Both the HOME and LIHTC programs require project owners to verify applicant income to ensure that they are income-eligible and that the property is in compliance with its initial and ongoing occupancy requirements. To demonstrate eligibility under both programs, project owners must obtain supporting documentation. This documentation must be kept in project unit files for review by the monitoring agencies. In general, third party written verification is preferred, with the verification being sent directly from the third party (e.g., employer, benefit provider) to the property.

How is Tenant Income Defined?
Like many HUD programs, the HOME and LIHTC programs use adjusted income for rent determination purposes, but use gross income to establish tenant eligibility. The HOME program has more flexibility in defining income eligibility than the LIHTC program. Under HOME, PJs have a choice among three definitions of income:

• The HUD Section 8 Definition (also know as The Part 5 Definition);
• The Census Long Form Definition; and
• The IRS Form 1040 Definition.
  

Under LIHTC rules, however, properties must use the Section 8 definition (as defined in HUD Handbook 4350.3). Thus, projects using both HOME funds and housing tax credits will generally use the Section 8 definition of income.

What are the requirements for Asset Income?
HOME requires verification of all asset income. In contrast, LIHTC rules require verification of asset income if the household's assets are greater than $5,000. For total assets less than $5,000, LIHTC allows the tenants to provide a signed statement of asset income. A tenant in a unit subsidized by both sources of funds would have to comply with the stricter HOME requirements.