unit is eligible. (See Sec. 982.352. Paragraphs (a)(6), (a)(7) and (b) of Sec. 982.352 do not apply.) 2) The unit is either a one -unit property (including a manufactured home) or a single dwelling unit in a cooperative or condominium. 3) The unit has been inspected by a PHA inspector and by an independent inspector designated by the family (see Sec. 982.631). 4) The unit satisfies the HQS (see Sec. 982.401 and Sec. 982.631). 16- 17 16 Purchase of home where family will not own fee title to the real property. Homeownership assistance may be provided for the purchase of a home where the family will not own fee title to the real property on which the home is located, but only if: 1) The home is located on a permanent foundation; and 2) The family has the right to occupy the home site for at least forty years. PHA DISAPPROVAL OF SELLER The PHA may not commence homeownership assistance for occupancy of a home if the PHA has been informed (by HUD or otherwise) that the seller of the home is debarred, suspended, or subject to a limited denial of participation under 2 CFR part 2424. PHA -OWNED UNITS Homeownership assistance may be provided for the purchase of a unit that is owned by the PHA that administers the assistance under the consolidated ACC (including a unit owned by an entity substantially controlled by the PHA), only if all of the following conditions are satisfied: 1) The PHA must inform the family, both orally and in writing, that the family has the right to purchase any eligible unit and a PHA -owned unit is freely selected by the family without PHA pressure or steering 2) The unit is not ineligible housing; 3) The PHA must obtain the services of an independent agency, in accordance with Sec. 982.352(b)(1)(iv)(B) and (C), to perform the following PHA functions: I. Inspection of the unit for compliance with the HQS, in accordance with Sec. 982.631(a); II. Review of the independent inspection report, in accordance with Sec. 982.631(b)(4); III. Review of the contract of sale, in accordance with Sec. 982.631(c); and IV. Determination of the reasonableness of the sales price and any PHA provided financing, in accordance with Sec. 982.632 and other supplementary guidance established by HUD. UNITS NOT YET UNDER CONSTRUCTION Families may enter into contracts of sale for units not yet under construction at the time the family enters into the contract for sale. However, the PHA shall not commence homeownership assistance for the family for that unit, unless and until: 16- 18 16 (1) Either: (i) The responsible entity completed the environmental review procedures required by 24 CFR part 58, and HUD approved the environmental certification and request for release of funds prior to commencement of construction; or (ii) HUD performed an environmental review under 24 CFR part 50 and notified the PHA in writing of environmental approval of the site prior to commencement of construction; (2) Construction of the unit has been completed; and (3) The unit has passed the required Housing Quality Standards (HQS) inspection (see Sec. 982.631(a)) and independent inspection (see Sec. 982.631(b)). The unit must meet HUD's "Eligible Housing" requirements. The unit may not be any of the following: • A public housing or Indian housing unit • A unit receiving Section 8 project -based assistance • A nursing home, board and care home, or facility providing continual psychiatric, medical or nursing services • A college or other school dormitory • A penal, reformatory, medical, mental, or similar public or private institutions. • A manufactured home in a park. • The unit must be existing or under construction at the time the family enters into a contract of sale. • The unit is a one -unit property, or a single dwelling unit (including a manufactured home) in a cooperative or condominium. • The unit may be a home where the family will not own fee title to the real property (such as a manufactured home), if the home has a • Permanent foundation and the family has the right to occupy the site for at least 40 years. • The unit has been inspected by the CDC and by an independent inspector designated by the family. • The unit meets HQS. 16- 19 16 The CDC must not approve the seller of the unit, if the CDC has been informed that the seller is debarred, suspended, or subject to a limited denial of participation. The CDC may disapprove the seller for any reason provided for disapproval of an owner in the voucher program. CDC SEARCH AND PURCHASE REQUIREMENTS [24 CFR 982.629] The CDC may establish the maximum time for a family to locate a home and to purchase the home. The CDC may, at its discretion, allow a reasonable extension of the maximum time, if requested in writing with justification. The family's deadline date for locating a home to purchase will be 120 calendar days from the date the family's eligibility for the homeownership option is determined. The CDC may require periodic family reports on the family's progress in finding and purchasing a home. The family must obtain financing for the home within 60 calendar days of the date the home was located. The family must purchase the home within 240 calendar days of the date the home was located. The CDC will not require periodic reports on the family's progress in finding and purchasing a home. If the family is unable to purchase a home within the maximum time established by the CDC, the CDC may issue the family a voucher to lease a unit or place the family's name on the waiting list for a voucher. INSPECTION AND CONTRACT [24 CFR 982.631] HQS INSPECTION BY PHA The PHA may not commence monthly homeownership assistance payments or provide a downpayment assistance grant for the family until the PHA has inspected the unit and has determined that the unit passes HQS. The independent inspection must cover major building systems and components, including foundation and structure, housing interior and exterior, and the roofing, plumbing, electrical, and heating systems. The independent inspector must be qualified to report on property conditions, including major building systems and components. 16- 20 16 The PHA may not require the family to use an independent inspector selected by the PHA. The independent inspector may not be a CDC employee or contractor, or other person under control of the PHA. However, the PHA may establish standards for qualification of inspectors selected by families under the homeownership option. The independent inspector must provide a copy Copies of the independent inspection report will be provided both to the family and the CDC. Based on the information in this report, the family and the CDC will determine whether any pre -purchase repairs are necessary. The PHA may not commence monthly homeownership assistance payments, or provide a downpayment assistance grant for the family, until the PHA has reviewed the inspection report of the independent inspector. Even if the unit otherwise complies with the HQS (and may qualify for assistance under the PHA's tenant -based rental voucher program), the PHA shall have discretion to disapprove the unit for assistance under the homeownership option because of information in the inspection report. CONTRACT OF SALE Before commencement of monthly homeownership assistance payments or receipt of a downpayment assistance grant, a member or members of the family must enter into a contract of sale with the seller of the unit to be acquired by the family. The family must give the CDC a copy of the contract of sale (see also Sec. 982.627(a)(7)). A copy of the contract must be given to the CDC. The contract of sale must specify the price and terms of sale, and provide that the purchaser will arrange for a pre- purchase independent inspection of the home. The contract of sale must: (i) Specify the price and other terms of sale by the seller to the purchaser. (ii) Provide that the purchaser will arrange for a pre -purchase inspection of the dwelling unit by an independent inspector selected by the purchaser. (iii) Provide that the purchaser is not obligated to purchase the unit unless the inspection is satisfactory to the purchaser. (iv) Provide that the purchaser is not obligated to pay for any necessary repairs. In addition to the requirements contained in paragraph (c)(2) of this section, a contract for the sale of units not yet under construction at the time the family is to enter into the contract for sale must also provide that: (i) The purchaser is not obligated to purchase the unit unless an environmental review has been performed and the site has received environmental approval prior to commencement of construction in accordance with 24 CFR 982.628. (ii) The construction will not commence until the environmental review has been completed and the seller has received written notice from the PHA that environmental approval has been obtained. Conduct of the environmental 16- 21 16 review may not necessarily result in environmental approval, and environmental approval may be conditioned on the contracting parties' agreement to modifications to the unit design or to mitigation actions. (iii) Commencement of construction in violation of paragraph (c)(3)(ii) of this section voids the purchase contract and renders homeownership assistance under 24 CFR part 982 unavailable for purchase of the unit. • State the purchaser is not obligated to buy the unit unless the inspection is satisfactory • State the purchaser is not obligated to pay for necessary repairs • Contain the seller's certification that he or she has not been debarred, suspended or subject to a limited denial of participation PHA DISAPPROVAL OF SELLER In its administrative discretion, the CDC may deny approval of a seller for any reason provided for disapproval of an owner in Sec. 982.306(c). FINANCING [24 CFR 982.632] The PHA may establish requirements for financing purchase of a home to be assisted under the homeownership option. Such PHA requirements may include requirements concerning qualification of lenders (for example, prohibition of seller financing or case -by -case approval of seller financing), or concerning terms of financing (for example, a prohibition of balloon payment mortgages, establishment of a minimum homeowner equity requirement from personal resources, or provisions required to protect borrowers against high cost loans or predatory loans). A PHA may not require that families acquire financing from one or more specified lenders, thereby restricting the family's ability to secure favorable financing terms. If the purchase of the home is financed with FHA mortgage insurance, such financing is subject to FHA mortgage insurance requirements. The PHA may establish requirements or other restrictions concerning debt secured by the home. The PHA may review lender qualifications and the loan terms before authorizing homeownership assistance. The PHA may disapprove proposed financing, refinancing or other debt if the PHA determines that the debt is unaffordable, or if the PHA determines that the lender or the loan terms do not meet PHA qualifications. In making this determination, the PHA may take into account other family expenses, such as child care, unreimbursed medical expenses, homeownership expenses, and other family expenses as determined by the PHA. 16- 22 16 All PHA financing or affordability requirements must be described in the PHA administrative plan. DOWNPAYMENT ASSISTANCE GRANTS [24 CFR 982.643] The CDC may provide a single downpayment assistance grant for a participant that has received tenant -based or project -based rental assistance in the Housing Choice Voucher Program. The downpayment assistance grant must be applied toward the downpayment required in connection with the purchase of the home and/or reasonable and customary closing costs in connection with the purchase of the home. If the CDC permits the downpayment grant to be applied to closing costs, the CDC must define what fees and charges constitute reasonable and customary closing costs. However, if the purchase of a home is financed with FHA mortgage insurance, such financing is subject to FHA mortgage insurance requirements, including any requirements concerning closing costs (see Sec. 982.632(b) of this part regarding the applicability of FHA requirements to voucher homeownership assistance and Sec. 203.27 of this title regarding allowable fees, charges and discounts for FHA -insured mortgages). Most of the regulations governing monthly homeownership assistance apply to downpayment assistance grants. However, families receiving these grants are not subject to the regulations concerning continued assistance, family obligations, the maximum term of assistance, amount and distribution of payments, or moves with continued assistance. MAXIMUM DOWNPAYMENT GRANT A downpayment assistance grant may not exceed twelve times the difference between the payment standard and the total tenant payment. MAXIMUM DOWNPAYMENT GRANT A downpayment assistance grant may not exceed twelve times the difference between the payment standard and the total tenant payment. PAYMENT OF DOWNPAYMENT GRANT The downpayment assistance grant shall be paid at the closing of the family's purchase of the home. 16- 23 16 ADMINISTRATIVE FEE For each downpayment assistance grant made by the PHA, HUD will pay the PHA a one-time administrative fee in accordance with Sec. 982.152(a)(1)(iii). A family that has received a downpayment assistance grant may apply for and receive tenant -based rental assistance, in accordance with program requirements and PHA policies. However, the CDC may not commence tenant -based rental assistance for occupancy of the new unit so long as any member of the family owns any title or other interest in the home purchased with homeownership assistance. Further, eighteen months must have passed since the family's receipt of the downpayment assistance grant. Implementation of downpayment assistance grants. A PHA may not offer downpayment assistance under this paragraph until HUD publishes a notice in the Federal Register. CONTINUED ASSISTANCE [24 CFR 982.633] Homeownership assistance will only be paid while the family is residing in the home. If the family moves out of the home, the PHA may not continue homeownership assistance after the month when the family moves out. The family or lender is not required to refund to the PHA the homeownership assistance for the month when the family moves out. The family must comply with the following obligations: o Ongoing counseling: To the extent required by the PHA, the family must attend and complete ongoing homeownership and housing counseling. o Compliance with mortgage: The family must comply with the terms of any mortgage securing debt incurred to purchase the home, or any refinancing of such debt. o Upon death of a family member who holds, in whole or in part, title to the home or ownership of cooperative membership shares for the home, homeownership assistance may continue pending settlement of the decedent's estate, notwithstanding transfer of title by operation of law to the decedent's executor or legal representative, so long as the home is solely occupied by remaining family members in accordance with Sec. 982.551(h). o Supplying required information: The family must supply required information to the CDC in accordance with Sec. 982.551(b). o In addition to other required information, the family must supply any information as required by the CDC or HUD concerning: • Any mortgage or other debt incurred to purchase the home, and any refinancing of such debt (including information needed to determine 16- 24 16 whether the family has defaulted on the debt, and the nature of any such default), and information on any satisfaction or payment of the mortgage debt; • Any sale or other transfer of any interest in the home; or • The family's homeownership expenses. o Notice of move -out: The family must notify the CDC before the family moves out of the home. o Notice of Mortgage Default: The family must notify the CDC if the family defaults on a mortgage securing any debt incurred to purchase the home. o Prohibition on ownership interest on second residence: During the time the family receives homeownership assistance under this subpart, no family member may have any ownership interest in any other residential property. o Additional PHA requirements: The PHA may establish additional requirements for continuation of homeownership assistance for the family (for example, a requirement for post -purchase homeownership counseling or for periodic unit inspections while the family is receiving homeownership assistance). The family must comply with any such requirements. o Other family obligations: The family must comply with the obligations of a participant family described in Sec. 982.551. However, the following provisions do not apply to assistance under the homeownership option: Sec. 982.551(c), (d), (e), (f), (g) and (j). o Statement of homeowner obligations: Before commencement of homeownership assistance, the family must execute a statement of family obligations in the form prescribed by HUD. In the statement, the family agrees to comply with all family obligations under the homeownership option. The subsidy standards are "locked in" at the time of home purchase and will not be increased or decreased upon a change in household size or composition. Before commencement of homeownership assistance, the family must execute a statement in which the family agrees to comply with all family obligations under the homeownership option. 16- 25 16 MAXIMUM TERM OF HOMEOWNERSHIP ASSISTANCE [24 CFR 982.634] MAXIMUM TERM OF ASSISTANCE Except in the case of a family that qualifies as an elderly or disabled family (see paragraph (c) of this section), the family members described in paragraph (b) of this section shall not receive homeownership assistance for more than: (1) Fifteen years, if the initial mortgage incurred to finance purchase of the home has a term is of 20 years or longer; or (2) Ten years, in all other cases. APPLICABILITY OF MAXIMUM TERM The maximum term described in paragraph (a) of this section applies to any member of the family who: (1) Has an ownership interest in the unit during the time that homeownership payments are made; or (2) Is the spouse of any member of the household who has an ownership interest in the unit during the time homeownership payments are made. EXCEPTION FOR ELDERLY AND DISABLED FAMILIES As noted in paragraph (a) of this section, the maximum term of assistance does not apply to elderly and disabled families. In the case of an elderly family, the exception only applies if the family is qualifies as an elderly family at the start of homeownership assistance. In the case of a disabled family, the exception applies if, at any time during receipt of homeownership assistance, the family qualifies as a disabled family. If, during the course of homeownership assistance, the family ceases to qualify as a disabled or elderly family, the maximum term becomes applicable from the date homeownership assistance commenced. However, such a family must be provided at least 6 months of homeownership assistance after the maximum term becomes applicable (provided the family is otherwise eligible to receive homeownership assistance in accordance with this part). Assistance for different homes or PHAs: If the family has received such assistance for different homes, or from different PHAs, the total of such assistance terms is subject to the maximum term described in paragraph (a) of this section. 16- 26 16 HOMEOWNERSHIP ASSISTANCE PAYMENTS AND HOMEOWNERSHIP EXPENSES [24 CFR 982.635] Amount of the monthly homeownership assistance payment: While the family is residing in the home, the PHA shall pay a monthly homeownership assistance payment on behalf of the family that is equal to the lower of: (1) The payment standard minus the total tenant payment; or (2) The family's monthly homeownership expenses minus the total tenant payment. Payment standard for family: The payment standard for a family is the lower of: (i) The payment standard for the family unit size; or (ii) The payment standard for the size of the home. If the home is located in an exception payment standard area, the PHA must use the appropriate payment standard for the exception payment standard area. The payment standard for a family is the greater of: (i) The payment standard (as determined in accordance with paragraphs (b)(1) and (b)(2) of this section) at the commencement of homeownership assistance for occupancy of the home; or (ii) The payment standard (as determined in accordance with paragraphs (b)(1) and (b)(2) of this section) at the most recent regular reexamination of family income and composition since the commencement of homeownership assistance for occupancy of the home. The CDC will pay the homeownership assistance payment directly to the lender. Some homeownership expenses are allowances or standards determined by the CDC in accordance with HUD regulations. These allowances are used in determining expenses for all homeownership families and are not based on the condition of the home. Homeownership expenses for a homeowner (other than a cooperative member) may only include amounts allowed by the PHA to cover: o Principal and interest on initial mortgage debt, any refinancing of such debt, and any mortgage insurance premium incurred to finance purchase of the home; o Real estate taxes and public assessments on the home; o Home insurance; o The PHA allowance for maintenance expenses; 16- 27 16 o The PHA allowance for costs of major repairs and replacements; o The CDC utility allowance used for the home; o Principal and interest on mortgage debt incurred to finance costs for major repairs, replacements or improvements for the home. If a member of the family is a person with disabilities, such debt may include debt incurred by the family to finance costs needed to make the home accessible for such person, if the PHA determines that allowance of such costs as homeownership expenses is needed as a reasonable accommodation so that the homeownership option is readily accessible to and usable by such person, in accordance with part 8 of this title; and o Land lease payments (where a family does not own fee title to the real property on which the home is located; see Sec. 982.628(b)). Homeownership expenses for a cooperative member may only include amounts allowed by the PHA to cover: (i) The cooperative charge under the cooperative occupancy agreement including payment for real estate taxes and public assessments on the home; (ii) Principal and interest on initial debt incurred to finance purchase of cooperative membership shares and any refinancing of such debt; (iii) Home insurance; (iv) The PHA allowance for maintenance expenses; (v) The PHA allowance for costs of major repairs and replacements; (vi) The PHA utility allowance for the home; and (vii) Principal and interest on debt incurred to finance major repairs, replacements or improvements for the home. If a member of the family is a person with disabilities, such debt may include debt incurred by the family to finance costs needed to make the home accessible for such person, if the PHA determines that allowance of such costs as homeownership expenses is needed as a reasonable accommodation so that the homeownership option is readily accessible to and usable by such person, in accordance with part 8 of this title. If the home is a cooperative or condominium unit, homeownership expenses may also include cooperative or condominium operating charges or maintenance fees assessed by the condominium or cooperative homeowner association. Payment to lender or family: The PHA must pay homeownership assistance payments either: 16- 28 16 (1) Directly to the family or; (2) At the discretion of the PHA, to a lender on behalf of the family. If the assistance payment exceeds the amount due to the lender, the PHA must pay the excess directly to the family. AUTOMATIC TERMINATION OF HOMEOWNERSHIP ASSISTANCE Homeownership assistance for a family terminates automatically 180 calendar days after the last homeownership assistance payment on behalf of the family. However, a PHA has the discretion to grant relief from this requirement in those cases where automatic termination would result in extreme hardship for the family. PORTABILITY [24 CFR 982.636, 982.353(b) and (c), 982.552, 982.553] General. A family may qualify to move outside the initial PHA jurisdiction with continued homeownership assistance under the voucher program in accordance with this section. Portability of homeownership assistance. Subject to Sec. 982.353(b) and (c), Sec. 982.552, and Sec. 982.553, a family determined eligible for homeownership assistance by the initial PHA may purchase a unit outside of the initial PHA's jurisdiction, if the receiving PHA is administering a voucher homeownership program and is accepting new homeownership families. Applicability of Housing Choice Voucher program portability procedures. In general, the portability procedures described in Sec. Sec. 982.353 and 982.355 apply to the homeownership option and the administrative responsibilities of the initial and receiving PHA are not altered except that some administrative functions (e.g, issuance of a voucher or execution of a tenancy addendum) do not apply to the homeownership option. Family and PHA responsibilities. The family must attend the briefing and counseling sessions required by the receiving PHA. The receiving PHA will determine whether the financing for, and the physical condition of the unit, are acceptable. The receiving PHA must promptly notify the initial PHA if the family has purchased an eligible unit under the program, or if the family is unable to purchase a home within the maximum time established by the PHA. Continued assistance under Sec. 982.637. Such continued assistance under portability procedures is subject to Sec. 982.637. The CDC will accept incoming portables into its Homeownership Program so long as they are identified as Homeownership participants by the initial PHA they are identified as Homeownership participants by the initial PHA and they are porting for the sole purpose of home purchase. 16- 29 16 MOVING WITH CONTINUED ASSISTANCE [24 CFR 982.637] Move to new unit. (1) A family receiving homeownership assistance may move to a new unit with continued tenant -based assistance in accordance with this section. The family may move either with voucher rental assistance (in accordance with rental assistance program requirements) or with voucher homeownership assistance (in accordance with homeownership option program requirements). The CDC will deny permission to move with continued rental or homeownership assistance, if the CDC determines that it does not have sufficient funding to provide continued assistance. The CDC may not commence continued tenant -based assistance for occupancy of the new unit so long as any family member owns any title or other interest in the prior home. The PHA may establish policies that prohibit more than one move by the family during any one year period. REQUIREMENTS FOR CONTINUATION OF HOMEOWNERSHIP ASSISTANCE The CDC must determine that all initial requirements listed in Sec. 982.626 (including the environmental requirements with respect to a unit not yet under construction) have been satisfied if a family that has received homeownership assistance wants to move to such a unit with continued homeownership assistance. However, the following requirements do not apply: o The requirement for pre -assistance counseling (Sec. 982.630) is not applicable. However, the PHA may require that the family complete additional counseling (before or after moving to a new unit with continued assistance under the homeownership option). o The requirement that a family must be a first-time homeowner (Sec. 982.627) is not applicable. DENIAL OR TERMINATION OF ASSISTANCE FOR FAMILY [24 CFR 982.638] General The PHA shall terminate homeownership assistance for the family, and shall deny voucher rental assistance for the family, in accordance with this section. Denial or termination of assistance under basic voucher program At any time, the PHA may deny or terminate homeownership assistance in accordance with Sec. 982.552 (Grounds for denial or termination of assistance) or Sec. 982.553 (Crime by family members). 16- 30 16 Failure to comply with family obligations The PHA may deny or terminate assistance for violation of participant obligations described in Sec. 982.551 or Sec. 982.633. Mortgage default The PHA must terminate voucher homeownership assistance for any member of family receiving homeownership assistance that is dispossessed from the home pursuant to a judgment or order of foreclosure on any mortgage (whether FHA -insured or non -FHA) securing debt incurred to purchase the home, or any refinancing of such debt. The PHA, in its discretion, may permit the family to move to a new unit with continued voucher rental assistance. However, the PHA must deny such permission, if: (1) The family defaulted on an FHA -insured mortgage; and (2) The family fails to demonstrate that: (i) The family has conveyed, or will convey, title to the home, as required by HUD, to HUD or HUD's designee; and [[Page 649]] (ii) The family has moved, or will move, from the home within the period established or approved by HUD. The CDC will terminate homeownership assistance if the family violates any of the family obligations contained in this section, this Plan, or the regulations. The CDC will terminate homeownership assistance if the family violates any of the following family obligations: • Transfer or conveyance of ownership of the home • Providing requested information to the CDC or HUD • Notifying the CDC before moving out of the home RECAPTURE OF HOMEOWNERSHIP ASSISTANCE There will be no recapture of homeownership assistance. PROJECT -BASED HOUSING CHOICE VOUCHERS [24 CFR 983 subpart A] GENERAL PROVISIONS The project -based component of the Housing Choice Voucher Program allows rental assistance to be attached to a specific unit and/or project instead of to a particular eligible assisted family. The project may be owned by any individual, corporation, trust, partnership, non-profit entity, as well as by the Community Development 16- 31 16 Commission of the City of National City (CDC), excluding those sanctioned from participation. The Section 8 Project -Based Housing Choice Voucher Program of the CDC may allocate up to 200 Housing Choice Vouchers (approximately 20 percent of the Housing Choice Voucher Program). These vouchers may be used in up to 100 percent of any given project that services elderly or disabled and up to 25 percent of mixed -family projects with more than four dwelling units and up to 100 percent of the units in projects where there are a maximum of four dwelling units per building. The CDC may administer a separate project -based waiting list. Eligible applicants for the Section 8 Project -Based Housing Choice Voucher Program may offer, for a term of up to ten years, either existing projects, projects to be rehabilitated, or projects to be constructed, with preference given, first, to existing projects, then, to projects to be rehabilitated. CDC projects may consist of following types of residences: apartments, condominiums, group homes, or houses. Ineligible projects include the following types of residences: shared housing, manufactured housing, nursing homes, or convalescent centers. Projects must be located in the CDC jurisdiction and must be located in areas of poverty rates of less than 20%. BACKGROUND The CDC's Section 8 Housing Choice Voucher holders have encountered a number of obstacles in their search for rental housing that qualifies for tenant -based rental assistance. The rental market, for several years, has reacted to the economic laws of supply and demand to the detriment of renters. For some time, supply has not kept up with demand, resulting in low vacancy rates and inflating rents. Due to these factors, landlords are less and less willing to participate in a program that assists low-income households, particularly when many program participants have a history of delinquent bills and evictions. After all, when a landlord looks at two applications, one that reflects a negative history, and the other a positive history (e.g., credit, rental or employment), the landlord will usually choose the latter. The CDC has found that many of those with a less than perfect credit and rental history never use the vouchers that are issued to them. This failure to assist those who need help the most has resulted in both a loss of time and effort by the CDC, and the anger and frustration of those unsuccessful in utilizing their vouchers. In order to improve the success rate of those least likely to be successful in a tenant -based rental assistance program, the CDC has determined it may be necessary to allocate its vouchers to projects -based assistance. PROJECT SELECTION PROCESS The CDC may advertise to accept applications from owners of rental housing developments who are interested in receiving project -based Section 8 vouchers for at least 25 percent for mixed family developments and up to 100 percent of the units in elderly and/or disabled developments. This federal Section 8 housing subsidy program 16- 32 16 will attach rental assistance directly to a specific unit or project for a term of up to ten years. The highest priority will be given to proposals with existing housing and those willing to commit to a ten-year contract. In addition, the projects must be located in areas of under 20% poverty rate. Finally, projects must be located within the jurisdiction of the CDC and cannot be located in the county and cities of San Diego, Oceanside, Encinitas, and Carlsbad. APPLICATION REQUIREMENTS Narrative written response to the evaluation criteria. Description per unit of unit rent, type, size, age, condition, amenities, and the utilities, services and appliances included in the rent. Comparable rent information for at least three comparable unassisted units. Gross rents must be rent reasonable and not exceed 110 percent of the applicable published area Fair Market Rents. Applications will be evaluated, based on responsiveness to the following criteria: • Site and design of existing project: Is the site and design of the project adequate and suitable for the number of units, and is the location of the project accessible to public and private social, recreational, educational, commercial, and health facilities and services, including employment and public transportation? • Extent to which the project contributes to the geographic distribution of affordable housing throughout the City of National City, promotes de - concentration of poverty, and furthers fair housing objectives. • Priority will be given to existing units that are attractive, in good condition and exceed housing quality standards. • Prior experience of the applicant in managing housing special needs households. • Only vacant units are eligible for the program. PROGRAM ADMINISTRATION INSPECTION OF THE PROJECTS AND UNITS Project must be inspected for conformance with Section 8 housing quality standards (HQS) prior to the execution of the contract with the project owner or designee. 16- 33 16 A copy of an inspection by a certified independent inspector done within the previous three months must be provided to the CDC prior to execution of the contract. Corrections to CDC identified deficiencies including those noted on either the housing quality standards or the independent inspection must be completed prior to execution of the contract. Individual units must be inspected prior to approval of a tenant lease and the commencement of project -based assistance for that unit. A random inspection of at least ten percent of the units must be inspected annually. The project and/or individual units are subject to special inspections for quality control purposes, or in response to a request and/or complaint MAINTENANCE OF PROJECTS Project must be maintained in conformance with Section 8 housing quality standards (HQS). Occupants of assisted units may be required to make repairs to correct violations in HQS that were caused by tenant abuse or neglect. Project must be in compliance with all relevant federal, State and local laws, as well as all zoning and other regulatory requirements. Taxes, fees, assessments, insurance, mortgages, or any other debts related to the projects must be kept current. The project must be maintained in accordance with the provisions of the contract. Project owners must take prompt action against residents engaging in illegal activities on the premises. The Contract will be a HUD standard contract, if available. If not available, the contract will be based on contracts currently in use by other public housing agencies, and must include the following: • The contract must state the remedies for non-compliance with the contract. • The contract must state the term. • The contract must contain provisions for termination by either party. • The contract must allow for termination by the CDC if funding becomes unavailable. • The contract must state the duties and responsibilities of all parties. 16- 34 16 • The contract must state the owner may request a rent adjustment once a year unless extraordinary additional expenses warrant a special rent adjustment. • In addition, the contract may have a provision for contract extensions. WAITING LIST A separate waiting list will be maintained for project -based assistance initially. Families will be selected off the waiting list in accordance with CDC -established selection preferences. Families selected off the waiting list will be processed for eligibility in conformance with the regulations and the CDC Section 8 Rental Assistance Division Administrative Plan. Families must meet income targeting guidelines in -place at the time of selection off the waiting list. Families denied admission to the project will be returned to the waiting list, if eligible, with the appropriate selection preferences and original date and time of application. VACANCIES Projects may be eligible for up to sixty days vacancy loss, upon request, providing all appropriate measures are taken to fill the vacancies. The CDC may reduce the number of units under the contract if the units remain vacant for 120 days. ASSISTANCE Assistance will be paid on behalf of eligible families in eligible project -based units. Assistance will be the difference between 30% of the family's monthly -adjusted income and the lower of either the gross rent or the applicable payment standard. INITIAL, ANNUAL AND ONGOING ACTIVITIES ALL FAMILIES: Annual eligibility determination of all families in units receiving project -based assistance. Annual review of progress families are achieving in meeting educational, job training and/or employment goals established at the time of initial eligibility. 16- 35 16 Annual random inspections of at least ten percent of the project -based units. All activities, unless indicated otherwise, or superseded by the regulations, will be in conformance with the Section 8 Administrative Plan. Families may request tenant -based Housing Choice Vouchers after one year. At that time, the next available tenant -based Housing Choice Vouchers or other assistance, such as HOME tenant -based rental assistance, will be offered to eligible families. Rent adjustments to the owner may be processed once a year provided the new rent is rent reasonable and the owner gives at least a 60-day advance notice to the tenant(s) and the CDC. No special rent adjustments will be allowed. SPECIAL CLAIMS Some CDC programs, may in some instances allow owners to make "special claims" for damages, unpaid rent, and vacancy loss. Except for project -based assistance, the Housing Choice Voucher Program does not have a "special claims" provision. Owner claims for payment for unpaid rent, damages, or vacancy loss will be reviewed for accuracy and completeness and compared with records in the file. The CDC establishes standards by which to evaluate claims, but the burden of proof rests with the owner. If vacancy loss is claimed, the CDC will ascertain whether or not the family gave proper notice of its intent to move. The file will also be reviewed to verify owner compliance at the time the contract was terminated. The CDC will pay properly filed claims to the owner as a function of the contract, but the tenant is ultimately responsible to reimburse the CDC for claims paid to the owner. UNPAID RENT Unpaid rent only applies to the tenant's portion of rent while the tenant is in residence under the assisted lease. It does not include the tenant's obligation for rent beyond the termination date of the HAP contract. Separate agreements are not considered a tenant obligation under the lease and the CDC will not reimburse the owner for any claims under these agreements. DAMAGES The owner or his authorized agent must be present during the move -out inspection, and only damages claimed by the owner are reimbursable. 16- 36 16 Actual bills for materials and labor and a copy of the cancelled checks or other receipts documenting payment must be provided to document claims. Invoices or bills from individuals providing labor must include their name, address and telephone number. The landlord may not bill him/herself for labor since that is not considered by the CDC to be an actual cost. However, the actual cost of the owner's employee's labor, such as the resident manager, to make repairs may be included. VACANCY LOSS In some special programs, vacancy loss is paid if the move was in violation of the notice requirements in the lease, or the result of an eviction. However, project -based Housing Choice Vouchers have vacancy loss provisions unique to the individual contracts with the owners. In order to claim vacancy loss, the unit must be available for lease and the landlord must: Notify the CDC within 48 hours excluding weekends and holidays upon learning of the vacancy, or prospective vacancy, and Pursue all possible activities to fill the vacancy, including, but not limited to: • Contacting applicants on the owner's waiting list, if any, • Seeking eligible applicants by listing the unit with the CDC, • Advertising the availability of the unit, and • Not rejecting potentially eligible applicants except for good cause. In the event that a unit becomes vacant because of the death of the tenant, the CDC will permit the owner to keep the HAP for the month in which the tenant died. If the tenant moves after the date given on their notice of intent to vacate, the landlord may claim vacancy loss by providing acceptable documentation that there was a bona fide prospective tenant to whom the unit could have been rented. To ensure valid claim processing, the CDC will conduct a thorough move -in inspection noting "conditions" as well as HQS deficiencies, take pictures of questionable items, and send a report of all items to the owner and tenant. 16- 37 16 MOVE -OUT AND CLOSE-OUT INSPECTIONS THE HOUSING CHOICE VOUCHER PROGRAM HAS NO DAMAGE CLAIM PROVISION. For older voucher contracts and other special programs that have a damage claim provision, the owner must notify the CDC of the move -out and request an inspection within 48 hours of learning. Otherwise, the owner cannot submit a claim for damages. If the contract was terminated due to owner breach, or the owner was in violation of the contract at the time that it was terminated, there will be no entitlement to claims and therefore no inspection. The owner and tenant will be notified of the date and time of the inspection. If the owner or his authorized agent is not present, the move -out inspection will not be rescheduled. The CDC will not conduct a move -out inspection upon a tenant's request, if the owner does not also request an inspection. A damage claim will not be approved unless the move -out inspection is requested and completed prior to any work being done. In the event that the CDC is unable to inspect within five days, the owner will be permitted to use date -stamped photographs to substantiate the claim. PROCESSING CLAIMS Any amount owed by the tenant to the owner for unpaid rent or damages will first be deducted from the maximum -security deposit, which the owner could have collected under the program rules. If the maximum allowable security deposit is insufficient to reimburse the owner for the unpaid tenant rent or other amounts that the family owes under the lease, the owner may request reimbursement from the CDC up to the limits for each program. If the owner claims vacancy loss, the security deposit that s/he collected or could have collected will be deducted from the vacancy loss claim. The CDC reviews claims for unpaid rent, damages, or vacancy loss and makes a preliminary determination of amount payable. The family is informed that a claim is pending (a notice is sent to last known address). The notification will state the preliminarily determined amount, the type of claim, and describe the procedure for contesting the claim. The CDC will offer the family ten days to contest the claim. If the family disputes the claim, the CDC will schedule an informal meeting with the owner and tenant in order to resolve the differences. If the tenant fails to attend the meeting, the CDC will proceed with its original determination. Meetings will not be rescheduled if neither the owner, nor the tenant attends. 16- 38 16 Meetings will not be rescheduled if either the owner or the tenant fails to attend. After a determination has been made, the CDC will notify the family in writing of the decision. If it has been determined that the family owes money, the CDC will pursue collection to repay either in a lump sum or through a payment agreement. The notice will warn the family that their assistance may be terminated and they may be denied future participation in the program if they do not reimburse the CDC as required. OTHER REQUIREMENTS FOR CLAIMS PROCESSING The CDC will require proof that the owner has complied with state and local laws applicable to security deposits before making payment on any claim. All notices to tenants during the processing of a claim must include proof of mailing or of personal delivery. Costs of filing eviction to remove the tenant or any other legal fees may not be reimbursed. No claims will be paid for a unit that is vacant as the result of the landlord voluntarily moving a family to another unit owned by the same landlord. All unpaid rent, damage, and vacancy loss claim forms must be fully complete when they are submitted, and they must be submitted within 30 days of the date the owner learned of the move -out. 16- 39 16 16- 40 GLOSSARY ACRONYMS USED IN SUBSIDIZED HOUSING AAF Annual Adjustment Factor: A factor published by HUD in the Federal Register that is used to compute annual rent adjustment. ACC Annual Contributions Contract BR Bedroom CDBG Community Development Block Grant CFR Code of Federal Regulations: Commonly referred to as "the regulations". The CFR is the compilation of Federal rules that are first published in the Federal Register and define and implement a statute. CPI Consumer Price Index: CPI is published monthly by the Department of Labor an inflation indicator. ELI Extremely low income FDIC Federal Deposit Insurance Corporation FHA Federal Housing Administration FICA Federal Insurance Contributions Act - Social Security taxes FMHA Farmers Home Administration FMR Fair Market Rent FY Fiscal Year FYE Fiscal Year End GAO Government Accounting Office GFC Gross Family Contribution: Note: Has been replaced by the term Total TENANT PAYMENT (UP). GR Gross Rent HAP Housing Assistance Payment HAP Plan Housing Assistance Payment Plan HCDA Housing and Community Development Act HQS Housing Quality Standards G- 1 GLOSSARY ACRONYMS HUD The Department of Housing and Urban Development or its designee. HURRA Housing and Urban/Rural Recovery Act of 1983; resulted in most of the 1984 HUD regulation changes to definition of income, allowances, rent calculations IG Inspector General IGR Independent Group Residence INS The U.S. Immigration and Naturalization Service. IPA Independent Public Accountant IRA Individual Retirement Account Kin -GAP Kinship Guardian Assistance Payments MSA Metropolitan Statistical Area established by the U. S. Census Bureau PHA Public Housing Agency PMSA A Primary Metropolitan Statistical Area established by the U.S. Census Bureau PS Payment Standards QC Quality Control RFAT Request for Approval of the Tenancy RFTA Request for Tenancy Approval RFP Request for Proposals RRP Rental Rehabilitation Program SRO Single Room Occupancy SEMAP Section 8 Management Assessment Program SSMA Standard Statistical Metropolitan Area. Has been replaced by MSA, Metropolitan Statistical Area. TR Tenant Rent TTP Total Tenant Payment G- 2 GLOSSARY ACRONYMS UA Utility Allowance URP Utility Reimbursement Payment VAWA Violence Against Women and Justice Department Reauthorization Act of 2005; Sec. 606. Amendments to the low-income Housing Assistance Voucher Program G- 3 GLOSSARY GLOSSARY OF TERMS IN SUBSIDIZED HOUSING 1937 ACT: The United States Housing Act of 1937 (42 U.S.C. 1437 et seq.) ABSORPTION: In portability (under subpart H of this part 982): the point at which a receiving PHA stops billing the initial PHA for assistance on behalf of a portability family. The receiving PHA uses funds available under the receiving PHA consolidated ACC. ACC RESERVE ACCOUNT (FORMERLY "PROJECT RESERVE"): Account established by HUD from amounts by which the maximum payment to the PHA under the consolidated ACC (during a PHA fiscal year) exceeds the amount actually approved and paid. This account is used as the source of additional payments for the program. ADA: Americans with Disabilities Act 1990 (42 U.S.C. 12101 et seq.) ADJUSTED INCOME: is defined as the Annual Income minus any HUD allowable expenses and deductions. ADMINISTRATIVE FEE: Fee paid by HUD to the PHA for administration of the program. See Sec. 982.152. ADMINISTRATIVE FEE RESERVE (Formerly "Operating reserve"): Account established by PHA from excess administrative fee income. The administrative fee reserve must be used for housing purposes. See Sec. 982.155. ADMINISTRATIVE PLAN: The plan that describes PHA policies for administration of the tenant -based programs. See Sec. 982.54. ADMISSION: The point when the family becomes a participant in the program. The date used for this purpose is the effective date of the first HAP contract for a family (first day of initial lease term) in a tenant -based program. ADULT: A person who is 18 years of age or older, or who has been convicted of a crime as an adult under any Federal, State, or tribal law. AU: means an administrative law judge appointed to HUD pursuant to 5 U.S.C. 3105 or detailed to HUD pursuant to 5 U.S.C. 3344. ANNUAL BUDGET AUTHORITY: The maximum annual payment by HUD to a PHA for a funding increment. ANNUAL CONTRIBUTIONS CONTRACT (ACC): means the written contract between HUD and a PHA under which HUD agrees to provide funding for a program under the 1937 Act, and the PHA agrees to comply with HUD requirements for the program. G- 4 GLOSSARY ANNUAL INCOME: The anticipated total Annual Income of an eligible family from all sources for the 12-month period following the date of determination of income, computed in accordance with the regulations. ANNUAL INCOME AFTER ALLOWANCES: The Annual Income (described above) less the HUD -approved allowances. APPLICANT (or applicant family): a person or a family that has applied for housing assistance. "AS -PAID" STATES: States where the welfare agency adjusts the shelter and utility component of the welfare grant in accordance with actual housing costs. ASSETS: (See Net Family Assets.) ASSISTANCE APPLICANT: Except as excluded pursuant to 42 U.S.C. 3543(b) and 3544(a)(2), this term means the following: • For any program under 24 CFR parts 215, 221, 236, 290 or 891, or any program under Section 8 of the 1937 Act: A family or individual that seeks admission to the program. ■ For the public housing program: A family or individual that seeks admission to the program. - For any program under 24 CFR part 235: a homeowner or cooperative member seeking homeownership assistance (including where the individual seeks to assume an existing mortgage). ASSISTED TENANT: A tenant who pays less than the market rent as defined in the regulations, includes tenants receiving rent supplement, Rental Assistance Payments, or Section 8 assistance and all other 236 and 221 (d)(3) BMIR tenants, except those paying the 236 market rent or 120% of the BMIR rent, respectively. BUDGET AUTHORITY: An amount authorized and appropriated by the Congress for payment to PHAs under the program. For each funding increment in a PHA program, budget authority is the maximum amount that may be paid by HUD to the PHA over the ACC term of the funding increment. CHILD: a member of the family other than the family head or spouse who is under 18 years of age. CHILD CARE EXPENSES: Amounts paid by the family for the care of minors under 13 years of age where such care is necessary to enable a family member to be employed or for a household member to further his/her education. CITIZEN: A citizen or national of the United States. CO-HEAD: An individual in the household who is equally responsible for the lease with the Head of Household. (A family never has a Co-head and a Spouse and; a Co-head is never a Dependant). G- 5 GLOSSARY COMMON SPACE: In shared housing: Space available for use by the assisted family and other occupants of the unit. COMPUTER MATCH: means the automated comparison of data bases containing records about individuals. COMPUTER MATCHING AGREEMENT: means the agreement that describes the responsibilities and obligations of the parties participating in a computer match. CONGREGATE HOUSING: Housing for elderly persons or persons with disabilities that meets the HQS for congregate housing. A special housing type: see Sec. 982.606 to Sec. 982.609. CONSENT FORM: means any consent form approved by HUD to be signed by assistance applicants and participants for the purpose of obtaining income information from employers and SWICAs; return information from the Social Security Administration (including wages, net earnings from self-employment, and payments of retirement income), as referenced at 26 U.S.C. 6103(0 (7) (A); and return information for unearned income from the Internal Revenue Service, as referenced at 26 U.S.C. 6103(0 (7) (B). The consent forms expire after a certain time and may authorize the collection of other information from assistance applicants or participants to determine eligibility or level of benefits as provided in Sec. Sec. 813.109. 913.109 and 950.315 of this title. CONSOLIDATED ANNUAL CONTRIBUTIONS CONTRACT (Consolidated ACC): See 24 CFR 982.151. CONTIGUOUS MSA: In portability, an MSA that shares a common boundary with the MSA in which the jurisdiction of the initial PHA is located. CONTINUOUSLY ASSISTED: An applicant is continuously assisted under the 1937 Housing Act the family is already receiving assistance under any 1937 Housing Act program when the family is admitted to the certificate or voucher program. CONTRACT: (See Housing Assistance Payments Contract.) COOPERATIVE: Housing owned by a corporation or association, and where a member of the corporation or association has the right to reside in a particular apartment, and to participate in management of the housing. COOPERATIVE MEMBER: A family of which one or more members own membership shares in a cooperative. COVERED FAMILIES: Families who receive welfare assistance or other public assistance benefits ("welfare benefits") from a State or other public agency ("welfare agency") under a program for which Federal, State, or local law requires that a member of the family must participate in an economic self-sufficiency program as a condition for such assistance. G- 6 GLOSSARY COVERED FAMILY: A household that receives benefits for welfare or public assistance from a state or public agency program which requires, as a condition of eligibility to receive assistance, the participation of a family member in an economic self- sufficiency program. COVERED HOUSING: Public housing, project -based assistance under section 8 (including new construction and substantial rehabilitation projects), and tenant -based assistance under section 8. COVERED PERSON: for purposes of 24 CFR 5, subpart I, and parts 966 and 982, means a tenant, any member of the tenant's household, a guest or another person under the tenant's control. CRIMINAL RECORD(S): for purposes of 24 CFR Part 982.552(c) (2) (ii): PHAs may be able to use their existing authority under this provision to deny or terminate voucher assistance for certain family members for criminal activity while permitting other members of a participant family to continue receiving assistance (provided that the culpable family member will no longer reside in the unit). The CDC verifies the criminal history of all adults at the time of program admission, adults admitted to the assisted household, adult family members who port into the jurisdiction of the CDC, all adult family members transferring to another assisted unit and may verify the criminal history of all adult program participants on a regular basis. The verification is conducted by researching criminal history, including status of a family member subject to a sex offender registration requirement of a state sex offender registration program. CURRENTLY ENGAGING IN: With respect to behavior such as illegal use of a drug, other drug -related criminal activity, or other criminal activity, currently engaging in means that the individual has engaged in the behavior recently enough to justify a reasonable belief that the individual's behavior is current. DEPARTMENT: means the Department of Housing and Urban Development. DEPENDENT: A member of the family household (excluding foster children) other than the family head or spouse, who is under 18 years of age or is a Disabled Person or Handicapped Person, or is a full-time student 18 years of age or over. DISABILITY ASSISTANCE EXPENSE: Anticipated costs for care attendants and auxiliary apparatus for disabled family members, which enable a family member (including the disabled family member) to work. DISABLED FAMILY: means a family whose head, spouse, or sole member is a person with disabilities it may include two or more persons with disabilities living together or one or more persons with disabilities living with one or more live-in aides. G- 7 GLOSSARY DISABLED HOUSEHOLD: According to 24 CFR 5.403, for the HCVP, a disabled household is defined as a family whose head, spouse, or sole member is an adult with a disability. It may include two or more adults with disabilities (either related or unrelated) living together, or one or more adults with disabilities living with one or more live-in aides. DISABLED PERSON: See Person with Disabilities. DISALLOWANCE: Exclusion from annual income. DISPLACED FAMILY: means a family in which each member, or whose sole member, is a person displaced by governmental action, or a person whose dwelling has been extensively damaged as a result of a disaster declared or otherwise formally recognized pursuant to federal disaster relief laws. DOMESTIC VIOLENCE: includes felony or misdemeanor crimes of violence committed by a current or former spouse of the victim, by a person with whom the victim shares a child in common, by a person who is cohabitating with or has cohabitated with the victim as a spouse, by a person similarly situated to a spouse of the victim under the domestic or family violence laws of the jurisdiction receiving grant monies, or by any other person against an adult or youth victim who is protected from that person's acts under the domestic or family violence laws of the jurisdiction. DOMICILE: The legal residence of the household head or spouse as determined in accordance with State and local law. DRUG: means a controlled substance as defined in section 102 of the Controlled Substances Act (21 U.S.C. 802). DRUG -RELATED CRIMINAL ACTIVITY: means the illegal manufacture, sale, distribution, or use of a drug, or the possession of a drug with intent to manufacture, sell, distribute or use the drug. DRUG TRAFFICKING: The illegal manufacture, sale, distribution, use, or possession with intent to manufacture, sell, distribute or use, of a controlled substance (as defined in section 102 of the Controlled Substances Act (21 U.S.C. 802). ECONOMIC SELF SUFFICIENCY PROGRAM: Any program designed to encourage, assist, train or facilitate the economic independence of HUD -assisted families; or to provide work for such families. These programs include programs for job training, employment counseling, work placement, basic skills training, English proficiency, Workfare, financial or household management, apprenticeship, and any program necessary to ready a participant for work (including a substance abuse or mental health treatment program) or other work activities. ELDERLY FAMILY: means a family whose head, spouse, or sole member is a person who is at least 62 years of age. It may include of two or more persons who are at least 62 years of age living together or one or more persons who are at least 62 years of age living with one or more live-in aides. G- 8 GLOSSARY ELDERLY HOUSEHOLD: A family whose head or spouse or whose sole member is at least 62 years of age; may include two or more elderly persons living together or one or more such persons living with another person who is determined to be essential to his/her care and well being. ELDERLY PERSON: means an individual who is at least 62 years of age. ELIGIBILITY INCOME: May 10, 1984, regulations deleted Eligibility Income, per se, because Annual Income is now for eligibility determination to compare to income limits. ELIGIBILITY FAMILY (Family): A family is defined by the PHA in the administrative Plan, which is approved by HUD. EMPLOYER IDENTIFICATION NUMBER (EIN): means the nine -digit taxpayer identifying number that is assigned to an individual, trust, estate, partnership, association, company, or corporation pursuant to sections 6011(b), or corresponding provisions of prior law, or 6109 or the Internal Revenue Code. ENGAGED IN OR ENGAGING IN VIOLENT CRIMINAL ACTIVITY: means any act within the past five years by an applicant or participant or household member which involved criminal activity that has as one of its elements the use, attempted use, or threatened use of physical force substantial enough to cause, or be reasonably likely to cause, serious bodily injury or property damage, which may or may not have resulted in the arrest and/or conviction of the applicant, participant, or household member; Criminal activity directly relating to domestic violence, dating violence, or stalking, engaged in by a member of a tenant's control shall not be cause for termination of assistance, tenancy, or occupancy rights if the tenant or an immediate member of the tenant's family is the victim or threatened victim of that domestic violence, dating violence, or stalking. It is not an appropriate basis for denial of program assistance or for denial of admission if the applicant otherwise qualifies for assistance or admission unless the applicant, participant fails to provide the required Certification of Domestic Violence, Dating Violence, or Stalking form within the required timeframe of 14 days. The CDC prohibits the illegal use of all controlled substances as defined under federal guidelines. ENTERPRISE INCOME VERIFICATION: (EIV) is information provided directly from a central information collection point, which includes the HUD Tenant Assessment Subsystem (WASS) for social security and supplementary security (SSI) income, the WorkNumber for wage income information, the local public assistance provider on- line informational link for CalWorks or TANIF income, etc. If this income information is received from this source and is reliable, no other verification is required. ENTITY APPLICANT: (1) Except as excluded pursuant to 42 U.S.C. 3543(b), 3544(a)(2), and paragraph (2) of this definition, this term means a partnership, corporation, or any other association or entity, other than an individual owner applicant, that seeks to participate as a private owner in any of the following: (i) The project -based assistance programs under Section 8 of the 1937 Act; G- 9 GLOSSARY (ii) The programs in 24 CFR parts 215, 221, or 236; or (iii) The other mortgage and Loan insurance programs in 24 CFR parts 201 through 267, except that the term "entity applicant" does not include a mortgagee or lender. (2) The term does not include a public entity, such as a PHA, IHA, or State Housing Finance Agency. ESSENTIAL CARE: The HCVP regulations do not specifically define "essential" care. The HUD HCVP Guidebook recommends "written certification from doctor or rehabilitation agency that care is necessary to employment of household member." 2 For household members, who require an attendant not for employment but simply to assist in activities of daily living, written certification from a doctor or other professional would be appropriate. This is an area where PHAs may choose to expand upon HUD's standards. For example, a PHA might accept documentation of need for a live-in aide from a non -medical agency that provides services to people with disabilities, such as a Center for Independent Living. EVIDENCE OF CITIZENSHIP OR ELIGIBLE STATUS: the documents which must be submitted to evidence citizenship or eligible immigration status. (see 55.508(b).) EXCEPTIONAL MEDICAL OR OTHER EXPENSES: Prior to the regulation change in 1982, this meant medical and/or unusual expenses as defined in Part 889, which exceeded 25% of the Annual Income. It is no longer used. EXCEPTION RENT: In the pre -merger certificate program, an initial rent (contract rent plus any utility allowance) in excess of the published FMR. See FMR/Exception rent. EXCESS MEDICAL EXPENSES: Any medical expenses incurred by elderly or disabled families only in excess of 3% of Annual Income which are not reimbursable from any other source. EXTENSIONS: The program manager or designee must approve all voucher extensions beyond the initial 60 days. An extension will be for a period of no more than 60 days (given in two (2) 30 day extensions). EXTREMELY LOW-INCOME FAMILY: A family whose annual income does not exceed 30 percent of the median income for the area, as determined by HUD, with adjustments for smaller and larger families, except that HUD may establish income ceilings higher or lower than 80 percent of the median income for the area on the basis of HUD's findings that such variations are necessary because of unusually high or low family incomes. FAILURE TO PROVIDE: refers to all requirements of the Family Obligations of the program as outlined elsewhere in the Plan. FAIR HOUSING ACT: means title VIII of the Civil Rights Act of 1968, as amended by the Fair Housing Amendments Act of 1988 (42 U.S.C. 3601 et seq.) G- 10 GLOSSARY FAIR MARKET RENT (FMR): means the rent that would be required to be paid in the particular housing market area in order to obtain privately owned, decent, safe and sanitary rental housing of modest (non -luxury) nature with suitable amenities. This Fair Market Rent includes utilities (except telephone). Separate Fair Market Rents will be established by HUD for dwelling units of varying sizes (number of bedrooms) and will be published in the Federal Register in accordance with part 888 of this title. FAMILY: includes but is not limited to: A person or group of persons, as determined by the PHA, approved to reside in a unit with assistance under the program. See discussion of family composition at Sec. 982.201(c). FAMILY CERTIFICATION: A [notarized] family certification will be accepted when no other form of verification is available. FAMILY OF VETERAN OR SERVICE PERSON: A family is a "family of veteran or service person" when: The veteran or service person, unless deceased, is living with the family or is only temporarily absent unless s/he was (a) formerly the head of the household and is permanently absent because of hospitalization, separation, or desertion, or is divorced; provided, the family contains one or more persons for whose support s/he is legally responsible and the spouse has not remarried; or (b) not the head of the household but is permanently hospitalized; provided, that s/he was a family member at the time of hospitalization and there remain in the family at least two related persons. FAMILY RENT TO OWNER: In the voucher program, the portion of the rent to owner paid by the family. For calculation of family rent to owner, see Sec. 982.515(b). FAMILY SELF-SUFFICIENCY PROGRAM (FSS PROGRAM): The program established by a PHA to promote self-sufficiency of assisted families, including the provision of supportive services. FAMILY SHARE: The portion of rent and utilities paid by the family. For calculation of family share, see Sec. 982.515(a). FAMILY UNIT SIZE: The appropriate number of bedrooms for a family, as determined by the PHA under the PHA's subsidy standards. FMR/EXCEPTION RENT: The fair market rent published by HUD headquarters. In the pre -merger certificate program the initial contract rent for a dwelling unit plus any utility allowance could not exceed the FMR/exception rent limit (for the dwelling unit or for the family unit size). In the voucher program the PHA adopts a payment standard schedule that is within 90% to 110% of the FMR for each bedroom size. FEDERAL AGENCY: means a department of the executive branch of the Federal Government. G- 11 GLOSSARY FEDERALLY ASSISTED HOUSING (for purposes of subparts I and J of this part): means housing assisted under any of the following programs: (1) Public housing; (2) Housing receiving project -based or tenant -based assistance under Section 8 of the U.S. Housing Act of 1937 (42 U.S.C. 1437f); (3) Housing that is assisted under section 202 of the Housing Act of 1959, as amended by section 801 of the National Affordable Housing Act (12 U.S.C. 1701q); (4) Housing that is assisted under section 202 of the Housing Act of 1959, as [[Page 41]] such section existed before the enactment of the National Affordable Housing Act; (5) Housing that is assisted under section 811 of the National Affordable Housing Act (42 U.S.C. 8013); (6) Housing financed by a loan or mortgage insured under section 221(d)(3) of the National Housing Act (12 U.S.C. 17151(d)(3)) that bears interest at a rate determined under the proviso of section 221(d)(5) of such Act (12 U.S.C. 17151(d)(5)); (7) Housing insured, assisted, or held by HUD or by a State or local agency under section 236 of the National Housing Act (12 U.S.C. 1715z-1); or (8) Housing assisted by the Rural Development Administration under section 514 or section 515 of the Housing Act of 1949 (42 U.S.C. 1483, 1484). FOSTER CHILD CARE PAYMENT: Payment to eligible households by state, local, or private agencies appointed by the State, to administer payments for the care of foster children. FRAUD AND ABUSE: Means a single act or pattern of actions: (1) That constitutes false statement, omission, or concealment of a substantive fact, made with intent to deceive or mislead; and (2) that results in payment of section 8 program funds in violation of section 8 program requirements. (24 CFR 5 792.103) FULL-TIME STUDENTS: A person who is attending school or vocational training on a full-time basis. FUNDING INCREMENT: Each commitment of budget authority by HUD to a PHA under the consolidated annual contributions contract for the PHA program. GENERAL COUNSEL: means the General Counsel of HUD. GRANTEE means the person or legal entity to which a grant is awarded and that is accountable for the use of the funds provided. GROSS FAMILY CONTRIBUTION: Changed to Total Tenant Payment. GROSS RENT: The sum of the Rent to Owner and the utility allowance. GROUP HOME: A dwelling unit that is licensed by a State as a group home for the exclusive residential use of two to twelve persons who are elderly or persons with disabilities (including any live-in aide). A special housing type: see Sec. 982.610 to Sec. 982.614. G- 12 GLOSSARY GUEST: only for purposes of 24 CFR part 5, subparts A and I, and parts 882, 960, 966, and 982, means a person temporarily staying in the unit with the consent of a tenant or other member of the household who has express or implied authority to so consent on behalf of the tenant. The requirements of parts 966 and 982 apply to a guest as so defined. HAP CONTRACT: Housing Assistance Payments contract. HEAD OF HOUSEHOLD: the adult member of the family who is the head of the household for purposes of determining income eligibility and rent. HOUSEHOLD: for the purposes of 24 CFR Part 982 and this chapter, means the family and PHA -approved live-in aide. HOUSING AGENCY: A state, county, municipality or other governmental entity or public body (or agency or instrumentality thereof) authorized to engage in or assist in the development or operation of low-income housing. ("PHA" and "HA" mean the same thing.) HOUSING AND COMMUNITY DEVELOPMENT ACT OF 1974: Act in which the U. S. Housing Act of 1937 (sometimes referred to as the Act) was recodified, and which added the Section 8 Programs. HOUSING ASSISTANCE PAYMENT: The monthly assistance payment by a PHA to an owner. The total assistance payment consists of: • A payment to the owner for rent to owner under the family's lease; and • An additional payment to the family if the total assistance payment exceeds the rent to owner. HOUSING ASSISTANCE PAYMENTS CONTRACT (HAP contract): A written contract between a PHA and an owner in the form prescribed by HUD headquarters, in which the PHA agrees to make housing assistance payments to the owner on behalf of an eligible family. HOUSING ASSISTANCE PLAN: (1) A Housing Assistance Plan submitted by a local government participating in the Community Development Block Program as part of the block grant application, in accordance with the requirements of 570.303© submitted by a local government not participating in the Community Development Block Grant (CDBG) Program and approved by HUD. (2) A Housing Assistance Plan meeting the requirements of 570.303© submitted by a local government not participating in the Community Development Block Grant Program and approved by HUD. HOUSING COVERED PROGRAMS: means the following programs administered by the Assistant Secretary for Housing: (1) Section 235 of the National Housing Act (12 U.S.C. 1715z) (the Section 235 Program); (2) Section 236 of the National Housing Act (12 U.S.C. 1715z-1) (tenants paying below market rent only) (the Section 236 Program); and (3) Section 101 of the Housing and Urban Development Act of 1965 (12 U.S.C. 1701s) (the Rent Supplement Program). G- 13 GLOSSARY HOUSING QUALITY STANDARDS (HQS): The HUD minimum quality standards for housing assisted under the tenant -based programs. See Sec. 982.401. HUD means the same as Department. HUD REQUIREMENTS: HUD requirements for the Section 8 programs. HUD requirements are issued by HUD headquarters as regulations. Federal Register notices or other binding program directives. IMMEDIATE FAMILY MEMBER: means, with respect to a person: (1) A spouse, parent, brother, or sister, or child of that person, or an individual to whom that person stands in loco parentis; or (2) Any other person living in the household of that person and related to that person by blood or marriage IMPUTED ASSET: Asset disposed of for less than Fair Market Value during two years preceding examination or reexamination. IMPUTED INCOME: HUD passbook rate x total cash value of assets. Calculation used when assets exceed $5,000. IMPUTED WELFARE INCOME: (1) A family's annual income includes the amount of imputed welfare income (because of a specified welfare benefits reduction, as specified in notice to the PHA by the welfare agency), plus the total amount of other annual income as determined in accordance with Sec. 5.609. (2) At the request of the PHA, the welfare agency will inform the PHA in writing of the amount and term of any specified welfare benefit reduction for a family member, and the reason for such reduction, and will also inform the PHA of any subsequent changes in the term or amount of such specified welfare benefit reduction. The PHA will use this information to determine the amount of imputed welfare income for a family. (3) A family's annual income includes imputed welfare income in family annual income, as determined at the PHA's interim or regular reexamination of family income and composition, during the term of the welfare benefits reduction (as specified in information provided to the PHA by the welfare agency). (4) The amount of the imputed welfare income is offset by the amount of additional income a family receives that commences after the time the sanction was imposed. When such additional income from other sources is at least equal to the imputed welfare income, the imputed welfare income is reduced to zero. (5) The PHA may not include imputed welfare income in annual income if the family was not an assisted resident at the time of sanction. INCOME: Income from all sources of each member of the household as determined in accordance with criteria established by HUD. INCOME FOR ELIGIBILITY: Annual Income. INCOME INFORMATION: means information relating to an individual's income, including: G- 14 GLOSSARY (1) All employment income information known to current or previous employers or other income sources that HUD or the processing entity determines is necessary for purposes of determining an assistance applicant's or participant's eligibility for, or level of assistance in, a covered program; (2) All information about wages, as defined in the State's unemployment Compensation law, including any Social Security Number; name of the employee; quarterly wages of the employee; and the name, full address, telephone number, and, when known, Employer Identification Number of an employer reporting wages under a State unemployment compensation law; (3) With respect to unemployment compensation: (i) Whether an individual is receiving, has received, or has applied for unemployment compensation; (ii) The amount of unemployment compensation the individual is receiving or is entitled to receive; and (iii) The period with respect to which the individual actually received such compensation; (4) Unearned IRS income and self-employment, wages and retirement income as described in the Internal Revenue Code, 26 U.S.C. 6103(1)(7); and (5) Wage, social security (Title II), and supplemental security income (Title XVI) data obtained from the Social Security Administration. INDIAN: Any person recognized as an Indian or Alaska native by an Indian tribe, the federal government, or any State. INDIAN HOUSING AUTHORITY (IHA): A housing agency established either by exercise of the power of self-government of an Indian Tribe, independent of State law, or by operation of State law providing specifically for housing authorities for Indians. INDIVIDUAL OWNER APPLICANT: Except as excluded pursuant to 42 U.S.C. 3543(b), 3544(a) (2), or paragraph (2) of this definition, this term means: (1) An individual who seeks to participate as a private owner in any of: (i) The project -based assistance programs under Section 8 of the 1937 Act; or (ii) The programs in 24 CFR parts 215, 221, 235 (without homeownership assistance), or 236, including where the individual seeks to assume an existing mortgage; or (2) An individual who: (i) Either: (A) Applies for a mortgage or loan insured or coinsured under any of the programs referred to in paragraph (1) (iii) of the definition of "entity applicant" in this section; or (B) Seeks to assume an existing mortgage or loan; and (ii) Intends to hold the mortgages property in his or her individual right. INITIAL PHA: In portability, the term refers to both: • A PHA that originally selected a family that later decides to move out of the jurisdiction of the selecting PHA; and • A PHA that absorbed a family that later decides to move out of the jurisdiction of the absorbing PHA. G- 15 GLOSSARY INITIAL PAYMENT STANDARD: The payment standard at the beginning of the HAP contract term. INITIAL RENT OT OWNER: The rent to owner at the beginning of the HAP contract term. INS: the U.S. Immigration and Naturalization Service. INTEREST REDUCTION SUBSIDIES: The monthly payments or discounts made by HUD to reduce the debt service payment and, hence, rents required on Section 236 and 221 (d) (3) BMIR projects. Includes monthly interest reduction payments made to mortgages of Section 236 projects and front-end loan discounts paid on BMIR projects. IRS: means the Internal Revenue Service. JURISDICTION: The area which the PHA has authority under State and local law to administer the program. KINSHIP PAYMENTS: foster care subsidies received for children living with a related legal guardian under the Kinship Guardian Assistance Payments (Kin -GAP) will be treated the same as foster care payments. LANDLORD: This term means either the owner of the property or the owner shall designate his/her representative or the managing agent or his/her representative. LARGE VERY LOW INCOME FAMILY: Prior to the 1982 regulations, this meant a very low-income family, which included six or more minors. This term is no longer used. LAW ENFORCEMENT AGENCY: The National Crime Information Center (NCIC), police departments and other law enforcement agencies that hold criminal conviction records. LEGAL CAPACITY: means that the tenant is bound by the terms of the lease and may enforce the terms of the lease against the owner. LEASE: (1) A written agreement between an owner and a tenant for the leasing of a dwelling unit to the tenant. The lease establishes the conditions for occupancy of the dwelling unit by a family with housing assistance payments under a HAP contract between the owner and the PHA. (2) In cooperative housing, a written agreement between a cooperative and a member of the cooperative. The agreement establishes the conditions for occupancy of the member's cooperative dwelling unit by the member's family with housing assistance payments to the cooperative under a HAP contract between the cooperative and the PHA. For purposes of this part 982, the cooperative is the Section 8 "owner" of the unit, and the cooperative member is the Section 8 "tenant." LEASE ADDENDUM: For pre -merger Certificate, pre -merger OFTO, and pre -merger Voucher tenancies, the lease language required by HUD in the lease between the tenant and the owner. G- 16 GLOSSARY LITIGATION: A lawsuit brought by a PHA to recover Section 8 program funds obtained as a result of fraud and abuse. LIVE-IN AIDE: means a person who resides with one or more elderly person, or near - elderly persons, or persons with disabilities, and who: (1) is determined to be essential to the care and well-being of the persons;(2) is not obligated for the support of the persons; and (3) would not be living in the unit except to provide necessary supportive services. LOCAL PREFERENCE: A preference used by the PHA to select among applicant families. LOW-INCOME FAMILY: A family whose annual income does not exceed 80 percent of the median income for the area, as determined by HUD, with adjustments for smaller and larger families.- , except that HUD may establish income ceilings higher or lower than 80% of the median income for the area on the basis of HUD's findings that such variations are necessary because of unusually high or low family incomes. MSA: means a metropolitan statistical area. MANUFACTURED HOME: A manufactured structure that is built on a permanent chassis, is designed for use as a principal place of residence, and meets the HQS. A special -housing type. See 24 CFR 982.620 and 982.621. MANUFACTURED HOME SPACE: In manufactured home space rental: A space leased by an owner to a family. A manufactured home owned and occupied by the family is located on the space. See 24CFR 982.622 to 982.624 MARKET RENT: The rent HUD authorizes the owner of FHA insured/subsidized multi- family housing to collect from families ineligible for assistance. For unsubsidized units in an FHA- insured multi -family project in which a portion of the total units receive project -based rental assistance, under the Rental Supplement or Section 202/Section 8 Programs, the Market Rate Rent is that rent approved by HUD and is the Contract Rent for a Section 8 Certificate holder. For BMIR units, Market Rent varies by whether the project is a rental or cooperative. MEDICAL EXPENSES: medical expenses, including medical insurance premiums that are anticipated during the period for which Annual Income is computed, and that are not covered by insurance. MERGER DATE: October 1, 1999. MINOR: A member of the family household (excluding foster children) other than the family head or spouse who is under 18 years of age. MIXED FAMILY: A family whose members include those with citizenship or eligible immigration status, and those without citizenship or eligible immigration status. G- 17 GLOSSARY MONTHLY ADJUSTED INCOME: 1/12 of the Annual Income after Allowances or Adjusted Income. MONTHLY INCOME: One twelfth of the Annual Income. MUTUAL HOUSING: Included in the definition of COOPERATIVE. NAHA: means the Cranston -Gonzalez National Affordable Housing Act (42 U.S.C. 12701 et seq.). NEPA: means the National Environmental Policy Act of 1969 (42 U.S.C. 4321). NATIONAL: A person who owes permanent allegiance to the United States, for example, as a result of birth in a United States territory or possession. NEAR -ELDERLY FAMILY: means a family whose head, spouse, or sole member is a person who is at least 50 years of age but below the age of 62; or two or more persons who are at least 50 years of age but below the age of 62, living together; or one or more persons who are at least 50 years of age but below the age of 62, living with one or more live-in aides. NEGATIVE RENT: Now called Utility Reimbursement, A negative Tenant Rent results in a Utility Reimbursement Payment (URP). NET FAMILY ASSETS: (1) Net cash value after deducting reasonable costs that would be incurred in disposing of real property, savings, stocks, bonds, and other forms of capital investment, excluding interests in Indian trust land and excluding equity accounts in HUD homeownership programs. The value of necessary items of personal property such as furniture and automobiles shall be excluded. (2) In cases where a trust fund has been established and the trust is not revocable by, or under the control of, any member of the family or household, the value of the trust fund will not be considered an asset so long as the fund continues to be held in trust. Any income distributed from the trust fund shall be counted when determining annual income under Sec. 5.609. (3) In determining net family assets, PHAs or owners, as applicable, shall include the value of any business or family assets disposed of by an applicant or tenant for less than fair market value (including a disposition in trust, but not in a foreclosure or bankruptcy sale) during the two years preceding the date of application for the program or reexamination, as applicable, in excess of the consideration received Therefore. In the case of a disposition as part of a separation or divorce settlement, the disposition will not be considered to be for less than fair market value if the applicant or tenant receives important consideration not measurable in dollar terms. (4) For purposes of determining annual income under Sec. 5.609, the term "net family assets" does not include the value of a home currently being purchased with assistance under part 982, subpart M of this title. This exclusion is limited to the first 10 years after the purchase date of the home. NET FAMILY CONTRIBUTION: Former name for Tenant Rent. G- 18 GLOSSARY NON -CITIZEN: A person who is neither a citizen nor a national of the United States. NOFA: means Notice of Funding Availability. OCCUPANCY STANDARDS: [Now referred to as Subsidy Standards]: Standards established by a PHA to determine the appropriate number of bedrooms for families of different sizes and compositions. OMB: means the Office of Management and Budget. ORGANIZATIONAL UNIT: means the jurisdictional area of each Assistant Secretary, and each office head or field administrator reporting directly to the Secretary. OTHER PERSON UNDER THE TENANT'S CONTROL: for the purposes of the definition of covered person and for 24 CFR part and 982 and for this chapter, means that the person, although not staying as a guest (as defined in this chapter) in the unit, is, or was at the time of the activity in question, on the premises because of an invitation from the tenant or other member of the household who has express or implied authority to so consent on behalf of the tenant. Absent evidence to the contrary, a person temporarily and infrequently on the premises solely for legitimate commercial purposes is not under the tenant's control. OVER-FMR TENANCY (OFTO): In the pre -merger Certificate program: A tenancy for which the initial gross rent exceeds the FMR/exception rent limit. OWNER: The persons or entity (or employee of an owner) that leases an assisted dwelling unit to an eligible family and includes, when applicable, a mortgage; or the owner of federally assisted housing. PARTICIPANT: Except as excluded pursuant to 42 U.S.C. 3543(b) and 3544(a) (2), this term has the following meaning: (1) For any program under 24 CFR part 891, or Section 8 of the 1937 Act: A family receiving rental assistance under the program; (2) For the public housing program: A family or individual that is assisted under the program; (3) For 24 CFR parts 215, 221, 236, and 290: A tenant or qualified tenant under any of the programs; and (4) For 24 CFR part 235: A homeowner or a cooperative member receiving homeownership assistance. PAYMENT STANDARD: The maximum monthly assistance payment for a family assisted in the voucher program (before deducting the total tenant payment by the family). PERSON WITH DISABILITIES: (1) Means a person who: (i) Has a disability, as defined in 42 U.S.C. 423; (ii) Is determined, pursuant to HUD regulations, to have a physical, mental, or emotional impairment that: (A) Is expected to be of long -continued and G- 19 GLOSSARY indefinite duration; (B) Substantially impedes his or her ability to live independently, and (C) Is of such a nature that the ability to live independently could be improved by more suitable housing conditions; or (iii) Has a developmental disability as defined in 42 U.S.C. 6001. (2) Does not exclude persons who have the disease of acquired Immunodeficiency syndrome or any conditions arising from the etiologic agent for acquired immunodeficiency syndrome; (3) For purposes of qualifying for low-income housing, does not include a person whose disability is based solely on any drug or alcohol dependence; and (4) Means "individual with handicaps", as defined in 58.3 of this title, for purposes of reasonable accommodation and program accessibility for persons with disabilities. PHA PLAN: The annual plan and the 5-year plan as adopted by the PHA and approved by HUD in accordance with part 903 of this chapter. PORTABILITY: Renting a dwelling unit with Section 8 tenant -based assistance outside the jurisdiction of the initial PHA. Newly admitted families who exercise portability prior to receiving initial assistance must be within the applicable income limit of the receiving PHAs. This requirement does not include those who had been participants with the initial PHA. PREMISES, for purposes of 24 CFR part 5, subpart I, and parts 960 and 966: means the building or complex dwelling unit is located, including common areas and grounds. PREVIOUSLY UNEMPLOYED: includes a person with disabilities who has earned, in the twelve months previous to employment, no more than would be received for 10 hours of work per week for 50 weeks at the established minimum wage. PRIVATE SPACE: In shared housing: The portion of a contract unit that is for the exclusive use of an assisted family. PROCESSING ENTITY: means the person or entity that, under any of the programs covered under this subpart B, is responsible for making eligibility and related determinations and an income. (In the Section 8 and public housing programs, the "processing entity" is the "responsible entity" as defined in Sec. 5.100.) PROGRAM: The Section 8 tenant -based assistance program under this part. PROGRAM RECEIPTS: HUD payments to the PHA under the consolidated ACC, and any other amounts received by the PHA in connection with the program. PROJECT OWNER: the person or entity that owns the housing project containing the assisted dwelling unit. PRO-RATA PORTION: means the ratio derived by dividing the number of persons in the assisted household by the total number of residents (assisted and unassisted) residing in the group home. The number of persons in the assisted household equals one assisted person plus any PHA -approved live-in aide. G- 20 GLOSSARY PUBLIC ASSISTANCE: Welfare or other payments to families or individuals based on need, which are made under programs funded, separately or jointly, by Federal, state, or local governments. PUBLIC HOUSING: means housing assisted under the 1937 Act, other than under Section 8. "Public housing" includes dwelling units in a mixed finance project that are assisted by a PHA with capital or operating assistance. PUBLIC HOUSING AGENCY (PHA). PHA includes both: (1) Any State, county, municipality, or other governmental entity or public body which is authorized to administer the program (or an agency or instrumentality of such an entity), and (2) Any of the following: (i) A consortium of housing agencies, each of which meets the qualifications in paragraph (1) of this definition, that HUD determines has the capacity and capability to efficiently administer the program (in which case, HUD may enter into a consolidated ACC with any legal entity authorized to act as the legal representative of the consortium members); (ii) Any other public or private non-profit entity that was administering a Section 8 tenant -based assistance program pursuant to a contract with the contract administrator of such program (HUD or a PHA) on October 21, 1998; or (iii) For any area outside the jurisdiction of a PHA that is administering a tenant -based program, or where HUD determines that such PHA is not administering the (iv) program effectively, a private non-profit entity or a governmental entity or public body that would otherwise lack jurisdiction to administer the program in such area. Also means: any State, county, municipality, or other governmental entity or public body, or agency or instrumentality of these entities that is authorized to engage or assist in the development or operation of low-income housing under the 1937 Act. PHA RELATION WITH WELFARE AGENCY: (1) The PHA must ask welfare agencies to inform the PHA of any specified welfare benefits reduction for a family member, the reason for such reduction, the term of any such reduction, and any subsequent welfare agency determination affecting the amount or term of a specified welfare benefits reduction. If the welfare agency determines a specified welfare benefits reduction for a family member, and gives the PHA written notice of such reduction, the family's annual incomes shall include the imputed welfare income because of the specified welfare benefits reduction. (2) The PHA is responsible for determining the amount of imputed welfare income that is included in the family's annual income as a result of a specified welfare benefits reduction as determined by the welfare agency, and specified in the notice by the welfare agency to the PHA. However, the PHA is not responsible for determining whether a reduction of welfare benefits by the welfare agency was correctly determined by the welfare agency in accordance with welfare program requirements and procedures, nor for providing the opportunity for review or hearing on such welfare agency determinations. G- 21 GLOSSARY (3) Such welfare agency determinations are the responsibility of the welfare agency, and the family may seek appeal of such determinations through the welfare agency's normal due process procedures. The PHA shall be entitled to rely on the welfare agency notice to the PHA of the welfare agency's determination of a specified welfare benefits reduction. PUBLIC HOUSING COVERED PROGRAMS: means the public housing programs administered by the Assistant Secretary for Public and Indian Housing under title I of the 1937 Act. This definition does not encompass HUD's Indian Housing programs administered under title II of the 1937 Act. (See definition of "Section 8 Covered Programs" in this section) QUALIFIED FAMILY: A family residing in housing assisted under one of the programs listed in the above paragraph of this section or receiving tenant -based rental assistance under one of the programs listed in paragraph (a) of this section. • Whose annual income increases as a result of employment of a family member who is a person with disabilities and who was previously unemployed for one or more years prior to employment; • Whose annual income increases as a result of increased earnings by a family member who is a person with disabilities during participation in any economic self-sufficiency or other job training program; or • Whose annual income increases, as a result of new employment or increased earnings of a family member who is a person with disabilities, during or within six months after receiving assistance, benefits or services under any state program for temporary assistance for needy families funded under Part A of Title IV of the Social Security Act, as determined by the responsible entity in consultation with the local agencies administering temporary assistance for needy families (TANF) and Welfare -to -Work (WTW) programs. The TANF program is not limited to monthly income maintenance, but also includes such benefits and services as one-time payments, wage subsidies and transportation assistance --provided that the total amount over a six-month period is at least $ 500. REASONABLE RENT: A rent to owner that is not more than rent charged: (1) For comparable units in the private unassisted, market; and (2) For comparable unassisted units in the premises. RECEIVING PHA: In portability: A PHA that receives a family selected for participation in the tenant -based program of another PHA. The receiving PHA issues a voucher and provides program assistance to the family. RECERTIFICATION: Sometimes called reexamination. The process of securing documentation of total family income used to determine the rent the tenant will pay for the next 12 months is there are no additional changes to be reported. There are annual and interim recertifications. G- 22 GLOSSARY REGULAR TENANCY: In the pre -merger certificate program: A tenancy other than an over-FMR tenancy. REMAINING MEMBER OF TENANT FAMILY: Person left in assisted housing after other family members have left and become unassisted. RENEWAL UNITS: The number of units, as determined by HUD, for which funding is reserved on HUD books for a PHA's program. This number is used for calculating renewal budget authority in accordance with § 982.102. RENT TO OWNER: The total monthly rent payable to the owner under the lease for the unit. Rent to owner covers payment for any housing services, maintenance and utilities that the owner is required to provide and pay for; the rent to owner for an assisted person may not exceed the pro-rata portion of the reasonable rent for the group home. REPAYMENT AGREEMENT: Means a formal document signed by a tenant or owner and provided to a PHA in which a tenant or owner acknowledges a debt, in a specific amount, and agrees to repay the amount due at specific time period(s). RESIDENCY PREFERENCE: A PHA preference for admission of families that reside anywhere in a specified area, including families with a member who works or has been hired to work in the area ("residency preference area"). RESIDENCY PREFERENCE AREA: The specified area where families must reside to qualify for a residency preference. RESIDENT ASSISTANT: A person who lives in an Independent Group Residence and provides on a daily basis some or all of the necessary services to elderly, handicapped, and disabled individuals receiving Section 8 housing assistance and who is essential to these individuals' care or well being. A Resident Assistant shall not be related by blood, marriage or operation of law to individuals receiving Section 8 assistance nor contribute to a portion of his/her income or resources towards the expenses of these individuals. RESPONSIBLE ENTITY: means (1) For the public housing program, the Section 8 tenant -based assistance program (part 982 of this title), and the Section 8 project - based certificate or voucher programs (part 983 of this title), and the Section 8 moderate rehabilitation program (part 882 of this title), responsible entity means the PHA administering the program under an ACC with HUD; (2) For all other Section 8 programs, responsible entity means the Section 8 project owner; (3) For the Section 8 project -based certificate or project -based voucher program (part 983 of this title) and the Section 8 moderate rehabilitation program (part 882 of this title), responsible entity means the PHA administering the program under an Annual Contributions Contract with HUD. For all other federally assisted housing, the responsible entity means the owner of the housing. G- 23 GLOSSARY REVIEW OF DOCUMENTS: The PHA's fourth choice is to review documents, when relevant, to substantiate the claim of an applicant or resident. REVIEW OF PHA DECISION--(1) Public housing. If a public housing tenant claims that the PHA has not correctly calculated the amount of imputed welfare income in accordance with HUD requirements, and if the PHA denies the family's request to modify such amount, the PHA shall give the tenant written notice of such denial, with a brief explanation of the basis for the PHA determination of the amount of imputed welfare income. The PHA notice shall also state that if the tenant does not agree with the PHA determination, the tenant may request a grievance hearing in accordance with part 966, subpart B of this title to review the PHA determination. The tenant is not required to pay an escrow deposit pursuant to Sec. 966.55(e) for the portion of tenant rent attributable to the imputed welfare income in order to obtain a grievance hearing on the PHA determination. (2) Section 8 participant. A participant in the Section 8 tenant -based assistance program may request an informal hearing, in accordance with Sec. 982.555 of this title, to review the PHA determination of the amount of imputed welfare income that must be included in the family's annual income in accordance with this section. If the family claims that such amount is not correctly calculated in accordance with HUD requirements, and if the PHA denies the family's request to modify such amount, the PHA shall give the family written notice of such denial, with a brief explanation of the basis for the PHA determination of the amount of imputed welfare income. Such notice shall also state that if the family does not agree with the PHA determination, the family may request an informal hearing on the determination under the PHA hearing procedure. SECRETARY: The Secretary of Housing and Urban Development. SECTION 8: means Section 8 of the United States Housing Act of 1937. (42 U.S.C. 1437f). SECTION 214: Means section 214 of the Housing and Community Development Act of 1980. as amended (42 U.S.C. 1436a). SECTION 214 Covered Programs: is the collective term for the HUD programs to which the restrictions imposed by Section 214 apply. These programs are set for in 55.500. SECURITY DEPOSIT: A dollar amount, which can be applied to unpaid rent, damages or other amounts to the owner under the lease. SELF-CERTIFICATION/SELF-DECLARATION: is when verification cannot be made by third -party verification or documents provided by the family, families are required to submit a notarized self -certification. A notarized self -certification means a family signed and dated affidavit/certification/ statement under penalty of perjury in the presence of a notary public. SERVICE PERSON: A person in the active military or naval service (including the active reserve) of the United States. G- 24 GLOSSARY SHARED HOUSING: A unit occupied by two or more families. The unit consists of both common space for shared use by the occupants of the unit and separate private space for each assisted family. A special housing type: see Sec. 982.602 to Sec. 982.605. SINGLE PERSON: A person living alone or intending to live alone. SINGLE ROOM OCCUPANCY HOUSING (SRO). A unit that contains no sanitary facilities or food preparation facilities, or contains either, but not both, types of facilities. A special housing type: see Sec. 982.602 to Sec. 982.605. SOCIAL SECURITY NUMBER (SSN): means the nine -digit number that is assigned to a person by the Social Security Administration and that identifies the record of the person's earnings reported to the Social Security Administration. The term does not include a number with a letter as a suffix that is used to identify an auxiliary beneficiary. SSA: means the Social Security Administration. SPECIAL ADMISSION: Admission of an applicant that is not on the PHA waiting list or without considering the applicant's waiting list position. SPECIAL HOUSING TYPES: See Subpart M of this part 982. Subpart M of this part states the special regulatory requirements for: SRO housing, congregate housing, group home, shared housing, manufactured home (including manufactured home space rental), cooperative housing (rental assistance for cooperative member) and homeownership option (homeownership assistance for cooperative member or first- time homeowner). SPECIFIED WELFARE BENEFIT REDUCTION: Those reductions of welfare benefits (for a covered family) that may not result in a reduction of the family rental contribution. A reduction of welfare benefits because of fraud in connection with the welfare program, or because of welfare sanction due to noncompliance with a welfare agency requirement to participate in an economic self-sufficiency program. SPLIT HOUSEHOLDS: When an assisted family or a family who has been issued a voucher divides into two otherwise eligible families, and cannot agree as to which new family unit should retain the assistance and/or the voucher, and there is no determination by a court, the CDC, to determine which family will receive the voucher, will consider the following factors, in ranking order of importance, with one (1) of the greatest importance, and six (6) of the least importance SPOUSE: The husband or wife of the head of the household. STALKING means: (1)(i) To follow, pursue, or repeatedly commit acts with the intent to kill, injure, harass, or intimidate another person; or (ii) To place under surveillance with the intent to kill, injure, harass, or intimidate another person; and G- 25 GLOSSARY (2) In the course of, or as a result of, such following, pursuit, surveillance, or repeatedly committed acts, to place a person in reasonable fear of the death of, or serious bodily injury to, or to cause substantial emotional harm to (i) That person, (ii) A member of the immediate family of that person, or (iii) The spouse or intimate partner of that person. STATE WAGE INFORMATION COLLECTION AGENCY (SWICA): means the State agency, including any Indian tribal agency, receiving quarterly wage reports from employers in the State, or an alternative system that has been determined by the Secretary of Labor to be as effective and timely in providing employment -related income and eligibility information. SUBSIDIZED PROJECT: A multi -family housing project (with the exception of a project owned by a cooperative housing mortgage corporation or association), which receives the benefit of subsidy in the form of: • Below -market interest rates pursuant to Section 221(d)(3) and (5) or interest reduction payments pursuant to Section 236 of the National Housing Act; or • Rent supplement payments under Section 101 of the Housing and Urban Development Act of 1965; or • Direct loans pursuant to Section 202 of the Housing Act of 1959; or • Payments under the Section 23 Housing Assistance Payments Program pursuant to Section 23 of the United States Housing Act of 1937 prior to amendment by the Housing and Community Development Act of 1974; • Payments under the Section 8 Housing Assistance Payments Program pursuant to Section 8 of the United States Housing Act after amendment by the Housing and Community Development Act unless the project is owned by a Public Housing Agency; • A Public Housing Project. SUBSIDY STANDARDS: Standards established by a PHA to determine the appropriate number of bedrooms and amount of subsidy for families of different sizes and compositions. SUBSTANDARD UNIT: Substandard housing is defined by HUD for use as a federal preference. SUSPENSION: Stopping the clock on the term of a family's voucher, for such period as determined by the PHA, from the time when the family submits a request for PHA approval of the tenancy, until the time when the PHA approves or denies the request. TENANCY ADDENDUM: For the Housing Choice Voucher Program, the lease language required by HUD in the lease between the tenant and the owner. G- 26 GLOSSARY TENANT: The person or persons (other than a live-in aide) who executes the lease as lessee of the dwelling unit. TENANTS LEGAL CAPACITY. The tenant must have legal capacity to enter a lease under State and local law. TENANT RENT: For a tenancy in the certificate program: The total tenant payment minus any utility allowance. THIRD -PARTY ORAL: The PHA's third choice is to use telephone verifications. THIRD -PARTY WRITTEN: The PHA's second choice is a written third party verification to substantiate claims made by an applicant or resident. TOTAL TENANT PAYMENT (TTP): The total amount the HUD rent formula requires the tenant to pay toward gross rent and utility allowance. UNAUTHORIZED PERSON(S): When person(s) live with participating families without Section 8 knowledge and approval. Participating families fail to comply with HUD requirements, provisions of the Housing Choice Voucher, and other program rules. UNIT: Residential space for the private use of a family. UNUSUAL EXPENSES: Prior to the change in the 1982 regulations, this was the term applied to the amounts paid by the family for the care of minors under 13 years of age or for the care of disabled or handicapped family household members, but only where such care was necessary to enable a family member to be gainfully employed. UTILITIES: Utilities means water, electricity, gas, other heating, refrigeration, cooking fuels, trash collection and sewage services. Telephone service is not included as a utility. UTILITY ALLOWANCE: If the cost of utilities (except telephone) and other housing services for an assisted unit is not included in the tenant rent but is the responsibility of the family occupying the unit, an amount equal to the estimate made or approved by a PHA or HUD of the monthly cost of a reasonable consumption of such utilities and other services for the unit by an energy -conservative household of modest circumstances consistent with the requirements of a safe, sanitary, and healthful living environment. UTILITY REIMBURSEMENT: The amount, if any, by which the utility allowance for a unit, if applicable, exceeds the total tenant payment for the family occupying the unit. (This definition is not used in the Section 8 voucher program, or for a public housing family that is paying a flat rent. UTILITY REIMBURSEMENT PAYMENT: In the pre -merger certificate program, the amount, if any, by which the Utility Allowance for the unit, if applicable, exceeds the Total Tenant Payment for the family occupying the unit. G- 27 GLOSSARY VACANCY LOSS PAYMENTS: (For pre -merger certificate contracts effective prior to 10/2/95) When a family vacates its unit in violation of its lease, the owner is eligible for 80% of the Contract Rent for vacancy period of up to one additional month, (beyond the month in which the vacancy occurred) if s/he notifies the PHA as soon as s/he learns of vacancy, makes an effort to advertise the unit, and does not reject any eligible applicant except for good cause. VAWA (Violence Against Women and Justice Department Reauthorization Act of 2005): Sec. 606... Amendments to the Low -Income Housing Assistance Voucher Program. Among many other things of significance to PHAs, VAWA prohibits the eviction of, and removal of assistance from, certain persons living in public or Section 8 -assisted housing if the asserted grounds for such action is an instance of domestic violence, dating violence, sexual assault, or stalking, as those terms are defined in Section 3 of the United States Housing Act of 1937 as amended by VAWA (42 U.S.C. 13925). VERY LARGE LOWER -INCOME FAMILY: Prior to the change in the 1982 regulations this was described as a lower -income family, which included eight or more minors. This term is no longer used. VERY LOW INCOME FAMILY: A Family whose annual income does not exceed 50% of the median income for the area, as determined by HUD with adjustments for smaller and larger families, except that HUD may establish income ceilings higher or lower than 50% of the median income for the area if HUD finds that such variations are necessary because of unusually high or low family incomes. VETERAN: A person who as served in the active military or naval service of the United States at any time and who shall have been discharged or released there from under conditions other than dishonorable. VICTIMS OF ABUSE: See VAWA VIOLENT CRIMINAL ACTIVITY: means any criminal activity that has as one of its elements the use, attempted use, or threatened use of physical force substantial enough to cause, or be reasonably likely to cause, serious bodily injury or property damage. VOUCHER (rental voucher): A document issued by a PHA to a family selected for admission to the voucher program. This document describes the program and the procedures for PHA approval of a unit selected by the family. The voucher also states the obligations of the family under the program. VOUCHER HOLDER: A family holding a voucher with an unexpired term (search time). VOUCHER PROGRAM: The Housing Choice Voucher program. WAITING LIST: A list of families organized according to HUD regulations and PHA policy that are waiting for subsidy to become available. G- 28 GLOSSARY WAITING LIST ADMISSION: An admission from the PHA waiting list. WELFARE ASSISTANCE: Welfare or other payments to families or individuals, based on need, that are made under programs funded, separately or jointly, by Federal, State or local governments (including assistance provided under the Temporary Assistance for Needy Families (TANF) program, as that term is defined under the implementing regulations issued by the Department of Health and Human Services at 45 CFR 260.31). WELFARE RENT: This concept is used ONLY for pre -merger Certificate tenants who receive welfare assistance on an "AS -PAID" basis. It is not used for the Housing Voucher Program. • If the agency does NOT apply a ratable reduction, this is the maximum a public assistance agency COULD give a family for shelter and utilities, NOT the amount the family is receiving at the time the certification is being processed. • If the agency applies a ratable reduction, welfare rent is a percentage of the maximum the agency could allow. WELFARE -TO -WORK (WTW) FAMILIES: Families assisted by a PHA with voucher funding awarded to the PHA under the HUD welfare -to -work voucher program (including any renewal of such WTW funding for the same purpose). G- 29 GLOSSARY GLOSSARY OF TERMS USED IN NON -CITIZEN RULE ASYLEES: means an alien in the United States or at a port of entry who is found to be unable or unwilling to return to his or her country of nationality, or to seek the protection of that country because of persecution or a well-founded fear of persecution. Persecution or the fear thereof must be based on the alien's race, religion, nationality, membership in a particular social group, or political opinion. For persons with no nationality, the country of nationality is considered to be the country in which the alien last habitually resided. Asylees are eligible to adjust to lawful permanent resident status after one year of continuous presence in the United States. These immigrants are limited to 10,000 adjustments per fiscal year CHILD:A member of the family other than the family head or spouse who is under 18 years of age. CITIZEN: A citizen or national of the United States. EVIDENCE OF CITIZENSHIP OR ELIGIBLE STATUS: The documents, which must be submitted to evidence citizenship or eligible immigration status. HEAD OF HOUSEHOLD: The adult member of the family who is the head of the household for purpose of determining income eligibility and rent. HUD: Department of Housing and Urban Development. INS: The U.S. Immigration and Naturalization Service. MIXED FAMILY: A family whose members include those with citizenship or eligible immigration status and those without citizenship or eligible immigration status. NATIONAL: A person who owes permanent allegiance to the United States, for example, as a result of birth in a United States territory or possession. NONCITIZEN: A person who is neither a citizen nor national of the United States. PHA: A housing authority who operates Public Housing. G- 30 GLOSSARY RESPONSIBLE ENTITY: The person or entity responsible for administering the restrictions on providing assistance to non -citizens with ineligible immigration status (the PHA). SECTION 214: Section 214 restricts HUD from making financial assistance available for non -citizens unless they meet one of the categories of eligible immigration status specified in Section 214 of the Housing and Community Development Act of 1980, as amended (42 U.S.C. 1436a). SPOUSE: Spouse refers to the marriage partner, either a husband or wife, who is someone you need to divorce in order to dissolve the relationship. It includes the partner in a common-law marriage. It does not cover boyfriends, girlfriends, significant others, or "co -heads". "Co-head" is a term recognized by some HUD programs, but not by public and Indian housing programs. G- 31 GLOSSARY