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Processing Certifications
Rural Housing Services Certification Procedure
  I. Certification Processing Overview
To be admitted and continue occupying the property, each tenant must meet basic requirements stated
for each Government Program.
Each household must:
      Have Income that does not exceed the limits defined by the Agency.
      Meet the program definition of an eligible household.

It is our responsibility to calculate the Household composition, Income, assets and deductions to verify
the household’s eligibility. If you encounter something that is not covered in this chapter you should ask
your certification specialist how it should be handled.

A comprehensive list of forms is included at the end of this chapter.


Completing a household Certification involves a 5 step process:
   1. Notification
   2. Gathering
   3. Verification
   4. Reviewing
   5. Submission to Government Agencies.

These steps apply to re-certifications and all steps with the exception of Notification apply to processing
Initial Certifications on applicants prior to move in.


USDA RD – United States Department of Agriculture Rural Development affordable housing program -
also designated below as RD

Tax Credit – also designated below by TC or LIHTC (Low Income Housing Tax Credit)
       Washington State Housing Finance Commission (W.S.H.F.C) program
       Nevada Housing Division (N.H.D.)
       Alaska Housing Finance Commission (A.H.F.C.)

Bond - Washington State Housing Finance Commission (W.S.H.F.C) program. Similar to Tax Credit’s
with one significant tighter restriction regarding students.

RD/TC - A property which is part of both RD and TC programs

I.A.S. – Income Asset Statement – a mandatory form within the certification process

ICO – Internet Compliance Officer – software/application for entering and transmitting information

    Chapter A-5, 09/01/08                               1
Program Handbook URL Reference:

USDA RD 3560                             

LIHTC State of Washington (W.S.H.F.C.) (Bond & T.C.)      

LIHTC                             State                     of                         Nevada

LIHTC State of Alaska                    


This Chapter is designed to facilitate explanation for multiple types of Ad-West Realty Services Inc.
managed properties. USDA Rural Development Only Properties, combination USDA RD and Low
Income Housing Tax Credit mixed properties & properties with Bond Funding. Each Government
program has unique requirements between them, and any may have more strict requirements than the
other. Ad-West Realty Services Inc. also manages LIHTC properties in three (3) different states. Each
State may have additional requirements making that specific program even stricter than others. We are
required to comply with whichever has the stricter guidelines to ensure compliance. Ad-West has
attempted to combine them in the Certification Process. This chapter of the manual is not intended for
Tax Credit only or HUD involved properties. However it may be used as a guide for these properties

        This manual will address all R.D. (only), R.D. /Tax Credit and Bond properties in WA
        STATE, and all R.D. Properties in Nevada and Alaska. Alaska & Nevada R.D./ Tax
        Credit properties may require separate forms that this manual will not contain but are
        available via the Internet at the above listed website. Contact your property manager or
        Cert Specialist for specific details. Unless you are directed to use a specific form due to
        your state directive, please use all forms listed in this manual.

USDA RD and W.S.H.F.C. change their certification requirements continually. At one point they require a
Notary and then the next moment they do not. Therefore Ad-West has adopted the policy of adhering to
appropriate procedures that will suffice for these anticipated changes. W.S.H.F.C. requires that we use
specific forms for the Certification Process and is quite strict in compliance (i.e. no question on any form
may be unanswered.) USDA RD however is a bit more lenient and allows management companies to
use their own forms for compliance. Many Ad-West managed properties are combination properties Tax
Credit and USDA RD properties, requiring Ad-West to combine both types of program compliance.
Therefore Ad-West has set some standards higher than the specific program. The following procedure
has been created to assist in the understanding the expectation on the Certification procedure for your
type of program. USDA RD regulations state “Follow HUD Regulations in completing certifications.”

The most important job as an on site manager at an RD and/or Tax Credit funded property will be to
maintain continuing compliance to the RD/Tax Credit Occupancy Program. Each site manager must be
aware of program requirements and eligibility restrictions when renting units to qualified applicants.
These eligibility requirements encompass properly verifying household income, initially and annually
certifying the residents, correctly vacating residents and moving new residents in, assigning rental
assistance when available, marketing the units and maintaining organized, legible and accurate records.

Certification Checklist.

The Certification Checklist (Ad-west #501) will be helpful to use in tracking the progress of each
Certification. As you review the Income Asset Statement, highlight on the Cert Checklist which 3 party
verification you will need to complete. The Cert Checklist initially notifies you which forms are required at
each Initial and Re-Cert periods. All forms listed with an X are required for all Initial and re-certifications.
All Form’s listed with a T are required for all Tax Credit buildings. This is NOT a list of items to be
submitted to Ad-West but a checklist to assist in completing Certifications.

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   The top portion of the Cert checklist, lists forms that are required for the Certification. The bottom
   portions are forms pertaining to the Leasing practice’s and are not required to be sent in with
   Pull the highlighted 3 party verification for the Tenant to fill out and sign. Form numbers are listed to the
   right of the form name to assist in locating the form. The date that you mail the verification form to the
   appropriate entity, write the date in the “Date Mailed” column. This will help you track which date that you
   mailed the form, and assist in reminding you that follow up calls and or 2 mailing/fax should initiated.

   When the verification form arrives back in your office insert a date in the “Date completed” column on the

A. Income Eligibility

   RD/Tax Credit program requirements state that for purposes of determining qualification as an RD/Tax
   Credit resident the income of applicants will be determined in a manner consistent with the RD/Tax Credit
   Program. It also states that annual income determinations will include some items of income that are not
   included in a taxpayer’s annual income for computing Federal Income Tax liability. Income limits vary by
   county and may be revised annually by the government agencies. Always be sure you use the correct
   limits for your area. Tax Credit properties will also need to know the percent Set Aside for their property
   to determine appropriate income limit. RD Income limits may not be exceeded and the household must
   move once they have gone over the Income Limit. After the first year of compliance, Tax Credit Income
   limits may be exceeded and the resident will still be Tax Credit Eligible.

B. Rural Development Handbook 7 CFR 3560.152 (HB-2 CHP 6)/WSHFC Tax Credit Handbook

   The best way to ensure the Program eligibility of RD/Tax Credit applicants is to follow the procedures
   outlined in the Rural Development Handbook 7 CFR 3560.152 - 156 HB 2 Ch 6 and the Washington State
   Housing Finance Commission Tax Credit Handbook, which can be obtained online at the above website
   or provided during a training seminar. The questionnaires, verification forms, procedures and examples
   found in this manual have been compiled with these guidelines in mind.

C. Housing and Urban Development Handbook 24 CFR 5.603, 609, 611

   Both the Tax Credit program and the Rural Development program both refer to and request following the
   HUD regulations regarding income and Asset Calculations. However each program also has either more
   strict or more lenient regulations in certain areas.

   Ad-West Realty Services Inc. utilizes the I.C.O. computer program to assist in facilitating the Certification
   Process. Specific Certification forms may be obtained by printing them out off of the ICO program.

   For further review on the operation of ICO, please refer to the ICO Handbook.

    II. Notification Procedure
   This process is used during the Re-certification process and involves sending out proper Notices
   informing the tenant of their upcoming Re-cert.

   Setting up an in person meeting with all household members is vital for an efficient cert process. Be sure
   to allow plenty of time for the household members to complete their I.A.S and all necessary 3 party
   verifications. It may also be beneficial requesting that the household members bring in with them names,
   addresses of all financial institutions, account numbers, medical facilities, and employer’s contact
   information as well.

       Chapter A-5, 09/01/08                                3
                Approximately 120 days out from the effective date of the RE-Certification, A record will show up in the
ICO Tip         “Up to Re-cert” column. Once the record appears, you may start printing out and sending Re-
                certification Notices via ICO. Click on the record and then click on “Send notification to recertify”. ICO
                will automatically select the appropriate Notice based upon the time-frame from the effective date.


          Initial Notification Letter: The site manager will forward to the resident the Initial Re-certification Notice
               (Ad-West # 503). Should the resident not respond within ten days, the site manager will forward a
               Follow-up Notice (Ad-West # 504) to the tenant. Each time a notice is sent, the site manager should
               note the date on the Re-certification Checklist. THE SITE MANAGER MUST KEEP COPIES OF ALL

          Follow-up Notice: Should the resident not respond, the site manager will send a Re-Cert. Follow up
              notice (Ad-West #504). Please note the date on the Re-certification checklist and keep copies of all
              for the file. The Follow-up notice informs the resident that if they do not respond they will become
              ineligible residents, lose rental assistance, have their rent increased and be subject to eviction

          30 Day Letter: At 30 days prior to the anniversary date, the resident will be sent a 30 day notice letter
             (Ad-West # 505) via Certified Mail, with Return Receipt. All tenants where their certification is NOT
             completed (signed) must receive a 30 day notice, no matter what issue is holding up their

          In the event the resident never makes contact with the office to re-certify within 30 days of initial re-cert,
          the site manager must notify the Certification Department and the Property Manager. Further, the site
          manager will be asked to start eviction proceedings on the resident once the anniversary date has


           III. Gathering Procedure
          The Gathering process is one of the most crucial procedures in completing the certification. This process
          will require meeting with all of the adult household members, having each member completely fill out an
          Income Asset Statement (I.A.S.). It will direct you to an insight of the total Income, Assets, and
          Deductions for the entire household.

          The I.A.S. is the Hub of the Gathering process. It has very specific questions for the household member
          to answer. Any “yes” answer must have full additional information area’s completed. The I.A.S. will direct
          you which third party verifications to send out. All questions MUST be answered and NO blank may
          be left unanswered. A simple N/A is sufficient for irrelevant information.
          3 party verification forms have been created for specific income, asset or deduction verification. To
          select the appropriate form refer to the I.A.S. the Certification Checklist, the table of forms at the end of
          this chapter or refer to a Cert Specialist. The type of property, will determine which verifications must be

                    The Interview

           1.       Interview All Adult Household Members: Each applicant that applies to live in an RHS/Tax
                      Credit unit will need to have their household’s eligibility determined. The first step in this
                      process is to interview all household members 18 years of age or older. This is done by
                      conducting a one-on-one interview with all members of the household. It may be difficult to get
                      all members together at one time; however, it will be important to interview each member fully.

                Chapter A-5, 09/01/08                                4
 2.      Income/Asset Statement (I.A.S.): When interviewing the household, use the Income/Asset
           Statement (Ad-West # 507) to obtain complete and accurate information. This questionnaire
           lists all household composition, income, asset types, and deduction eligibility requirements. Be
           sure each question is answered completely by all adult household members. The applicant will
           answer “YES” or “NO” to each question listed. Have each adult member complete a separate
           I.A.S. This will help to avoid any confusion for the applicants or mix-ups in stating all income
           and asset sources. All adult household members should sign the Income/Asset Statement
           indicating all information given is true and complete.

 3.      Review the Income Asset Statement: Before the interview is complete, review all written
          answers and statements made. It is important for the site manager to review the I.A.S.
          thoroughly to be sure there are no “holes” or missing information. Site Managers should not be
          afraid to ask for clarification if the information does not make sense. (For example, the
          applicant says he does not have a checking account, yet he pays his application fee or rent
          with a check.) or (the Household member states they have no income yet, they have a cell
          phone, car, auto insurance, gas, and new toys.)

           When reviewing I.A.S make sure:

           For all questions that the tenant answers Yes to the following information is required:
           Source – Name of employer, Military Branch, or other “source” of the Income

           Address/Phone #’s: of the source

           Household Member: Name of the member of the household who earns or received the income

           Amount: Annual Income received from the Source. If resident is uncertain of annual amount
           they may state amount monthly (with it noted as monthly). Any amount that is shown and not
           based annually must state the basis.

           For those questions answered No, the resident does not need to expand on the information.


The Income Asset Statement (I.A.S.) (Ad-west #507) is the key to a successful Certification. The I.A.S.
has been created as an informative statement by the Tenant to disclose the Household composition,
Total Household Income source, Assets and Deductible expenses.

Each question must be answered with a yes or no. Each Yes answer must give a detailed description so
that appropriate 3 party verifications can be created from the data. No answer may be unanswered, nor
blank. Double check the entire form for accuracy and completeness.

The property name, address, manager’s name, phone number and fax number along with type of
certification (Initial Move in cert, Annual Re-cert or Interim cert) should be filled out by the onsite manager.
The tenant is to fill out the remainder of the form.

        The household composition section is used to determine the entire population that will be living in
        the apartment unit.

         The top entry of the household composition must be the individual filling out that specific I.A.S.
         Then proceed by filling in the remainder of the household members.

         Each child must be verified that they have authorization to be living with that individual to receive
         the child Deduction of $480.00. For example: if a grand child is living with their grand parent,

      Chapter A-5, 09/01/08                               5
    some sort of authorization must be provided that they have guardianship over that child. Court
    documents giving guardianship or a Notarized document from the parents is sufficient

    A copy of social security card’s for each occupant 6 years of age and older and a copy of photo
    ID of all adults over the age of 18 must be obtained and submitted with each certification.
    Increase the copy size 150% of normal so that the details can be easily visible. An initial copy
    may be made at move in, and subsequent copies may be made each year as long as the I.D. is
    valid and is legible each year.

    Relationship: Write the relationship to the individual filling out the I.A.S. Is the person stated
       “Self, wife, girlfriend, husband, boy friend, son, daughter, etc”.

    Sex: Male or Female.

    Date of Birth: Write in the exact date of birth for that individual.

    Social Security Number: We are required to obtain the social security number, Alien
       Identification Number, or Registration number of each individual above the age of 12 months
       or have the Identification Certification (form Ad-West 511) completed.

    Full Time Student: Will this individual be a full time student as decided by the educational
        institution they may be attending.

    Questions: The following questions on the I.A.S. regarding Household Composition are to help
       us understand whether they anticipate any additions or deletions to the household during the
       next 12 months. If any of the questions are marked “Yes” a detailed explanation must be
       written in the appropriate line. Detailed explanation will prevent any future questions or

   The questions within this section are geared to extract all possible income that tenant may be

    Review each answer verifying that each question has been answered property and in detail. It is
    suggested that the tenant bring in documents with addresses, account numbers, phone numbers,
    fax numbers, addresses etc while filing out the I.A.S.

    Each question has a verification form listed on the left side that must be used to verify the tenants
    income source.

    Assist the resident with completing the form required to verify the income. If there is more than
    one source for a type of income you will need to have the resident complete one for each source
    (i.e., two part time jobs would require two Employment Verifications)

ASSET INFORMATION: The questions within this section are geared to extract all possible assets
   that tenant may possess. Review each answer verifying that each question has been answered
   properly and in detail. It is suggested that the tenant bring in documents with addresses, account
   numbers, phone numbers, fax numbers, addresses etc while filing out the I.A.S.

    Each question has a verification form listed on the left side that must be used to verify each of the
    tenants Asset. If the tenant has more than one source for any asset you will need separate
    forms for each source (i.e., more than one Bank)

ZERO INCOME: Any adult member of the household who does not participate in providing income to
   the household must be listed on the I.A.S. SSI, Social Security, Public Assistance (i.e. DSHS,

Chapter A-5, 09/01/08                                 6
      TANF), Pensions, child Support are all considered Income. This would be any household
      member who has absolutely zero (NO Financial contribution to the household) Income, or inflow
      of finances.


      Tax Credit: Households with all members who are full time students are not allowed in any Tax
      Credit subsidized property with limited exceptions. The exceptions are “Full time students are
      eligible for occupancy if the student(s) in occupancy is/are:

         A.   Receiving assistance under Title IV of the Social Security Act:
         B.   Enrolled in a job training program receiving assistance under the Job Training Partnership
              Act or under similar federal, state or local programs;
         C.   A single parent and neither the parent or child(ren) is/are a dependent for federal income
              tax purposes of another individual (generally this means the child must be the student’s
              dependent under IRS rules).
         D.   Married and file a joint return;
         E.   Determined to otherwise comply with defined IRS requirements.

      BOND: Households with all members who are full time students are not allowed in any Bond
      Financed Property with one exception. The following is the ONLY exception where occupancy by
      full time students is allowed:

         A.    A unit occupied entirely by full time students if such students are married and files a joint
               tax return.

      RD only; Children who are attending K - 12 are considered full time students. Ad-West Realty
      Services Inc. requires all Household members to answer this question, but are not required to fill
      out the required forms (Ad-West #516 & 524) unless an adult resident qualifies for deduction
      based on student status in such cases as a child over 18 who attends college full time.


      Any tenant requiring a live in care attendant must have a “Reasonable Accommodation Request
      Form (R.A.R.F.)” (Ad-West # 235) filled out and signed by a physician. The R.A.R.F. must
      specify that they are required to have a live in care attendant. A Live in Care Attendant is not
      considered a “Tenant” therefore we do NOT count their income, nor do we place them on the
      certification or the Lease. They are present to assist the tenant. We are required to Screen the
      care provider for Criminal activity ONLY. Live In Care Attendant Addendum (Ad-West # 523)
      must be completed and signed by the Live In care Attendant and included with the certification.


      Child CARE: Child care expenses are allowed to be deducted for children under the age of 13
          years of age to allow the tenant to work attend vocational or academic courses only. If the
          Tenant is not participating in work or to attend vocational or academic courses they are not
          allowed the child care deduction.

          All child care expenses relating to their minor children are allowed to be deducted from their
          income. (Ad-West # 570) is to be completed for each child/childcare facility.

      MEDICAL: Elderly and Disabled households are allowed to deduct all medical related expenses
         projected over the following 12 months which exceed the percentage of their total income as
         set by the government agency. Medical expenses include items such as:
             Medicare

   Chapter A-5, 09/01/08                               7
              Insurance Premiums
              Prescriptions and over the counter medications medically required (such as aspirin)
              Patient Co-Pay for services and prescriptions

           One time large medical charges/expenses may be deducted during the following year.
           Further information is available in the Verifying section under Deductions.

   CERTIFICATION AGREEMENT: This statement is required by all tenants stating they will cooperate
      in completing their certification in a timely manner. It also authorizes you to obtain their signature
      on the certification page before approval from the Ad-West Realty Services Inc. Cert Specialist
      approval. And upon a denied certification due to re-work, the Tenant will cooperate in re-Signing
      a corrected Certification page.

   SIGNATURE CLAUSE: All I.A.S. must be signed by the originator of the said I.A.S.

 IV. Verifying Procedure

Each household member must provide the income, deduction, and household information needed to
make income determinations. Most of this information should be provided on the Income Asset
Statement, but some additional follow-ups with the household member may be required.

   Verification Requirements

       All Verifications must be faxed or mailed by management. At no time are applicants/tenants
       permitted to hand deliver verification. Written verifications provided by third-party sources or
       documents prepared by third-party sources, signed and dated are generally accepted as backup.
       Oral verifications, if accepted, must be documented carefully.

       Written income-related verifications are valid for 90 days and may be valid for an additional 30
       days with oral verification at the end of the 90-day period. In no case may information that is
       older than 120 days be used. Written documentation must be used for all oral verification’s.

       When it is not immediately possible to obtain the written verification from the income or asset
       source, the income or asset may be temporarily verified by actually examining the income
       checks, check stubs, bank statements or other reliable data the person possesses which
       indicates gross income. Income and Asset verification is REQUIRED for all tenants.

           After interviewing the Household members with the I.A.S., the next step is to verify the
           income, assets, deductions and other eligibility information given on the I.A.S. (Ad-West #
           507). We are verifying the anticipated income and deductions projecting them for the next 12

           Review the I.A.S. and note the information they have stated. (Noted by the selection of “YES”
           on the I.A.S. questions). Each I.A.S. must be reviewed and verified independently with a 3
           party verification form. Third-party verification of income and employment, as applicable, is
           required whenever it is possible or available.

               Third-Party Verifications:

                   Written third-party verifications should be attempted first. Third-Party verifications are
                   written verifications authorized by the tenant and mailed or faxed to the 3 party

   Chapter A-5, 09/01/08                               8
               verifier. The verifications are received from the applicable third-party source
               independent from the applicant or other household members. Such verifications are
               obtained by having the household member sign the appropriate 3 party verification
               form dictated by the I.A.S. granting the site manager the authority to request the
               information. Verification forms must be mailed, faxed or delivered to the source by
               the site manager. The “Verification cover Letter” (Ad-west #121) is recommended to
               accompany the verification form to the 3 party verifier.

               A list of Verifications is listed further in this chapter. Depending upon the type of
               program your property is involved with determines the applicable forms that need to
               be used. Some forms are appropriate for both programs.

               NOTE: The household member cannot deliver the verification to the source or
               return the completed verification to the manager. The information gathering
               process must be independent from the applicant or the household member
               whose information is being verified.

               Completed third-party verification must contain enough information for you to use in
               the certification process to accurately calculate the necessary information. Every
               question on the form must be answered. Questions not relevant must be
               answered with either a “No” or “N/A”. If the information is unclear or incomplete, use
               the Phone Clarification Record (Ad-West # 14), to clarify the missing information.
               This can be done via in person or telephone. It is best to have all third party
               verification in written form with a signature of the verifier, title and date.

               Third-party verifications are effective for 90 days from the date the information was
               completed on the form. This means it is good 90 days from the date the third-party
               source SIGNED the form, NOT 90 days from the date you received it in your office.

           Second-party Verifications:

               Second-Party verifications should only be accepted when it is not possible to get
               third-party verification. It is imperative that you document in the cert file why you
               were unable to acquire 3 party verifications. Second-party verifications are
               documents that contain information regarding the item in question such as check
               stubs, grant award letters, bank statements and W-2 forms.

               Second-Party verifications should be completed documents with original signatures if
               applicable. It is best if you can make copies of these verifications from the original
               copy whenever possible.

               If the second-party verification is verifying a reoccurring item, it may be necessary to
               gather several documents. For example, if check stubs are being used to verify
               employment income, stubs for an applicable period of time will need to be gathered
               to prove the average income. Do not use one such verification to verify information
               that could be subject to changes.

           First-Party Affidavits

               Some information cannot be verified by third or second-party verifications. Examples
               include self-employment and contents of safety deposit box. When obtaining this
               type of verification, be sure to have the applicant or applicable household member
               sign the correct affidavit form. If you are using this type of verification due to the
               inability or lack of cooperation from a 3 party source document in the cert file why
                                                                     rd   nd
               you are using a first party verification rather than 3 or 2 .

Chapter A-5, 09/01/08                              9
                           Some forms must be signed in the presence of a Notary Public. It is permissible for
                           the Household member to take that form to a Notary and return. Forms requiring a
                           Notary Public are Listed below, but not limited to:

                                                                  R.D.              R.D/T.C.
               Gift Affidavit          (Ad-West #558)             Yes               Yes
               Child Support Affidavit (Ad-West #554)             Yes               Yes
               Affidavit of Tip Income (Ad-West #543)             No                No

     Verification Procedure

              HOUSEHOLD COMPOSITION: Verification of household composition can be accomplished
               through a variety of sources and documents. For example, a birth certificate or custody
               agreement verifies that a minor child is part of the household. Also, divorce or separation
               agreements can verify that an individual is no longer a member of the household.

              INCOME: All sources of income must be verified with the appropriate verification form(s) as
               dictated by the Income Asset Statement.

              ASSET: All assets must be verified and income from those assets must be calculated and added
               to Income.

              DISABILITY: Disabilities are verified only if necessary to qualify the household as an elderly
               family, or if a disability affects the household’s eligibility for deductions from income. Verification
               may be provided by a physician, a clinic, welfare agency, the Social Security Administration, or
               other knowledgeable source.

              CHILD CARE: Household’s only get the Child Care deduction if it allows the tenant or co-tenant
               to work or go to school. We then only allow those hours they are working and/or going to school
               plus appropriate travel time to and from. If they are neither working nor going to school they do
               not get the child care deduction. Child Care verification form (Ad-West #570).

     All original verifications must be maintained in the tenants file.
               Once all Verifications have been sent out to the appropriate 3 party verifiers, click on the “Green”
 ICO Tip       button in the ICO record. This will move the “Status” of the Tenant record from gathering mode to
               Verifying mode.
     Closely monitor the status of the outstanding verifications. If necessary contact 3 parties via phone or
                                 nd    rd
     refax verification noting “2 or 3 request. It is imperative that the certification gets completed and
     submitted in a timely manner. Document all requests and contacts with 3 party verifiers.

     Once all verification forms have been returned either via fax or mail, a thorough review of each statement
     must be made verifying that all questions have been answered. Any blank answers mean you MUST use
     the Phone verification form to acquire and document the missing information.

               Enter into ICO all information for all accounts, income etc. Example; Even if the bank account
               states (0) Zero, enter that amount into ICO. If the family is receiving exempt income (i.e. food
               stamps) enter that amount into ICO under the income category of “Exempt Income”. This will
ICO Tip        enable any future viewers to understand that the zero balance account and exempt income was
               noted and that nothing was over looked. If a bank balance is negative enter zero as we are not
               permitted to use negative amounts. USDA RD will also question how a tenant is living on such
               minimal income. Including the Food stamps income will answer any questions that may arise.

           Chapter A-5, 09/01/08                                10
    It is quite helpful to circle the amount on the verification form that you are using. It is quite difficult at
    times to locate the exact number used. IF your state agency does not allow writing on verifications
    disregard this request.

    Including a written explanation or your calculations on a separate form will assist future viewers on
    understanding how you came up with your numbers.

             When entering Wages in the ICO program make sure you utilize the “Verification function” and
             click on “print, post and close” and include that wage calculation page behind the employment
             verification page that it corresponds to. You can calculate the Year to Date, print post and close.
             Then calculate the hours times wage rate, print post and close to compare these two calculations
             to see which is higher. Be sure that you use the higher calculation and post that as your final
             calculation in ICO.


    This Section is completed automatically in the ICO program. The following information explains the basis
    of the ICO calculations.

    LIHTC (TC/BOND) bases their eligibility by GROSS income of the entire household.

    USDA (RD) bases their eligibility by Net Income. This is calculated by Total Gross income minus any
    eligible deductions (Child care, medical, etc).

    After obtaining all completed verifications, R.D./Tax Credit eligibility will need to be determined. Be sure
    to question & Document all unusual circumstances or information.

    1. Determining Total Household Income: Total household income equals the sum of all annualized
        household incomes plus the applicable amount of income from the total household assets. To
        correctly determine total household income, you will need to be sure to separate income types from
        asset income types. If this is not done correctly, total household income can be miscalculated leading
        to the possibility of moving in a Program ineligible applicant or turning away a Program eligible

          A. Calculating Annual Income: Each household income amount must be annualized and then
             added together.

             1. Definition of Income: (Refer to 7 CFR 3560 HB-2) the first step in this process is to separate
                the income types from the asset income types as they are calculated differently. Income is a
                type of money that is received on a regular, recurring basis.

                 a. The gross amount (before any deductions) of wages, salaries, overtime pay,
                    commissions, fees, tips and bonuses

                 b. The net income from a business or profession.

                 c. Full amount of periodic payments received from: social security or SSI (inclusive of
                    payments received for minors for their own support or by adults on behalf of minors and
                    before deduction of Medicare) Annuities, Insurance Policies, Retirement Funds,
                    Pensions, Disability or death benefits (except settlements), other regular periodic sources
                    of income including lottery earnings or a lump sum payment

                 d. Payments in lieu of earnings such as: unemployment, workmen's compensation,
                    severance pay

          Chapter A-5, 09/01/08                              11
              e. Alimony and Child Support: Count the amount the tenant or co-tenant can reasonably
                 expect to receive. If this amount varies from amounts listed on the divorce or other legal
                 decrees, the revised amount can be used with proof of a lesser payment or non-payment.
                 The burden of proof is on the resident

              f.   Regularly recurring contributions or gifts received from persons not residing in the unit.
                   This may include rental or utility payments paid on behalf of the resident to the Utility
                   Company, clothing, food, cell phone, etc.

              g. Veteran's Administration Benefits or Disability

              h. Earned income of full time students 18 years of age and older (count the first $480).

              i.   Military Pay (except hazard duty pay for persons exposed to hostile fire)

              j.   For example, employment, social security, and pension payments received periodically,
                   (i.e., monthly, quarterly).

       2. Annualizing Income: All income must be annualized for the period of 12 months from the
          expected Certification effective date.

              NOTE: Annual incomes are always projected forward 12 months. Do not use past
              income to determine income eligibility unless it is the only means available. An example of a
              time when you can use past income would be self-employment. An applicant may not be able
              to determine the amount of income for the next 12 months, so you may need to rely on past

              To annualize income, multiply the income amount by the correct number of periods that
              reflect the amount of time it will be received in 12 months. Annualized income amounts are
              then added together.

Table A-5-1
                              (a) Hourly                X 2080 Hours
                              (b) Weekly                x 52 weeks
                              (c) Biweekly              x 26 weeks
                              (d) Semimonthly           x 24 weeks
                              (e) Monthly               x 12 months
                              (f) Bimonthly             x 6 months
                              (g) Quarterly             x 4 months

   B. Calculating Asset Income: To determine asset income, the annual income earned on each asset
      must be determined and then added together. Because some assets do not earn income, USDA
      also determined that the imputed income of the total assets over $5,000 must be calculated.
      Asset income is the greater of the actual income and the imputed income.

       1. Definition of an Asset: An asset is defined as any amount of money that is in a lump sum
          amount that the household has access to. If the money is not in a lump sum amount, it is an
          income. If the household does not have access to the money, is excluded from the total
          household income calculation. Examples of assets are checking accounts, Certificates of
          Deposits, and pension amounts received in one single amount. Examples of assets that are
          not accessible are trust funds that cannot be touched until the person turns a certain age or
          irrevocable funeral trusts.

       2. Determining Actual Asset Income: Managers must determine the income generated from
          each asset by verifying the amount of annual interest, yields or rental income earned. Actual
          asset income is the sum of all income amounts.

   Chapter A-5, 09/01/08                                  12

          a. Interest bearing savings accounts. Multiply the cash value of the asset by the annual
             interest rate

          b. Stocks: Determine the amount of expected annual yield.

          c. Rental income: Multiply the monthly rents by 12. Then deduct all expenses including
             Mortgage payment, insurance, taxes, Utilities, and maintenance costs.

      3. Determining Imputed Asset Income: The total cash value of each income must be added
         together and then the sum must be multiplied by the current Passbook Rate (listed on the
         Project Data Printout) only if the assets are over $5,000.

          a. NET Cash Value: The net cash value is the remaining portion of the asset after any
             expenses are deducted if the asset would be converted to cash.

             NOTE: The applicant does not have to convert the asset to cash, but the calculation must
             be done as if it was being converted to cash.

    A. Calculating Total GROSS Household Income: Total GROSS household income is the sum of
       the annual income plus the asset income or the imputed income, whichever is greater.

How to determine NET income from GROSS Income..

    D. Calculating Deductions

      Adjusted income is used to determine eligibility for USDA RD programs, as well as eligibility for
      and the amount of payment subsidies under rental assistance.

      Adjusted income is calculated by subtracting from annual income any of five deductions that
      apply to the household. Not all households are eligible for all deductions. Refer to (Refer to 7
      CFR 3560 HB-2 Chapter 6 Exhibit 6C) for more detailed information regarding deductions.

      1. Elderly Household Deductions:

         a. A single $400 deduction is made from annual income for any elderly household. To be
            considered an elderly household, the head of household, spouse, or sole member of a
            household who is party to the lease must be 62 years of age or older, or an individual with
            a disability.

         b. In the case of a family where the deceased tenant or spouse was at least 62 years old or
            an individual with disabilities, the surviving household members may continue to reside in a
            housing project after the departure or death of the tenant or co-tenant, provided that:
             They are eligible with respect to adjusted income.
             The surviving household members occupied the dwelling with the deceased member at
                 the time of death.
             They execute a tenant certification form establishing their own tenancy and
             They have the legal ability to sign a lease for the rental unit, except where a legal
                 guardian may sign when the tenant or member is otherwise eligible.

         c. Non-elderly or non-disabled surviving members of an elderly or disabled household are not
            entitled to the elderly family adjustment to income.

      2. Deductions for Disability Expenses:

   Chapter A-5, 09/01/08                             13
         Reasonable expenses for the care of an individual with disabilities in excess of three
         percent of annual income may be deducted from annual income if the expenses:
          Enable the individual with disabilities or another household member to work;
          Are not reimbursable from insurance or any other source; and
          Do not exceed the amount of income earned by the person who is able to work as a
             result of the expenses.

           Typical Disability Assistance Expenses

          Care attendant to assist an individual with disabilities with activities of daily living directly
            related to permitting the individual or another household member to work.
          Special apparatus, such as wheelchairs, ramps, and adaptations to vehicles or workplace
            equipment, if directly related to permitting the individual with disabilities or another
            household member to work.

   3. Deduction for Medical Expenses (for elderly households only)

   Medical expenses may be deducted from annual income for elderly households if the expenses;
           (1) will not be reimbursed by insurance or another source; and
           (2) When combined with any disability assistance expenses are in excess of three
               percent of annual income.

   If the household qualifies for the medical expenses deduction, expenses of all members are
   considered. For example, if a household included the head (grandmother, age 64) her son (age
   37), and her granddaughter (age 6), the medical expenses of all three household member would
   be considered.

   There are two types of medical expenses; On-going medical expense, and one time expense.

   Ongoing Medical Expense:
   A medical expense incurred to the household on a consistent and predictable basis. i.e. (An
   ongoing medical ailment) diabetic insulin, needles, heart medication, yearly doctor visits for a
   specific ongoing medical condition, etc. The medical expense must be clearly predictable as an
   ongoing medical expense.

   One Time Medical Expense: (Must have been paid in full)
   A medical cost incurred by the household that was not expected. i.e. Dr. Visit because of a one
   time illness (Flue, Cold, pneumonia, TB, etc). And Medication for a one time medical condition
   (antibiotics taken for a one time period). Unpredicted hospital stay, Dr. Visit, or Specialist visit,
   due to an accident, sudden temporary illness etc.

                    Medical expenses may be deducted from annual income for elderly
                    households if the expenses (1) will not be reimbursed by insurance
                    or another source; and (2) when combined with any disability
                    assistance expenses are in excess of three percent of annual
                    income. 4350.3 Ch5

   If household qualifies for the medical expense deduction, expenses of all members are

   One of the most challenging aspects of determining allowable medical expenses is estimating a
   household’s medical expense for the coming year. While some anticipated expenses can be
   documented easily, others need to be estimated. Estimates must be realistic.

Chapter A-5, 09/01/08                                14
                    Refer to the HUD Manual 4350.3 Table 5-3 for example of medical expenses
                    that are deductible and nondeductible. The USDA RD and HUD Manual allow
                    room for Management Companies to write their own policies regarding certain
                    issues. Medical is one issue. This section explains the Ad-West Realty Services
                    Inc. Medical calculation Policy.

   This policy was written to help create a direction and flow with each medical deduction.
   Medical deductions can be quite confusing, and complicated. This policy is an attempt at
   making it fair and reasonable for everyone involved. Any deviation from the policy must
   be with the explicit approval from the Cert office Manager or the Property Manager.

   On-Going Medical Expenses:

           Prescription & Physician visits
           On-Going Prescription medical expenses must be proven to occur and be ongoing. This
           can be proven by one of two methods;
           A.       Form #571 may be sent to the third party, verifying the ongoing expense.
                    Detailed information as to the cost for the next 12 months must be provided.
           B.       Each Medical expense must be entered Into ICO on a separate line.
                    Prescriptions from the same pharmacy may be listed on same line.
           C.       As a last resort, Tenant may produce bill’s showing the ongoing expense, and
                    itemized expense. The billing must be 6 months worth showing an ongoing
                    consistent expense. Documentation on why 3 party written verification was not
                    able to be obtained must accommodate this verification method.

           Over the Counter Expenses
           All on-going medical expenses that are over-the-counter items must be accompanied with
           a written Physicians note but must contain the specific information on form #572. Only
           those items listed will be given the deduction. Expenses are then written on the
           Certification Medical Worksheet (Ad-West #591) and entered into ICO on one expense
           line. Use for price information. Look up specific items on that web
           site print out the cost and include with your certification.

   One-Time Medical Expense:

           A $400 deduction is automatically given to all qualified Elderly Households to help offset
           unpredictable medical costs. Accumulative One time medical expense over $100.00 may
           be deducted on the next Re-Certification as long as they meet the following Criteria:
           A.      The one time expense must be paid in full by the household and proof of
                    payment(s) must accompany the cert. (i.e. billing and canceled check)
                    Expense(s) reimbursed by third party source are not allowed.
           B.      Expense must have occurred in the past 12 months ONLY. All verifications,
                    statements, etc must be dated within 12 months of the effective cert date.
           C.      Total amount of accumulated expenses (for the past 12 months) must exceed
                    $100 for expense to be allowed. Accumulated one time expense amounts (for
                    the past 12 months) under $100 will not be allowed. No expense already
                    deducted on previous cert will be allowed in this total.
           D.      One-Time Over-The-Counter Medical expense will not be allowed unless it is
                    accompanied with a Dr’s. Written recommendation that the tenant needs such

   Outstanding Medical Bills;

           If a medical bill is outstanding and the household is making regular (consistent) payments,
           only the average yearly amount paid on that bill will be allowed to be deducted. Once the

Chapter A-5, 09/01/08                              15
           full value of the bill has been deducted the household no longer will be eligible for a
           deduction even though they may have missed some payments, and they still owe on that

           If payments towards the bill are greater than 12 months, it is the manager’s responsibility
           to document in each cert a copy of the itemization schedule of what has been deducted
           and for which past cert it was deducted and the potential future payment’s for future cert

                   (Example) Tenant owes a total of $10,000 on a medical bill. The
                   medical provider has established a payment schedule of $100.00 per
                   month for a total of $12,000.00 per year. Only $12,000.00 per year may
                   be deducted. This payment will continue for 8.3 years. Therefore the
                   tenant may deduct $1,200.00 for each cert for 8 years. On year 9 the
                   tenant may only deduct $400.00.

           If the tenant pay’s additional monies one year, the Itemization must be reconfigured and
           no additional deduction is allowed for that additional payment.

           If the tenant misses payments during the year and pay less than anticipated, no change
           to the itemization is to occur. However if a consistent pattern occurs where they miss
           payments during two years out of the itemization period, then a reconfiguration of the
           itemization is to occur lowering their deduction amount to the lower payment years

                   (Example) On year on tenant only paid $1,000.00 toward bill. On year
                   two the tenant paid the full $1,200.00 toward bill. On year three the
                   tenant only paid $1,000.00. A new itemization would be configured o
                   show a yearly payment and deduction of $1,000.00

   Dependent Deduction

   A deduction from annual income of $480 is made for each household member who qualifies as a
   dependent. Dependents are household members who are not the head or spouse (tenant or co-
   tenant) and who are age 17 or younger, an individual with a disability, or a full-time student. If an
   applicant requests a deduction for dependents attending school full time, the applicant must
   provide documentation from the school that the dependent is enrolled as a full time student.

   Child Care Expenses

   Reasonable un-reimbursed child care expenses for the care of children under the age of 13 are
   deducted from annual income if: (1) the care enables a household member to work or go to
   school; (2) no other adult household member is available to care for the children; and (3) in the
   case of child care that enables a household member to work, the expenses deducted do not
   exceed the income generated by that household member. IF the child care provider is a
   household member, the cost of the children’s care cannot be deducted.

   To qualify for the deduction, the applicant must:

           1. Identify the children who are receiving the child care and the household member who
              can work or go to school as a result of the care.
           2. Demonstrate that there is no adult household member available or able to care for
              the children:
           3. Identify the child care provider, the hours of child care provided, and the costs.
           4. If the expenses enable a household member to go to school, identify the educational
              institution. The household member need not be a full time student.

Chapter A-5, 09/01/08                              16
                Verification of Child Care (Ad-West #570) would be used to verify the actual cost for calculating
                this deduction.

                Student Status Verification (Ad-West #524) would be used to verify student status at an
                educational facility.

          V. Reviewing Procedure
                Once you have entered the data into the ICO program, select the “Total” Tab in the specific
                tenant certification. Review all of the details to verify Eligibility under the Rural Development
                Program. Also under the “total” tab review the bottom area titled Flags and Concerns”. USDA
                may reject a certification for any number of those reasons. It would be in our best interest that we
                resolve these issues along with your certification submission to ad-West Cert office. This will
                prevent any further call or request to produce documents to solve these Denied Certifications in
                the future. An example is an extreme increase of Income – if the household has more than one
                person able to work and another starts to work that including that explanation accounts for the
                Income increase that might otherwise raise questions. After reviewing the information in ICO,
                close the record and reopen it prior to printing documents o that information for the resident is
                updated correctly or the forms may print with incorrect information.

      If your property is also Tax Credit, then select the “Tax Credit” tab to review the Tax Credit Eligibility.
      Verify they meet the tax credit income limits and satisfy your appropriate set asides. If you have any
      question always consult the Certification Specialist or your Property Manager.

      Print out the necessary documents (i.e. Cert, Cert Summary, R.H.S. Lease Addendum, Notice of Rent
      Increase due to Re-Certification, Tax Credit Certification page from ICO) for submission to Ad-West.

      In order to keep consistency and efficiency with both the Tax Credit commission and USDA it is
      imperative that you file, and submit to the Ad-West Cert Office all cert’s in the order shown in table A-5-2.
      Depending upon which type of property you are, you will have more or less Verification forms. Please
      Submit your Certification’s paper-clipped and NOT STAPLED.

      Ad-West Cert Office Roles and Responsibilities:

            A. Review each certification for Accuracy in calculations. This will help prevent any financial fines
               and/or tax credit recapture.
            B. Work with Auditors who frequent our office year round. They are required to view sample
               certifications at their will. It is easier to have a second set of books here in our office for them to
            C. Work with other agencies, owners, syndicators, state of WA, etc. who require monthly reports and
            D. Electronically transmit Certs to USDA
            E. Produce the mortgage calculation and statement for payment.
            F. Responsible for accurately billing USDA for RA payments.
            G. Work with USDA to resolve all Flags & concerns on rejected Certifications.

      Additional Cert Information

               Initial Move in paperwork is to be FAXED to the Ad-West Certification Office w/o signatures. ALL
                Annual and Interim Certification packets must be MAILED and received 45 days prior to the
                Effective date.

               DO NOT sign new move in Certification’s until they have been “approved” by the Ad-West cert
                office. All Annual and Interim Certifications may be submitted Signed.

            Chapter A-5, 09/01/08                                17
       The Ad-West Cert office will review the certifications as if USDA or the state LIHTC Office is
        reviewing the Cert’s themselves. They will submit in a timely manner any necessary requests via
        ICO and/or Email or FAX.         Please respond within a timely manner faxing necessary
        documentations as quickly as possible, with a cert cover sheet. Contact the Cert office if you
        have any questions or concerns regarding their request.

       Please include the Cert Cover sheet with all correspondence to the Ad-west Cert office. Only fax
        certifications and cert paperwork to 425.391.3938.

       The Ad-West Certification office will Review in priority order all certifications. All approved
        certifications will be marked “Approved” in the ICO program, and “Ready for signature”. At this
        point you will have the Tenant and Co-Tenant sign the certification, (Tax Credit certification,
        R.H.S. Lease Addendum, Notice of Rent Change resulting from Re-Certification and Tax Credit
        &/or Bond Lease Rider(s) and Fax them to the Ad-West Cert office with a Cert Cover sheet.

 VI. Submission to Government Agencies
Ad-West is required to submit to USDA via electronic means all of the data from the certification on the
10 of the month.

Upon submission to USDA, Ad-West must wait for a written confirmation of acceptance by the 10th of the
month. Numerous times USDA will deny a certification for some unknown reason and will require quick
effort on our part to solve and rectify the issue so that the certification is accepted by the first of the
month. Failure to do so in a timely manner will result in financial fines by both the property and Ad-West
Realty Services Inc.

Common reasons a certification is denied:
          Incomplete or inaccurate information entered (i.e. Social Security numbers, Date of birth).
          Tenant registered living at another USDA RD property.
          Large Income or Deduction change from previous year.
          Missing Information.
          Change of household composition not properly transmitted to USDA

All certifications not accepted by USDA by the deadline will result in the Tenant paying NOTE rate rent
and/or financial fines to the property and/or management company.

Tax Credit: requires yearly reports to be submitted every January for the past 12 months.

Bond Financing: requires yearly reports to be submitted every January for the past 12 months.

Nevada Housing finance commission: Online reporting allows immediate access to all Tax Credit
Records for each property.

Alaska Finance Commission: requires yearly reports to be submitted every January for the past 12

 VII. Re-Certification Procedures
        Annual and Interim Re-certification

        Each resident must be re-certified at least annually or whenever the household's income or
        allowances (child care and/or medical) goes up by $100.00 or more per month ($1200 per year)
        or goes down by $50.00 or more per month to prove continuing Program eligibility. Annually is
        defined as within 12 months from the last full certification date (changes due to approved property

    Chapter A-5, 09/01/08                              18
     rate changes or assignment of RA do not reset annual certification date but all other Interim re-
     certifications do). When completing re-certifications, the same procedure must be used as when
     completing the initial certification. All income, assets, deductions and program eligibility must be
     re-verified using the same procedure as stated above. When the annual re-certification is
     complete, and the resident is determined to be program qualified, a new Certification Form must
     be completed.

     Annual re-certifications and Interim re-certifications are to be completed in an annual basis in the
     same format as initial certifications. However the following are the differences:

     1. Pull the previous certification and double check the income differences, household
        composition differences and deduction differences. Question large discrepancies.

     2. Annual and Interim Cert’s must be mailed into the Ad-west office no later than 45 days before
        their effective date. DO NOT FAX Annual Re-Certifications!

     Re-certifications and Interim Cert’s are to be mailed into the Ad-West office 45 days before their
     effective date. You have the option of sending them in signed by the tenant and Co-Tenant at
     that time, or you may wait for approval.

VIII. Other Certification Procedures
     CERTIFICATION OF TRANSFERS: All transfers are planned. Certs must be in the office by the
     15 of the month prior to the effective date. The transfer must be the last day of the month
     unless multiple transfers take place. Coordinate with your PM and the cert office for multiple

             Rural Development ONLY transfers:
                  Have household fill out IAS to determine if there is a change in household size or
                     significant change in income. If no significant changes have occurred continue
                     with this section. If a significant change has occurred you must completely
                     recertify this household for the effective transfer date. (follow R.D./Tax Credit
                     buildings section)
                 In ICO Select “Daily Activities”, and then select “Transfer”.
                 Follow onscreen instructions.
                 Print out a transfer certification and have tenant sign cert.
                 Fax signed cert into the Ad-West Cert office, write on top “Transfer to Unit XXX”.
                 Fax over an Apartment Inspection Report write on top “Transfer to Unit XXX”.

              R.D./Tax Credit buildings:
             We cannot accept transfers at Tax Credit buildings. We must do a complete Move-out
             and Move-in for the household and they must meet the income qualifications. For ICO &
             R.D. purposes we must “transfer” the unit in ICO and also Re-Certify the entire household
             in the new unit, Effective on the transfer date.
                   Begin the transfer by Re-Certifying the entire household with a completed I.A.S.
                   Complete the “Transfer Process in ICO”.
                         o In ICO Select “Daily Activities”, and then select “Transfer”.
                         o Follow onscreen instructions.
                         o Print out a transfer certification and have tenant sign cert.
                   Enter the Recertification into the ICO system, recertifying them in the new unit.
                   Fax to the Cert office a “move out inspection report” Clearly writing the word’s
                      “TRANSFER TO UNIT XX” on the top of the move out.
                   Mail to the Ad-West Cert office all appropriate Transfer and Recertification paper
                      work along with backup.
                   Tax Credit transfer certs must be approved before tenant’s sign certification.

  Chapter A-5, 09/01/08                              19
   ASSIGNMENT OF RENTAL ASSISTANCE: As soon as a unit with R.A. vacates the unit, run a
   priority for R.A. report in ICO. Rental Assistance will be assigned to the neediest household
   immediately, effective for the 1 of the following month.

           Verifying Household Recipient:
                Select “Reporting” mode
                Enter the appropriate assignment date (first of the month to be assigned) and
                   click on “Priority for R.A.”.
                Review the report. The household at the top of the report will be eligible.
                        o Households with section 8 are NOT eligible for Rental Assistance.
                Print out the report circling the Eligible household.

           Priorities for Assigning Rental Assistance:
                First priority is always to eligible very low-income tenants paying the highest
                    percentage of their adjusted annual income in shelter costs.
                Second priority is to very low-income applicants on the waiting list considering
                    the applicants unit size and type needed.
                Third priority is to eligible low-income tenants paying the highest percentage of
                    their adjusted annual income in shelter cost.
                Fourth priority is to eligible low-income applicants on the waiting list.
                Final priority is to households that are residing in a rental unit for which they do
                    not qualify on the basis of an occupancy waiver or other special approval

           Assigning Rental Assistance:
           Once you have verified with the Ad-West Cert office which tenant is eligible to receive
           the Rental Assistance. Have the Adult members of the receiving RA unit fill out an IAS.
           Review for significant changes in income/assets/deductions from previous Certification.
           If no significant changes have occurred continue with the RA Assignment process.
                Go to “Daily Activities”.
                Click on “Assign R.A.”
                Follow the step’s to assign the appropriate household their R.A.
                At the conclusion of the steps, print out the Certification for Household
                Have Household Date the certification on or Before the Effective date for the R.A.
                    effective date.
                Fax The certification, R.H.S. Lease Addendum, Printout of the R.A. Priority with
                    circled household to the Ad-west Cert office no later than 9:00AM the last
                                             th                                     th
                    business day before the 5 of the effective month. (i.e. if the 5 is on Saturday or
                    Sunday it must reach the cert office by Friday AM)


   Once a tenant’s income exceeds limit set by RD (Tax Credit limit applies at Initial Certification but
   not at Interim or Annual recertification unless you have set-asides. Contact the Cert office in this
   situation. ) they are required to Move Out. Contact your Property Manager and meet with the
   tenant to let them know they must move within 30 Days of Notice or expiration of current Lease,
   whichever is greater (3560.158).


   Project Worksheet’s are no longer needed to be sent into the Ad-West office. However you are
   required to print a project worksheet effective on the first of the month and review for

Chapter A-5, 09/01/08                              20
       discrepancies. Contact the Ad-West Realty Services Inc. Cert office immediately if any
       discrepancies are found to resolve these issues.

                     To Print “Project Worksheets”
                      Click on “Reporting Mode”
                      Enter the effective date in the first calendar box. It should always be the first day
                         of the month.
                      Make sure the “preview” box is NOT checked.
                      Click on the “Project worksheet”

 IX. Move Out Procedures

       Vacating a unit on ICO can be done ahead of time before the tenant actually moves out; this
       enables you to begin the Certification process on the new tenant.

                   To vacate a unit in ICO:
                    Select “Daily Activities”
                    Select “Vacate a Unit”.
                    Follow the ICO guide using your best judgment on the exact move-out date. We
                       can always change the exact move-out date if necessary. The move-out date can
                       always be changed by contacting the Cert-Office.
                    Fax within 3 days the completed Move-out paperwork (Apt Inspection Report,
                       Tenant Vacancy report, Vacate notice) to the cert office.
                       o Verify all area’s of the Apt Inspection Report is completely filled out and
                       o If all information is not available, note on the bottom of the form “May be
                           adjusted” and fax the move out forms into our office. Fax in adjusted copy
                           with the words “Revised” on top when complete.

Further information on Move Out is covered in Chapter A-7.

 X. Certification Summary
       New Move-In Certification

       All Move-In Certifications MUST be approved by the Ad-West Cert Office before Tenant
       and Co-Tenant may sign Cert, Lease, and Move in.

          Complete/Review the Income Asset Statement.
          Send Out All Applicable Verification Forms
          Summarize Income (Third Party Verifications)
          Summarize Assets (Third Party Verifications)
          Summarize Allowable Deductions (Third Party Verifications
          Enter all the data into the ICO program
          Complete Certification Form
          Fax initial Certifications To Occupancy Specialist Department For Approval

       Annual/Interim Certification

       You have the option of sending certification in already signed, or wait for approval from
       the Ad-West cert office.

       □   Send out all annual certification Notices within a timely manner (between 120 and 90 Days
           prior to expiration)
          Complete/Review the Income Asset Statement.

   Chapter A-5, 09/01/08                               21
           Send Out All Applicable Verification Forms
           Summarize Income (Third Party Verifications)
           Summarize Assets (Third Party Verifications)
           Summarize Allowable Deductions (Third Party Verifications
           Enter all data into the ICO Program
           Complete Certification Form
           Mail via U.S.P.S. To Occupancy Specialist Department For Approval
           Fax to the cert office any requested documentation with a Cert Cover Sheet attached.

        Unit Transfers:
        □ R.D. only buildings can transfer simply by transferring their certification.
        □ R.D. / Tax Credit buildings must Completely Move out the tenant, Transfer the tenant,
            Recertify the household, and complete new move in. (In ICO you will still use transfer – see
            detailed steps earlier in this chapter or in your ICO manual)

        Move-Out summary

        □   Move the household out early in ICO.
        □   Fax the Apartment Inspection report, Vacate Notice, and Vacancy Summary within 3 days.


These tables include form names, descriptions and information. In all cases where there are more than
one type of proof acceptable, they will be listed in order preferred. Always try to obtain the first item listed
and continue down through options only if you can not get the preceding ones.                For Tax Credit
properties, if you need to use Alternate proof you must always also submit the documentation
(form and dates of attempt to obtain preferred verification) that shows efforts to obtain preferred
verification were made and unsuccessful.

Required items will have R under R.D and/or RD/TC columns to indicate they are required for Rural
Development and/or Rural Development/Tax Credit properties.

If X is marked under R.D and/or RD/TC columns that item is required if applicable to the resident based
on their income/asset/deduction information. All forms required for any Tax Credit certification should be
considered to also be required for Bond Properties with the addition of Bond specific form(s) such as 097
Bond Lease Rider. A Y in the “ICO” column refers to those forms that are able to be printed directly from

Information should be submitted in the same order as they appear in the tables below.

 Table A-5-2
#      FORM NAME AND INFORMATION                                                      R.D    RD/TC Bond            ICO
590 Cert Cover Sheet: Please Include a Cert Cover sheet with every
                                                                                      R      R
       certification, filling it out completely.
ICO Copy of Certification Form (Original Signed in Blue Ink)
593 NOTE: verify that the cert control number (Top right corner of page one
       of the cert. The number starts with letter “C” and followed by a number
                                                                                      R      R                     Y
       with a “-“and another number.) corresponds with the cert control
       number in ICO. If these numbers are different you must print another
       cert and have tenant sign.
ICO ICO Cert Summary Page / Worksheet
       NOTE: You can write any documentation regarding the cert on the
                                                                                      R      R                     Y
       bottom of this page, signed and dated.

    Chapter A-5, 09/01/08                                 22
        (If NOT on ICO)
        Tenant Certification Worksheet
        Copy of Photo ID on all occupants 18 years or older
                                                                                      X   R
        Note: Enlarge to 150% making sure copy is clear
        Copy of Social Security Cards for all occupants
        Note: Enlarge to 150% making sure copy is clear
511     Identification Certification                                                  R   R   Y
        NOTE: One of the three options must be selected and completely filled
        out. Alternative identification must have a copy made and attached with
512     Release of Information Authorization
        Note: Each occupant 18 years or older must complete one, verify Social        R   R   Y
        Security number matches what is on the certification.
513     Authorization
                                                                                      R   R   Y
        Note: Each occupant 18 years or older must complete one
        If a resident under 18 years old is not the child of any of the residents –
        proof of Custody, Guardianship or legal authority for the child to reside
        must be provided. A signed, notarized statement from parent(s) or
                                                                                      X   X
        other legal document is acceptable. This must be submitted with Initial
        Certification or first recertification where child becomes a resident and
        kept on file.
        Copy of Birth Certificate on each occupant under 18 should be
        submitted with Initial Certification or first recertification where child
        becomes a resident and kept on file. If resident does not claim Child         X   X
        Support due to father unknown the Birth Certificate should be checked
        to see if it names a father.
507     Income Asset Statement
        Note: Each occupant 18 years or older must complete one
        Ensure ALL items are answered. If answer is Yes, ensure information is        R   R
        completed. Use this as a guide to determine what verifications are
520     Disability Addendum
        RD: This form is NOT used for RD Only buildings.
        TC/RD: if your property has “Disabled set-asides” you are required to
        have each household must fill out a “Disability Addendum”. If they have
        answered “yes” you must also have them fill out form 31 “Verification of
521     Verification of Disability
        Note; If resident receives SSI and information returned by Social
        Security Administration indicates tenant is disabled (DI) that is adequate
        proof of Disability. If Disability is permanent include copy of proof from
        earlier certification.
        Acceptable sources of Disability Verification are physician, relative,        X   X
        social worker, or caregiver. The verification should simply state that the
        applicant/resident falls within the definition of being disabled.
        RD: This form is used to verify household meets the definition of an
        Elderly or disabled household.
        RD/TC: If form #31 is selected “YES” this form must be completed.
524     Verification of Student Status
        RD Note: If student is full time but not tenant or co-tenant or a minor
        (i.e., over 18 college student who is not tenant or co-tenant) this form is
                                                                                      X   X
        required to document deduction for that occupant.
        TC: Student status is required to verify status for both full time and part
        time students.

      Chapter A-5, 09/01/08                               23
516     Student Addendum and Certification                                                R              Y
        This form is mandatory for all individuals 18+ in the household for every
        Certification and Re-certifications. RD/TC households must complete.
        All questions must be answered.
        And                                                                               R              Y
515     Student Housing Addendum
        RD/TC households must complete. All questions must be answered.
527     Pregnancy Self-Certification
        RD: The unborn child also may be counted towards occupancy
        guidelines qualification.
        TC: Use this form if a Household member is pregnant and you want to         X     X
        include the unborn child as part of the household so a higher maximum
        allowable income may be used. The unborn child also may be counted
        towards occupancy guidelines qualification.
528     Affidavit of Estrangement
        Note: Use this form if an Applicant/resident is separated from his or her
        spouse but a formal separation agreement or final divorce decree has
        not been filed.
523     Live In Care Attendant Affidavit:
        NOTE: If tenant has a Live In Care Attendant this form must accompany       X     X
        the certification, and be completely filled out.

#     FORM NAME AND INFORMATION                                                     R.D   RD/TC   Bond   ICO
530   Verification of Bank Assets                                                   X     X              Y
      Note: Use 6 month average balance for Checking accounts. For all
      other account types use the most recent balance.
      Resident may provide multiple bank statements however
      Documentation must be made by the manager on why 3 party
      verification was not obtained, and an affidavit that it was attempted.
      For Checking accounts only, use an average of the balances on the
      statements (up to 6 months), for all other account types use the most
      recent balance. Show calculation work.
      Submit, in this order, Deposit Verification Request form,
      documentation of attempts to obtain completed form, and then bank
      statements to prove need to use alternate method of verification.
530B Bank of America Verification of Deposit
      Bank of America requires the use of their specific form for accounts
      with their institution.
530C Wells Fargo Verification of Deposit
      Wells Fargo requires the use of their specific form for accounts with
      their institution.
531   Verification of Stocks                                                        X     X              Y
533   Verification of General Asset                                                 X     X              Y
      NOTE: Income received from Labor and Industries, Disability
      Insurance, Life insurance and Trust funds are verified with this form.
534   Verification of Disposed Asset                                                X     X
536      Real Estate Evaluation Worksheet                                           X     X
537      Student Financial Aid Worksheet                                            X     X

#    FORM NAME AND INFORMATION                                                      R.D RD/TC     Bond   ICO

      Chapter A-5, 09/01/08                              24
540     Employment Verification                                                               Y
        Note: Ensure form is filled out completely by verifier. If any information
                                                                                      X   X
        is incomplete you will need to both call and have verifier add the
        missing information to resend to you (if form was sent by fax they will
        have a copy yet), or ask for the information and complete a Telephone
        Clarification document.      Documentation of clarification should be
        included after the Employment Verification.
        Calculate and compare year to date to hours/rate and use the higher of
        the two calculations unless documentation explains why. (i.e. less hours
        working due to pregnancy).
        If employer gives range of hours, use the greater of the hours, NOT
        Print and include the calculation from within ICO (see ICO manual for
        more detailed information)
        If verification states resident will have a change, has multiple rates
        (such as some hours with a shift differential) or other complex waged
        you can make multiple entries in ICO to ensure calculation is clear and
        ICO Wage Calculation Page(s)                                                          Y
        Resident may provide multiple pay stubs. Pay stubs should also
        include year to date so compare the average from received stubs to
        year to date annualized and use the higher calculation.
        Note: Submit, in this order, Employment Verification form,
        documentation of attempts to obtain completed form, then pay stubs to
        prove need to use alternate method of verification.
541     Income Verification/clarification by telephone:
                                                                                      X   X
        Utilize this form to get any employment question clarified. Fill out who
        you spoke with, title phone number called and sign and date form.
543     Affidavit of Tip Income                                                       X   X   Y
        Note: This form is required for all members working in the service
        industry. If a resident shows they work in a position where tips might
        be received but they have not stated tips on the I.A.S. You should also
        check the Employment Verification to see if it says tips are received.
        Tips may be entered in ICO as a separate Income item.
        The following percentage of tip’s MUST be used unless their employer
        states they do NOT receive such;
                      1. Service Industry – 20%
                      2. Gambling Industry – 40%
547     Applicant Affidavit of Seasonal Income                                        X   X
        If tenant or household member receives income from seasonal work.
544     Self Employment Verification                                                  X   X   Y
        Note: Include signed copy of most recent tax return
546     Military Pay Verification                                                     X   X   Y
        Service members can provide copies of the LES. Managers can
        access         information      with      Service        member          at
        Service member may sign into this site with their password to obtain
        copy of LES.
550     Use Verification Request of Unemployment Benefits to obtain                   X   X
        Submit Statement from Unemployment Office.
551     Public Assistance Verification                                                X   X   Y
        WA STATE:

      Chapter A-5, 09/01/08                               25
553     Use Verification of Child Support Payments to obtain information            X     X              Y
        Submit Printed Verification
554     Child Support Affidavit                                                     X     X              Y

        Note: Both forms are required for all single parents with children unless
        they can prove the other parent is deceased or parent is receiving
        DSHS or TANF.
556     Social Security Verification Request                                        X     X              Y
        Note: Use the full amount prior to Medicare deduction. You may use
        this same documentation and enter Medicare as a deduction.
        It is rare that you cannot receive response from Social Security but if
        you are unable to, the resident can provide their most recent Letter of
        TC Note: Submit, in this order, Social Security Verification Request
        form, documentation of attempts to obtain response, then Letter of
        Benefits to prove need to use alternate method of verification.
557     Verification Of Pension                                                     X     X

558     Affidavit of Gift’s Received                                                X     X              Y
        NOTE: This form MUST BE notarized.

#   FORM NAME AND INFORMATION                                                       R.D   RD/TC   Bond   ICO
570 Verification Of Child Care                                                      X     X              Y
571 Verification Of Medical Expense                                                 X     X              Y
    Note: Households that qualify as Elderly or have a Disability may
    deduct all medical expenses for all household members. Proof of
    Elderly/Disability must be included.
    Elderly proof: Social Security benefits information will usually include
    birth date which would document Elderly proof – alternate proof such as
    a Birth Certificate may be used
    Disability proof: If Social Security benefits show DI, this is proof of
    Disability, you may also use 521 Verification Of Disability.
    Medical deductions must be medically related. Any medical deduction
    that is questionable must have a Dr. Recommendation for that said
    Any one time large medical expenses may be deducted on next
    recertification. Please see Medical Deduction section of this Chapter
    for further details.
572 Verification of Medical (Non-Prescription Expenses)                             X     X
    NOTE: ALL Over the counter medical deductions must have a Dr.
    Recommendation for that said product. I.E. vitamins/minerals/etc.

#       FORM NAME AND INFORMATION                                                   R.D   RD/TC   Bond   ICO
580     Zero Income Certification                                                   X     X
        NOTE: All adult household members who do not contribute to the
        household income must sign this form.
581     R.H.S Addendum to Lease Agreement                                           R     R              Y
        Note: You will use this form for all re-certifications (Interim, Annual,
        Approved Rate/Utility change, Assignment of RA on non-expired

      Chapter A-5, 09/01/08                              26
        certifications) unless a new version of Lease is being implemented.
        If the Addendum is for Rate/Utility change or Assignment of RA (a
        modification of current certification but not a complete recertification)
        you should mark a line through Section 2 that extends the Lease for a
        year as those actions do not reset the Lease date or recertification date
        for the resident.
        If Certification is Initial Certification you will not use this form - see
        Chapter A-6 on Move In Procedures for further information
582     Tax Credit Lease Rider
                                                                                         R        Y
        TC: Date signed must match date signed on certification.
583     Bond Lease Rider
                                                                                             *R   Y
        BOND: Date signed must match date signed on certification
591     Certification Medical Expense Worksheet
595     Notice of Tenant Contribution Change from Re-cert                            R   R
        If Certification is Initial Certification you will not use this form - see
        Chapter A-6 on Move In Procedures for further information
508     Statement of Monthly Incomes and Expense                                     R   R
        Note: If a tenant has extremely low income or No income this form
        must be filled out with the cert, and then monthly and maintained in their
        file. Form must be completely filled out by tenant. Double check HOW
        the tenant plans on paying for expenses. Compare income stated on
        this form with income on I.A.S.

      Chapter A-5, 09/01/08                              27