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Exhibit 3-14: Section 236 With Benefit of Additional Assistance – Special Instructions for Determining Prorated Assistance Payment and Prorated Total Tenant Payment/Tenant Rent for Families Subject to Proration Procedures Regarding the Restriction on Assistance to Noncitizens

G. Calculating Income from Assets - Specific Types of Assets

HUD Handbook 4350.3 REV-1 — Occupancy Requirements of Subsidized Multifamily Housing Programs · 2026 edition · updated 2026-07-29 · United States

  1. Trusts.

    • a. Explanation of trusts.

      • (1) A trust is a legal arrangement generally regulated by state law in which one party (the creator or grantor) transfers property to a second party (the trustee) who holds the property for the benefit of one or more third parties (the beneficiaries). A trust can contain cash or other liquid assets or real or personal property that could be turned into cash. Generally, the assets are invested for the benefit of the beneficiaries.

      • (2) Trusts may be revocable or nonrevocable. A revocable trust is a trust that the creator of the trust may amend or end (revoke). When there is a revocable trust, the creator has access to the funds in the trust account. When the creator sets up a nonrevocable trust, the creator has no access to the funds in the account.

      • (3) The beneficiary frequently will be unable to touch any of the trust funds until a specified date or event (e.g., the

HUD Occupancy Handbook Chapter 5: Determining Income & Calculating Rent

6/07

5-29

Section 1: Determining Annual Income

4350.3 REV-1

beneficiary’s 21[st] birthday or the grantor’s death). In some instances, the beneficiary may receive the regular investment income from the trust but not be able to withdraw any of the principal.

  • (4) The beneficiary and the grantor may be members of the same family. A parent or grandparent may have placed funds in trust to a child. If the trust is revocable, the funds may be accessible to the parent or grandparent but not to the child.

  • b. How to treat trusts.

    • (1) The basis for determining how to treat trusts relies on information about who has access to either the principal in the account or the income from the account.

    • (2) Revocable trusts. If any member of the tenant family has the right to withdraw the funds in the account, the trust is considered to be an asset and is treated as any other asset. The cash value of the trust (the amount the family member would receive if he or she withdrew all that could be withdrawn) is added to total net assets. The actual income received is added to actual income from assets.

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▸ Contents — HUD Handbook 4350.3 REV-1 — Occupancy Requirements of Subsidized Multifamily Housing Programs
HUD Handbook 4350.3 REV-1 — Occupancy Requirements of Subsidized Multifamily Housing Programs
  1. HUD Handbook 4350.3: Occupancy Requirements of Subsidized Mult…
  2. Exhibit 3-12: Section 8, RAP, and Rent Supplement Programs – S…
  3. Exhibit 3-13: Section 236 Without Additional Assistance – Spec…
  4. ▸ Exhibit 3-14: Section 236 With Benefit of Additional Assistanc…
    Overview
    1. Special Instructions for Determining Prorated Assistance Payme…
    2. A. Calculate the difference between market rent and the contra…
    3. C. Calculate the assistance adjustment for Rent Supplement, RA…
    4. D. Calculate the prorated TTP.
    5. E. Calculate the prorated assistance payment.
    6. CHAPTER 4. WAITING LIST AND TENANT SELECTION
    7. 4-1 Introduction
    8. Key Terms
    9. Section 1: Tenant Selection Plan
    10. 4-3 Key Regulations
    11. B. Income-Targeting
    12. D. Required Criminal and Drug Screening Standards
    13. G. Rejecting Applicants and Denial of Rental Assistance
    14. Denial of Assistance to Noncitizens and DHS Appeal Process
    15. A. Key Requirements
    16. B. HUD Review of the Tenant Selection Plan
    17. Figure 4-2: Written Tenant Selection Plan - Topics
    18. B. Recommended Topics
    19. C. Required Contents of the Tenant Selection Plan
    20. 1. Project eligibility requirements.
    21. Additional Owner Policies and Practices
    22. Modification of the Tenant Selection Plan
    23. Availability of the Tenant Selection Plan
    24. 4-5 Income-Targeting – Applicable Only to the Section 8 Projec…
    25. B. Methods to Comply with Income-Targeting Requirements
    26. 4-6 Preferences
    27. Statutory, HUD, State, and Local Preferences
    28. C. Owner-Adopted Preferences
    29. D. Determining the Relative Weight of Owner-Adopted Preferences
    30. Screening for Suitability
    31. A. Screening Versus Determining Eligibility
    32. D. Screening Using the EIV Existing Tenant Search
    33. E . Considerations In Developing Screening Criteria
    34. a. Screening criteria for assisted units in cooperatives.
    35. Permitted Screening Criteria Commonly Used by Owners
    36. Prohibited Screening Criteria
    37. Criteria That Require Medical Evaluation or Treatment
    38. Criteria That Require Donation or Contribution
    39. E. Criteria That Inquire about Disabled Status
    40. F. Criteria Prohibited by State and Local laws
    41. 4-9 Rejecting Applicants and Denial of Rental Assistance
    42. Example – Denial of Unit
    43. C. Notification of Applicant Rejection
    44. Owner Meetings with Applicants to Discuss Rejection Notices
    45. Section 2: Marketing
    46. 4-10 Key Regulations
    47. Affirmative Fair Housing Marketing and Fair Housing Poster
    48. 4-11 Summary of Key Requirements
    49. B. Fair Housing Poster
    50. 4-12 Affirmative Fair Housing Marketing
    51. A. Key Requirements
    52. Affirmative Fair Housing Marketing Plan
    53. Special Marketing Requirements
    54. E. Records
    55. Updating the Marketing Plan
    56. Section 3: Waiting List Management
    57. 4-13 Key Regulations
    58. Social Security Number (SSN) Requirements
    59. D. Record-Keeping
    60. 4-14 Taking Applications for Occupancy
    61. 1. At time of application:
    62. 2. After admission:
    63. Retention and confidentiality of contact information.
    64. A. Overview
    65. Nondiscrimination When Matching Applicants to Available Units
    66. Matching Family Characteristics with Available Units
    67. D. Section 8 Units: Extremely Low-Income Targeting Requirement…
    68. E. Restrictions on Applicant Selection Based on Income
    69. F. Matching Single Persons to Units
    70. A. Key Requirements
    71. B. Opening and Closing the Waiting List
    72. C. Determining an Applicant’s Preliminary Eligibility
    73. 4-17 Placing Families with Disabled Family Members
    74. 4-18 Documenting Changes to Waiting Lists
    75. Providing an Auditable Record of Changes to Waiting Lists
    76. Maintaining Documentation of the Waiting Lists
    77. D. Maintaining Records of Manually Recorded Waiting Lists
    78. Maintaining Records for Electronic Waiting Lists
    79. 4-19 Updating Waiting List Information
    80. Example - Applicant Change in Household Composition
    81. 4-20 Removing Names from the Waiting List
    82. 4-21 Reinstating Applicants to the Waiting List
    83. 4-22 Record-Keeping
    84. Section 4: Selecting Tenants from the Waiting List
    85. 4-23 General
    86. 4-24 Applicant Interviews
    87. 4-25 Applying Income Targeting Requirements in Section 8 Prope…
    88. Figure 4-6: Sample Steps Owners May Use to Implement Income-Ta…
    89. Example
    90. Example 2 – Income-Targeting Method
    91. Example Admissions Log to Track Income-Targeting Progress
    92. 4-26 Verification of Preferences
    93. 4-27 Implementing Screening Reviews
    94. C. Screening for Rental History
    95. Objective/Acceptable Questions
    96. Inappropriate Questions
    97. D. Screening for Housekeeping
    98. Screening for Drug Abuse and Other Criminal Activity
    99. 4-28 Ensuring That Screening Is Performed Consistently
    100. B. Extenuating Circumstances
    101. Example – Extenuating Circumstances
    102. 4-29 Verifying the Need for Accessible Units
    103. 4-30 Addressing Requests for Reasonable Accommodations
    104. Example – Reasonable Accommodation
    105. 4-31 Denial of Assistance to Noncitizens
    106. A. Applicability
    107. Offering and Continuing Assistance
    108. Events Triggering Denial of Assistance
    109. D. Required Notice
    110. Chapter 4 Exhibits
    111. Records of Earned Income
    112. Records of Other Income
    113. Asset Information
    114. Records of Family Circumstances/Family Composition/Allowances
    115. Date (mm/dd/yyyy) :
    116. There is no penalty for persons who do not complete the form.
    117. A. General Instructions:
    118. CHAPTER 5. DETERMINING INCOME AND CALCULATING RENT
    119. 5-1 Introduction
    120. 5-2 Key Terms
    121. Section 1: Determining Annual Income
    122. Key Regulations
    123. Key Requirements
    124. Methods for Projecting and Calculating Annual Income
    125. Example – Anticipated Increase in Hourly Rate
    126. Examples – Irregular Employment Income
    127. Examples – Irregular Employment Income
    128. A. Income of Adults and Dependents
    129. Examples – Income of Temporarily Absent Family Members
    130. C. Deployment of Military Personnel to Active Duty
    131. D. Income of Permanently Confined Family Members
    132. Educational Scholarships or Grants
    133. F. Alimony or Child Support
    134. Regular Cash Contributions and Gifts
    135. Examples – Regular Cash Contributions
    136. H. Income from a Business
    137. Periodic Social Security Payments
    138. Example – Adjustment for Prior Overpayment of Benefits
    139. Example – Welfare Income in “As Paid” Localities
    140. L. Periodic Payments from Long-Term Care Insurance, Pensions, …
    141. Example – Withdrawals from IRAs or 401K Accounts
    142. M.
    143. Income from Training Programs
    144. O. Income Received by a Resident of an Intermediate Care Facil…
    145. Withdrawal of Cash or Assets from an Investment
    146. Q. Lump Sum Payments Counted as Income
    147. Figure 5-3: Treatment of Delayed Benefit Payments Received in …
    148. Examples – Income Exclusions
    149. Examples – Income Exclusions
    150. 5-7 Calculating Income from Assets
    151. Determining Income from Assets
    152. Example – Calculating the Cash Value of an Asset
    153. D. Assets Owned Jointly
    154. Example – Determining the Cash Value of an Asset
    155. Examples – Jointly Owned Assets
    156. Calculating Income from Assets When Assets Exceed $5,000
    157. Example – Imputed Income from Assets
    158. G. Calculating Income from Assets - Specific Types of Assets
    159. Example – A Trust Accessible to Family Members
    160. Example – Nonrevocable Trust As an Asset Disposed of for Less …
    161. Example – Nonrevocable Trust Distributing Income to the Creato…
    162. c. Special needs trusts.
    163. Example – Special Needs Trust
    164. 2. Annuities.
    165. c. Calculations when an annuity is considered an asset.
    166. Example – Calculating the Cash Value of an Annuity
    167. Examples – Lump Sum Additions to Family Assets (One-Time Payme…
    168. 4. Balances held in retirement accounts.
    169. Examples – Balances Held in an IRA or 401K Retirement Account
    170. 5. Federal Government/Uniformed Services Pensions
    171. 7. Mortgage or deed of trust.
    172. Examples – Assets of More or Less Than $1,000 Disposed of for …
    173. Example – Asset Disposed of for Less Than Fair Market Value
    174. Section 2: Determining Adjusted Income
    175. 5-8 Key Regulations
    176. 5-9 Key Requirements for Determining Adjusted Income
    177. 5-10 Calculating Adjusted Income
    178. Example – Child Care Deduction Separate Expenses for Time at W…
    179. Examples – Eligible Disability Assistance Expenses
    180. Example – Calculating a Deduction When Disability Assistance E…
    181. D. Medical Expense Deduction
    182. The following example illustrates the two options. Tenants may…
    183. Example – Medical Expense Paid over a Period of Time
    184. Example – Special Calculation for Families Who Are Eligible fo…
    185. F. No Deduction for Alimony or Child Support Paid to a Person …
    186. Example – Child Support Garnished from Wages
    187. Section 3: Verification
    188. 5-11 Key Regulations
    189. 5-12 Verification Requirements
    190. Figure 5-4: Privacy Act Notice
    191. B. Timeframe for Conducting Verifications
    192. 5-13 Acceptable Verification Methods
    193. Third-Party Verification
    194. Example – Verification by Internet Printout
    195. 5-14 Identifying Appropriate Verification Sources
    196. A. Consent and Verification Forms
    197. HUD-Required Consent and Release Forms
    198. Owner-Created Verification Forms
    199. 5-16 Effective Term of Verifications
    200. A. Duration of Verification Authorization
    201. 5-17 Inconsistent Information Obtained Through Verifications
    202. A. Key Requirement
    203. B. Documenting Third-Party Verification
    204. C. Documenting Telephone Verification
    205. D. Recording Inspection of Original Documents
    206. E. Documenting Why Third-Party Verification Is Not Available
    207. Reasonable Accommodation
    208. Examples – Reasonable Accommodation
    209. 5-19 Confidentiality of Applicant and Tenant Information
    210. 5-20 Security of EIV Data
    211. 5-21 Refusal to Sign Consent Forms
    212. 5-22 Interim Recertifications
    213. 5-23 Record-Keeping Procedures
    214. Section 4: Calculating Tenant Rent
    215. 5-24 Key Regulations
    216. 5-25 Calculating the Tenant Contribution for Section 8, PAC, P…
    217. B. Unit Rent
    218. Timeframe for Calculating Rent
    219. Section 8, PAC, PRAC, and RAP
    220. Rent Supplement
    221. A. Tenant Rent
    222. B. Assistance Payments
    223. Example – Calculating HAP
    224. Utility Reimbursement
    225. Section 8 Minimum Rent
    226. Example – Utility Reimbursement for a Tenant Paying Minimum Rent
    227. 3. Financial hardship exemptions.
    228. Example – Temporary Hardship Schedule
    229. 5-27 Calculating Assistance Payments for Authorized Police/Sec…
    230. 5-28 Calculating Tenant Contribution for “Double Occupancy” in…
    231. B. Total Tenant Payment
    232. Example – TTP Calculation for Double Occupancy
    233. C. Contract Rent and Assistance Payment in Section 202/8 Group…
    234. Example – Assistance Payment, Section 202/8 Double Occupancy
    235. Example – Section 202/8 Double Occupancy
    236. Example – Calculating the Assistance Payment for a Double Occu…
    237. Example – Section 811 Total Tenant Payments
    238. Example – Section 202/8 Calculation at a Change in Occupancy
    239. Example – Section 811 Calculation at a Change in Occupancy
    240. 5-29 Calculating Tenant Contribution for Section 236 and Secti…
    241. A. Tenant’s Rent Contribution
    242. B. Timeframe for Calculating Rent
    243. Figure 5-7: Tenant Contributions for the Section 236 and Secti…
    244. Section 221(d)(3) BMIR
    245. 5-30 Determining Tenant Contribution at Properties with Multip…
    246. 5-31 Procedures for Calculating Rent
    247. Chapter 5 Exhibits
    248. 24 CFR 5.609(b) and (c)
    249. INCOME INCLUSIONS
    250. INCOME EXLCUSIONS:
    251. Exhibit 5-2: Assets
    252. Example – Withdrawals from a Keogh Account
    253. 6. Retirement and pension funds.
    254. Example – Retirement Benefits as Lump-Sum and Periodic Payments
    255. Computation of imputed income:
    256. Regulatory References
    257. Example – Assets that are Part of an Active Business
    258. Example – Assets not Effectively Owned by the Applicant
    259. Example
    260. Medical Expenses That Are Deductible and Nondeductible
    261. Exhibit 5-4: Certification for Qualified Long-Term Care Insura…
    262. Unit Number
  5. Document Package for Applicant's/Tenant's Consent to the Relea…
  6. Exhibit 7-2: Sample Annual Recertification First Reminder Notice
  7. Exhibit 7-4: Sample Annual Recertification Third Reminder Noti…
  8. SAMPLE TENANT CONSENT TO DISCLOSE EIV INCOME INFORMATION
  9. Applying the Model Lease for Subsidized Programs to Individual…
  10. Applying the Model Leases for Section 202 PRAC and Section 811…
  11. Sample Move-In/Move-Out Inspection Form
  12. Memorandum February 5, 2002: Fact Sheets for Project-Based Ass…

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