Example – Retirement Benefits as Lump-Sum and Periodic Payments
HUD Handbook 4350.3 REV-1 — Occupancy Requirements of Subsidized Multifamily Housing Programs · 2026 edition · updated 2026-10-05 · United States
Upon retirement, Eleanor Reilly received a lump-sum payment of $15,000. She will also receive periodic pension payments of $350 a month.
The lump-sum amount of $15,000 is generally treated as an asset. In this instance, however, Eleanor spent $5,000 of the lump sum on a trip following her retirement. The remaining $10,000 she placed in her mutual fund with other savings. The entire mutual fund will be counted as an asset.
The owner has verified that Eleanor is now not able to withdraw the balance from her pension. Therefore, the owner will count the $350 monthly pension payment as annual income and will not list the pension account as an asset.
HUD Occupancy Handbook Exhibit 5-2
6/07
4350.3 REV-1
Cash value of life insurance policies available to the individual before death (e.g., the surrender value of a whole life policy or a universal life policy). It would not include a value for term insurance, which has no cash value to the individual before death.
Personal property held as an investment. Include gems, jewelry, coin collections, or antique cars held as an investment. Personal jewelry is NOT considered an asset.
Lump-sum receipts or one-time receipts. (See paragraph 5-6 P for additional information on what is counted as a lump-sum receipt and how to treat lump-sum receipts.) These include inheritances, capital gains, one-time lottery winnings, victim's restitution, settlements on insurance claims (including health and accident insurance, worker's compensation, and personal or property losses), and any other amounts that are not intended as periodic payments.
A mortgage or deed of trust held by an applicant.
a. Payments on this type of asset are often received as one combined payment of principal and interest with the interest portion counted as income from the asset.
b. This combined figure needs to be separated into the principal and interest portions of the payment. (This can be done by referring to an amortization schedule that relates to the specific term and interest rate of the mortgage.)
c. To count the actual income for this asset, use the interest portion due, based on the amortization schedule, for the 12-month period following the certification.
d. To count the imputed income for this asset, determine the asset value as of the effective date of the certification. Since this amount will continually be reduced by the principal portion paid during the previous year, the owner will have to determine this amount at each annual recertification. See the following example:
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