3 of Handbook 4350.3 discusses the guidelines for excluding income
residents receive under training programs using HUD funds when calculating
monthly rents. This policy was designed to clarify one of the income
exclusions cited in existing regulations. This chapter reiterates
the Department's commitment to empowering the poor, ensuring economic
opportunity, and, subsequently, expanding affordable housing options.
Under the provisions of the regulations cited in this chapter, owners
and management agents may request to use project funds and/or the
release of funds from the Residual Receipts account to underwrite
all or a portion of the cost of developing, maintaining, and managing
a job-training program for project residents, if funds are available.
These job-training programs may partner with community organizations,
local colleges and universities, and/or local businesses, to develop
and implement various job-training programs designed for project
Income received, such as stipends, wages, transportation payments,
and childcare vouchers, pursuant to a job-training program, are
excluded from annual income for the purpose of calculating rent.
This exclusion of income is allowed only during the job-training
It is the Department's position that this income exclusion promotes
long-term upward mobility, educational achievement, and a decrease
in the number of families dependent on welfare and other social
services. The costs of this exclusion will be offset by the increasing
number of economically self-sufficient families residing in assisted
housing, thereby resulting in future cost savings to the federal
The following is an excerpt of the relevant sections from the Handbook.
This notice is in the Occupancy
Requirements of Subsidized Multifamily Housing Programs (Handbook
4350), Chapter 3.
EXCLUSION OF INCOME RECEIVED UNDER TRAINING PROGRAMS IN MULTIFAMILY
The Department recognizes the need to prepare tenants receiving
rent subsidy in multifamily projects for long-term self-sufficiency,
independence, and increased economic opportunity, to aid both
welfare reform and Neighborhood Networks.
In an effort to encourage and assist tenants toward long-term
upward mobility, we provide clarity on the application and interpretation
of the regulations at 24 CFR 813.106(c)(8)(i) which allow exclusion
of income received under training programs funded by HUD. It
is anticipated that the costs of these exclusions will be offset
by long-term future savings to the Federal Government, because
the exclusions will increase the number of economically self-sufficient
families residing in assisted housing.
Eligibility. All insured and noninsured projects assisted
under Section 215 Rent Supplement Payments, Section 236 Mortgage
Insurance and Interest Reduction Payment for Rental Projects,
including Section 236 Rental Assistance Payments, and Section
8 of the United States Housing Act of 1937.
Programs Funded by HUD. The Office of Multifamily Housing
does not have special funds designated for job training programs.
However, owners and/or management agents may request to use
project funds and/or the release of funds from the Residual
Receipts account to underwrite all or a portion of the cost
of developing, maintaining, and managing a job training program
for project residents if funds are available. The Field Office
will make the determination if the job training program may
be approved, and if project funds are sufficient to fund the
job training program and maintain the physical and financial
integrity of the project. Job training programs may either be
on-site at the project or off-site. For example, job training
programs that have partnerships with local colleges, community
based organizations, or local business, may have in-house job
training programs designed for project residents.
Funds that an owner may choose to use to underwrite a job training
program may include Section 8 funds, Community Development Block
Grant funds, housing authority funds, modernization funds, etc.
These funds may be used to cover the costs of various components
of a job training program, i.e., course materials, computer
software, computer hardware, personnel costs, etc.' Also, contractors
and subcontractors, in connection with work performed under
a Flexible Subsidy contract, may elect to hire project residents
to perform certain skills required under the contract. If the
employment of the project residents was pursuant to an apprenticeship
program, this could constitute a training program using HUD
funds, and income received by the tenants in the apprenticeship
program will qualify as an exclusion from income.
Participation in a job training program is voluntary on the
part of the owner and tenant. However, in the context of Neighborhood
Networks (see HBK 4381.5 REV-2, CHG-2, Chapter 9) and Welfare
Reform, income exclusions for job training are a good incentive
for getting people to work.
For Determining Income Received From Training Programs. Amounts
received such as stipends, wages, transportation payments, and
child care vouchers received, pursuant to the training program,
are excluded from annual income for the purpose of calculating
rent. Income received as compensation for employment is excluded
only if the employment is a component of a job training program.
Amounts excluded under this provision may include, but are not
limited to, compensation received during:
the job training programs.
exclusion of income earned is allowed only during the job training
program, or training oriented employment, but not during employment
secured or maintained once all training has been completed. Any
additional compensation received during the training period that
is unrelated to the job training program (i.e., income received
prior to participating in the job training program, e.g., welfare
benefits, social security payments, etc.) would not be excluded
Acceptable training-oriented employment for the purposes of
excluding income for calculating rent must be distinguished
from ordinary employment by its characteristics of 1) the activities
occur under a training program that has clearly defined goals
and objectives; and 2) the training program is for a pre-determined
limited time period, and initially, not to exceed one year.
It is acceptable that the program use both HUD funds and non-HUD
funds, but HUD funding must be a material portion of the total
funding designated for the training program. Owners/management
agents are encouraged to seek partnerships with local service
providers and to mobilize support and participation from corporate
and community based organizations to provide key components
of the training program.
HUD Office Review. Requests to use HUD funds to underwrite
all or a portion of a job training program must be submitted to
and approved by the Local HUD Field Office.
Field Offices must verify that a material portion of the job
training program is funded by HUD and that the employment activities
are part of a training program. Owners and management agents
should be required to submit regular reports detailing the operation
of the program, funding sources received from other resources,
the number of tenants participating in the program, etc. Frequency
and content of the reports will be determined by the Field Office.
At the conclusion of the pre-determined time period for the
job training program, Field offices will review it to determine
if it is meeting its defined goals, and if it would be advantageous
to the tenants and to the Department to continue the program.
However, the training program may only be extended for no more
than one additional year. The total training program will not
exceed two years.