The Trainer

Complying with New HUD Rule and SCRA

In this issue, we discussed complying with a final rule that HUD issued in January and with the Servicemembers Civil Relief Act (SCRA). Here's a review of the main requirements you must comply with.

EDITOR'S NOTE: As the Insider went to press, HUD issued a notice proposing a 60-day delay of the effective date of the final rule on the provisions requiring proof of SSNs. See page 5 for more information.

Using EIV

HUD's final rule affects when and how you must use HUD's Enterprise Income Verification (EIV) system:

• Public housing authorities (PHAs) are already required to use EIV. Multifamily housing owners must begin using EIV on Sept. 30, 2009.

• After September 30, HUD will require use of EIV for verifying income sources maintained in the EIV system at all recertifications or reexaminations.

Verifying Social Security Numbers

Although the effective date may be delayed, HUD's final rule, as issued in January, requires you to obtain and verify Social Security numbers (SSNs) in the following circumstances:

• Effective March 30, 2009, site owners or managers must verify the SSNs of all applicants, residents, and new household members.

• Each resident whose initial certification was initiated before March 30, 2009, must submit his complete and accurate SSN, and those of all household members, at the household's next interim or regularly scheduled reexamination or recertification. Site owners or managers must keep documentation that the participant disclosed the SSNs as required—namely, by keeping a copy of each card in the household's file, unless HUD later directs otherwise.

• HUD now requires cards even for small children. There is no grace period for compliance with this rule. The revised program regulations require a PHA or site owner to terminate the assistance or the tenancy of a resident who does not meet SSN disclosure requirements.

• Applicants who cannot provide SSNs for all household members may retain their place on the site waiting list, as long as the head of the household has provided a valid number. Each member of the household must provide an SSN before the household may move into a unit. HUD requires the PHA or owner to reject the application if the applicant does not provide accurate SSNs for the whole household.

Determining Income and Rent

Effective March 30, 2009, HUD gives program administrators the discretion to use either actual past income or projected future income in calculating annual income. PHAs and owners may use actual past annual income data from EIV if:

• The resident does not dispute the income information; and

• The current resident-provided documentation or third-party verification does not suggest that the resident's income will be higher in the next 12 months.

Complying with SCRA

SCRA applies to all active-duty members of the military—including those who are residents at assisted housing sites. SCRA applies to a servicemember who: (1) receives permanent change-of-station orders; (2) is deployed to a new location for at least 90 days; or (3) is called to active-duty service for at least 90 days.

If one of your residents qualifies as an active-duty servicemember, he has the right to terminate his lease without penalty. To do so, he must provide you with proper written notice, asserting the right of termination under SCRA. He must include a copy of his military orders showing that one of the three situations above applies. For all rental agreements (except month-to-month rentals), the effective date of termination is the last day of the month after the month in which the servicemember delivers the proper notice.

SCRA requires the servicemember to pay the rent only until the effective date of lease termination. If the resident has paid rent in advance, you must prorate and refund the unused portion. If the lease required a security deposit, you must return it to the servicemember within 30 days of the date of lease termination.

TRAINER'S QUIZ

INSTRUCTIONS: Each of the questions below has only one correct answer. On a separate sheet of paper, write down the number of each question, followed by the answer you have chosen—for example, 1) b, 2) a, and so on. The correct answers (with explanations) follow the quiz. Good luck!

QUESTION #1

Under the new HUD rule, I have discretion to use actual past income (based on EIV) or projected future income in calculating annual income. Do I have to use one method or the other for all my residents, or can I decide which to use on a case-by-case basis?

1. You must use choose one method to use for all your residents.

2. HUD doesn't specify which you must do, so you may choose a method on a case-by-case basis.

QUESTION #2

Mr. Bracey, a long-time resident at my site, has two children, ages 5 and 9. I do not have Social Security cards on file for either child. Does Mr. Bracey need to provide them?

1. Yes, by March 30, 2009.

2. Yes, by the time of his next recertification.

3. No, because his original certification occurred before March 30, 2009.

QUESTION #3

Ms. Carter, a current resident, has provided cards for her entire household except one person. Do I have to terminate her assistance if she does not provide the missing card?

1. Yes.

2. b. No.

QUESTION #4

One of your residents, James Smith, retired from the Army two years ago. He signed a 12-month lease, but now he wants to end his lease early, after just four months. Does SCRA allow him to terminate without penalty?

1. a. Yes.

2. b. No.

QUESTION #5

Jane Wilson's annual lease expires June 30, but she is terminating her lease early, under SCRA, effective March 30. She has already paid you through April 30. You must refund her the rent she paid for April, but you may keep her security deposit.

1. a. True.

2. b. False.