What to do when a HUD Subsidized Tenant Claims “Zero Income”

My first question is​ “​Did you  go through the Zero Income Questionnaire with your Tenant? ​”​The tenant may think that “income” means employment only income.  As we know​, ​and as defined in Chapter 5 of the HUD Handbook 4350.3 Change 4 & Exhibit 5-1, income includes several sources ​ including​ Federal Wage, Non-Federal Wage, SS and SSI​, just to mention a few.  The other source which​ a tenant may overlook is periodic contributions from a family member.  For example, Grandma gives her daughter living in a Section 8 unit $100 per week for groceries, or Dad is making the car payments for his son/daughter.  These recurring contributions are to be included as income.

Now that we have covered that, what about the HUD 50059?  If you have exhausted any possibilities of income and the tenant legitimately claims “Zero Income,” then ​it is necessary to ​process the 50059 to reflect that.  What about the “Section 8 Minimum Rent” rule?  When the tenant claims a Section 8 Minimum Rent hardship exemption, we must (according to the HUD Handbook, page​​ 5-68) determine if it is of temporary nature.  If the tenant feels that he or she​ may be evicted if  the $25.00 minimum rent ​cannot be afforded, the $25.00 must be waived.

Here are some more requirements that must be followed.  When the tenant pays the minimum rent of $25.00, their zero income status must be re-verified​ in the Enterprise Income ​Verification system (EIV) every 90 days.  If ​a ​tenant​ ​​​gets the exemption​,​ you must re-certify and re-verify every 90 days.  There should be an IR in the tenant file every 90 days.  I would suggest that, after you process the IR certification and ​have​ it signed by the tenant, you should place it in the tenant folder  behind a new divider and ​write​ a short note: “Re-verification of tenant claiming zero income”.

​This will enable the person performing your MOR to know why you have a number of IR’s in the tenant folder. This could be the subject for review during an MOR so it is important to get this right.  The intricacies of our industry!