The Trainer — March 2015
Terminating Over-Income Households' Assistance; Disposing of Assets for Less than FMV
In this month’s feature, we discussed how to follow HUD’s notice requirements when terminating assistance. If you don’t, the household could claim that the termination was invalid.
In this issue’s Q&As, we discussed the rule about recertifying households who have disposed of an asset, such as a house, for less than fair market value (FMV). Every recertification file for a household must include a signed, written statement saying whether household members have disposed of assets for less than FMV.
When terminating a household’s assistance you must deliver a written termination notice:
a. By first-class mail.
b. By hand, to any adult answering the door at the unit, or if no one answers, by sliding it under the door or affixing it to the door.
c. Either a or b.
d. Both a and b.
Terminating a household’s assistance doesn’t terminate the household’s lease before the end of the lease term. But when the lease term does expire, you don’t have to offer them a HUD lease form. True or false?
When you’re figuring a household’s assets for recertification, you must include any asset that a household member sold for less than fair market value in the previous:
a. 12 months.
b. Two years.
c. Five years.
d. 10 years.
The only assets disposed of for less than fair market value that are not to be counted are those resulting from:
b. Divorce and separation.
d. All of the above.
ANSWERS & EXPLANATIONS
Correct answer: d
According to HUD, the notice should be served by both sending a letter by first-class mail, properly stamped and addressed and including a return address, to the household at the unit address; and delivering a copy of the notice to any adult person answering the door at the unit. If no adult answers the door, the person serving the notice may place it under or through the door, or affix it to the door [HUD Handbook 4350.3, par. 8-6(A)(4)].
Correct answer: a
True. When the lease term expires, you may offer the household whatever form of lease you wish. You no longer have to use the HUD Model Lease, although many sites continue to use a modified version.
Correct answer: b
You must include any asset that a household member sold for less than fair market value in the previous two years [HUD Handbook 4350.3, par. 5-7(G)(8)]. The amount counted as an asset is the difference between the cash value and the amount actually received.
Correct answer: d
The only assets disposed of for less than fair market value that are not to be counted are those involuntary dispositions resulting from bankruptcy, divorce, foreclosure, or separation [HUD Handbook 4350.3, par. 5-7(G)(8)(d)]. In these instances, owners and managers should clearly document inquiries with the tenant as to why the disposition was involuntary and collect supporting documents where necessary, such as divorce agreements and foreclosure documents, to support the involuntary nature of the disposition.