How to Prorate Assistance for “Mixed” Households with Ineligible Noncitizens

Chances are, your site contains “mixed” households—that is, households that, in addition to U.S. citizens and/or eligible noncitizens, include ineligible noncitizens. Special rules apply to the assistance these mixed households can get. For example, you’ll need to prorate the assistance payments Section 8 households get by multiplying the assistance amount by a fraction based on the number of eligible members.

The rules on prorating assistance are complicated. They get more complicated still if you have a household in a Section 236 unit that also gets assistance from another federal housing program. So it’s easy to make mistakes. But if you don’t properly calculate the amount of assistance and rent for these households, you could end up having to repay HUD for excess assistance.

We’ll give you the basics on dealing with noncitizen households and then show you how to prorate assistance for mixed households for your housing program.

Who’s Eligible for Full Assistance Payments?

By law, only U.S. citizens and eligible noncitizens may benefit from federal rental assistance [HUD Handbook 4350.3, par. 3-12(A)]. HUD rules say that only households comprised entirely of U.S. citizens or certain eligible noncitizens can get full assistance payments. An eligible noncitizen is someone who, for example, is a permanent resident alien. Households that don’t include at least one U.S. citizen or eligible noncitizen can’t get any assistance at all, except for certain households that were getting assistance in 1995 [HUD Handbook 4350.3, par. 3-12(N)].

If a household includes noncitizens who either don’t claim eligible status or can’t document or verify their eligibility, you must tell the household that it can’t get full assistance payments. If none of the household members are eligible, then the household can’t get any assistance. But if the household is mixed—meaning that, in addition to U.S. citizens and/or eligible noncitizens, it includes one or more ineligible noncitizens—then it can get prorated assistance. That is, it can’t get the full amount of assistance, but it can get some [HUD Handbook 4350.3, par. 3-12(G)].

How to Determine Whether Household Has Ineligible Noncitizens

When certifying an applicant household, you must ask all members to sign a declaration stating whether they’re U.S. citizens or noncitizens eligible for housing assistance under HUD’s rules. You must also do this whenever a new member moves into an existing household. It’s important to note that the latest Change 4 Handbook updates revised the Citizenship Declaration Form.

If members claim U.S. citizenship. All you need to support this claim is a declaration signed by the member (or parent, in the case of a minor child). HUD doesn’t require any further verification, but you may request verification if you wish [HUD Handbook 4350.3, par. 3-12(I)(1)(a)].

If members claim to be eligible noncitizens. In this case, you must get documentation to support the claim. Along with a declaration that they’re eligible noncitizens, HUD requires these members show one of the Department of Homeland Security (DHS) approved documents [HUD Handbook 4350.3, par. 3-12(I)(1)(c)(3)]. And owners are required to verify with the DHS the validity of documents provided by applicants [HUD Handbook 4350.3, par. 3-12(H)]. Acceptable DHS documents include Form 1-551 (Permanent Resident Card), Form I-94 (Arrival-Departure Record annotated with the proper designation), Form I-94 (Arrival-Departure Record) with no annotation accompanied by a proper court decision or letter granting asylum or withholding deportation, a receipt issued by the DHS indicating application has been made, or other acceptable evidence as determined by the DHS [HUD Handbook 4350.3, Figure 3-4]. And they must also sign a verification consent form giving you permission to verify the claim with DHS.

But sometimes an existing household will report that a new member has moved into the unit. If you determine that the new member is an ineligible noncitizen, you should tell the household that it will have its assistance prorated. Some households that can get prorated assistance may choose not to accept it, and instead opt for a temporary delay in assistance termination to find suitable housing.

HOW TO PRORATE ASSISTANCE FOR MIXED HOUSEHOLDS

Mixed households that don’t qualify for full assistance can get prorated assistance based on the number of eligible and ineligible members of the household. This means that the amount of assistance they get will be reduced by a fraction that you determine, based on either the number of ineligible people or the number of eligible people in the household. How you do this depends on the housing program under which the household gets assistance.

Section 8 Assistance Program

To prorate assistance for these households, take the following steps:

1. Determine the fraction by dividing the number of eligible members by the total number of members.
2. Multiply the full assistance payment by this fraction [HUD Handbook 4350.3, par. 3-12(P)(1)].

Example: A three-person household at a Section 8 site consists of one eligible noncitizen and two ineligible noncitizens. If all members were U.S. citizens or eligible noncitizens, the household would be entitled to $300 a month in housing assistance. Here’s what to do:

1. Determine the fraction by dividing the number of eligible members (1) by the total number of members (3). You get 1/3.
2. To get the prorated amount, multiply the full assistance payment ($300) by this fraction. The prorated amount is $100 (1/3 × $300). Therefore, the tenant rent increase would be $200 (full assistance less prorated assistance payment).

This method also applies to households that get assistance payments under the Rent Supplement program [HUD Handbook 4350.3, par. 3-12(P)(2)].

Section 236 Program with No RAP, Rent Supplement, or Section 8 Assistance

These households don’t get assistance payments. So instead of prorating the assistance payments, you adjust or “prorate” the rent the household must pay. This prorated rent is not proportionately reduced, as the term prorate seems to imply. Instead, it’s higher than the rent the household would pay if all members were U.S. citizens or eligible noncitizens (at Section 236 sites, that’s the greater of the HUD-approved basic rent, or 30 percent of monthly adjusted income capped at the lower of the HUD-approved market rent or fair market rent for your area).

To prorate the rent for households at Section 236 sites, take the following steps:

1. Determine the fraction by dividing the number of ineligible members by the total number of members.
2. Multiply this fraction by the difference between the market rent and the basic rent.
3. Add that amount to the rent the household would be entitled to pay if all members were U.S. citizens or eligible noncitizens [HUD Handbook 4350.3, par. 3-12(P)(3)].

Example: A four-person household at a Section 236 site consists of three eligible noncitizens and one ineligible noncitizen. Based on the household’s monthly adjusted income if all members were U.S. citizens or eligible noncitizens, the household would be entitled to pay the basic rent for the unit of $300. The Section 236 market rent for the unit is $500. Here’s what to do:

1. Determine the fraction by dividing the number of ineligible members (1) by the total number of members (4). You get 1/4.
2.  Multiply this fraction by $200, which is the difference between the market rent ($500) and the basic rent ($300). You get $50 (1/4 × $200).
3.  Add this to the rent the household would be entitled to pay if all members were U.S. citizens or eligible noncitizens ($300). So the prorated rent is $350 ($300 + $50).

Section 236 Program with RAP, Rent Supplement, or Section 8 Assistance

These households pay Section 236 rent, and get assistance payments that lower the amount of that rent they must pay. So if these households include eligible noncitizens, you’ll need to prorate the Section 236 rent and prorate the assistance payment they’ll get to reduce the assistance amount and increase the partially prorated rent to get a final figure for the prorated rent. Take these steps to calculate the prorated rent:

1. Determine the fraction by dividing the number of ineligible members by the total number of members.
2. Multiply this fraction by the difference between the market rent and basic rent.
3. Add this amount to the amount the household would pay after taking all federal rent assistance into account if all members were U.S. citizens or eligible noncitizens.

Take these steps to calculate how the prorated assistance affects the partially prorated rent:

1. Determine the fraction by dividing the number of ineligible members by the total number of members.
2. Multiply the full assistance payment by this fraction.
3. Add this amount to the partially prorated rent [HUD Handbook 4350.3, par. 3-12(P)(4)].

Example: Assume you have a household with the same composition and basic and market rents as in the previous example. But the household would be entitled to an assistance payment of $100 to help pay the basic rent of $300 if all members were U.S. citizens or eligible noncitizens. So the household would pay a rent of $200 ($300 basic rent - $100 assistance payment).

Calculate the prorated rent:

1. Determine the fraction by dividing the number of ineligible members (1) by the total number of members (4). You get 1/4.
2. Multiply this fraction by $200 (the difference between the market rent of $500 and the basic rent of $300). You get $50 (1/4 × $200).
3. Add the $50 to the amount the household would pay after all federal rent assistance if all members were U.S. citizens or eligible noncitizens ($200). So the partially prorated rent is $250 ($200 + $50).

Calculate how the prorated assistance affects the rent.

1. Determine the ineligibility fraction by dividing the number of ineligible members (1) by the total number of members (4). You get 1/4.
2. Multiply the full assistance payment ($100) by 1/4 to get $25 (1/4 × $100).
3. To get the increased amount of rent the household should pay based on the prorated assistance, add the $25 decrease in assistance to the $250 partially prorated rent. So the household will pay $275 ($250 + $25).