HUD Issues Fair Housing Act Guidance on Use of Artificial Intelligence

On May 2, 2024, the Department of Housing & Urban Development (HUD) released two guidance documents addressing the application of the Fair Housing Act (FHA) to two areas in which the use of artificial intelligence (AI) poses particular concerns: the tenant screening process and its application to the advertising of housing opportunities through online platforms that use targeted ads. This guidance follows an Executive Order from President Biden that required HUD to provide guidance to combat discrimination enabled by algorithmic tools used to make leasing decisions. This guidance clearly states that the FHA applies to tenant screening and housing advertising, including when AI performs these functions. The tenant screening guidance describes fair housing issues created by tenant screening practices, including the increasing use of third-party screening companies to aid tenant screening decisions and the emerging use of machine learning and AI. The guidance also suggests best practices for fair, transparent, non-discriminatory tenant screening policies for housing providers and companies offering tenant screening services. Housing providers and tenant screening companies are crucial in ensuring that tenant screenings are transparent, accurate, and fair. The tenant screening guidance underscores that the use of third-party screening companies, including those that use AI or other advanced technologies, must comply with the FHA. It also emphasizes the importance of ensuring that all housing applicants are given an equal opportunity to be evaluated on merit, making you feel responsible and accountable for fair practices. Advertisers and online platforms should be acutely aware of the risks of deploying targeted advertisement tools for ads covered by the FHA. Violations of the Act can occur when certain ad targeting and delivery functions unlawfully deny consumers information about housing opportunities based on their protected characteristics. Similarly, violations can occur when ad targeting and delivery functions are used, based on protected characteristics, to target vulnerable consumers for predatory products or services, display content that could discourage or deter potential consumers, or charge different amounts for delivered advertisements. This highlights the need for caution and strict adherence to the FHA. Owners and managers using third-party screening services for applicant selection should carefully review this new HUD guidance. I will provide future articles analyzing both the screening guidance and the use of online platforms.

HUD Publishes Income and Rent Limits for Multiple Programs, Including HOME

The Department of Housing and Urban Development (HUD) published income limits for seven programs on April 29, 2024. Income limits for the following programs go into effect on May 1, 2024: Community Development Block Grant (CDBG) CDBG Disaster Recovery Neighborhood Stabilization Program (NSP) Income limits for the following programs go into effect on June 1, 2024: Emergency Solutions Grants (ESG) Housing Opportunities for Persons with AIDS (HOPWA) HOME Investment Partnerships Program (HOME) Housing Trust Fund (HTF) HUD also published the 2024 rent limits for HOME and HTF, which take effect on June 1, 2024. For the CDBG, CDBG-DR, and NSP programs, HUD is ensuring the accuracy of the information by updating the CPD Income Eligibility Calculator on May 1, 2024, to reflect these programs effective date. It's important to note that calculations based on the FY 2023 Income Limits data will only be accessible if downloaded from the calculator and saved to a user s hard drive (or printed off) before May 1. Calculations completed on or after May 1 will use the FY 2024 Income Limits to determine eligibility. Please note that for the rest of the CPD programs (e.g., ESG, HOPWA, HOME, HTF), the CPD Income Eligibility Calculator will continue to use FY 2023 Income Limits until the FY 2024 are in effect on June 1, 2024.

HUD Publishes Proposed Rule on Reducing Barriers to Affordable Housing - Including New Criminal Screening Requirements

On April 10, 2024, HUD published a proposed rule titled "Reducing Barriers to HUD-Assisted Housing." Comments on the proposed rule are due no later than June 9, 2024. In the proposed rule, HUD assumes that everyone deserves to be considered as the individual they are, and everyone needs a safe and affordable place to live. For people with criminal records, having a stable place to live is critical to rebuilding a productive life. Yet too many people who apply for housing opportunities are not given full consideration as individuals but instead are denied opportunities simply because they have a criminal record. Criminal records are often incomplete or inaccurate, and criminal conduct that occurred years ago may not indicate a person's current fitness as a tenant. Criminal screening policies disproportionately impact Black and Brown people, Native Americans, other people of color, people with disabilities, and other historically marginalized and underserved communities. In April 2016, HUD issued guidance to all housing providers cautioning that unnecessary and unwarranted exclusions based on criminal records may create a risk of Fair Housing Act liability because they can have an unjustified disparate impact based on race. That guidance advised housing providers that individualized assessments considering relevant mitigating information are likely to have a less discriminatory effect than categorical exclusions based on criminal record. HUD believes that people are still excluded from HUD-assisted housing for convictions that do not reflect current fitness for tenancy, such as stale convictions dating back more than a quarter century or those for low-level, nonviolent offenses, such as riding a subway without paying a fare. As mounting evidence shows, such exclusions do little to further legitimate interests such as safety, as an increasing number of housing providers and public housing agencies (PHAs) now recognize. This proposed rule would help standardize practices within HUD programs concerning prospective tenants. The goal is to provide clearer rules and standards to help HUD-subsidized housing providers, and PHAs carry out the legitimate and important ends of maintaining the safety of their properties and the surrounding communities and following federal law (which requires exclusion from HUD-assisted housing of people who are engaged in certain conduct or have certain criminal history), but without engaging in overbroad or discriminatory denials of housing. This proposed rule would establish in HUD program regulations a set of practices that already are required of housing providers under state and local law in much of the country; that are consistent with guidance HUD has provided to all housing providers to comply with the Fair Housing Act and to HUD-subsidized providers and PHAs to comply with program rules; and that, as HUD has heard from its industry partners, are already being used and work in practice to effectively balance various equities. In doing so, the proposed rule would clarify a legal landscape many HUD-subsidized housing providers and PHAs find confusing, leading to divergent practices within HUD programs. While existing HUD regulations generally permit a fact-specific, individualized assessment approach, they have not been updated to require it. This proposed rule would cover various HUD programs, including public housing and Section 8 assisted housing programs, as well as the Section 221(d)(3) below-market interest rate (BMIR) program, the Section 202 program for the elderly, the Section 811 program for persons with disabilities, and the Section 236 interest reduction payment program, and in doing so would amend existing programmatic regulations. A summary of some of how these changes would impact different program rules is explained below: Clarifying what counts as relevant criminal activity and how recently it must have occurred: Existing regulations permit an assisted owner or PHA (for voucher applicants) to prohibit admission when the household has engaged in "in a reasonable time prior to admission," (1) drug-related criminal activity; (2) violent criminal activity; (3) other criminal activity that would threaten the health, safety, or right to peaceful enjoyment of the premises of other residents; or (4) other criminal activity that would threaten the health or safety of the PHA or owner or any employee, contractor, subcontractor or agent of the PHA or owner. While public housing regulations do not have a similar "reasonable time prior to admission" qualifier, there is a "relevancy" qualifier preceding these same four substantive categories of criminal activity. Under the proposed rule, PHAs and assisted owners would still be able to deny admission for these four categories of criminal activity; however, the proposed rule would clarify that assisted owners and PHAs may not deny admission for categories of criminal activity beyond those specified in the regulations. The proposed rule would require establishing a "lookback period" limiting the reliance on old convictions. For all programs, it would provide that prohibiting admission for some time longer than three years following any particular criminal activity is "presumptively unreasonable." The general rule would be that PHAs and assisted owners cannot make decisions based on criminal history that research indicates is not predictive of future criminal activity; that is irrelevant to safety, health, or fitness for tenancy; or that is based on incomplete or unreliable evidence of criminal activity ( e.g., a record for an arrest that has not resulted in a conviction). Specifying procedural requirements before denying admission: Program regulations require PHAs and assisted owners to follow various procedural steps before denying admission based on a criminal record but do not provide important specifics. For example, PHAs and assisted owners must notify the household of the proposed denial, supply a copy of a criminal record, and provide an opportunity to dispute the accuracy and relevancy of the record before the denial of admission. However, the current regulations do not specify how much notice a household must receive or the meaning of the opportunity to dispute the accuracy and relevancy of the record before a denial of admission. The proposed rule would clarify that tenants shall be given at least 15 days to challenge the information's accuracy and relevance and provide any relevant mitigating information before an admissions decision. Requiring a fact-specific and individualized assessment before making a discretionary decision to deny tenancy or admission based on criminal history: Current program regulations note that PHAs and assisted owners "may consider" certain circumstances before making a discretionary denial of admission or termination decision, and the different program regulations provide incomplete and inconsistent lists of appropriate considerations. HUD is proposing amended language that would make clear that for all discretionary admission and termination determinations, PHAs, and assisted owners must consider relevant mitigating circumstances. For admissions decisions, the proposed rule would require a fact-specific and individualized assessment of the applicant, adopting a term and concept familiar in the industry but not previously required in HUD programs. The proposed rule would harmonize the non-exhaustive list of relevant considerations across programs, setting out some specific factors that will frequently be considered relevant, such as how long ago the offense or incident occurred, mitigating conduct that has taken place since ( e.g., evidence of rehabilitation and successful reentry, including employment and tenancy), and completion of drug or alcohol treatment programs. So long as housing providers consider the circumstances relevant to the decision, the ultimate decision to deny tenancy or admission would remain within their discretion. Revising and making available tenant selection plans and PHA administrative plans: Under existing rules, owners participating in certain assisted housing programs must have a written tenant selection plan. The proposed rule would require these owners to update their tenant selection plans to reflect the relevant policies they employ within six months following this rule's effective date. The proposed rule would also require PHAs and owners to make PHA administrative plans and tenant selection policies more widely available. Providing additional guidance for PHAs and owners conducting screenings: When PHAs access criminal records from law enforcement agencies, existing regulations require PHAs to obtain consent from families before accessing their criminal records, require them to be kept confidential, and permit disclosure under limited circumstances. The proposed rule would broaden these protections to apply to all criminal record searches conducted by PHAs and assisted owners where appropriate. The proposed rule also would specify that, except in circumstances where housing providers and PHAs rely exclusively on an applicant's self-disclosure of a criminal record, they may not bar admission for failure to disclose a criminal record unless that criminal record would have been material to the decision. Clarifying mandatory admission denial standards: Language concerning mandatory admission denials based on criminal activity and alcohol abuse, which are required by federal statute, is largely left unchanged by the proposed rule. For example, the requirement that an assisted owner or PHA prohibit the admission of individuals "if any household member has been evicted from federally assisted housing for drug-related criminal activity" in the last three years unless the "the circumstances leading to the eviction no longer exist" has not been modified. Nor have any modifications been made to the prohibition on admission to HUD-assisted housing to those who are "subject to a lifetime registration requirement under a State sex offender registration program." The requirement that assisted owners or PHAs must establish standards to prohibit the admission of individuals "currently engaged in" illegal use of a drug and in situations where individuals' pattern of illegal drug use or alcohol abuse may interfere "with the health, safety, or right to peaceful enjoyment of the premises by other resident[s]" would remain substantively unchanged. However, HUD proposes adding greater clarification to the definition of "currently engaging in," which, as described above, triggers a mandatory exclusion concerning illegal drug use and discretionary exclusion authority concerning certain criminal activity. The existing regulations provide only that currently engaging in "means that the individual has engaged in the behavior recently enough to justify a reasonable belief that the individual's behavior is current." The proposed rule would provide that a PHA or assisted owner may not rely solely on criminal activity that occurred 12 months ago or longer to establish that behavior is "current." The proposed rule would also require that any such determination be based on a preponderance of the evidence standard and that such a determination consider mitigating evidence, for example, that the individual has completed substance use treatment services. Specifying standards of proof in admissions and terminations decisions based on criminal activity: Existing regulations are largely silent on the standards of proof that must be met for admissions and terminations decisions based on criminal activity. Where they speak to the subject at all, they state broadly that an assisted owner or PHA may terminate a tenancy when a household member engages in certain criminal activity, regardless of whether they have been arrested or convicted for such activity, and without satisfying the heightened standard of proof necessary to support a criminal conviction. There is no similar provision in existing regulations regarding admission decisions, nor do existing rules specifically discuss how PHAs and assisted owners may or may not consider arrest records in making either admissions or termination determinations. The proposed rule would (1) prohibit the consideration of arrest records standing alone (in the absence of other reliable evidence of criminal conduct) for any exclusion from the housing and (2) provide that criminal conduct or any other finding on which such an exclusionary decision is made must be based on a preponderance of the evidence. This would establish and clarify certain evidentiary standards and requirements for making key determinations in a manner that is largely consistent with what HUD already recommends in guidance for its housing providers and PHAs. Implementing limited changes affecting owners accepting Housing Choice Vouchers (HCVs) and Project Based Vouchers (PBVs): Most of the changes in the proposed rule would not apply to owners who participate in the HCV or PBV programs. The proposed rule would not apply most changes to owners participating in the HCV or PBV programs to avoid discouraging owner participation. Those owners who participate in the HCV or PBV programs would still be able to screen for drug-related criminal activity and other criminal activity that is a threat to the health, safety, or property of others. The proposed rule would add language to clarify that this includes "violent" criminal activity and that owners in the HCV and PBV program must also conduct any screening consistent with the Fair Housing Act, which was not previously spelled out in program regulations. Additionally, for tenancy terminations, HUD proposes the same standards regarding the preponderance of evidence and arrest records as would apply for PHAs and assisted owners. Finally, existing regulations note that owners "may consider" certain mitigating circumstances when terminating a tenancy. HUD proposes that where termination is based on criminal activity, illegal drug use, or alcohol abuse, an owner may consider an updated set of circumstances the same circumstances, including mitigating and contextualizing evidence, that PHAs and assisted owners would be required to consider in the context of admissions and termination decisions. Collectively, the principles embodied by this proposed rule are meant to ensure that people are considered individuals in HUD-assisted housing. Requiring housing providers and PHAs to make fact-specific determinations based on the totality of the circumstances, rather than denying opportunities based solely on criminal history, would help ensure that stale, inaccurate, and/or incomplete evidence and stigma surrounding people with criminal justice system involvement do not create unnecessary and counterproductive barriers to safe and affordable housing. Research shows that expanding access to such housing reduces the risk of future criminal justice system involvement and, in doing so, strengthens public safety. That does not mean everyone with a criminal history will satisfy legitimate tenant screening criteria that apply to all applicants equally. Housing providers would retain the authority to screen out individuals who they determine, based on consideration of relevant information, pose a threat to the health and safety of other tenants. The proposed rule would bar the categorical, blanket exclusion of people with criminal records without regard to all relevant and contextualizing evidence and consideration of the full life someone has lived. Bottom Line HUD's proposed rule, "Reducing Barriers to HUD-Assisted Housing," aims to address discriminatory practices hindering individuals with criminal records from accessing safe, affordable housing. Emphasizing the importance of considering individuals' circumstances, the rule challenges blanket denials based solely on criminal history. HUD highlights the disproportionate impact on marginalized communities and the flawed nature of relying on outdated or incomplete records. The rule advocates for individualized assessments, considering mitigating factors like rehabilitation efforts and the relevance of past offenses to tenancy. It outlines procedural requirements for admissions decisions, ensuring transparency and fairness for applicants. While maintaining safety standards, the rule discourages overbroad exclusions and encourages housing providers to adopt a nuanced approach in accordance with Fair Housing Act principles. The proposed changes will apply to various HUD programs, including public housing and Section 8 assistance. However, exceptions are made for Housing Choice Voucher and Project-Based Voucher programs to maintain owner participation. Overall, the rule seeks to promote access to housing while safeguarding community well-being. It acknowledges the potential for rehabilitation and the value of considering each individual's unique circumstances. Owners and operators of HUD programs affected by the Proposed Rule are encouraged to review the rule and provide comments to HUD no later than June 9, 2024.

HUD Publishes Final Rule Persons with Criminal Convictions to Engage in Testing for Fair Housing Violations

On April 1, 2024, the Department of Housing and Urban Development (HUD) published a final rule on Expanding the Fair Housing Testing Pool for FHIP and FHAP Funded Entities. This document is a final rule issued by the Department of Housing and Urban Development (HUD) regarding using fair housing testers with criminal convictions. The rule eliminates certain restrictions and responds to the need for a diverse group of testers with actual criminal convictions to fully investigate potentially discriminatory criminal background screening policies under federal civil rights laws. The document provides background information on the Fair Housing Act, which prohibits discrimination in housing based on various protected characteristics. It explains that FHIP and FHAP were established to fund fair housing enforcement activities by government agencies and private non-profits. Testing is a key tool these entities use to investigate potential violations of the Fair Housing Act. The document also discusses the current regulatory landscape, which includes restrictions on using testers with criminal convictions. The proposed rule was issued in response to a directive from HUD Secretary Marcia Fudge to review HUD programs and remove barriers that prevent individuals with criminal histories from participating. The proposed rule received public comments, both in support and opposition. Supporters of the rule argued that it would expand opportunities for individuals with criminal convictions, promote equity and civil rights, and improve fair housing testing. Opponents expressed concerns about the credibility and safety of testers with criminal convictions. After carefully considering public comments, HUD has finalized the rule to remove the restrictions on testers with criminal convictions. This rule is expected not only to strengthen fair housing enforcement efforts but also provide employment opportunities and promote equity and inclusion for individuals with criminal conviction The document also addresses other issues, such as the impact on small entities, federalism considerations, environmental impact, and compliance with the Unfunded Mandates Reform Act. It concludes with the amendments to the relevant parts of the Code of Federal Regulations. In summary, this document announces a final rule issued by HUD to remove restrictions on using fair housing testers with criminal convictions. The rule promotes equity, inclusion, and effective fair housing enforcement. It is based on public comments and considerations of various factors and amends the relevant regulations to reflect the changes. The final rule takes effect in May 2024.

The Rural Development Service Announces HOTMA Implementation

A memorandum from Joaquin Altoro, the Administrator of the Rural Housing Service (RHS), addressed to Multifamily Housing Owners and Management Agents Multifamily Housing Partners, has explained how HOTMA will be implemented by the Rural Housing Service (RHS). All housing programs administered by RHS are affected, but the primary impact will be felt in the Section 515 Program.  The memorandum concerns an Administrator Exception related to implementing the Housing Opportunity Through Modernization Act (HOTMA).   The memorandum explains that the Housing Act of 1949, which governs the RHS, requires the calculation of a tenant's annual and adjusted household income to be based on the definition provided by the Housing Act of 1937. As a result, RHS must determine income for housing purposes per 24 CFR 5.609, the section of the Code of Federal Regulations governing HUD housing programs.  However, HOTMA directed the U.S. Department of Housing and Urban Development (HUD) to issue a rule changing the income calculation requirements.  HUD published a Final Rule updating 24 CFR 5.609 on February 14, 2023, effective January 1, 2024.  The memorandum states that the Housing Act of 1949 does not incorporate the updates found in 24 CFR 5.609(c), and therefore, the RHS and Multifamily Housing (MFH) will not implement 24 CFR 5.609(c).   The memorandum further explains that under the authority granted in 7 CFR 3560.8, a regulatory waiver has been approved to exclude 24 CFR 5.609(c) from Rural Development's annual income calculation requirements.  The waiver is effective retroactive to January 1, 2024.  The memorandum lists the specific requirements that RD will not implement, including interim tenant income reexaminations where adjusted income is estimated to increase or decrease by 10% or more, using other programs' income determinations, and allowing de minimis errors resulting in $30 or less per month to remain in compliance. Concerning recertifications, tenants at RD properties must be income recertified at least annually and whenever household income changes by $100 or more per month or $50 or more per month if the tenant requests such a change be made. This requirement remains in place.  The Administrator's Exception will be in effect until 7 CFR 3560.153(a) is updated to refer only to 24 CFR 5.609(a) and (b). RD will apply all HOTMA changes regarding the definition of annual income, including all revised inclusions and exclusions from income.    The memorandum also mentions that full compliance with HOTMA is mandatory, effective January 1, 2025, and RD is establishing further guidance and updating handbooks and forms to incorporate the changes.   RD encourages owners and management agents to discuss the implementation with software providers to ensure seamless data transmission.   The memorandum concludes by stating that RD will not penalize owners for HOTMA-related tenant file issues during RD Supervisory reviews conducted before January 1, 2025. 

A. J. Johnson Partners with Mid-Atlantic AHMA for Affordable Housing Training - May 2024

During May 2024, A. J. Johnson will partner with the Mid-Atlantic Affordable Housing Management Association for training sessions for real estate professionals, particularly those in the affordable multifamily housing field. The sessions will be presented via live webinars.  The following sessions will be presented: May 8: Intermediate LIHTC Compliance  - Designed for more experienced managers, supervisory personnel, investment asset managers, and compliance specialists, this practical program expands on the information covered in the Basics of Tax Credit Site Management. A more in-depth discussion of income verification issues is included, as well as a discussion of minimum set-aside issues (including the Average Income Minimum Set-Aside), optional fees, and use of common areas. The Available Unit Rule is covered in great detail, as are the requirements for units occupied by students. Attendees will also learn the requirements for setting rents at a tax-credit property. This course contains some practice problems but is more discussion-oriented than the Basic course. A calculator is required for this course. May 14: Basic LIHTC Compliance - This training is designed primarily for site managers and investment asset managers responsible for site-related asset management and is especially beneficial to those managers who are relatively inexperienced in the tax credit program. It covers all aspects of credit related to on-site management, including the applicant interview process, determining resident eligibility (income and student issues), handling recertification, setting rents - including a full review of utility allowance requirements - lease issues, and the importance of maintaining the property. The training includes problems and questions to ensure students fully comprehend the material. May 16: The Verification and Calculation of Income and Assets on Affordable Housing Properties - The live webinar provides concentrated instruction on the required methodology for calculating and verifying income and determining the value of assets and income generated by those assets. The first section of the course involves a comprehensive discussion of employment income, military pay, pensions/social security, self-employment income, and child support. It concludes with workshop problems designed to test what the student has learned during the discussion phase of the training and serve to reinforce HUD-required techniques for determining income. The second component of the training focuses on a detailed discussion of requirements related to determining asset value and income. It applies to all federal housing programs, including the low-income housing tax credit, tax-exempt bonds, Section 8, Section 515, and HOME. Multiple types of assets are covered, both in terms of what constitutes an asset and how they must be verified. This section also concludes with problems designed to test the student s understanding of the basic requirements relative to assets. These sessions are part of a year-long collaboration between A. J. Johnson and MidAtlantic AHMA designed to provide affordable housing professionals with the knowledge needed to effectively manage the complex requirements of the various agencies overseeing these programs, ensuring long-term success in the field. Persons interested in any (or all) training sessions may register by visiting either or

HUD Publishes 2024 Income Limits

On April 1, 2024, HUD published the 2024 income limits for HUD programs as well as for the Low-Income Housing Tax Credit and Tax-Exempt Bond programs. The limits are effective on April 1, 2024.  The limits for the LIHTC and Bond projects are published separately from the limits for HUD programs. LIHTC and Bond properties use the Multifamily Tax Subsidy Project (MTSP) limits and are held harmless from income limit (and therefore rent) reductions. These properties may use the highest income limits used for resident qualification and rent calculation purposes since the project has been in service. HUD program income limits are not held harmless. HUD publishes the 50% and 60% MTSP limits in the same table with the Average Income (AI) limits. AI limits are set at 20%, 30%, 40%, 50%, 60%, 70%, and 80%. Projects in service prior to 2009 may use the HERA Special Income Limits in areas where HUD has published such limits. Projects placed in service after 2008 may not use the HERA Special Limits. Projects in rural areas that are not financed by tax-exempt bonds may use the higher of the MTSP limits or the National Non-Metropolitan Income Limits (NNMIL). According to HUD, the non-metropolitan median income has gone up approximately .78% from 2023 to 2024. Owners of LIHTC projects may rely on the 2023 income limits for all purposes for 45 days after the effective date of the newly issued limits. This 45-day period ends on May 16, 2024. The limits for HUD programs may be found at The limits for LIHTC and Bond programs may be found at

HUD Expands List of Federally Mandated Income Exclusions

On January 31, 2024, the Department of Housing and Urban Development (HUD) published an updated list of income excluded for HUD-assisted housing programs. Since the Low-Income Housing Tax Credit Program (LIHTC) must follow HUD rules regarding income determination, these exclusions also apply to the LIHTC program. Four new income exclusions were added, and existing exclusions were modified to specifically identify which sources of income are excluded from income calculations and asset determinations. This is the first comprehensive update of income exclusions since May 2014, and it incorporates the Housing Opportunities Through Modernization Act (HOTMA) exclusions. New Income Exclusions HUD has added four types of income that will no longer be counted for affordable housing program purposes. These include specific tax refunds, allowances for children of some veterans, distributions from ABLE accounts, and emergency rental assistance payments. Tax Refunds: The amount of any refund (or advance payment for a refundable credit) issued under the Internal Revenue Code is excluded from income. Such refunds are also excluded from assets for 12 months after being received. Children of Certain Service Members: Allowances paid to children of certain Thailand service veterans born with spina bifida are excluded from income and assets. This is in addition to any allowances paid to children of Vietnam veterans born with spina bifida, children of women Vietnam veterans born with certain birth defects, and children of certain Korean service veterans born with spina bifida. ABLE Account Distributions: Any amount in an Achieving a Better Life Experience (ABLE) account is excluded from income and assets. This includes the value of distributions from and certain contributions to ABLE accounts. Emergency Rental Payments: Payments received by a household under the Emergency Rental Assistance Program, which was part of the Consolidated Appropriations Act of 2021 and the American Rescue Plan Act of 2021, are excluded from income and assets. Modifications to Existing Exclusions In addition to adding new income exclusions, HUD is modifying existing exclusions. AmericorpsVISTA payments: In the past, payments to volunteers under the Domestic Volunteer Service Act of 1973 were always excluded. Now, such payments are included in income if the CEO of the Corporation for National and Community Service determines that the value of the payments, adjusted to reflect the number of hours served by volunteers, is equal to or greater than the federal or state/local minimum wage, whichever is greater. Tribal Trust Settlements: The first $2,000 of per capita payments are excluded unless the per capita payments exceed the amount of the original Tribal Trust Settlement. NAHASDA Benefits: The change more accurately captures the language in the United States Code that describes the exclusion of programs under the Native American Housing Assistance & Self-Determination Act. Individual Development Accounts (IDA): Any amounts in an IDA are excluded from assets, and any assistance, benefit, or amounts earned by or provided to an individual development account are excluded from income. This exclusion was updated to clarify that an IDA is excluded from assets, and any IDA benefits are also excluded from income. This program was defunded in 2017, so the exclusion is moot. It is important to note that HUD s updated list of federally mandated income exclusions is not a comprehensive list of all exclusions from income. Following are the types of income that are expressly excluded by federal law. Other income exclusions, as listed in various HUD Handbooks and Notice H 2023-10/PIH 2023-27, remain applicable. Also note that the exclusions listed below apply to income only, except where noted concerning assets. The value of the allotment provided to an eligible household under the Food Stamp Act of 1977. This exclusion also applies to assets. Payments, including for supportive services and reimbursement of out-of-pocket expenses, for volunteers under the Domestic Volunteer Service Act of 1973 are excluded from income except that the exclusion shall not apply in the case of such payments when the Chief Executive Officer of the Corporation for National and Community Service appointed under 42 U.S.C. 12651c determines that the value of all such payments, adjusted to reflect the number of hours such volunteers are serving, is equivalent to or greater than the minimum wage then in effect under the Fair Labor Standards Act of 1938 or the minimum wage, under the laws of the State where such volunteers are serving, whichever is the greater. This exclusion also applies to assets. Certain payments received under the Alaska Native Claims Settlement Act. This exclusion also applies to assets. Income derived from certain submarginal land of the United States is held in trust for certain Indian tribes. This exclusion also applies to assets. Payments or allowances made under the Department of Health and Human Services Low-Income Home Energy Assistance Program. This exclusion also applies to assets. Income derived from the disposition of funds to the Grand River Band of Ottawa Indians. This exclusion also applies to assets. The first $2,000 of per capita shares received from judgment funds awarded by the National Indian Gaming Commission or the U.S. Claims Court, the interests of individual Indians in trust or restricted lands, and the first $2,000 per year of income received by individual Indians from funds derived in interests held in such trust or restricted lands. This exclusion does not include proceeds of gaming operations regulated by the Commission. This exclusion also applies to assets. Amounts of student financial assistance funded under Title IV of the Higher Education Act of 1965, including awards under Federal work-study programs or the Bureau of Indian Affairs student assistance programs. For Section 8 programs only, any financial assistance in excess of amounts received by an individual for tuition and any other required fees and charges under the Higher Education Act of 1965 from private sources or an institution of higher education (as defined under the Higher Education Act of 1965), shall not be considered income to that individual if the individual is over the age of 23 with dependent children. Payments received from programs funded under Title V of the Older Americans Act of 1965. Payments received on or after January 1, 1989, from the Agent Orange Settlement Fund or any other fund established pursuant to the settlement in Re Agent Orange Product Liability Litigation, M.D.L. No 381 (E.D.N.Y.). This exclusion also applies to assets. Payments received under the Maine Indian Claims Settlement Act of 1980. This exclusion also applies to assets. The value of any childcare 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. Earned income tax credit (EITC) refund payments received on or after January 1, 1991, for programs administered under the United States Housing Act of 1937, title V of the Housing Act of 1949, Section 101 of the Housing & Urban Development Act of 1965, and Sections 221(d)(3), 235, and 236 of the National Housing Act. This exclusion also applies to assets. Note - while this income exclusion addresses EITC refund payments for certain HUD programs, the exclusion in 26 U.S.C. 6409 excludes Federal tax refunds more broadly for any Federal program or under any State or local program financed in whole or in part with Federal funds. The amount of any refund (or advance payment for a refundable credit) issued under the Internal Revenue Code is excluded from income and assets for 12 months after receipt. Payments by the Indian Claims Commission to the Confederated Tribes and Bands of the Yakima Indian Nation or the Apache Tribe of the Mescalero Reservation. This exclusion also applies to assets. Allowances, earnings, and payments to AmeriCorps participants under the National and Community Service Act of 1990. Any allowance paid to children of Vietnam veterans born with spina bifida, children of women Vietnam veterans born with certain birth defects, and children of certain Korean and Thailand service veterans born with spina bifida. This exclusion also applies to assets. Any amount of crime victim compensation that provides medical or other assistance (or payment or reimbursement of the cost of such assistance) under the Victims of Crime Act of 1984 received through a crime victim assistance program, unless the total amount of assistance that the applicant receives from all such programs is sufficient to fully compensate the applicant for losses suffered as a result of the crime. This exclusion also applies to assets. Allowances, earnings, and payments to individuals participating in programs under the Workforce Investment Act of 1988, reauthorized as the Workforce Innovation and Opportunity Act of 2014. Any amount received under the Richard B. Russell School Lunch Act and the Child Nutrition Act of 1966, including reduced-price lunches and food under the Special Supplemental Food Program for Women, Infants, and Children (WIC). This exclusion also applies to assets. Payments, funds, or distributions authorized, established, or directed by the Seneca Nation Settlement Act of 1990. This exclusion also applies to assets. Payments from any deferred U.S. Department of Veterans Affairs disability benefits that are received in a lump sum or in prospective monthly payments. Any amounts (i) not received by the family, (ii) that would be eligible for exclusion under 42 U.S.C. 1382b(a)(7), and (iii) received for service-connected disability under 38 U.S.C. chapter 11 or dependency and indemnity compensation under 38 U.S.C. chapter 13 as provided by an amendment by the Indian Veterans Housing Opportunity Act of 2010 to the definition of income applicable to programs under the Native American Housing Assistance and Self Determination Act (NAHASDA). A lump sum or a periodic payment received by an individual Indian under the class action settlement agreement in the case titled Elouise Cobell et al. v. Ken Salazar et al., 816 F. Supp.2d 10 (Oct 5, 2011, D.D.C), for one year from the time of receipt of that payment as provided in the Claims Resolution Act of 2010. This exclusion also applies to assets. As provided by the Assets for Independence Act, as amended, any amounts in an "individual development account" are excluded from assets, and any assistance, benefit, or amounts earned by or provided to the individual development account are excluded from income. An Individual Development Account (IDA) is a special bank account that assists a family in saving for education, purchasing a first home, or starting a business. To enroll in the program, participants must (1) Have a paying job, (2) earn less than 200% of the federal poverty level, and (3) not have more than $10,000 in assets, excluding one car and one home. The owner of the account contributes money from their job to the account. The contributions are matched from the State TANF program or a special state fund. These additional funds are excluded from income or assets. Per capita payments made from the proceeds of Indian Tribal Trust Settlements listed in IRS Notice 2013-1 and 2013-55 must be excluded from annual income unless the per capita payments exceed the amount of the original Tribal Trust Settlement proceeds and are made from a Tribe s private bank account in which the Tribe has deposited the settlement proceeds. Such amounts received in excess of the Tribal Trust Settlement are included in the gross income of the members of the Tribe receiving the per capita payments as described in IRS Notice 2013-1. The first $2,000 of per capita payments are also excluded from assets unless the per capita payments exceed the amount of the original Tribal Trust Settlement proceeds and are made from a Tribe s private bank account in which the Tribe has deposited the settlement proceeds. Individuals and families receiving federal assistance for a major disaster or emergency under the Robert T. Stafford Disaster Relief and Emergency Assistance Act and comparable disaster assistance that is provided by States, local governments, and disaster assistance organizations. This exclusion also applies to assets. Any amount in an Achieving Better Life Experience (ABLE) account, distributions from, and certain contributions to an ABLE account established under the ABLE Act of 2014, as described in Notice PIH 2019-09/H 2019-06 or a subsequent or superseding notice. This exclusion also applies to assets. Assistance received by a household under the Emergency Rental Assistance Program under the Consolidated Appropriates Act of 2021 and the American Rescue Plan Act of 2021. While all these exclusions will be reflected in a future update of HUD Handbook 4350.3, that update is not yet available. Therefore, owners and managers of properties subject to HUD income and asset exclusions should keep this list handy.

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