The HOME regulations at 92.203(a) require that PJs determine the income eligibility of applicants to HOME programs by examining source documentation which provides evidence of annual income, such as:

• wage statements,
• interest statements, and
• unemployment compensation statements.

PJs may develop their own procedures for verifying the income of program applicants, provided that they collect source documentation and that this documentation is sufficient for HUD to monitor program compliance.

Check out the HUD-approved forms available in the HOME Front's Sample Forms module for assistance with documentation. These forms can be used for income verification purposes to help meet HUD's documentation requirements.

As a basis for developing their own verification procedures, PJs may use two of the three verification methods provided to public housing agencies (PHAs) for the Section 8 Program.

Note that the third method provided to PHAs, Applicant Certification, does not provide adequate source documentation for the HOME Program.

Third Party Verification

Third-party verifications are a useful form of income verification because they provide independent verification of information and permit the PJ to determine if any changes to current circumstances are anticipated.

Third-party verification involves the PJ contacting an outside entity to obtain information about the income of household member(s). Examples of third parties that may be appropriate for these purposes include:

• employers,
• banks,
• the U.S. Social Security Administration, and
• public assistance agencies.

In order to conduct third-party verifications, a PJ must obtain a signed release from the household member(s) authorizing the third party to release the required information.

Release forms are available for printing and/or downloading on the HOME Front's Sample Forms module.

Although written requests and responses are generally preferred, conversations with third parties are also acceptable if they are documented through a memorandum to the file. This memorandum should record the:

• contact person,
• information conveyed, and
• date of the conversation.

Some third-party providers may be unwilling or unable to provide the needed information in a timely manner. Other third-party providers (such as banks) may charge a fee to provide the information. In such cases, the PJ should attempt to find suitable documentation without the third-party verification -- for example, bank statements or a savings passbook.

If suitable alternative documentation is not available, the costs associated with third party verifications are considered eligible expenses under the HOME Program;
However, low-income beneficiaries must not be required to pay for verifications as a condition of receiving assistance.

Review of Documents

Documents provided by the applicant may be the most appropriate documentation for certain types of income and can be used as an alternative to third-party verifications. Examples of appropriate documents that may be provided by program applicants include:

• pay stubs,
• tax returns, and
• bank statements.

If a copy of a tax return is needed, IRS Form 4506 "Request for Copy of Tax Form" must be completed and signed. Copies of documents provided by program applicants should be retained in project files.

Although easier to obtain than third-party verifications, a review of documents may not provide all the information necessary to project the annual (gross) income of household member(s). For instance, an employed applicant's pay stubs may not provide sufficient information about the average number of hours worked, overtime, tips, and bonuses. In this case, a conversation with the employer may be necessary to accurately project annual income.