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Rejecting an Affordable Housing Applicant

If you are an affordable housing provider, it is critical to know the rules regarding when an applicant for housing can be rejected.  The software you use typically has a Waitlist module and some folks rely on the old spreadsheet method even today.  Knowing the rules will greatly reduce complaints filed against the O/A. It’s a MUST in my opinion to have a written guideline, or resident selection plan, so that you can treat every applicant equally. The Civil Rights and Fair Housing laws prohibit discrimination based on race, color, religion, sex, national origin, familial status, or disability. (See Chapters 2, 3, and 4 of the HUD Handbook 4350.3 for more detail.)

               Here are just some Reasons to Reject an applicant;

  1. Household income exceeds the program income limits
  2. Ineligible for the project’s specific requirements such as project designated for specific family types
  3. Household size has exceeded the property’s occupancy standards
  4. Unwilling to disclose and provide proof of Social Security numbers for all family members age 6 or older
  5. Unwilling to provide proof of U.S. citizenship or eligible non-citizens status as required for the assistance program
  6. Refusal to sign and submit verification consent forms or the Authorization for Release of Information (forms HUD-9887 and HUD-9887-A)
  7. Providing false information with the intent to deceive
  8. Household maintains one or more residence
  9. Failure to meet the criminal background screening criteria
  10. Failure to meet the credit history screening criteria (lack of credit history is not a basis for rejection)
  11. Any household member currently engaging in or has engaged in violent criminal activity or other criminal activity that would threaten the health, safety, or right to peaceful enjoyment of the premises by other residents, or the site’s employees, contractors, or agents;
  12. Failure to meet one or more criteria stated in the property’s resident selection plan
  13. The applicant has current or recent problems involving their inability to have the Utilities including but not limited to (Electrical, Gas, Cable and Phone) service in the name of the Head of Household’s name;
  14. Unwilling/unable to pay rent and comply with the lease requirements
  15. The applicant was evicted or lost housing assistance because s/he purposefully falsified, misrepresented or withheld information or submitted inaccurate and/or incomplete information on any application or during the interview related to eligibility, award of preference for admission, allowance, family composition or rent;

Notification Procedures

Rejection notice must be in writing (certified mail recommended). The rejection notice must state the specific reason(s) the application is rejected and must also inform the applicant that he or she has the right to respond within 14 days to appeal or dispute the rejection.

Meetings with Applicants to Discuss the Rejection

HUD requires that any meeting with the applicant must be conducted by someone who did not participate in the initial decision to reject the applicant. The owner or agent has five business days after the meeting to advise the applicant in writing of the final decision on eligibility.

In conclusion, the best way to avoid any dispute or challenge is to lay out the rules up front in the resident selection plan. Applicants should be made aware of the contents in the plan before proceeding with the application process.  And you should always ask if they need an accommodation to assist them in the application process if they have a disability that inhibits them in any way.

Make sure you have these procedures in place or you can end up on the wrong end of ALJ’s gavel!

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