3. Financial hardship exemptions.

• a. Owners must waive the minimum rent for any family unable to pay due to a long-term financial hardship, including the following:

  • The family has lost federal, state, or local government assistance or is waiting for an eligibility determination.

  • The family would be evicted if the minimum rent requirement was imposed.

  • The family income has decreased due to a change in circumstances, including but not limited to loss of employment.
  • A death in the family has occurred.
  • Other applicable situations, as determined by HUD, have occurred.

• b. Implementing an exemption request. When a tenant requests a financial hardship exemption, the owner must waive the minimum $25 rent charge beginning the month immediately following the tenant’s request and implement the TTP calculated at the higher of 30% of adjusted monthly income or 10% of gross monthly income (or the welfare rent). The TTP will not drop to zero unless those calculations all result in zero.

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• (1) The owner may request reasonable documentation of the hardship in order to determine whether there is a hardship and whether it is temporary or long term in nature. The owner should make a determination within one week of receiving the documentation.

• (2) If the owner determines there is no hardship as covered by the statute, the owner must immediately reinstate the minimum rent requirements. The tenant is responsible for paying any minimum rent that was not paid from the date rent was suspended. The owner may not evict the tenant for nonpayment of rent during the time in which the owner was making the determination. The owner and tenant should reach a reasonable repayment agreement for any back payment of rent.

• (3) If the owner determines that the hardship is temporary, the owner may not impose the minimum rent requirement until 90 days after the date of the suspension. At the end of the 90-day period, the tenant is responsible for paying the minimum rent, retroactive to the initial date of the suspension. The owner may not evict the tenant for nonpayment of rent during the time in which the owner was making the determination or during the 90-day suspension period. The owner and tenant should reach a reasonable repayment agreement for any back payment of rent.

HUD Occupancy Handbook Chapter 5: Determining Income & Calculating Rent

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