HUD Handbook 4350.3 § 5-13

A.     Methods of Verification

                Owners must use verification methods that are acceptable to HUD. The owner is
                responsible for determining if the verification documentation is adequate and
                credible. *Acceptable methods of verification, in order of acceptability: 1)
                upfront-income verification (UIV) with use of EIV being mandatory and use of
                non-EIV UIV being optional; 2) third-party verification from source (written), 3)
                third-party verification from source (oral), and 4) family certification.* If third-party
                verification is not available, owners must document the tenant file to explain why
                third-party verification was not available. Appendix 3 provides a detailed list of
                acceptable forms of verification by type of information.

         B.     Third-Party Verification

                1.       *The following describes the types of third-party verification in order of
                         acceptability

                         a.      Upfront-income verification (UIV)

                                 UIV is verification of income before or during a certification and/or
                                 recertification, through an independent source that systematically
                                 and uniformly maintains income information in a computerized
                                 form.

                                 (1)      Using HUD’s EIV system for tenants (not available for
                                          applicants). (Mandatory)

                                          It is mandatory that owners use the EIV system as the
                                          third-party source to verify employment and income
                                          information of tenants during recertification (annual and
                                          interim) of family composition and income.

                                  (2)     UIV using non-EIV system (Optional)

                                          (a)      Owners may use other non-HUD UIV tools such as
                                                   The Work Number and other state government
                                                   databases, if available, to verify income:

                                                   (1)     Of applicants;

                                                   (2)     When no employment or income is available
                                                           in EIV; or

                                                   (3)     For other types of income received by the
                                                           family.

b.      Third-party verification from source (written)

                                  (1)     An original or authentic document generated by a third
                                          party source that is dated within 120 days from the date of
                                          receipt by the owner. Such documentation may be in
                                          possession of the tenant (or applicant), and commonly
                                          referred to as tenant-provided documents. These
                                          documents are considered third-party verification because
                                          they originated from a third-party source.

                                          Examples of tenant-provided documentation that may be
                                          used includes, but is not limited to: pay stubs, payroll
                                          summary report, employer notice/letter of hire/termination,
                                          SSA benefit letter, bank statements, child support payment
                                          stubs, welfare benefit letters and/or printouts, and
                                          unemployment monetary benefit notices.

                                          Owners must consider the following when using tenant-
                                          provided documentation:

                                          (a)      Is the document current? Documentation of public
                                                   assistance may be inaccurate if it is not recent and
                                                   does not show any changes in the family’s benefits
                                                   or work and training activities.

                                          (b)      Is the documentation complete? Owners may not
                                                   accept pay stubs to document employment income
                                                   unless the applicant or tenant provides the most
                                                   recent four to six, consecutive pay stubs to illustrate
                                                   variations in hours worked. Actual paychecks or
                                                   copies of paychecks should never be used to
                                                   document income because deductions are not
                                                   shown on the paycheck.

                                          (c)      Is the document an unaltered original? The
                                                   greatest shortcoming of tenant-provided documents
                                                   as a verification source is their susceptibility to
                                                   undetectable change through the use of high-
                                                   quality copying equipment. Documents with
                                                   original signatures are the most reliable.
                                                   Photocopied documents generally cannot be
                                                   assumed to be reliable.

                                 (2)      Written documentation sent directly by the third-party
                                          source by mail or electronically by fax, email or internet.

                                          Note: See Paragraph 9-10 for situations when this method
                                          of verification must be used prior to verifying through (1)
                                          above.*

(For information about electronic documentation, see
                                          subparagraph B.2 below.)

                         c.      *Third-party verification from source (oral).*

                                 When verifying information over the telephone, it is important to be
                                 certain that the person on the telephone is the party he or she
                                 claims to be. Generally, it is best to telephone the verification
                                 source rather than to accept verification from a source calling the
                                 property management office. Oral verification must be
                                 documented in the file, as described in paragraph 5-18.C.

                         d.      *Family Certification.

                                 An owner may accept a tenant’s notarized statement or signed
                                 affidavit regarding the veracity of information submitted only if the
                                 information cannot be verified by another acceptable verification
                                 method. In these instances, the owner must document the file
                                 why third-party verification was not available. (See Paragraph 5-
                                 18.E for documentation requirements when third-party verification
                                 is not available.). The owner may witness the tenant signature(s)
                                 in lieu of a notarized statement or affidavit.*

                 2.      *The following describes use of electronic information when used as third-
                         party verification.*

                         *Electronic Verification.* The owner may obtain accurate third-party
                         written verification by facsimile, email, or Internet, if adequate effort is
                         made to ensure that the sender is a valid third-party source.

                         a.      Facsimile. Information sent by fax is most reliable if the owner
                                 and the verification source agree to use this method in advance
                                 during a telephone conversation. The fax should include the
                                 company name and fax number of the verification source.

                         b.      Email. Similar to faxed information, information verified by email
                                 is more reliable when preceded by a telephone conversation
                                 and/or when the email address includes the name of an
                                 appropriate individual and firm.

                         c.      Internet. Information verified on the Internet is considered third
                                 party verification if the owner is able to view web-based
                                 information from a reputable source on the computer screen. Use
                                 of a printout from the Internet may also be adequate verification in
                                 many instances. Refer to subparagraph C. Review of Documents
                                 below.

Example – Verification by Internet Printout
               Jose Perez maintains a portfolio of stocks and bonds through an Internet-based
               stockbroker. The broker only provides electronic account statements and will not
               respond to a written verification request. The owner may accept a printout of
               Jose’s most recent statement if it includes the relevant information required for
               third-party verification and an Internet address and header or footer that identifies
               the company issuing the statement. If the owner has reason to question the
               authenticity of a document, the owner may require Jose to access the electronic
               file via the Internet in the owner’s office, without providing the owner with
               username or password information.