c. Calculations when an annuity is considered an asset.
HUD Handbook 4350.3 REV-1 — Occupancy Requirements of Subsidized Multifamily Housing Programs · 2026 edition · updated 2026-10-05 · United States
(1) When an applicant or tenant has the option of withdrawing the balance in an annuity, the annuity will be treated like any other asset. It will be necessary to determine the cash value of the annuity in addition to determining the actual income earned.
(2) In most instances, an annuity from which payments have not yet been made is earning income on the balance in the annuity. A fixed annuity will earn income at a fixed rate in the same manner that a CD earns income. A variable annuity will earn (or lose) based on current market conditions, as with a mutual fund.
(3) The owner will need to verify with the insurance agent or other appropriate source:
The right of the holder to withdraw the balance (even if penalties are involved).
The basis on which the annuity may be expected to grow during the coming year.
The surrender or early withdrawal penalty fee.
The tax rate and the tax penalty that would apply if the family withdrew the annuity.
(4) The cash value will be the full value of the annuity, less the surrender (or withdrawal) penalty, and less any taxes and tax penalties that would be due.
(5) The actual income is the balance in the annuity times the percentage (either fixed or variable) at which the annuity is expected to grow over the coming year. (This money will be reinvested into the annuity, but it is still considered actual income.)
(6) The imputed income from the asset is calculated only after the cash value of all family assets has been determined.
HUD Occupancy Handbook Chapter 5: Determining Income & Calculating Rent
6/07
5-34
Section 1: Determining Annual Income
4350.3 REV-1
Imputed income from assets is calculated on the total cash value of all family assets.
Lump sum receipts counted as assets.
a. Commonly, when a family receives a large amount of money, a lump sum payment, the family will put the money in a checking or savings account, or will purchase stocks or bonds or a CD. Owners must count lump sum payments received by a tenant as assets. Examples of lump sum payments include the following:
(1) Inheritances;
(2) Capital gains;
(3) Lottery winnings paid in one payment;
(4) Cash from the sale of assets;
(5) Insurance settlements (including health and accident insurance, workers compensation, and personal and property losses); and
(6) Any other amounts that are received in one-time lump sum payments.
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