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If an asset is owned by more than one person, including a family member, but the family member does not have unrestricted access to the asset, SARA will prorate the asset according to the percentage of ownership. If no percentage is specified or provided for by state or local law, SARA will prorate the asset evenly among all owners. Assets Disposed Of for Less than Fair Market Value j24 CFR 5.603(b)J HUD regulations require SARA to count as a current asset any business or family asset that was disposed of for less than fair market value during the two years prior to the effective date of the examination/reexamination, except as noted below. Minimum Threshold The MVC Guidebook permits SARA to set a threshold below which assets disposed of for less than fair market value will not be counted [HCV GB, p. 5-27]. SARA will not include the value of assets disposed of for less than fair market value unless the cumulative fair market value of all assets disposed of during the past two years exceeds the gross amount received for the assets by more than $1,000. When the two-year period expires, the income assigned to the disposed asset(s) also expires. If the two-year period ends between annual re-certifications, the family may request an interim recertification to eliminate consideration of the asset(s). Assets placed by the family in irrevocable trusts are considered assets disposed of for less than fair market value except when the assets placed in trust were received through settlements or ~u gments. Separation or Divorce The regulation also specifies that assets are not considered disposed of for less than fair market value if they are disposed of as part of a separation or divorce settlement and the applicant or tenant receives important consideration not measurable in dollar terms. All assets disposed of as part of a separation or divorce settlement will be considered assets for which important consideration not measurable in monetary terms has been received. In order to qualify for this exemption, a family member must be subject to a formal separation or divorce settlement agreement established through arbitration, mediation, or court order. Foreclosure or Bankruptcy Assets are not considered disposed of for less than fair market value when the disposition is the result of a foreclosure or bankruptcy sale. Family Declaration Families must sign a declaration form at initial certification and each annual recertification identifying all assets that have been disposed of for less than fair market value or declaring that no assets have been disposed of for less than fair market value. SARA may verify the value of the assets disposed of if other information available to SARA does not appear to agree with the information reported by the family. 2/25/13 Page 6-13