Question One

An applicant lists on their application the existence of a rental property that is co-owned with a brother. It is verified that both parties have equal ownership and that the rental income is shared equally. The home has a current market value of $150,000 and a mortgage balance of $140,000, and anticipated costs to sell being  $12,000. Annual net rental income is $12,000.  The annual income for this household is:

A.  $6,000

B.  $12,000

C.  $21,000

D.  $20,280

Answer: (A) $6,000.00; the asset is owned jointly, therefore the household would only receive a prorated portion of the net income, in this case 50%. The cash value, if sold is a negative therefore zero value is included.

Question Two

True or False - When a household is receiving SS and SSI payments on a Direct Express Debit Card, the card is treated as a savings account with the current balance on the card being verified and included with the total assets of the household.

Answer: True.  The balance on the card is considered an asset and verification is consistent with savings account verifications. HUD RHIIP Listserv Posting #296

Question Three

In determining the total assets for Scott and Carla Jones, the manager receives verifications for the checking account, listing a current balance of $800.00 and a 6-month average balance of $900 and the savings account listing a current balance of $3800.00 and 6-month average of $5000.00. Scott’s annuity is verified to have a current value of $250,000.00, and pays quarterly dividends of $600.00. The total market value of the assets equals:

A.  $254,600

B.  $309,000

C.  $4,700

D.  $4,600

Answer: (C) Per Chapter 5 of the 4350.3 HUD Handbook, we use the 6-month average balance for checking accounts, and the current balance for savings accounts. Because the household is receiving quarterly periodic payments, the annuity is not included.

NEED TO BRUSH UP OR TRAIN YOUR STAFF? 

Check out our highly acclaimed, nationally recognized Training Calendar!