Technical Guide for 

Determining Income and 

Allowances for the 

HOME Program 

Third Edition 

January 2005

U.S. Department of Housing and Urban Development 

Community Planning and Development 

Office of Affordable Housing Programs 

HOME Model Series 

Prepared for the Office of Affordable Housing Programs by ICF Consulting, Inc. 

Preface 

The HOME Investment Partnerships (HOME) Program is a flexible and versatile funding 

resource for affordable housing. A fundamental component of using HOME funds effectively is 

ensuring that they are targeted to households that are low- and very low-income. 

The HOME Program requires that participating jurisdictions (PJs) use one of three definitions of 

annual income in order to determine the income eligibility of applicants to their programs. PJs 

can choose from these options: 

• Annual income as used in HUD programs like Section 8 and defined in 24 CFR 5.609, 

• Annual income as reported on the Census long form for the most recent decennial 

census, and 

• Adjusted gross income as defined by the Internal Revenue Service (IRS) Form 1040 

series for individual Federal annual income tax reporting purposes. 

This guide will be useful for most PJs, since all PJs must verify the income eligibility of every 

HOME program participant. Using this guide provides an opportunity for a PJ to review and 

understand the differences in each of the three income definitions and to determine which 

definition(s) is most appropriate for each of the HOME activities the PJ undertakes. In addition, 

some PJs may be familiar with the process of determining income eligibility for one or two of the 

three allowable income definitions. As a result of staff turnover, or other circumstances, other 

PJs may need to develop expertise in understanding all of the possible definitions. Regardless 

of the PJ’s experience level, PJs will find that there are certain rules unique to each of the three 

definitions, but in general the rules are understandable and relatively easy to work with. 

This self-study guide provides explanations of each of the three definitions of income, and 

describes what sources of income must be included or excluded when conducting income 

verification. In addition to a description of these basic requirements, the guide provides 

exercises and case studies to enable readers to test their understanding of the key concepts. 

This HOME model program guide is a companion to other guides published by the Office of 

Affordable Housing Programs of the U.S. Department of Housing and Urban Development. 

These guides are available through the HOME Program’s Model Program Guides website at: 

http://www.hud.gov/offices/cpd/affordablehousing/library/modelguides/index.cfm.

Technical Guide for Determining Income and Allowances for the HOME Program — i 

Contents 

Chapter One – Overview 

Chapter Two – General Requirements 

Chapter Three – Calculating Annual (Gross) Income 

Chapter Four – Calculating Adjusted Income 

Chapter Five – Calculating Assistance Amounts 

Appendices

Appendix A: Glossary of Terms 

Appendix B: Sample Format for Computing Part 5 Annual Income 

Appendix C: Sample Format for Computing Census Long Form Annual Income 

Appendix D: Sample Format for Computing IRS Form 1040 Adjusted Gross Income 

Appendix E: Sample Format for Computing Part 5 Adjusted Income 

Appendix F: Sample Format for Computing Total Tenant Payment and PJ Subsidy – 

Rental Voucher Method 

Appendix G: Sample Format for Computing Total Tenant Payment and PJ Subsidy – 

Rental Certificate Method 

Appendix H: Sample Verification Forms for Determining Annual (Gross) Income 

Appendix I: Sample Verification Forms for Determining Part 5 Adjusted Income 

Appendix J: Sample Annual Recertification of Income Forms 

Technical Guide for Determining Income and Allowances for the HOME Program — iii 

Chapter One 

Overview 

The HOME Investment Partnerships 

(HOME) Program has historically required 

that participating jurisdictions (PJs) use the 

Section 8 program definition of annual (also 

referred to as gross) income to measure the 

eligibility of applicants to their HOME 

programs. However, with the publication of 

the HOME Final Rule, effective October 16, 

1996, PJs were given the flexibility to 

choose one of three definitions of annual 

income -- annual income as defined in 24 

CFR 5.609,1

 annual income as reported on 

the Census long form for the most recent 

decennial census, and adjusted gross 

income2

 as defined for purposes of 

reporting under Internal Revenue Service 

(IRS) Form 1040 series for individual 

Federal annual income tax purposes. 

This change in the HOME regulations is 

consistent with a similar change to the 

Community Development Block Grant 

(CDBG) regulations, which went into effect 

December 11, 1995. The change in the 

HOME regulations was intended to ease 

administration for PJs when projects are 

funded by multiple sources, including 

CDBG. 

In several specific circumstances, PJs are 

required to adjust the income of households 

participating in the HOME Program. 

Chapter Four details these circumstances 

and the process of adjusting household 

income using the rules at 24 CFR 5.611. 

When PJs are required to use adjusted 

income, they must use the HUD rules at 24 

CFR 5.611 regardless of the definition of 

annual income originally used to qualify the 

household for participation in the HOME 

Program. Throughout this guide, the term 

“annual income” will be used to refer to 

annual income as calculated using one of 

the three definitions allowed under the 

HOME Program, unless otherwise specified. 

The term “Part 5 annual income” will be 

used to refer to annual income as defined at 

24 CFR 5.609. This was formerly called the 

“Section 8” definition of income. Further, 

“adjusted income” will be used to refer to 

adjusted income calculated according to the 

rules at 24 CFR 5.611. 

Income-Related Program 

Requirements 

Exhibit 1.1 summarizes the uses of the 

income definitions under the HOME 

Program. 

Household income must be calculated for a 

number of different uses under the HOME 

Program, including: 

• Eligibility. To receive HOME 

assistance, households must have 

incomes at or below 80 percent of the 

area median household income, 

adjusted for household size, and 

determined annually by HUD. This is 

commonly referred to as “the Section 8 

Low-Income Limit.” To determine 

whether a household is eligible, a PJ 

must determine its annual income using 

one of the three allowable income 

definitions and comparing that income to 

the Section 8 Low-Income Limit. For 

HOME rental projects and tenant based 

rental assistance (TBRA) programs, 

income eligibility must be re-established 

annually (refer to Chapter 2). 

• Targeting of Funds. Income 

determinations are also necessary to 

comply with HOME targeting 

requirements. For each annual HOME 

allocation a PJ receives, ninety percent 

of the occupants of HOME-funded rental 

housing units and households assisted 

with TBRA must have annual incomes 

at or below 60 percent of the area 

median income. 

• Occupancy of Rental Projects. In 

addition to the program targeting 

requirements, at least 20 percent of the 

Technical Guide for Determining Income and Allowances for the HOME Program — 1 
Chapter One – Overview 

HOME-assisted units in rental projects 

with five or more HOME-assisted units 

must be occupied by households with 

incomes at or below 50 percent of the 

area median income. 

• Subsidy Amounts. For HOME-funded 

TBRA programs, annual income is used 

to determine eligibility and adjusted 

income is used to determine the amount 

of subsidy an eligible household can 

receive. 

• Displacement Activities. Income 

calculations are also used to determine 

assistance to families who may be 

displaced as a result of HOME-funded 

activities. Exhibit 1.1 provides additional 

detail on these calculations. 

Using this Guide 

This guide has been organized to help the 

reader absorb income rules one at a time. 

Within each chapter, examples and 

exercises provide the opportunity to think 

about the practical applications of the rules. 

• Chapter Two. This chapter reviews the 

general requirements that relate to 

determining and calculating income. 

These rules apply regardless of the 

definition of annual income used by the 

PJ. 

• Chapter Three. Chapter Three provides 

detailed information on how to calculate 

income using each of the three 

allowable income definitions. This 

chapter also discusses and illustrates 

the differences between the three 

definitions. 

• Chapter Four. This chapter discusses 

the circumstances under which PJs 

must adjust annual household income 

and describes how to do so. 

• Chapter Five. Chapter Five provides 

detailed guidance on calculating 

assistance amounts in HOME TBRA 

programs and when conducting 

displacement activities. 

A number of appendices follow Chapter 

Five, including a glossary of terms and 

sample forms. 

Additional Resources 

In addition to this guide, there are several 

other HUD resources PJs can use as 

reference material: 

• HOME Program Regulations. The 

HOME Program regulations can be 

found at 24 CFR Part 92. 

• General HUD Program Requirements 

found at 24 CFR Part 5. The 

requirements pertaining to annual and 

adjusted income for HUD programs are 

found in this regulation. These 

regulations are updated periodically, 

with notification provided through the 

Federal Register.3

 Agencies are given 

60 days from the date of publication to 

implement changes. 

• HUD Handbook 4350.3. This 

handbook, entitled “Occupancy 

Requirements of Subsidized Multifamily 

Housing Programs,” applies to many of 

HUD’s multifamily housing programs, 

including Section 8 and Section 236. 

The HOME Program does not require 

the use of this handbook, but many PJs 

will find the information in it, particularly 

Chapter 5, helpful in understanding and 

clarifying the Part 5 income rules and 

requirements. The handbook is updated 

whenever changes are made to the 

regulations. 

The HOME Program statute, regulations, 

notices, and waivers can be obtained 

through the HOME Program page of the 

HUD web site. This site is located at 

www.hud.gov/offices/cpd/affordablehousing/

programs/home/index.cfm. Federal 

regulations, HUD handbooks, and notices 

can be obtained through HUD offices or on 

the Internet at www.hud.gov and 

www.hudclips.org.

Technical Guide for Determining Income and Allowances for the HOME Program — 2 
Chapter One – Overview 

Census publications, including sample 

forms and instructions, are available on the 

Census Bureau’s website 

(www.census.gov) or by calling its customer 

service center at (301) 763-4636. IRS 

forms, instructions and other publications 

are also available on online at 

www.irs.ustreas.gov, or by calling the IRS at 

1-800-829-3676.

Further guidance on the calculation of 

annual income under the HOME Program is 

available online at 

www.hud.gov/offices/cpd/affordablehousing/

training/calculator/index.cfm.

Exhibit 1.1 – Summary of Uses of Income Definitions in the HOME Program 

HOME Program Activities Uses of Income Definitions 

Homeowner Rehabilitation Use one of three definitions of annual (gross) income4. 

Homebuyer Activities Use one of three definitions of annual (gross) income. 

Rental Activities Use one of three definitions of annual (gross) income for initial 

determination and at recertification. 

Use adjusted income5 to determine rent for tenants whose 

income increases above 80% of median. 

Can use annual (gross) income and adjusted income to 

determine project rents for tenants below 50% of median and 

occupying at least 20% of the units in a project with five or more 

HOME-assisted units, although most PJs use standard High and 

Low HOME rents. 

TBRA Use one of three definitions of annual (gross) income to 

determine income initially and at annual recertification. 

Use one of three definitions of annual (gross) and Part 5 adjusted 

income to determine the tenant’s share of the rent. 

Relocation and Displacement 

Activities 

Uniform Relocation Act Use Part 5 annual (gross)6 and adjusted income to determine if a 

low-income household is economically displaced. 

Use Part 5 annual (gross) income to compute Replacement 

Housing Payments. 

Section 104(d) – Displacement, 

Relocation Assistance, and Real 

Property Acquisition for HUD and 

HUD-Assisted Programs 

Use Part 5 annual (gross) income to determine Replacement 

Housing Payments. 

Technical Guide for Determining Income and Allowances for the HOME Program — 3 

Chapter Two 

General Requirements

While PJs have the option of choosing one 

of three definitions of annual (gross) income 

to determine income eligibility of applicants 

to their HOME Program activities, certain 

rules and requirements apply regardless of 

the definition used. These overarching 

requirements include how to determine 

whose income to count, anticipate and 

verify income, and compare income to HUD 

income limits. This chapter reviews these 

requirements. 

Determining Whose Income to Count 

The HOME Program regulations require that 

income of all family members be included in 

the determination of income. 

The Part 5 definition of annual income 

provides specific guidance pertaining to 

whose income in a household must be 

included in that calculation. Chapter Three 

reviews this in detail. 

Anticipating Income 

The HOME regulations at 24 CFR 

92.203(d)(1) require that, for the purpose of 

determining eligibility for HOME assistance, 

a PJ must project a household’s income in 

the future. To do so, a “snapshot” of the 

household’s current circumstances is used 

to project future income. In general, a PJ 

should assume that today’s circumstances 

will continue for the next 12 months, unless 

there is verifiable evidence to the contrary. 

For example, if a head of household is 

currently working for $7.00 per hour, 40 

hours per week, the PJ should assume that 

this family member will continue to do so for 

the next year. Thus, estimated earnings will 

be $7.00 per hour multiplied by 2,080 hours, 

or $14,560 per year. 

This method should be used even when it is 

not clear that the type of income received 

currently will continue in the coming year. 

For example, assume a family member has 

been receiving unemployment benefits of 

$100 per month for 16 weeks at the time of 

income certification. It is unlikely that the 

family member will continue on 

unemployment for another 52 weeks. 

However, because it is not known whether 

or when the family member will find 

employment, the PJ should use the current 

circumstances to anticipate annual (gross) 

income. Income would therefore be 

calculated as follows: $100 per week x 52 

weeks, or $5,200. 

The exception to this rule is when 

documentation is provided that current 

circumstances are about to change. For 

example, an employer might report that an 

employee currently makes $7.50 an hour, 

but a negotiated union contract will increase 

this amount to $8.25 an hour eight weeks 

from the date of assistance. In such cases, 

income can be calculated based on the 

information provided. In this example, the 

calculation would be as follows: 

• $7.50/hour x 40 hours/week x 8 weeks = 

$2,400 

• $8.25/hour x 40 hours/week x 44 weeks 

= $14,520 

• $2,400 + $14,520 = $16,920. 

Verifying Income 

The HOME regulations at 24 CFR 92.203(a) 

require that PJs determine income eligibility 

of HOME applicants by examining source 

documents (such as wage statements or 

interest statements) as evidence of annual 

income. 

PJs may develop their own verification 

procedures provided that they collect source 

documentation and that this documentation 

is sufficient for HUD to monitor program 

compliance. (Sample verification forms are 

provided in Appendix H.) 

PJs may use two of the three verification 

procedures provided to public housing 

agencies (PHAs) for the Section 8 Program 

Technical Guide for Determining Income and Allowances for the HOME Program — 5 
Chapter Two – General Requirements 

as a basis for developing their procedures. 

These forms of verification are third party 

verification and review of documents. (The 

third method provided to PHAs, applicant 

certification, does not provide adequate 

source documentation for the HOME 

Program.) 

Third-Party Verification 

Under this form of verification, a third party 

(e.g., employer, Social Security 

Administration, or public assistance agency) 

is contacted to provide information to verify 

income. Although written requests and 

responses are generally preferred, 

conversations with a third party are 

acceptable if documented through a 

memorandum to the file that notes the 

contact person, information conveyed, and 

date of call. In addition, a PJ may obtain 

third party written verification by facsimile, 

email, or Internet. The PJ must make 

adequate effort to ensure the sender is a 

valid third-party source. 

To conduct third-party verifications, a PJ 

must obtain a written release from the 

household that authorizes the third party to 

release required information. (See 

Appendix H for a sample release form, 

“HOME Program Eligibility Release Form.”) 

Third-party verifications are helpful because 

they provide independent verification of 

information and permit the PJ to determine 

if any changes to current circumstances are 

anticipated. Some third-party providers 

may, however, be unwilling or unable to 

provide the needed information in a timely 

manner. 

Some third-party providers (such as banks) 

may charge a fee to provide the information. 

In such cases, the PJ should attempt to find 

suitable documentation without the thirdparty verification – for example, bank 

statements or a savings passbook. If 

suitable documentation is not available, 

costs associated with third party 

verifications are eligible administrative or 

project expenses under the HOME 

Program; however, low-income 

beneficiaries must not be required to pay for 

verifications as a condition of receiving 

assistance. 

Review of Documents 

Documents provided by the applicant (e.g., 

pay stubs, tax returns, etc.) may be most 

appropriate for certain types of income and 

can be used as an alternative to third party 

verifications. (Note, however, that if a copy 

of a tax return is needed, IRS Form 4506 

“Request for Copy of Tax Form” must be 

completed and signed.) Copies of 

documents should be retained in project 

files. 

Although easier to obtain than third-party 

verifications, a review of documents 

provided by the applicant often does not 

provide all necessary information. For 

instance, an employed applicant’s pay stubs 

may not provide sufficient information about 

the average number of hours worked, 

overtime, tips, and bonuses. In this case, 

the PJ may also need to contact the 

employer to accurately project annual 

income. 

Assessing Information 

PJs must assess all the facts underlying the 

income information collected. Below are 

some of the considerations PJs must take 

into account. 

Pay period. The PJ should determine the 

basis on which employees are paid (hourly, 

weekly or monthly, and with or without 

overtime). An employee who gets paid 

“twice a month” may actually be paid either 

twice a month (24 times a year) or every 

two weeks (26 times a year). 

An annual salary is counted as annual 

income regardless of the payment schedule. 

For example, if a teacher’s annual salary is 

$30,000, this is the annual income 

regardless of whether the teacher is paid 

over a nine- or 12-month period. 

Variations in pay. For applicants whose 

jobs provide steady employment (e.g., 40 

hours a week, 50 weeks a year), it can be 

assumed that there will only be slight 

Technical Guide for Determining Income and Allowances for the HOME Program — 6 
Chapter Two – General Requirements 

variations in the amount of earnings 

reflected in monthly or bi-weekly pay stubs. 

In such cases, three consecutive month’s 

worth of income documentation is an 

appropriate amount upon which to base a 

projection of income over the following 12-

month period. 

For those whose annual employment is less 

stable or does not conform to a twelvemonth schedule (e.g., seasonal laborers, 

construction workers, teachers), PJs should 

examine income documentation that covers 

the entire previous twelve-month period. 

Such workers can experience substantial 

variations in earned income over the course 

of a year. As such, an examination of three 

month’s worth of income documentation 

may not provide an accurate basis upon 

which to project the applicant’s income over 

the following 12 months. 

Sources of earned income. In addition to 

hourly earnings, PJs must account for all 

earned income. In addition to the base 

salary, this will include annual cost of living 

adjustments (COLAs), bonuses, raises, and 

overtime pay. In the case of overtime, it is 

important to clarify whether overtime is 

sporadic or a predictable component of an 

employee’s income. If it is determined that 

an applicant has earned and will continue to 

earn overtime pay on a regular basis, PJs 

should calculate the average amount of 

overtime pay earned by the applicant over 

the pay period the PJ is using to calculate 

income eligibility (3 months or 12 months). 

This average amount is then to be added to 

the total amount of projected earned income 

over the following 12-month period. Exhibit 

2.1 provides a step-by-step explanation of 

the standard methodology for projecting 

annual income. 

Comparing Annual Income to 

Published Income Limits 

Once household and income information 

has been established and verified, a PJ 

must compare the information to the 

appropriate HUD income limits to determine 

if the household is eligible for participation in 

the HOME Program. 

To determine eligibility, PJs must use a 

copy of the most recent HUD income limits, 

adjusted for family size and by geographic 

area (county or metropolitan area). The 

income limits are updated annually and are 

available through HUD offices or on the 

Internet at 

www.hud.gov/offices/cpd/affordablehousing/

programs/home/limits/income/index.cfm.

Exhibit 2.2 provides a sample income limits 

table. 

Determining Household Size 

The income limits are adjusted by 

household7

 size; therefore, one of the first 

steps in determining eligibility is to 

determine the size of the applicant 

household. 

Some households may include persons who 

are not considered as family members for 

the purposes of determining household size 

and income eligibility, including: 

• Foster children; 

• Foster adults; 

• Live-in aides; and 

• Children of live-in aides. 

These persons should not be counted as 

household members when determining 

household size, and their income, if any, is 

not included when calculating annual 

income. 

A child who is subject to a shared-custody 

agreement in which the child resides with 

the household at least 50 percent of the 

time can be counted in the household. 

Comparing Household Income to the 

HUD Limits 

To compare a household’s annual income 

information to the HUD income limits, follow 

these steps: 

1. Find the geographic area in which the 

PJ is located on the HUD income limit 

chart. 

2. Find the column that corresponds to the 

number of persons in the household 

(i.e., family size). 

Technical Guide for Determining Income and Allowances for the HOME Program — 7 
Chapter Two – General Requirements 

3. Compare the verified income of the 

household with the income limit for that 

household size. 

Using the sample income limits chart in 

Exhibit 2.2, consider the following example: 

Mr. and Mrs. Jackson have three 

children that permanently reside with 

them. It has been determined by the PJ 

staff that the Jackson’s have an annual 

household income of $48,500. Based 

on the income limits, the Jackson family 

must have an income of less than 

$59,250 in order to participate in the 

HOME Program. Since the Jackson’s 

income of $48,500 is less than the LowIncome Limit of $59,250, they are 

eligible for HOME assistance. 

Timing of Income Certifications 

All households that receive HOME 

assistance must be income-eligible at the 

time assistance is provided. Generally, the 

HOME Program permits income verification 

dated no earlier than six months prior to 

receipt of assistance. Households must 

qualify as low-income at the time of 

occupancy or at the time HOME funds are 

invested, whichever is later. 

A preliminary determination of eligibility 

should, however, be made much earlier in 

the process. Application processing is labor 

intensive. Early screening for income 

eligibility can eliminate excessive work in 

processing an ineligible applicant. For 

example, when considering an application 

from a developer to rehabilitate an existing 

rental project, it is important for a PJ to 

know whether the current tenants will 

continue to be eligible once HOME funds 

are invested in the project. 

Establishing a deadline for formal eligibility 

determinations is a challenging part of the 

planning process. The formal determination 

of income eligibility must be made shortly 

before a household receives assistance. 

Because eligibility determination involves 

verification of income, waiting too long can 

delay a project. Conducting income 

certifications too early in the process, 

however, might mean that certifications 

become outdated and must be redone. 

Income Certifications for LeasePurchase or Contract-to-Purchase 

Housing 

PJs have some flexibility when certifying the 

income of homebuyers in lease-purchase or 

contract-to-purchase programs. 

Homebuyers are required to qualify as lowincome: 

• In the case of a contract to purchase 

existing housing, at the time of 

purchase; 

• In the case of a lease-purchase 

agreement for existing housing or for 

housing to be constructed, at the time 

the agreement is signed; or 

• In the case of a contract to purchase 

housing to be constructed, at the time 

the contract is signed. 

Income Recertification for Rental 

Housing 

In addition to initial certifications at the time 

of eligibility determinations, tenants 

receiving TBRA or occupying HOMEassisted rental units must have their 

incomes recertified annually. Because new 

income certifications should be effective on 

each tenant’s “anniversary date” (one year 

from the start of assistance or last 

recertification date), the income certification 

process should begin 60 to 90 days prior to 

that time. 

For rental housing projects, the PJ must use 

one of the following three methods for 

recertifying tenant incomes: 

• Review of source documents. This 

involves a review of source 

documentation, such as that done for a 

household’s initial eligibility 

determination. 

• Statement and certification from the 

family. This is a written statement from 

the family indicating family size and 

annual income. This must include a 

certification from the family that 

Technical Guide for Determining Income and Allowances for the HOME Program — 8 
Chapter Two – General Requirements 

information is complete and accurate, 

and must indicate that source 

documents will be provided upon 

request. A sample certification is 

provided in Appendix J. 

• Statement from another government 

program. This is a written statement 

from the administrator of another 

government program under which the 

family receives benefits, and that 

examines the annual (gross) income of 

the family each year. The statement 

must indicate the family size, or provide 

the current income limit for the program 

and a statement that the family’s income 

does not exceed that limit. A sample of 

this type of certification is found in 

Appendix J. 

If the PJ chooses to allow rental project 

owners to accept the written statement from 

the family or other governmental entity at 

income recertification, it must require 

owners to review full source documentation 

every sixth year of the affordability period. 

For a rental project with a 20-year 

affordability period, for example, source 

documentation must be used to certify all 

tenants’ income at initial lease-up, and in 

years six, 12 and 18 of the affordability 

period. In the other years, the family or 

government program statement may be 

accepted without further verification of 

income. 

Technical Guide for Determining Income and Allowances for the HOME Program — 9 
Chapter Two – General Requirements 

Exhibit 2.1 – Step-by-Step Methodology for Projecting Annual Income 

Steps Instructions 

Step 1: Collect appropriate 

income documentation. 

Appropriate documentation includes pay stubs, third-party verification, 

bank statements (checking and/or savings), or certified copies of tax 

returns. (These can be acquired by submitting an IRS Form 4506, 

“Request for Copy of Tax Form.”) 

Step 2: Calculate the 

applicant household’s 

projected income based upon 

documentation. 

This calculation must include hourly wage figures, overtime figures, 

bonuses, anticipated raises, COLAs, or other anticipated changes in 

income. Other specific inclusions must also be reflected in the 

calculation, depending upon which definition of annual income the PJ 

has elected to use for its program. Specific instructions for each of the 

three definitions of income under HOME are provided later in this 

guide. 

Step 3: Compare the amount 

of projected income against 

current HOME income limits. 

Once the PJ has calculated the household’s income, based on its 

selected definition, it must compare the household’s final projected 

figure to annual HOME income limits, which are adjusted according to 

household size. These limits are posted online at: 

www.hud.gov/offices/cpd/affordablehousing/programs/home/limits/inco

me/index/cfm. This information is also available through the CPD 

office of your state or local HUD Field Office. Households whose 

projected annual income is less than the current HOME income limits 

are eligible for HOME assistance. 

Exhibit 2.2 – Sample Income Limits Schedule (FY 2004) 

Area: Baltimore, MD

Adjusted Income Limits 

1 

Person 

2 

Person 

3 

Person 

4 

Person 

5 

Person 

6 

Person 

7 

Person 

8 

Person 

30% Limits $14,400 $16,450 $18,500 $20,600 $22,250 $23,850 $25,500 $27,150 

Very LowIncome 

(50% Limits) $24,000 $27,450 $30,850 $34,300 $37,050 $39,800 $42,550 $45,300 

60% Limits $28,800 $32,940 $37,020 $41,160 $44,460 $47,760 $51,060 $54,360 

Low-Income 

(80% Limits) $38,400 $43,900 $49,400 $54,900 $59,250 $63,650 $68,050 $72,450 

Last Modified: January 2005 

Technical Guide for Determining Income and Allowances for the HOME Program — 10 
Chapter Three 

Calculating Annual (Gross) Income 

As discussed in Chapter One, the HOME 

Program gives PJs the flexibility to choose 

one of three definitions of annual income to 

determine whether households are eligible 

for participation in the HOME Program. The 

three definitions are: 

1. Annual income as defined in 24 CFR 

Part 5 (Part 5 annual income); 

2. Annual income as reported under the 

Census long form for the most recent 

decennial census; and 

3. Adjusted gross income as defined for 

purposes of reporting under Internal 

Revenue Service (IRS) Form 1040 

series for individual Federal annual 

income tax purposes. 

PJs may use different definitions of income 

for each of the different HOME activities it 

administers. For example, a PJ may decide 

to use the Part 5 definition of income for its 

rental projects and TBRA program, and use 

the Census long form definition within its 

homebuyer and owner-occupied 

rehabilitation programs. However, PJs must 

ensure that applicants to their HOMEfunded programs and activities are treated 

equitably. For this reason, the same 

income definition must be used within a 

particular program or activity. For example, 

if a PJ decides to use the Part 5 definition of 

annual income for its homebuyer program, it 

must use this definition for all applicants to 

the homebuyer program. It may not use the 

Census definition for one applicant and the 

Part 5 definition for another applicant. 

Chapter Two discussed how and when 

income information must be verified. This 

chapter provides detailed guidance about 

calculating annual (gross) income using 

each of the three allowable definitions. 

Definition 1: Annual Income as 

Defined in 24 CFR Part 5 

The annual income definition found at 24 

CFR Part 5 is used by a variety of Federal 

programs including Section 8, public 

housing and the Low-Income Housing Tax 

Credit Program. Annual income is used to 

determine program eligibility and, in some 

programs, the level of assistance the 

household will receive. This definition was 

formerly commonly referred to as the 

Section 8 definition. 

The Part 5 definition of annual income is the 

gross amount of income of all adult 

household members that is anticipated to be 

received during the coming 12-month 

period. Each of the italicized phrases in this 

definition is key to understanding the 

requirements for calculating annual income: 

• Gross amount. For those types of 

income counted, gross amounts (before 

any deductions have been taken) are 

used; 

• Income of all adult household 

members. The Part 5 definition of 

annual income contains income 

“inclusions” – types of income to be 

counted – and “exclusions” – types of 

income that are not considered (for 

example, income of minors); and 

• Anticipated to be received. The Part 5 

annual income is used to determine 

eligibility and the amount of Federal 

assistance a family can receive. A PJ 

must, therefore, use a household’s 

expected ability to pay, rather than past 

earnings, when estimating housing 

assistance needs. 

Technical Guide for Determining Income and Allowances for the HOME Program — 11 
Chapter Three – Calculating Annual (Gross) Income 

Whose Income to Count 

Knowing whose income to count is as 

important as knowing which income to 

count. Under the Part 5 definition of annual 

income, special consideration is given to 

income earned by the following groups of 

people: 

• Minors. Earned income of minors, 

including foster children (age 18 and 

under) is not counted. However, 

unearned income attributable to a minor 

(e.g., child support, TANF payments and 

other benefits paid on behalf of a minor) 

is included; 

• Live-in aides. If a household includes a 

paid live-in aide (whether paid by the 

family or a social service program), the 

income of the live-in aide, regardless of 

the source, is not counted. Except 

under unusual circumstances, a related 

person does not qualify as a live-in aide. 

• Persons with Disabilities. During the 

annual recertification of a family’s 

income, PJs are required to exclude 

from annual income certain increases in 

the income of a disabled member of 

qualified families residing in HOMEassisted housing or receiving HOME 

tenant-based rental assistance. 24 CFR 

5.617(a) outlines the eligible increases 

in income. These exclusions from 

annual income are of limited duration. 

The full amount of increase to a 

qualified family’s annual income is 

excluded for the cumulative 12-month 

period beginning on the date the 

disabled family member is first 

employed or the family first experiences 

an increase in annual income 

attributable to the employment. During 

the second cumulative 12-month period, 

the PJ is required to exclude from 

annual income 50 percent of any 

increase in income. The disallowance 

of increased income of an individual 

family member who is a person with 

disabilities is limited to a lifetime 48-

month period. 

• Temporarily absent family members. 

The income of temporarily absent family 

members is counted in the Part 5 

definition of annual income – regardless 

of the amount the absent member 

contributes to the household. For 

example, a construction worker 

employed at a temporary job on the 

other side of the state earns $600 per 

week. He keeps $200 per week for 

expenses and sends $400 per week 

home to his family. The entire amount 

($600 per week) is counted in the 

family’s income; 

• Adult students living away from 

home. If the adult student is counted as 

a member of the household in 

determining the household size (to 

compare against the HUD income 

limits), the first $480 of the student’s 

income must be counted in the family’s 

income. Note, however, that the $480 

limit does not apply to a student who is 

the head of household or spouse (their 

full income must be counted); and 

• Permanently absent family members. 

If a family member is permanently 

absent from the household (e.g., a 

spouse who is in a nursing home), the 

head of household has the choice of 

either counting that person as a member 

of the household, and including income 

attributable to that person as household 

income, or specifying that the person is 

no longer a member of the household. 

Types of Income to Count 

Exhibits 3.1 and 3.2 provide a 

comprehensive list of income that is 

included and excluded from calculations of 

annual income under Part 5. This list 

comes directly from the Federal regulations 

at 24 CFR 5.609. HUD updates this list 

when changes are made by Congress. 

Program administrators generally are 

expected to implement changes within 60 

days of publication in the Federal Register. 

Technical Guide for Determining Income and Allowances for the HOME Program — 12 
Chapter Three – Calculating Annual (Gross) Income 

In general, income exclusions fall into the 

following categories: 

• Benefits that should not be counted as 

income; 

• Income of certain household members 

that should not be counted, including 

earned income of minors and income 

attributable to foster children and live-in 

aides; and 

• Amounts that are counted as assets 

rather than income, such as lump-sum 

lottery winnings. 

Welfare Rent as Income 

Welfare assistance is counted as income. 

Most PJs will use the actual gross amount 

of welfare assistance the household 

receives. In certain “as-paid” localities, 

however, a special calculation is required. 

In an as-paid jurisdiction, welfare assistance 

for housing costs is established separately 

from the rest of the welfare assistance and 

may be adjusted based on the actual cost of 

the family’s housing. 

PJs in as-paid jurisdictions must count as 

income the amount of general assistance a 

family receives plus the maximum amount 

of housing assistance the family could

receive (rather than the amount the 

household is actually receiving). 

Sample Format for Computing Part 5 

Annual Income 

Exhibit 3.3 shows a sample format for 

computing annual income using the Part 5 

annual income definition. 

Exhibits 3.4 through 3.7 provide examples 

and exercises that demonstrate how the 

Part 5 annual income definition is applied to 

individual family circumstances. Answers to 

the exercises are provided in each exhibit. 

These exhibits do not include income from 

assets, which is addressed below. 

Examples and exercises concerning asset 

calculation follow that discussion. 

Treatment of Assets 

Some assistance programs require that 

families “spend down” assets before they 

can participate. There is no asset limitation 

for participation in the HOME Program. 

Income from assets is, however, recognized 

as part of annual income under the Part 5 

definition. To comply with the Part 5 rules 

regarding assets, PJs must know: (1) what 

to include as assets, (2) how to compute the 

market and cash value of those assets, and 

(3) how to determine the income from the 

asset to be included in annual income. 

What to Include as an Asset 

In general terms, an asset is a cash or noncash item that can be converted to cash. 

Exhibit 3.8 summarizes items that are and 

are not to be considered assets. (Note: it is 

the income earned – e.g., interest on a 

savings account – not the value of the asset 

– that is counted in annual income.) 

Exhibits 3.9 through 3.11 provide examples 

and exercises that demonstrate how income 

from assets is calculated. Market Value and 

Cash Value Assets have both a market 

value and a cash value. The market value 

of an asset is simply its dollar value on the 

open market. For example, the market 

value of a share of stock is the price quoted 

on the stock exchange on a particular day. 

A property’s market value is the amount it 

would sell for on the open market. This may 

be determined by comparing the property 

with similar, recently sold properties. 

An asset’s cash value is the market value 

less reasonable expenses required to 

convert the asset to cash, including: 

• Penalties or fees for converting 

financial holdings. Any penalties, 

fees, or transaction charges levied when 

an asset is converted to cash are 

deducted from the market value to 

determine its cash value (e.g., penalties 

charged for premature withdrawal of a 

certificate of deposit, the transaction fee 

for converting mutual funds to cash or 

broker fees for converting stocks to 

cash); and/or 

• Costs for selling real property. 

Settlement costs, real estate transaction 

fees, payment of mortgages/liens 

Technical Guide for Determining Income and Allowances for the HOME Program — 13 
Chapter Three – Calculating Annual (Gross) Income 

against the property and any legal fees 

associated with the sale of real property 

are deducted from the market value to 

determine equity in real estate. 

Under the rules of Part 5, only the cash 

value (rather than the market value) of an 

item is counted as an asset. If more than 

one person owns an asset, PJs must 

prorate the asset according to the 

applicant’s percentage of ownership. If no 

percentage is specified or provided by state 

or local law, PJs must prorate the asset 

evenly among all owners. If an asset is not 

effectively owned by an individual, it is not 

counted as an asset. 

Actual Income from Assets 

Assets can generate income, and for the 

purpose of determining an applicant’s 

income, the actual income generated by the 

asset (e.g., interest on a savings or 

checking account) is what counts, not the 

value of the asset. The income is counted, 

even if the household elects not to receive 

it. For example, if an applicant elects to 

reinvest the interest or dividends from an 

asset, it is still counted as income. 

As with other types of income, the income 

included in annual income calculation is the 

income that is anticipated to be received 

from the asset during the coming 12 

months. Several methods may be used to 

approximate the anticipated income from 

the asset. For example, to obtain the 

anticipated interest on a savings account, 

the current account balance can be 

multiplied by the current interest rate 

applicable to the account. Alternatively, if 

the value of the account is not anticipated to 

change in the near future and the interest 

rate has been stable, a copy of the IRS 

1099 form showing past interest earned can 

be used. 

Many PJs are surprised to learn that 

checking account balances (as well as 

savings account balances) are considered 

an asset. This rule is not intended to count 

monthly income as an asset, but rather, is 

recognition that some households keep 

assets in their checking accounts. To avoid 

counting monthly income as an asset, PJs 

should use the average monthly balance 

over a six-month period as the cash value of 

the checking account. 

Two Unique Rules 

For most assets, calculating cash value and 

the income from the assets is 

straightforward. Special rules have, 

however, been established to address two 

circumstances – situations in which the 

assets produce little or no income, and 

assets that are disposed of for less than fair 

market value. 

When an Asset Produces Little or No 

Income 

This rule assumes that a household with 

assets has an increased payment ability, 

even if its assets do not currently produce 

income. (For example, a household that 

owns land that is not rented or otherwise 

used to produce income.) Rather than 

require the household to dispose of the 

property, the rule requires that an “imputed” 

income be calculated based on a Passbook 

Rate that is applied to the cash value of all 

assets. 

This rule only applies if the total cash value 

of all assets is more than $5,000. The 

following examples illustrate how imputed 

income from assets calculation is applied. 

Example 1: The Cayhill family has $6,000 

(average balance over six months) in a noninterest-bearing checking account. The PJ 

would include in annual income an amount 

based on the current Passbook Rate. The 

calculation would be: $6,000 x .02 = $120. 

Example 2: The Shaw family has $3,000 

(average balance over six months) in a noninterest-bearing checking account and 

$5,500 in an interest-bearing savings 

account. The family reports and the PJ 

verifies $150 interest on the savings 

account. The PJ would count the greater of 

the actual income from assets or the 

imputed income based on the Passbook 

Rate, as shown below: 

Technical Guide for Determining Income and Allowances for the HOME Program — 14 
Chapter Three – Calculating Annual (Gross) Income 

Imputed income ($8,500 x .02) = $170 

Actual income $150 

Included in annual income $170 

Note: Currently, each Field Office 

establishes the passbook savings rate to be 

used by the PHAs within its jurisdiction. A 

Field Office determines the rate based on 

the average interest rate received on 

passbook savings accounts at several 

banks in the local area (24 CFR 5.609 and 

Form HUD-50058 Family Report Instruction 

Booklet,8

 p. 22). Although the new Public 

Housing Occupancy Guidebook,9

 page 122, 

footnote 35, states that "Consistent with the 

Multi-family Housing Program, PHAs will 

use a standard 2% passbook rate," the 

current method described above will remain 

in effect until superceded by PIH Notice. 

Check with your state or regional HUD Field 

Office for the applicable Passbook Rate for 

your community. 

Example 3: The Smiths have $600 

(average balance over six months) in a noninterest-bearing checking account. No 

income from assets would be counted 

because the family has no actual income 

from assets and the total amount of all 

assets is less than $5,000. 

When Assets are Disposed of at Less 

than Fair Market Value 

Applicants who dispose of assets for less 

than fair market value (i.e., value on the 

open market in an “arm’s length 

transaction”) have, in essence, voluntarily 

reduced their ability to afford housing. The 

Part 5 rules require, therefore, that any 

asset disposed of for less than fair market 

value during the two years preceding the 

income determination be counted as if the 

household still owned the asset. 

The amount to be included as an asset is 

the difference between the cash value of the 

asset and the amount that was actually 

received (if any) in the disposition of the 

asset. Consider the following examples. 

Example 1: Mr. Jones cashed in stock to 

give a granddaughter funds for college in 

August 2004. The stock had a market value 

of $4,500 and a broker fee of $500 was 

charged for the transaction. 

Market value $4,500 

Less broker’s fee 500

Cash value to be considered $4,000 

The $4,000 in assets would be counted for 

any income determination conducted until 

August 2006 (looking forward two years 

from the time of disposal). 

If Mr. Jones has no other assets, no income 

from assets would be included in annual 

income because the cash value of the asset 

is less than $5,000. If other assets brought 

total assets to more than $5,000, however, 

the imputed income calculation described 

previously would be required. 

Example 2: Mrs. Dutch “sold” a piece of 

property to a family member for $30,000 on 

July 1, 2004. The home was valued at 

$75,000 and had no loans against it. 

Market value $75,000 

Less settlement costs 3,000 

Less sales price 30,000

Cash value to be considered $42,000 

The $42,000 would be counted as an asset 

for any income determination conducted 

until July 1, 2006. 

The $42,000 would be combined with the 

cash value of other assets (if any), and an 

imputed income calculation would be 

required. 

Each applicant must certify whether an 

asset has been disposed of for less than fair 

market value. Assets disposed of for less 

than fair market value as a result of 

foreclosure or bankruptcy are not included 

in this calculation. In the case of a 

disposition as part of a separation or divorce 

settlement, the disposition will not be 

considered to be less than fair market value 

if the applicant receives (or received) 

important consideration not measurable in 

dollar terms. 

Technical Guide for Determining Income and Allowances for the HOME Program — 15 
Chapter Three – Calculating Annual (Gross) Income 

Definition 2: Census Long Form 

Annual Income 

Every ten years, the U.S. Bureau of the 

Census conducts a complete enumeration 

of all residents in the United States. This 

process involves gathering extensive 

information about people and where they 

live through the use of a detailed 

questionnaire, referred to as the Long Form. 

An entire section of the Long Form includes 

questions concerning household income. 

PJs may choose to use this definition of 

“annual income” when determining the 

eligibility of applicants to its HOME 

programs. 

Types of Income to be Counted 

Exhibit 3.12 lists what is and is not included 

in the annual income definition as set forth 

in the Long Form used in the 2000 census. 

The list of income inclusions for the Census 

Long Form definition is very similar to the 

list of income inclusions under the Part 5 

definition of annual income. However, Part 

5 includes the income of minors and adults 

over the age of 18 whereas the Census 

Long Form definition includes the income of 

minors and adults over the age of 15. 

Treatment of Assets 

The primary difference between the Part 5 

and Census Long Form definitions of annual 

income is in the treatment of assets. The 

asset calculation required when using the 

Part 5 definition is not necessary for the 

Long Form calculation of annual income. 

This is not to say that income from certain 

kinds of assets is not included in the 

Census Long Form definition of income. 

While the asset calculation is unique to the 

Part 5 definition, income generated by 

assets is still considered when calculating 

income under the Census (and IRS) 

definition of income. 

As shown in Exhibit 3.12, the following 

types of income from assets are included in 

the Census Long Form definition of annual 

income: 

• Interest; 

• Dividends; 

• Profit from royalties or real estate; and 

• Income from payments from an estate 

or trust fund. 

Income from some types of assets, 

however, is not included in the income 

calculation. Examples include: 

• Withdrawals of savings; 

• Capital gains (or losses) from the sale of 

homes, stock, and other property; 

• Insurance settlements; and 

• Assets disposed of for less than fair 

market value within two years prior to 

the income determination. 

The treatment of assets is an important 

distinction PJs must consider when 

determining which definition of annual 

income to use. 

Sample Format for Computing Census 

Long Form Annual Income 

Exhibit 3.13 is a sample format for 

calculating annual income based on the 

Census Long Form definition. It is very 

similar to the sample format for Part 5 

annual income except that the asset 

calculation information is not included. 

Exhibit 3.14 provides an example of the 

Census Long Form annual income 

calculation. 

Definition 3: IRS Form 1040 Adjusted 

Gross Income 

Citizens of the United States and resident 

aliens, except those with gross incomes 

below a certain level, are required to file an 

income tax return with the Department of 

the Treasury’s Internal Revenue Service 

(IRS) each year. The tax return is officially 

referred to as IRS Form 1040. The 

definition of adjusted gross income for the 

HOME Program is based on this form, also 

commonly referred to as “the long form.” 

The definition set forth in the short form, 

known as the 1040EZ (known as “the short 

form”), may not be used to determine 

applicant eligibility. 

Technical Guide for Determining Income and Allowances for the HOME Program — 16 
Chapter Three – Calculating Annual (Gross) Income 

IRS Form 1040 requires reporting of certain 

kinds of income, as the Part 5 and Census 

Long Form definitions of income discussed 

in this guide require, which are added 

together to constitute what is referred to as 

gross income. However, unlike the other 

two definitions of income, another step is 

required. From the gross income figure, 

certain deductions are taken to arrive at an 

adjusted gross income number. This is the 

figure that is used to determine an 

applicant’s eligibility for participation in the 

HOME Program. 

The term ”adjusted gross income” as used 

when referring to the IRS Form 1040 

definition of income should not be confused 

with adjusted income, which is calculated in 

accordance with the regulations at 24 CFR 

Part 5 and used to determine subsidy and 

payment levels. (Refer to Chapter 4). 

Note: The HOME and CDBG Programs 

use the IRS definition of annual income 

in different ways: 

• CDBG does not require use of the 

long form. 

• CDBG allows tax returns as proof of 

income. 

• Documentation for CDBG income 

qualification can be up to 12 months 

old. 

Calculating Adjusted Gross Income 

PJs must determine if an applicant 

household has any of the types of income 

included in the Form 1040 definition of 

income and what amount, if any, must be 

included when calculating gross income. 

Exhibit 3.15 lists the types of income that 

are to be included in the calculation. 

Once the gross income figure is obtained, 

applicable deductions must be subtracted to 

arrive at the household’s adjusted gross 

income. The deductions are: 

• IRA deductions, 

• Medical savings account deductions, 

• Moving expenses, 

• One-half of self-employment taxes, 

• Self-employed health insurance 

deductions, 

• KEOGH and self-employed SEP and 

SIMPLE plans, 

• Penalties on early withdrawal of 

savings, and 

• Paid alimony. 

To determine if a household may take any 

of these deductions and in what amount, the 

IRS Form 1040 instructions should be 

followed. 

If the household has a Form 1040 that was 

submitted to the IRS for income tax 

purposes and the form is less than six 

months old, PJs may use the form to 

determine eligibility. Using the actual tax 

return has several implications. First, PJs 

must ensure that IRS Form 4506 “Request 

for Copy of Tax Form” is completed and 

signed. Secondly, PJs are required to 

determine if any of the circumstances as 

reported on the form have changed or will 

change in the upcoming 12 months and to 

make such adjustments. For example, if the 

applicant received a raise at his/her job 

since the tax return was submitted, the 

applicant’s current income should be used 

to determine eligibility. Finally, PJs must 

ensure that everyone in the household is 

represented through the use of the tax 

return. For example, if a husband and wife 

file a joint return, but their adult son that 

resides with them files a separate return, 

the tax return of the husband and wife 

would not be sufficient for determining 

income. 

Treatment of Assets 

The primary difference between the Part 5 

and IRS Form 1040 definitions of annual 

income is treatment of assets. The asset 

calculation required when using the Part 5 

definition is not necessary for the IRS Form 

1040 calculation of adjusted gross income. 

This is not to say that income from certain 

kinds of assets is not included in the IRS 

Form 1040 definition of income. While the 

asset calculation is unique to the Part 5 

Technical Guide for Determining Income and Allowances for the HOME Program — 17 
Chapter Three – Calculating Annual (Gross) Income 

definition, income from certain assets must 

still be carefully considered when 

calculating income under the IRS (and 

Census) definition of annual income. 

As shown in Exhibit 3.15, the following 

types of income from assets are included in 

the IRS Form 1040 definition of annual 

income: 

• Taxable Interest; 

• Dividends; 

• Prizes, awards; and 

• Gambling, lottery or raffle winnings. 

Some types of assets, however, are not 

included in the income calculation. 

Examples include life insurance proceeds 

and inherited money or property. 

The treatment of assets is an important 

distinction PJs must consider when 

determining which definition of annual 

income to use. 

Sample Format for Computing IRS Form 

1040 Adjusted Gross Income 

Exhibit 3.16 is a sample format for 

computing IRS Form 1040 adjusted gross 

income. Exhibit 3.17 provides an example of 

how to calculate income using the IRS 

definition. 

Comparison of the Three Definitions 

of Annual Income 

As the exhibits on the following pages 

demonstrate, the definition of annual 

income that a PJ selects can affect the 

eligibility of certain households, depending 

on their particular financial circumstances. 

When deciding which definition(s) to use, 

the PJ may want to consider how it will use 

each definition, staff familiarity with any of 

the definitions, the types of income 

inclusions and exclusions for each 

definition, and the calculation of assets. 

Using the Definitions 

PJs must select one of the three definitions 

of income for each of their HOME-funded 

activities and apply that definition to all 

program applicants of each activity. For 

example, a PJ can choose to use the Part 5 

definition of annual income for its 

homeownership program. If it does, it must 

apply this definition to all applicants to that 

program. It may not use the IRS Form 1040 

definition of adjusted gross income for one 

household just because they do not qualify 

using the Part 5 definition of annual income. 

The PJ may, however, choose to use the 

IRS Form 1040 definition for all applicants 

to its homeowner rehabilitation program. 

Familiarity and Consistency 

While the HUD definition of income found in 

24 CFR Part 5 may appear cumbersome on 

the surface, it has been used for many 

years in various HUD programs like Section 

8 and public housing. Early on in the 

HOME Program, it was the only definition of 

annual income PJs were permitted to use. 

In addition, the HUD Part 5 definition of 

income is used in the Low Income Housing 

Tax Credit Program. This program is often 

used in combination with HOME Program 

funding in rental housing projects. 

For these reasons, most PJs have 

experience with this definition, and many 

have developed administrative procedures 

and forms based on these rules and 

requirements. This existing expertise 

should be considered when making a 

decision about which definition to use. 

Asset Calculation 

The Part 5 definition of annual income 

requires the special computations 

concerning assets. The Census Long Form 

and IRS Form 1040 definitions do not 

require such calculations; however, income 

from certain kinds of assets may be 

included under these definitions. 

Technical Guide for Determining Income and Allowances for the HOME Program — 18 
Chapter Three – Calculating Annual (Gross) Income 

Income Inclusions and Exclusions 

There are some differences between the 

three definitions of income that can result in 

different income calculations. Some of the 

differences are illustrated in the following 

case studies (Exhibits 3.18 and 3.19). The 

three most significant differences between 

the three definitions are: 

1. Child support payments are not included 

in the IRS Form 1040 definition of 

income. 

2. The IRS Form 1040 definition allows the 

deduction of alimony payments. 

3. Inheritances and insurance settlements 

are included in the Part 5 asset 

calculation, but not included in the 

Census or IRS definitions of income. 

Technical Guide for Determining Income and Allowances for the HOME Program — 19 
Chapter Three – Calculating Annual (Gross) Income 

Exhibit 3.1 – 24 CFR Part 5 Annual Income Inclusions 

1. The full amount, before any payroll deductions, 

of wages and salaries, overtime pay, 

commissions, fees, tips and bonuses, and 

other compensation for personal services. 

2. The net income from the operation of a 

business or profession. Expenditures for 

business expansion or amortization of capital 

indebtedness shall not be used as deductions 

in determining net income. An allowance for 

depreciation of assets used in a business or 

profession may be deducted, based on 

straight-line depreciation, as provided in 

Internal Revenue Service regulations. Any 

withdrawal of cash or assets from the operation 

of a business or profession will be included in 

income, except to the extent the withdrawal is 

reimbursement of cash or assets invested in 

the operation by the family. 

3. Interest, dividends, and other net income of 

any kind from real or personal property. 

Expenditures for amortization of capital 

indebtedness shall not be used as deductions 

in determining net income. An allowance for 

depreciation is permitted only as authorized in 

number 2 (above). Any withdrawal of cash or 

assets from an investment will be included in 

income, except to the extent the withdrawal is 

reimbursement of cash or assets invested by 

the family. Where the family has net family 

assets in excess of $5,000, annual income 

shall include the greater of the actual income 

derived from all net family assets or a 

percentage of the value of such assets based 

on the current passbook savings rate, as 

determined by HUD. 

4. The full amount of periodic amounts received 

from Social Security, annuities, insurance 

policies, retirement funds, pensions, disability 

or death benefits, and other similar types of 

periodic receipts, including a lump-sum amount 

or prospective monthly amounts for the 

delayed start of a periodic amount (except for 

certain exclusions, listed in Exhibit 3.2, number 

14). 

5. Payments in lieu of earnings, such as 

unemployment and disability compensation, 

worker’s compensation, and severance pay 

(except for certain exclusions, as listed in 

Exhibit 3.2, number 3). 

6. Welfare Assistance. Welfare assistance 

payments made under the Temporary 

Assistance for Needy Families (TANF) program 

are included in annual income: 

• Qualify as assistance under the TANF 

program definition at 45 CFR 260.31; and 

• Are otherwise excluded from the calculation 

of annual income per 24 CFR 5.609(c). 

If the welfare assistance payment includes an 

amount specifically designated for shelter and 

utilities that is subject to adjustment by the 

welfare assistance agency in accordance with 

the actual cost of shelter and utilities, the 

amount of welfare assistance income to be 

included as income shall consist of: 

• the amount of the allowance or grant 

exclusive of the amount specifically 

designated for shelter or utilities; plus

• the maximum amount that the welfare 

assistance agency could in fact allow the 

family for shelter and utilities. If the family’s 

welfare assistance is reduced from the 

standard of need by applying a percentage, 

the amount calculated under 24 CFR 5.609 

shall be the amount resulting from one 

application of the percentage. 

7. Periodic and determinable allowances, such as 

alimony and child support payments, and 

regular contributions or gifts received from 

organizations or from persons not residing in 

the dwelling. 

8. All regular pay, special pay, and allowances of 

a member of the Armed Forces (except as 

provided in number 8 of Income Exclusions). 

Last Modified: January 2005 

Technical Guide for Determining Income and Allowances for the HOME Program — 20 
Chapter Three – Calculating Annual (Gross) Income 

Exhibit 3.2 – 24 CFR Part 5 Annual Income Exclusions 

1. Income from employment of children (including 

foster children) under the age of 18 years. 

2. Payments received for the care of foster 

children or foster adults (usually persons with 

disabilities, unrelated to the tenant family, who 

are unable to live alone). 

3. Lump-sum additions to family assets, such as 

inheritances, insurance payments (including 

payments under health and accident insurance 

and worker’s compensation), capital gains, and 

settlement for personal or property losses 

(except as provided in Exhibit 3.1, number 5 of 

Income Inclusions). 

4. Amounts received by the family that are 

specifically for, or in reimbursement of, the cost 

of medical expenses for any family member. 

5. Income of a live-in aide (as defined in 24 CFR 

5.403). 

6. Certain increases in income of a disabled 

member of qualified families residing in HOMEassisted housing or receiving HOME tenantbased rental assistance (24 CFR 5.671(a)). 

7. The full amount of student financial assistance 

paid directly to the student or to the educational 

institution. 

8. The special pay to a family member serving in 

the Armed Forces who is exposed to hostile 

fire. 

9. (a) Amounts received under training programs 

funded by HUD. 

(b) Amounts received by a person with a 

disability that are disregarded for a limited time 

for purposes of Supplemental Security Income 

eligibility and benefits because they are set 

side for use under a Plan to Attain SelfSufficiency (PASS). 

(c) Amounts received by a participant in other 

publicly assisted programs that are specifically 

for, or in reimbursement of, out-of-pocket 

expenses incurred (special equipment, 

clothing, transportation, childcare, etc.) and 

which are made solely to allow participation in 

a specific program. 

(d) Amounts received under a resident service 

stipend. A resident service stipend is a modest 

amount (not to exceed $200 per month) 

received by a resident for performing a service 

for the PHA or owner, on a part-time basis, that 

enhances the quality of life in the development. 

Such services may include, but are not limited 

to, fire patrol, hall monitoring, lawn 

maintenance, resident initiatives coordination, 

and serving as a member of the PHA’s 

governing board. No resident may receive 

more than one such stipend during the same 

period of time. 

(e) Incremental earnings and benefits resulting 

to any family member from participation in 

qualifying state or local employment training 

programs (including training not affiliated with 

a local government) and training of a family 

member as resident management staff. 

Amounts excluded by this provision must be 

received under employment training programs 

with clearly defined goals and objectives, and 

are excluded only for the period during which 

the family member participates in the 

employment training program. 

10. Temporary, nonrecurring, or sporadic income 

(including gifts). 

11. Reparation payments paid by a foreign 

government pursuant to claims filed under the 

laws of that government by persons who were 

persecuted during the Nazi era. 

12. Earnings in excess of $480 for each full-time 

student 18 years old or older (excluding the 

head of household or spouse). 

13. Adoption assistance payments in excess of 

$480 per adopted child. 

14. Deferred periodic amounts from supplemental 

security income and social security benefits 

that are received in a lump sum amount or in 

prospective monthly amounts. 

15. Amounts received by the family in the form of 

refunds or rebates under state or local law for 

property taxes paid on the dwelling unit. 

16. Amounts paid by a state agency to a family 

with a member who has a developmental 

disability and is living at home to offset the 

cost of services and equipment needed to 

keep the developmentally disabled family 

member at home. 

17. Amounts specifically excluded by any other 

Federal statute from consideration as income 

for purposes of determining eligibility or 

benefits under a category of assistance 

programs that includes assistance under any 

program to which the exclusions set forth in 24 

CFR 5.609(c) apply. A notice will be 

published in the Federal Register and 

distributed to housing owners identifying the 

benefits that qualify for this exclusion. 

Technical Guide for Determining Income and Allowances for the HOME Program — 21 
Chapter Three – Calculating Annual (Gross) Income 

Updates will be published and distributed when 

necessary. The following is a list of income 

sources that qualify for that exclusion: 

• The value of the allotment provided to an 

eligible household under the Food Stamp 

Act of 1977; 

• Payments to volunteers under the 

Domestic Volunteer Service Act of 1973 

(employment through AmeriCorps, VISTA, 

Retired Senior Volunteer Program, Foster 

Grandparents Program, youthful offender 

incarceration alternatives, senior 

companions);

• Payments received under the Alaskan 

Native Claims Settlement Act; 

• Income derived from the disposition of 

funds to the Grand River Band of Ottawa 

Indians; 

• Income derived from certain submarginal 

land of the United States that is held in 

trust for certain Indian tribes; 

• Payments or allowances made under the 

Department of Health and Human 

Services’ Low-Income Home Energy 

Assistance Program; 

• Payments received under the Maine Indian 

Claims Settlement Act of 1980 ( 25 U.S.C. 

1721); 

• The first $2,000 of per capita shares 

received from judgment funds awarded by 

the Indian Claims Commission or the U.S. 

Claims Court and the interests of individual 

Indians in trust or restricted lands, including 

the first $2,000 per year of income received 

by individual Indians from funds derived 

from interests held in such trust or 

restricted lands; 

• Amounts of scholarships funded under Title 

IV of the Higher Education Act of 1965, 

including awards under the Federal workstudy program or under the Bureau of 

Indian Affairs student assistance programs; 

• Payments received from programs funded 

under Title V of the Older Americans Act of 

1985 (Green Thumb, Senior Aides, Older 

American Community Service Employment 

Program);

• Payments received on or after January 1, 

1989, from the Agent Orange Settlement 

Fund or any other fund established 

pursuant to the settlement in the In Re 

Agent Orange product liability litigation, 

M.D.L. No. 381 (E.D.N.Y.); 

• Earned income tax credit refund payments 

received on or after January 1, 1991, 

including advanced earned income credit 

payments; 

• The value of any child care provided or 

arranged (or any amount received as 

payment for such care or reimbursement 

for costs incurred for such care) under the 

Child Care and Development Block Grant 

Act of 1990; 

• Payments received under programs funded 

in whole or in part under the Job Training 

Partnership Act (employment and training 

programs for Native Americans and 

migrant and seasonal farm workers, Job 

Corps, veterans employment programs, 

state job training programs and career 

intern programs, AmeriCorps);

• Payments by the Indian Claims 

Commission to the Confederated Tribes 

and Bands of Yakima Indian Nation or the 

Apache Tribe of Mescalero Reservation;

• Allowances, earnings, and payments to 

AmeriCorps participants under the National 

and Community Service Act of 1990;

• Any allowance paid under the provisions of 

38 U.S.C. 1805 to a child suffering from 

spina bifida who is the child of a Vietnam 

veteran;

• Any amount of crime victim compensation 

(under the Victims of Crime Act) received 

through crime victim assistance (or 

payment or reimbursement of the cost of 

such assistance) as determined under the 

Victims of Crime Act because of the 

commission of a crime against the 

applicant under the Victims of Crime Act; 

and

Allowances, earnings, and payments to 

individuals participating in programs under 

•

the Workforce Investment Act of 1998. 

Last Modified: January 2005 

Technical Guide for Determining Income and Allowances for the HOME Program — 22 
Chapter Three – Calculating Annual (Gross) Income 

Exhibit 3.3 – Sample Format for Computing Part 5 Annual Income 

1. Name: 2. Identification No.: 

ASSETS

Family 

Member Asset Description 

Current Cash Value 

of Assets 

Actual Income 

from Assets 

3. Net Cash Value of Assets................................. 3. 

4. Total Actual Income from Assets................................................................. 4. 

5. If line 3 is greater than $5,000, multiply line by ___ (Passbook Rate) 

and enter results here; otherwise, leave blank. 

5. 

ANTICIPATED ANNUAL INCOME 

Family 

Members 

a. Wages/ 

Salaries 

b. Benefits/ 

Pensions 

c. Public 

Assistance 

d. Other 

Income 

e. Asset 

Income 

Enter the

greater of 

lines 4 or 5 

from above 

in e.

6. Totals a. b. c. d. e. 

7. Enter total of items from 6a. through 6e. This is Annual Income .............................. 7. 

X 

Signature 

For Office Use Only 

$__________ Income Limit 

$__________ Income Limit of Household 

Technical Guide for Determining Income and Allowances for the HOME Program — 23 
Chapter Three – Calculating Annual (Gross) Income 

Exhibit 3.4 – Calculating Part 5 Annual Income – Example 

Family Members Position in Family Age Income Sources 

George Jefferson Head 53 Works full-time at $7.25/hour; also receives 

$400/month from the government as a result of a 

settlement in the Agent Orange product liability 

litigation. 

Eloise Jefferson Spouse 48 Works 18 hours/week at a bank at $7.50/hour; also 

receives $50/month from her mother to help with 

expenses. 

Lionel Jefferson Son 19 Full-time student at City College where he has a 

part-time, 15-hour/week job in the student bookstore 

at $6.00/hour for the 46 weeks when classes are in 

session. 

Under the HOME Program, the Income Limit for a family of three in the jurisdiction is $23,900. Are the 

Jefferson’s eligible for HOME assistance? Assume for this example that the Jefferson’s have no 

assets. 

ANTICIPATED ANNUAL INCOME 

Family 

Members 

a. Wages/ 

Salaries 

b. Benefits/ 

Pensions 

c. Public 

Assistance 

d. Other 

Income 

e. Asset 

Income 

George $15,080 Enter the 

Eloise $7,020 $600 greater of 

Lionel $480 lines 4 or 5 

from above 

in e.

6. Totals a. $22,580 b. c. d. $600 e. N/A 

7. Enter total of items from 6a. through 6e. This is Annual Income .............................. 7. $23,180 

This family is eligible for assistance because its total income of $23,180 is below the Low-Income Limit. 

Explanation 

George George’s earning from work count as income, but his income from the Agent Orange 

Settlement Fund ($4,800/year) does not. Thus, George’s income is $7.25/hour x 40 

hours/week x 52 weeks/year, or $15,080. 

Eloise Eloise’s income from wages of $7.50/hour x 18 hours/week x 52 weeks, or $7,020. In 

addition, her regular gift income of $50/month or $600/year counts as income. (The gift 

income is counted as “other income.”) 

Lionel Because Lionel is a full-time student and is not the head of household or spouse, only the first 

$480 of his earnings count toward the family income. 

Technical Guide for Determining Income and Allowances for the HOME Program — 24 
Chapter Three – Calculating Annual (Gross) Income 

Exhibit 3.5 – Calculating Part 5 Annual Income – Exercise 

Family Members Position in Family Age Income Sources 

Blanche Deverou Head 55 Works 6 hours/night, 4 nights/week at $5.00/hour as 

a waitress; also earns an average of $55/night in 

tips. 

Rose Nylen Friend 58 Earns $6.50/hour as a full-time aide in a hospital; 

employer reports that her wages will increase to 

$6.75/hour, 7 weeks from the effective date of this 

calculation. 

Dorothy Spornac Friend 61 Earns $60/day as a substitute teacher, and works 

an average of 3 days/week for the 40 weeks school 

is in session (she made $7,200 last year); also 

receives $40/month in Food Stamps. 

Under the HOME Program, the Income Limit for a household of three is $38,500. Assuming that these 

are the only sources of income, does the household qualify for assistance? 

Complete the following table to calculate annual income (as defined in 24 CFR Part 5) for the household. 

Answers are found on the following page. 

ANTICIPATED ANNUAL INCOME 

Family 

Members 

a. Wages/ 

Salaries 

b. Benefits/ 

Pensions 

c. Public 

Assistance 

d. Other 

Income 

e. Asset 

Income 

Blanche Enter the 

Rose greater of 

Dorothy lines 4 or 5 

from above 

in e. 

6. Totals a. b. c. d. e. N/A 

7. Enter total of items from 6a. through 6e. This is Annual Income .............................. 7. 

Technical Guide for Determining Income and Allowances for the HOME Program — 25 
Chapter Three – Calculating Annual (Gross) Income 

Exhibit 3.5 – Calculating Part 5 Annual Income – Exercise (continued) 

ANSWERS 

ANTICIPATED ANNUAL INCOME 

Family 

Members 

a. Wages/ 

Salaries 

b. Benefits/ 

Pensions 

c. Public 

Assistance 

d. Other 

Income 

e. Asset 

Income 

Blanche $17,680 Enter the 

Rose $13,980 greater of 

Dorothy $7,200 lines 4 or 5 

from above 

in e.

6. Totals a. $38,860 b. c. d. e. N/A 

7. Enter total of items from 6a. through 6e. This is Annual Income .............................. 7. $38,860 

The household is not eligible for assistance. Its income exceeds the Low-Income Limit by $360. 

Explanation 

Blanche Blanche’s income must include both wages and tips. (The tips are included as wage/salary 

income.) Her wage income is $6,240 annually ($5.00/hour x 6 hours/night x 4 nights/week x 

52 weeks/year) and her tip income is $11,440 annually ($55/night x 4 nights/week x 52 

weeks/year). 

Rose Rose’s wage income must be calculated in two steps. For the first 6 weeks of the year, she 

earns $6.50/hour. Her income at this wage is $6.50/hour x 40 hours/week x 6 weeks = 

$1,560. For the next 46 weeks, her wage will be $6.75/hour. Her income at this wage is 

$6.75/hour x 40 hours/week x 46 weeks = $12,420. 

Dorothy Dorothy made $7,200 last year, and there is no reason to expect that she will work more or 

less often in the coming year. Her income is, therefore, estimated at $7,200. Per the Income 

Exclusions (see Exhibit 3.2), the income she receives from Food Stamps is excluded from 

this calculation. 

Technical Guide for Determining Income and Allowances for the HOME Program — 26 
Chapter Three – Calculating Annual (Gross) Income 

Exhibit 3.6 – Calculating Part 5 Annual Income – Example 

Family Members Position in Family Age Income Sources 

Murphy Brown Head 38 Earns $550 semi-monthly as a manager in the 

housewares department of the local Kmart, and 

receives $100/month in child support. 

Eldon Bernakey Boyfriend 36 Earns $250/week as a part-time painting instructor 

at the local school for the 40 weeks/year when 

school is in session; attends evening classes at the 

Art Institute, which he pays with a State Student 

Incentive Grant of $3,500; and pays $50/month in 

child support for his twins – when he can. 

Avery Brown Son 3 No income. 

Under the HOME Program, the Income Limit for a family of three in the jurisdiction is $25,700. Is this 

household eligible for HOME assistance? 

ANTICIPATED ANNUAL INCOME 

Family 

Members 

a. Wages/ 

Salaries 

b. Benefits/ 

Pensions 

c. Public 

Assistance 

d. Other 

Income 

e. Asset 

Income 

Murphy $13,200 $1,200 Enter the 

Eldon $10,000 greater of 

lines 4 or 5 

from above 

in e.

6. Totals a. $23,200 b. c. d. $1,200 e. N/A 

7. Enter total of items from 6a. through 6e. This is Annual Income .............................. 7. $24,400 

This family is eligible for assistance. Its total income is $24,400, which is below the Low- Income Limit. 

Explanation 

Murphy Murphy’s annual wage income is $550 semi-monthly x 24 periods/year, or $13,200. In 

addition, she receives $100/month x 12 months = $1,200/year. This is other income. 

Eldon Eldon’s wage income is based on 40 weeks of work: $250/week x 40 weeks/year, or $10,000 

annually. His scholarship does not count as income. The child support Eldon pays cannot 

be deducted from his income. 

Technical Guide for Determining Income and Allowances for the HOME Program — 27 
Chapter Three – Calculating Annual (Gross) Income 

Exhibit 3.7 – Calculating Part 5 Annual Income – Exercise 

Family Members Position in Family Age Income Sources 

Ricky Ricardo Head 80 Receives gross Social Security in the amount of 

$625/month; receives a pension from the local 

musicians’ union in the amount of $25 every quarter 

(3 months). 

Lucy Ricardo Spouse 79 Receives gross Social Security in the amount of 

$120/month; grossed $4,200 for giving voice 

lessons last year, but paid business expenses of 

$1,250 from this income for equipment and sound 

proofing. 

Ricky Ricardo II Child 45 Earns $330/week as an interpreter for a local 

nonprofit organization. 

If the Low-Income Limit for a household of three is $30,000 and the Ricardo’s have no other source of 

income, do they qualify for assistance? 

Complete the following table to calculate annual income (as defined in 24 CFR Part 5) for the household. 

Answers are found on the following page. 

ANTICIPATED ANNUAL INCOME 

Family 

Members 

a. Wages/ 

Salaries 

b. Benefits/ 

Pensions 

c. Public 

Assistance 

d. Other 

Income 

e. Asset 

Income 

Ricky Enter the 

Lucy greater of 

Ricky II lines 4 or 5 

from above 

in e. 

6. Totals a. b. c. d. e. N/A 

7. Enter total of items from 6a. through 6e. This is Annual Income .............................. 7. 

Technical Guide for Determining Income and Allowances for the HOME Program — 28 
Chapter Three – Calculating Annual (Gross) Income 

Exhibit 3.7 – Calculating Part 5 Annual Income – Exercise (continued) 

ANSWERS 

ANTICIPATED ANNUAL INCOME 

Family 

Members 

a. Wages/ 

Salaries 

b. Benefits/ 

Pensions 

c. Public 

Assistance 

d. Other 

Income 

e. Asset 

Income 

Ricky $7,600 Enter the 

Lucy $1,440 $2,950 greater of 

Ricky II $17,160 lines 4 or 5 

from above 

in e. 

6. Totals a. $17,160 b. $9,040 c. d. $2,950 e. N/A 

7. Enter total of items from 6a. through 6e. This is Annual Income .............................. 7. $29,150 

The household is eligible for assistance. 

Explanation 

Ricky Ricky’s entire income is comprised of pensions and benefits. It equals $625/month x 12 

months/year ($7,500) plus $25/quarter x 4 quarters/year ($100), or $7,600. 

Lucy Lucy’s benefits income is $120/month x 12 months/year, or $1,440. Her net income from her 

business was $4,200 - $1,250, or $2,950. (Her equipment and soundproofing expense is an 

allowable deduction because the business funds were reinvested in the business and did not 

represent expansion. Refer to Exhibit 3.1) 

Ricky II Ricky II’s income is wage income. The calculation is $330/week x 52 weeks/year = $17,160. 

Technical Guide for Determining Income and Allowances for the HOME Program — 29 
Chapter Three – Calculating Annual (Gross) Income 

Exhibit 3.8 – Part 5 Annual Income Net Family Asset Inclusions and Exclusions 

Inclusions Exclusions 

1. Cash held in savings accounts, checking 

accounts, safe deposit boxes, homes, etc. For 

savings accounts, use the current balance. For 

checking accounts, use the average 6-month 

balance. Assets held in foreign countries are 

considered assets. 

2. Cash value of revocable trusts available to the 

applicant. 

3. Equity in rental property or other capital 

investments. Equity is the estimated current 

market value of the asset less the unpaid 

balance on all loans secured by the asset and 

all reasonable costs (e.g., broker fees) that 

would be incurred in selling the asset. Under 

HOME, equity in the family’s primary residence 

is not considered in the calculation of assets for 

owner-occupied rehabilitation projects. 

4. Cash value of stocks, bonds, Treasury bills, 

certificates of deposit, mutual funds, and 

money market accounts. 

5. Individual retirement, 401(K), and Keogh 

accounts (even though withdrawal would result 

in a penalty). 

6. Retirement and pension funds. 

7. Cash value of life insurance policies available 

to the individual before death (e.g., surrender 

value of a whole life or universal life policy). 

8. Personal property held as an investment such 

as gems, jewelry, coin collections, antique 

cars, etc. 

9. Lump sum or one-time receipts, such as 

inheritances, capital gains, lottery winnings, 

victim’s restitution, insurance settlements and 

other amounts not intended as periodic 

payments. 

10. Mortgages or deeds of trust held by an 

applicant. 

1. Necessary personal property, except as noted 

in number 8 of Inclusions, such as clothing, 

furniture, cars, and vehicles specially 

equipped for persons with disabilities. 

2. Interest in Indian trust lands. 

3. Assets not effectively owned by the applicant. 

That is, when assets are held in an individual’s 

name, but the assets and any income they 

earn accrue to the benefit of someone else 

who is not a member of the household and 

that other person is responsible for income 

taxes incurred on income generated by the 

asset. 

4. Equity in cooperatives in which the family 

lives. 

5. Assets not accessible to and that provide no 

income for the applicant. 

6. Term life insurance policies (i.e., where there 

is no cash value). 

7. Assets that are part of an active business. 

“Business” does not include rental of 

properties that are held as an investment and 

not a main occupation. 

Last Modified: January 2005 

Technical Guide for Determining Income and Allowances for the HOME Program — 30 
Chapter Three – Calculating Annual (Gross) Income 

Exhibit 3.9 – Calculating Asset Income Under Part 5 – Example 

Family Members Assets Asset Value 

Juan Herrera Checking account $870 average 6-month balance with an interest rate of 

2.7%. 

Inheritance Received an inheritance of $30,000 that he used to buy 

a new car for $12,000; pay off his $3,000 credit card 

bill; and open a mutual fund account (which has no 

associated account costs) to invest the remaining 

$15,000 at an annual interest rate of 5.3%. 

The HUD Passbook Rate is 2%. 

ASSETS

Family 

Member Asset Description 

Current Cash Value 

of Assets 

Actual Income 

from Assets 

Juan Herrera Checking account $870 $23 

Same Mutual fund $15,000 $795 

3. Net Cash Value of Assets ................................. 3. $15,870 

4. Total Actual Income from Assets ................................................................. 4. $818 

5. If line 3 is greater than $5,000, multiply line by 2% (Passbook Rate) and 

enter results here; otherwise, leave blank. 

5. $317 

The asset income to be used in the annual income calculation is $818 since the actual income generated 

by the assets is greater than the imputed income. 

Explanation 

Checking account The income from the checking account is calculated based on the 6-month balance 

and the interest rate ($870 x .027 = $23). 

Inheritance A car owned for personal use is not considered an asset. However, the mutual 

fund is an asset. $15,000 x .053 = $795. 

Because the total cash value of the assets exceeds $5,000, the HUD Passbook Rate must be used to 

calculate the imputed income from all assets combined. In this case, $15,870 x .02 = $317. The actual 

income earned ($818) is greater, however, so that amount must be used in the calculation of annual 

income for this family. 

Technical Guide for Determining Income and Allowances for the HOME Program — 31 
Chapter Three – Calculating Annual (Gross) Income 

Exhibit 3.10 – Calculating Asset Income (under Part 5) – Exercise 

Family Members 

Position in 

Family Age Family Assets Asset Value 

Archie Bunker Head 72 Checking account $595 average 6-month balance in a 

non-interest-bearing account. 

Edith Bunker Spouse 73 Savings account $2,695 at 3.1% 

HUD Passbook rate is 2%. 

Calculate the Bunkers’ asset income by completing the following chart. Answers are provided below. 

ASSETS

Family 

Member Asset Description 

Current Cash Value 

of Assets 

Actual Income 

from Assets 

3. Net Cash Value of Assets.................................. 3. 

4. Total Actual Income from Assets................................................................... 4. 

5. If line 3 is greater than $5,000, multiply line by ____ (Passbook Rate) and 

enter results here; otherwise, leave blank. 

5. 

Asset Income to be used in annual income calculation: $_____________ 

ANSWERS 

ASSETS

Family 

Member Asset Description 

Current Cash Value 

of Assets 

Actual Income 

from Assets 

Archie Bunker Checking Account $595 $0 

Edith Bunker Savings Account $2,695 $84 

3. Net Cash Value of Assets.................................. 3. $3,290 

4. Total Actual Income from Assets................................................................... 4. $84 

5. If line 3 is greater than $5,000, multiply line by ____ (Passbook Rate) and 

enter results here; otherwise, leave blank. 

5. $0 

The Bunkers’ income from assets is $84. 

Explanation 

Use the actual income in this case, because the cash value of the Bunker’s total assets is less than 

$5,000. The imputed income is only calculated for assets when the total cash value of all assets exceeds 

$5,000. 

Technical Guide for Determining Income and Allowances for the HOME Program — 32 
Chapter Three – Calculating Annual (Gross) Income 

Exhibit 3.11 – Calculating Asset Income Under Part 5 – Exercise 

Family 

Members 

Position in 

Family 

Age Family Assets Asset Value 

Fred Mertz Head 85 Rental property Small rental property that grosses 

$6,500/year (expenses to keep up the 

property are $3,400/year). The property has 

a fair market value of $69,000, but they have 

a mortgage on the property in the amount of 

$35,000. The average closing cost in a real 

estate transaction is 8% in the area. 

Ethel Mertz Spouse 81 Savings account Savings of $5,000 that earned $179 in 

interest during the past year. 

Stock 100 shares of stock in “Why Buy it, Inc.,” with 

a face value of $4.25 per share, that have not 

shown a dividend in years. The cost to sell 

the stock would be about $76. 

HUD Passbook rate is 2%. 

Calculate the Mertz’s asset income by completing the following chart. Answers are provided on the 

following page. 

ASSETS

Family 

Member Asset Description 

Current Cash Value 

of Assets 

Actual Income 

from Assets 

3. Net Cash Value of Assets.................................. 3. 

4. Total Actual Income from Assets................................................................... 4. 

5. If line 3 is greater than $5,000, multiply line by ____ (Passbook Rate) and 

enter results here; otherwise, leave blank. 

5. 

Asset Income to be used in annual income calculation: $_____________ 

Technical Guide for Determining Income and Allowances for the HOME Program — 33 
Chapter Three – Calculating Annual (Gross) Income 

Exhibit 3.11 – Calculating Asset Income – Exercise (continued) 

ANSWERS 

ASSETS

Family 

Member Asset Description 

Current Cash Value 

of Assets 

Actual Income 

from Assets 

Fred Mertz Rental Property $28,480 $3,100 

Ethel Mertz Savings Account $5,000 $179 

Same Stock $349 

3. Net Cash Value of Assets.................................. 3. 33,829 

4. Total Actual Income from Assets................................................................... 4. $3,279 

5. If line 3 is greater than $5,000, multiply line by 2% (Passbook Rate) and 

enter results here; otherwise, leave blank. 

5. $677 

The asset income to be used in the annual income calculation is $3,279, since the actual income from 

assets is greater than the imputed income. 

Explanation

Apartment Building The cash value of the property is: 

Market value $69,000 

Less mortgage 35,000 

Less sales costs ($69,000 X .08) 5,520

Cash value $28,480 

The income earned is the net income ($6,500 – $3,400) of $3,100. 

Savings Account The information is provided. 

Stock The cash value of the stock is the sales proceeds (100 shares x $4.25/share = 

$425) less the cost to sell ($76). It generates no dividend income. 

Because the total cash value of the assets exceeds $5,000, calculate the imputed income by multiplying 

the cash value by the HUD Passbook Rate ($33,829 x .02 = $677). This is less than the actual income 

earned of $3,279. 

Technical Guide for Determining Income and Allowances for the HOME Program — 34 
Chapter Three – Calculating Annual (Gross) Income 

Exhibit 3.12 – Census Long From Annual Income Inclusions and Exclusions 

Inclusions Exclusions 

1. Wages, salary, commissions, bonuses and tips 

from all jobs before deductions for taxes, 

bonds, dues, or other items. (For minors over 

the age of 15 and adults.) 

2. Self-employment net income (after business 

expenses) from own non-farm business or farm 

business, including proprietorship and 

partnership. 

3. Any of the following: 

• Interest received or credited to checking 

and savings accounts, money market 

funds, certificates of deposit, mutual funds, 

individual retirement accounts (IRAs), 

401(K) plans, KEOGH retirement plans, 

and government bonds. 

• Dividends received, credited, or reinvested 

from ownership of stocks or mutual funds. 

• Profit (or loss) from royalties or rental of 

land, buildings or real estate, or roomers or 

boarders. (Income received from selfemployed persons whose primary source 

of income is renting properties or from 

royalties should be included in number 2, 

above.) 

• Income from regular payments from an 

estate and or trust fund. 

4. Social security or railroad retirement (before 

Medicare deductions). 

5. Supplemental Security Income (SSI). 

6. Any public assistance or welfare payments 

from the state or local welfare office. 

7. Retirement, survivor, or disability pensions 

from companies and unions; Federal, state and 

local governments; and the U.S. military. 

Includes regular income from annuities, IRAs, 

401(K)s, or KEOGH retirement plans. 

8. Other sources of income received regularly, 

including Veterans Administration (VA) 

payments, unemployment compensation, child 

support or alimony, and all other regular 

payments (e.g., Armed Forces transfer 

payments, assistance from private charities, 

and regular contributions from persons not 

living in the household).

1. In-kind pay such as food, free rent, etc. 

2. Profit (or loss) of incorporated businesses 

owned by the applicant. 

3. Profit (or loss) of incorporated farm businesses 

owned by the applicant and amounts from land 

rented for cash. 

4. Any of the following: 

• Refunds or rebates of any kind. 

• Withdrawals from savings of any kind. 

• Capital gains (or losses) from the sale of 

homes, shares of stock, etc. 

• Inheritances or insurance settlements. 

• Any type of loan. 

5. Assistance to pay for heating or cooling costs. 

Last Modified: January 2005 

Technical Guide for Determining Income and Allowances for the HOME Program — 35 
Chapter Three – Calculating Annual (Gross) Income 

Exhibit 3.13 – Sample Format for Computing Census Long Form Annual Income 

Name: Identification No.: 

ANTICIPATED ANNUAL INCOME 

Family 

Member 

a. Wages/ 

Salaries 

b. Business 

Income 

c. Interest/ 

Dividends 

d. Benefits/ 

Pensions 

e. Public 

Assistance 

f. Other 

Income 

1. Totals a. b. c. d. e. f. 

2. Enter total of items from 1a. through 1f. This is Annual Income..................................... 2. 

Technical Guide for Determining Income and Allowances for the HOME Program — 36 
Chapter Three – Calculating Annual (Gross) Income 

Exhibit 3.14 – Calculating Census Long Form Annual Income – Example 

Family Members Position in Family Age Income Sources 

Adrian Marshall Head 43 Earns $400/week as an airline employee. 

Penny Marshall Spouse 42 Earns $16,000/year as an administrative assistant 

with an insurance company. 

Shirley Marshall Child 19 Earns $7.00/hour working in a retail store at the 

mall. Works an average of 24 hours/week. Fulltime student at the local community college. 

Their Assets 

The Marshall’s non-interest-bearing checking account has an average 6-month balance of $700. 

Penny Marshall has a savings account with a $2,500 balance. The account earned interest of $72 

last year. 

The Marshall’s recently received an insurance settlement of $20,000. 

If the Low-Income Limit for a household of three is $40,500, do the Marshall’s qualify for assistance? 

Name: Adrian and Penny Marshall Identification No.: 

ANTICIPATED ANNUAL INCOME 

Family 

Member 

a. Wages/ 

Salaries 

b. Business 

Income 

c. Interest/ 

Dividends 

d. Benefits/ 

Pensions 

e. Public 

Assistance 

f. Other 

Income 

Adrian $20,800 

Penny $16,000 $72 

Shirley $ 8,736 

1. Totals a. $45,536 b. c. $72 d. e. f. 

2. Enter total of items from 1a. through 1f. This is Annual Income ........................................ 2. $45,608 

The Marshall’s are not eligible for assistance because their income of $45,608 is above the low -income 

limit of $40,500. 

Explanation 

Adrian Adrian’s income is $400/week x 52 weeks/year, or $20,800. 

Penny Penny’s income is $16,000/year and she received $72 in interest on the savings account. 

Shirley Shirley earns $7.00/hour x 24 hours/week x 52 weeks/year, or $8,736. Note: Even though 

Shirley is a full-time student, her full income is included in the Census Long Form definition 

of income. 

The insurance settlement is excluded under the Census Long Form definition of annual income. The 

checking account is not included because it earns no interest. 

Technical Guide for Determining Income and Allowances for the HOME Program — 37 
Chapter Three – Calculating Annual (Gross) Income 

Exhibit 3.15 – IRS From 1040 Adjusted Gross Income Inclusions and Exclusions 

Inclusions Exclusions 

1. Wages, salaries, tips, etc. 

2. Taxable interest. 

3. Dividends. 

4. Taxable refunds, credits or offsets of state 

and local income taxes. There are some 

exceptions – refer to Form 1040 instructions. 

5. Alimony (or separate maintenance 

payments) received. 

6. Business income (or loss). 

7. Capital gain (or loss). There are some 

exceptions – refer to Form 1040 instructions. 

8. Other gains (or losses) (i.e., assets used in a 

trade or business that were exchanged or 

sold). 

9. Taxable amount of individual retirement 

account (IRA) distributions. (Includes 

simplified employee pension [SEP] and 

savings incentive match plan for employees 

[SIMPLE] IRA.) 

10. Taxable amount of pension and annuity 

payments. 

11. Rental real estate, royalties, partnerships, 

S corporations, trusts, etc. 

12. Farm income (or loss). 

13. Unemployment compensation payments. 

14. Taxable amount of Social Security benefits. 

15. Other income, including prizes and awards; 

gambling, lottery or raffle winnings; jury duty 

fees; Alaska Permanent fund dividends; 

reimbursements for amounts deducted in 

previous years; income from the rental of 

property if not in the business of renting such 

property; and income from an activity not 

engaged in for profit. 

1. Child support. 

2. Money or property that was inherited, willed or 

given as a gift. 

3. Life insurance proceeds received as a result of 

someone’s death. 

Last Modified: January 2005 

Technical Guide for Determining Income and Allowances for the HOME Program — 38 
Chapter Three – Calculating Annual (Gross) Income 

Exhibit 3.161 – Sample Format for Computing IRS 1040 Series Adjusted Gross Income 

Name: Identification No.: 

Family Member 

Subtotal 

(add a-d) 

a. b. c. d. e. 

1. Wages, salaries, tips 

2. Taxable interest 

3. Dividend income 

4. Taxable refunds/ 

credits/offsets of state/ 

local income taxes 

5. Alimony received 

6. Business income (or loss) 

7. Capital gain (or loss) 

8. Other gains (or losses) 

9. Taxable amount of IRA 

distributions 

10. Taxable amount of 

pensions and annuities 

11. Rental real estate, 

royalties, partnerships, 

trusts, etc. 

12. Farm income (or loss) 

13. Unemployment 

compensation 

14. Taxable amount of Social 

Security benefits 

15. Other income 

16. Subtotal (lines 1-15) 

17. IRA deduction 

18. Medical savings account 

deduction 

19. Moving expenses 

20. One-half of selfemployment tax 

21. Self-employed health 

insurance deduction 

22. Keogh and self-employed 

SEP and SIMPLE plans 

23. Penalty on early 

withdrawal of savings 

24. Paid alimony 

25. Subtotal (lines 17-24) 

26. Subtract line 25 from line 

16. This is Adjusted 

Gross Income ..................

 

1

 Note to users: The income inclusions and exclusions allowed under the IRS 1040 definition of income are subject to 

change from tax year to tax year. This worksheet is a general representation of the IRS Form 1040, and as such 

cannot reflect all updated inclusions and exclusions each tax year. The user is advised to consult the IRS Web site 

for the most current version of this form at www.irs.gov. 

Technical Guide for Determining Income and Allowances for the HOME Program — 39 
Chapter Three – Calculating Annual (Gross) Income 

Exhibit 3.17 – Calculating IRS Long Form Annual (Gross) Income – Example 

Family Members Position in Family Age Income Sources 

Bernard Williams Head 35 Bernard owns a contracting business. The net 

income from the business is $32,000. 

Amy Moynihan Girlfriend 32 Amy receives alimony of $200/month and child 

support of $350/month for her two sons. 

Gary Moynihan Son 10 None 

Charles Moynihan Son 7 None 

Their Assets 

Bernard’s checking account has an average six month balance of $1,725. He earned interest of 

$100 last year. 

Amy has a savings account with a $500 balance. This account earned $17 in interest last year. 

Under the HOME Program, the Income Limit for a household of 4 is $42,000. Does the household qualify 

for assistance? 

Name: Bernard Williams and Amy Moynihan Identification No.: 

Family Member 

Subtotal 

(add a-d) 

a. b. c. d. e. 

1. Wages, salaries, tips 

2. Taxable interest $100 $17 $117 

3. Dividend income 

4. Taxable refunds/ 

credits/offsets of state/ 

local income taxes 

5. Alimony received $2,400 $2,400 

6. Business income (or loss) $32,000 $32,000 

7. Capital gain (or loss) 

8. Other gains (or losses) 

9. Taxable amount of IRA 

distributions 

10. Taxable amount of 

pensions and annuities 

11. Rental real estate, 

royalties, partnerships, 

trusts, etc. 

12. Farm income (or loss) 

13. Unemployment 

compensation 

14. Taxable amount of Social 

Security benefits 

15. Other income 

16. Subtotal (lines 1-15) $34,517 

17. IRA deduction 

18. Medical savings account 

deduction 

19. Moving expenses 

20. One-half of selfemployment tax 

Technical Guide for Determining Income and Allowances for the HOME Program — 40 
Chapter Three – Calculating Annual (Gross) Income 

Family Member 

Subtotal 

(add a-d) 

a. b. c. d. e. 

21. Self-employed health 

insurance deduction 

22. Keogh and self-employed 

SEP and SIMPLE plans 

23. Penalty on early 

withdrawal of savings 

24. Paid alimony 

25. Subtotal (lines 17-24) $34,517 

26. Subtract line 25 from line 

16. This is Adjusted 

Gross Income ..................

$34,517 

The household is eligible for HOME assistance. Their annual income of $34,517 is less than the LowIncome Limit of $42,000. 

Explanation 

Bernard Bernard’s business income of $32,000 is included. Interest income of $100 is included as 

interest. 

Amy Alimony of $200/month x 12 = $2,400 is included. The child support is not included as 

income under the IRS definition of adjusted gross income. The $17 in interest income is 

included as income. 

Technical Guide for Determining Income and Allowances for the HOME Program — 41 
Chapter Three – Calculating Annual (Gross) Income 

Exhibit 3.18 – Calculating Annual Income Using the Three Allowable Definitions – 

Example 

Family Members Position in Family Age Income Sources 

Daniel Ming Head 39 Daniel Ming works full-time at a local 

manufacturing plant at a rate of $11.00/hour. 

Anabel Ming Spouse 37 Anabel Ming operates an in-home day care 

business for a small number of neighborhood 

children. Her net income from this business is 

$12,000 per year. 

Marsha Ming Daughter 13 None 

Assets 

• The Ming’s non-interest-bearing checking account has a $950 average 6-month balance. 

• The Mings have a savings account with a current balance of $5,000. The account carries an 

annual interest rate of 3%. 

• The Mings also have certificates of deposit totaling $5,000. The applicable interest rate is 5%. 

• The Mings plan to use the savings account and redeem the certificates of deposit in order to pay 

the downpayment on the home they purchase. 

Additional Information 

• Daniel Ming pays $200 per month in alimony to his ex-wife. 

Under the HOME Program, the Income Limit for a family of three in the jurisdiction is $34,500. Are the 

Mings eligible for HOME assistance under each of three definitions of income? 

The following pages show the income calculations for the Mings using each of the three allowable 

definitions of income. 

Sample Format for Computing Part 5 Annual Income 

1. Name: Daniel and Anabel Ming 2. Identification 

ASSETS 

Family 

Member Asset Description 

Current Cash Value 

of Assets 

Actual Income 

from Assets 

Daniel & Anabel Checking account $950 $0 

Daniel & Anabel Savings $5,000 $150 

Daniel & Anabel Certificates of deposit $5,000 $250 

3. Net Cash Value of Assets.................................. 3. $10,950 

4. Total Actual Income from Assets................................................................... 4. $400 

5. If line 3 is greater than $5,000, multiply line by .02 (Passbook Rate) and 

enter results here; otherwise, leave blank. 

5. $219 

ANTICIPATED ANNUAL INCOME 

Family 

Members 

a. Wages/ 

Salaries 

b. Benefits/ 

Pensions 

c. Public 

Assistance

d. Other 

Income 

e. Asset 

Income

Daniel $22,880 Enter the 

Anabel $12,000 greater of 

lines 4 or 5 

from above 

in e.

6. Totals a. $22,880 b. c. d. $12,000 e. $400 

7. Enter total of items from 6a. through 6e. This is Annual Income ............................... 7. $35,280 

Technical Guide for Determining Income and Allowances for the HOME Program — 42 
Chapter Three – Calculating Annual (Gross) Income 

Sample Format for Computing Census Long Form Annual Income 

Name: Daniel and Anabel Ming Identification No.: 

ANTICIPATED ANNUAL INCOME 

Family 

Member 

a. Wages/ 

Salaries 

b. Business 

Income 

c. Interest/ 

Dividends 

d. Benefits/ 

Pensions 

e. Public 

Assistance 

f. Other 

Income 

Daniel $22,880 $400 

Anabel $12,000 

1. Totals a. $34,880 b. c. $400 d. e. f. 

2. Enter total of items from 1a. through 1f. This is Annual Income ........................................ 2. $35,280 

Technical Guide for Determining Income and Allowances for the HOME Program — 43 
Chapter Three – Calculating Annual (Gross) Income 

Sample Format for Computing IRS 1040 Series Adjusted Gross Income 

Name: Daniel and Anabel Ming Identification No.: 

Family Member 

Subtotal 

(add a-d) 

a. Daniel b. Anabel c. d. e. 

1. Wages, salaries, tips $22,880 $22,880 

2. Taxable interest $400 $400 

3. Dividend income 

4. Taxable refunds/ 

credits/offsets of state/ 

local income taxes 

5. Alimony received 

6. Business income (or loss) $12,000 $12,000 

7. Capital gain (or loss) 

8. Other gains (or losses) 

9. Taxable amount of IRA 

distributions 

10. Taxable amount of 

pensions and annuities 

11. Rental real estate, 

royalties, partnerships, 

trusts, etc. 

12. Farm income (or loss) 

13. Unemployment 

compensation 

14. Taxable amount of Social 

Security benefits 

15. Other income 

16. Subtotal (lines 1-15) $35,280 

17. IRA deduction 

18. Medical savings account 

deduction 

19. Moving expenses 

20. One-half of selfemployment tax 

21. Self-employed health 

insurance deduction 

22. Keogh and self-employed 

SEP and SIMPLE plans 

23. Penalty on early 

withdrawal of savings 

24. Paid alimony $2,400 $2,400 

25. Subtotal (lines 17-24) $2,400 

26. Subtract line 25 from line 

16. This is Adjusted 

Gross Income ..................

$32,880 

Technical Guide for Determining Income and Allowances for the HOME Program — 44 
Chapter Three – Calculating Annual (Gross) Income 

Exhibit 3.18 – Calculating Annual Income Using the Three Allowable Definitions – 

Example 

Section 8 Annual Income 

1. Gross amount of wages, salaries, overtime pay, commissions, fees, tips and bonuses. $22,880

2. Net income from operation of a business or profession. 12,000

3. Interest, dividends, and other net income from real or personal property. Requires 

asset calculation. 

400

4. Full amount of periodic amounts received from Social Security, annuities, insurance 

policies, retirement funds, pensions, disability or death benefits. 

5. Payments in lieu of earnings (unemployment, disability compensation, worker’s 

compensation and severance pay). 

6. Welfare or other need based payments to families or individuals. 

7. Periodic and determinable allowances (alimony, child support payments, regular 

contributions or gifts). 

8. Regular pay, special pay and allowances of a member of the Armed Forces. 

Total $35,280

Census Long From Annual Income 

1. Gross amount of wages, salaries, commissions, bonuses or tips from all jobs. $22,880

2. Net income from self-employment from non-farm business, including proprietorship 

and partnership. 

12,000

3. Net income from farm self-employment, including earnings as sharecropper or tenant 

farmer. 

400

4. Interest, dividends, net rental income, royalty income or income from estates or trusts. 

5. Social security or railroad retirement. 

6. Supplemental Security Income (SSI), Temporary Assistance to Needy Families 

(TANF) or other public assistance or public welfare payments. 

7. Retirement, survivor or disability pensions. 

8. Any other sources of income received regularly, including Veterans’ (VA) payments, 

unemployment compensation, child support or alimony. 

Total $35,280

IRS 1040 Adjusted Gross Income 

1. Wages, salaries, tips, etc. $22,880

2. Taxable interest. 400

3. Dividend income. 

4. Taxable refunds, credits, or offsets of state and local income taxes. 

5. Alimony received. 

6. Business income (or loss). 12,000

7. Capital gain (or loss). 

8. Other gains (or losses) 

9. Taxable amount of individual retirement account (IRA) distributions. 

10. Taxable amount of pensions and annuities. 

11. Rental real estate, royalties, partnerships, S corporations, trust, etc. 

12. Farm income (or loss). 

13. Unemployment compensation. 

14. Taxable amount of Social Security benefits. 

15. Other income. 

Subtotal A (Add 1–15) $35,280

Technical Guide for Determining Income and Allowances for the HOME Program — 45 
Chapter Three – Calculating Annual (Gross) Income 

IRS 1040 Adjusted Gross Income 

Subtractions

16. IRA deduction (head of household and spouse). 

17. Medical savings account deduction. 

18. Moving expenses. 

19. One-half of self-employment tax. 

20. Self-employed health insurance deduction. 

21. Keogh and self-employed SEP and SIMPLE plans. 

22. Penalty on early withdrawal of savings. 

23. Paid alimony. 2,400

Subtotal B (Add 16 – 23) 2,400

Subtract subtotal B from subtotal A. This is the Total: $32,880

Explanation 

The Mings are not eligible for HOME assistance using the Part 5 and Census Long Form definitions of 

annual income. Using these two definitions, the Mings income is $35,280, which exceeds the LowIncome Limit for a family of three of $34,500. 

The Mings are eligible, however, using the IRS 1040 Form definition of adjusted gross income. Using the 

IRS definition, which allows for the subtraction of alimony paid, the Mings have an income of $ 32,880. 

This is below the Low-Income Limit for a family of three of $34,500. 

Technical Guide for Determining Income and Allowances for the HOME Program — 46 
Chapter Three – Calculating Annual (Gross) Income 

Exhibit 3.19 – Calculating Annual Income Using the Three Allowable Definitions – 

Example 

Family Members Position in Family Age Income Sources 

Samantha Johnson Head 36 Samantha earns a salary of $30,000 per year as 

an administrative assistant. Samantha receives 

$500 per month as child support for her sons Eric 

and Andrew. 

Barbara Johnson Mother 66 Barbara receives a pension check of $200 per 

month and Social Security of $600 per month. 

Eric Johnson Son 12 None 

Andrew Johnson Son 14 None 

Their Assets 

• Samantha has a savings account with a $2,500 balance. The annual interest rate is 3.5%. 

• Barbara’s sister Helen recently passed away and left her home to Barbara. The home is valued 

at $50,000 and has a mortgage balance of $8,000. The average cost of settlement and real 

estate transfers equals 8% of the value of the property. 

Additional Information 

• Barbara does not plan to sell the house she inherited in the near future because she wants to 

allow her other sister Martha and her husband to live in the home (rent-free). 

Under the HOME Program, the Income Limit for a family of four in the jurisdiction is $45,000. Is the 

Johnson family eligible for HOME assistance under each of three definitions of income? 

Sample Format for Computing Part 5 Annual Income 

1. Name: Samantha Johnson 2. Identification 

ASSETS 

Family 

Member Asset Description 

Current Cash Value 

of Assets 

Actual Income 

from Assets 

Samantha Savings Account $2,500 $88 

Barbara House $38,000 $0 

3. Net Cash Value of Assets.................................. 3. $40,500 

4. Total Actual Income from Assets................................................................... 4. $88 

5. If line 3 is greater than $5,000, multiply line by .02 (Passbook Rate) and 

enter results here; otherwise, leave blank. 

5. $810 

ANTICIPATED ANNUAL INCOME 

Family 

Members 

a. Wages/ 

Salaries 

b. Benefits/ 

Pensions 

c. Public 

Assistance

d. Other 

Income 

e. Asset 

Income 

Samantha $30,000 $6,000 Enter the 

Barbara $9,600 greater of 

lines 4 or 5 

from above 

in e.

6. Totals a. $30,000 b. $9,600 c. d. $6,000 e. $810 

7. Enter total of items from 6a. through 6e. This is Annual Income ............................... 7. $46,410 

Technical Guide for Determining Income and Allowances for the HOME Program — 47 
Chapter Three – Calculating Annual (Gross) Income 

Sample Format for Computing Census Long Form Annual Income 

Name: Samantha Johnson Identification No.: 

ANTICIPATED ANNUAL INCOME 

Family 

Member 

a. Wages/ 

Salaries 

b. Business 

Income 

c. Interest/ 

Dividends 

d. Benefits/ 

Pensions 

e. Public 

Assistance 

f. Other 

Income 

Samantha $30,000 $88 $6,000 

Barbara $9,600 

1. Totals a. $30,000 b. c. $88 d. $9,600 e. f. $6,000 

2. Enter total of items from 1a. through 1f. This is Annual Income .............................................. 2. $45,688 

Technical Guide for Determining Income and Allowances for the HOME Program — 48 
Chapter Three – Calculating Annual (Gross) Income 

Sample Format for Computing IRS 1040 Series Adjusted Gross Income 

Name: Samantha Johnson Identification No.: 

Family Member 

Subtotal 

(add a-d) 

a. Samantha b. Barbara c. d. e. 

1. Wages, salaries, tips $30,000 $30,000 

2. Taxable interest $88 $88 

3. Dividend income 

4. Taxable refunds/ 

credits/offsets of state/ 

local income taxes 

5. Alimony received 

6. Business income (or 

loss) 

7. Capital gain (or loss) 

8. Other gains (or losses) 

9. Taxable amount of IRA 

distributions 

10. Taxable amount of 

pensions and annuities 

$2,400 $2,400 

11. Rental real estate, 

royalties, partnerships, 

trusts, etc. 

12. Farm income (or loss) 

13. Unemployment 

compensation 

14. Taxable amount of 

Social Security benefits 

$7,200 $7,200 

15. Other income 

16. Subtotal (lines 1-15) $39,688 

17. IRA deduction 

18. Medical savings account 

deduction 

19. Moving expenses 

20. One-half of selfemployment tax 

21. Self-employed health 

insurance deduction 

22. Keogh and selfemployed SEP and 

SIMPLE plans 

23. Penalty on early 

withdrawal of savings 

24. Paid alimony 

25. Subtotal (lines 17-24) $0 

26. Subtract line 25 from line 

16. This is Adjusted 

Gross Income ..................

 $39,688 

Technical Guide for Determining Income and Allowances for the HOME Program — 49 
Chapter Three – Calculating Annual (Gross) Income 

Exhibit 3.19 – Calculating Annual Income Using the Three Allowable Definitions – 

Example 

Section 8 Annual Income 

1. Gross amount of wages, salaries, overtime pay, commissions, fees, tips and bonuses. $30,000

2. Net income from operation of a business or profession. 

3. Interest, dividends, and other net income from real or personal property. Requires 

asset calculation. 

810

4. Full amount of periodic amounts received from Social Security, annuities, insurance 

policies, retirement funds, pensions, disability or death benefits. 

9,600

5. Payments in lieu of earnings (unemployment, disability compensation, worker’s 

compensation and severance pay). 

6. Welfare or other need based payments to families or individuals. 

7. Periodic and determinable allowances (alimony, child support payments, regular 

contributions or gifts). 

6,000

8. Regular pay, special pay and allowances of a member of the Armed Forces. 

Total $46,410

Census Long From Annual Income 

1. Gross amount of wages, salaries, commissions, bonuses or tips from all jobs. $30,000

2. Net income from self-employment from non-farm business, including proprietorship 

and partnership. 

3. Net income from farm self-employment, including earnings as sharecropper or tenant 

farmer. 

4. Interest, dividends, net rental income, royalty income or income from estates or trusts. 88

5. Social security or railroad retirement. 7,200

6. Supplemental Security Income (SSI), Temporary Assistance to Needy Families 

(TANF) or other public assistance or public welfare payments. 

7. Retirement, survivor or disability pensions. 2,400

8. Any other sources of income received regularly, including Veterans’ (VA) payments, 

unemployment compensation, child support or alimony. 

6,000

Total $45,688

IRS 1040 Adjusted Gross Income 

1. Wages, salaries, tips, etc. $30,000

2. Taxable interest. 88

3. Dividend income. 

4. Taxable refunds, credits, or offsets of state and local income taxes. 

5. Alimony received. 

6. Business income (or loss). 

7. Capital gain (or loss). 

8. Other gains (or losses) 

9. Taxable amount of individual retirement account (IRA) distributions. 2,400

10. Taxable amount of pensions and annuities. 

11. Rental real estate, royalties, partnerships, S corporations, trust, etc. 

12. Farm income (or loss). 

13. Unemployment compensation. 

14. Taxable amount of Social Security benefits. 7,200

15. Other income. 

Subtotal A (Add 1–15) $39,688

Technical Guide for Determining Income and Allowances for the HOME Program — 50 
Chapter Three – Calculating Annual (Gross) Income 

IRS 1040 Adjusted Gross Income 

Subtractions

16. IRA deduction (head of household and spouse). 

17. Medical savings account deduction. 

18. Moving expenses. 

19. One-half of self-employment tax. 

20. Self-employed health insurance deduction. 

21. Keogh and self-employed SEP and SIMPLE plans. 

22. Penalty on early withdrawal of savings. 

23. Paid alimony. 

Subtotal B (Add 16 – 23) 0

Subtract subtotal B from subtotal A. This is the Total: $39,688

Explanation 

The Johnson family is not eligible for HOME assistance using the Part 5 definition of income. Using this 

definition, the Johnson’s income is $46,410, above the Low-Income Limit for a family of four of $45,000. 

Using the Census Long Form definitions of annual income, the Johnson’s are also not eligible. Under this 

definition, the Johnson’s income is $46,688, over the Low-Income Limit of $45,000. 

The Johnson family is eligible using the IRS 1040 Form definition of adjusted gross income. Using the 

IRS definition, which does not include child support as income, the Johnson family has an income of 

$39,688. This is below the Low-Income Limit of $45,000. 

Technical Guide for Determining Income and Allowances for the HOME Program — 51 

Chapter Four 

Calculating Adjusted Income 

Annual (gross) income is needed to 

determine whether a household is income 

eligible for participation in many Federal 

assistance programs. In contrast, adjusted 

income as defined in 24 CFR 5.611 is used 

to determine total tenant payment (TTP), 

which is a measure of a household’s ability 

to pay housing costs. Under the HOME 

Program, adjusted income is needed for 

calculating: 

• The subsidy and tenant’s share of rent 

under a HOME-funded tenant based 

rental assistance (TBRA) program. This 

calculation is done when the tenant first 

receives assistance and whenever the 

tenant’s income is recertified; 

• The rent for a tenant in a HOMEassisted rental unit whose rent must be 

adjusted because the household income 

increases above 80 percent of the area 

median; and 

• The household’s eligibility for, and 

amount of, assistance to be provided 

under the Uniform Relocation Act (URA) 

or Section 104(d) relocation and tenant 

assistance requirements. 

Adjusted income is not needed for HOMEfunded owner-occupied rehabilitation or 

homebuyer programs. 

Typically under HOME rental housing 

programs, the rent each family pays is 

based on “high” and “low” HOME rents 

established for each unit in the project. The 

family’s rent is established for the unit they 

will occupy, not its ability to pay. 

HOME Program rules do permit PJs to 

design a program in which rents are based 

on the household’s ability to pay, however. 

When a PJ elects this option, it must use 

adjusted income in its rent calculation. 

The deductions (also called allowances) of 

24 CFR 5.611 must be applied whenever 

adjusted income is required (as outlined 

previously) regardless of the definition of 

annual income used by the PJ to determine 

initial eligibility. 

This chapter describes how to calculate and 

document adjusted income. 

How is Adjusted Income Calculated? 

Adjusted income is derived by subtracting 

any of five deductions (or allowances) that 

apply to the household from the household’s 

annual (gross) income. The household’s 

eligibility for deductions depends, in part, on 

the type of household that it is. Not all 

households are eligible for all deductions. 

Exhibit 4.1 summarizes these deductions by 

household type. 

Exhibit 4.1 Allowable Deductions 

Type of Household 

Type of 

Deduction 

Permitted 

Elderly 

or 

Disabled 

NonElderly or

NonDisabled 

Elderly or disabled 

household •

Dependent • •

Child care • •

Medical expenses •

Disability 

assistance 

expenses 

• •

In order to determine which deductions a 

family is eligible for, PJs must determine 

what type of household it represents. 

Types of Households 

As noted in Exhibit 4.1, a household’s 

eligibility for adjustments to annual income 

depends in part on whether the household 

qualifies as an “elderly” household, a 

“disabled” household, or a “family” (nonelderly) household. 

Technical Guide for Determining Income and Allowances for the HOME Program — 53 
Chapter Four – Calculating Adjusted Income 

An elderly household is any household in 

which the head, spouse, or sole member is 

62 years of age or older; two or more 

persons who are at least 62 years of age 

live together; or one or more persons who 

are at least 62 years of age live with one or 

more live-in aides. 

Each of the following are considered elderly 

households: 

• Alice Smith (65 years of age) and her 

husband Joe (60); 

• Juan Azul (69) and Rosa Ramirez (63) 

who live together; 

• Jane Green (92); and 

• Thomas Miller (74) and his live-in aide. 

A disabled household is one in which the 

head, spouse, or sole member is a person 

with disabilities. Two or more persons with 

disabilities living together and one or more 

persons with disabilities living with one or 

more live-in aides also qualify as disabled 

households. 

The following are considered disabled 

households: 

• Carlos Blanco (25 and disabled); 

• Fred Jones (42) and his wife Suzanne 

(41 and disabled); and 

• Daniel Jackson (35 and disabled) and 

his housemate Charlie Andrews (38 and 

disabled) and their live-in aide. 

Certain households may, however, include 

elderly or disabled family members and still 

not qualify as an elderly or disabled 

household. For example, neither of the 

following households qualify as an elderly or 

disabled household: 

• Bob and Carol Jackson (50 and 49, 

respectively) who have taken in Bob’s 

mother (age 70) to live with them. 

Because Bob’s mother is not the 

household head or spouse, this is not an 

elderly household; and 

• Ted and Alexis Cooper (both age 35) 

have a son (age 14) who is disabled. 

Because the son is not the household 

head or spouse, this household is not a 

disabled household. 

Some household compositions will require 

clarification as to whether they are elderly or 

disabled households. Compare the 

following examples: 

• Don and Alice Brown (45 and 46, 

respectively) have recently taken Don’s 

mother (75) into their home because her 

apartment building is being converted to 

condominiums. In this situation, Don 

and Alice are the head of household and 

spouse, so the household is not an 

elderly household; but 

• Rita Smith (75) has recently taken in her 

son Don and his wife Alice (45 and 46, 

respectively) into her home because 

their apartment building is being 

converted to condominiums. In this 

situation, Rita is the head of the 

household, so the household is an 

elderly household. 

In cases such as these, PJs must clarify the 

family type with the family before making a 

judgement about the type of household. 

Exhibit 3.1 of Chapter Three identified 

persons whose incomes are not counted in 

the Part 5 definition of annual income. For 

the purposes of adjusting income, these 

same persons are not considered family 

members—even if they live in the same 

household—and cannot qualify a family for 

deductions or allowances. These include 

live-in aides, children of live-in aides, and 

foster children. 

For example, if a live-in aide must pay $50 

per week for child care in order to work for a 

family, the family itself cannot consider this 

child care cost when determining whether it 

is eligible for a child care deduction because 

the live-in aide is not considered a family 

member. (See the discussion on child care, 

below.) 

Elderly or Disabled Household 

Deduction 

A household that meets the definition of an 

elderly or disabled household is entitled to a 

Technical Guide for Determining Income and Allowances for the HOME Program — 54 
Chapter Four – Calculating Adjusted Income 

deduction of $400 per household. It is 

essential to understand the distinction 

between elderly/disabled households and 

non-elderly/non-disabled households in 

order to apply the allowances correctly. 

Complete the following chart to assess your 

understanding of these issues. 

Which of the following households qualify 

for an elderly or disabled household 

deduction of $400? (Note: the age of the 

family member is shown in parentheses.) 

Household Characteristics Yes No 

1. Head (59), spouse (63) 

2. Head (40), disabled 

spouse (39) 

3. Head (59), disabled son 

(16) 

4. Head (59), disabled son 

(32) 

5. Head (40), father (63) 

6. Disabled head of 

household (51) 

The answers can be found in Exhibit 4.2 at 

the end of this chapter. 

Dependent Deduction 

When calculating adjusted income, PJs 

must deduct $480 from annual income for 

each household dependent. HUD’s 

definition of dependent is different from the 

Internal Revenue Service (IRS) definition. 

HUD defines as dependent any household 

member who is not the head, co-head, or 

spouse, but is: 

• Under the age of 18 years; or 

• Disabled (of any age); or 

• A full-time student (of any age). 

The household member must qualify for the 

deduction at the time the income 

certification is made. For example, a 

household member is 17 years of age at the 

time, but will turn 18 six months later. 

Because the member is dependent at the 

time of certification, the family receives the 

$480 deduction. The PJ is not required to 

recertify the family six months later when 

the member turns 18. When the 

household’s income is recertified the 

following year, however, the family loses the 

$480 deduction (unless the 18-year-old 

family member is a full-time student). 

A household may request a re-examination 

of income if its status changes (e.g., the 

family has a baby or adopts a child), and it 

now qualifies for more deductions. 

Child Care Expenses Deduction 

Reasonable child care expenses for the 

care of a child age 12 or under may be 

deducted from annual income if the child 

care (1) enables an adult family member to 

seek employment actively, be gainfully 

employed, or further his/her education; and 

(2) expenses are not reimbursed. The child 

care expenses must be reasonable. 

To document that the anticipated child care 

expenses can be deducted, the household 

must: 

• Identify the child(ren) who will be cared 

for; 

• Identify the family member who is 

enabled to work, look for work, or go to 

school because of the child care; 

• Demonstrate that no other adult 

household member is available to care 

for the child; 

• Identify the child care provider; and 

• Provide documentation of costs. 

If a deduction for child care expenses is 

requested, the allowable expenses cannot 

exceed the income generated by that 

household member during the period the 

care is provided. The PJ should look at the 

family’s actual circumstances to determine 

which family member is enabled to work. In 

general, the person with the lowest income 

(i.e., the person who would quit work to take 

care of the children if no child care were 

available) is considered the family member 

enabled to work. 

If a deduction for child care expenses is 

requested to enable a family member to 

seek work, the family must provide evidence 

that the household member is looking for 

work. 

Technical Guide for Determining Income and Allowances for the HOME Program — 55 
Chapter Four – Calculating Adjusted Income 

If a deduction for child care expenses is 

requested to enable a family member to go 

to school, the household must provide 

documentation that the household member 

is enrolled in a vocational program or 

degree-granting institution. The household 

member need not be a full-time student. 

Medical Expenses Deduction 

Elderly or disabled households (as defined 

previously) that have no disability 

assistance expenses (see below) may claim 

as a deduction medical expenses that are in 

excess of three percent of annual income. 

Medical expenses that may be considered 

include all medical expenses anticipated to 

be incurred during the coming year that are 

not covered by insurance. Medical 

expenses can include such items as: 

• Services of a physician or other health 

care professional; 

• Services of a hospital or other health 

care facility; 

• Medical insurance premiums; 

• Prescription and nonprescription 

medicines; 

• Dental expenses; 

• Eyeglasses and eye examinations; 

• Medical or health products or apparatus 

(e.g., hearing aids or batteries); 

• Live-in or periodic medical care 

assistance (e.g., visiting nurses or care 

attendants); and 

• Periodic payments on accumulated 

medical bills. 

The medical expenses allowance is the 

amount by which total medical expenses 

exceed three percent of annual income. For 

example, the Smith family has anticipated 

annual income of $25,000 and anticipated 

medical expenses of $3,000 (not covered by 

insurance). The calculation for the medical 

expense deduction would be: 

Total medical expenses $3,000 

Less 3% of annual income 750

Allowable medical expenses $2,250 

One of the most challenging aspects of 

determining allowable medical expenses is 

“anticipating” a household’s medical 

expenses for the coming year. Some 

anticipated expenses can be documented 

(such as Medicare and other medical 

insurance premiums, the cost of ongoing 

prescriptions, and payment agreements for 

accumulated medical bills). Whenever 

possible, the PJ should request such 

documentation. 

Using the previous year’s medical expenses 

is not always appropriate. The family may 

have had medical expenses last year that 

will not be repeated this year (e.g., major 

surgery) or the family may have new 

medical problems that were not reflected in 

last year’s costs (e.g., a family member has 

recently been diagnosed with a medical 

disorder). Even so, the experience from the 

previous year can provide a useful basis for 

anticipating future expenses. PJs can use 

last year’s history to help the family to 

anticipate costs, particularly in a household 

where a family member has regular medical 

or prescription needs. For example, if all 

household members went to the dentist 

twice during the previous year, it is 

appropriate to assume they will do so in the 

coming year. For “general” medical 

expenses (e.g., prescription and 

nonprescription medicines) using the 

previous year’s expenses is acceptable 

unless the family can provide 

documentation that higher expenses can be 

anticipated. 

Allowable medical expenses are established 

at the time of income certification. Under a 

HOME-funded TBRA program, the 

household may request a re-examination of 

medical expenses if a major illness or 

emergency would significantly affect the 

anticipated amount. 

Although medical expenses are permitted 

only for elderly or disabled households, 

once a household qualifies as an elderly or 

disabled household, the medical expenses 

of all household members are considered. 

For example, if a household includes the 

Technical Guide for Determining Income and Allowances for the HOME Program — 56 
Chapter Four – Calculating Adjusted Income 

head (grandmother, age 65), her daughter 

(age 35) and her granddaughter (age 12), 

the medical expenses of all three family 

members would be considered. 

HUD Notice PIH-2004-11 

HUD issued Notice PIH-2004-11, “Income 

Calculation Regarding Medicare 

Prescription Drug Cards and Transitional 

Assistance,” on July 15, 2004. While the 

Notice addresses the calculation of annual 

household income under certain HUD 

programs, including certain Section 8 

activities, the Notice and the Medicare 

Prescription Drug Card program do not 

affect the calculation of annual income 

under the Part 5 definition, and thus does 

not affect the calculation of annual or 

adjusted income for the purposes of HOME 

eligibility. The Medicare Modernization Act 

authorizing this benefit amended the Social 

Security Act to require that benefits 

provided under this program “not be treated 

as benefits or otherwise taken into account 

in determining an individual’s eligibility for, 

or amount of benefits under, any other 

Federal program.” Benefits provided under 

the Medicare Prescription Drug Benefit 

program must be excluded from the 

calculation of annual income of tenants 

residing in HUD’s public housing and 

assisted housing program units. 

Disability Assistance Expenses 

Deduction 

Disability assistance expenses can also be 

deducted from annual income to the extent 

that they exceed three percent of annual 

income. The purpose of this deduction is to 

recognize expenses for the care of a 

disabled person that enable the disabled 

person or some other family member to 

work. Disability assistance expenses may 

include the cost of a care attendant and/or 

auxiliary apparatus that enables a 

household member, including the disabled 

member, to work. Consider the following 

examples: 

• Jane and John Doe have a disabled 17-

year-old son (John, Jr.). If a care 

attendant takes care of John, Jr., Jane 

can go to work. The cost of the care 

attendant would be an eligible disability 

assistance expense. 

• Samuel Brown, age 35, uses a 

wheelchair. The wheelchair and a 

specially adapted automobile enable 

John to go to work. The cost of his 

wheelchair and the adaptations to his 

automobile are eligible disability 

assistance expenses. 

Expenses can be considered only if they 

enable a household member to work. 

Consider the following example: 

• Samuel Brown, age 35, uses a 

wheelchair and a specially adapted 

automobile. His income comes from a 

disability pension. The costs of the 

wheelchair and the adaptations to the 

automobile are not eligible disability 

assistance expenses because no family 

member is enabled to work. Samuel’s 

disability does, however, qualify him as 

a disabled head of household. Thus, he 

is entitled to medical expenses. The 

wheelchair (but not the adaptations to 

the automobile) could qualify as a 

medical expense. 

Expenses may be deducted only if: (1) they 

are reasonable; (2) they are not reimbursed 

from another source, such as insurance; (3) 

they do not exceed the amount of income 

generated by the person enabled to work; 

and (4) they are in excess of three percent 

of annual income. 

When Both Medical and Disability 

Assistance Expenses Apply 

As noted above, both medical expenses 

and disability assistance expenses are 

limited to those in excess of three percent of 

annual income. For families who qualify for 

both types of expenses, the allowable 

amount is the amount by which the 

combined expenses exceed three percent 

of annual income. Because disability 

assistance expenses are also capped by 

the amount of income earned, a special 

calculation is required. 

Technical Guide for Determining Income and Allowances for the HOME Program — 57 
Chapter Four – Calculating Adjusted Income 

Sample Format for Calculating 

Adjusted Income 

The PJ first calculates the allowable 

disability assistance expenses and then 

adds to that the allowable medical 

expenses. The form in Exhibit 4.3 is 

designed to help perform this calculation. 

As for annual income, any information used 

to determine the household’s eligibility for 

participation in the program or the amount 

of a deduction or allowance must be 

documented in a way that allows HUD to 

monitor the PJ’s determination. Exhibit 4.3 

provides a sample format for calculating 

adjusted income. Exhibits 4.4 through 4.6 

provide examples and exercises on 

calculating adjusted income. 

Exhibit 4.2 – Answers to Exercise on page 55 

Which of the following households qualify for an elderly or disabled household deduction of $400? 

Household Characteristics Yes No 

1. Head (59), spouse (63) •

2. Head (40), disabled spouse (39) •

3. Head (59), disabled son (16) •

4. Head (59), disabled son (32) Maybe; the head and son could be 

living as co-heads, in which case the 

household would be a disabled 

household. 

5. Head (40), father (63) Maybe; the head and father could be 

living as co-heads, in which case the 

household would be an elderly 

household. If the father were the head 

of household, the household would be 

an elderly household. 

6. Disabled head of household (51) •

Technical Guide for Determining Income and Allowances for the HOME Program — 58 
Chapter Four – Calculating Adjusted Income 

Exhibit 4.3 – Sample Format for Calculating Part 5 Adjusted Income 

1. Enter Annual Income. 1. 

2. Enter the number of family members (excluding head or 

spouse) under 18, disabled, or full-time students. 

2. 

3. Multiply line 2 by $480. 3. 

4. If a family member is enabled to work or further their 

education as a result of child care expenses, enter the 

unreimbursed annual child care expenses (reasonable 

child care expenses for children age 12 and under). 

4. 

5. If the family member was enabled to work as a result of 

the child care expenses, enter that family member’s 

annual employment income. 

5. 

6. If an amount is reported in Line 5, enter the lesser of 

Lines 4 or 5. Otherwise, enter the amount in Line 4. 

6. 

7. If the household qualifies as an elderly and/or disabled 

household, enter $400. 

7. 

8. Add Lines 3, 6, and 7. 8. 

9. If this household has no unreimbursed disability 

assistance or medical expenses, subtract Line 8 from 

Line 1. This is Adjusted Income for this household 

without these expenses. 

9. 

********** FILL IN LINES 10 THROUGH 20 IF THE FAMILY HAS 

UNREIMBURSED DISABILITY ASSISTANCE OR 

MEDICAL EXPENSES 

********** 

10. Enter unreimbursed annual disability assistance 

expenses. 

10. 

11. Enter the annual earned income of the family member 

enabled to work as a result of unreimbursed disability 

assistance expenses. 

11. 

12. Enter the lesser of Lines 10 or 11. 12. 

13. Enter unreimbursed annual medical expenses. 13. 

14. Add Lines 12 and 13. 14. 

15. Multiply Line 1 by 0.03. 15. 

16. Subtract Line 15 from Line 12. If negative, enter 0. 16. 

17. Subtract Line 15 from Line 13. If negative, enter 0. 17. 

18. Subtract Line 15 from Line 14. If negative, enter 0. 18. 

19a. If the household reported only unreimbursed disability 

expenses but no unreimbursed medical expenses, add 

Lines 8 and 16. 

19a. 

19b. If the household reported only unreimbursed medical 

expenses but no unreimbursed disability expenses, add 

Lines 8 and 17. 

19b. 

19c. If the household reported both unreimbursed disability 

expenses and unreimbursed medical expenses, add 

Lines 8 and 18. 

19c. 

20. Subtract either Line 19a, 19b, or 19c from Line 1. This is 

Adjusted Income for this household with these 

expenses. 

20. 

Technical Guide for Determining Income and Allowances for the HOME Program — 59 
Chapter Four – Calculating Adjusted Income 

Exhibit 4.4 – Calculating Part 5 Adjusted Income – Example 

Family Member 

Position 

in Family Age Income Expenses 

Pearl Henderson Head 76 $13,500 Prescription medication – $75/month; 

Medicare deduction – $38.50/month 

Marshall Jones Grandson 19 No income; fulltime student Visits to physician – $120/year 

1. Enter Annual Income. 1. $13,500 

2. Enter the number of family members (excluding head or 

spouse) under 18, disabled, or full-time students. 

2. 1 

3. Multiply line 2 by $480. This is the dependent 

deduction. 

3. $480 

4. If a family member is enabled to work or further their 

education as a result of child care expenses, enter the 

unreimbursed annual child care expenses (reasonable 

child care expenses for children age 12 and under). 

4. N/A 

5. If the family member was enabled to work as a result of 

the child care expenses, enter that family member’s 

annual employment income. 

5. N/A 

6. If an amount is reported in Line 5, enter the lesser of 

Lines 4 or 5. Otherwise, enter the amount in Line 4. 

6. $0.00 

7. If the household qualifies as an elderly and/or disabled 

household, enter $400. This is the elderly/disabled 

household deduction. Otherwise, enter 0. 

7. $400 

8. Add Lines 3, 6, and 7. 8. $880 

9. If the household has no unreimbursed disability 

assistance or medical expenses, subtract Line 8 from 

Line 1. This is Adjusted Income for a household 

without these expenses. Otherwise, proceed to line 10. 

9. 

********** FILL IN LINES 10 THROUGH 20 IF THE FAMILY HAS 

UNREIMBURSED DISABILITY ASSISTANCE OR 

MEDICAL EXPENSES 

********** 

Technical Guide for Determining Income and Allowances for the HOME Program — 60 
Chapter Four – Calculating Adjusted Income 

Exhibit 4.4 (continued)

10. Enter unreimbursed annual disability assistance 

expenses. 

10. N/A 

11. Enter the annual earned income of the family member 

enabled to work as a result of unreimbursed disability 

assistance expenses. 

11. N/A 

12. Enter the lesser of Lines 10 or 11. 12. N/A 

13. Enter unreimbursed annual medical expenses. 13. $1,482 

14. Add Lines 12 and 13. 14. $1,482 

15. Multiply Line 1 by 0.03. 15. $405 

16. Subtract Line 15 from Line 12. If negative, enter 0. 16. $0.00 

17. Subtract Line 15 from Line 13. If negative, enter 0. 17. $1,077 

18. Subtract Line 15 from Line 14. If negative, enter 0. 18. $1,077 

19a. If the household reported only unreimbursed disability 

expenses but no unreimbursed medical expenses, add 

Lines 8 and 16. 

19a. 0 

19b. If the household reported only unreimbursed medical 

expenses but no unreimbursed disability expenses, add 

Lines 8 and 17. 

19b. $1,957 

19c. If the household reported both unreimbursed disability 

expenses and unreimbursed medical expenses, add 

Lines 8 and 18. 

19c. 0 

20. Subtract either Line 19a, 19b, or 19c from Line 1. This is 

Adjusted Income for this household with these 

expenses. 

20. $11,543 

Explanation 

Line 2 Marshall is a full-time student, so the household qualifies for one $480 deduction. 

Line 4 There are no children under age 12. 

Lines 5-9 The household qualifies as an elderly household and does have annual unreimbursed 

medical expenses. 

Lines 10-14 The household does not have any annual unreimbursed disability assistance expenses 

(Lines 10-12), but does have annual unreimbursed medical expenses [($75/month x 12 

months/year) + ($38.50/month x 12 months/year) + ($120/year) = $1,482]. This amount is 

entered in Line 13. 

Line 15 The household can only deduct those unreimbursed medical and disability assistance 

expenses that exceed 3 percent of annual household income. 

Lines 16-18 The household deducts 3 percent of its annual income from the total amount of annual 

unreimbursed medical expenses (Line 17). 

Lines 19a-19c The household adds its medical expenses deduction (Line 17) to the other deductions 

(dependent deduction, elderly household deduction) that are summed in Line 8, and 

enters this total in Line 19b (households reporting medical expenses, but no disability 

assistance expenses). 

Line 20 The amount entered in Line 19b ($1,957) is subtracted from the household’s annual 

income figure in Line 1 ($13,500), giving it an adjusted income of $11,543. 

Technical Guide for Determining Income and Allowances for the HOME Program — 61 
Chapter Four – Calculating Adjusted Income 

Exhibit 4.5 – Calculating Part 5 Adjusted Income – Example 

Family Member 

Position in 

Family Age Income Expenses 

Clark Griswald Head 40 $27,900 Prescription medication – $75/month 

Rusty Griswald Son 13 No income Child care – $50/week 

Audrey Griswald Daughter 11 No income Child care – $50/week 

1. Enter Annual Income. 1. $27,900 

2. Enter the number of family members (excluding head or 

spouse) under 18, disabled, or full-time students. 

2. 2 

3. Multiply line 2 by $480. This is the dependent 

deduction. 

3. $960 

4. If a family member is enabled to work or further their 

education as a result of child care expenses, enter the 

unreimbursed annual child care expenses (reasonable 

child care expenses for children age 12 and under). 

4. $2,600 

5. If the family member was enabled to work as a result of 

the child care expenses, enter that family member’s 

annual employment income. 

5. $27,900 

6. If an amount is reported in Line 5, enter the lesser of 

Lines 4 or 5. Otherwise, enter the amount in Line 4. 

6. $2,600 

7. If the household qualifies as an elderly and/or disabled 

household, enter $400. This is the elderly/disabled 

household deduction. Otherwise, enter 0. 

7. 0 

8. Add Lines 3, 6, and 7. 8. $3,560 

9. If the household has no unreimbursed disability 

assistance or medical expenses, subtract Line 8 from 

Line 1. This is Adjusted Income for a household 

without these expenses. Otherwise, proceed to line 10. 

9. $24,340 

********** FILL IN LINES 10 THROUGH 20 IF THE FAMILY HAS 

UNREIMBURSED DISABILITY ASSISTANCE OR 

MEDICAL EXPENSES 

********** 

Technical Guide for Determining Income and Allowances for the HOME Program — 62 
Chapter Four – Calculating Adjusted Income 

Exhibit 4.5 (continued)

10. Enter unreimbursed annual disability assistance 

expenses. 

10. N/A 

11. Enter the annual earned income of the family member 

enabled to work as a result of unreimbursed disability 

assistance expenses. 

11. N/A 

12. Enter the lesser of Lines 10 or 11. 12. N/A 

13. Enter unreimbursed annual medical expenses. 13. N/A 

14. Add Lines 12 and 13. 14. N/A 

15. Multiply Line 1 by 0.03. 15. N/A 

16. Subtract Line 15 from Line 12. If negative, enter 0. 16. N/A 

17. Subtract Line 15 from Line 13. If negative, enter 0. 17. N/A 

18. Subtract Line 15 from Line 14. If negative, enter 0. 18. N/A 

19a. If the household reported only unreimbursed disability 

expenses but no unreimbursed medical expenses, add 

Lines 8 and 16. 

19a. N/A 

19b. If the household reported only unreimbursed medical 

expenses but no unreimbursed disability expenses, add 

Lines 8 and 17. 

19b. N/A 

19c. If the household reported both unreimbursed disability 

expenses and unreimbursed medical expenses, add 

Lines 8 and 18. 

19c. N/A 

20. Subtract either Line 19a, 19b, or 19c from Line 1. This is 

Adjusted Income for this household with these 

expenses. 

20. N/A 

Explanation 

Line 2 There are two children in the family under the age of 18. 

Lines 4-6 Although the family has child care expenses for both children, only Audrey’s expenses are 

eligible for the child care deduction because only she is under the age of 12. Audrey’s child 

care expenses are less than Clark’s annual income, and are reported as the household’s 

child care expense deduction (Line 6). 

Line 7 The household does not qualify for either the elderly or disabled household deduction of 

$400. 

Lines 8-9 The household’s eligible deductions are subtracted from Clark’s annual income. This is the 

household’s adjusted income ($24,340). 

Lines 10-20 There are no further calculations or adjustments to be made to the Griswald’s annual 

income. 

Technical Guide for Determining Income and Allowances for the HOME Program — 63 
Chapter Four – Calculating Adjusted Income 

Exhibit 4.6 – Calculating Part 5 Adjusted Income – Exercise 

Instructions: Based on the information about the Taylor household below, complete the worksheet to determine its 

adjusted income figure. 

Family 

Member 

Position in 

Family Age Income Expenses 

Jill Taylor Head 36 $22,984 Health insurance – $230/month; 

Prescription medication – $75/month for 

Jill and Randy; Visits to the physician for 

Randy and Brad – $370/year. 

Tim Taylor Spouse; fulltime student 36 $3,500; plus 

$2,500 from 

a school loan 

Randy Taylor Son – disabled 15 None Attendant care, which frees Tim to work – 

$50/week 

Brad Taylor Son 11 None Child care – $25/week 

1. Enter Annual Income. 1. 

2. Enter the number of family members (excluding head or 

spouse) under 18, disabled, or full-time students. 

2. 

3. Multiply line 2 by $480. This is the dependent 

deduction. 

3. 

4. If a family member is enabled to work or further their 

education as a result of child care expenses, enter the 

unreimbursed annual child care expenses (reasonable 

child care expenses for children age 12 and under). 

4. 

5. If the family member was enabled to work as a result of 

the child care expenses, enter that family member’s 

annual employment income. 

5. 

6. If an amount is reported in Line 5, enter the lesser of 

Lines 4 or 5. Otherwise, enter the amount in Line 4. 

6. 

7. If the household qualifies as an elderly and/or disabled 

household, enter $400. This is the elderly/disabled 

household deduction. Otherwise, enter 0. 

7. 

8. Add Lines 3, 6, and 7. 8. 

9. If the household has no unreimbursed disability 

assistance or medical expenses, subtract Line 8 from 

Line 1. This is Adjusted Income for a household 

without these expenses. Otherwise, proceed to line 10. 

9. 

********** FILL IN LINES 10 THROUGH 20 IF THE FAMILY HAS 

UNREIMBURSED DISABILITY ASSISTANCE OR 

MEDICAL EXPENSES 

********** 

Technical Guide for Determining Income and Allowances for the HOME Program — 64 
Chapter Four – Calculating Adjusted Income 

Exhibit 4.6 (continued) 

10. Enter unreimbursed annual disability assistance 

expenses. 

10. 

11. Enter the annual earned income of the family member 

enabled to work as a result of unreimbursed disability 

assistance expenses. 

11. 

12. Enter the lesser of Lines 10 or 11. 12. 

13. Enter unreimbursed annual medical expenses. 13. 

14. Add Lines 12 and 13. 14. 

15. Multiply Line 1 by 0.03. 15. 

16. Subtract Line 15 from Line 12. If negative, enter 0. 16. 

17. Subtract Line 15 from Line 13. If negative, enter 0. 17. 

18. Subtract Line 15 from Line 14. If negative, enter 0. 18. 

19a. If the household reported only unreimbursed disability 

expenses but no unreimbursed medical expenses, add 

Lines 8 and 16. 

19a 

19b. If the household reported only unreimbursed medical 

expenses but no unreimbursed disability expenses, add 

Lines 8 and 17. 

19b. 

19c. If the household reported both unreimbursed disability 

expenses and unreimbursed medical expenses, add 

Lines 8 and 18. 

19c. 

20. Subtract either Line 19a, 19b, or 19c from Line 1. This is 

Adjusted Income for this household with these 

expenses. 

20. 

Technical Guide for Determining Income and Allowances for the HOME Program — 65 
Chapter Four – Calculating Adjusted Income 

ANSWERS 

1. Enter Annual Income. 1. $26, 484 

2. Enter the number of family members (excluding head or 

spouse) under 18, disabled, or full-time students. 

2. 2 

3. Multiply line 2 by $480. This is the dependent deduction. 3. $960 

4. If a family member is enabled to work or further their 

education as a result of child care expenses, enter the 

unreimbursed annual child care expenses (reasonable child 

care expenses for children age 12 and under). 

4. $1,300 

5. If the family member was enabled to work as a result of the 

child care expenses, enter that family member’s annual 

employment income. 

5. $3,500 

6. If an amount is reported in Line 5, enter the lesser of Lines 

4 or 5. Otherwise, enter the amount in Line 4. 

6. $1,300 

7. If the household qualifies as an elderly and/or disabled 

household, enter $400. This is the elderly/disabled 

household deduction. Otherwise, enter 0. 

7. 0 

8. Add Lines 3, 6, and 7. 8. $2,260 

9. If the household has no unreimbursed disability assistance 

or medical expenses, subtract Line 8 from Line 1. This is 

Adjusted Income for a household without these expenses. 

Otherwise, proceed to Line 10. 

9. 

********** FILL IN LINES 10 THROUGH 20 IF THE FAMILY HAS 

UNREIMBURSED DISABILITY ASSISTANCE OR 

MEDICAL EXPENSES 

********** 

10. Enter unreimbursed annual disability assistance 

expenses. 

10. $2,600 

11. Enter the annual earned income of the family member 

enabled to work as a result of unreimbursed disability 

assistance expenses. 

11. $3,500 

12. Enter the lesser of Lines 10 or 11. 12. $2,600 

13. Enter unreimbursed annual medical expenses. 13. N/A 

14. Add Lines 12 and 13. 14. $2,600 

15. Multiply Line 1 by 0.03. 15. $795 

16. Subtract Line 15 from Line 12. If negative, enter 0. 16. $1,805 

17. Subtract Line 15 from Line 13. If negative, enter 0. 17. 0 

18. Subtract Line 15 from Line 14. If negative, enter 0. 18. $1,805 

19a. If the household reported only unreimbursed disability 

expenses but no unreimbursed medical expenses, add 

Lines 8 and 16. 

19a. $4,065 

19b. If the household reported only unreimbursed medical 

expenses but no unreimbursed disability expenses, add 

Lines 8 and 17. 

19b. 0 

19c. If the household reported both unreimbursed disability 

expenses and unreimbursed medical expenses, add 

Lines 8 and 18. 

19c. 0 

20. Subtract either Line 19a, 19b, or 19c from Line 1. This is 

Adjusted Income for this household with these 

expenses. 

20. $22,419 

Technical Guide for Determining Income and Allowances for the HOME Program — 66 
Chapter Four – Calculating Adjusted Income 

Explanation 

Line 1 Include Jill’s annual income of $22,984 plus Tim’s income of $3,500. Do not include 

Tim’s student loan of $2,500. 

Line 2 There are two children in the family under the age of 18. Although Tim is a full-time 

student, he is not eligible for a $480 deduction because he is the head of household or 

spouse. 

Lines 4-6 Brad is the only child under age 12. Include his child care costs of $25/week X 52 

weeks/year = $1,300. Brad’s child care services allow Tim to work. The lesser of Tim’s 

annual earned income and Brad’s child care expenses is $1,300. This is the household’s 

child care deduction. 

Line 7 Although Randy is disabled, this does not qualify the household as “disabled” under the 

Part 5 definition. The Taylors do not qualify for the $400 deduction for disabled and/or 

elderly households. 

Lines 10-12 The attendant care for Randy allows Tim to work and go to school. Randy’s attendant 

expenses ($1,300) are less than Tim’s annual income ($3,500), and are entered as the 

amount of unreimbursed annual disability services costs. 

Line 13. The Taylor household does not qualify as an elderly or disabled household, therefore 

none of Jill’s medical expenses exceeding 3 percent of household income can be 

deducted. 

Lines 15-16 Three percent of the household’s annual income is $795. This amount is subtracted from 

the annual cost of Randy’s disability assistance, and entered as the household’s disability 

deduction. 

Line 19a The Taylor household’s combined dependent, child care and disability assistance 

deductions sum to $4,065. 

Line 20 The figure from Line 19a ($4,065) is subtracted from Line 1 to determine the household’s 

adjusted income ($22,419). 

Technical Guide for Determining Income and Allowances for the HOME Program — 67 

Chapter Five 

Calculating Assistance Amounts 

This chapter describes how HOME Program 

definitions of income (found at 24 CFR Part 

92.203) are used to calculate tenant 

payments and PJ subsidies under a HOMEfunded tenant based rental assistance 

(TBRA) program and to comply with antidisplacement and tenant assistance 

requirements under the Uniform Relocation 

Act (URA) and Section 104(d) relocation 

requirements. 

Detailed guidance on HOME TBRA 

programs is provided in a companion 

guide, Tenant Based Rental Assistance: A 

HOME Program Model. This model 

program guide is available online at the 

HOME Program Model Program Guide 

website at 

http://www.hud.gov/offices/cpd/affordable

housing/library/modelguides/index.cfm.

In summary, the PJ must establish a rent 

standard for each unit size (by number of 

bedrooms) that is: (1) not greater than the 

HUD-published Existing Housing Fair 

Market Rent (FMR) or the HUD-approved 

Area Exception Rent; or (2) determined 

locally based on local market conditions. 

Tenant and PJ Payments for HOME 

TBRA Programs 

Under the HOME regulations pertaining to 

TBRA, PJs have some discretion in the 

amount of rental subsidy they provide to, or 

on behalf of, a tenant. The subsidy can be 

no greater than the difference between a 

PJ-established payment standard and 30 

percent of the household’s adjusted monthly 

income. The PJ must also establish a 

minimum tenant contribution. 

PJs can use either the Section 8 Rental 

Certificate or Rental Voucher Program as a 

model to determine the PJ subsidy, or they 

can establish their own methodology, in 

conformance with regulatory requirements. 

Rental Certificate Model 

A PJ that chooses to use the Rental 

Certificate Program as a model assumes a 

fixed tenant payment—the tenant’s share of 

housing costs (Total Tenant Payment [TTP]) 

is calculated by formula. The public 

housing agency (PHA) then pays the 

difference between the tenant’s share and 

the approved rent for the unit. 

The formula for computing TTP under the 

Certificate Program requires a tenant to pay 

the greatest of: 

• 30 percent of its household’s monthly 

adjusted income; 

• 10 percent of its household’s monthly 

annual (gross) income; or 

• Welfare rent (applies only to welfare 

recipients in as-paid localities). 

Exhibit 5.1 demonstrates this method. 

Rental Voucher Model 

The Rental Voucher Program assumes a 

fixed PHA payment—the maximum PHA 

subsidy is calculated and the tenant pays 

the difference between the PHA subsidy 

and the approved rent for the unit. 

Using the Rental Voucher method, the PJ 

first establishes rent standards by unit size 

for the program as a whole. Details on 

establishing the payment standard are 

provided in the TBRA model program guide, 

Tenant-Based Rental Assistance: A HOME 

Program Model. The PJ generally pays the 

difference between its rent standard and 30 

percent of the tenant’s monthly adjusted 

income. A minimum tenant payment of 10 

percent of monthly annual (gross) income is 

required, however. Exhibit 5.2 

demonstrates this method. 

Technical Guide for Determining Income and Allowances for the HOME Program — 69 
Chapter Five – Calculating Assistance Amounts 

Income Calculations for 

Antidisplacement Activities 

A household that must move because it can 

no longer afford housing costs after 

completion of a Federally-funded activity is 

considered displaced. For instance, 

displacement might occur if rents are raised 

after Community Development Block Grant 

(CDBG) or HOME funds are used to 

rehabilitate a rental project. 

For the CDBG and HOME Programs, to 

avoid displacement, any increased rents 

that are the result of the CDBG or HOME 

activity cannot exceed the following: 

• For low-income households (those with 

incomes at or below 80 percent of the 

area median, as established by HUD), 

the household’s TTP as calculated for 

the Certificate Program—the greatest of 

30 percent of monthly adjusted income, 

10 percent of monthly gross income, or 

the Welfare rent; or 

• For households above the low-income 

limit, 30 percent of monthly gross 

income. 

Replacement Housing Payments to 

Displaced Households 

Among other assistance, displaced renter 

households are entitled to replacement 

housing payments. In concept, the 

replacement housing payments are 

intended to make up the difference between 

the family’s old base monthly rent and the 

amount the family must pay for housing at 

its new location. The formula for 

determining how much the family should 

receive varies depending on the family’s 

length of occupancy, its income and 

whether it is covered by Section 104(d) or 

the Uniform Relocation Act [URA]. (See 

HUD Handbook 1378 for a complete 

discussion of this topic.) 

Under the URA (for both low-income 

households and those above the lowincome limit) the household’s base monthly 

rent is the lesser of: 

• Rent and utilities the tenant paid at the 

displacement unit (old residence); or 

• 30 percent of monthly gross income 

([annual income / 12 months] x .30); or 

• Welfare rent (applies only to welfare 

recipients in as-paid localities). 

The PJ must make up the difference 

between this ability to pay (household’s 

base monthly rent) and the household’s 

actual housing costs at the replacement unit 

(new residence) or a comparable rent 

established by the PJ if the new rent is 

higher than the old. Exhibit 5.3 provides an 

example of a URA replacement housing 

payment calculation. 

A similar calculation is made under Section 

104(d). Ability to pay under Section 104(d) 

is, however, based on the Section 8 Total 

Tenant Payment formula—the greatest of 

30 percent of monthly adjusted income, 10 

percent of gross monthly income, or welfare 

rent. 

Sample Format for Calculating Total 

Tenant Payments 

Exhibits 5.4 and 5.5 provide sample formats 

for calculating TTP using both the Rental 

Certificate and Rental Voucher models. 

Examples of these calculations are included 

in Exhibits 5.6 and 5.7. 

Technical Guide for Determining Income and Allowances for the HOME Program — 70 
Chapter Five – Calculating Assistance Amounts 

Exhibit 5.1 – Sample Calculation of Tenant and PJ Payments Using the Rental Certificate 

Method 

The Cleavers have been issued a 2-bedroom HOME TBRA coupon. Their Part 5 annual and adjusted 

incomes are $22,500 and $18,300, respectively. They find an apartment that rents for $725 per month, 

including utilities. 

The Cleavers must pay the greater of: 

The PJ must pay the difference between the 

tenant’s share and the approved rent. 

30% of monthly adjusted income 

($18,300/12 months) x .30 

$458 

Approved rent for the unit: $725 

Or Less total tenant payment (TTP) $458

10% of monthly gross income 

($22,500/12 months) x .10 

$188 PJ’s share of the rent $267 

Exhibit 5.2 – Sample Calculation of Tenant and PJ Payments Using the Rental Voucher 

Method 

The Cleavers have been issued a 2-bedroom HOME TBRA coupon. Their Part 5 annual and adjusted 

incomes are $22,500 and $18,300, respectively. As in Exhibit 5.1, their monthly adjusted income and 

monthly gross income are $458 and $188, respectively. They find an apartment that rents for $800 per 

month, including utilities. The PJ’s Rent Standard is $775. 

The maximum PJ subsidy is: The Cleavers’ share is: 

Rent standard $775 Approved rent $800 

Less 30% of monthly adjusted income $458 Less maximum PJ subsidy $317

Maximum PJ subsidy $317 Cleaver’s payment $483 

In this example, the Cleavers will pay more than 30% of their adjusted monthly income for housing 

because they selected a unit that rents for more than the standard. Had the Cleavers found a very 

inexpensive unit, the requirement that the family pay at least 10% of monthly gross income might apply. 

Approved rent $500 

Less maximum PJ subsidy $317

Calculated tenant share $183 

The Cleavers, however, must pay at least 10% of gross monthly income 

(($22,500/12 months) x .10 = $188). The PJ’s contribution would be reduced by $5. 

Technical Guide for Determining Income and Allowances for the HOME Program — 71 
Chapter Five – Calculating Assistance Amounts 

Exhibit 5.3 – Sample URA Replacement Housing Payment Calculation 

The Simpson family is being displaced from a HOME rental project because their household size is too 

large for any unit in the project after its rehabilitation. The family’s current rent (including utilities) is $475 

per month. The PJ identifies a unit that is suitable to the family’s size and otherwise comparable to the 

unit they will be leaving. The rent for the comparable unit is $500. The Simpson family elected to move 

to another unit that rents for $520. This is not a welfare as-paid jurisdiction. The Simpson's annual 

income is $15,000/year. 

The replacement payment would be calculated as follows: 

1. Determine the family’s ability to pay as the lesser of: 

30% of gross monthly income (($15,000/12 months) x .30) $ 375 

Or 

Family’s rent and utilities at displacement unit $ 475 

2. Determine the new housing costs to be considered as the lesser of: 

PJ-determined comparable unit $ 500 

Family’s rent and utilities at replacement unit $ 520 

3. Provide the family with the difference between these two amounts for a 42-month 

period 

New housing costs to be considered $ 500 

Less family’s ability to pay $ 375

 $ 125 

Months x 42

Replacement housing payment $5,250 

Technical Guide for Determining Income and Allowances for the HOME Program — 72 
Chapter Five – Calculating Assistance Amounts 

Exhibit 5.4 – Sample Format for Computing Total Tenant Payment and PJ Subsidy -- 

Rental Voucher Model 

(This form is designed to continue from the Sample Format for Computing Part 5 Adjusted 

Income, presented in Chapter 4.) 

15. Rent Standard 15. 

16. 30% of Monthly Adjusted Income ((line 14 ÷ 12) x 0.30). 16. 

17. Maximum Subsidy (line 15 minus line 16). 17. 

18. Rent Charged by Owner.2 18. 

19. Utility Allowance — if any. 19. 

20. Gross Rent for the Unit (line 18 plus line 19). 20. 

21. Gross Rent minus Maximum Subsidy (line 20 minus line 17). 21. 

22. 10% of Monthly Gross Income (line 1 ÷ 12) x 0.10). 22. 

23. Total Family Contribution (higher of line 21 or line 22). 23. 

24. Gross Rent minus Family Contribution (line 20 minus line 23). 24. 

25. Total Voucher Subsidy (lower of line 17 or line 24). 25. 

26. PJ Payment to Owner (lower of line 18 or line 25). 26. 

27. Family Rent to Owner (line 18 minus line 26). 27. 

28. Utility Reimbursement — if any (line 25 minus line 26). 28. 

 

2

 If this is a Section 236 or Department of Agriculture Rural Development Section 515 project, enter the lower of the 

project’s market Rent or line 22, but never less than the project’s Basic Rent. 

Technical Guide for Determining Income and Allowances for the HOME Program — 73 
Chapter Five – Calculating Assistance Amounts 

Exhibit 5.5 – Sample Format for Computing Total Tenant Payment and PJ Subsidy -- 

Rental Certificate Model3

(This form is designed to continue from the Sample Format for Computing Part 5 Adjusted 

Income, presented in Chapter 4.) 

15. 30% of Monthly Adjusted Income (line 14 ÷ 12) x 0.30). 15. 

16. 10% of Gross Monthly Income (line 1 ÷ 12) x 0.30). 16. 

17. Welfare rent (if applicable). 17. 

18. TOTAL TENANT PAYMENT (greater of lines 15, 16 or 17). 18. 

19. Contract Rent to Owners. 19. 

20. Utility Allowance. 20. 

21. Gross Rent (line 19 plus line 20). 21. 

22. Tenant Rent (line 18 minus line 20) 

If line 20 is greater than line 18, enter zero, and enter the 

difference in line 23. 

22. 

23. Utility Reimbursement to Tenant (line 20 minus line 18 only 

if line 20 is greater than line 18). 

23. 

24. PJ Payment to Owner (line 19 minus line 22). 24. 

 

3

 Must be used for calculation of TTP when required for anti-displacement activities. 

Technical Guide for Determining Income and Allowances for the HOME Program — 74 
Chapter Five – Calculating Assistance Amounts 

Exhibit 5.6 – Calculating PJ Subsidy -- Exercise 

The Petrillos family - Salvador (head of household), age 75, Sophia (spouse), age 77, and their son 

Phil, age 38 and handicapped- want to leave their house and move to an apartment that costs $625 

per month (utilities included). They will need HOME tenant based rental assistance (TBRA) to afford 

the apartment. When they applied for assistance, they had not found a buyer for their home. 

The PJ’s rent standard is $600. 

Income Sources 

• Salvador receives a pension check of $350/month and gross social security of $625/month. 

• Sophia receives a pension check of $375/month. She works as a Retired Senior Volunteer and 

has averaged 20/hours week during the past year at $6.50 an hour. 

• Phil receives gross social security of $305/month. 

Their Assets 

• The Petrillos own a home with a market value of $50,000. The outstanding balance on the 

mortgage is $10,000. The average cost of settlement and real estate transfers is five percent. 

• The Petrillos’ checking account has a $1,525 average six-month balance. The actual yearly 

interest income on this account is $58. 

• The Petrillos’ savings account holds $2,500 with an annual interest rate of three percent. 

• The Petrillos have a certificate of deposit worth $10,000 with an annual interest rate of 4.2 

percent. 

• Last month, the Petrillos sold all their stock and gave the proceeds to their daughter Dorothy. 

Their net proceeds from the sale of the stock was $1,850. 

The HUD Passbook Rate is two percent. 

Their Expenses 

• Doctor and medication expenses for Salvador and Phil total $1,390 per year. 

Attendant care for Phil works costs $50/week. This care enables Sophia to work. 

• Medical insurance for the household equals $2,300 per year. 

Using the above information and the following format, calculate the Petrillos’ annual and 

adjusted income using the Part 5 definitions. How much will the subsidy be? 

Technical Guide for Determining Income and Allowances for the HOME Program — 75 
Chapter Five – Calculating Assistance Amounts 

Sample Format for Calculating Part 5 Annual Income 

1. Name 2. Identification No.: 

ASSETS

Family Member Asset Description 

Current Cash Value 

of Assets 

Actual Income 

from Assets 

3. Net Cash Value of Assets.................................. 3. 

4. Total Actual Income from Assets................................................................... 4. 

5. If line 3 is greater than $5,000, multiply line by _____ (Passbook Rate) 

and enter results here; otherwise, leave blank 

5. 

ANTICIPATED ANNUAL INCOME 

Family 

Members 

a. Wages/ 

Salaries 

b. Benefits/ 

Pensions 

c. Public 

Assistance 

d. Other 

Income 

e. Asset 

Income 

Enter the

greater of 

lines 4 or 5 

from above 

in e.

6. Totals a. b. c. d. e. 

7. Enter total of items from 6a. through 6e. 

This is Annual Income.

7. 

Technical Guide for Determining Income and Allowances for the HOME Program — 76 
Chapter Five – Calculating Assistance Amounts 

Sample Format for Calculating Adjusted Income 

1. Annual Income. 1. 

2. Number of family members (excluding head or spouse) 

under 18, disabled, or full-time students. 

2. 

3. Multiply line 2 by $480. 3. 

4. Child care deduction (reasonable child care expenses 

for children age 12 and under). 

4. 

[If family has disability assistance expenses or qualifies 

as an elderly family, proceed to line 5; otherwise, skip to 

line 13.] 

5. Enter disability assistance expenses. 5. 

6. Multiply line 1 by 0.03. 6. 

7. Subtract line 6 from line 5.If negative, enter 0. 7. 

8. Enter amount earned by family member enabled to work 

as a result of disability assistance expenses. 

8. 

9. Enter the lesser of lines 7 or 8. This is the disability 

assistance allowance. 

9. 

***FILL IN LINES 10 THROUGH 12 FOR ELDERLY FAMILIES ONLY*** 

10. Enter total medical expenses. 10. 

11. Allowable medical expenses: 

• If the household reported no expenses in line 5, 

enter line 10 minus line 6. 

• If the household reported expenses in line 5, but 

line 7 is zero, enter line 10 minus (line 6 minus 

5). 

• If the household reported expenses in line 7 and 

line 7 is greater than zero, enter line 10. 

11. 

12. Enter $400. 12. 

13. Add lines 3, 4, 9, 11, and 12. 13. 

14. Subtract line 13 from line 1. This is Adjusted 

Income. 

14. 

Technical Guide for Determining Income and Allowances for the HOME Program — 77 
Chapter Five – Calculating Assistance Amounts 

Sample Format for Computing Total Tenant Payment and PJ Subsidy 

Rental Voucher Model 

(This form is designed to continue from the Sample Format for Computing Part 5 Adjusted 

Income, presented in Chapter 4.) 

15. Rent Standard 15. 

16. 30% of Monthly Adjusted Income ((line 14 ÷ 12) x 0.30). 16. 

17. Maximum Subsidy (line 15 minus line 16). 17. 

18. Rent Charged by Owner.4 18. 

19. Utility Allowance — if any. 19. 

20. Gross Rent for the Unit (line 18 plus line 19). 20. 

21. Gross Rent minus Maximum Subsidy (line 20 minus line 17). 21. 

22. 10% of Monthly Gross Income (line 1 ÷ 12) x 0.10). 22. 

23. Total Family Contribution (higher of line 21 or line 22). 23. 

24. Gross Rent minus Family Contribution (line 20 minus line 23). 24. 

25. Total Voucher Subsidy (lower of line 17 or line 24). 25. 

26. PJ Payment to Owner (lower of line 18 or line 25). 26. 

27. Family Rent to Owner (line 18 minus line 26). 27. 

28. Utility Reimbursement — if any (line 25 minus line 26). 28. 

 

4

 If this is a Section 236 or Department of Agriculture Rural Development Section 515 project, enter the lower of the 

project’s market Rent or line 22, but never less than the project’s Basic Rent. 

Technical Guide for Determining Income and Allowances for the HOME Program — 78 
Chapter Five – Calculating Assistance Amounts 

Sample Format for Computing Total Tenant Payment and PJ Subsidy 

Rental Certificate Model5

(This form is designed to continue from the Sample Format for Computing Part 5 Adjusted 

Income, presented in Chapter 4.) 

15. 30% of Monthly Adjusted Income (line 14 ÷ 12) x 0.30). 15. 

16. 10% of Gross Monthly Income (line 1 ÷ 12) x 0.10). 16. 

17. Welfare rent (if applicable). 17. 

18. TOTAL TENANT PAYMENT (greater of lines 15, 16 or 17). 18. 

19. Contract Rent to Owners. 19. 

20. Utility Allowance. 20. 

21. Gross Rent (line 19 plus line 20). 21. 

22. Tenant Rent (line 18 minus line 20). 

If line 20 is greater than line 18, enter zero, and enter the 

difference in line 23. 

22. 

23. Utility Reimbursement to Tenant (line 20 minus line 18 only 

if line 20 is greater than line 18). 

23. 

24. PJ Payment to Owner (line 19 minus line 22). 24. 

 

5

 Must be used for calculation of TTP when required for anti-displacement activities. 

Technical Guide for Determining Income and Allowances for the HOME Program — 79 
Chapter Five – Calculating Assistance Amounts 

Sample Format for Calculating Part 5 Annual Income 

1. Name Salvador and Sophia Petrillo 2. Identification No.: 

ASSETS

Family 

Member Asset Description 

Current Cash Value 

of Assets 

Actual Income 

from Assets 

Salvador & Sophia Home $37,500 $ 0 

Salvador & Sophia Checking Account $1,525 $ 58 

Salvador & Sophia Savings Account $2,500 $ 75 

Salvador & Sophia Certificates of Deposit $10,000 $420 

Salvador & Sophia Stock $1,850 $ 0 

3. Net Cash Value of Assets.................................. 3. $53,375 

4. Total Actual Income from Assets................................................................... 4. $ 553 

5. If line 3 is greater than $5,000, multiply line by .02 (Passbook Rate) and 

enter results here; otherwise, leave blank 

5. $1,068 

ANTICIPATED ANNUAL INCOME 

Family 

Members 

a. Wages/ 

Salaries 

b. Benefits/ 

Pensions 

c. Public 

Assistance 

d. Other 

Income 

e. Asset 

Income 

Salvador $11,700 Enter the 

Sophia $ 4,500 greater of 

Phil $ 3,660 lines 4 or 5 

from above 

in e.

6. Totals a. b. $19,860 c. d. e. $ 1,068 

7. Enter total of items from 6a. through 6e. 

This is Annual Income.

7. 20,928 

Technical Guide for Determining Income and Allowances for the HOME Program — 80 
Chapter Five – Calculating Assistance Amounts 

Sample Format for Calculating Adjusted Income 

1. Annual Income. 1. $20,928 

2. Number of family members (excluding head or spouse) 

under 18, disabled, or full-time students. 

2. 1 

3. Multiply line 2 by $480. 3. 480 

4. Child care deduction (reasonable child care expenses 

for children age 12 and under). 

4. N/A 

[If family has disability assistance expenses or qualifies 

as an elderly family, proceed to line 5; otherwise, skip to 

line 13.] 

5. Enter disability assistance expenses. 5. 2,600 

6. Multiply line 1 by 0.03. 6. 628 

7. Subtract line 6 from line 5.If negative, enter 0. 7. 1,972 

8. Enter amount earned by family member enabled to work 

as a result of disability assistance expenses. 

8. 6,760 

9. Enter the lesser of lines 7 or 8. This is the disability 

assistance allowance. 

9. 1,972 

***FILL IN LINES 10 THROUGH 12 FOR ELDERLY FAMILIES ONLY*** 

10. Enter total medical expenses. 10. 3,690 

11. Allowable medical expenses: 

• If the household reported no expenses in line 5, 

enter line 10 minus line 6. 

• If the household reported expenses in line 5, but 

line 7 is zero, enter line 10 minus (line 6 minus 

5). 

• If the household reported expenses in line 7 and 

line 7 is greater than zero, enter line 10. 

11. 3,690 

12. Enter $400. 12. 400 

13. Add lines 3, 4, 9, 11, and 12. 13. 6,542 

14. Subtract line 13 from line 1. This is Adjusted 

Income. 

14. 14,386 

Technical Guide for Determining Income and Allowances for the HOME Program — 81 
Chapter Five – Calculating Assistance Amounts 

Sample Format for Computing Total Tenant Payment and PJ Subsidy 

Rental Voucher Model 

15. Rent Standard 15. 600 

16. 30% of Monthly Adjusted Income ((line 14 ÷ 12) x 0.30). 16. 360 

17. Maximum Subsidy (line 15 minus line 16). 17. 240 

18. Rent Charged by Owner.6 18. 625 

19. Utility Allowance — if any. 19. 0 

20. Gross Rent for the Unit (line 18 plus line 19). 20. 625 

21. Gross Rent minus Maximum Subsidy (line 20 minus line 17). 21. 385 

22. 10% of Monthly Gross Income (line 1 ÷ 12) x 0.10). 22. 174 

23. Total Family Contribution (higher of line 21 or line 22). 23. 385 

24. Gross Rent minus Family Contribution (line 20 minus line 23). 24. 240 

25. Total Voucher Subsidy (lower of line 17 or line 24). 25. 240 

26. PJ Payment to Owner (lower of line 18 or line 25). 26. 240 

27. Family Rent to Owner (line 18 minus line 26). 27. 385 

28. Utility Reimbursement — if any (line 25 minus line 26). 28. 0 

 

6

 If this is a Section 236 or Department of Agriculture Rural Development Section 515 project, enter the lower of the 

project’s market Rent or line 22, but never less than the project’s Basic Rent. 

Technical Guide for Determining Income and Allowances for the HOME Program — 82 
Chapter Five – Calculating Assistance Amounts 

Sample Format for Computing Total Tenant Payment and PJ Subsidy 

Rental Certificate Model7

15. 30% of Monthly Adjusted Income (line 14 ÷ 12) x 0.30). 15. 360 

16. 10% of Gross Monthly Income (line 1 ÷ 12) x 0.30). 16. 174 

17. Welfare rent (if applicable). 17. N/A 

18. TOTAL TENANT PAYMENT (greater of lines 15, 16 or 17). 18. 360 

19. Contract Rent to Owners 19. 625* 

20. Utility Allowance. 20. 0 

21. Gross Rent (line 19 plus line 20). 21. 625 

22. Tenant Rent (line 18 minus line 20). If line 20 is greater 

than line 18, enter zero, and enter the difference in line 23. 

22. 360 

23. Utility Reimbursement to Tenant (line 20 minus line 18 only 

if line 20 is greater than line 18). 

23. 0 

24. PJ Payment to Owner (line 19 minus line 22). 24. 265 

 

7

 Must be used for calculation of TTP when required for anti-displacement activities. 

Technical Guide for Determining Income and Allowances for the HOME Program — 83 
Chapter Five – Calculating Assistance Amounts 

Explanation 

Assets 

HOME: For HOME TBRA, the cash value of the home is counted as an asset when 

determining imputed asset income. The net market worth is $50,000, less 

$10,000 for the second mortgage and $2,500 ($50,000 x 5%) for the sales 

expenses, or $37,500. 

Checking Account: The actual income from this account was $58. 

Savings Account: $2,500 in this account times an annual interest rate of 3% (.03) = $75. 

Certificate of Deposit: $10,000 mature certificate of deposit times an interest rate of 4.2% (.042) = $420. 

Stock: Because the asset was sold less than two years ago, it must be included in this 

total. 

The HUD Passbook Rate is 2%. The actual income, from the accounts and the certificate, is $553. The 

imputed income is the total asset value times the Passbook Rate, or $1,068. Because $1,068 is larger 

than the actual amount earned, it must be used. 

Income 

Salvador: His pension check of $350/month and gross Social Security of $625/month come 

to $11,700 annually. This is all benefit/pension income. 

Sophia: Her pension check of $375/month comes to $4,500 annually. Her wages for 

Retired Senior Volunteer are not counted as income (refer to Exhibit 3.2). 

Phil: His gross Social Security payment of $305/month comes to $3,660 annually. 

Adjustments 

Line 2: Phil is disabled and is therefore eligible for a $480 deduction. 

Line 4: There are no children in the family. 

Line 5: Phil’s attendant costs $50/week. $50/week x 52 weeks/year = $2,600. 

Line 7: The eligible amount of disabled assistance expense deduction is the portion that 

is in excess of 3% of the household’s annual income. 

Line 8-9: The maximum allowable disability assistance expense deduction is the amount 

that was earned because of the expenditure. In this case, this is Sophia’s 

income of $6,760. The disability allowance (line 9) is the lesser of this maximum 

amount or the portion of the disabled assistance expense that is in excess of 3% 

of the household total income. 

Line 10: This is an elderly household (head or spouse over 62 years). 

Line 11: Because the 3% of annual income has already been deducted from the disability 

assistance expense, the medical expense can be deducted in full. 

Line 12: Allowance for elderly households. 

Technical Guide for Determining Income and Allowances for the HOME Program — 84 
Endnotes 

1

 The rules concerning Section 8 annual income were previously found at 24 CFR Part 813; however, 

Part 813 was removed from the Federal regulations on October 18, 1996. At the same time, 24 CFR Part 

5 was published. Subpart F of Part 5 consolidated the requirements pertaining to income for many of 

HUD’s programs, including Section 8. 

2

 While the IRS uses the term adjusted gross income, it is considered annual income for the purposes of 

the HOME Program. Under the HOME Program, the term “adjusted income” is used only in reference to 

the process of subtracting certain deductions from annual income to determine subsidy or payment level 

in accordance with 24 CFR 5.611. 

3 http://www.archives.gov/federal_register/index.html

4

 Throughout this guide, unless specified otherwise, “annual income” refers to annual income as 

calculated using one of the three definitions allowed under the HOME Program. 

5

 “Adjusted income” is calculated using annual income (as calculated using one of the three allowable 

definitions of annual income) and subtracting adjustments defined at 24 CFR 5.611. 

6

 “Part 5 annual income” refers to the annual income calculation defined at 24 CFR 5.609. It was formerly 

commonly known as “Section 8 annual income” and was previously the only definition of annual income 

allowed under the HOME Program. 

7

 For the purposes of this discussion, the terms household and family are interchangeable. 

8 http://www.hud.gov/offices/pih/systems/pic/50058/pubs/ib/ib_final_0601.pdf

9 http://www.hud.gov/offices/pih/programs/ph/rhiip/phguidebooknew.pdf

Technical Guide for Determining Income and Allowances for the HOME Program — 85 
Appendices 

Appendix A: Glossary of Terms 

Appendix B: Sample Format for Computing Part 5 Annual Income 

Appendix C: Sample Format for Computing Census Long Form Annual Income 

Appendix D: Sample Format for Computing IRS Form 1040 Series Adjusted Gross Income 

Appendix E: Sample Format for Computing Part 5 Adjusted Income 

Appendix F: Sample Format for Computing Total Tenant Payment and PJ Subsidy – Rental 

Voucher Model 

Appendix G: Sample Format for Computing Total Tenant Payment and PJ Subsidy – Rental 

Certificate Model 

Appendix H: Sample Verification Forms for Determining Annual (Gross) Income 

Appendix I: Sample Verification Forms for Determining Part 5 Adjusted Income 

Appendix J: Sample Annual Recertification of Income Forms (for Rental Housing Projects) 

Technical Guide for Determining Income and Allowances for the HOME Program — 86 

Appendix A 

Glossary of Terms 

Adjusted Income The HOME Program uses three definitions of annual (gross) 

income. Adjusted income is annual (gross) income reduced by 

deductions (or allowances) for dependents, elderly households, 

medical expenses, disability assistance expenses, and child 

care. Adjusted income is used only under certain 

circumstances. 

Affordability As used in this guide, affordability refers to the requirements of 

the HOME Program that relate to the cost of housing both at 

initial occupancy and over established timeframes, as 

prescribed in the HOME regulations. Affordability requirements 

vary depending on the nature of the HOME-assisted activity 

(i.e., homeownership or rental housing). 

Annual (Gross) Income The HOME Program allows the use of three income definitions 

for the purpose of determining applicant eligibility -- annual 

income as defined in 24 CFR 5.609, annual income as reported 

under the Census Long Form for the most recent decennial 

Census, and adjusted gross income as defined for purposes of 

reporting under Internal Revenue Service (IRS) Form 1040 

series for individual Federal annual income tax purposes. The 

definitions are collectively referred to as annual (gross) income, 

and are also used in the Community Development Block Grant 

Program. 

Community Development 

Block Grant (CDBG) 

Federal funding that allows communities to carry out flexible, 

locally designed comprehensive community development 

activities in accordance with Title I, Housing and Community 

Development Act of 1974 and its implementing regulations at 

24 CFR Part 570. 

Community Housing 

Development Organization 

(CHDO) 

A private, nonprofit organization that meets a series of 

qualifications prescribed in the HOME regulations. CHDOs 

must receive at least 15 percent of a participating jurisdiction’s 

annual allocation of HOME funds. CHDOs may own, develop, 

or sponsor HOME-financed housing. 

Consolidated Plan A plan of up to five years in length that describes a 

community’s needs, resources, priorities, and proposed 

activities to be undertaken with certain HUD funding, including 

funding under the HOME Program. The Consolidated Plan is 

updated annually. 

Technical Guide for Determining Income and Allowances for the HOME Program — 88 
Appendix A – Glossary of Terms 

HOME-Assisted Units Units within a HOME project where HOME funds are used and 

rent, occupancy, and/or long-term affordability restrictions 

apply. 

HOME Funds All appropriations for the HOME Program, plus all repayments 

and interest or other return on the investment of these funds. 

HOME Investment Trust 

Fund 

The term given to the two accounts — one at the Federal level 

and one at the local level — that “hold” the participating 

jurisdiction’s HOME funds. The Federal HOME Investment 

Trust Account is the U.S. Treasury account for each 

participating jurisdiction. The local HOME Investment Trust 

Fund account includes repayments of HOME funds, matching 

contributions, and payment of interest or other returns on 

investment. 

HOME Investment 

Partnerships Program 

(HOME) 

The HOME Program is a formula-based allocation program 

intended to support state and local affordable housing 

programs. The goal of the program is to increase the supply of 

affordable rental and ownership housing through acquisition, 

construction, reconstruction, and moderate or substantial 

rehabilitation activities. The program was authorized by Title II 

of the National Affordable Housing Act of 1990. Its 

implementing regulations are found at 24 CFR Part 92. 

HUD U.S. Department of Housing and Urban Development. 

Low-Income Family Family whose annual (gross) income does not exceed 80 

percent of the median family income for the area (adjusted for 

family size), as determined by HUD. HUD may establish, on an 

exception basis, income ceilings higher or lower than 80 

percent of median income for an area. 

National Affordable 

Housing Act of 1990 

(NAHA) 

Enacted by Congress to authorize the HOME Investment 

Partnerships Program, the National Homeownership Trust 

program, and programs to amend and extend certain laws 

relating to housing, community, and neighborhood preservation 

and related programs. 

New Construction The creation of new dwelling units. Any project that includes 

the creation of additional dwelling units outside the existing 

walls of a structure is also considered new construction. 

Participating 

Jurisdiction (PJ) 

The term given to any state, local government, or consortium of 

local governments that HUD has designated to administer a 

HOME Program. HUD designation as a PJ occurs if a state, 

local government, or consortium meets the funding thresholds, 

notifies HUD that it intends to participate in the program, and 

obtains approval by HUD of a Consolidated Plan. 

Technical Guide for Determining Income and Allowances for the HOME Program – 89 
Appendix A – Glossary of Terms 

Project One or more buildings on a single site or multiple sites that are 

under common ownership, management, and financing and are 

to be assisted with HOME funds as a single undertaking. 

Section 8 Existing 

Rental Assistance 

A Federal program that provides rental assistance to lowincome families who are unable to afford market rents. 

Assistance may be in the form of vouchers or certificates. 

Implementing regulations can be found at 24 CFR Part 982. 

State Recipient Any unit of local government designated by a state to receive 

HOME funds. The state PJ is responsible for ensuring that 

HOME funds allocated to state recipients are used in 

accordance with the HOME regulations and other applicable 

laws. 

Subrecipient A public agency or nonprofit organization selected by a 

participating jurisdiction to administer all or a portion of the 

participating jurisdiction’s HOME Program. A public agency or 

nonprofit organization that receives HOME funds solely as a 

developer or owner of housing is not a subrecipient. 

Targeting Requirements of the HOME Program relating to the income or 

other characteristics of households that may occupy HOMEassisted units. 

Total Development 

Cost (TDC) 

The sum of all costs for site acquisition, relocation, demolition, 

construction and equipment, interest and carrying charges. 

Very Low-Income 

Family 

Family whose annual (gross) income does not exceed 50 

percent of the median income for the area (adjusted for family 

size), as determined by HUD. HUD may establish income 

ceilings higher or lower than 50 percent of median income for 

an area on an exception basis. 

Technical Guide for Determining Income and Allowances for the HOME Program – 90 

Appendix B 

Sample Format for Calculating Part 5 Annual Income 

1. Name 2. Identification No.: 

ASSETS

Family 

Member Asset Description 

Current Cash Value 

of Assets 

Actual Income from

Assets 

3. Net Cash Value of Assets ....................... 3. 

4. Total Actual Income from Assets .................................................... 4. 

5. If line 3 is greater than $5,000, multiply line by _____ (Passbook 

Rate) and enter results here; otherwise, leave blank 

5. 

ANTICIPATED ANNUAL INCOME 

Family 

Members 

a. Wages/ 

Salaries 

b. Benefits/ 

Pensions

c. Public 

Assistance 

d. Other 

Income 

e. Asset 

Income 

Enter the 

greater of 

lines 4 or 5 

from above 

in e. 

6. Totals a. b. c. d. e. 

7. Enter total of items from 6a. through 6e. This is Annual Income................ 7. 

_X____________________________________ 

Signature 

----------------------------------------------------------------------------------------------------------------------------- 

For Office Use Only 

___________________ Income Limit 

___________________ Income Limit of Household 

Technical Guide for Determining Income and Allowances for the HOME Program –92 

Appendix C 

Sample Format for 

Computing Census Long Form Annual Income 

Name: Identification No.: 

ANTICIPATED ANNUAL INCOME 

Family 

Member 

a. Wages/ 

Salaries 

b. Business 

Income 

c. Interest/ 

Dividends 

d. Benefits/ 

Pensions 

e. Public 

Assistance 

f. Other 

Income 

1. Totals a. b. c. d. e. f. 

2. Enter total of items from 1a. through 1f. 

This is Annual Income............................................................................................

2. 

_X____________________________________ 

Signature 

----------------------------------------------------------------------------------------------------------------------------- 

For Office Use Only 

___________________ Income Limit 

___________________ Income Limit of Household 

Technical Guide for Determining Income and Allowances for the HOME Program –94 

Appendix D 

Sample Format for Computing IRS 1040 Series 

Adjusted Gross Income 

Name: Identification No.: 

Family Member 

Subtotal 

(add a-d) 

a. b. c. d. e. 

1. Wages, salaries, tips 

2. Taxable interest 

3. Dividend income 

4. Taxable refunds/ 

credits/offsets of state/ 

local income taxes 

5. Alimony received 

6. Business income (or loss) 

7. Capital gain (or loss) 

8. Other gains (or losses) 

9. Taxable amount of IRA 

distributions 

10. Taxable amount of 

pensions and annuities 

11. Rental real estate, 

royalties, partnerships, 

trusts, etc. 

12. Farm income (or loss) 

13. Unemployment 

compensation 

14. Taxable amount of Social 

Security benefits 

15. Other income 

16. Subtotal (lines 1-15) 

Technical Guide for Determining Income and Allowances for the HOME Program –96 
Appendix D – Sample Format for Computing IRS 1040 Series Adjusted Gross Income 

Family Member 

Subtotal 

(add a-d) 

a. b. c. d. e. 

17. IRA deduction 

18. Medical savings account 

deduction 

19. Moving expenses 

20. One-half of selfemployment tax 

21. Self-employed health 

insurance deduction 

22. Keogh and self-employed 

SEP and SIMPLE plans 

23. Penalty on early 

withdrawal of savings 

24. Paid alimony 

25. Subtotal (lines 17-24) 

26. Subtract line 25 from line 

16. This is Adjusted Gross 

Income...............................

X____________________________________ 

Signature 

----------------------------------------------------------------------------------------------------------------------------- 

For Office Use Only 

___________________ Income Limit 

___________________ Income Limit of Household 

Technical Guide for Determining Income and Allowances for the HOME Program —97 
Appendix E 

Sample Format for Computing Part 5 Adjusted Income 

1. Annual Income. 1. 

2. Number of family members (excluding head or 

spouse) under 18, disabled, or full-time students. 

2. 

3. Multiply line 2 by $480. 3. 

4. Child care deduction (reasonable child care 

expenses for children age 12 and under). 

4. 

[If family has disability assistance expenses or 

qualifies as an elderly family, proceed to line 5; 

otherwise, skip to line 13.] 

5. Enter disability assistance expenses. 5. 

6. Multiply line 1 by 0.03. 6. 

7. Subtract line 6 from line 5. If negative, enter 0. 7. 

8. Enter amount earned by family member enabled to 

work as a result of disability assistance expenses. 

8. 

9. Enter the lesser of lines 7 or 8. This is the disability 

assistance allowance. 

9. 

***FILL IN LINES 10 THROUGH 12 FOR ELDERLY FAMILIES ONLY*** 

10. Enter total medical expenses. 10. 

11. Allowable medical expenses: 

• If the household reported no expenses in 

line 5, enter line 10 minus line 6. 

• If the household reported expenses in line 

5, but line 7 is zero, enter line 10 minus 

(line 6 minus 5). 

• If the household reported expenses in line 7 

and line 7 is greater than zero, enter line 

10. 

11. 

12. Enter $400. 12. 

13. Add lines 3, 4, 9, 11, and 12. 13. 

14. Subtract line 13 from line 1. This is Adjusted 

Income. 

14. 

Technical Guide for Determining Income and Allowances for the HOME Program –98 

Appendix F 

Sample Format for Computing 

Total Tenant Payment and PJ Subsidy 

Rental Voucher Model 

(This form is designed to continue from the Sample Format for Computing Part 5 

Adjusted Income, presented in Chapter 4.) 

15. Rent Standard 15. 

16. 30% of Monthly Adjusted Income ((line 14 ÷ 12) x 0.30). 16. 

17. Maximum Subsidy (line 15 minus line 16). 17. 

18. Rent Charged by Owner.1 18. 

19. Utility Allowance — if any. 19. 

20. Gross Rent for the Unit (line 18 plus line 19). 20. 

21. Gross Rent minus Maximum Subsidy (line 20 minus line 

17). 

21. 

22. 10% of Monthly Gross Income (line 1 ÷ 12) x 0.10). 22. 

23. Total Family Contribution (higher of line 21 or line 22). 23. 

24. Gross Rent minus Family Contribution (line 20 minus 

line 23). 

24. 

25. Total Voucher Subsidy (lower of line 17 or line 24). 25. 

26. PJ Payment to Owner (lower of line 18 or line 25). 26. 

27. Family Rent to Owner (line 18 minus line 26). 27. 

28. Utility Reimbursement — if any (line 25 minus line 26). 28. 

 

1

 If this is a Section 236 or Department of Agriculture Rural Development Section 515 project, enter the lower of the 

project’s market Rent or line 22, but never less than the project’s Basic Rent. 

Technical Guide for Determining Income and Allowances for the HOME Program –100 

Appendix G 

Sample Format for Computing 

Total Tenant Payment and PJ Subsidy 

Rental Certificate Model2

(This form is designed to continue from the Sample Format for Computing Part 5 

Adjusted Income, presented in Chapter 4.) 

15. 30% of Monthly Adjusted Income (line 14 ÷ 12) x 

0.30). 

15. 

16. 10% of Gross Monthly Income (line 1 ÷ 12) x 0.30). 16. 

17. Welfare rent (if applicable). 17. 

18. TOTAL TENANT PAYMENT (greater of lines 15, 16 

or 17). 

18. 

19. Contract Rent to Owners. 19. 

20. Utility Allowance. 20. 

21. Gross Rent (line 19 plus line 20). 21. 

22. Tenant Rent (line 18 minus line 20) 

If line 20 is greater than line 18, enter zero, and enter 

the difference in line 23. 

22. 

23. Utility Reimbursement to Tenant (line 20 minus line 18 

only if line 20 is greater than line 18). 

23. 

24. PJ Payment to Owner (line 19 minus line 22). 24. 

 

2

 Must be used for calculation of TTP when required for anti-displacement activities. 

Technical Guide for Determining Income and Allowances for the HOME Program – 102 

Appendix H 

Sample Verification Forms for 

Determining Annual (Gross) Income 

HOME Program Eligibility Release Form_________________________________________106 

Verification of Employment ___________________________________________________107 

Verification of Income from Business____________________________________________108 

Verification of Social Security Benefits __________________________________________109 

Verification of Pension and Annuities ___________________________________________110 

Verification of Veterans Administration Benefits ___________________________________111 

Verification of Unemployment Benefits __________________________________________112 

Verification of Public Assistance Income _________________________________________113 

Verification of Child Support Payments __________________________________________114 

Verification of Alimony or Separation Payments ___________________________________115 

Verification of Recurring Cash Contributions ______________________________________116 

Verification of Income from Military Service_______________________________________117 

Verification of Assets on Deposit _______________________________________________118 

Verification of Assets Disposed ________________________________________________119 

Record of Oral Verification____________________________________________________120 

Technical Guide for Determining Income and Allowances for the HOME Program – 104 

HOME Program 

Eligibility Release Form

Organization requesting release of information (PJ 

name, address, telephone, and date) 

Purpose: Your signature on this HOME Program 

Eligibility Release Form, and the signatures of each 

member of your household who is 18 years of age or 

older, authorizes the above-named organization to 

obtain information from a third party relative to your 

eligibility and continued participation in the: 

HOME TBRA Program 

HOME Homebuyer Program 

HOME Rental Rehabilitation Program 

HOME Homeowner Rehabilitation Program 

Privacy Act Notice Statement: The Department of 

Housing and Urban Development (HUD) is requiring 

the collection of the information derived from this form 

to determine an applicant’s eligibility in a HOME 

Program and the amount of assistance necessary 

using HOME funds. This information will be used to 

establish level of benefit on the HOME Program; to 

protect the Government’s financial interest; and to 

verify the accuracy of the information furnished. It 

may be released to appropriate Federal, state, and 

local agencies when relevant to civil, criminal, or 

regulatory investigators, and to prosecutors. Failure 

to provide any information may result in a delay or 

rejection of your eligibility approval. The Department 

is authorized to ask for this information by the 

National Affordable Housing Act of 1990. 

Instructions: Each adult member of the household 

must sign a HOME Program Eligibility Release Form 

prior to the receipt of benefit and on an annual basis 

to establish continued eligibility. Additional signatures 

must be obtained from new adult members whenever 

they join the household or whenever members of the 

household become 18 years of age. 

NOTE: THIS GENERAL CONSENT MAY NOT BE 

USED TO REQUEST A COPY OF A TAX 

RETURN. IF A COPY OF A TAX RETURN IS 

NEEDED, IRS FORM 4506, “REQUEST FOR 

COPY OF TAX FORM” MUST BE 

PREPARED AND SIGNED SEPARATELY. 

Head of Household—Signature, Printed Name, and Date: Family Member 

HEAD 

Other Adult Member of the Household—Signature, Printed Name, and Date: 

Family Member #3 

Information Covered: Inquiries may be made about 

items initialed by applicant/tenant. 

Verification

Required Initials 

Income (all sources) 

Assets (all sources) 

Child Care Expense 

Handicap Assistance 

Expense (if applicable) 

Medical Expense (if 

applicable) 

Other (list) 

_______________________ 

_______________________ 

Dependent Deduction 

_____ Full-Time Student 

_____ Handicap/Disabled 

Family Member 

_____ Minor Children 

Authorization: I authorize the above-named HOME 

Participating Jurisdiction and HUD to obtain 

information about me and my household that is 

pertinent to eligibility for participation in the HOME 

Program. 

I acknowledge that: 

(1) A photocopy of this form is as valid as the 

original. 

(2) I have the right to review the file and the 

information received using this form (with a 

person of my choosing to accompany me). 

(3) I have the right to copy information from this 

file and to request correction of information I 

believe inaccurate. 

(4) All adult household members will sign this form 

and cooperate with the owner in this process. 

Other Adult Member of the Household—Signature, Printed Name, and Date: 

Family Member #2 

Other Adult Member of the Household—Signature, Printed Name, and Date: 

Family Member #4 

Technical Guide for Determining Income and Allowances for the HOME Program — 106 
VERIFICATION OF: Employment 

(Name of HOME Participating Jurisdiction) 

AUTHORIZATION: Federal Regulations 

require us to verify Employment Income of 

all members of the household applying for 

participation in the HOME Program which 

we operate and to re-examine this income 

periodically. We ask your cooperation in 

supplying this information. This 

information will be used only to determine 

the eligibility status and level of benefit of 

the household. 

Your prompt return of the requested 

information will be appreciated. A selfaddressed return envelope is enclosed. 

Employed since: _____ Occupation: ________ 

Salary: ________ 

Effective date of last increase: ____ 

Base pay rate: $_____/Hour; or $_____/Week; or 

$_____/Month 

Average hours/week at base pay rate: _____ 

Hours 

No. Weeks ___, or No. Weeks ___ worked per 

year 

Overtime pay rate: $_______/Hour 

Expected weekly average number of hours 

overtime to be worked during next 12 months 

________ 

Any other compensation not included above 

(specify for commissions, bonuses, tips, etc.): 

For: _______________ $_____ per ________ 

Is pay received for vacation? ___ If yes, no. of 

days/yr.___ 

Total base pay earnings for past 12 mos. $_____ 

Total overtime earnings for past 12 mos. $_____ 

Probability and expected date of any pay 

increase: _______________________________ 

Does the employee have access to a 

retirement account?  Yes  No 

If Yes, what amount can they get access to: 

$________________ 

RELEASE: I hereby authorize the release 

of the requested information. 

__________________________________ 

(Signature of Applicant) 

Date: ____________________________ 

or a copy of the executed “HOME Program 

Eligibility Release Form,” which authorizes 

the release of the information requested, is 

attached. 

Signature of _________________________ or 

Authorized Representative _________________ 

Title: _______________________________ 

Date:________________________ 

Telephone: ______________________________ 

WARNING: Title 18, Section 1001 of the U.S. Code states that a person is guilty of a felony for knowingly and 

willingly making false or fraudulent statements to any department of the United States Government. 

Technical Guide for Determining Income and Allowances for the HOME Program — 107 
VERIFICATION OF: Income from Business 

(Name of HOME Participating Jurisdiction) 

AUTHORIZATION: Federal Regulations 

require us to verify Business Income of all 

members of the household applying for 

participation in the HOME Program which we 

operate and to re-examine this income 

periodically. We ask your cooperation in 

supplying this information. This information 

will be used only to determine the eligibility 

status and level of benefit of the household. 

Your prompt return of the requested 

information will be appreciated. A selfaddressed return envelope is enclosed. 

Based on business transacted from 

____________ to _____________ 

1. Gross Income $__________

2. Expenses 

(a) Interest on loans $__________

(b) Cost of goods/materials $__________

(c) Rent $__________

(d) Utilities $__________

(e) Wages/salaries $__________

(f) Employee contributions $__________

(g) Federal Withholding Tax $__________

(h) State Withholding Tax $__________

(i) FICA $__________

(j) Sales tax $__________

(k) Other: 

____________________ $__________

____________________ $__________

____________________ $__________

(l) Straight line depreciation $__________

Total Expenses $__________

3. Net Income $__________

RELEASE: I hereby authorize the release of 

the requested information. 

_____________________________________ 

(Signature of Applicant) 

Date:_________________________________

Or a copy of the executed “HOME Program 

Eligibility Release Form,” which authorizes the 

release of the information requested, is 

attached. 

Signature of ________________________ or 

Authorized Representative ______________ 

Title: ________________________________ 

Date: _______________________________ 

Telephone: ___________________________ 

WARNING: Title 18, Section 1001 of the U.S. Code states that a person is guilty of a felony for 

knowingly and willingly making false or fraudulent statements to any department of the 

United States Government. 

Technical Guide for Determining Income and Allowances for the HOME Program — 108 
VERIFICATION OF: Social Security Benefits 

(Name of HOME Participating Jurisdiction) 

AUTHORIZATION: Federal Regulations 

require us to verify Social Security Benefit 

Income of all members of the household 

applying for participation in the HOME 

Program which we operate and to re-examine 

this income periodically. We ask your 

cooperation in supplying this information. This 

information will be used only to determine the 

eligibility status and level of benefit of the 

household. 

Your prompt return of the requested 

information will be appreciated. A selfaddressed return envelope is enclosed. 

Social Security Data 

__________ Date of birth 

__________ Gross monthly Social Security 

Benefit amount, type of benefit 

__________ Gross monthly Supplemental 

Security Income payment 

amount (including state 

supplement), type of benefit 

RELEASE: I hereby authorize the release of 

the requested information. 

_____________________________________ 

(Signature of Applicant) 

Date: ________________________________ 

Or a copy of the executed “HOME Program 

Eligibility Release Form,” which authorizes the 

release of the information requested, is 

attached. 

Signature of ________________________ or 

Authorized Representative _______________ 

Title: ________________________________ 

Date: ________________________________ 

Telephone: ___________________________ 

WARNING: Title 18, Section 1001 of the U.S. Code states that a person is guilty of a felony for 

knowingly and willingly making false or fraudulent statements to any department of the 

United States Government. 

Technical Guide for Determining Income and Allowances for the HOME Program — 109 
VERIFICATION OF: Pension and Annuities 

(Name of HOME Participating Jurisdiction) 

AUTHORIZATION: Federal Regulations 

require us to verify Pension and Annuities 

Income of all members of the household 

applying for participation in the HOME 

Program which we operate and to re-examine 

this income periodically. We ask your 

cooperation in supplying this information. This 

information will be used only to determine the 

eligibility status and level of benefit of the 

household. 

Your prompt return of the requested 

information will be appreciated. A selfaddressed return envelope is enclosed. 

Current monthly gross amount of 

pension or annuity $__________ 

Deductions from gross for 

medical insurance premiums $__________ 

Date of initial award __________ 

Effective date of current amount __________ 

Contributions to company 

retirement/pension fund $__________ 

Amount received in a lump sum $__________ 

RELEASE: I hereby authorize the release of 

the requested information. 

____________________________________ 

(Signature of Applicant) 

Date: ________________________________ 

Or a copy of the executed “HOME Program 

Eligibility Release Form,” which authorizes the 

release of the information requested, is 

attached. 

Signature of ________________________ or 

Authorized Representative _______________ 

Title: ________________________________ 

Date: ________________________________ 

Telephone: ___________________________ 

WARNING: Title 18, Section 1001 of the U.S. Code states that a person is guilty of a felony for 

knowingly and willingly making false or fraudulent statements to any department of the 

United States Government. 

Technical Guide for Determining Income and Allowances for the HOME Program — 110 
VERIFICATION OF: Veterans Administration Benefits 

(Name of HOME Participating Jurisdiction) 

AUTHORIZATION: Federal Regulations 

require us to verify Veterans Administration 

Benefits Income of all members of the 

household applying for participation in the 

HOME Program which we operate and to 

re-examine this income periodically. We 

ask your cooperation in supplying this 

information. This information will be used 

only to determine the eligibility status and 

level of benefit of the household. 

Your prompt return of the requested 

information will be appreciated. A selfaddressed return envelope is enclosed. 

Name of Veteran: ________________________ 

Address: ______________________________ 

______________________________________ 

Claim No.: ____________________________ 

Date of Birth: __________________________ 

Service Dates: ___________ to ____________ 

Benefits Paid to: _______________________ 

1. Current Benefit Amount $__________ 

2. Original Start Date __________ 

3. This amount will increase/ 

decrease to (circle one) $__________ 

Date Change Takes Effect __________ 

4. Benefits are for: 

 GI Bill Training 

 Insurance 

 Service Connected Compensation 

Disability (%) _____________ 

 Nonservice Pension Death 

 Service Connected Compensation Death 

 Other _____________________________ 

 __________________________________ 

RELEASE: I hereby authorize the release 

of the requested information. 

___________________________________ 

(Signature of Applicant) 

Date: ______________________________ 

Or a copy of the executed “HOME Program 

Eligibility Release Form,” which authorizes 

the release of the information requested, is 

attached. 

Signature of ___________________________ or 

Authorized Representative ______________ 

Title: _________________________________ 

Date: _________________________________ 

Telephone: ____________________________ 

WARNING: Title 18, Section 1001 of the U.S. Code states that a person is guilty of a felony for 

knowingly and willingly making false or fraudulent statements to any department of the 

United States Government. 

Technical Guide for Determining Income and Allowances for the HOME Program — 111 
VERIFICATION OF: Unemployment Benefits 

(Name of HOME Participating Jurisdiction) 

AUTHORIZATION: Federal Regulations 

require us to verify Unemployment Benefits 

Income of all members of the household 

applying for participation in the HOME 

Program which we operate and to re-examine 

this income periodically. We ask your 

cooperation in supplying this information. This 

information will be used only to determine the 

eligibility status and level of benefit of the 

household. 

Your prompt return of the requested 

information will be appreciated. A selfaddressed return envelope is enclosed. 

Benefits 

1. Are benefits being paid now?  Yes  No 

2. If yes, what is Gross Weekly 

Payment? $__________ 

3. Date of Initial Payment __________ 

4. Duration of Benefits _____ weeks 

Is claimant eligible for future 

benefits?  Yes  No 

5. If yes, how many weeks? _____ weeks 

6. If no, what is the termination 

date of benefits? __________ 

RELEASE: I hereby authorize the release of 

the requested information. 

_____________________________________ 

(Signature of Applicant) 

Date: ________________________________ 

Or a copy of the executed “HOME Program 

Eligibility Release Form,” which authorizes the 

release of the information requested, is 

attached. 

Signature of ________________________ or 

Authorized Representative ______________ 

Title: ________________________________ 

Date:________________________________ 

Telephone: ___________________________ 

WARNING: Title 18, Section 1001 of the U.S. Code states that a person is guilty of a felony for knowingly 

and willingly making false or fraudulent statements to any department of the United States 

Government. 

Technical Guide for Determining Income and Allowances for the HOME Program — 112 
VERIFICATION OF: Public Assistance Income 

(Name of HOME Participating Jurisdiction) 

AUTHORIZATION: Federal Regulations 

require us to verify Public Assistance Income 

of all members of the household applying for 

participation in the HOME Program which we 

operate and to re-examine this income 

periodically. We ask your cooperation in 

supplying this information. This information 

will be used only to determine the eligibility 

status and level of benefit of the household. 

Your prompt return of the requested 

information will be appreciated. A selfaddressed return envelope is enclosed. 

Public Assistance Data Rate per Month

Number in family: ________ 

Aid to Families with Dependent 

Children $__________

General Assistance $__________

Does this amount include courtawarded support payments?  Yes  No 

Amount specifically designated 

for shelter and utilities $__________

Other assistance—type: 

_________________________ $__________

 Total Monthly Grant $___________

Other income—Sources: 

________________________ $__________

Maximum allowance for rent 

and utilities (as-paid states) $__________

Amount of public assistance 

received during past 12 months $__________

RELEASE: I hereby authorize the release of 

the requested information. 

_____________________________________ 

(Signature of Applicant) 

Date: ________________________________ 

Or a copy of the executed “HOME Program 

Eligibility Release Form,” which authorizes the 

release of the information requested, is 

attached. 

Signature of _______________________ or 

Authorized Representative ______________ 

Title: ________________________________ 

Date: ________________________________ 

Telephone: ___________________________ 

WARNING: Title 18, Section 1001 of the U.S. Code states that a person is guilty of a felony for 

knowingly and willingly making false or fraudulent statements to any department of the 

United States Government. 

Technical Guide for Determining Income and Allowances for the HOME Program — 113 
VERIFICATION OF: Child Support Payments 

(Name of HOME Participating Jurisdiction) 

AUTHORIZATION: Federal Regulations 

require us to verify Child Support Payments 

made to all members of the household 

applying for participation in the HOME 

Program which we operate and to re-examine 

this income periodically. We ask your 

cooperation in supplying this information. This 

information will be used only to determine the 

eligibility status and level of benefit of the 

household. 

Your prompt return of the requested 

information will be appreciated. A selfaddressed return envelope is enclosed. 

Name of Person Paying Child Support: 

_____________________________________ 

Address of Person Paying Child Support: 

_____________________________________ 

_____________________________________ 

_____________________________________ 

Support is for  his  her children. 

Name(s) of children being supported: 

_____________________________________ 

_____________________________________ 

_____________________________________ 

Amount of support: 

$__________  Week  Month  Year 

RELEASE: I hereby authorize the release of 

the requested information. 

_____________________________________ 

(Signature of Applicant) 

Date: ________________________________ 

Or a copy of the executed “HOME Program 

Eligibility Release Form,” which authorizes the 

release of the information requested, is 

attached. 

Signature of __________________________ 

or Authorized Representative 

_____________________________________ 

Title: ________________________________ 

Date: ________________________________ 

Telephone: ___________________________ 

WARNING: Title 18, Section 1001 of the U.S. Code states that a person is guilty of a felony for 

knowingly and willingly making false or fraudulent statements to any department of the 

United States Government. 

Technical Guide for Determining Income and Allowances for the HOME Program — 114 
VERIFICATION OF: Alimony or Separation Payments 

(Name of HOME Participating Jurisdiction) 

AUTHORIZATION: Federal Regulations 

require us to verify Alimony and Separation 

Payments made to all members of the 

household applying for participation in the 

HOME Program which we operate and to reexamine this income periodically. We ask 

your cooperation in supplying this information. 

This information will be used only to determine 

the eligibility status and level of benefit of the 

household. 

Your prompt return of the requested 

information will be appreciated. A selfaddressed return envelope is enclosed. 

Name of Person Paying Alimony or Separation 

Payments: 

_____________________________________ 

Address of Person Paying Alimony or 

Separation Payments: 

_____________________________________ 

_____________________________________ 

_____________________________________ 

Name of person being supported: 

_____________________________________ 

Amount of support: 

$____________  Week  Month  Year 

RELEASE: I hereby authorize the release of 

the requested information. 

_____________________________________ 

(Signature of Applicant) 

Date: ________________________________ 

Or a copy of the executed “HOME Program 

Eligibility Release Form,” which authorizes the 

release of the information requested, is 

attached. 

Signature of __________________________ 

or Authorized Representative 

_____________________________________ 

Title: ________________________________ 

Date: ________________________________ 

Telephone: ___________________________ 

WARNING: Title 18, Section 1001 of the U.S. Code states that a person is guilty of a felony for 

knowingly and willingly making false or fraudulent statements to any department of the 

United States Government. 

Technical Guide for Determining Income and Allowances for the HOME Program — 115 
VERIFICATION OF: Recurring Cash Contributions 

(Name of HOME Participating Jurisdiction) 

AUTHORIZATION: Federal Regulations 

require us to verify Recurring Cash 

Contributions made to all members of the 

household applying for participation in the 

HOME Program which we operate and to reexamine this income periodically. We ask 

your cooperation in supplying this information. 

This information will be used only to determine 

the eligibility status and level of benefit of the 

household. 

Your prompt return of the requested 

information will be appreciated. A selfaddressed return envelope is enclosed. 

Purpose of Cash Contribution: 

_____________________________________ 

_____________________________________ 

_____________________________________ 

_____________________________________ 

Amounts anticipated to be received during the 

next 12 months: 

Date: _______________________$_________

Date: _______________________$_________

Date: _______________________$_________

Date: _______________________$_________

Date: _______________________$_________

Date: _______________________$_________

Date: _______________________$_________

Date: _______________________$_________

Date: _______________________$_________

Date: _______________________$_________

Date: _______________________$_________

Date: _______________________$_________

RELEASE: I hereby authorize the release of 

the requested information. 

_____________________________________ 

(Signature of Applicant) 

Date: ________________________________ 

Or a copy of the executed “HOME Program 

Eligibility Release Form,” which authorizes the 

release of the information requested, is 

attached. 

Signature of __________________________ 

or Authorized Representative 

_____________________________________ 

Title: ________________________________ 

Date: ________________________________ 

Telephone: ___________________________ 

WARNING: Title 18, Section 1001 of the U.S. Code states that a person is guilty of a felony for 

knowingly and willingly making false or fraudulent statements to any department of the 

United States Government. 

Technical Guide for Determining Income and Allowances for the HOME Program — 116 
VERIFICATION OF: Income from Military Service 

(Name of HOME Participating Jurisdiction) 

AUTHORIZATION: Federal Regulations 

require us to verify Military Service Income of 

all members of the household applying for 

participation in the HOME Program which we 

operate and to re-examine this income 

periodically. We ask your cooperation in 

supplying this information. This information 

will be used only to determine the eligibility 

status and level of benefit of the household. 

Your prompt return of the requested 

information will be appreciated. A selfaddressed return envelope is enclosed. 

Years __________ and Months __________ 

of service for pay purposes. 

Income: 

Base and Longevity Pay $__________

Proficiency Pay $__________

Sea and Foreign Duty Pay $__________

Hazardous Duty Pay $__________

Subsistence Allowance $__________

Quarters Allowance (include 

only amount contributed by 

the Government) $__________

Number of dependents claimed __________

Imminent Danger Pay $__________

Other (explain): 

____________________________________ 

_____________________________________ 

_____________________________________ 

RELEASE: I hereby authorize the release of 

the requested information. 

_____________________________________ 

(Signature of Applicant) 

Date: ________________________________ 

Or a copy of the executed “HOME Program 

Eligibility Release Form,” which authorizes the 

release of the information requested, is 

attached. 

Signature of __________________________ 

or Authorized Representative 

_____________________________________ 

Title: ________________________________ 

Date: ________________________________ 

Telephone: ___________________________ 

WARNING: Title 18, Section 1001 of the U.S. Code states that a person is guilty of a felony for 

knowingly and willingly making false or fraudulent statements to any department of the 

United States Government. 

Technical Guide for Determining Income and Allowances for the HOME Program — 117 
VERIFICATION OF: Assets on Deposit 

(Name of HOME Participating Jurisdiction) 

AUTHORIZATION: Federal Regulations 

require us to verify Assets on Deposit of all 

members of the household applying for 

participation in the HOME Program which 

we operate and to re-examine this income 

periodically. We ask your cooperation in 

supplying this information. This information 

will be used only to determine the eligibility 

status and level of benefit of the household. 

Your prompt return of the requested 

information will be appreciated. A selfaddressed return envelope is enclosed. 

Checking 

Account No. 

___________ 

___________ 

Savings 

Account No. 

___________ 

___________ 

Certificate of 

Deposit 

Account No. 

___________ 

___________ 

Average Monthly 

Balance for Last 

6 Months 

_____________ 

_____________ 

Current Balance 

_____________ 

_____________ 

Amount 

_____________ 

_____________ 

Current 

Interest rate 

__________ 

__________ 

Current 

Interest Rate 

__________ 

__________ 

Withdrawal 

Penalty 

__________ 

__________ 

Current 

Interest Rate 

__________ 

__________ 

Retirement Savings (IRA, Keogh, 401(k)) Account No. 

___________ 

___________ 

Amount 

__________ 

__________ 

Withdrawal 

Penalty 

__________ 

__________ 

Current 

Interest Rate 

__________ 

__________ 

Money Market Funds Money Market 

Funds 

___________ 

___________ 

Amount 

(Average 

6-month 

Balance) 

___________ 

___________ 

Interest Rate 

__________ 

__________ 

RELEASE: I hereby authorize the release 

of the requested information. 

___________________________________ 

(Signature of Applicant) 

Date: ______________________________ 

Or a copy of the executed “HOME Program 

Eligibility Release Form,” which authorizes 

the release of the information requested, is 

attached. 

Signature of _________________________ or 

Authorized Representative 

_______________________________________ 

Title: __________________________________ 

Date: __________________________________ 

Telephone: _____________________________ 

WARNING: Title 18, Section 1001 of the U.S. Code states that a person is guilty of a felony for knowingly and 

willingly making false or fraudulent statements to any department of the United States Government. 

Technical Guide for Determining Income and Allowances for the HOME Program — 118 
VERIFICATION OF ASSETS DISPOSED 

I/We certify that during the 2-year (24-month) period preceding the effective date of my 

certification or recertification of eligibility for program participation, I/we _____ have _____ have 

not disposed of more than $1,000 in asset(s) for less than fair market value. 

If asset(s) were disposed of for less than fair market value, describe: 

Asset Date of Disposition 

1. 

2. 

3. 

Amount received for asset(s) disposed of: 

1. _________________________________________ 

2. _________________________________________ 

3. _________________________________________ 

___________________________________________ _____________________________ 

Signature of Applicant Date 

___________________________________________ _____________________________ 

Signature of Spouse Date 

Technical Guide for Determining Income and Allowances for the HOME Program — 119 
RECORD OF ORAL VERIFICATION

APPLICANT INFORMATION 

Re: ________________________________________________________________________ 

Address: ____________________________________________________________________ 

____________________________________________________________________________ 

Date Received: ________________________________________ 

INFORMATION VERIFIED 

Item Verified: _____________________________________________ 

Person Contacted: _________________________________________ 

Representing: _____________________________________________ 

INFORMATION SUPPLIED 

_____________________________________________ _____________________________ 

Signature of Person Receiving Verification Date and Time 

Technical Guide for Determining Income and Allowances for the HOME Program — 120 

Appendix I 

Sample Verification Forms for 

Determining Part 5 Adjusted Income 

Verification of Full-Time Student Status__________________________________________124 

Verification of Medical Expenses _______________________________________________125 

Verification of Transportation to Medical Treatment ________________________________126 

Verification of Prescription/Nonprescription Expense _______________________________127 

Verification of Child Care/Dependent Care _______________________________________128 

Technical Guide for Determining Income and Allowances for the HOME Program — 122 

VERIFICATION OF: Full-Time Student Status 

(Name of HOME Participating Jurisdiction) 

AUTHORIZATION: Federal Regulations 

require us to verify Full-Time Student Status of 

all members of the household applying for 

participation in the HOME Program which we 

operate and to re-examine this income 

periodically. We ask your cooperation in 

supplying this information. This information 

will be used only to determine the eligibility 

status and level of benefit of the household. 

Your prompt return of the requested 

information will be appreciated. A selfaddressed return envelope is enclosed. 

Name of Full-Time Student: 

_____________________________________ 

Name of institution: _____________________ 

_____________________________________ 

Address of institution: ___________________ 

_____________________________________ 

Check applicable box: 

Referenced individual   is is not a full-time 

student in good standing at this institution. 

Years remaining to complete Degree or 

Program: _______ 

RELEASE: I hereby authorize the release of 

the requested information. 

_____________________________________ 

(Signature of Applicant) 

Date: ________________________________ 

Or a copy of the executed “HOME Program 

Eligibility Release Form,” which authorizes the 

release of the information requested, is 

attached. 

Signature of __________________________ 

or Authorized Representative 

_____________________________________ 

Title: ________________________________ 

Date: ________________________________ 

Telephone: ___________________________ 

WARNING: Title 18, Section 1001 of the U.S. Code states that a person is guilty of a felony for 

knowingly and willingly making false or fraudulent statements to any department of the 

United States Government. 

Technical Guide for Determining Income and Allowances for the HOME Program — 124 
VERIFICATION OF: Medical Expenses 

(Name of HOME Participating Jurisdiction) 

AUTHORIZATION: Federal Regulations 

require us to verify Medical Expenses of all 

members of the household applying for 

participation in the HOME Program which we 

operate and to re-examine this income 

periodically. We ask your cooperation in 

supplying this information. This information 

will be used only to determine the eligibility 

status and level of benefit of the household. 

Your prompt return of the requested 

information will be appreciated. A selfaddressed return envelope is enclosed. 

This is to certify that 

_____________________________________ 

anticipates $_____________ in medical 

expenses over the next 12 months. 

RELEASE: I hereby authorize the release of 

the requested information. 

_____________________________________ 

(Signature of Applicant) 

Date: ________________________________ 

Or a copy of the executed “HOME Program 

Eligibility Release Form,” which authorizes the 

release of the information requested, is 

attached. 

Signature of __________________________ 

or Authorized Representative 

_____________________________________ 

Title: ________________________________ 

Date: ________________________________ 

Telephone: ___________________________ 

WARNING: Title 18, Section 1001 of the U.S. Code states that a person is guilty of a felony for 

knowingly and willingly making false or fraudulent statements to any department of the 

United States Government. 

Technical Guide for Determining Income and Allowances for the HOME Program — 125 
VERIFICATION OF: Transportation to Medical Treatment 

(Name of HOME Participating Jurisdiction) 

AUTHORIZATION: Federal Regulations 

require us to verify expenses for 

Transportation to Medical Treatment for all 

members of the household applying for 

participation in the HOME Program which we 

operate and to re-examine this income 

periodically. We ask your cooperation in 

supplying this information. This information 

will be used only to determine the eligibility 

status and level of benefit of the household. 

Your prompt return of the requested 

information will be appreciated. A selfaddressed return envelope is enclosed. 

Number of Trips to Medical 

Treatment (yearly) __________

Cost per Trip $__________

Total Expense for Transportation 

to Medical Treatment $__________

or __________ miles traveled per 

year at a cost of ________ cents 

per mile for a total cost of $__________

RELEASE: I hereby authorize the release of 

the requested information. 

_____________________________________ 

(Signature of Applicant) 

Date: ________________________________ 

Or a copy of the executed “HOME Program 

Eligibility Release Form,” which authorizes the 

release of the information requested, is 

attached. 

Signature of __________________________ 

or Authorized Representative 

_____________________________________ 

Title: ________________________________ 

Date: ________________________________ 

Telephone: ___________________________ 

WARNING: Title 18, Section 1001 of the U.S. Code states that a person is guilty of a felony for 

knowingly and willingly making false or fraudulent statements to any department of the 

United States Government. 

Technical Guide for Determining Income and Allowances for the HOME Program — 126 
VERIFICATION OF: Prescription/Nonprescription Expense 

(Name of HOME Participating Jurisdiction) 

AUTHORIZATION: Federal Regulations 

require us to verify Prescription and 

Nonprescription Expenses of all members of 

the household applying for participation in the 

HOME Program which we operate and to reexamine this income periodically. We ask 

your cooperation in supplying this information. 

This information will be used only to determine 

the eligibility status and level of benefit of the 

household. 

Your prompt return of the requested 

information will be appreciated. A selfaddressed return envelope is enclosed. 

Prescription expenses for the months from 

_____________ to _________________. 

Average yearly cost for 

prescription medications that 

are not covered by 

Medicare or other insurance $__________

Average yearly cost for 

nonprescription drug items 

used for medical reasons 

(aspirin, pain relief medications 

taken by mouth or applied to the 

skin, antacids, etc.) $__________

RELEASE: I hereby authorize the release of 

the requested information. 

_____________________________________ 

(Signature of Applicant) 

Date: ________________________________ 

Or a copy of the executed “HOME Program 

Eligibility Release Form,” which authorizes the 

release of the information requested, is 

attached. 

Signature of __________________________ 

or Authorized Representative 

_____________________________________ 

Title: ________________________________ 

Date: ________________________________ 

Telephone: ___________________________ 

WARNING: Title 18, Section 1001 of the U.S. Code states that a person is guilty of a felony for 

knowingly and willingly making false or fraudulent statements to any department of the 

United States Government. 

Technical Guide for Determining Income and Allowances for the HOME Program — 127 
VERIFICATION OF: Child Care/Dependent Care 

(Name of HOME Participating 

Jurisdiction) 

AUTHORIZATION: Federal Regulations 

require us to verify Child 

Care/Dependent Care Expenses of all 

members of the household applying for 

participation in the HOME Program 

which we operate and to re-examine this 

income periodically. We ask your 

cooperation in supplying this information. 

This information will be used only to 

determine the eligibility status and level 

of benefit of the household. 

Your prompt return of the requested 

information will be appreciated. A selfaddressed return envelope is enclosed. 

Child Care/Dependent Care is performed on the 

following days for the hours indicated for the 

following person(s): _________________________ 

 M Hours: From _____ AM to _____ AM 

 _____ PM to _____ PM 

 T Hours: From _____ AM to _____ AM 

 _____ PM to _____ PM 

 W Hours: From _____ AM to _____ AM 

 _____ PM to _____ PM 

 Th Hours: From _____ AM to _____ AM 

 _____ PM to _____ PM 

 F Hours: From _____ AM to _____ AM 

 _____ PM to _____ PM 

 Sat Hours: From _____ AM to _____ AM 

 _____ PM to _____ PM 

 Sun Hours: From _____ AM to _____ AM 

 _____ PM to _____ PM 

Total hours per week: _____, per month: _______ 

Amount received for care from the family: 

$__________  per week;  per month 

Amount received for care from others (if any) 

$__________  per week;  per month 

Estimated cost of care for the next 12 months 

(include full-time summer care of school children, if 

applicable $___________ 

RELEASE: I hereby authorize the 

release of the requested information. 

________________________________ 

(Signature of Applicant) 

Date: ____________________________ 

Or a copy of the executed “HOME 

Program Eligibility Release Form,” which 

authorizes the release of the information 

requested, is attached. 

Signature of ____________________________ or 

Authorized Representative ___________________ 

Title: ____________________________________ 

Date: ____________________________________ 

Telephone: _______________________________ 

WARNING: Title 18, Section 1001 of the U.S. Code states that a person is guilty of a felony for knowingly and 

willingly making false or fraudulent statements to any department of the United States Government. 

Technical Guide for Determining Income and Allowances for the HOME Program — 128 
Technical Guide for Determining Income and Allowances for the HOME Program — 129 
Appendix J 

Sample Annual Recertification of Income Forms 

(for Rental Housing Projects) 

Recertification of Annual Income by Tenant Family_________________________________132 

Recertification of Annual Income by Government Programs __________________________133 

Technical Guide for Determining Income and Allowances for the HOME Program — 130 

Recertification of Annual Income by Tenant Family 

Household Information

Household name: _____________________________________________ 

Household size (total number in household): _________ 

Household members (list): ______________ _______________ 

______________ ______________ _______________ 

______________ ______________ _______________ 

Income Information

Annual (gross) income (total of all household members): $________________ 

I/we certify that this information is complete and accurate. I/we agree to provide, upon request, 

documentation on all income sources to (Name of PJ and/or Property Owner/Manager). 

Signature of __________________________________________________________________ 

or Authorized Representative ____________________________________________________ 

Title: ____________________________________ 

Date: ____________________________________ 

Telephone: _______________________________ 

WARNING: Title 18, Section 1001 of the U.S. Code states that a person is guilty of a felony for 

knowingly and willingly making false or fraudulent statements to any department of the United States 

Government. 

Technical Guide for Determining Income and Allowances for the HOME Program — 132 
Recertification of Annual Income by Government Programs 

The purpose of this form is to certify that ___________________________ (name of 

household) residing at __________________________________________________________ 

(address) receives benefits under _________________________________________________ 

(name of government program). As such, the annual income of this household has been 

examined and determined to be below $___________________ (income limit for the program 

for a family of ___ [household size]). 

Certified by: 

Signature of Authorized Representative ___________________________________________ 

Name (Print) ___________________________________________________ 

Title __________________________________________________________ 

Agency _______________________________________________________ 

Date __________________________________________________________ 

WARNING: 

Title 18, Section 1001 of the U.S. Code states that a person is guilty of a felony for knowingly and willingly 

making false or fraudulent statements to any department of the United States Government. 

Technical Guide for Determining Income and Allowances for the HOME Program — 133