HUD Handbook 4350.3 § 7-12

A.        When a tenant requests an interim recertification or when a tenant reports
                   changes in income or other circumstances as required, the owner must take the
                   following steps when processing an interim recertification.
                   1.      Interview the tenant to obtain information on the reported change. The
                           owner must also review and ask if there have been other changes to
                           family composition, income, assets, or allowances since the most recent
                           certification.
                   2.      Obtain third-party verification of the income or other facts reported as
                           changed since the last recertification and maintain documentation in the
                           tenant file. (See Chapter 5, Section 3 for more information about
                           verification.)

                   3.      *The EIV system must be used at the time a tenant reports a change in
                           employment or income to determine if any information has been provided
                           by the employer or if the tenant had unreported income. However,
                           because of the delay in reporting requirements by state agencies, EIV
                           may not contain data that can be used to verify employment or income for
                           use in processing interim recertifications in instances where tenants
                           report a change in employment or income. In these cases, the owner will
                           need to use another method of verification.*input any changes to the
                           tenant’s income or other characteristics in the owner’s software program
                           and print *the* HUD-50059.*

                   4.      Document the resulting changes in the tenant’s rent and assistance
                           payment by obtaining signatures on the HUD-50059 from the head, co-
                           head, and spouse and all other adult family members. Maintain copy
                           with original signatures in the tenant file. Provide the tenant with a
                           separate copy.

                   5.      After obtaining tenant and owner representative signatures, electronically
                           transmit interim recertification to the Contract Administrator or HUD to
                           update the tenant information in TRACS.

         B.        Owners must take the following steps upon learning that a tenant failed to report
                   a change in income or family composition, as stated in the lease.

HUD Multifamily Occupancy Handbook               7-26                                             8/13
Chapter 7: Recertification, Unit Transfers,
and Gross Rent Changes

1.      Tenant notification. When owners learn that a tenant has experienced a
                           change in family income or composition listed in paragraph 7-11 A, they
                           must immediately notify the tenant in writing of his or her responsibility to
                           provide information about such changes. *This includes the owner using
                           the EIV New Hires Report in accordance with their written policies and
                           learning that the tenant, or a member of the tenant’s household, has new
                           employment. (The owner must have policies in place to use the New
                           Hires Report at least quarterly. See Chapter 9, Enterprise Income
                           Verification (EIV).* The owner’s notice must:

                           a.       Refer the tenant to the lease clause that requires the interim
                                    recertification;

                           b.       Give the tenant 10 calendar days to respond to the notice; and

                           c.       Inform the tenant that his or her rent may be raised to the market
                                    rent if the 10-day deadline is not met.

                           NOTE: See Exhibit 7-7 for a sample letter.

                   2.      Timely tenant response. If the tenant responds to the notice and supplies
                           the required information within 10 days, the owner must process the
                           request in accordance with subparagraph A above and implement any
                           resulting rent changes in accordance with paragraphs 7-13 C and D.

                   3.      Tenant fails to respond within 10 calendar days of notice. If the tenant
                           fails to respond within the 10 calendar days, the owner must require the
                           tenant to pay market rent as of the first rent period following the 10-day
                           notice period. (See sample notice provided in Exhibit 7-8.) If the tenant
                           subsequently submits the required information, the owner must reduce
                           the tenant’s rent on the first of the following month. In a Section 202
                           PRAC or 811 PRAC project, the owner may evict the tenant for
                           noncompliance with the lease requirement to report changes in family
                           income or composition.