Determining Gross Annual Income

Written by Deb Bechetti, Spectrum Enterprises

Determining gross annual income can sometimes be difficult, especially when an applicant does not understand, or management does not have enough training as to what is to be considered income.

Case in point:

I was at an audit of a 100% tax credit family property and pulled a new move-in.  A man and his girlfriend had applied and moved in a few months prior to the audit.  Both were working part-time jobs.  The rental rate being paid was $1000.00.  When looking at the application I noted that the man listed a brand new Tahoe as his car.  I looked at the credit report in the file and saw that the truck was financed and the monthly payment was $675.00.  After calculating the part-time employment incomes, I realized that there was either another source of income or someone was making the truck payment for the tenant.  I asked the manager if perhaps there was another source of income that we did not know about and she said “no, his parents are making the payments”.

HUD states that annual income includes all amounts, monetary or not, that go to or are received on behalf of the family head, spouse or co-head.

The truck payments that the tenant’s parents were making on behalf of the tenant were a source of income that should have been verified prior to move-in.  Thankfully, this income was not enough to take the household over the income limit.

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