News | RD: "Wait before doing recerts based on social security COLAs"

NOTE: This article was published before RD published the guidance promised below. See HERE for the update.

As announced in this blog earlier, the Social Security Administration announced the highest Cost Of Living Adjustment (COLA) in several decades, to take effect in 2023. This is estimated to result in an average increase of over $140 for many households in the US. 

Because HUD's threshold requiring interim recertification of income and recalculation of rent is $200, this increase is not likely to trigger a lot of interim recertification, and HUD has rules in place to deal with the timing of social security COLAs (as discussed in the COLA announcement linked above).

Rural Development, however, has a $100 monthly increase threshold that requires recertification, which is less than the average COLA will provide most households.

WAIT before you process  RD certs based on COLA increases as usual! Please read on...

To address issues with the above, the Deputy Administrator for Multifamily Housing for Rural Development, provided the following notification regarding the 2023 interim recertification requirements for RD tenants.

On October 13, 2022, the Social Security Administration announced there will be an 8.7% increase in Social Security and Supplemental Security Income (SSI) benefits in 2023. The 8.7% cost-of-living adjustment (COLA) will begin with benefits payable in January 2023. According to the Social Security Administration, Social Security benefits will increase by an average of more than $140 per month starting in January. This increase is due in part to the current inflationary pressures on the economy and a demanding labor market that has dramatically increased salaries, also seen in HUD’s average increase of 11-12% in Area Median Income this year.

 
Current RD regulation states: “7 CFR 3560.152(e) Tenant certification and verification indicates tenant households must be recertified and must execute a tenant certification at least annually or whenever a change in household income of $100 or more per month occurs.” As this would mean interim recerts for most Social Security recipients, the Agency is developing a solution to align with other federal programs and prevent unnecessary work for management agents and tenants. Please wait for further information before processing and submitting interim recertifications for January 2023 and beyond. This does not apply to annual renewal certifications.

We will notify our stakeholders as soon as the Agency has updated guidance to provide. If you have questions, please feel free to reach out to the Servicing Specialist assigned to your property.

Sincerely,
Nancie-Ann Bodell
Deputy Administrator for Multifamily Housing

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October 27, 2022
Multifamily Stakeholders,

As RD issues further guidance, we will pass it along to our readers!   

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