Perform Interim Recertification After Five Household-Reported Changes

Occasionally, you may need to perform an interim recertification for a household. This means that you must recalculate the household’s income and assistance before the household’s scheduled recertification date based on a change in the household’s situation. For example, when a household tells you that its income has increased you may need to initiate an interim recertification. But not every change warrants an interim recertification. HUD requires you to perform them only after you’re notified of five types of household changes [HUD Handbook 4350.3, par. 7-11 (A)].

It’s important that you know what these five changes are because if you don’t perform an interim recertification when you’re supposed to, you could end up charging a household the wrong rent or losing points on your management and occupancy review. You also need to know when you don’t have to perform an interim recertification, so you don’t waste valuable time performing one that’s unnecessary or that would make more sense to do later.

For example, you don’t normally need to perform interim recertifications for households living in market-rate units [HUD Handbook 4350.3, par. 7-11(G)]. But sometimes a household living in a market-rate unit covered by a Section 8, RAP, or PAC housing assistance contract asks you to perform an interim recertification to check its eligibility to receive program assistance. If asked, you must do so [Handbook 4350.3, par. 7-4(B)(1)]. If the interim recertification determines that the household is eligible, you must then submit an initial certification (not an interim recertification) to Tenant Rental Assistance Certification System (TRACS).

Here are the five household changes that require an interim recertification. We’ve also included a Model Memo: Tell Staff When to Perform Interim Recertification, which you can give to your staff to explain which household changes require an interim recertification.

1. Household Composition Changes

Perform an interim recertification when a household’s composition changes, either because a new member joins the household or a current member leaves. For example, a household member might have a child or might die. All HUD model leases require that households report to you when a household member permanently moves out of the unit [Handbook 4350.3, app. 4]. And tenants must notify the owner when a household proposes to move a new member into the unit [HUD Handbook 4350.3, par. 7-10 (A)(2)].

Another possible household composition change requiring an interim recertification may occur due to Violence Against Women Act (VAWA) legislation. Residents of public housing and Section 8 tenant-based and project-based programs are protected. VAWA allows a lease to be “bifurcated” to remove an offending household member from the home and to protect a domestic violence victim. In the event that one household member is removed from the unit because of engaging in acts of domestic violence, dating violence, or stalking against another household member, an interim recertification should be processed reflecting the change in household composition [HUD Handbook 4350.3, par. 6-5 (G)(3)(b)].

Editor’s Note: On March 25, HUD Secretary Julian Castro announced a proposed rule that would implement the Violence Against Women Reauthorization Act of 2013. This rule expands HUD’s authority to protect survivors of domestic and dating violence, stalking, and sexual assault to all who reside in HUD-assisted housing. Newly covered programs include HOME, Section 202, Section 236, Section 811, Section 221(d)(3) Below Market Interest Rate, HOPWA, low-income housing tax credits, USDA rural housing, and the Housing Trust Fund.

2. Household Income Increases by More than $200 per Month

HUD requires households to report to you if their income increases by more than $200 a month [HUD Handbook 4350.3, par. 7-10(A)(4)]. Perform an interim recertification whenever a household’s income increases by more than $200 a month. This might occur, for example, if an adult household member starts working more hours at her job.

3. Member’s Citizenship Status Changes

Owners must process an interim recertification if a tenant reports a change in citizenship or eligible immigration status of any family members [HUD Handbook 4350.3, par. 7-11(A)(5)]. HUD rules say that only households comprised entirely of U.S. citizens or certain eligible noncitizens such as a permanent resident alien can get full assistance payments. Perform an interim recertification when there’s a change in citizenship or eligible immigration status of any household member.

Households are likely to report to you when a household member changes from an ineligible noncitizen to an eligible noncitizen or U.S. citizen, even though the HUD model leases don’t require them to do so. Once a household member becomes an eligible noncitizen or U.S. citizen, the member becomes eligible for assistance, which will often result in a reduction in the household’s rent.

4. Household’s Allowance Increases

Households may request an interim recertification due to changes in allowances [HUD Handbook 4350.3, par. 7-10 (B)(2)]. HUD allows deductions from household income through five allowances: the medical expense allowance, the disability assistance allowance, the elderly household allowance, the child care assistance allowance, and the dependent allowance.

Perform an interim recertification when the amount of any allowance a household is entitled to increases or when a household becomes eligible for a new allowance. For example, perform an interim recertification if a household gets a medical expense allowance and those expenses increase or if a household becomes eligible for a child care expense allowance. Even though they’re not required to, households will often report expenses that will increase an allowance or make them eligible for a new one, because their rent will often be reduced as a result.

5. Household Income Decreases

When a household’s income decreases, you should normally perform an interim recertification. For example, a household’s income may decrease because a household member is working fewer hours at her job or has sold an income-generating asset such as a rental property. Households often report income decreases, even though HUD doesn’t require them to, because such decreases can result in rent reductions.

When you can delay interim recertification for income decrease. You may delay performing an interim recertification when the household’s income decreases if you get “confirmation” that the household’s income will be fully or partially restored in two months [Handbook 4350.3, par. 7-11(F)]. During the delay, you can continue charging the household the current rent.

For example, if a household notifies you that its income has decreased because a household member lost his job, and that the member has applied for unemployment benefits. You contact the unemployment office, which verifies that the household member applied for benefits and appears eligible, and that it’s processing the application. You may delay performing the interim recertification in this case until the processing of the unemployment claim has been completed and the new income is known. But during the delay, you can neither:

• Evict the household for nonpayment of rent [Handbook 4350.3, par. 7-11(F)(1)(b)]; nor
• Charge it a fee for a late rent payment [Handbook 4350.3, par. 7-11(F)(1)(c)].

After you learn the household’s new income and verify it, you must recertify the household and retroactively apply any rent reduction to the first day of the month after the date the household’s income decreased [Handbook 4350.3, par. 7-11(F)(2)(b)].

When you can refuse interim recertification for income decrease. You may refuse to perform an interim recertification when a household’s income decreases if:

> Decrease is deliberate attempt to avoid paying rent. If the household deliberately caused its income to decrease to avoid paying rent, you don’t have to perform an interim recertification [Handbook 4350.3, par. 7-11(D)(1]. But it’s hard to prove that a household acted deliberately to get a rent reduction. And unless you have solid proof of this, it’s best to process the interim recertification. If you refuse to process it and later must sue a household for nonpayment of rent, you could have trouble winning your case without solid proof that the household’s actions were deliberate. Consult your attorney for what courts in your area might see as solid proof.

> Decrease will last less than a month. If the household’s decrease in income will last for less than a month, you don’t have to perform an interim recertification. But you must get “confirmation” of the length of the decrease. Also, you must have a policy of refusing to perform an interim recertification whenever any household’s income decreases for less than a month [Handbook 4350.3, par. 7-11(D)(2)].

For example, say you ask an employer to verify that the household member was laid off. The employer tells you that that the household member will be laid off for only two weeks. In this instance, you could refuse to perform an interim recertification if your site has a policy of refusing to perform one when any household’s income decreases for less than a month.

Also, you don’t need to perform an interim recertification if an as-paid welfare agency reduces a household’s shelter and utility allowance because it’s greater than the household’s actual rent [Handbook 4350.3, par. 7-11(E)]. Among other things, an as-paid welfare program pays a household a specific amount for shelter and utilities, with the amount adjusted based on the household’s actual payments for shelter and utilities. When computing income for households in an as-paid welfare program, you generally include in income the maximum amount the welfare agency could pay for shelter and utilities for a household of that size, not the amount that the household actually gets [Handbook 4350.3, par. 5-6(K)(3)(b)].