News | RD: "The income recertification threshold now $200"

As reported in our Blog HERE, RD had instructed owners of RD properties to pause any recertification based on social security COLA increases, pending further guidance. Now, in an Unnumbered Letter, RD has informed RD staff of a temporary exception to some of the tenant recertification requirements in 7 CFR 3560.152(e) and requires notification of the exception to borrowers, project managers, and tenants.

Background | As announced HERE on our Blog, 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. 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 current inflation 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). The RD regulation at 7 CFR 3560.152(e) requires that RD tenant households must be recertified and must execute a tenant certification form at least annually or whenever a change in household income of $100 or more per month occurs.

The Temporary Exception | The 8.7% cost-of-living adjustment (COLA) will begin with benefits payable in January 2023. As this would require recertifications for most Social Security recipients, the Agency is temporarily waiving the recertification requirement for tenants whose household income,  regardless of income type, has increased by more than $100 but less than $200. Accordingly, during the Exception period, tenants will not be required to execute a tenant certification form unless their household income changes by $200 or more per month. This temporary change also aligns with HUD regulatory requirements. This is a temporary waiver that will be in place through calendar year 2023, expiring on December 31, 2023.

During the period of the waiver, tenant households must be recertified annually and whenever a change in household income of $200 or more per month occurs. The requirement that borrowers must recertify for changes of $50 per month, if the tenant requests that such change be made, is still in effect.

This exception does not apply to, or change the requirements for, annual renewal certifications.

What's Next? | RD Field staff and owners are instructed to take the following steps:

1. A copy of an upcoming Federal Register notice must be provided to all property owners and management agents in each area.

2. Owners and management agents must post the notices in a conspicuous location at their property(s) as well as provide a copy of the notices to all tenants.

Both owner/agents and residents of RD properties should welcome this news, as it will reduce the burden of many certifications. 

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