An update to a previous post, additional guidance has been published to facilitate interim tenant income re-certifications without in-person meetings or original signatures.
In a blog post on March 27, 2020, we discussed HUD’s guidance on tenant income re-certifications for multifamily property owners of HUD-assisted housing. That guidance left some questions unanswered. HUD updated their coronavirus (COVID-19) FAQs to provide additional clarity on April 2, 2020 (“April 2 Update”).
HUD-assisted multifamily property owners may submit interim tenant income re-certifications if tenant incomes change because of coronavirus (COVID-19). These interim re-certifications can reduce the tenant’s portion of rent and increase the HUD subsidy to maintain the total contract rent level. The standard certification process requires in-person tenant interviews and obtaining original signatures to forms. If COVID-19 makes those requirements infeasible, HUD has issued guidance on flexibilities property owners may have. Property owners may skip tenant interviews and obtain tenant signatures at a later date.
The April 2 Update provides that where original, wet signatures cannot be obtained, HUD will allow alternate signatures, including copies and images (photos) of signatures which may be sent by email, fax or other electronic means. Original signatures must be obtained at a later date, within 90 days. Forms that may follow this alternate signature guidance include form HUD-9887/9887A (the Tenant’s Consent to Release of Information”), form HUD-50059 (the Owner’s Certification of Compliance with HUD’s Tenant Eligibility and Rent Procedures), lease agreements, family certifications of income (including certifications of unemployment and/or zero income), and state lifetime sex offender forms.
Where third-party verification of income is not available, self-certifications or family certifications are acceptable. The property owner must document in the tenant’s file why third party verification was not available. The HUD Occupancy Handbook 4350.3, at Chapter 5 and Appendix 3, provides additional guidance on acceptable methods of income verification.
When entering annual or interim re-certifications in HUD’s Tenant Rental Assistance Certification System (TRACS), if tenants are unable or unwilling to come into the office to sign forms, HUD will allow property owners to submit the re-certification without tenant signature. In this case, the property owner (or contract administrator, as applicable) should use one of three codes to indicate that extenuating circumstances prevented the signature:
- Code 1 — Medical (if the tenant has been quarantined)
- Code 2 — Late certification due to accommodation or extenuating circumstances
- Code 10 — Other
Additional guidance can be found HUD Occupancy Handbook 4350.3, Chapter 7 and TRACS guidance.
NP has also issued Alerts summarizing much of the guidance set forth in the HUD FAQs, including information on tenant re-certification:
- March 16, 2020: HUD FAQs for owners of multifamily assisted housing on dealing with COVID-19
- March 19, 2020: Update 1.0 – guidance for closing transactions
- March 26, 2020: Update 2.0 – guidance on property management, re-certification, and HUD closing issues
- April 2, 2020: Update 3.0 –property management, asset management, FHA, tenant notice, and re-certification issues