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December 2018 Quizzle

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.


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