Article | "Go Fund Me" Accounts | Income or Asset?

Many people today benefit from crowd-funding accounts such as GoFundMe. With these accounts, friends, family, and even strangers on the internet can contribute to a person's fund. As we enter the HOTMA era, the question is raised if this personal donation funding represents income, an asset, or both for applicants and residents of affordable housing. HOTMA implementation guidance indicates that it depends on whether the fund is one-time and nonrecurring or repeated. Following are examples adapted from the Joint HOTMA Implementation Notice 2023-10 from HUD MFH that help explain the correct approach.

Examples

Year one...

Logan fundraises $5,000 online to help pay for personal expenses through GoFundMe. The manager verified with Logan that this was a one-time solicitation for donations of cash and that Logan did not intend for this to be a recurring source of income. The $5,000 is a one-time, lump-sum addition to net family assets and should not be included in the annual income calculation.

Year two...

At the next annual reexamination, the manager determined that Logan solicited donations online a second time and raised an additional $4,500. Again, Logan certified that he does not intend for this to be a recurring source of income, but, because the manager can establish a pattern, the $4,500 is not considered a lump-sum addition to net family assets and should be included in the annual income calculation.

Year three...

Logan must self-certify that he hasn’t solicited funds online and doesn’t plan to in the following year. He must also provide records from the account that documented no fundraising activity in the prior 12-month period. If these requirements are met, no income will be counted. 

Adapted from the Joint HOTMA Implementation Notice 2023-10 Example G4: Lump-Sum Additions to Net Family Assets and Example B3: Calculating Annual Income at Annual Reexamination.

When conducting certifications in the HOTMA era, applications and recertification questionnaires must establish if the applicant or tenant has a GoFundMe or other similar crowd-funding internet account. Additionally, it will need to ask if it has historically been funded for multiple rounds. If the account has been funded for one round, the balance is a lump-sum asset. If it has been funded more than once, the proceeds must be counted as income and not an asset. Although the example above reveals the repeated funding through recertification, the owner/agent will not have this luxury at the initial certification, and asking helpful questions about the fund's history and verifying the answers as necessary will be important.  

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