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***A Publication of Rural Development's Multi-Family Housing Program***

**The Project Worksheet Form has been Replaced: Are [You]{.underline}
Using the Correct Form?**

Rural Development has renumbered all forms to coincide with the 3560
Regulation. This includes Form RD 1944-29, "Project Worksheet for
Interest Credit and Rental Assistance."

Hereafter, Form RD 3560-29 (Rev 2-05), "Notice of Payment Due Report,"
must be used when mailing your payment to Rural Development. Please note
that not only has the form been renumbered, it has been renamed and
revised.

If you have converted to using the new form -- [thank you!]{.underline}

If you have not converted to using the new form, we ask you to do so now
and destroy all versions of the now obsolete Form RD 1944-29. To
retrieve a copy of this new form you can visit the regulations web site
at [<http://www.rurdev.usda.gov/regs>.]{.underline}

If Rural Development staff receives project worksheets on the obsolete
form, you will be requested to submit a replacement copy using the new
form.

**Due Dates**

There appears to be some confusion regarding the two critical due dates
for MFH tenant transactions and project worksheets.

-   What is due no later than the 10th of the month?

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-   What happens on the 17th of each month?

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-   What should I be doing between the 1st and prior to the 10th of each
    month?

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-   **Tenant Certifications** and other tenant actions (vacates, subsidy
    changes, etc.) MUST be submitted so that they are RECEIVED by Rural
    Development staff no later than the 10^th^ of the month. For
    example: A tenant certification effective November 1, 2005, must be
    received by Rural Development no later than November 10, 2005. This
    deadline applies regardless of whether the certifications are being
    submitted through electronic submission or in hard copy.\
    A tenant certification postmarked on Novem-\
    ber 10, 2005, will not be considered on time\
    and will be coded as a late certification.

-   **Project worksheets** are "released" on the 17^th^\
    of each month. This is the first day that you are able to
    electronically process your project worksheet(s) for the month.

-   **You are strongly encouraged to view your project worksheet each
    month [PRIOR TO THE 10^TH^]{.underline}. This will allow time for
    you to make any necessary corrections and help you avoid the
    significant penalties associated with late tenant certifications.**
    If you discover discrep-ancies, you should contact Alice or Rachel
    in the CPC.

**Social Security Benefits to Increase**

Monthly Social Security and Supplemental Security Income benefits will
increase 4.1 percent for calendar year 2006. Each recipient of these
benefits is provided with a letter from the Social Security
Administration advising them of the amount of his/her monthly benefit.
You should use the GROSS amount of the benefit as income for the purpose
of the Tenant Certification.\
THIS IS A GOOD TIME TO GET A COPY OF YOUR TENANTS' AWARD LETTERS BEFORE
THEY MISPLACE THEM!

**Medical Mileage Deduction Update**

Costs of medically-related travel that are not reimbursed are an
allowable medical expense deduction for elderly (disabled) households.
The cost of the mileage is to be calculated using the Internal Revenue
Service (IRS) rate.

The IRS, in response to the recent gas price increases, has announced a
special adjustment to the optional standard mileage rates for the final
four months of 2005. (The IRS normally updates the mileage rates once a
year in the fall for the next calendar year.)

The new four-month rate for computing deductible medical expenses will
be 22 cents a mile, up from\
15 cents for the first eight months of 2005.

Borrowers/managers are advised to review and modify any tenant
certifications effective September 1, 2005,\
or later to ensure tenants have been given the correct medical mileage
deduction.

To date, the IRS has not yet posted the rate for 2006. Rural Development
staff recommends that you regularly monitor the IRS website at
[http://www.irs.gov](http://www.irs.gov/) for the 2006 and subsequent
rate postings. (Please see the June 2005 InfoNow for additional
instructions regarding this web site.)

**Project Compliance**

Owners and managers will be notified of project findings resulting from
annual inspections, management reviews, compliance reviews, year end
financial reviews, etc. Typically you will have 30 days to present a
plan which would outline how the compliance issues will be fixed\
and a time frame in which to cure it.

HB-2-3560, Chapter 4, Exhibit 4-3 "Items to Be Covered in a Budget
Narrative," must be submitted with the proposed 2006 operating budgets.
The second bullet states: "A statement of project compliance. This
statement should indicate any outstanding monitoring findings and the
borrower's progress in addressing these compliance problems."

Part 4.25 addresses reviewing outstanding compliance findings and
checking if adequate efforts have been made in the budget to address the
findings. If the project compliance issues have not been addressed, the
budget documents should be returned to the borrower for revision. The
proposed budget could also be rejected if found unacceptable (findings
not adequately addressed).

Please work with the Area Specialist servicing your property to make
sure that you adequately address any project findings. Necessary rent
increases could be rejected if findings have not been properly
addressed.

**Occupancy Ineligibles**

Rural Development staff asks that all properties be reviewed to
ascertain that occupancy requirements are being complied with. Tenant
leases address over-crowding and under-utilization and require the
tenant to move to the first available appropriate unit or vacate the
property. Tenants who do not meet the occupancy requirements and whose
lease is up for renewal should be placed on a 30-day lease renewal until
they transfer\
to an appropriate unit or vacate the project on 30-day notice from
management.

**Tenants who Move and Deceased Tenants**

When a tenant moves out without giving a 30-day notice, or vacates prior
to the end of the 30-day notice, you cannot list the tenant on the
project worksheet and claim rental assistance (RA) if they are not
"residing" in the unit on the first day of the month following the
notice to vacate.

**Example:** A 30-day notice is given September 5.\
The tenant actually moves out September 26, but is responsible for rent
until October 5. The tenant will not be listed on the October 1 Project
Worksheet. The tenant will be charged basic rent for the prorated number
of days responsible for rent in October. If the tenant is not residing
in the unit on the first day of the month, he/she cannot be listed on
the project worksheet -- it does not matter what the legal termination
date is.

Likewise, when a tenant passes away, you cannot collect RA for the next
month even if it is less than 30 days (notice period) since they passed
away. If the family has not removed all belongings, the family or estate
must pay basic rent (prorated).

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