THE NEWS AND INFORMATION QUARTERLY FOR OWNERS AND AGENTS
OF THE ASSISTED HOUSING SERVICES CORPORATION
The CA Quarterly Review
Welcome to the Summer 2005 edition of the
quarterly newsletter. The purpose of the newsletter
is to familiarize owners and agents with AHSC as
well as provide useful information in regards to
compliance and policy changes.
If you are not already receiving this publication via
e-mail or if you have ideas, suggestions or
questions for future publications, we’d like to hear
from you. Your thoughts and concerns can be sent
to: [email protected].
Summer 2005
2
Further Guidance
on 4350.3, REV-1
Communication via
TRACSMail
3
Common MOR Findings
(con’d) Guidance
4
(con’d) Guidance
(con’d) MOR Findings
Further Guidance on Handbook 4350.3, REV-1
On May 24, 2005 Stillman Knight issued a memo releasing, as policy, answers
to questions submitted by members of the housing industry. This memo and
answers to questions posed by owners, agents, contract administrators and
others can be found at the following website:
http://www.hud.gov/offices/hsg/mfh/rhiip/mfhrhiip.cfm. This information is
extremely important in going forward as it is part of the RHIIP initiative to reduce
errors in subsidy determination.
This impacts owners and Performance-based Contract Administrators (PBCA)
alike. As part of the requirements of the Annual Contributions Contract AHSC
has conducted tenant file reviews at Management and Occupancy Reviews.
Going forward, the guidance provided by the Summary of Questions and
Answers provided by Stillman Knight will be incorporated into our review of files
and used as references to support any findings discovered.
The document is comprehensive and AHSC strongly suggests that owners,
agents and staff responsible for managing any aspect of the applicant intake
process read this document carefully. AHSC has selected the following
questions and answers which impact, directly, our performance of file reviews.
Resident Rights Brochure
Question 46—The answer confirms that per Chapter 5, Paragraph 5-15, C.2,
the Resident’s Rights and Responsibility brochure is to be given at the time of
the original move in and annually at recertification. In addition, Question 47
states, “The Handbook does not require tenants to sign a certification of receipt
of the brochure, however, the owner will have to show that the requirement is
being met.
How AHSC will confirm during a file review: AHSC will accept a written
notation from the owner/agent in the file stating that the brochure was given to
the tenant.
Family Summary Sheet
Question 60—provides that “A Family Summary Sheet must be completed for
tenants from whom the owner has not previously collected
citizenship/immigration status documentation OR whose documentation
suggests that their status is likely to change. The owner will have to complete
an Owner Summary of Family, under the circumstances described in Chapter 3,
Paragraph 3-12, E….If a family members moves out of the unit, the owner
should place a note on the Family Summary Sheet stating that the family
member no longer lives in the unit as of a specific date.
How AHSC will confirm during a file review: AHSC will require that a Family
Summary Sheet completed by the tenant is in the file. As new family members
are added to the household, additions to the Family Summary Sheet will be
required. Absent either of these two documents, AHSC will write a finding.
Income
Question 70—makes the determination that borrowed money is NOT
considered income and thus not used to calculate TTP.
Question 74—Regulations require that gross income be used to calculate
assistance even if, in some cases, the tenant does not actually receive the
money. The example in this case is child support payments. Owners must
use the gross income in their calculations to determine subsidy unless a
Continued on page 3
Communication via TRACSMail
TRACSMail is a HUD run email system
dedicated to supporting the TRACS
system. It is used by sites to send and
receive information to the contract
administrators (CA), and by the CA to
send and receive information with the
TRACS system. Two kinds of
information are sent in the system.
First is the vouchers and tenant
certifications sent by the site to the CA,
and from the CA to TRACS. The
second is response information from
TRACS and the CA back to the site.
There are three kinds of responses.
First is a Fatal Error message. This is
generated when the voucher or
certification has a problem that will not
allow it be accepted into the receiving
system at the CA or HUD. These
messages need to be resolved
immediately.
The second type of response is
Discrepancies. These arise when a
particular voucher or certification has a
problem. The problem will be explained
in the message. It will also contain an
action code which indicates how
quickly HUD wants the problem
resolved.
Action Code 1 should be corrected
within 45 days.
Action Code 2 should be corrected with
the next transaction for that tenant on a
voucher submission.
Action Code 3 does not necessarily
need to be corrected, but HUD wants
you to be aware.
Action Code 5 follow-up is needed
between the owner\agent & the tenant.
The third type of response is
Informational. These do not require any
action on the site’s part. They are to let
the site know about upcoming
activities. Address issues by becoming
familiar with the MAT User Guide and
Errors Documents.
2
(con’d)
Guidance on Handbook
Common MOR Findings
regulation specifically excludes a deduction. For regulations governing annual
income, see 24 CFR 5.609 and 5.611
How AHSC will confirm during a file review: AHSC will use its Tenant File
Checklist and do all the income calculations. Any errors will be noted and a
finding issued.
Deductions/Allowances
Question 86—clarifies the definition of “past, one-time nonrecurring medical
expenses that have been paid in full” requires that owners use “good judgment”
based on the circumstances of each case. The examples given are root canals,
or cataract surgery, which qualify under this provision, but which MAY occur
again. An owner can judge, based on the particulars of the situation, whether an
expense qualifies under this provision. The question also provides the following
example of a “recurring” medical expense: the addition of a new medication that
requires continued use in the upcoming year.
How AHSC will treat Deductions/Allowances during a file review: AHSC will
review the owner’s determination. Only if owner’s reason proves unsupportable
will a finding be issued.
Question 88—The cost of a Life Line or a cell phone should not be considered as
a medical expense. Allowable medical expenses include items that treat or
alleviate a medical condition.
Question 91—Medical practitioners who are licensed to prescribe medicines may
prescribe supplements, herbal medicines or nonprescription medications as
treatments if the specific medical condition for which they are being used was
diagnosed by a medical professional licensed to do so. In this case, a deduction
for this item would be allowable. The question also provides a distinction between
those items prescribed for ordinary good health or for a medical condition. If the
item is prescribed for maintenance of good health, the cost is NOT an allowable
medical deduction.
How AHSC will treat Deductions/Allowances during a file review: AHSC will
look for two types of documentation to support this deduction: 1.) evidence of a
diagnosis of a condition by a licensed professional and 2.) written documentation
that the supplement/medication is required to treat this condition. Absent
documentation of both of these AHSC will write a finding.
Verification
Question 99—states that the tenant certification that he/she is not receiving
alimony or child support payments and that he/she is taking or has taken all
reasonable legal means to collect (including filing with courts or enforcement
agencies) does need to be notarized. Owners/agents should also see Chapter
5, Paragraph 5-6 E and also Appendix 3 under “Alimony or child support” for
other acceptable forms of verification the owner may use.
How AHSC will treat Verification during a file review: AHSC will accept as
verification all items listed in Appendix 3 of Handbook 43503, REV-1. or
documentation identified in Question 99.
Question 106—Provides that owners/agents may accept verification
documentation from tenants under certain circumstances and if the owner is
Continued on page 4
Lease
1. Initial term of the lease is for less
than one year. Many owners
make the initial term 11 months
plus a partial month. For
example, if someone moves in
on June 15, 2005, the lease will
run to May 31, 2006. The
owners think their practice is
acceptable.
2. Not using the latest version of
the HUD Model Lease. Many
owners are not aware that they
should have issued the latest
Model Lease that came out in
2003 to tenants that were
already on the property.
3. Security deposit does not meet
HUD requirements. The security
deposit for some properties is
only one month’s TTP. The
owners of some of these
properties charge the greater of
$50 or one month’s TTP. We
have also seen other properties
where the security deposit is set
as a flat fee for all tenants.
4. Charging for all returned checks
– 1st bounce is free. Many
owners simply are not aware that
HUD will not allow a charge for
the first NSF check, unless the
charge has been HUD approved.
Tenant Selection Plan/Waiting List
1. Plans do not contain all 7 of the
required topics. Many owners
struggle with the income
targeting requirement. Other
common problems are
statements on unit transfers,
opening and closing the waiting
list, and including a policy on
meeting Section 504
requirements.
2. Waiting list does not have all the
required information.
a. Date and time.
b. Income categories.
c. Preferences
Continued on page 4
3
(con’d)
Guidance on Handbook
(con’d) Common MOR Findings
certain that the information provided on the form the tenant provides is indeed
from the third party source. The owner must document, in the file, why the third
party verification was not received from that source. Charges for the cost of
obtaining verifications are considered project expenses.
Applications
Applications not signed, dated and
time stamped by managers.
How AHSC will treat Verifications during a file review: AHSC will accept as
valid tenant provided third-party verifications IF documentation in the file clearly
and reasonably explains why the verifications were not received from the source.
If the file does not reflect this documentation, a finding will be issued.
Pet Policy
The pet policy does not allow for
accumulation of the pet deposit. For
some properties, it is required to
permit the pet deposit to be paid in
installments.
Annual and Interim Recertification
Questions 109 and 110— These questions address whether an
increase/decrease in a tenant’s rent can be retroactive. The answer states: if the
tenant submitted his documentation to the owner timely and the owner failed to
complete the certification process by the tenant’s anniversary date then and
INCREASE in the tenant’s rent would NOT be retroactive; the owner would have
to provide the tenant with 30-days’ notice of the increase. If the recertification
determines a tenant’s rent will DECREASE, the owner must retroactively
reimburse the tenant for the difference that the tenant overpaid.
Recertification Procedures
Need proof that the required notices
(120, 90, 60 days) are being sent.
This is especially important when
recertifications are done too late to
give a tenant a 30 day notice of an
increase in their TTP.
Question 112—If a tenant is late to recertify and begins paying market rent for a
few months, his annual recertification date will change to the first day of the month
when the property begins again receiving assistance for this tenant. The
recertification is processed as an INITIAL certification, per Chapter 7, Paragraph
7-8 D.3.g.
How AHSC will treat during the file review: If an owner has not followed the
guidance provided in the two examples above, AHSC will issue a finding and most
probably require a correction to the previously completed certification.
Lease and Lease Attachments
Question 123—Per the Model Lease for 202/8 properties: If a tenant does not
complete the initial one year lease period, and leaves, he/she will NOT receive a
refund of his security deposit.
Question 124—Per the FAMILY Model Lease—If a tenant moves within the
initial one year term of the lease and provides 30-day notice the tenant is entitled
to a full refund of the security deposit plus accrued interest IF the tenant does not
owe any amount under the lease.
Question 126—HUD does not require Rural Housing Services Section 515
projects with Section 8 assistance to use the HUD Model lease. If owner uses the
Rural Housing Lease provisions of Chapter 6, Exhibit 6-2 of the Handbook must
be added to the lease.
How AHSC will treat during the file review: AHSC will list findings when
guidance on Questions 123, 124 and 126 are not followed.
The issues above represent only a sample of the useful information provided in
the Summary of Questions listed on the web. AHSC encourages owner/agents to
review the document carefully as its provisions are considered policy going
forward. 
Tenant Files and Records
1. No 3rd party verification for
income and deductions. Owners
will report difficulty in getting 3rd
party verifications, but we need
to see evidence in the file that
they have attempted to get the
verification.
2. Not using a 6 month average for
checking account balances.
Many owners are not aware that
six months are required.
3. Files not updated when a new
family member is added (SSN,
50059, family summary sheet,
owner’s summary of family
sheet).
4. Missing owner’s summary of
family sheet. There are many
owners who are unaware of this
sheet.
5. Missing race/ethnicity forms.
Owners mistakenly believe that it
is their option to offer the form to
tenants. Other owners have a
race/ethnicity form, but it is not
the HUD Form 27061-H. 
4