News

Assistance Animal Requests Under the Fair Housing Act - HUD Issues Important New Guidance

On January 28, 2020, HUD issued FHEO Notice 2020-01. The subject of the Notice is: Assessing a Person s Request to Have an Animal as a Reasonable Accommodation (RA) under the Fair Housing Act (FHA) Purpose of the Notice The Notice explains certain obligations of housing providers under the FHA with respect to animals that individuals with disabilities may request as reasonable accommodations. The guidance gives housing providers a set of best practices for complying with the FHA when assessing requests for RA to keep animals in housing, including the information that a housing provider may need to know from a health care professional about in individual s need for an assistance animal. This Notice replaced prior guidance (FHEO - 2013-01). Assessing a Person s Request to Have an Animal as a RA under the FHA Assistance animals are not pets. They are animals that do work, perform tasks, assist, and/or provide therapeutic emotional support for individuals with disabilities (i.e., "support" animals). A housing provider may exclude or charge a fee or deposit for a pet but not for service animals or other assistance animals. (This section of the Notice clearly prohibits any type of fee or deposit for an assistance animal). FH complaints concerning denial of RA requests comprise almost 60% of all FH complaints and assistance animal complaints are increasing (this is actually the most common complaint. HUD is providing this guidance to help housing providers distinguish between a legitimate assistance animal and a person who simply wants to avoid pet rules or fees. Important - housing providers should not reassess requests for RA requests that were granted prior to the issuance of this guidance. Part I: Service Animals Service animals are defined under the Americans with Disabilities Act (ADA), which does not recognize "support" animals. Service animals must be allowed in housing. Generally, only dogs are considered service animals (although miniature horses are also recognized in certain circumstances). Any other type of animal is not a service animal. If it is "readily apparent" that a dog is a service animal, no verification is permitted. It is "readily apparent" if the dog is observed: Guiding an individual who is blind or has low vision;Pulling a wheelchair; orProviding assistance with stability or balance to an individual with an observable mobility impairment. In the case of service animals, housing providers may ask the following two questions: Is the animal required because of a disability; andWhat work or task has the animal been trained to perform? Do not ask for documentation of the animal s training. These questions may be asked in the form of a sworn affidavit. If the answer to either question is "no" or "none," it is not a service animal but may be a support animal (guidance on this is provided in Part II of the Notice). Part II - Analysis of Reasonable Accommodation (RA) Requests Under the Fair Housing Act for Assistance Animals Other Than Service Animals A resident may request a RA either before or after acquiring the assistance animal. (This addresses the complaint of many manager when they discover pets that are then claimed as assistance animals). However, this may lead to an inference of bad faith on the part of the person seeking the accommodation. Question that may be asked regarding a "non-service" animal Has the individual requested a RA - this is have they asked to get or keep an animal in connection with a physical or mental impairment or disability?The request may be oral or written. It may be made by others on behalf of the individual, including a person legally residing in the unit with the requesting individual or a legal guardian or authorized representative.If the answer to this question is "no," no RA is required. If the answer is "yes," owners must assess whether to grant the accommodation. Part III - Criteria for Assessing Whether to Grant the Requested Accommodation The following questions may be used to assess whether to grant the requested accommodation: Does the person have an observable disability or does the housing provider already have information giving them reason to believe that the person has a disability? If "yes," information regarding what the animal does may be requested (covered later). If the answer is "no," has the person requesting the accommodation provided information that reasonably supports that the person has a disability? Observable & Non-Observable Disabilities Observable impairments include blindness or low vision, deafness or being hard of hearing, mobility limitations, and some intellectual impairments (e.g., autism), neurological impairments (e.g., stroke, Parkinson s disease, cerebral palsy, epilepsy, or brain injury), and mental illness. Observable impairments are generally obvious and would not be reasonably attributed to non-medical causes by a lay-person. In other words, the impairment would be obvious to an ordinary person. However, many impairments requiring an emotional support animal are not observable. In these cases, verification of both need and disability may be required. When verification of a disability is needed, housing providers should (but are not required to) provide the requester the Guidance on Documenting the Need for an Assistance Animal. Information about a disability may include: A determination of disability from a federal, state, or local government agency;Receipt of disability benefits or services (SSI if under age 65, SSDI, VA disability, services from a vocational rehab agency, etc.);Eligibility for housing assistance received because of a disability; orInformation confirming disability from a health care professional. Documentation from the Internet Some websites sell certificates, registrations, and licensing documents for assistance animals to anyone who answers certain questions or participates in a short interview and pays a fee. Housing providers are entitled to reliable documentation for needs or disabilities that are not obvious. HUD s position is that Internet documentation - by itself - is not sufficient to reliably establish that an individual has a need for an assistance animal. However, many legitimate, licensed health care providers provide services over the Internet. In such cases, verification is considered reliable if it (1) confirms a person s disability; (2) confirms the need for the animal; and (3) indicates that the provider has personal knowledge of the individual. Information Confirming Disability-Related Need for an Assistance Animal Information from a licensed health care professional - e.g., physician, optometrist, psychiatrist, psychologist, physician s assistant, nurse practitioner, or nurse - the information may be general to the condition but must be specific to the disabled individual and the support provided by the animal. Type of Animal If the requested animal is one that is commonly kept in households, the reasonable accommodation should be provided if it is confirmed that the animal is needed due to a disability. However, if the animal is one that is not commonly kept in households, the reasonable accommodation need not be provided, except in very rare circumstances (described below). Animals Commonly Kept in Households If the animal is a dog, cat, small bird, rabbit, hamster, gerbil, other rodent, fish, turtle, or other small domesticated animal that is traditionally kept in the home for pleasure rather than for commercial purposes, then the reasonable accommodation should be granted because the requester has provided information confirming that there is a disability-related need for the animal. Reptiles (other than turtles), barnyard animals, monkeys, kangaroos, and other non-domesticated animals are not considered common household animals. Unique Animals If the individual is requesting to keep a unique type of animal that is not commonly kept in households as described above (e.g.,. a boa constrictor), then the requester has the substantial burden of demonstrating a disability-related therapeutic need for the specific animal or the specific type of animal. If the housing provider enforces a "no pets" policy or a policy prohibiting the type of animal the individual seeks to have, the housing provider may take reasonable steps to enforce the policy if the requester obtains the animal before submitting reliable documentation from a health care provider that reasonably supports the requester s disability-related need for the animal. This places a substantial burden on tenants who retain such animals before requesting permission to have the animal. The housing provider should make a determination promptly, generally within ten days of receiving documentation. A reasonable accommodation may be necessary when the need for a unique animal involves unique circumstance. E.g., the animal is individually trained to do work or perform tasks that cannot be performed by a dog.Information from a health care professional confirms that:Allergies prevent the person from using a dog; orWithout the animal, the symptoms or effects of the person s disability will be significantly increased.The individual seeks to keep the animal outdoors at a house with a fenced yard where the animal can be appropriately maintained. Example of a unique type of support animal: An individually trained capuchin monkey performs tasks for a person with paralysis caused by a spinal cord injury. The monkey has been trained to retrieve a bottle of water from the refrigerator, unscrew the cap, insert a straw, and place the bottle in a holder so the individual can get a drink of water. The monkey is also trained to turn lights on and off and retrieve requested items from inside cabinets. The monkey can use its hands to perform manual tasks that a service dog cannot perform. General Considerations The FHA does not require a dwelling to be made available to an individual whose tenancy would constitute a direct threat to the health or safety of other individuals or whose tenancy would result in substantial physical damage to the property of others. A housing provider may, therefore, refuse to allow an assistance animal if the specific animal poses a direct threat that cannot be eliminated or reduced to an acceptable level through actions the individual takes to maintain or control the animal (e.g., keeping the animal in a secure enclosure).Pet rules do not apply to service animals and support animals. For this reason, housing providers may not limit the size or breed of a dog used as a service or support animal just because of the size or breed but can, as noted, limit based on specific issues with the animal s conduct because it poses a direct threat or a fundamental alteration.A housing provider may not charge a deposit, fee, or surcharge for an assistance animal. However, a landlord may charge a tenant for damage an assistance animal causes if it is the provider s usual practice to charge for damage caused by tenants.A person with a disability is responsible for feeding, maintaining, providing veterinary care, and controlling his or her assistance animal. They may do this on their own or with the assistance of family, friends, volunteers, or service providers. Since it would fundamentally alter how a project operates, asking a housing provider to care for the animal would not be a reasonable accommodation.Before denying a RA request due to lack of information confirming an individual s disability or disability-related need for an animal, the housing provider is encouraged to engage in a good-faith dialogue with the requestor called the "interactive process." Guidance on Documenting an Individual s Need for Assistance Animals in Housing As part of the Notice, HUD included specific guidance on how to document the need for assistance animals. Housing providers should familiarize themselves with this guidance and are also encouraged to provide it to applicants or residents who request an accommodation relating to an assistance animal. This section of the Notice provides "best practices" for documenting an individual s need for assistance animals in housing. It is intended to help individuals with disabilities explain to their health care professionals the type of information that housing providers may need to help them make sometimes difficult legal decisions under fair housing laws. Housing providers may not require a health care professional to use a specific form, to provide notarized statements, to make statements under penalty of perjury, or to provide an individual s diagnosis or other detailed information about a person s physical or mental impairments. This document only provides assistance on the type of information that may be needed under the FHA. When providing this information, health care professionals should use personal knowledge of their patient/client - i.e., the knowledge used to diagnose, advise, counsel, treat, or provide health care or other disability-related services to their patient/client. As a best practice, documentation contemplated in certain circumstances is recommended to include the following generally information: The patient s name;Whether the health care professional has a professional relationship with that patient/client involving the provision of health care or disability-related services; andThe type of animal(s) for which the reasonable accommodation is sought (i.e., dog, cat, bird, rabbit, hamster, gerbil, other rodent, fish, turtle, other specified type of domesticated animal, or other specified unique animal. Disability-related information: a disability for purposes of fair housing laws exists when a person has a physical or mental impairment that substantially limits one or more major life activities. It is recommended that individuals seeking reasonable accommodations for support animals ask health care professionals to provide information related to the following: Whether the patient has a physical or mental impairment;Whether the patient s impairment(s) substantially limits at least one major life activity or major bodily function; andWhether the patient needs the animal(s) [because it does work, provides assistance, or performs at least one task that benefits the patient because of his or her disability, or because it provides therapeutic emotional support to alleviate a symptom or effect of the disability of the patient/client, and not merely as a pet]. If the animal is not a domesticated animal that is traditionally kept in the home for pleasure rather than for commercial purposes, it may be helpful for patients to ask health care professionals to provide the following additional information: The date of the last consultation with the patient;Any unique circumstances justifying the patient s need for the particular animal (if already owned or identified by the individual) or particular type of animal(s); andWhether the health care professional has reliable information about this specific animal or whether they specifically recommended this type of animal. It is also recommended that the health care professional sign and date any documentation provided and provide contact information and any professional licensing information. This is important new guidance relating to a very difficult and controversial area of fair housing law. Housing providers should review this Notice and provide it to their legal counsel. In the end, this guidance does not in any way remove the responsibility of housing providers to provide reasonable accommodations - including permission to have support animals - for applicants and residents who require such an accommodation. The notice does, however, provide the most specific guidance to date regarding the level of verification that housing providers may be entitled to before granting these accommodations.

Special Needs Trust- Determination of Annual Income

Managers of affordable housing properties (e.g., Section 8 or LIHTC) must consider whether a household has assets that may contribute to the income of the household. Common assets include cash-on-hand, bank accounts, and retirement accounts. A less common type of asset is a "trust." A trust is a legal arrangement generally regulated by state law in which one party (the creator or grantor) transfers property to a second party (the trustee) who holds the property for the benefit of one or more third parties (the beneficiaries). A trust can contain cash or other liquid assets or real or personal property that could be turned into cash. Generally, the assets are invested for the benefit of the beneficiaries. Trusts may be revocable or nonrevocable. A revocable trust is a trust that the grantor of the trust may amend or end (revoke). When there is a revocable trust, the grantor has access to the funds in the trust account. When the grantor sets up a nonrevocable trust, the grantor has no access to the funds in the account. The beneficiary frequently will be unable to touch any of the trust funds until a specified date or event (e.g., the beneficiary s 21st birthday or the death of the grantor). In some instances, the beneficiary may receive the regular investment income from the trust but is unable to withdraw any of the principal. How to Treat Trusts The decision on how to handle a trust depends on who has access to either the principal in the account or the income from the account. If any member of the tenant family has the right to withdraw funds from the account, the trust is considered to be an asset and is treated as any other asset. If no family member has access to either the principal or income of the trust at the current time (or within the upcoming 12-months of the certification year), the trust is not included in the calculation of income from assets or in actual income. If only the income (and none of the principal) from the trust is currently available to a family member, the income is counted in annual income, but the trust is not included in the calculation of income from assets. Special Needs Trusts A special needs trust (SNT) is a trust that may be created under most state laws, often by family members for disabled persons who are not able to make financial decisions for themselves. Generally, the assets within the trust are not accessible to the beneficiary. If the beneficiary does not have access to income from the trust, then it is not counted as part of the income.If income from the trust is paid to the beneficiary regularly, those payments are counted as income. This is the extent of the guidance from HUD regarding Special Needs Trusts in Handbook 4350.3. Unfortunately, the guidance creates more questions than it answers, such as: What is considered "income from the trust?" Technically, income from the trust would be income generated "by" the trust, such as interest or dividends. Payment of principal from the trust to the beneficiary would be a "distribution," but may not be actual income from the trust.If distributions from the trust are counted as income, what if the principal in the trust was put into the trust by the household and was already counted as income for the household?Example: A special needs trust is established by a family for a disabled child. The family funds the trust with income earned from employment, which is counted as income when earned. Years later, the family member who created the trust dies and the trustee begins using the funds in the trust to cover expenses of the disabled child. If these distributions are counted as income, the income would essentially have been counted twice. Recommendations When Dealing with a Special Needs Trust Based on available HUD guidance, we do know with some degree of confidence how to handle disbursements from Special Needs Trusts in certain circumstances: Direct distributions from a SNT may be excluded from annual income if the payment/income is "temporary, nonrecurring or sporadic." [See 24 CFR 5.609(e)(9).Amounts specifically excluded by any other Federal statute from consideration as income for purposes of determining eligibility or benefits under a category of assistance programs that includes assistance under any program to which the exclusions set forth in 24 CFR 5.609(e) apply. Whether the income distributed by Trustees to or for the benefit of a beneficiary is or will be counted as annual income depends upon the nature of the expenditure or distribution and the frequency. Depending on the purpose and/or manner of payment a distribution may or may not rise to the definition of "income" subject to inclusion in an annual income determination. We do know that based on HUD s clear definition of income in both regulation and the HUD 4350.3, income includes amounts which "go to, or on behalf of (emphasis added) the family head or spouse (even if temporarily absent) or to any other family member." This appears to clearly indicate that money paid on behalf of a household (not just directly to a household) may be counted as income. Based on all available guidance regarding the treatment of disbursements from Special Needs Trusts, I make the following recommendations: If the money that is placed into a SNT would be excluded when originally received (e.g., a lump sum settlement), it should not be counted when disbursed from the SNT. (This recommendation is supported by a court s decision in Decambre v. Brookline Housing Authority, et. al., June 2016).If the money in a SNT came from the household in which the trust beneficiary lives and would have counted as income when originally received, distributions of principal should not count until the full amount contributed to the SNT has been paid out. This recommendation is also supported by the court decision in the Decambre case cited above and 24 CFR 5.609(b)(3).If the income generated by the SNT (i.e., interest or dividends) is paid to the beneficiary and is not specifically excluded by federal regulation (e.g., direct reimbursement of medical expenses), it should be counted as income for the household.If principal from the SNT is disbursed to the beneficiary, it should be counted as income unless:The funds were contributed to the SNT by the household in which the beneficiary lives and eitherWould have been counted as income when received by the household, such as wages, orWould have been excluded from income if received directly by the household (e.g., lump sum payments).Finally, for properties with Low-Income Housing Tax Credits, when in doubt as to whether or not to count income distributed from a SNT, consult the Housing Finance Agency responsible for monitoring the tax credit property for compliance with IRS regulations.

IRS Issues Ruling on Determination of Income Limits for Average Income Minimum Set-Aside

On January 29, 2020, the IRS released Revenue Ruling 2020-4. This ruling outlines the requirements for determining the designated income limits under the Average Income (AI) Minimum Set-Aside. The Conference committee report for the Tax Reform Act of 1986 stated that the Department of Housing & Urban Development (HUD) published Area Median Gross Income (AMGI) serves as the base for computing the Section 42 (LIHTC) income limits. It also stated that for purposes of the original 20/50 and 40/60 minimum set-aside tests, adjustments should be made in a manner consistent with determinations of Very Low-Income (VLI) families under Section 8. Revenue Ruling 89-24 provided the manner in which to properly compute the Section 42 income limits, and that the limits would be calculated based on the VLI limits. In adding the Average Income test, Congress did not indicate that a different HUD income level calculation category should be used. For this reason, the IRS will continue to use HUD s determinations for VLI families as the starting point for determining the income limit for each income designation. For purposes of the AI set-aside, the seven income limits will be determined by computing them all from HUD s VLI limits. HUD s VLI calculation, as adjusted by family size and consistent with the methods provided in Revenue Ruling 89-24, is to be used as the basis for determining the full range of income limits under the AI set-aside. For the AI test under 42(g)(1)(c), the 20, 30, 40, 50, 60, 70, and 80 percent of AMGI income limitations will be calculated as follows: 20% limit: 40% of the 50% limit as published by HUD;30% limit: 60% of the 50% limit as published by HUD;40% limit: 80% of the 50% limit as published by HUD;50% limit: HUD published VLI limit;60% limit: 120% of the 50% limit as published by HUD;70% limit: 140% of the 50% limit as published by HUD; and80% limit: 160% of the 50% limit as published by HUD. Applying the Rule to Projects Already Allocated Credits If: A taxpayer requested an allocation of credits;The request made it clear that the taxpayer intended to elect the AI Minimum Set-Aside, the request clearly set forth a specific dollar amount for designated imputed income limits for a unit in the project, and that dollar amount is higher than the amount determined under this Revenue Ruling;The taxpayer s determination of that amount was reasonable; andPrior to the publication date of this ruling, the HFA allocated housing credits in response to that request, then, for that taxpayer, for the remaining compliance period, the dollar amount for the income limits under this ruling for that unit will not be less than the reasonable amount. If a tenant occupies a unit with an income in excess of the income required by this revenue ruling, as long as the determination of that higher income was reasonable, the tenant will be treated as having initially met the income limit for that unit. Summary This revenue ruling confirms that the method that has been widely expected with regard to the determination of the designated income limits under the AI set-aside is the method that is required by the IRS. This ruling should enable HUD to publish the AI income limits when the 2020 limits are published this spring.

Excess Subsidy Repayment Agreements

When households receiving federal rental assistance - such as Section 8 - receive more assistance than they are entitled to based on their income, the residents are required to repay the excess amount. In order to ensure that these repayments are made, HUD encourages owners to work with residents by entering into repayment agreements. As noted, residents are obligated to reimburse the owner for any excess assistance received due to underreporting of income. Residents must repay the difference between the rent that should have been paid and the amount actually charged. However, residents are not required to reimburse the owner for undercharged rent caused by the owner s failure to follow HUD rules relating to the calculation of rent. In these cases, the owner must repay the excess subsidy. Notification of the Resident After a determination is made that a tenant provided false or incomplete information leading to the payment of excess rental subsidy, the owner must notify the resident in writing of the error and identify the information believed to be incorrect. The written notice must: Provide an explanation of the error;Identify what information is believed to be incorrect;Notify the resident that he or she has an opportunity to meet with the owner to discuss the allegations within ten days from the date of the letter; andInform the resident that failure to meet with the owner to discuss the situation may result in the resident s termination of tenancy. Meeting with the Resident When the owner meets with the resident, the result of the investigation must be discussed. A designated representative for the owner who has not been involved in any manner with the review of the information must chair the meeting. Once the meeting is held, within ten days the owner must provide a written final decision to the tenant based solely on the facts presented and discussed at the meeting. The decision must state the basis for the determination. Determining the Amount Owed If it is determined that the unreported (or underreported) income was unintentional, the owner must go back to the time the misreported income started and calculate the difference between the amount of rent the resident should have paid and the amount of rent the resident actually paid. The time period may not exceed the five-year limitation during which the resident was receiving assistance. (Note: if the underreporting of income was intentional {1.e., fraud}, the proper course of action is termination of tenancy). The owner must notify the resident of any amount owed and his or her obligation to reimburse the owner. A record of this calculation must be provided to the resident and be kept in the resident s file. The owner must also correct certifications and/or retroactively process certifications that should have been processed if the resident had reported accurate information at the proper time. If the owner discovers prior certifications that involve incorrect income, correction of those certifications must be created to show the accurate income for the prior certification period. Income for this time period must be verified before creating corrections and/or retroactive certifications. The information contained within the third party verification must apply to the appropriate certification time period. When processing a correction to a certification, the original certification must be in the resident file as well as the corrected certification. The corrected certification must be signed and dated by both the resident and the owner/agent along with supporting documentation. Repayment Options Residents may repay amounts due in a lump-sum (i.e., one-time) payment, periodic payments, or a combination of the two. Residents have the right to consult with HUD s Housing Counseling Agency in their area to assist them in working with the owner to reach agreeable terms for the repayment agreement. If the resident has agreed to a monthly repayment, the payment must be what the resident can afford based on the family s income. The monthly payment plus the amount of the resident s total tenant payment (TTP) at the time the repayment agreement is executed should not exceed 40 percent of the family s monthly adjusted income. The monthly payment may exceed 40 percent of the monthly adjusted income if the family agrees to the amount stated in the repayment agreement, but they cannot be forced to do so. If the family s income increases or decreased by $200 or more per month during the term of the agreement, the agreement should be renegotiated. There are no regulations that authorize owners to limit the amount of time the resident has to pay off the debt. Repayment Agreement Information that is required to be in the repayment agreement is found in HUD Handbook 4350.3, Paragraph 8-23(B): The total retroactive rent amount owed, the amount of lump sum paid at time of execution of the agreement (if any), and the monthly payment amount;A reference to the paragraphs in the lease with which the resident is in noncompliance and whereby the resident may be subject to termination of the lease;A clause stating that the terms of the agreement will be renegotiated if there is a decrease or increase in the family s income of $200 or more per month;A statement that the monthly retroactive rent repayment amount is in addition to the family s regular monthly rent payment and is payable to the owner;A statement that late and missed payments constitute default of the repayment agreement and may result in termination of assistance and/or tenancy; andDated signatures of the resident and the owner. It is recommended that the head of household and, if applicable, the family member who had the unreported or underreported income sign the repayment agreement. How Much of the Repayment May Owners Retain? Owners may retain a portion of the repayments collected from the residents who have improperly reported income at the time of certification or recertification to help defray the cost of pursuing these cases. Owners may only retain an amount necessary to cover actual costs, which is considered the lesser of: Actual costs; or20% of the amount received from the resident. Amounts retained by the owner/agent (O/A) must be deposited into the site s operating account.

2020 Mileage Rates

The IRS has issued the mileage rates for 2020, including the rate for miles driven for medical purposes. This is an important rate for Section 8 and Rural Development Properties since elderly households may deduct such mileage as a medical expense. Beginning on January 1, 2020, the new rate for medical mileage expense will be $.17 per mile, down from the 2019 rate of $.20 per mile. Elderly households with travel expenses relating to medical services have the option of claiming the expense based on the actual cost of travel, such as bus fare, cab fare, etc. In these cases, documentation of the actual cost is required. Other IRS mileage reimbursements include: Business Mileage: $.575, down cent from 2019; andDriving for charitable organizations: $.14 - unchanged from 2019.

What Affordable Housing Managers Need to Know About Changes in Retirement Laws

Just before adjourning for the Christmas/New Year holiday, Congress included, and the President signed, the Setting Every Community Up for Retirement Enhancement (SECURE) Act in the federal government spending bill. This action provides the most significant changes in retirement law in more than a decade. Some of the changes relate to how income will be determined for eligibility in various affordable housing programs, including the LIHTC and Section 8. Here are some of the changes that affordable housing managers should be familiar with: An increase in the required minimum distribution (RMD) age. Most affordable housing managers know that with the exception of Roth IRAs, individuals must begin taking a minimum annual distribution from retirement accounts once they turn 70.5. This new law increases the RMD age to 72 for persons who turn 70.5 after December 31, 2019. So, for applicants/residents who were 70.5 on or before December 31, 2019, we should still be looking for RMDs. However, if you have an applicant or resident who will turn 70.5 after December 31, 2019, the RMD will not be required until they reach age 72.Eliminated the age cap for traditional IRA contributions. Under the prior law, people age 70.5 with wage income were prohibited from putting money into a traditional IRA. This cap has been removed, meaning that regardless of age or whether they are working, individuals may continue to contribute to their IRA. So, even for older residents, the balance in these accounts may increase from year-to-year.Makes it easier to include annuities inside retirement plans. Companies have been reluctant to offer annuities in 401k plans due to legal liabilities. The SECURE Act reduces the legal issue so we may see more retirement accounts that include annuities. While this will not require any immediate change in how affordable housing managers deal with annuities, it may cause HUD to re-examine how annuities are handled for housing purposes. However, changes are incremental at HUD, so any short-term change is unlikely.Eligibility for part-time workers has been expanded. The former rules required that people work at least 1,000 hours in a calendar year to participate in most company plans. Beginning in 2021, the new law will allow those who worked at least 500 hours per year for at least three consecutive years to enroll in retirement plans. This means that affordable housing managers - beginning in 2021 - should not assume that part-time workers do not have company retirement plans such as 401ks. From the standpoint of affordable housing managers, the biggest change is the age change for RMDs. This should be kept in mind when determining the potential income of older applicants and residents.

Rules for Electronic Waiting Lists at Section 8 Properties

In most cases, HUD projects are required to maintain waiting lists. A waiting list is a formal record of applicants for housing assistance that identifies the applicant s name, date and time of application, selection preferences claimed, income category, and the need for an accessible unit. The waiting list may be kept in either a bound journal or a computer program. While many of the HUD waiting list rules apply to both the manual and electronic waiting lists, some are unique to the electronic lists. Setting Up the List There are two main issues to consider when setting up an electronic waiting list: How to maintain the list - you can use a spreadsheet or specially designed software. If special software will be used, there are some highly recommended features:Tracking History: all changes made to the waiting list are tracked;Handbook Rules are Built Into the System: this alerts the user when a change is being made to the list that violates HUD rules;List Filtering: allows the list to be sorted by various categories including unit size, applicant age, and income categories;Integration: allows applicant information to be keyed into the system only once;Reports: e.g., comparing information like precertified applicants and yearly turnover;Usability; andUser Control: limits password access to selected staff users.How to convert a manual to an electronic waiting list - ensure that no applicant names are lost or misspelled and the list s order is not changed. Once the manual list is transcribed to the electronic lists, the manual list should be retained for at least 36 months. Meeting HUD Requirements Primary HUD rules include: Include required information:Name of head of household;Date and time application was submitted;Applicant s preference status;Applicant s annual income level for income targeting purposes (e.g., ELI, VLI, or LI);Whether the applicant needs an accessible unit, including the need for accessible features; andUnit size needed. Note that the applicant s race/ethnicity/gender/family size should not be included on the waiting list. Include applicant phone number, address, email, and date of contact on the list. Explain all changes - this includes why applicants were selected, withdrawn, rejected, or had family status changed. Any list should include a comment section.Document all changes - the following methods for documenting changes should be used:Use a "data backup function" that records the time and date that changes are made to the list;Print a record of the list at least monthly to show each applicant s place on and selection from the list. A copy should be made each time an applicant is added to or selected from the list. The copy should include the time and date of the printing. Keep a copy in the applicant file and central waiting list file. If there has been no change to the list, keep a copy in the waiting list file only.Re-sort and print the list after making changes in an applicant s status, such as changes in family composition and unit size.Both before and after an applicant is removed from the list the list should be printed and preserved.If the list is printed monthly to document the changes, you should also file a copy of the monthly rejection letters with the printouts.Implement safeguards -  the following safeguards are not required, but are recommended:Limit password access to only staff members who maintain the waiting list;The system should track the time and date each change is made to the list and should identify the staff member who made the change;Store hard copies in a secure location;Backup the list every time it is modified;Store back-ups both on and off site; andTake steps to avoid staff manipulation.Print out the list periodically and compare it to the previous printout to detect any inappropriate changes. This should be done at least every few months. An electronic waiting list is a convenient, comprehensive, and safe way to maintain a project s waiting list. As long as the procedures and recommendations noted above are adhered to, the use of an electronic waiting list is often preferable to manual waiting lists. Projects that still use manual waiting lists should give consideration to converting to an electronic system, which, in the long-run, will make life easier for onsite staff.

Minimum Wage to Increase in Many Areas

In 2020, 21 states will increase their minimum wage requirements for workers beginning January 1, 2020 and Connecticut, Nevada, and Oregon (and possibly Delaware) will have increases later in the year. Affordable housing managers responsible for determining the income of applicants and residents need to be aware of state and local minimum wage laws in order to ensure the most accurate possible projection of income. States with Minimum Wage in Excess of Federal $7.25 per Hour (as of 1/1/20) Alaska: $10.19Arizona: $12.00Arkansas: $10.00California: $13.00 - applies only to employers with 26 or more employees. Employers in CA with 25 or fewer employees have a minimum wage of $12.00 per hour.Colorado: $12.00Connecticut: $11.00 ($12.00 effective 9/1/20)Delaware: $9.25District of Columbia: $14.00 ($15.00 effective 7/1/20)Florida: $8.56Hawaii: $10.10Illinois: $9.25Maine: $12.00Maryland: $11.00Massachusetts: $12.75Michigan: $9.65Minnesota: $10.00 - this is the rate for large employers (employers with $500,000 or more gross revenue). Small employers have a minimum wage of $8.15 per hour.Missouri: $9.45Montana: $8.65Nebraska: $9.00Nevada: $8.25 for employees who are not offered health insurance. On July 1, 2020, minimum wage for employees with health insurance will increase to $8.00 and those without health insurance to $9.00.New Jersey: $11.00New Mexico: $9.00New York: $11.80 statewide ($15.00 in New York City)Ohio: $8.70Oregon: $11.25 (Portland, $13.25 on July 1) - effective July 1, 2020, statewide minimum will be $12.00 ($11.50 for nonurban counties).Rhode Island: 10.50South Dakota: $9.30Vermont: $10.96Washington: $13.50West Virginia: $8.75 Certain occupations are exempt from federal minimum wage laws, but states have their own exemptions. Anytime an applicant or resident reports or has a verification of income that is less than the federal or state minimum wage, managers should follow up with employers to determine the reason. That reason should be documented in the file.