Asset Verification Requirements- Clarification from Headquarters

 

 

Assets are a challenging part of the HUD rent calculation process. A frequent question PMCS receives from clients is how to handle assets that residents cash out and then spend the funds. Because some states’ Contract Administrators (both traditional and performance-based) require owners to verify how these funds were spent, PMCS was asked to seek HUD Headquarters clarification on this issue.

The clarification request read:

We have numerous clients in different areas of the nation wherein the CA requires owners/agents to verify (through review of receipts) how funds from an asset, converted to cash, are spent. Is this requirement appropriate? HUD Handbook 4350.3, Change 4, 5-7 G. 3.b. states, “A lump sum payment is counted as an asset only as long as the family continues to possess it. If the family uses the money for something that is not an asset, the lump sum must not be counted.”

Can you weigh in on this please?

 

 

The complete response received from Catherine Brennan at HUD Headquarters was as follows:

“Requiring owners to gather receipts from households definitely goes beyond the Handbook requirements, and is inappropriate”.