HUD clarifies guidance pertaining to a new passbook rate to be effective February 1, 2015

On November 7, 2014, we notified you that HUD issued a new passbook savings rate of 0.06% to be effective February 1, 2015.  HUD issued a RHIIP Listserv #322 on Friday, November 14, 2014 that clarified HUD’s intentions regarding the February 1, 2015 effective date.

To comply with the requirements of the notice, owners are required to use the new Passbook Savings Rate of 0.06% for all certifications effective February 1, 2015 and later.  If owners have already completed a certification to be effective on February 1, 2015 or later, the certification will need to be corrected using the 0.06% rate.  Additionally, HUD Handbook 4350.3, REV-1 and the HUD model lease permit tenants to request an interim recertification if their income changes before the next recertification.  Because a reduction in the Passbook Savings Rate could reduce household income, tenants are permitted to request an interim recertification using the new 0.06% rate beginning February 1, 2015.

While this instruction is clear, related questions regarding how and when compliance software will be updated are pending.  In reality, managers will be working on future certifications at the same time they are working on historical certifications.  In these situations, will the software:

• Be able to pick from and utilize multiple passbook savings rate based on the effective date of the certification being created? ; or
• Will users be able to reference a software-generated log of passbook savings rates with associated effective date for each?  ; or
• Will users have to continuously update their setup screen to display the correct rate they need incorporated on the certification(s) they are working on?

PMCS is reaching out to several software vendors to ask these questions and offer suggestions that we hope assist in developing a solution.