The following example illustrates the two options. Tenants may use either option.…
HUD Handbook 4350.3 REV-1 — Occupancy Requirements of Subsidized Multifamily Housing Programs · 2026 edition · updated 2026-10-05 · United States
Maria and Gustav Crumpler had a total of $2,932 in medical expenses last year (Year 1). Of this amount, $932 covered Gustav’s gall bladder surgery; $2,000 was for routine costs that are expected to re-occur in the coming year. The entire amount may be included in the Crumpler’s medical costs for the coming year (Year 2) despite the fact that the gall bladder surgery is a past event that is not likely to re-occur.
If, during the coming year (Year 2), the Crumplers experience additional one-time medical costs not anticipated at the annual recertification, they may request an interim recertification or wait for their next annual recertification (during Year 3) and ask for the unanticipated expenses to be included in the medical expense calculation for the following year.
The owner may wish to explain to residents that including past one-time medical expenses in an annual recertification rather than in an interim recertification will result in a rent reduction for a larger number of months.
For example, let us assume Maria has unanticipated dental surgery during Year 2 at a cost of $3,550 six months after the annual recertification. The Crumpler’s current TTP is $560; their annual income is $25,000.
| Annual income Less elderly household deduction Less allowable medical deduction ($2,932 less 3% of $25,000) Adjusted annual income Adjusted monthly income TTP |
$25,000 - $400 -$2,182 $22,418 $1,868 $560 |
|---|
If the Crumplers request an interim recertification, the $3,550 additional cost will lower their rent for 6 months; if they wait for their annual recertification, the cost of the dental surgery will affect their rent for 12 months.
| Annual income Less elderly household deduction Less allowable medical deduction ($6,482 less 3% of $25,000) Adjusted annual income Adjusted monthly income TTP |
$25,000 - $400 -$5,732 $18,868 $1,572 $472 |
|---|
At the Crumplers’ current annual income, the large dental bill reduces rent by $88.
OPTION #1: If the Year 2 rent is adjusted through an interim recertification, the Crumplers will save 6 months times $88 or $528.
OPTION #2: If the Crumplers wait until their annual recertification, the large bill will affect their rent for the 12 months of Year 3, and they will save twice as much, or $1,056.
HUD Occupancy Handbook Chapter 5: Determining Income & Calculating Rent
6/07
5-48
Section 2: Determining Adjusted Income
4350.3 REV-1
- When a family is making regular payments over time on a bill for a past one-time medical expense, those payments are included in anticipated medical expenses. However, if a family has received a deduction for the full amount of a medical bill it is paying over time, the family cannot continue to count that bill even if the bill has not yet been paid.
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