HCV Rent Calculation Certification Examination

PART I: Annual Income

1. Which of the following is INCLUDED in annual income?1. Which of the following is INCLUDED in annual income?

2. A Family has had their welfare benefits sanctioned due to noncompliance with welfare’s economic self-sufficiency requirements. The PHA must:

• a. Exclude the welfare benefits from annual income so that the family’s rent is reduced
• b. Terminate their assistance
• c. Include imputed welfare income in the calculation of annual income so that the family’s rent is not reduced
• d. Give the family an informal hearing to decide whether the welfare sanction was determined properly

3. Which of the following is included in annual income?

• a. Developmental disability care payments
• b. Child support payments
• c. Amounts received for the reimbursement of medical expenses
• d. Earnings of a minor
• e. None of the above

4. Which income of a minor is included in annual income?

• a. $100 birthday gift from grandparents
• b. Interest on a savings account
• c. Wages
• d. None of the above

5. The income of the head of household who is temporarily absent from the unit:

• a. Is excluded while the family member is absent
• b. Is included if it is earned, but is excluded if it is unearned
• c. Is included even while absent
• d. Is excluded if it is earned, but is included if it is unearned

6. Eric Smith’s gross monthly Social Security benefit is $800 per month. However, he only receives $750 monthly because $50 is taken out to pay his Medicare premium. He has no other source of income. Calculate Eric’s annual income:

• a. $9,200
• b.$9,000
• c. $9,600
• d. None of the above

7. Joe Adams has been receiving $400 per month in TANF. He recently enrolled in a qualifying state training program. As a result, his TANF benefit ended. How much of his monthly income is included while he is enrolled in the training program?

• a. $0
• b. $200
• c. $400
• d. $600
• e. $1,000

8. In the housing choice voucher program, the earned income disallowance applies to which of the following?

• a. Only the head of household or spouse
• b. Only a family whose head or spouse is a person with disabilities
• c. Any adult family member who is a person with disabilitites
• d. Any adult family member, even if not disabled.

9. Which of the following lump-sum payments is included in annual income?

• a. A deferred periodic payment for the delayed start of welfare benefits
• b. An inheritance
• c. A deferred periodic payment for the delayed start of Social Security benefits
• d. Lottery winnings
• e. none of the above

10. Which of the following is INCLUDED in annual income?

• a. Food Stamps
• b. The first $480 from earnings of an adult full-time student (not head/spouse/cohead)
• c. Earnings in excess of $480 of an adult full-time student (not head/spouse/cohead)
• d. Sporadic or nonrecurring income

11. Which of the following is INCLUDED in annual income?

• a. The value of groceries received regularly from an outside source
• b. Sporadic income
• c. Holocaust reparation payments
• d. Income received under a HUD-funded training program
• e. None of the above

12. Which of the following is EXCLUDED from annual income?

• a. Income of a temporarily absent spouse
• b. Regular periodic payments
• c. A resident service stipend of $200 per month
• d. Supplemental Security Income (SSI)

13. Maria just qualified for the earned income disallowance (EID). Her income before she qualified consisted of $4,800 from TANF. Now she’s working and earning $7.25 per hour, working 30 hours per week, and has no other income. How much of Maria’s annual income will be excluded?

• a. $6,510
• b. $11,310
• c. $4,800
• d. $3,255

14. To convert biweekly income to annual income, multiply by ______. To convert semimonthly income to annual income, multiply by ______.

• a. 24,26
• b. 26,24

15. The unearned income of minors is INCLUDED in annual income.

• a. True
• b. False

16. All regular pay, special pay (except for hostile fire pay), and allowances of an armed forces memeber are INCLUDED in annual income.

• a. True
• b. False

17. Periodic payments in lieu of earnings such as unemployment, workers compensation, and severance pay are INCLUDED as income.

• a. True
• b. False

18. When determining annual income from wages, only net wages (wages after deductions such as 401 (k) contributions) are INCLUDED.

• a. True
• b. False

19. A family who has lost their TANF benefits due to their time limit expiring will have their rent calculated using imputed welfare income

• a. True
• b. False

20. One way family may qualify for the earned income disallowance is if they experience an increase in earned income within 6 months of participating in an economic self sufficiency or job training program.

• a. True
• b. False

21. The income of a live-in aide is EXCLUDED from annual income.

• a. True
• b. False

22. A family who has qualified for the earned disallowance will ALWAYS have the full amount of their employment income excluded during the initital 12 month exclusion.

• a. True
• b. False

23. The full amount of adoption assistance payments are EXCLUDED from annual income.

• a. True
• b. False

24. Social Security lump-sum payments for deferred periodic payments are EXCLUDED from annual income.

• a. True
• b. False

25. Andrea Marsala has two jobs. She is a teacher for nine months of every year and works part time in the summer for three months. How would the PHA calculate Andrea’s income?

• a. Exclude it all as sporadic income
• b. Annualize her teaching income by multiplying it by nine and exclude the part time income as sporadic.
• c. Treat it as seasonal income and calculate using one of the two HUD approved methods.
• d. Exclude all but $480 of her earnings.

26. Karen Schultz invested $12,000 in a 401k twenty years ago. That 401k now has a balance of $50,000 and will begin paying her monthly payments of $500 next month. The PHA verifies Karen’s initial investment. How long does it have to wait to begin counting the $500 a month as income.

• a. They can begin counting it immediately.
• b. Never because it is a personal investment account
• c. 10 years
• d. 2 years

27. Jennifer Powelson receives Social Security of $1,000 a month. The SSA has recently reduced her benefit to $900 to make up for a precious overpayment. The PHA verifies verification that Jennifer will receive $900 a month for the next two years. What does the PHA count for Jennifer’s social security income?

• a. $12,000
• b. $10,800
• c. $1,200
• d. 12,900

28. Megan McKee is a full-time student who is 25 years old, lives independently, and has 5-year-old child. Megan receives financial aid of $10,000 a year to cover her $5,000 per year of tuition and additional expenses. How much of Megan’s financial aid is included in annual income?

• a. Include all financial aid for Megan
• b. None; exclude all financial aid for Megan
• c. Any amount above the cost of tuition
• d. $480

PART II: Assets and Asset Income

29. Which of the following is NOT an asset according to HUD?

• a. Checking accounts
• b. Money market funds
• c. Personal property
• d. Savings accounts
• e. None of the above

30. Shelby’s certificate of deposit (CD) has a balance of $6,500. If she cashes in the CD, she will pay an early withdrawal penalty of $415. The CD pays 2.75% interest annually. The PHA-determined passbook rate is .0075. Shelby has no other assets. What is her final asset income?

• a. $82
• b. $88
• c. $167
• d. $179

31. Melanie Samuels owned a house worth $250,000, and there was no mortgage balance. She recently sold the house to her son for $100,000. Her son paid all realtor fees and transfer costs. The PHA must:

• a. Include $150,000 in the cash value of her assets for two years from the date she sold the house.
• b. Multiply $200,000 by the HUD passbook rate and include this amount as an asset for two years from the date she sold the house.
• c. Require her to sell the house for market value
• d. Include the $150,000 in her annual income for two years from the date she sold the house.

32. Danielle Prior received $3,000 in lottery winnings. She bought a car for $2,900 and spent the remaining $100 on clothes. At her next annual reexamination, what is the total cash value of her lottery winnings that is to be treated as an asset?

• a. $0
• b. $100
• c. $2,900
• d. $3,000

33. When the cash value of the family’s assets is less than $5,000, the actual income from assets is used.

• a. True
• b. False

34. The cash value of a certificate of deposit is ALWAYS equal to the balance in the account.

• a. True
• b. False

35. The PHA- determined passbook rate is used only to determine imputed asseet income when the cash value of the family’s assets is more than $5,000.

• a. True
• b. False

36. To determine the cash value of an asset, start with the market value and subtract any expenses incurred to convert it to cash.

• a. True
• b. False

37. Personal property held as an investment is an asset according to HUD.

• a. True
• b. False

38. When assets are disposed of for less than market value as a result of bankruptcy, or foreclosure, they still must be counted when determining the cash value of the family’s assets.

• a. True
• b. False

39. An irrevocable trust that is inaccessible to the family is not an asset according to HUD.

• a. True
• b. False

40. The market value of an asset is what the asset is worth.

• a. True
• b. False

PART III: Adjusted Income

41. Costs for the care of a disabled 14-year-old family member may be deducted as a child care expense.

• a. True
• b. False

42. If a family qualifies for the $400 elderly/disabled deduction, for which other deduction do they also qualify?

• a. Medical expense
• b. Disability assistance expense
• c. Dependent
• d. None of the above

43. Only disabled families qualify for the disability assistance expense deduction.

a. True

b. False

44. Which of the following is true regarding the child care expense deduction?

• a. The PHA may disallow the deduction because there is an unemployed adult family member in the household
• b. Foster children may qualify for the deduction
• c. The PHA may decide who will provide the necessary child care
• d. None of the above

45. The PHA’s policy determines if child care expenses are reasonable.

a. True

b. False

46. If a family meets HUD’s definition of an “elderly family, ” the medical expenses for all family members, regardless of age, are eligible for the deduction.

a. True

b. False

47. Wanda Watson owes $10,000 on a medical bill. In the coming year she plans on paying off the bill at $10 per month. Assuming that Wanda qualifies for the medical expense deduction, and PHA policy allows this as a medical expense, what is Wanda’s anticipated out of pocket expense that is eligible for a deduction?

a. $120

b. $10,000

c. $10

d. $0

48. When child care enables a family member to work, the amount of child care expense is capped by the employment income that is included in annual income.

a. True

b. False

49. Foster children may qualify the family for the child care deduction, but do not qualify them for the dependent deduction.

a. True

b. False

50. If it’s policy in the administrative plan, the PHA may deny a medical expense deduction to a qualified family for nonprescription medication even if the medication is reommended by a doctor.

a. True

b. False

51. A family may qualify for the child care deduction if the child care enables a family member to attend college.

a. True

b. False

52. A family consists of a 72- year-old head of household, and his 68 -year-old wife. Their annual income is $12,000. They have verified medical expenses of $1,500. What is their adjusted income?

a. $10,100

b. $10,460

c. $10,500

d. $10,900

53. A family consists of a disabled head of household, an elderly spouse, and an elderly other adult. What is the total deduction for which the family qualifies?

a. $800

b. $400

c. $480

d. $880

54. Medical expenses may NOT include:

a. Health insurance premiums

b. Transportation to medical appointments

c. Eyeglasses

d. Expenses paid by insurance

55. Which of the following family members qualifies as a dependent?

a .Spouse who is a full time student, age 18

b. Mother of head, age 63

c. Disabled brother of head of household, age 23

d. None of the above

56. Which of the following qualifies as a disability assistance expense?

a. Auxiliary apparatus that enables a 23-year-old disabled son to work

b. Care attendant that enables the head of household to attend school

c. Prescription costs

d. Both a and b

PART IV: Deductions

The following questions are based on the family described below:

Head, age 45

Spouse, age 42, disabled

Daughter, age 17, who has quit school and is working

Son, age 21, disabled

Foster child, age 10

Grandson, age 2 months

Grandfather, age 70

Sister of spouse, age 40, who is a full-time student

57. Who qualifies the family for the $400 elderly/disabled deduction?

a. Daughter, son , grandson, and foster child

b. foster child, daughter, grandson, and sister of spouse

c. Daughter, son, grandson, and sister of spouse

d. Daughter, son, and grandson

e. Spouse, daughter, grandson, and sister of spouse

58. Who qualifies the family for the $400 elderly/disabled deduction?

a. Spouse

b. Grandfather

c. Son

d. Only a and b

e. All of the above

59. Whose medical expenses can be deducted?

a. Everyone in the household

b. Everyone in the household except the foster child

c. Spouse, son, and grandfather only

d. Spouse only

60. If the spouse was not disabled, whose medical expenses could be deducted?

a. Everyone in the household

b. Everyone in the household except the foster child

c. Sister of the spouse and Grandfather only

d. No one

PART V: Verification

61. What is the PHA required to verify for wages of minors?

a. The amount of their income

b. Their age

c. The source and the amount of thier income

d. The source

62. At her annual reexamination, UIV data from HUD’s Enterprise income Verification (EIV) system shows that Robin is working at Fashion Fabrics. However, Robin disputes the EIV data and claims she has been unemployed for the past year. The PHA must then:

a. Request written verification from the employer to resolve the discrepancy

b. Calculate based on the EIV data

c. Implement a repayment agreement

d. Terminate her assistance

63. According to HUD’s verification hierarchy, oral third-party verification is more desirable than written third-party because it is easier and quicker to obtain.

a. True

b. False

64. According to HUD’s verification hierarchy, if a family member is employed, in order to verify wages the PHA must always send a written third party verification form directly to the family member’s employer.

a. True

b. False

PART VI: Minimum Rent

65. The PHA has verified that the Smith family qualifies for the minimum rent hardship exemption. What is their total tenant payment based on the following information?

a. $0

b. $25

c. $35

d. $50

66. Once a PHA determines that a family qualifies for a minimum rent hardship that is temporary, the PHA:

a. Must exempt them from the minimum rent for 90 days

b. Must suspend the minimum rent for 90 days and then offer a reasonable repayment agreement

c. Must exempt them the minimum rent for a period determined by the family

d. None of the above

67. Financial hardship exemptions from minimum rent include:

a. When the family’s income has been reduced because of loss of employment

b. When a death has occurred in the family

c. When the family would be evicted because it is unable to pay the minimum rent

d. Other circumstances determined by HUD or the PHA

e. All of the above

68. A family whose total tenant payment is based on the minimum rent is not entitled to a utility reimbursement.

a. True

b. False

69. The minimum rent must be between $25 and $50.

a. True

b. False

PART VII: Payment Standards

70. If a PHA lowers its payment standard during the term of a HAP contract, when will the lower payment standard be applied to the family?

a. At the family’s first annual reexamination after the payment standard is lowered

b. At the family’s first interim reexamination after the payment standard has been lowered

c. At the time established by PHA policy

d. At the family’s second annual reexamination after the payment standard is lowered

e. Never, because a PHA cannot lower its payment standard

71. If a family is issued a 2 bedroom voucher and leases a 1 bedroom unit, the payment standard used is:

a. 2 bedroom

b. 1 bedroom

c. The average of both payment standards

72. If a PHA increases its payment standard during the term of a HAP contract, when will the lower payment standard be applied to the family?

a. At the family’s first annual reexamination after the payment standard is lowered

b. At the family’s first interim reexamination after the payment standerd has been lowered

c. At the time established by PHA policy

d. At the family’s second annual reexamination after the payment standard is lowered

e. Never, because a PHA cannot lower its payment standard

73. A Family may lease a unit where the gross rent exceeds the applicable payment standard.

a. True

b. False

HCV Rent Calculation

74. If the gross rent for a unit exceeds the applicable payment standard, the family share may not exceed 40% of adjusted monthly income at which of the following times?

a. Only when a family is admitted to the program

b. Only when a family moves to a new unit

c. When a family is admitted to the program or moves to a new unit

d. At any time specified in PHA policy

e. At any time while a family is receiving assistance under the program

75. HAP is calculated by subtracting the total tenant payment from the:

a. Payment standard

b. Gross rent

c. Rent to owner

d. Lesser of the payment standard or the gross rent

76. Rent to owner minus housing assistance payment (HAP) equals:

a. Utility allowance

b. Tenant rent to owner

c. Maximum subsidy

d. Total family share

77. The Smith family qualifies for a 3 bedroom voucher and leased up in a 4 bedroom unit. When calculating their rent, the PHA must use the :

a. 3 bedroom payment standard and 4bedroom utility allowance

b. 4 bedroom payment standard and 4 bedroom utility allowance

c. 3 bedroom payment standard and 3 bedroom utility allowance

78. The PHA may not establish a separate payment standard within the basic range (90% to 110% FMR) for a designated part of an FMR area.

a. True

b. False

79. If the total housing assistance payment (HAP) exceeds the rent to the owner, the family will receive a utility reimbursement payment (URP).

a. True

b. False

Use the following information to answer questions 80-82:

Bill Martin is entering the program and has found a unit.

Rent to owner: $575

Utility allowance: $50

Payment standard: $600

Total Family Share: $450

Monthly adjusted income: $1,100

80. Is Mr. Martin suject to the affordability rule?

a. Yes

b. No

81. Can he afford this unit?

a. Yes

b. No

82. Which of the following statements is true about Mr. Martin’s situation?

a. He could lease up in this unit if the owner reduced the rent by $10

b. He could never lease up in this unit

c. He could lease up in this unit if the owner reduced the rent by $5

d. He can lease up in the unit without any changes to the rent

Section 8 Case Studies

Case Study #1: Padilla Family

Situation: The Padilla family has just reported a change in income to Our Town Housing Authority (OTHA). Based on these changes, OTHA is conducting an interim reexamination in accordance with PHA policy. The Padillas have a 2bedroom voucher.

Family information: The Padilla family consists of the following members:

Relationship	Name	Age	Disabled	Citizenship Status
Head	Steve Padilla	37	Y	Eligible Citizen
Spouse	Elsa Padilla	35	N	Eligible Citizen
Son	Marco Padilla	12	N	Eligible Citizen

Steve has been receiving Social Security disability benefits in the amount for $250 per month. He recently reported that he has obtained employment and will be earning $12,550 annually. He will continue to receive his Social Security disability benefits while working. The family has no other income.

Unit information:

-Size: 2 bedrooms

-Rent to owner: $735

PHA policy:

-OTHA 2bedroom payment standard: $850

-Utility allowance: $45

-OTHA minimum rent: $50

PHA-determined passbook rate: .0075

83. Total annual income (7i)

a. $3,000

b. $8,600

c. $12,500

d. $15,550

84. The family’s income exclusion (7e):

a. $0

b. $6,950

c. $7,550

d. $12,550

85. Total allowances (8x):

a. $0

b. $480

c.$880

d. $960

86. Total tenant payment (9j):

a. $129

b. $53

c. $367

d. $377

87. Tenant rent to owner (12v):

a. $84

b. $18

c. $8

d. $322

88. HAP to owner (12u):

a. $651

b. $403

c. $413

d. $727

Case Study #2: Myers Family

Situation: The Myers family has just reported a change in income to the Midtown Housing Authority (MHA). Based on these changes, MHA is conducting an interim reexamination in accordance with PHA policy.

Family information: The Myers family consists of the following members:

Relationship	Name	Age	Disabled	Citizenship Status
Head	Joan Myers	39	N	Eligible Citizen
Daughter	Marla Myers	11	N	Eligible Citizen
Son	Scott Myers	8	N	Eligible Citizen
Daughter	Jennifer Myers	5	Y	Eligible Citizen

Joan has a savings account with a current balance of $4,500 that earns 1.2% interest annually. Joan has a non-interest bearing checking account with a 6 month average balance of $550.

Joan recently had her monthly TANF benefits reduced from $500 to $300 because she failed to comply with the requirements of the economic self-sufficiency program. She also receives $300 per month in Supplemental Security Income (SSI) for Jennifer.

Joan pays $50 per week in child care costs so that she may attend school.

Unit information:

-Size: 3 bedrooms

-Rent to owner: $1,100

PHA policy:

-MHA will use the current balance of a savings account as its cash value.

-Payment standard: $1,200

-Utility allowance: $55

-MHA minimum rent: $0

PHA-determine passbook rate: .0075

89. Total annual income (7i):

a. $7,200

b. $7,254

c. $9,663

d. $9,654

90. Final asset income (6j):

a. $0

b. $38

c. $56

d. $54

91. Total allowances (8x)

a. $1,440

b. 2,960

c. $3,440

d. $4,040

92. Total family share (12t)

a. $134

b. $147

c. $81

d. $177

93. Tenant rent to owner (12v):

a. $99

b. $100

c. $108

d. $134

94. HAP to owner (12u):

a. $987

b. $1,000

c. $1,017

d. $1,102

Case Study #3: Woodward Family

Situation: The Best Town Housing Authority (BTHA) is conducting an annual reexamination for the Woodward family.

Family information: The Woodward family consists of the following members:

Relationship	Name	Age	Disabled	Citizenship Status
Head	Jake Woodward	65	N	Eligible Citizen
Spouse	Amanda Woodward	63	N	Eligible Citizen
Grandson	Tim Woodward	24	Y	Eligible Citizen

Jake has a certificate of deposit (CD) with a balance of $5,525 that pays 2.5% interest annually. If he were to cash in his CD, he would pay a penalty of $300. Jake also has a non-interest bearing checking account with an average six month balance of $445.

Jake Woodward’s gross monthly Social Security benefit is $675. Amanda’s gross monthly Social Security benefit is $500. Tim works for the local library earning $7.25 per hour, 20 hours per week.

Jake has $65 taken out of his Social Security to pay his Medicare premium. Tim’s medical expenses cost the family $300 per month. Amanda pays $100 per month for her prescription drugs.

Unit Information:

-Size: 2 bedrooms

-Rent to owner: $825

PHA policy:

-BTHA 2 bedroom payment standard: $900

-BTHA will use the average six month balance of a checking account as its cash value.

-Utility allowance: $40

-BTHA minimum rent: $25

PHA-determined passbook rate: .0075

95. Total annual income (7i):

a. $19,456

b. $19,587

c. $21,778d. $24,950

96. Final asset income (6j):

a. $119

b. $130

c. $138

d. $145

97. Total allowances (8x):

a. $5,392

b. $5,472

c. $5,807

d. $6,460

98. Total family share (12t):

a. $320

b. $399

c. $422

d. $434

99. Tenant rent to owner (12v):

a. $359

b. $382

c. $394

d. $414

100. HAP to owner (12u):

a. $451

b. $466

c. $582

d. $599