Effective January 1, 2024, the HUD imputed rate on assets over $50,000 will increase from .06% to .40%. This is a significant increase in the imputed rate but comes with other changes to how income will be imputed to assets for properties subject to the HUD imputing rule.
HOTMA and the final rule specifically include “actual” income from assets in the definition of income. Therefore, any actual income received must be counted as family income.
- Imputed income on assets of a combined value of more than $50,000 must be calculated if no actual income can be computed.
- In a major procedural change, if the actual income can be computed for some assets, but not all assets, housing providers must compute the actual income for those assets, calculate the imputed income for all remaining assets where the actual income cannot be computed, and combine both amounts to account for assets with a combined value of more than $50,000.
- Notice the significant difference from the current rule where income from assets more than $5,000 is the greater of the total actual income or total imputed income. Actual and imputed income are never combined.
- Financial assets (e.g., bank accounts) that generate no income (i.e., 0% interest or no dividends) are not assets on which income will be imputed. Non-financial assets (e.g., real property or non-necessary personal property) are subject to imputing.
Owners and operators of HUD projects are subject to the imputing rule, as are operators of LIHTC and Rural Development Section 515 properties. This new imputed rate and the methodology for imputing will apply to all these properties effective January 1, 2024.