x Assets Under $5,000 “The Missing Instruction Manual” - Spectrum Enterprises


Assets Under $5,000 “The Missing Instruction Manual”

Written by Wesley Chisholm, Spectrum Enterprises


Rev Proc 94-65 allows the use of a tenant signed affidavit to verify assets if the household total net value is lower than $5,000.  In 2000 as part of the LIHTC compliance Best Practices effort the NCSHA distributed the form Under $5,000 Asset Certification which has become widely used.

Please note there is a section in Rev Proc 94-65 that explains this form may not be used to verify assets ‘if a reasonable person in the Owner’s position would conclude that the tenant’s income is higher than the tenant’s represented annual income.’  If a tenant/applicant clearly misrepresents their income, 3rd party verifications of all assets are required.

Am I Required To Use This Form?

Generally you are not required.  This form is an option.  It was meant to reduce the paperwork burden in certifying low income tenants.  You may choose to obtain other verification such as 3rd party forms instead of using the affidavit.  There is no Code requirement to use both 3rd party and the affidavit.

However, many management companies have decided they want their files to be very strong in documenting income and assets.  So you may have a company policy mandating the use of the Under $5,000 Asset Certification affidavit.

Remember that this form should definitely not be used for a household whose assets exceed $5,000.

Remember the form may be used to satisfy the verification requirements for the LIHTC program only.  It may not be used to verify assets for programs such as HUD, HOME, RD, Tax Exempt Bonds, etc.

Common Issues:

Spectrum Compliance Analysts spend a lot of time writing up issues surrounding the use of this form.  We spend a lot of time discussing this on the phone with people who are confused on how to correctly use the form. Here is a list of the more common issues we see.


  • Use One Per Household:


Do not use one form per person (except in California where the state has adjusted the instructions for using this).  Use one form per household; make sure all adults sign the form; make sure the form lists all household assets.


  • Disposed of Assets


The form contains an either/or statement to demonstrate if a household has disposed of any assets in the past 2 years for less than market value.  Please make sure one of these boxes is checked.  Please make sure both boxes are not checked.


  • Households with Zero Assets


The form contains a line for certain households to certify they have zero assets.  This should not be checked for a household with bank accounts, cash on hand, pre-paid debit cards, or any other asset(s).  


  • Cash Value and Asset Income


The form provides a space to list the cash value, the interest rate and the income for each asset.  We see a lot of forms where this calculation is completed incorrectly.

Multiply the balance by the interest rate to derive the asset income.  This should be completed for all assets listed.   

The form also provides a space at the bottom to list the total income from all assets. Add up the income from each asset and list the total.  Do not leave this space blank.


  • Incomplete Forms


Make sure the form is completed in its entirety.  We write up incomplete forms for the following reasons:

  • The total income from all assets is left blank
  • The interest rate column is neglected
  • Asset income is not calculated
  • The assets disposed question is unanswered
  • Assets disclosed on the questionnaire or application are omitted entirely  


  • Inaccurate Forms


The total household income from assets is often incorrect. Households use this space to list the total value of their assets, or their annual (non-asset) income.  Check that the answer is a sum of the income listed from each asset.   

Many households check that they have no assets, but have also listed checking and savings accounts.

Applicants mark the form for both answers to the assets disposed either/or question.


  • New Imputed Rate


Effective 2/1/2015 there is a new imputed rate of interest on cumulative assets to be used for all households with over $5,000 in assets that is 0.06%.  Households whose assets do not exceed $5,000 will continue to count the actual income from their assets.


  • Ask About Debit Cards


Social Security and other benefits are typically disbursed electronically on prepaid debit cards.  This is an asset that requires verification, but many applicants forget to disclose it.  If a household is receiving Social Security, TANF, or any other form of assistance, ask how they receive their payments.  There is a space for “Other” on the list of assets where prepaid debit cards can be listed.


  • Managers Should Not Fill This Out


This form is an affidavit certifying the value of a household’s assets.  The tenant should be filling this form out themselves.  If doing 3rd party verification of assets & the Under $5,000 Asset Certification form, don’t worry if the amounts do not match.  Managers must review the form to see if all disclosed assets have been included and provide guidance if needed.  They should not be completing this affidavit on behalf of the applicant or resident.  

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