HUD Housing Notice § 2019-06

                                 U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
                                               WASHINGTON, DC 20410-5000


OFFICE OF PUBLIC AND INDIAN HOUSING


______________________________________________________________________________

Special Attention of:                                    NOTICE PIH 2019-09
                                                         NOTICE H-2019-06
Public Housing Field Office Directors
Public Housing Agency Directors                          Issued: May 6, 2019
Public Housing Hub Office Directors
Multifamily Regional Center Directors
Rural Services (RHS) Directors                           This notice remains in effect until amended,
Supervisory Housing Project Managers                     superseded or rescinded.
Housing Project Managers
Contract Administrators                                  Cross Reference: 24 CFR 5.609; ABLE Act of
Multifamily Owners and Management Agents                 2014
______________________________________________________________________________
Title: Treatment of ABLE Accounts in HUD-Assisted Programs
Purpose: This notice provides guidance regarding the federally mandated exclusion of ABLE accounts
from the calculation of income and assets, as required under the Achieving a Better Life Experience Act
of 2014 (ABLE Act). Per the mandate of the ABLE Act, for the purpose of determining eligibility and
continued occupancy, HUD will disregard amounts in the designated beneficiary’s/individual’s ABLE
account.

Background: The Achieving Better Life Experience (ABLE) Act (P.L. 113-295.) was signed into law on
December 19, 2014. The ABLE Act allows States to establish and maintain a program under which
contributions may be made to a tax-advantaged ABLE savings account to provide for the qualified
disability expenses of the designated beneficiary of the account. The designated beneficiary must be a
person with disabilities, whose disability began prior to his or her 26th birthday and who meets the
statutory eligibility requirements.

Applicability: This notice applies to the following programs:

   1. Housing Choice Voucher Program, including all special voucher types
   2. Public Housing
   3. Project-based Section 8
           o New Construction
           o State Agency Financed
           o Substantial Rehabilitation
           o Section 202/8
           o Rural Housing Services (RHS) Section 515/8
           o Loan Management Set-Aside (LMSA)
           o Property Disposition Set-Aside (PDSA)
           o Rental Assistance Demonstration Project Based Rental Assistance (RAD/PBRA)
   4. Section 202/162 Project Assistance Contract (PAC)
   5. Section 202 Project Rental Assistance Contract (PRAC)
   6. Section 202 Senior Preservation Rental Assistance Contracts (SPRAC)
   7. Section 811 PRAC
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   8. Section 811 Project Rental Assistance (PRA)
   9. Section 236 (including RAP)
   10. Section 221(d)(3)/(d)(5) Below Market Interest Rate (BMIR)

Definition of Terms: This Section includes definitions of terms referred to in this notice.

    A. ABLE account means an account established for the benefit of an eligible individual, maintained
       under a qualified ABLE program.
    B. Contribution is the deposit of funds into an ABLE account.
    C. Designated beneficiary is the eligible individual who established and owns the ABLE account.
    D. Distribution is the withdrawal or issuance of funds from an ABLE account.

Treatment of ABLE account in HUD programs: Section 103 of the ABLE Act mandates that an
individual’s ABLE account (specifically, its account balance, contributions to the account, and
distributions from the account) is excluded/disregarded when determining the designated beneficiary’s
eligibility and continued occupancy under certain federal means-tested programs.

Individuals have to be income eligible to receive assistance under HUD programs. Per 24 CFR 5.609,
annual income is defined as the anticipated total income from all sources received by every family
member which are not specifically excluded in 24 CFR 5.609(c). The exclusion found at 24 CFR
5.609(c)(17) instructs PHAs and owners to exclude from income all amounts that are specifically
excluded by other Federal statute when the statute is applicable to HUD programs. Given that the ABLE
Act creates a federally mandated exclusion for ABLE accounts applicable to HUD programs, in
determining a family’s income, HUD will exclude amounts in the individual’s ABLE account pursuant to
24 CFR 5.609(c)(17). The entire value of the individual’s ABLE account will be excluded from the
household’s assets. This means actual or imputed interest on the ABLE account balance will not be
counted as income. Distributions from the ABLE account are also not considered income. All wage
income received, regardless of which account the money is paid to, is included as income.

For example:

1. Contributions made by the designated beneficiary
   Pursuant to 24 CFR 5.609(a), all amounts received by the designated beneficiary are counted as
   income, unless they fall under one of the enumerated exclusions under 5.609(c) or are federally
   mandated, as with distributions from ABLE accounts.

    If the beneficiary has a portion of his/her wages directly deposited into his/her ABLE account, then
    all wage income received, regardless of which account the money is paid to, is included as income.
    Pre-tax employer contributions to an ABLE account (that are not deducted from wages) are excluded.
    If the designated beneficiary subsequently deposits any amount previously included as income into
    his/her ABLE account, that deposited amount must not be included in the household’s asset
    calculation or counted as income again when the beneficiary receives a distribution from the account.
2. Contributions made by others directly into the ABLE account
    If someone other than the designated beneficiary contributes directly to the ABLE account, that
    contribution will not be counted as income to the designated beneficiary.
    If a relative provides a recurring gift of $100 per month directly to the beneficiary, the recurring gift
    would be counted as income. If a relative deposits the $100 recurring monthly gift directly into the
    ABLE account, then it will not be counted as income. Note: Any person can contribute to an ABLE
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   account. However, the Internal Revenue Service (IRS) limits the total annual contributions that any
   ABLE account can receive from all sources for a given calendar year.

3. Rollovers from existing ABLE accounts
          Rollovers from existing ABLE accounts to the designated beneficiary’s ABLE account are
          not counted as income to the designated beneficiary.

Verification: In accordance with program requirements at 24 CFR 5.240(c), PHAs and owners should
verify the amount held in the ABLE account. PHAs and owners should develop a policy and procedure
for verifying ABLE accounts that obtains the following information:

      the name of the designated beneficiary; and
      the State ABLE program administering the account to verify that the account qualifies as an
       ABLE account.

Contact Information: If you have any questions regarding this notice, please contact Annecia Durr
(Office of Housing) at Annecia.Durr@hud.gov or 202-402-2618, or Becky Primeaux (Office of Public
and Indian Housing) at Becky.L.Primeaux@hud.gov or 202-402-6050.

Paperwork Reduction Act: The information collection requirements referred to in this notice have been
approved by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995
(44 U.S.C. 3520) and assigned OMB control numbers 2577-0169 and 2502-0204.




 _________/s/_______________________                 ________/s/_________________________
 R. Hunter Kurtz                                     Brian D. Montgomery
 Principal Deputy Assistant Secretary                Assistant Secretary for Housing –
  for Public and Indian Housing                        Federal Housing Commissioner