HUD HOTMA Rules Clarify and Change the Treatment of Assets

person A.J. Johnson today 02/14/2024

Introduction

HUD Notice H 2013-10 expands upon the Final Rule for implementing the Housing Opportunity Through Modernization Act (HOTMA). This final rule makes some changes to the way managers of HUD-assisted housing will deal with assets on HUD-assisted properties. Since LIHTC properties are required to follow HUD rules relative to the determination of income, these changes also apply to tax credit properties.

Net family assets are defined as the net cash value of all assets owned by the family, after deducting reasonable costs that would be incurred in disposing of real property, savings, stocks, bonds, and other forms of investment, except as excluded by regulation.

Assets with Negative Equity

While assets with negative equity are still considered assets, the cash value of real property or other assets with negative equity are considered to have zero value for purposes of calculating net family assets. Negative numbers are never used in the calculation of asset value.

Assets Owned by a Business Entity

If a business entity (e.g., LLC or LP) owns an asset, then the family’s asset is their ownership stake in the business. The actual assets of the business are not counted as family assets. However, if the family holds the assets in their name (e.g., they own 1/3 of a restaurant) rather than in the name of the business entity, then the percentage value of the asset owned by the family is what is counted toward the net family assets (e.g., one-third of the value of the restaurant).

Jointly Owned Assets

For assets jointly owned by the family and one or more individuals outside of the assisted family, owners must include the total value of the asset in the determination of net family assets, unless the asset is otherwise excluded, or unless the assisted family can demonstrate that the asset is inaccessible to them, or that they cannot dispose of any portion of the asset without the consent of another owner who refuses to comply. If the family demonstrates that they can only access a portion of an asset, then only that portion’s value shall be included in the calculation of net family assets.

Exclusions from Assets

Required exclusions from net family assets include the following:

  • The value of necessary items of personal property;
  • The value of all non-necessary items of personal property with a total combined value of $50,000 or less, annually adjusted for inflation;
  • The value of any retirement plan recognized by the IRS, including IRAs, employer retirement plans, and retirement plans for self-employed individuals;
  • The value of real property that the family does not have the effective legal authority to sell. Examples of this include (1) co-ownership situations {including situations where one owner is a victim of domestic violence} where one party cannot unilaterally sell the property, (2) property that is tied up in litigation, and (3) inherited property in dispute;
  • The value of any education savings account under Section 530 of the IRC 1986, the value of any qualified tuition program under Section 529 of the IRC, and the contributions to and distributions from any Achieving a Better Life Experience (ABLE) account authorized under Section 529A of the IRC;
  • The value of any "baby bond" account created, authorized, or funded by the federal, state, or local government (money held in trust by the government for children until they are adults);
  • Interests in Indian trust land;
  • Equity in a manufactured home where the family receives assistance under the Housing Choice Voucher Program;
  • Equity in a property under the Homeownership Option where the family receives assistance under the Housing Choice Voucher Program;
  • Family Self-Sufficiency accounts;
  • Federal or state tax refunds or refundable tax credits for 12 months after receipt by the family;
  • The full amount of assets held in an irrevocable trust; and
  • The full amount of assets held in a revocable trust where a member of the family is the beneficiary, but the grantor and trustee of the trust is not a member of the family.

Necessary & Non-Necessary Personal Property

Necessary personal property is excluded from assets. Non-necessary personal property with a combined value of more than $50,000 (adjusted by inflation) is an asset. When the combined value of non-necessary personal property does not exceed $50,000, it is excluded from assets.

All assets are categorized as either real property (e.g., land, a home) or personal property. Personal property includes tangible items, like boats, as well as intangible items, like bank accounts. For example, a family could have non-necessary personal property with a combined value that does not exceed $50,000 but also own real property such as a parcel of land. While the non-necessary personal property would be excluded from assets, the real property would be included - regardless of its value, unless it meets a specific exclusion.

Necessary personal property are items essential to the family for the maintenance, use, and occupancy of the premises as a home; or they are necessary for employment, education, or health and wellness. Necessary personal property includes more than mere items that are indispensable to the bare existence of the family. It may include personal effects (such as items that are ordinarily worn or used by the individual), items that are convenient or useful to a reasonable existence, and items that support and facilitate daily life within the family’s home. Necessary personal property does not include bank accounts, other financial investments, or luxury items.

Determining what is a necessary item of personal property is very fact-specific and will require a case-by-case analysis. Following are examples of necessary and non-necessary personal property (not an exhaustive list).

Necessary Personal Property

  • Vehicles used for personal or business transportation;
  • Furniture and appliances;
  • Common electronics such as TV, radio, DVD players, gaming systems;
  • Clothing;
  • Personal effects that are not luxury items (e.g., toys and books);
  • Wedding & Engagement rings;
  • Jewelry used in religious or cultural celebrations or ceremonies;
  • Medical equipment & supplies;
  • Musical instruments used by the family;
  • Personal computers, tablets, phones, and related equipment;
  • Educational materials; and
  • Exercise Equipment

Non-Necessary Personal Property

  • RVs not needed for day-to-day transportation, including motor homes, campers, and all-terrain vehicles;
  • Bank accounts or other financial investments (e.g., checking/savings account, stocks/bonds);
  • Recreational boats or watercraft;
  • Expensive jewelry without cultural or religious significance or which has no family significance;
  • Collectibles, such as coins or stamps;
  • Equipment/machinery that is not part of an active business; and
  • Items such as gems, precious metals, antique cars, artwork, etc.

Trusts

Any trust (both revocable and non-revocable) that is not under the control of the family is excluded from assets.

For a revocable trust to be excluded from net family assets, no family or household member may be the account’s trustee.

A revocable trust that is under the control of the family or household (e.g., the grantor is a member of the assisted family or household) is included in net family assets, and, therefore, income earned on the trust is included in the family’s income from assets. This also means that PHAs/MFH Owners will calculate imputed income on the revocable trust if net family assets are more than $50,000, as adjusted by inflation, and actual income from the trust cannot be calculated (e.g. if the trust is comprised of farmland that is not in use).

Actual Income from a Trust

If the Owner determines that a revocable trust is included in the calculation of net family assets, then the actual income earned by the revocable trust is also included in the family’s income. Where an irrevocable trust is excluded from net family assets, the Owner must not consider actual income earned by the trust (e.g., interest earned, rental income if the property is held in the trust) for so long as the income from the trust is not distributed.

Trust Distributions & Annual Income

A revocable trust is considered part of net family assets: If the value of the trust is considered part of the family’s net assets, then distributions from the trust are not considered income to the family. 

Revocable or irrevocable trust not considered part of net family assets: If the value of the trust is not considered part of the family’s net assets, then distributions from the trust are treated as follows: (1) All distributions from the trust’s principal are excluded from income. (2) Distributions of income earned by the trust (i.e., interest, dividends, realized gains, or other earnings on the trust’s principal), are included as income unless the distribution is used to pay for the health and medical expenses for a minor.

Actual & Imputed Income from Assets

The actual income from assets is always included in a family’s annual income, regardless of the total value of net family assets or whether the asset itself is included or excluded from net family assets unless that income is specifically excluded.

Income or returns from assets are generally considered to be interest, dividend payments, and other actual income earned on the asset, and not the increase in market value of the asset.

Imputed income from assets is no longer determined based on the greater of actual or imputed income from the assets. Instead, imputed asset income must be calculated for specific assets when three conditions are met: (1) The value of net family assets exceeds $50,000 (as adjusted for inflation); (2) The specific asset is included in net family assets; and (3) Actual asset income cannot be calculated for the specific asset. Imputed asset income is calculated by multiplying the net cash value of the asset, after deducting reasonable costs that would be incurred in disposing of the asset, by the HUD-published passbook rate. If the actual income from assets can be computed for some assets but not all assets, then PHAs/MFH Owners must add up the actual income from the assets, where actual income can be calculated, then calculate the imputed income for the assets where actual income could not be calculated. After the PHA/MFH owner has calculated both the actual income and imputed income, the housing provider must combine both amounts to account for income on net family assets with a combined value of over $50,000. When the family’s net family assets do not exceed $50,000 (as adjusted for inflation), imputed income is not calculated. Imputed asset income is never calculated on assets that are excluded from net family assets. When actual income for an asset — which can equal $0 — can be calculated, imputed income is not calculated for that asset.

Owners should not conflate an asset with an actual return of $0 with an asset for which an actual return cannot be computed, such as could be the case for some non-financial assets that are items of nonnecessary personal property. If the asset is a financial asset and there is no income generated (for example, a bank account with a 0 percent interest rate or a stock that does not issue cash dividends), then the asset generates zero actual asset income, and imputed income is not calculated. When a stock issues dividends in some years but not others (e.g., due to market performance), the dividend is counted as the actual return when it is issued, and when no dividend is issued, the actual return is $0. When the stock never issues dividends, the actual return is consistently $0.

Self-Certification of Net Family Assets Equal to or Less Than $50,000

Owners may determine net family assets based on a self-certification by the family that the family’s total assets are equal to or less than $50,000, adjusted annually for inflation, without taking additional steps to verify the accuracy of the declaration at admission and/or reexamination. Owners are not required to obtain third-party verification of assets if they accept the family’s self-certification of net family assets. When Owners accept self-certification of net family assets at reexamination, the Owner must fully verify the family’s assets every three years. Owners may follow a pattern of relying on self-certification for two years in a row and fully verifying assets in the third year.

The family’s self-certification must state the amount of income the family anticipates receiving from such assets. The actual income declared by the family must be included in the family’s income unless specifically excluded from income under HUD regulations. Owners must clarify, during the self-certification process, which assets are included/excluded from net family assets.  Owners may combine the self-certification of net family assets and questions inquiring about a family’s present ownership interest in any real property into one form.

Bottom Line

Owners and managers of properties that are subject to HOTMA should familiarize themselves with these new asset rules and ensure they are in place. HUD properties will be required to implement the rules when they put the HOTMA changes into effect in 2024. LIHTC properties should consult the appropriate HFA to determine when the new rules must be followed.

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The Rural Development Service Announces HOTMA Implementation

A memorandum from Joaquin Altoro, the Administrator of the Rural Housing Service (RHS), addressed to Multifamily Housing Owners and Management Agents Multifamily Housing Partners, has explained how HOTMA will be implemented by the Rural Housing Service (RHS). All housing programs administered by RHS are affected, but the primary impact will be felt in the Section 515 Program.  The memorandum concerns an Administrator Exception related to implementing the Housing Opportunity Through Modernization Act (HOTMA).   The memorandum explains that the Housing Act of 1949, which governs the RHS, requires the calculation of a tenant's annual and adjusted household income to be based on the definition provided by the Housing Act of 1937. As a result, RHS must determine income for housing purposes per 24 CFR 5.609, the section of the Code of Federal Regulations governing HUD housing programs.  However, HOTMA directed the U.S. Department of Housing and Urban Development (HUD) to issue a rule changing the income calculation requirements.  HUD published a Final Rule updating 24 CFR 5.609 on February 14, 2023, effective January 1, 2024.  The memorandum states that the Housing Act of 1949 does not incorporate the updates found in 24 CFR 5.609(c), and therefore, the RHS and Multifamily Housing (MFH) will not implement 24 CFR 5.609(c).   The memorandum further explains that under the authority granted in 7 CFR 3560.8, a regulatory waiver has been approved to exclude 24 CFR 5.609(c) from Rural Development's annual income calculation requirements.  The waiver is effective retroactive to January 1, 2024.  The memorandum lists the specific requirements that RD will not implement, including interim tenant income reexaminations where adjusted income is estimated to increase or decrease by 10% or more, using other programs' income determinations, and allowing de minimis errors resulting in $30 or less per month to remain in compliance. Concerning recertifications, tenants at RD properties must be income recertified at least annually and whenever household income changes by $100 or more per month or $50 or more per month if the tenant requests such a change be made. This requirement remains in place.  The Administrator's Exception will be in effect until 7 CFR 3560.153(a) is updated to refer only to 24 CFR 5.609(a) and (b). RD will apply all HOTMA changes regarding the definition of annual income, including all revised inclusions and exclusions from income.    The memorandum also mentions that full compliance with HOTMA is mandatory, effective January 1, 2025, and RD is establishing further guidance and updating handbooks and forms to incorporate the changes.   RD encourages owners and management agents to discuss the implementation with software providers to ensure seamless data transmission.   The memorandum concludes by stating that RD will not penalize owners for HOTMA-related tenant file issues during RD Supervisory reviews conducted before January 1, 2025. 

A. J. Johnson Partners with Mid-Atlantic AHMA for Affordable Housing Training - May 2024

During May 2024, A. J. Johnson will partner with the Mid-Atlantic Affordable Housing Management Association for training sessions for real estate professionals, particularly those in the affordable multifamily housing field. The sessions will be presented via live webinars.  The following sessions will be presented: May 8: Intermediate LIHTC Compliance  - Designed for more experienced managers, supervisory personnel, investment asset managers, and compliance specialists, this practical program expands on the information covered in the Basics of Tax Credit Site Management. A more in-depth discussion of income verification issues is included, as well as a discussion of minimum set-aside issues (including the Average Income Minimum Set-Aside), optional fees, and use of common areas. The Available Unit Rule is covered in great detail, as are the requirements for units occupied by students. Attendees will also learn the requirements for setting rents at a tax-credit property. This course contains some practice problems but is more discussion-oriented than the Basic course. A calculator is required for this course. May 14: Basic LIHTC Compliance - This training is designed primarily for site managers and investment asset managers responsible for site-related asset management and is especially beneficial to those managers who are relatively inexperienced in the tax credit program. It covers all aspects of credit related to on-site management, including the applicant interview process, determining resident eligibility (income and student issues), handling recertification, setting rents - including a full review of utility allowance requirements - lease issues, and the importance of maintaining the property. The training includes problems and questions to ensure students fully comprehend the material. May 16: The Verification and Calculation of Income and Assets on Affordable Housing Properties - The live webinar provides concentrated instruction on the required methodology for calculating and verifying income and determining the value of assets and income generated by those assets. The first section of the course involves a comprehensive discussion of employment income, military pay, pensions/social security, self-employment income, and child support. It concludes with workshop problems designed to test what the student has learned during the discussion phase of the training and serve to reinforce HUD-required techniques for determining income. The second component of the training focuses on a detailed discussion of requirements related to determining asset value and income. It applies to all federal housing programs, including the low-income housing tax credit, tax-exempt bonds, Section 8, Section 515, and HOME. Multiple types of assets are covered, both in terms of what constitutes an asset and how they must be verified. This section also concludes with problems designed to test the student s understanding of the basic requirements relative to assets. These sessions are part of a year-long collaboration between A. J. Johnson and MidAtlantic AHMA designed to provide affordable housing professionals with the knowledge needed to effectively manage the complex requirements of the various agencies overseeing these programs, ensuring long-term success in the field. Persons interested in any (or all) training sessions may register by visiting either www.ajjcs.net or https://www.mid-atlanticahma.org.

HUD Publishes 2024 Income Limits

On April 1, 2024, HUD published the 2024 income limits for HUD programs as well as for the Low-Income Housing Tax Credit and Tax-Exempt Bond programs. The limits are effective on April 1, 2024.  The limits for the LIHTC and Bond projects are published separately from the limits for HUD programs. LIHTC and Bond properties use the Multifamily Tax Subsidy Project (MTSP) limits and are held harmless from income limit (and therefore rent) reductions. These properties may use the highest income limits used for resident qualification and rent calculation purposes since the project has been in service. HUD program income limits are not held harmless. HUD publishes the 50% and 60% MTSP limits in the same table with the Average Income (AI) limits. AI limits are set at 20%, 30%, 40%, 50%, 60%, 70%, and 80%. Projects in service prior to 2009 may use the HERA Special Income Limits in areas where HUD has published such limits. Projects placed in service after 2008 may not use the HERA Special Limits. Projects in rural areas that are not financed by tax-exempt bonds may use the higher of the MTSP limits or the National Non-Metropolitan Income Limits (NNMIL). According to HUD, the non-metropolitan median income has gone up approximately .78% from 2023 to 2024. Owners of LIHTC projects may rely on the 2023 income limits for all purposes for 45 days after the effective date of the newly issued limits. This 45-day period ends on May 16, 2024. The limits for HUD programs may be found at www.huduser.gov/portal/datasets/il.html. The limits for LIHTC and Bond programs may be found at www.huduser.gov/portal/datasets/mtsp.html.

HUD Expands List of Federally Mandated Income Exclusions

On January 31, 2024, the Department of Housing and Urban Development (HUD) published an updated list of income excluded for HUD-assisted housing programs. Since the Low-Income Housing Tax Credit Program (LIHTC) must follow HUD rules regarding income determination, these exclusions also apply to the LIHTC program. Four new income exclusions were added, and existing exclusions were modified to specifically identify which sources of income are excluded from income calculations and asset determinations. This is the first comprehensive update of income exclusions since May 2014, and it incorporates the Housing Opportunities Through Modernization Act (HOTMA) exclusions. New Income Exclusions HUD has added four types of income that will no longer be counted for affordable housing program purposes. These include specific tax refunds, allowances for children of some veterans, distributions from ABLE accounts, and emergency rental assistance payments. Tax Refunds: The amount of any refund (or advance payment for a refundable credit) issued under the Internal Revenue Code is excluded from income. Such refunds are also excluded from assets for 12 months after being received. Children of Certain Service Members: Allowances paid to children of certain Thailand service veterans born with spina bifida are excluded from income and assets. This is in addition to any allowances paid to children of Vietnam veterans born with spina bifida, children of women Vietnam veterans born with certain birth defects, and children of certain Korean service veterans born with spina bifida. ABLE Account Distributions: Any amount in an Achieving a Better Life Experience (ABLE) account is excluded from income and assets. This includes the value of distributions from and certain contributions to ABLE accounts. Emergency Rental Payments: Payments received by a household under the Emergency Rental Assistance Program, which was part of the Consolidated Appropriations Act of 2021 and the American Rescue Plan Act of 2021, are excluded from income and assets. Modifications to Existing Exclusions In addition to adding new income exclusions, HUD is modifying existing exclusions. AmericorpsVISTA payments: In the past, payments to volunteers under the Domestic Volunteer Service Act of 1973 were always excluded. Now, such payments are included in income if the CEO of the Corporation for National and Community Service determines that the value of the payments, adjusted to reflect the number of hours served by volunteers, is equal to or greater than the federal or state/local minimum wage, whichever is greater. Tribal Trust Settlements: The first $2,000 of per capita payments are excluded unless the per capita payments exceed the amount of the original Tribal Trust Settlement. NAHASDA Benefits: The change more accurately captures the language in the United States Code that describes the exclusion of programs under the Native American Housing Assistance & Self-Determination Act. Individual Development Accounts (IDA): Any amounts in an IDA are excluded from assets, and any assistance, benefit, or amounts earned by or provided to an individual development account are excluded from income. This exclusion was updated to clarify that an IDA is excluded from assets, and any IDA benefits are also excluded from income. This program was defunded in 2017, so the exclusion is moot. It is important to note that HUD s updated list of federally mandated income exclusions is not a comprehensive list of all exclusions from income. Following are the types of income that are expressly excluded by federal law. Other income exclusions, as listed in various HUD Handbooks and Notice H 2023-10/PIH 2023-27, remain applicable. Also note that the exclusions listed below apply to income only, except where noted concerning assets. The value of the allotment provided to an eligible household under the Food Stamp Act of 1977. This exclusion also applies to assets. Payments, including for supportive services and reimbursement of out-of-pocket expenses, for volunteers under the Domestic Volunteer Service Act of 1973 are excluded from income except that the exclusion shall not apply in the case of such payments when the Chief Executive Officer of the Corporation for National and Community Service appointed under 42 U.S.C. 12651c determines that the value of all such payments, adjusted to reflect the number of hours such volunteers are serving, is equivalent to or greater than the minimum wage then in effect under the Fair Labor Standards Act of 1938 or the minimum wage, under the laws of the State where such volunteers are serving, whichever is the greater. This exclusion also applies to assets. Certain payments received under the Alaska Native Claims Settlement Act. This exclusion also applies to assets. Income derived from certain submarginal land of the United States is held in trust for certain Indian tribes. This exclusion also applies to assets. Payments or allowances made under the Department of Health and Human Services Low-Income Home Energy Assistance Program. This exclusion also applies to assets. Income derived from the disposition of funds to the Grand River Band of Ottawa Indians. This exclusion also applies to assets. The first $2,000 of per capita shares received from judgment funds awarded by the National Indian Gaming Commission or the U.S. Claims Court, the interests of individual Indians in trust or restricted lands, and the first $2,000 per year of income received by individual Indians from funds derived in interests held in such trust or restricted lands. This exclusion does not include proceeds of gaming operations regulated by the Commission. This exclusion also applies to assets. Amounts of student financial assistance funded under Title IV of the Higher Education Act of 1965, including awards under Federal work-study programs or the Bureau of Indian Affairs student assistance programs. For Section 8 programs only, any financial assistance in excess of amounts received by an individual for tuition and any other required fees and charges under the Higher Education Act of 1965 from private sources or an institution of higher education (as defined under the Higher Education Act of 1965), shall not be considered income to that individual if the individual is over the age of 23 with dependent children. Payments received from programs funded under Title V of the Older Americans Act of 1965. Payments received on or after January 1, 1989, from the Agent Orange Settlement Fund or any other fund established pursuant to the settlement in Re Agent Orange Product Liability Litigation, M.D.L. No 381 (E.D.N.Y.). This exclusion also applies to assets. Payments received under the Maine Indian Claims Settlement Act of 1980. This exclusion also applies to assets. The value of any childcare provided or arranged (or any amount received as payment for such care or reimbursement for costs incurred for such care) under the Child Care and Development Block Grant Act of 1990. Earned income tax credit (EITC) refund payments received on or after January 1, 1991, for programs administered under the United States Housing Act of 1937, title V of the Housing Act of 1949, Section 101 of the Housing & Urban Development Act of 1965, and Sections 221(d)(3), 235, and 236 of the National Housing Act. This exclusion also applies to assets. Note - while this income exclusion addresses EITC refund payments for certain HUD programs, the exclusion in 26 U.S.C. 6409 excludes Federal tax refunds more broadly for any Federal program or under any State or local program financed in whole or in part with Federal funds. The amount of any refund (or advance payment for a refundable credit) issued under the Internal Revenue Code is excluded from income and assets for 12 months after receipt. Payments by the Indian Claims Commission to the Confederated Tribes and Bands of the Yakima Indian Nation or the Apache Tribe of the Mescalero Reservation. This exclusion also applies to assets. Allowances, earnings, and payments to AmeriCorps participants under the National and Community Service Act of 1990. Any allowance paid to children of Vietnam veterans born with spina bifida, children of women Vietnam veterans born with certain birth defects, and children of certain Korean and Thailand service veterans born with spina bifida. This exclusion also applies to assets. Any amount of crime victim compensation that provides medical or other assistance (or payment or reimbursement of the cost of such assistance) under the Victims of Crime Act of 1984 received through a crime victim assistance program, unless the total amount of assistance that the applicant receives from all such programs is sufficient to fully compensate the applicant for losses suffered as a result of the crime. This exclusion also applies to assets. Allowances, earnings, and payments to individuals participating in programs under the Workforce Investment Act of 1988, reauthorized as the Workforce Innovation and Opportunity Act of 2014. Any amount received under the Richard B. Russell School Lunch Act and the Child Nutrition Act of 1966, including reduced-price lunches and food under the Special Supplemental Food Program for Women, Infants, and Children (WIC). This exclusion also applies to assets. Payments, funds, or distributions authorized, established, or directed by the Seneca Nation Settlement Act of 1990. This exclusion also applies to assets. Payments from any deferred U.S. Department of Veterans Affairs disability benefits that are received in a lump sum or in prospective monthly payments. Any amounts (i) not received by the family, (ii) that would be eligible for exclusion under 42 U.S.C. 1382b(a)(7), and (iii) received for service-connected disability under 38 U.S.C. chapter 11 or dependency and indemnity compensation under 38 U.S.C. chapter 13 as provided by an amendment by the Indian Veterans Housing Opportunity Act of 2010 to the definition of income applicable to programs under the Native American Housing Assistance and Self Determination Act (NAHASDA). A lump sum or a periodic payment received by an individual Indian under the class action settlement agreement in the case titled Elouise Cobell et al. v. Ken Salazar et al., 816 F. Supp.2d 10 (Oct 5, 2011, D.D.C), for one year from the time of receipt of that payment as provided in the Claims Resolution Act of 2010. This exclusion also applies to assets. As provided by the Assets for Independence Act, as amended, any amounts in an "individual development account are excluded from assets, and any assistance, benefit, or amounts earned by or provided to the individual development account are excluded from income. An Individual Development Account (IDA) is a special bank account that assists a family in saving for education, purchasing a first home, or starting a business. To enroll in the program, participants must (1) Have a paying job, (2) earn less than 200% of the federal poverty level, and (3) not have more than $10,000 in assets, excluding one car and one home. The owner of the account contributes money from their job to the account. The contributions are matched from the State TANF program or a special state fund. These additional funds are excluded from income or assets. Per capita payments made from the proceeds of Indian Tribal Trust Settlements listed in IRS Notice 2013-1 and 2013-55 must be excluded from annual income unless the per capita payments exceed the amount of the original Tribal Trust Settlement proceeds and are made from a Tribe s private bank account in which the Tribe has deposited the settlement proceeds. Such amounts received in excess of the Tribal Trust Settlement are included in the gross income of the members of the Tribe receiving the per capita payments as described in IRS Notice 2013-1. The first $2,000 of per capita payments are also excluded from assets unless the per capita payments exceed the amount of the original Tribal Trust Settlement proceeds and are made from a Tribe s private bank account in which the Tribe has deposited the settlement proceeds. Individuals and families receiving federal assistance for a major disaster or emergency under the Robert T. Stafford Disaster Relief and Emergency Assistance Act and comparable disaster assistance that is provided by States, local governments, and disaster assistance organizations. This exclusion also applies to assets. Any amount in an Achieving Better Life Experience (ABLE) account, distributions from, and certain contributions to an ABLE account established under the ABLE Act of 2014, as described in Notice PIH 2019-09/H 2019-06 or a subsequent or superseding notice. This exclusion also applies to assets. Assistance received by a household under the Emergency Rental Assistance Program under the Consolidated Appropriates Act of 2021 and the American Rescue Plan Act of 2021. While all these exclusions will be reflected in a future update of HUD Handbook 4350.3, that update is not yet available. Therefore, owners and managers of properties subject to HUD income and asset exclusions should keep this list handy.

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