Over Income Households At First Annual Certification

Written by Wil Whalen

In the first minute of a file review, a Spectrum Compliance Analyst will notice whether or not a household’s income is above or below the income limit. If it’s above the income limit at first annual certification, we’re going to want to know why. It’s not uncommon for an LIHTC household to go above the income limit at the first annual certification. In most cases, the increase in income could not have been anticipated at move-in and it’s often the result of a tenant getting a raise, an increase in hours, a promotion, a new job, etc. As long as the increase in income could not have been anticipated at move-in, eligibility is not affected. Also, when a file goes above the income limit at their first annual certification, management needs to document the reason for the increase in income the file. Also, spotlight the supporting documentation i.e.: Employment Verifications. The Work Number, Self-Employment Affidavits, Child Support Verification, Social Security Letter, etc.

 

Lately, we’ve reviewed some files where the increase in income isn’t even acknowledged in the file. This is problematic because if your files are only being reviewed every three years and you don’t investigate an over income household at first annual certification, you could have an over income household for two years on your property. That’s why it’s imperative that when a household goes above the income limit at the first annual certification that the increase, the reason for the increase and the supporting documentation be documented in the file.

 

In 2020, Spectrum released a brand new form called “The Over Income Verification Form.” This form was designed to help facilitate documenting a household whose income goes over the income limit at the first annual certification. This form asks all the pertinent questions and if completed correctly, would satisfy the requirement of documenting an over income household. Though it is not required, this form has been approved for use.

 

Whether or not, you decide to start using our Over Income Clarification Form, do know that any time a household goes over the income at their first annual certification, it must be documented and explained in the file.

 


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