Use Policy Tools for HUD Tenants Behind on Rent to Avoid Eviction

HUD reminds owners of tenant recertification flexibilities.

Beyond considering certain hardship exemptions such as minimum rent and childcare expenses that may be applicable to households who fall behind on their rent obligations, there are interim recertifications that can be used to adjust rent to help financially struggling residents. HUD’s Office of Housing recently sent a bulletin reminding owners and managing agents who participate in HUD Multifamily project-based rental assistance programs of flexibilities regarding recertifications that can be used to help support residents who are behind in their rent and help them avoid evictions.  

We’ll go over what HUD says about interim reexaminations, how soon owners must conduct the reexaminations, and policies for retroactive rent adjustments for those households who have and have not complied with the owner’s interim reporting requirements.

Interim Recertifications

Tenants are typically required to go through an initial certification process to qualify for HUD-assisted housing programs. The certification process checks if people or families are eligible for the program. Factors like income, household size, citizenship, and other program requirements are considered. The certifications are renewed annually, also called recertifications.

Interim recertification is the process of updating rent and subsidies for tenants in HUD-assisted housing programs, done in the middle of their certification period. While regular recertification occurs annually, interim recertification comes into play when changes in income or household composition occur before the next scheduled recertification.

The purpose of interim recertification is to make sure that the rent and housing subsidy calculations are still correct and fair for the tenant’s current situation. It helps adjust rent and subsidy amounts quickly based on changes in income or household, so tenants pay the right portion of their income for rent.

Interim recertification is triggered by various circumstances and events. Some common triggers include:

Changes in income. If a tenant’s income changes while they are being certified, their rent and subsidy need to be adjusted with interim recertification. This ensures that tenants pay a fair share of their income towards rent and prevents overpayment or underpayment.

Changes in household composition. If there are changes in the people living in a tenant’s home, like adding or removing household members, an interim recertification is needed to update the rent calculation based on the new household size. This adjustment helps ensure that the subsidy accurately reflects the tenant’s current living situation.

Changes in employment status. If a tenant’s employment status changes, like losing or getting a job, their rent may be adjusted based on their new income. This is done through an interim recertification. This helps maintain the fairness and accuracy of the rent and subsidy amounts.

The bulletin reminds owners that tenants may request an interim recertification due to any change in family income that may affect their Total Tenant Payment (TTP) or tenant rent and assistance payment that occurred since their last income recertification.

Owners must conduct the interim recertification within a reasonable time period after the household’s request. What qualifies as a “reasonable time” may vary based on the amount of time it takes to verify information, but HUD says owners generally should conduct the interim reexamination not longer than 30 days from the date a household reports changes in income to the owner.

Obligation to Apply Adjusted Rent

When a tenant complies with the owner’s interim reporting requirements, the owner/agent must retroactively apply any reduction in rent starting with the first day of the month after the date of the action that caused the decrease in income.

In other words, if the tenant’s rent will decrease as a result of the interim recertification, the change in rent is effective on the first day of the month after the date of action that caused the interim certification, such as the first of the month after the date of loss of employment [HUD Handbook 4350.3, par. 7-13(C)(2)]. A 30-day notice isn’t required for rent decreases.

Retroactive Recertification

If a tenant doesn’t comply with the owner’s interim reporting requirements and the owner discovers the tenant has failed to report the decrease in income and subsequently recertifies, any resulting rent decrease must be implemented effective the first rent period following completion of the recertification [HUD Handbook 4350.2, par. 7-13(D)(2)].

However, as an optional policy for rent decreases, rent decreases may be applied retroactively at the discretion of the owner, in accordance with the owner’s conditions as established in written policy. In other words, if a household reports an income decrease outside of the time required by the owner’s written policy, the owner may, per their written policy, process a rent reduction retroactively to the first rental period after the event to the time before the household reported.

Applying a retroactive change in rent of household share as the result of an interim reexamination may reduce the potential hardship on households and eliminate or significantly reduce the amount a household may owe for back rent if the household has had difficulty making timely rent payments during the time between the loss of income and the interim reexamination. 

HUD says a retroactive reduction may not be applied prior to either the first of the month following the event that led to the income change or the first of the month following the effective date of the family’s most recent previous income examination. And owners must establish as part of a written policy that they will implement retroactive rent decreases in order to exercise this flexibility. According to the bulletin, while owners/agents are responsible for setting policies prescribing when and under what conditions a family must report a change in family income or composition, HUD encourages owners to be as flexible as possible when creating such policies.