3 - PUBLIC HEARING ANNUAL ACTION PLAN

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. Administrative Plan 4/1/16 . Page 6-13 use other than current circumstances to anticipate income when (1) an imminent change in circumstances is expected (2) it is not feasible to anticipate a level of income over 12 months or (3) SAHA believes that past income is the best indicator of anticipated income. For example, if a family member owns real property that typically receives rental income but the property is currently vacant, SAHA can take into consideration past rental income along with the prospects of obtaining a new tenant. SAHA Policy Anytime current circumstances are not used to determine asset income, a clear rationale for the decision will be documented in the file. In such cases the family may present information and documentation to SAHA to show why the asset income determination does not represent the family’s anticipated asset income. Valuing Assets The calculation of asset income sometimes requires SAHA to make a distinction between an asset’s market value and its cash value. • The market value of an asset is its worth in the market (e.g., the amount a buyer would pay for real estate or the total value of an investment account). • The cash value of an asset is its market value less all reasonable amounts that would be incurred when converting the asset to cash. SAHA Policy Reasonable costs that would be incurred when disposing of an asset include, but are not limited to, penalties for premature withdrawal, broker and legal fees, and settlement costs incurred in real estate transactions [HCV GB, p. 5-28]. Lump-Sum Receipts Payments that are received in a single lump sum, such as inheritances, capital gains, lottery winnings, insurance settlements, and proceeds from the sale of property, are generally considered assets, not income. However, such lump-sum receipts are counted as assets only if they are retained by a family in a form recognizable as an asset (e.g., deposited in a savings or checking account) [RHIIP FAQs]. (For a discussion of lump-sum payments that represent the delayed start of a periodic payment, most of which are counted as income, see sections 6-I.H and 6-I.I.) Imputing Income from Assets [24 CFR 5.609(b)(3), Notice PIH 2012-29] When net family assets are $5,000 or less, SAHA will include in annual income the actual income anticipated to be derived from the assets. When the family has net family assets in excess of $5,000, SAHA will include in annual income the greater of (1) the actual income derived from the assets or (2) the imputed income. Imputed income from assets is calculated by multiplying the total cash value of all family assets by an average passbook savings rate as determined by SAHA. • Note: The HUD field office no longer provides an interest rate for imputed asset income. The “safe harbor” is now for SAHA to establish a passbook rate within 0.75 percent of a national average. 3-141