HUD Handbook 4350.3 § 7-4

A.       To ensure that assisted tenants pay rents commensurate with their ability to pay,
                  HUD requires the following:

                  1.       Owners must conduct a recertification of family income and composition
                           at least annually. Owners must then recompute the tenants’ rents and
                           assistance payments, if applicable, based on the information gathered.

                  2.       Tenants must supply information requested by the owner or HUD for use
                           in a regularly scheduled recertification of family income and composition
                           in accordance with HUD requirements.

                  3.       Tenants must sign consent forms and asset declaration forms

                  4.       *Owners must use the EIV Income Report as third-party verification of
                           employment and income unless the tenant disputes the information on
                           the EIV report. (See Chapter 5, for more information on determining and
                           verifying income. and Chapter 9, Enterprise Income Verification (EIV) for
                           using EIV reports.)*

                  5.       *Owners must obtain third-party verification directly from the third party
                           source for the following items. (See Chapter 5, Section 3, for more
                           information about verification of income.)

                           a.       Annual income from wages, unemployment and Social Security
                                    benefits when tenant is unable to provide acceptable income
                                    documentation or disputes the employment and income
                                    information in the EIV system (see Chapter 5, Paragraph 5-5.A.3
                                    for calculation of tenant income);

b.       Reported family annual income from sources not reporting income
                                    data to the EIV system;*

                           c.       The value of family assets;

                           d.       Expenses related to deductions from annual income; and

                           e.       Other factors that affect the determination of adjusted income.

                  6.       At each annual recertification, the owner must provide the tenant with a
                           copy of the HUD Fact Sheet describing how the tenant’s rent is
                           determined. *The owner must also provide the tenant with a copy of the
                           EIV & You brochure.*

                  7.       Owners have the authority to require a criminal background check,
                           *including a State lifetime sex offender registration check*, on tenants at
                           recertification. Owners who adopt the policy of conducting criminal
                           background checks, *including a State lifetime sex offender registration
                           check*, at recertification must conduct *the checks* on all tenants at
                           recertification. If the background checks indicate that the tenant is in
                           violation of the provisions of the lease, the owner may evict the tenant in
                           accordance with the lease and the owner’s standards for termination of
                           tenancy. The owner must:

                           a.       Notify the household of the proposed action based on the
                                    information.

                           b.       Must provide the subject of the criminal record and the tenant with
                                    a copy of the information and an opportunity to dispute the
                                    accuracy and relevance of the information obtained from any law
                                    enforcement agency.

                           *NOTE: Persons who are subject to a lifetime sex offender registration
                           requirement who were admitted prior to June 25, 2001, the effective date
                           of the Screening and Eviction of Drug Abuse and Other Criminal Activity
                           final rule, must not be evicted unless they commit criminal activity while
                           living in federally assisted housing or have some other lease violation, in
                           which case the owner may terminate the tenancy and pursue eviction to
                           the extent allowed by their lease and state or local law.*

                  8.       Owners must perform annual recertifications on any resident of a Section
                           236 project paying less than the Section 236 market rent, and on any
                           resident of a Section 221(d)(3) BMIR project paying the BMIR rent.
                           Tenants of Section 236 and Section 221(d)(3) BMIR projects must be
                           supported in the Tenant Rental Assistance Certification System (TRACS)
                           with a submission of the required HUD-50059.

                           NOTE: Section 236 and Section 221(d)(3) BMIR cooperatives must
                           enforce annual recertifications for both current and new members.

B.       Owners do not have to perform annual recertifications for individual tenants who
                  are paying market rent as described below:

                  1.       Tenants paying the contract rent or market rent and living in a unit
                           covered by a Section 8, RAP, Rent Supplement, or PAC housing
                           assistance payment contract, unless the tenants request an initial
                           certification to determine their eligibility to receive program assistance.

                  2.       Tenants of a Section 236 project paying the Section 236 market rent
                           established for the property, unless the tenants request an initial
                           certification to determine their eligibility to pay less than the market rent.

                  3.       Tenants of a Section 221(d)(3) BMIR project paying 110% of the BMIR
                           rent established for the property, unless the tenants request an initial
                           certification to determine their eligibility to pay the BMIR rent.

         C.       If a tenant in a property covered by this handbook is receiving rental assistance
                  through the Section 8 Housing Choice Voucher Program, the Public Housing
                  Authority (PHA) administering the voucher completes the annual recertification.
                  Owners are not responsible for completing recertification activities but must
                  cooperate with PHA staff in providing needed information.

         D.       When a change in family composition is reported in Section 202/8 projects, adult
                  children are eligible to move in after initial occupancy only if they are essential for
                  the care or well-being of the elderly tenant(s). They are considered a part of the
                  family and their income must be counted. Owners should require adult children
                  to sign a release form relinquishing any future rights to the unit as a remaining
                  member of the tenant family, as they qualify for occupancy only as long as the
                  individual needing the supportive services is in occupancy.

         E.       When a change in family composition is reported in Section 202 PRAC and
                  Section 811 projects, occupancy by adult children is subject to the following
                  restriction. Adult children are not eligible to move into a unit after initial
                  occupancy unless they are performing the functions of a live-in aide and are
                  classified as a live-in aide for eligibility purposes. See paragraph 3-6 E.3 for
                  eligibility requirements for a live-in aide.

Figure 7-2: Comparison of Live-in Aid and Adult Child in 202/8 and 202 PRAC projects

                                                          202/8                     202 PRAC

Admission to household after
initial occupancy:

  Live-in aide                                Yes                             Yes

  Adult child                                 Yes – if needed for essential   Yes - Only if performing
                                              care of family member           function of live-in aide

Income counted:

  Live-in aide                                No                              No

  Adult child                                 Yes                             No

Counted as member of family:

   Live-in aide                               No                              No

   Adult child                                Yes                             No

Right to remain in unit: (See
paragraphs 7-4.D and 3-6.E.3 for
lease addendum requirements.)

   Live-in aide                               No                              No

   Adult child                                No                              No