HUD has published Rental Housing Integrity Improvement Project Listserv #293 clarifying the HUD policy regarding timing of applicant eligibility determinations on HUD properties when income limits change after an applicant on a waiting list has been deemed eligible.
The issue at hand is whether an applicant at a HUD property is eligible to be housed from the waiting list if they have been determined to be eligible based on the prior year’s income limits and, just before housing the applicant, new income limits are published which would make the applicant ineligible. HUD Handbook 4350.3 states “Owners determine income eligibility prior to approving applicants for tenancy. Owners compare the family’s annual income to the appropriate income limit prior to placing an applicant on the waiting list. However, owner’s may wait until a unit is available to verify the applicant’s income eligibility.” Following this guidance in the Handbook, HUD indicates that if a unit becomes available and an applicant is selected from the waiting list, is processed for eligibility, and meets all eligibility requirements at the time of processing, the applicant is eligible to move into the project even if new income limits have been published.
What this means for owners is that if you selected an applicant from your waiting list, and processed them for eligibility and determined that they were eligible prior to the issuance of the 2013 income limits, they will be considered eligible. This will be the case even if the 2013 income limits are lower than the income limits under which the applicant was qualified, and they had not moved in at the time of publication of the 2013 limits.
Please feel free to contact me with any questions on this HUD ruling.