Article | Unique Rural Development Provisions #3 | Wait List Order

This quarterly series discusses unique aspects of the Rural Development 3560 regulations as explained in the Asset Management Handbook, HB-2-3560. The focus is on issues that affect the everyday management of RD multifamily communities.

HB-2 6.18 C 2

Most programs require that applications be handled strictly in order or application. RD adds some additional requirements. Once an applicant has submitted a complete application and signed a form authorizing the borrower to verify employment, the date and time must be recorded on the waiting list to establish priority for selection.

Selection from the waiting list will be made according to date and time in the following order:

• Very low-income applicants (at or below 50% of area median income (AMI)
• Low-income applicants (80% AMI); and
• Moderate-income applicants (low-income limit + $5,500).

Within 10 calendar days of receipt of a complete application, the borrower must notify the applicant in writing that he has been selected for immediate occupancy, placed on a waiting list, or rejected.

The procedures used by the borrower to purge the project’s waiting list must be described in the project’s management plan.

HB-2-3560 6.21

Once a unit becomes available, the borrower must decide who is entitled to that unit based on various factors.

1. Eligible residents residing in the property who are either under- or over-housed receive priority over new applicants if relocating them into the newly vacant unit would bring the household into compliance with the occupancy policy for the property.
2. If there are no over-or under-housed existing residents, the borrower must select a new applicant from the waiting list to fill the newly vacant unit. The borrower must use the project’s occupancy policy to look at applicants on the waiting list who are eligible based on the unit size. From these, the borrower must determine, based on income levels and priorities, which applicant is entitled to the unit.

The order in which applicant households are entitled to housing depends on two factors:

1. The income level of the household; and
2. The priorities for which the household may qualify.

Note that all the households that are very low-income will be first on the list, arranged among the very low-income households based on the date they applied. Then all low-income households arranged based on the date applied. Finally, all moderate-income households, are also arranged based on the date applied.

Applicants who need the features of a unit designed for persons with disabilities have first priority over all other applicants, if the available unit has the needed feature. If more than one household needs the features, then the priority will be arranged among these households based on income level, then date applied. 

Example | For the below scenario, the order of priority would be Kessel, then Miller (the very low-income applicants, in order of the date they applied), then Schmidt (low-income), and Camp (moderate-income). Note that, although the Millers' actual income is lower than Kessel's, within the very low-income group Kessel gets first place - it is the date applied, not actual income, that determines the priority within an income group. 

Thank you for joining us! This is the final article in this series, but watch this blog for more information vital to maintaining RD compliance. 

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