In the event that a tenant must reimburse HUD for overpayment of assistance by entering into a repayment agreement with the property, the following policies will ensure accurate accounting measures for both the property and SHCC. Chapter 8, Paragraph 8-23 of HUD Handbook 4350.3 REV-1, Change 4 provide specific guidance in regards to tenants’ obligations to repay.
Once a tenant and the owner (the property) have entered into a Repayment Agreement, please follow the following steps to reimburse HUD:
- Submit the updated, signed certifications retroactive to when the change occurred through TRACS on the voucher following the discovery of overpayment. This should include corrections for any certifications that were submitted with the incorrect HAP amount during the time of overpayment. If the tenant refuses to sign the certifications or has moved out, you cannot submit certifications through TRACS since you will be unable to obtain the resident signature. No TRACS submissions should be taken in that event. If the resident did sign the certifications, proceed to Step 2 below.
- Get a Repayment Agreement signed and dated by the resident. Per HUD Notice H 2013-06, each Repayment Agreement must include the following:
- The total retroactive rent amount owed, the lump sum paid, if applicable, and the monthly payment amount.
- A reference to the paragraphs in the lease whereby the tenant is in non-compliance and may be subject to lease termination.
- A clause whereby the terms of the agreement will be renegotiated if the family’s income increases or decreases by $200 or more per month.
- A statement that the monthly retroactive rent amount is in addition to the household’s monthly rent payment and is payable to the Owner/Agent.
- A statement that late and missed payments constitute default of the agreement and may result in termination of tenancy and/or assistance.
- Tenant and Owner/Agent signature.
- The next voucher submission should include adjustments to take back the overpaid assistance. Chapter 8, Paragraph 8-21 of the 43503.3 states, “the owner is not required to reimburse HUD immediately for overpayments of assistance where the overpayment was caused by the tenant’s submission of incorrect information.” For this reason, submit a positive OARQ adjustment to offset the amount deducted from the voucher due to the submission of the corrected certifications. The OARQ amount should equal the total dollar amount owed by the tenant on the Repayment Agreement.
- A ledger explaining how much the tenant has repaid should be submitted monthly as the repayment occurs. If the tenant has made a payment, please add that amount to your voucher as a separate, negative OARQ. This adjustment should equal the amount on the updated repayment ledger. As the tenant continues to repay, each month there should be another negative OARQ on the voucher as well as an updated ledger submission.
Example
James Smith in unit 103 received an overpayment of subsidy that was discovered by the property. It was determined that Mr. Smith had a job that he did not report.
Mr. Smith had been receiving subsidy of $600 dollars for January 2014 through March 2014, but new certifications are created to include his employment income and that takes his subsidy payment down to $100 between January 2014 and March 2014.
Regular adjustments that should be on the paper voucher for Mr. Smith in Unit 103:
| Tenant Name | Unit Number | Prior or New Billing | Cert Date | Type | Adjustment Period | No. of Months | Monthly Rate | Requested |
|---|---|---|---|---|---|---|---|---|
| Smith, Anna | 1 | Prior | 1/1/2014 | IR | 1/1/14-3/31/2014 | 3 | $600 | $-1,800 |
| Smith, Anna | 1 | New | 1/1/2014 | IR | 1/1/14-3/31/2014 | 3 | $100 | $300 |
The total amount of these adjustments comes to $-1,500, reported on the May 2014 voucher. The property submitted a repayment agreement signed and dated by Mr. Smith. In order to recoup the $1,500 while Mr. Smith is making payments, the property requested a $1,500 OARQ on the May 2014 voucher to “wash” the balance out.
Mr. Smith made a payment on 5/1/14 in the amount of $100, and the property submitted a $-100 adjustment on the June 2014 voucher submission along with a ledger showing the remaining balance.
If you have any questions regarding overpayment of assistance, please contact your TRACS Data Analyst for more information.