Frequently Asked Questions About Properties Subsidized by HUD's
Section 8 Program

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We get many questions from our partners in the subsidized multi-family business in HUD's multi-family offices in Ohio, so we developed this helpful guide. Unless otherwise indicated, all the guidance is based on HUD Handbook 4350.3 REV1. Please remember that our staff is always ready to answer your questions in person or over the phone.

	Income/Assets
	Verification
	Medical Issues
	Re-certification
	Lease
	Special Claims
	TRACS/Secure Systems
	Other Important Issues

INCOME/ASSETS ISSUES:
Question 1:	What is an acceptable way of calculating child support when the amount received varies?
Answer 1:	When the amount of the Child Support payments that have been verified by the court documents is not received, management should verify the amount that was received by whatever means possible (e.g. ADC records, statement from the person making the payments, notarized statement from the resident with copies of checks, etc.). An average of the monthly amounts paid during the timeframe provided should be calculated (using at least 3 months or more if available) and then annualized. We recommend the tenant be interviewed every 90 days or so to determine if circumstances may have changed and an Interim Recertification completed if applicable.
Question 2:	If a tenant has resided in your property for 10 years, and you have just discovered the tenant disposed of assets of $10,000 for less than fair market value (gave it away to family) 4 years ago, would you begin to count it at this time for 2 years-or would you go back 4 years and make corrections to prior 50059's?
Answer 2:	Assets that were disposed of for less than fair market value (when fair market value amount is more than $1,000 over the amount received) must be counted for a period of 2 years from the date the asset was disposed of. (See paragraph 5-7G.6) Since in the situation described here, the 2-year period had already passed before it was discovered, the proper procedure would be to make retroactive corrections to the effected 50059's. The resident may then be required to make a repayment of any difference to the rent.
Question 3:	If someone sells their settlement or winnings to a company agreeing to take a lump sum rather than take payments over time, is the total amount counted as income since they made the choice to not take monthly payments? (E.g., a lottery winning of $10,000 payable in monthly increments of $1,000, tenant makes choice to "sell" their winnings to a company that gives them $8,000 in one lump sum and than the company gets a total payment from the lottery distribution of $10,000.)
Answer 3:	Had the resident taken monthly payments of their lottery winnings, their winnings would have been counted as income instead of an asset. Now that the resident has sold the right to the monthly payment for a lump sum payment, it becomes an asset valued at the amount received ($8000). Remember a lump sum payment is counted as an asset only as long as the tenant possesses it. If the tenant uses the funds for something that is not an asset (pays for a new car, education, etc.), you do not count the funds (only the amount placed into an account or kept as cash).
VERIFICATION ISSUES:
Question 1:	Are third party verifications for every issue mandatory? If you are wrongly cited at your management review, is there no procedure to retract that citing?
Answer 1:	A direct third party written request is the preferred method for verification purposes whenever possible. The only exceptions are verifications of age, family membership, Social Security number, etc. If third party verification is not possible, the owner/agent should document the file as to why it was not available (see paragraph 5-19 E on documenting files). Management should then follow the next preferred verification methods (review of documents and then tenant self-certification-see paragraph 3-25B). If the owner/agent disagrees with any management review findings, they may appeal the findings to the PBCA/CA, stating the reasons and the Handbook citations to support their claim. If the finding is not satisfactorily resolved between the management and PBCA/CA, it may be appealed to HUD.
Question 2:	Can we run credit reports on persons (current residents) suspected of fraud?
Answer 2:	Yes, the owner's options when investigating and discovering facts if fraud is suspected are outlined in the new handbook paragraph 8-17C.1. This includes obtaining additional information from other persons or agencies and taking other actions to verify either the tenant's information or conflicting information. It is reasonable to include credit reports as "taking other actions" to verify the information.
Question 3:	Verification of Income: what if verification was dated 9-1-03, but received 12-31-03, and stamped on 12-31-03, but move -in date is 2-1-04, is verification considered "current?"
Answer 3:	Yes, the verification would be considered current. (See paragraph 5-17B. 1. Verifications are valid for 90-days from the date of receipt by the owner. Additional information is contained in the RHIIP website Frequently Asked Questions under question 19 regarding the timing of the verifications. The answer to this question in part reads "…Owners may now extend the validation period from 90 days to 120 days and are no longer required to complete the extra step of calling to confirm the validity of the information. For verifications that are more than 120 days old, the owner must obtain new verifications (see paragraph 5-17B.3.)"
Question 4:	What is required to verify criminal activity and sexual predator information (the specific minimum an owner must use)? Is self- declaration acceptable?
Answer 4:	HUD does not provide specific information on this subject. However paragraph 4-27E .3 lists some sources that owners may use in the process of screening tenants (local PHA, private credit and screening services, etc.). NOTE: The local PHAs may not be prepared to provide this service. You will need to check with the PHA in your locality. It is reasonable that verifications from these sources would be adequate information. It is not reasonable to believe an applicant/tenant's self-declaration regarding one of these offenses would be accurate.
Question 5:	Is there a state website to get criminal background history for prospective residents?
Answer 5:	HUD does not maintain a listing of such websites. It is suggested that you check with your municipal and county law enforcement agencies for availability of local websites in your area. A website with some level of criminal background information is maintained by the State of Ohio at http://www.drc.state.oh.us/. Please be advised that HUD accepts no responsibility for the accuracy or reliability of the information provided by any of these websites.
Question 6:	Is criminal and credit history screening mandatory? Does 4350.3 REV 1 suggest and/or recommend it but not require it? Also, if screening is implemented, must the specifics be outlined in tenant selection plans?
Answer 6:	Yes, HUD guidelines provide that tenant selection plans must include screening criteria for drug-related or criminal activity (see paragraph 4-7C.). All screening criteria adopted by the owner/agent must be included in the tenant selection plan. Credit Reports are a good source for screening for credit as well as criminal activity. See paragraph 4-7E-2 for guidelines in using a credit report. The cost for credit reports and criminal background check may not be charged to the tenant. It is a project expense. Remember consistency is required for all applicants.
Question 7:	Please provide the citation for the requirement of completing 60-90 day re-verifications of zero income reported by the tenant?
Answer 7:	HUD-4350.3, Appendix 3: Acceptable Forms of Verification, Page 16, on the chart under the topic of Verification Tips. "Owners may require the tenant to re-verify zero income status at least every 90 days." Some owner/agents require "zero" income residents to re-verify their income status more often than 90 days.
Question 8:	Third Party verifications-The handbook has a list of documents the applicant/tenant can bring to the interview. Is it necessary to do the third party verification again, even if they were dated prior to the re-certification? If there is an interview date within 30 days or so-but not more than 90 days from the re-certification date?
Answer 8:	Exhibit 4-1 of the new handbook is the list of documents that applicants may bring with them to the interview. This information is used for the purpose of determining initial eligibility for the project. Yes, it is necessary to complete the third party verifications. The information provided by the applicant at the time of their interview may also be used to assist owner/agents in obtaining third party verification. (In some cases the information provided by the applicant may be used when third party verifications are not obtainable or used temporarily when the verifications are not returned timely.)
MEDICAL ISSUES:
Question 1:	What is considered an "assistance animal?" If someone brings a prescription for an animal to lower blood pressure, or for depression or emotional well being, do we then consider this an assistance animal? Do we then allow for vet bills on those animals in an elderly/disabled household?
Answer 1:	An assistance animal is one that works, provides assistance or performs tasks for the benefit of a person with a disability. Page 4 of the Glossary in the handbook gives a full definition of an Assistance Animal. Part of which is "…providing emotional support to persons with disabilities who have a disability related need for such support." See paragraph 2-44 and 3-38 for additional information on determining if a resident meets the definition of a person with a disability that makes them eligible for an assistance animal as a reasonable accommodation and how to verify the need for an assistance animal. The need for an assistance animal has to be directly related to a disability, and the services performed by the animal must alleviate one or more identified symptom of that person's disability. Veterinary bills as well as other expenses related to the upkeep of the assistance animal are allowed medical expense for a qualified assistance animal.
Question 2:	Are companion animals' expenses medical deductions just like assistance animals?
Answer 2:	Yes, if the animal you refer to as a companion animal meets the definition of an assistance animal and the requirements of Paragraphs 2-44 and 3-38 in HUD Handbook 4350.3 REV-1 are followed.
Question 3:	If medical expenses were incurred prior to June 13, 2003, (the implementation of 4350.3 REV 1) can they be used as a medical expense paid within the last 12 months?
Answer 3:	Yes, if the expense was paid in full and was not previously used for an Interim Recertification.
Question 4:	Can household help be included if prescribed (not recommended) by a doctor?
Answer 4:	Household help is not allowed to be included as a medical expense regardless of whether the doctor prescribes it or recommends it. (See Exhibit 5-3, page 5-89.)
Question 5:	Can medical deductions be used at initial move-in based on past 12 months history of medical bills?
Answer 5:	The owner may use reoccurring medical expenses paid by the tenant during the past 12 months at the initial move-in as a method of estimating anticipated medical expense for the coming year. If the tenant is under a payment plan for medical expense, the total amount of payments to be made for the year may be used. (One time medical expense paid in full prior to move-in should not be used since the tenant was not on Section 8 and medical deductions were not a consideration in calculating the rent at the time it was paid.) Exhibit 5-3, page 5-89 lists items that are not included as medical expense.
Question 6:	If a doctor prescribes that a tenant use items such as Depends to aid a medical condition, is it an allowable deduction? The question was raised in an earlier training that it would be a questionable expense because of the word "prescribe." Doctors are not likely to "prescribe" such an item-it is likely that they would instead "recommend." Bottom line, are reviewers going to question this deduction even if the doctor states on a 3rd party verification form that they prescribe this item?
Answer 6:	If the doctor prescribes the personal use item to prevent or alleviate a physical or mental defect or illness of the patient it may be included. (Exhibit 5-3, page 5-90 indicates when personal use items may be used as a medical expense.)
Question 7:	Regarding one-time medical expenses, does this include all paid expenses the tenant has incurred in the past year? For example if the tenant had, an x-ray, cat-scan, an EEG, and bought new glasses and new dentures with everything in the past year paid in full except the cat-scan, which is being paid in monthly installments - are all expenses counted?
Answer 7:	Yes, all expenses paid in full by the tenant (after the Medicare or other insurance has paid their portion) and not previously used for an Interim would be included. If a medical expense were being paid under a payment plan, it would be counted as an anticipated expense. (See paragraph 5-10 D. 6 a. and b; How to calculate a one time medical expense.) The third party verification remains the preferred method. (See Appendix 3, page 12)
Question 8:	Is a notarized statement required for over the counter medication that does not have an RX as supporting documentation?
Answer 8:	No, a notarized statement is not sufficient verification for over the counter drugs. Over the counter medicine must be prescribed by a physician for a particular condition or illness to qualify as a medical expense. (See Exhibit 5-3, page 5-90.)
Question 9:	Are there new forms for medical verifications?
Answer 9:	The 4350.3 Rev-1 does not provide any forms for verification of medical expense. Owner/agents must develop their own individual consent forms. Appendix 15-A provides a sample and guidance for the development of Individual Consent forms.
RECERTIFICATION ISSUES:
Question 1:	Interim re-certification is supposed to be effective on the first day of month after the occurrence of an event that causes income to go down. If a person's job ended 11/15, and they signed up for unemployment benefits that began 12/1, but November's income did not go down because of remaining vacation pay being paid, is the effective date of lowering rent to unemployment compensation 12/1 or 1/1? Income did not go down in November but did in December.
Answer 1:	The resident's job ended 11/15, resident received vacation pay from 11/16 thru 11/30, and unemployment benefits began 12/1; therefore, the interim re-certification is effective 12/1. (First month after action that caused the Interim). (See paragraph 7-13C.2)
Question 2:	Re: $200 interim change-For example, a mother who is on welfare gives birth and has an increase in ADC (i.e. $223 to $350). Is an interim certification needed to add the baby and also change income?
Answer 2:	Yes, all changes that may have occurred since their most recent certification that would affect the housing assistance payment (e.g., family composition, income, assets, allowances, etc.) must be reported when processing an interim. (Paragraph 7-12.A.1)
Question 3:	A Section 236 resident has a Section 8 voucher through a housing authority. If the resident is re-certified through the housing authority-do they also have to be re-certified by the property?
Answer 3:	No-however, you should have a copy of the housing authority's re-certification on file so you will know what the tenant's portion of the rent is. (See paragraphs 3-20 B. and C.)
Question 4:	Please clarify (page 32 of Hot Topics packet). If a person fails to re-certify until 14 months and 28 days after their last anniversary date, do we: 1) Return their subsidy to them? 2) Make rental changes retroactive to new annual re-certification date? 3) And what if we already gave their subsidy to someone else-do they go on a waiting list?
Answer 4:	The statement on the third slide on page 32 of the Hot Topics Power Point Presentation handout reads, "Assistance payments will be terminated if certifications are not submitted to TRACS within 15 months of the previous years anniversary date." This statement is referring to the housing assistance payment to the owner (if the TRACS submission has not been made within 15 months of the anniversary date) not to the tenant's failure to report for re-certification. In the example provided in your question, the tenant's rent would have been raised to market rent on the anniversary date. (See question 6 below for clarification on tenant's failure to report before the anniversary date).
Question 5:	If someone comes in on March 12 and reports a change of income (increase), will the new rent be charged 4/01/04 or 5/01/04? If the answer is 5/1/04, are the tenants back-billed to 4/1/04 and a repayment plan worked out?
Answer 5:	The new rent would be effective 5/1/04. If the tenant's rent increases because of an interim adjustment, the owner must give the tenant 30 days advance notice of the increase. The effective date of the increase would be the first of the month commencing after the end of the 30-day period (Paragraph 7-23). In this example, tenants would not be back-billed to 4/1/04 and there would not be any repayment.
Question 6:	Please clarify the matter of a resident going to market rent and being restored to subsidized rent by 11th month.
Answer 6:	The resident does not go to market rent unless they did not respond until after the re-certification anniversary date. At this point, the Tenant is out of compliance according to paragraph 7-8 D. This situation occurs when: 1) The owner provides all three re-certification reminder notices per HUD requirements; and 2) the tenant reports for the re-certification interview on or after the re-certification anniversary date. On the re-certification anniversary date, the tenant must begin paying the market rent. Assistance is reinstated only if: 1) the required information is received, 2) Assistance is available at the project, and 3) The tenant is qualified. If the owner/agent then completes processing during the month the tenant reported, the effective date is the 1st day of the month following the month the tenant reported. If the processing is not completed until later, the rent change is retroactive to the 1st day of the month after the tenant reported (see examples on page 7-16 and 17). Under these circumstances, the 30-day notice does not apply. The re-certification is processed as an Initial Certification and the re-certification date changes to the first day of the month the project began to receive assistance again for the tenant.
Question 7:	With respect to the eleventh month Recertification compliance: Previously it was the 10th day of the 12th month-and now it is the 11th month (i.e., for re-certification effective 1-1-03, the 10th day of 12th month would have been 12-10-03. The 10th of the 11th month is 11-10-03 (the new deadline). Is this the correct interpretation?
Answer 7:	Yes.
Question 8:	Does the Initial Notification of Recertification specify the cut-off date, or will the month only be ok?
Answer 8:	The new Handbook (paragraph 7-7) outlines the requirements of the Initial Notice. Paragraph 7-3a(2) states "Specify the cutoff date (the 10th day of the 11th month after the last annual re-certification) by which the tenant must contact the owner and provide the required information and signatures necessary for the owner to process the re-certification." However, Annual Re-certification Initial Notice Form (Exhibit 7-1) indicates only the month and year the management will conduct the re-certification interviews. We suggest you make this date conform to the Handbook requirement stated above. The Handbook is currently being revised and Exhibit 7-1 will be corrected to include the cutoff date.
LEASE ISSUES:
Question 1:	We implemented a new lease last year with a June 1 effective date. With the new Handbook the only thing not in compliance is the $200 threshold for an interim. Can we implement that with a lease addendum, or do we have to wait until the current lease expiration date on June 1, 2003?
Answer 1:	The FAQ found on the RHIIP Web site provides guidance regarding this issue. The answer to question 13 states, "Tenants who are on a year-to-year lease must sign the new lease no later than at the next re-certification. For those tenants on a month-to-month lease, the owner may execute a lease addendum. The lease addendum must be approved by the local HUD Field Office." A lease addendum may be used for residents that are on a month-to-month lease. However, owner/agents must ensure that all differences between the two leases are addressed before submitting to HUD for approval. All new residents should be placed on the new lease.
Question 2:	With the new lease as found in Handbook 4350.3 released 6-12-03, and the changes of re-certification at 120 days and $200 reporting requirements, can the owner develop their own addendum for the change without HUD approval? The owner has already implemented the 7/02 HUD model lease.
Answer 2:	Refer to answer for Question 1under this section.
Question 3:	Appendix 4, HUD Model Lease, of Handbook 4350.3, is the lease to be used for Direct Loan Section 202/8 projects. That lease, however, does not mention "Late Fees." Many of these projects have been charging late fees for years. Does HUD have to approve a change in the lease to insert the late feel language of $5.00 on the 6th day and $1.00 per day thereafter for the remainder of the month? Was this a mistake being left out of the Model Lease? Must HUD approve the insertion of such language now into the lease?
Answer 3:	The "Late Fee" clause has not been in any 202/8 leases (or PAC and 202/811 PRAC). Paragraph 6-5 D. (and 6-5 E. for 202/811 PRACS) of the new handbook states that the Model Lease for these projects can only be modified for documented state or local laws or to include a provision that permits the owner to enter the premises at any time without advance notice when there is reasonable cause to believe an emergency exists. Based on the above citation, the leases for Section 202/8 and PACs, and Section 202/811 PRACS may not be modified to include the "Late Fee" clause with or without HUD's approval.
Question 4:	Per HUD or State law, for Security Deposits on file more than 6 months and greater than $50, is it correct that interest is paid at 5% per annum on the excess of over $50 (or one months rent)
Answer 4:	This question pertains to the Ohio Revised Code Section 5321.16 Security deposit procedures. (A) Any security deposit in excess of fifty dollars or one month's periodic rent, whichever is greater, shall bear interest on the excess at the rate of five percent per annum if the tenant remains in possession of the premises for six months or more, and shall be computed and paid annually by the landlord to the tenant." The Lorman Education Services Landlord and Tenant Law in Ohio course presented by Joseph V. Maskovyak, Legal Aid Society of Columbus clarifies this Ohio Revised Code section as "Security deposits can be in any amount..…The statute says that the owner is entitled to charge $50 or one month's rent, whichever is greater, as a security deposit for which there is no requirement of paying any interest. Interest is charged on the amount in excess of one month's rent at the rate of 5% with a requirement the resident reside in the unit for at least 6 months in order to receive the interest payment…" As a reminder, the above is state law regarding Security Deposits and not HUD requirement. It pertains to interest being paid on the amount of Security Deposit collected in excess of one month TTP (at move-in) or $50 whichever is greater. The HUD requirements for Security Deposit should never exceed the TTP or $50. So this state requirement would not pertain to any programs listed in Figure 6-6 of Handbook 4350.3 REV 1. HUD has no requirement for any program not listed in Figure 6-6.
Question 5:	We have several RHS 515 projects with Sec. 8 where the Rural Development loan has been paid off. Are we still required to collect Security Deposits based on Figure 6-6 (equal to one month's total tenant payment) or would the deposit be collected based on Section 8 NC on or after 11-5-1979 TTP or minimum of $50.
Answer 5:	HUD has no requirements regarding Security Deposits for Uninsured projects or those not listed in Figure 6-6. Owners may follow the state or local law guidelines (refer to the Ohio Revised Code guidance listed in Question 3 above). The project's original HAP contract addresses security deposits. Whatever the HAP states the owner should follow.
Question 6:	What is the security deposit minimum/maximum for a LMSA Non-Insured or any other property type not listed on Figure 6-6? Is it safe to assume a $50 minimum?
Answer 6:	Refer to answer for Question 4 under this section. If the project's original subsidy contract addresses the security deposit then that is what should be charged.
Question 7:	What rate has to be paid on Security Deposits?
Answer 7:	The rate of interest that is to be paid to the residents on their Security Deposit varies depending on the interest rate paid by the bank where the investment is held. The requirement is that the interest accrued be paid to the resident.
Question 8:	One of the changes in 4350.3 REV 1 is that all adult members of the household must sign the 50059's. At this time, the 50059 must be signed on or before the effective date to be eligible for special claims. Will there be any allowance given for the signature dates, i.e., do all signatures have to be on or before the effective date of the 50059?
Answer 8:	Yes, the signatures of all adult members have to be on or before the effective date of the 50059 unless there are extenuating circumstances for some adult members that may not be able to sign (e.g. away on active military duty, unable to sign due to an illness, etc.). In such cases, the file should be documented as to the reason for the delay and indicate how and when the proper signature will be provided. In some instance when the extenuating circumstance will continue a long period of time, an alternative would be for another adult member to obtain Power of Attorney for the adult family member that was unable to sign the 50059.
Question 9:	Vouchering is completed at our corporate office; on site we do handwritten 50059s for move-ins and interims. I was told that the handwritten 50059 after signed by manager and tenant is not valid until the computer generated 50059 is signed, and that the 30-day notice of rent increase isn't effective until the computer generated 50059 is signed and from that date of signature rather than the date the tenant signed the handwritten 50059. Is this true? We are unable to receive the computer generated 50059 from our corporate office immediately. I have received different responses from different regional AHSC.
Answer 9:	The new Handbook requires that both the tenant and owner sign the 50059 facsimile before it is electronically submitted. It does not give any guidance regarding the use of handwritten 50059's. The paper copy is not a valid form and should not be used (See the Note under Figure 9-1 of paragraph 9-2). However, since the Ohio Hub recognizes that this is a problem that a number of projects face, we will accept the handwritten 50059 as the officially signed copy when it is not possible to obtain the computerized 50059 for signature prior to the effective date. The handwritten copy must contain exactly the same information as the computer generated 50059, and the computer generated 50059 must be signed and attached as soon as it is received but no later than 30 days after the effective date. Management should make every effort to process all 50059s in time so that the computerized facsimile is returned and can be signed before the effective date.
Question 10:	Owner completes long hand 59s on site then forwards to Service Vendor to complete for TRACS. The tenant file contains a 59 (handwritten) that is signed and dated on or before the effective date. The Service vendor sends the computer generated 59 back with the monthly voucher submission. The owner has not been having tenant sign any other 59 that is computer generated. Must the owner have the Service Vendor get the computer generated 59 to the owner earlier to ensure that the computer generated 59 is signed on or before effective date. Small mom and pop management companies are doing this.
Answer 10:	Refer to answer for Question 9
Question 11:	Does HUD have an approved pet addendum to the lease for properties that are not 202/8 (e.g., 221(d) 4 for wholly elderly) or must owners send in separate approvals?
Answer 11:	No, HUD does not have an approved pet addendum to the lease for any properties (including Section 202/8). Owners must develop their own pet addendum based on mandatory rules and discretionary rules found in Exhibit 6-4. The Owners' pet rules are then included as an addendum or attachment to the lease. Guidance on how to develop pet rules is found in Exhibit 6-5. Other housing programs may use these guidelines in developing their pet rules if they choose to.
Question 12:	Does Live-in Care Attendant only appear on amendment to lease or as an actual person on the lease and counted as part of the household?
Answer 12:	The Live-in Care Attendant is listed on the 50059 and coded "L" (live-in care attendant). They are household members and counted for the purposes of bedroom size, but are not considered "family members." Their income is not counted. They do not sign either the lease or the 50059, and do not have remaining rights if the resident dies or leaves the unit.
SPECIAL CLAIMS ISSUES:
Question 1:	Are grease build up, markings and drawings on wall etc. considered extensive wear and tear for purposes of special claims? I am not getting paid for extensive cleaning or to remove a truckload of belongings.
Answer 1:	The descriptions of grease buildup, extensive cleaning, and truck-load of belongings are not sufficient in describing cleaning/repair beyond normal wear and tear. The descriptions as stated could be considered normal maintenance items found in Handbook 4350.1 REV-1 that include: Damages and Cleaning Fees, Janitor and Cleaning, Janitor and Cleaning Supplies and Garbage and Trash Removal. The markings and drawings on wall would be considered damages with clear documentation to support the claims. Reference is made to Handbook 4350.3 REV-1, 9-14.B.2 a through e. The damages must be due to tenant negligence or abuse. The owner may not request a special claim for routine maintenance and normal wear and tear. The owners must provide evidence that the tenant was billed for the damages. The move-out inspection report must reflect clear documentation of the repair/cleaning beyond normal wear and tear. A breakdown of the charges must be provided on the Security Deposit Disposition form. Contract Administrators will review the Reconditioning Log, Move-out Inspection Report, and the Security Deposit Disposition form for consistency and clear documentation of the damages.
Question 2:	Is there an actual "certificate" of compliance? Or does this refer to pages in 4350.3 that deal with compliance (particularly pgs. 9-33 & 3-34 in REV 1? (Refers to the Ohio Hub's check sheet requirement for submission of Special Claims)
Answer 2:	The certificates of compliance is the certification that appears at the bottom left-hand side on the Special Claims Forms HUD-52670-A, Part 2, 52671-C, 52671-A, 52671-B, and 52671-D. For example, the unpaid rent/tenant damage claims reflect: I certify: (a) I collected the appropriate security deposit according to Chapter 4, Section 2, page 4-4, paragraph 4-8b(2) and (3), (b) I billed tenants for unpaid rent or damages and took all reasonable steps to collect the debt. (c) I determined the damage claim was due to the tenant's negligence or abuse. (d) All documentation will be retained in the project's file for 3 years. The owner's printed name, signature, date, and phone number have certified to this form. Also, the signed and dated form HUD-50059 is a Certification of Compliance. Owner/Agent and Tenants (all adult family members) must sign the form HUD-50059. The pages referenced are not certifications of compliance. These pages provide the key requirements for regular vacancy claims, including calculating the claim amount and processing the vacancy claims.
Question 3:	Should a vacancy claim be denied in its entirety because it took more than 7 days to complete the work, (E.g. in a 20 year old project where we are doing a total rehab of the unit)?
Answer 3:	No, claims will not be denied based solely on the number of excessive days taken to recondition a unit when there is a reasonable explanation for the delay. The owner should provide this explanation with their submission.
Question 4:	Special Claims will not be paid for FMR tenants. Does this include tenants taken to FMR as a result of program violations that result in eviction? If so, why should the owner take to FMR?
Answer 4:	This issue has been debated. Currently, the Columbus Hub is not denying special claims if the owner has sent all three reminder notices to re-certify per HUD requirements, and the tenant was moved to market rent for failure to respond or they respond after the re-certification anniversary date. In this case the tenant is out of compliance. If the tenant moves out before re-certifying, and the owner submits a special claim for unpaid rent, this claim would be approved for payment for a maximum of 30 days at the subsidized tenant rent (line 51 on form HUD-50059) prior to the tenant being moved to market rent. These procedures will be followed until this issue has been clarified through changes made to the new Handbook.
Question 5:	Special Claims must be made within 90 days of opt-out, what about claims after the 90-day period?
Answer 5:	After a 90-day period has elapsed after the project has opted out, it is customary for any remaining funds for the contract to be recaptured. When this happens there will not be any funds left to pay the claims. Claims will not be paid after the 90-day period because the project is no longer covered under the Section 8 program.
Question 6:	Special Claims that are submitted via Certified Mail are not addressed and requests as to the status go unanswered. Special Claims get submitted and resubmitted and are ignored or new rules are then implemented retroactively.
Answer 6:	Unresolved disputes/disagreements should to be directed to Mr. Matthew McGuire, Acting Director of Operations, (614) 469-5737, extension 8223. All Special Claims should be addressed by approving, adjusting, denying, or returning the entire submission to the owner/agent unprocessed with a brief explanation. The status should be made known to the owner/agent upon request. The general guidelines for processing special claims are currently found in HUD Handbook 4350.3 REV 1, beginning with Chapter 9-14, pages 9-27 through 9-37. The Stillman D. Knight Memorandums dated August 21, 2003, and November 26, 2003, have addressed the implementation of the new Handbook and any exceptions to the effective date of implementation.
TRACS/SECURE SYSTEMS ISSUES:
Question 1:	I have managed my property for almost 7 years. During this time, I have never received error messages from Ohio Housing Finance Agency (OHFA). I am still not receiving any error messages. How can I get this resolved so that I know my errors are getting addressed?
Answer 1:	We conferred with OHFA about TRACS compliance ratios and requested an update of the TRACS compliance ratios and error messages. OHFA had a problem with their software, which required a patch to successfully transmit the data to TRACS. A successful test transmission was done earlier this month. OHFA is currently submitting the data beginning with December 2003 tenant certifications and vouchers to the present. Compliance should improve over the next few weeks. OHFA will be changing the TRACSMail Ids and forwarding your error messages within the next few weeks.
Question 2:	OHFA does not send us any error messages for TRACS. Don't know when a 50059 has a TRACS discrepancy.
Answer 2:	See Response to Question 1 under this section.
Question 3:	We have to do an interim before we do a unit transfer with the Micro rent program, so if we transfer on the 15th, we run an interim for the 15th, then the unit transfers for the 15th?
Answer 3:	Please request from your software vendor a patch that should correct the situation. An "Interim Recertification" is done when you have change in family composition or a change in family income only and an "Interim Recertification" is only effective on the 1st day of the month after the action occurs. The unit transfer can be done any time during the month once the move-out has occurred from the first unit.
Question 4:	I have a Sec. 8 property with assistance tax credit (as of 3-30-03). If a tenant transfers, I know I have to move them in and out on tax credit. With Sec. 8 I just transferred them. Now I am being told that I have to change their tenant number and the move-in date. Someone else stated I should simply change his or her Recertification date. Please help.
Answer 4:	If you are transferring a tenant within the same contract, process a move-out certification for the vacated unit, wait 24 hours and process the UT for the next tenant. However, if the remaining tenant is being moved to a unit in another contract, process a "move-out" certification for Contract #1 and process a "move-in" certification for Contract #2.
Question 5:	I was not able to receive any messages on Micro HUD. Can I receive them now with the new Soft Ware, Indiana Quadel?
Answer 5:	Real Page products may require a patch to the software to allow corrections and receipt of error messages. You should be able to receive the error messages.
Question 6:	TASS-Not all of my tenants are on TASS??
Answer 6:	Some tenants may be listed under their deceased spouse's SSNs. Several on-line Internet systems have implemented security checks, and, as a result owners/agents will not be able to access secured systems until TRACS has been updated.
OTHER TOPICS:
Question 1:	How can you prove a case of an unauthorized occupant when a resident advises, and provides management with a notarized statement stating, "no unauthorized occupant," yet management suspects that there is an unauthorized resident. No mail or utility bill comes in the other occupant's name.
Answer 1:	The handbook does not provide guidelines for proving unauthorized occupants. The only guidance given is on page 28 of the handbook Glossary for definitions of Unauthorized Occupant. "… An Owner must follow state or local law regarding an unauthorized occupant and establish an equitable and consistent policy and incorporate that policy into the house rules." The project's house rules should clearly define when a person would be considered an unauthorized occupant (as opposed to a guest) Management is expected to follow-up on information received regarding the possibility of residents having unauthorized occupants. All reasonable efforts should be made and the tenant files documented.
Question 2:	What is the allowable amount for lockout fees?
Answer 2:	HUD does not set the amount management may charge for lockout fees. The amount should be reasonable and customary with management practices for the area and be included in the House Rules.
Question 3:	Do preference (elderly, extremely low income, special preferences) need to be weighted as a combination of points to make a placement on waiting list?
Answer 3:	The Owners' Tenant Selection Plan is required to describe their procedures for selecting from their waiting list with first priority given to Income Targeting and then any other preferences. Paragraph 4-5 gives guidance on developing a methodology for meeting the 40% target and paragraph 4-6 for assigning other applicable preference to applicants meeting certain criteria. If the owner chooses to do so, guidance for determining the relative weight of owners' preferences is found in paragraph 4.6.D. Another useful reference is paragraph 4-25.
Question 4:	Have all Federal Preferences been done away with?
Answer 4:	The three mandatory Federal Preferences (Involuntarily Displaced, Occupying Substandard Housing and Paying in Excess of 50% of Income for Rent) were permanently repealed under Section 514(c) of QHWRA, Notice H00-18.
Question 5:	The new handbook says tenants are allowed 60 days extended absence from the unit. At the current time, if a tenant moves into a second property without informing the first property, the first property must change the move-out date to a date prior to the move-in at the second property. Is the first property forbidden from entering the unit for the 60-day period if he suspects the tenant has skipped? Does the first property have any recourse in recovering the rent lost? What date should they use for the move-out? (This date has a big impact on special claims.) Can the property claim unpaid rent past the date the property has to set move-out to accommodate the move-in at the second property?
Answer 5:	The new Handbook suggests 60-day extended absences be allowed from the unit for purposes other than medical as a guideline. It is not a requirement. The owners' House Rules should define the number of days the property will allow for extended absence from the unit for other than medical reasons. The House rules may also include the requirement that any resident planning on being absent from the unit for a given period of time must inform the managing agent. The new Handbook suggests 60-day extended absences be allowed from the unit for purposes other than medical as a guideline. It is not a requirement. The owners' House Rules should define the number of days the property will allow for extended absence from the unit for other than medical reasons. The House rules may also include the requirement that any resident planning on being absent from the unit for a given period of time must inform the managing agent. Management is not forbidden from entering the unit if there is "just cause" (repairs, regular inspections, emergencies, etc.) to do so. The required notice should be given in the usual manner and entry made after the notice period has ended even if the tenant is not there to receive the notice. In the case where the resident may have moved to another subsidized property without informing the first property, TRACS does assign the HAP to the second property on the MI date. So the first property would need to make the MO date the day before. The only recourse for the 1st property is to bill the resident for Market Rent beginning on the day they moved into the second property and place it in the hands of a collection agency as well as reporting to the Credit Bureau. The property may not submit Special Claims for unpaid rent after the MO date.
Question 6:	How long will HUD pay assistance for a unit abandoned due to medical reasons?
Answer 6:	Units should not usually be considered "abandoned" due to medical reasons. The new Handbook suggests 180 days be allowed for absences from the unit due to medical reasons (doctors' statement would be needed). The House Rules should define the project's procedures for the number of days and other requirements for this type of absences. Extenuating circumstances should be taken into consideration that may include a longer period if necessary. The Owner needs to take action if the House Rule requirements are not followed. Assistance would be paid according to the time permitted by the House Rules or extenuating circumstances determined by the owner.
Question 7:	Must owner's/agents use the current Race & Ethnicity data form for each household member or can the owner continue to use the form they created that contains the same information?
Answer 7:	The owner must follow the requirements in Notice H 2003-23 issued on November 13, 2003 and use the OMB approved form provided with that Notice.
Question 8:	What if people want to name a race that is not specified or what if someone wants to list a race that is different than their birth certificate?
Answer 8:	The requirement is that the applicants/residents be allowed to self-certify their race/ethnicity. Management should accept whatever race/ethnicity is certified to whether or not it is different on their birth certificate or not specified on the form. It would fall in the category of "other."
Question 9:	If someone receives foster care certification and is living in a one-bedroom apt, do we move them to a 2 or 3 bedroom in anticipation that they will eventually be housing/caring for foster children?
Answer 9:	A person is not entitled to a larger sized unit solely because they have a foster care certification. They could be moved to a larger unit when verification from the proper authority has been received that the placement of a child/children is either in the process or is likely to be placed within a certain time frame.
Question 10:	Was the 15% subsidy error reduction met for 2003?
Answer 10:	Yes, The Department reduced the number of errors in FY 2003 by 26%.
Question 11:	What are file folders supposed to look like when considered to be complete?
Answer 11:	See Attachment 5, Required Tenant File Documentation, of the Rent and Income Determination Quality Control Monitoring Guide, found on the RHIIP page of the Internet for a listing of documents that must be in tenant files. The Handbook does not have any requirements regarding the set-up of the tenant files. However, it is in the best interest of both the managing agent and HUD/CA if the files are set up in an organized manner so that documents are consistently located in the same place in each of the files. This enables the documents to be found easily during management reviews or when needed. The documents in each section should be in chronological order with the most recent document on top. The back-up documentation should be placed directly behind each 50059 in a specific section. The files should always be kept current and up-to-date. A sample "Section 8 New Six-Part File Order and Checklist" (listing suggested file location of various documents) is available from the local Ohio HUD offices upon request.
Question 12:	1) What length of time is considered long-term hardship? 2) What is considered verifiable documentation? 3) What if person just doesn't want to work or is eligible for Social Security and does not follow up? 4) Does tenant repay any portion of minimum rent if hardship is determined to be long term? 5) Timeframe for tenant to provide documentation for verification after requesting hardship? 6) Does zero-rent applicant have to show ability to pay $25 minimum? 7) Can tenant request hardship (no income) and do volunteer work? 8) Reasons to deny tenant request for hardship?
Answer 12:	1) Generally for the hardship to be considered long-term, it should be expected to last longer than 90 days. The overall length is not defined and should be determined on an individual basis. The suspension may be effective until such time that the hardship no longer exists. Refer to paragraph 5-26.3 (4) for further clarification. 2) The new Handbook does not define the documentation needed-only for reasonable verification. That might be doctor's statements regarding an illness, death certificate for the death of the family member, other documents supporting the reasons for the request, etc. 3) The Owner/agent makes the determination regarding whether or not the qualifications are met supporting a hardship exemption. The tenant may be determined not to qualify. 4) If the Owner/agent determines the hardship is long term, the tenant is exempt from paying minimum rent. However, the TTP will not drop to zero unless the calculations of 30% of adjusted monthly income or 10% of gross income result in zero. The Handbook does not specify that the tenant must repay the minimum rent when a long-term hardship has been determined. 5) The new Handbook does not specify the timeframe for tenants to provide documentation. However, it is reasonable to expect it to be received immediately (taking into consideration any extenuating circumstances). The owner/agent has one week to make their determination. 6) The new Handbook does not require the applicant to show ability to pay $25 minimum rent. (See paragraph 4-7E.3 "…In the Section 8, RAP, and Rent Supplement programs, owners may not establish a minimum income requirement for applicants." 7) Each request for hardship should be determined on an individual basis. All circumstances should be considered before determining whether or not the ability to do volunteer work would be a factor. 8) The reason to deny a hardship request is if the Owner/agent determines the financial hardship claimed does not exist. Hardship situations that may be considered are listed in paragraph 5-26.D.3.
Question 13:	For AHSC-When there is a SSN # change and we put the old SSN # in "previous," it then gives multiple occupancy errors from TRACS. This is the same with unit transfers.
Answer 13:	This would appear to be a software issue. We recommend you consult your software vendor. Sometimes the 50059's are submitted as a correction (for SSN change) and do not have fields in Section 2 of the basic record. The "incorrect" SSN may have been deleted and replaced with the correct SSN improperly. If owner/ agents are unaware of how the software needs to process changes in SSN correctly so that fields 4-9 contain the original incorrect information, we advise you to contact your vendor as stated above. The fields that need to contain information are numbers 4 through 9. Specific instructions on these fields as it relates to changes can be found in the Mat User Guide pages 4-7 and 4-8. (Answer provided by AHSC).
Question 14:	Tenant 50059 lists Social Security number as listed on Social Security Income Verification. The tenant's Social Security card has different number. ASHC has "Fatal Error." How will I correct the 50059 using the Social Security card number as instructed?
Answer 14:	In the situation described above where the SSN shown on resident's Social Security card is different than the number listed on the Social Security Income Verification, the resident should be advised to contact Social Security to have either their card or the verification be corrected as appropriate to reflect the correct number. The individual residents must make this request to Social Security themselves due to privacy reasons. If Fatal Error messages are still received after all the corrections have been made, the software vendor should be contacted. (Answer provided by AHSC)