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Household Composition on HUD and LIHTC

As compliance consultants who review thousands of HUD and LIHTC files, we have put together some frequently asked questions regarding household composition. We are hoping that the following FAQs will provide you with guidance concerning household composition.

Effects of Divorce on LIHTC Household Eligibility

Q. A married couple qualified at the time they moved into their LIHTC unit. They got divorced a year later, and one spouse moved out of the unit. The remaining spouse has a new roommate, and the roommate’s income was verified. Their combined income now exceeds the LIHTC income limit but is still below the 140% level. Do they still qualify for the unit?

A. Yes. The household was initially qualified, and the change in the household composition does not constitute a new household since an original household member is still residing in the unit. We recommend that you re-qualify the entire household at the time of the roommate’s addition. One reason for doing this is to determine if the roommate would be income-eligible if living in the unit by themselves. If the original occupant moves from the unit leaving just the roommate, you could end up with an over income household. If the roommate would not qualify by themselves, you must take additional action. You can still allow the person to move in, but it is critical that your lease agreement clearly states that the roommate does not have rights to the apartment should the original household members were to vacate the unit.

Effects of Live-in Aide’s on HUD and LIHTC Eligibility

Q. An applicant has indicated on her housing application that she wants to include a live-in aide. The issue is that the live-in aide is married with two kids. Are the live-in aide’s spouse and kids allowed to live in the unit with this applicant?

A. In order to treat the live-in aide as a Live-In Aide (LIA) as defined by HUD (meaning that the LIA’s income is excluded from gross income, and he/she has no rights to the unit), the LIA’s family members cannot live in the qualified unit with her/him and the applicant. However, if the applicant is willing to consider the LIA as a household member, then you can qualify the LIA and the family members. In this case, the person would not be a Live-In Aide according to HUD’s definition; all of their income would be counted, and they would all have rights to the unit and be parties to the lease.

How Do Shared Custody Children Effect Eligibility?

Q. Do I count children as household members if they do not live with my tenant on a full-time basis?

A. Only children who live in the unit at least 50% of the time in the household would be counted as household members. Proof of custody is recommended especially if it appears the household would not income qualify for the LIHTC program without the child/children.

Q. A tenant in a LIHTC unit moved in two months ago and had asked if his 22-year-old son can move in with him. Is that permissible?

A. It depends. We highly recommend that all leases for LITHC include a clause that no household changes can occur during the first six months so that questions regarding the income-qualified status can be avoided (this applies to adults, not to the birth or adoption of a child). That being said, if you wish to allow the household addition, we recommend that you re-qualify the entire household at the time of the addition. One reason for doing this is to determine if the new occupant would be income-eligible if living in the unit by themselves. If the original occupant moves from the unit leaving just the new household member, you could end up with an over income household. If the new occupant would not qualify by themselves, you must take additional action. You can still allow the person to move in, but it is critical that your lease agreement clearly states that the new occupant does not have rights to the apartment should the original household members were to vacate the unit.

Does Bedroom Size Affect Household Eligibility at a HUD Property?

Q. Can a three-person household reside in a one-bedroom unit?

A. It depends. For HUD units, owners must have written standards as long as the standards do not violate fair housing requirements or contain prohibited policies. They must also comply with Federal, State, and local fair housing and civil rights laws; tenant-landlord laws; zoning restrictions; and HUD’s Equal Opportunity and nondiscrimination requirements under HUD’s administrative procedures. A two-persons-per-bedroom standard is acceptable, but owners may establish different standards based on specific characteristics of the unit and property.

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