HUD PIH Notice § 2012-29

                             U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
                             PUBLIC AND INDIAN HOUSING
OFFICE
_______________________________________________________________________________________________________________________________________




Special Attention of:                                                              Notice               PIH 2012-29
Regional Directors: State and Area
Coordinators; Regional Economists;                                                 Issued:               June 21, 2012
Public Housing HUB Directors;
Public Housing Agencies                                                            Expires:             Effective until
                                                                                                        Amended, Superseded
                                                                                                        or Rescinded

                                                ______________________      __
                                                Cross References:
______________________________________________________________________________
Subject: Establishing the Passbook Savings Rate

1. Purpose.
    This Notice clarifies program policy related to the passbook savings rate used to determine
annual income from net family assets. Under 24 CFR §5.609(b)(3), when determining annual
income for families who apply for or receive assistance in the Housing Choice Voucher (HCV)
and public housing programs, a public housing agency (PHA) includes in annual income the
greater of either: (1) actual income resulting from all net family assets; or (2) a percentage of the
value of such assets based upon the current passbook savings rate as determined by the U.S.
Department of Housing and Urban Development (HUD) when a family has net assets in excess
of $5000. This Notice also minimizes the administrative burden on Field Offices and PHAs in
conducting a survey of local banks, by relying on a rate that is publicly available and based upon
recent market data.

2. Applicability.
       This Notice applies to all PHAs and localities that operate a HCV program, public
housing program, or Section 8 Moderate Rehabilitation program. Moving-To-Work (MTW)
agencies, to the extent they have established an alternate policy in their MTW plan, are excluded
from the provisions of this Notice.

3. Passbook Savings Rate.
       This notice provides guidance to supplement information provided in the Form HUD-
50058 Instruction Booklet, Public Housing Occupancy Guidebook, and the Housing Choice
Voucher Program Guidebook on the passbook savings rate used to calculate imputed income
from assets. The guidance in this notice supersedes any guidance included in the above
referenced form and guidebooks.

Safe Harbor
       The PHA may establish its own passbook rate that the PHA will apply in calculating
imputed assets from income. The PHA should review its passbook rate at least annually to
determine that it is within the safe harbor range. The PHA must apply its policy to calculate




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imputed asset income consistently to all participants.

PHAs may establish a passbook rate within 75 basis points (plus or minus .75 percent) of the
Savings National Rate in effect at the time the PHA establishes the passbook rate.1 The
passbook rate may not be less than 0 percent. The Savings National Rate is a simple average of
rates by United States (US) depository institutions as calculated by the Federal Deposit Insurance
Corporation (FDIC). The FDIC publishes this rate on a weekly basis. The PHA can access
historical and current Savings National Rates at the following website:
www.fdic.gov/regulations/resources/rates/.

Examples: If the published FDIC Savings National Rate at the time the PHA establishes its
passbook rate is .12%. Acceptable passbook rate would fall in the range between 0% and 0.87%.
If the published FDIC Savings National Rate at the time the PHA establishes its passbook rate is
.92%. Acceptable passbook rate would fall in the range between 0.17% and 1.67%.

4. For Further Information.
       For further information regarding this Notice, please contact Brian Gage, in the Office of
Public Housing and Voucher Programs at 202-402-4254.




                                               _______________/s/_______           _____________
                                               Sandra B. Henriquez
                                               Assistant Secretary for Public and Indian Housing




1
 The 75 basis points threshold is consistent with interest rate restrictions applicable to less than
well capitalized institutions under Part 337.6 of the FDIC Rules and Regulations.