To Verify or Not to Verify…that is the question!
Under $5000 Asset Certification
The LIHTC program or Section 42 Housing program requires income and income from assets to be reported as household resources. LIHTC regulation typically follows the directives listed in the HUD Handbook however, handling of assets is one area that LIHTC veers from the HUD standard.
An asset is defined by HUD as ‘items of value that may be turned into cash.’ Examples of assets may include bank accounts, stocks, bonds, investments, real estate, trust funds, life insurance policies, cash on hand, and electronic funds/debit card assets.
For households whose total household assets do NOT exceed a combined net total of $5000, the Under $5000 Asset Certification form may be used in lieu of traditional third-party verifications. Managers and applicants frequently ask for guidance on its use and it’s worth noting that this form can only be used if assets for all members combined are less than $5000.
The Under $5000 Asset Certification will be completed on a household basis and allows applicants to disclose their assets by account type or to certify that they have no assets at all. The form prompts members to list the fair market value, interest rate, and annual income from the asset. Additionally, the Under 5K form goes on to give applicants the opportunity to report assets disposed of at less than fair market value (AKA imputed assets).
Of course, there are exceptions to every rule and your State Agency or management company may have established more restrictive policies requiring traditional verification of all assets each year or specifying a form to be completed by unrelated household members. Please be sure to check with your State Agency and/or management company for further information.