HUD Handbook 4350.3 - Ch 5 Terms

Question 1

Adjusted Income

Answer 1

Annual income of family minus the following deductions:
1. $480/dependent
2. $400 for any elderly or disabled family
3. Sum of following, to the extent the sum exceeds 3% of annual income:
a. Unreimbursed reasonable medical expenses of any elderly or disabled family
b. 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 who are able to work because of such attendant care or auxiliary apparatus
4. Any reasonable child care expenses necessary to enable the family member to be employed or to further his or her education

Question 2

Annual Income

Answer 2

All amounts, monetary or not, which:

1. Go to, or on behalf of, the family head or spouse [or co-head] (even if temporarily absent) or to any other family member; or
2. Are anticipated to be received from a source outside the family during the 12-month period following admission or annual reexamination effective date; and
3. Which are not specifically excluded [by regulation]. Annual income also means amounts derived (during the 12-month period) from assets to which any member of the family has access. [24 CFR 5.609]

Question 3

Assistance Payment

Answer 3

The amount HUD pays the owner for a unit occupied by a Section 8, RAP, Rent Supplement, or PAC tenant. It includes HUD’s share of the contract rent and any utility reimbursement due the tenant. It is the gross rent for the unit minus the Total Tenant Payment (TTP). The assistance payment for an occupied PRAC unit is the operating rent minus the TTP.

Question 4

Assisted Rent

Answer 4

Any rent less than the market rent. Includes section 236 rents that are greater than the basic rent.

Question 5

Assisted Tenant

Answer 5

A tenant who pays less than the market rate. Includes tenants:

1. Receiving Rent Supplement, RAP, PAC, or Section 8 assistance;
2. Living in a Section 202 PRAC or Section 811 PRAC development paying equal to or less than the operating rent;
3. Living in a Section 202 PRAC or Section 811 PRAC development paying more than the operating rent, which generates excess income;
4. Paying the BMIR contract rent;
5. Paying the Section 236 basic rent; or
6. Paying above basic rent, which generates excess income, but less than market rent, in a Section 236 project.

Question 6

Basic Rent

Answer 6

The minimum rent all tenants in a Section 236 project must pay. It is HUD approved and represents the amount of rent the owner needs to receive in order to operate the property with the mortgage interest rate reduced to as low as 1%.

Question 7

Co-head of Household

Answer 7

An adult member of the family who is treated the same as a head of the household for purposes of determining income, eligibility, and rent.

Question 8

Contract Rent

Answer 8

The rent HUD or the Contract Administrator has approved for each unity type covered under an assistance contract. The rent may be paid by the tenant, HUD, or both. Refer to the project’s rental schedule (form HUD-92458) or Rental Assistance contract for exact amounts.

Question 9

Dependent

Answer 9

A member of the family other than the head, spouse, or co-head, who is under 18 years of age or is a person with disabilities or a full-time student. For the purposes of this Handbook, a foster child, a foster adult, or a live-in aide may never be a dependent regardless of age or disability.

Question 10

Enterprise Income Verification (EIV)

Answer 10

HUD’s computer system that mus be used by owners as a third party verification of employment and income during mandatory recertifications of family composition and income and to reduce administrative and subsidy payment errors.

Question 11

Extremely Low-Income Family

Answer 11

A family whose annual income does not exceed 30% 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 30% of the median income for the area if HUD finds that such variations are necessary because of unusually high or low family incomes.

Question 12

Foster Adult

Answer 12

A foster adult is usually an adult with a disability who is unrelated to the tenant family and who is unable to live alone.

Question 13

Foster Children

Answer 13

Children that are in the legal guardianship or custody of a State, county, or private adoption or foster care agency, yet are cared for by foster parents in their own homes, under some kind of short-term or long-term foster care arrangement with the custodial agency. These children will generally remain in foster care until they are reunited with their parents, or until their parents voluntarily consent to their adoption by another family, or until the court involuntarily terminates or severs
the parental right of their biological parents, so that they can become available to be adopted by another family. Therefore, the parental rights of the parents of these children may or may not have been terminated or severed, and the children may or may not be legally
available for adoption.

Question 14

Full-time Student

Answer 14

A person who is attending school or vocational training on a full-time basis.

Question 15

Gross Rent

Answer 15

The gross rent for a unit equals the contract rent plus the utility allowance, if the property has a utility allowance. For Section 202 PRAC and Section 811 PRAC, the gross rent is referred to as the operating rent.

Question 16

Hardship Extension

Answer 16

An exemption from the $25 minimum rent an owner must provide for any household unable to pay the Section 8 minimum rent due to a long-term financial hardship as defined in the regulation.

Question 17

Head of Household

Answer 17

The adult member of the family who is the head of the household for purposes of determining income eligibility and rent.

Question 18

HAP

Answer 18

Housing Assistance Payment - The payment made by HUD or the Contract Administrator to the owner of an assisted unit as provided in the contract. Where the unit
is leased to an eligible family, the payment is the difference between the contract rent and the tenant rent. An additional payment is made to the family when the utility allowance is greater than the total tenant
payment. A housing assistance payment, known as a “vacancy payment,” may be made to the owner when an assisted unit is vacant, in accordance with the terms of the contract. [24 CFR 880.201]

Question 19

Income Limit

Answer 19

HUD establishes income limits that are used to determine whether housing applicants qualify for admission to HUD-subsidized properties. These income limits are based on HUD estimates for area median family income with certain statutorily permissible adjustments. Different programs use different income limits. (See paragraph 3-6 for applicability.)

Question 20

Live-in Aide

Answer 20

A person who resides with one or more elderly persons, 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 the necessary supportive services. [24 CFR 5.403]

Question 21

Low-income Family

Answer 21

A family whose annual income does not exceed 80% of the area median income, as determined by HUD, with adjustments for smaller and larger families.

Question 22

Market Rent

Answer 22

The rent HUD authorizes the owner to collect from families ineligible for assistance. For Section 236 units, the market rent is shown on the project’s HUD-approved rent schedule. For Rent Supplement, Section 202, and Section 8 units, the market rent is the same as the
contract rent. For BMIR units, market rent varies by whether the project is a rental or cooperative.
1. BMIR Rentals. Market rent equals 110% of the BMIR rent.
2. BMIR Cooperatives. Cooperatives use the term “carrying charge” to describe the amount charged a cooperative member for occupying a unit. Market carrying charges equal the contract carrying charge plus any surcharge established by the cooperative
and approved by HUD. If the cooperative has not received HUD approval of a plan for surcharging its over-income members, the market carrying charge equals 110% of the contract carrying charge.

Question 23

Minimum Rent

Answer 23

The lowest total tenant payment permitted for tenants receiving Section 8 assistance. The minimum rent is $25 and is used when 30% of adjusted monthly income and 10% of gross monthly income and the welfare rent (where applicable) are all below $25. The minimum rent covers the tenant’s contribution for rent and utilities.

Question 24

Operating Rent (PRAC)

Answer 24

The operating rent (gross rent) is the rent* approved by HUD to cover the operating expenses at a PRAC project.

Question 25

PAC

Answer 25

Project Assistance Contract - The contract entered into by the borrower and HUD setting forth the rights and duties of the parties with respect to the project and the
payments under the PAC. See paragraph 1-3 of this handbook for further description. [24 CFR 891.655]

Question 26

PRAC

Answer 26

Project Rental Assistance Contract - The contract entered into by the owner and HUD setting forth the
rights and duties of the parties with respect to the project and the payments under the PRAC. PRAC is used for Section 202 and Section 811 projects. See paragraph 1-3 of this handbook for further description. [24 CFR 891.105]

Question 27

Project Assistance Payment

Answer 27

The payment made by HUD to the borrower for assisted units as provided in the PAC. The payment is the difference between the contract rent and the tenant rent. An additional payment is made to a family occupying an assisted unit in an independent living complex when the utility allowance is greater than the total tenant payment. A project assistance payment, known as a “vacancy payment,” may be made to the borrower when an assisted unit (or resident space in a
group home) is vacant, in accordance with the terms of the PAC. [24 CFR 891.655]

Question 28

Project Rental Assisatnce Payment

Answer 28

The payment made by HUD to the owner for assisted units as provided in the PRAC. The payment is the difference between the total tenant payment and the HUD-approved per-unit operating expenses, except for expenses related to items not eligible under design and cost provisions. An additional payment is made to a
household occupying an assisted unit when the utility allowance is greater than the total tenant payment. A project rental assistance payment, known as a “vacancy payment,” may be made to the owner
when an assisted unit is vacant, in accordance with the terms of the PRAC. [24 CFR 891.105]

Question 29

Tenant Rent

Answer 29

The amount payable monthly by the family as rent to the owner.

1. Where all utilities (except telephone) and other essential housing services are supplied by the owner, tenant rent equals total tenant payment.
2. Where some or all utilities (except telephone) and other essential housing services are not supplied by the owner, tenant rent equals total tenant payment less the utility allowance.

Question 30

Total Tenant Payment

Answer 30

The total amount the HUD rent formula requires the tenant to pay toward the gross rent. Total Tenant Payment is computed in accordance with the formula in Exhibit 5-8.

Question 31

Unearned Income

Answer 31

Income received that is not wages, tips, or other compensation for work performed

Question 32

Utility Allowance

Answer 32

HUD’s or the Contract Administrator’s estimate of the average monthly utility bills (except telephone) for an energy-conscious household. This estimate considers only utilities paid directly by the tenant. If all utilities are included in the rent, there is not a utility allowance. Utility allowances vary by unit type and are listed on the
project’s rent schedule or HAP contract.

Question 33

Utility Reimbursement

Answer 33

The amount, if any, by which the utility allowance for a unit exceeds the total tenant payment for the family occupying the unit.

Question 34

Very Low-Income Family

Answer 34

A very low-income family is a family whose annual income does not exceed 50 percent of the area median income, as determined by HUD, with adjustments for smaller and larger families. [24 CFR 5.603]

Question 35

Welfare Assistance

Answer 35

Welfare or other payments to families or individuals, based on need, that are made under programs funded, separately or jointly by the Federal, State, or local government. [24 CFR 5.603]

Question 36

Welfare Rent

Answer 36

In those States in which the welfare grant is based on the actual amount a family pays for shelter and utilities, the welfare rent is the maximum amount permitted under welfare rule for rent and utilities.