TRACS 202D GENERAL CHANGES AND VOUCHER CHANGES WORKBOOK

TRACS 202D GENERAL CHANGES AND VOUCHER CHANGES WORKBOOK A Review of HUD s TRACS System Update ROSS BUSINESS DEVELOPMENT, INC. www.rbdnow.com www.rbdnow.com 0 info@rbdnow.com

All rights reserved. Not for duplication. All other brands and product names are trademarks or registered trademarks of their respective owners. Printed in the United States of America Ross Business Development, Inc. 3134 Shumard Way Marietta, GA 30064 770-424-1806 www.rbdnow.com Disclaimer The material contained in this document is not comprehensive of the continually emerging issues surrounding policies in The Multifamily Housing industry. In addition, the handbook guidance is derived from The HUD Handbook 4350.3 Rev 1 Change 4 released in August 2013 and subsequent notices, the TRACS MAT Guide and the EIV Guides and Notices. The student should understand that these training materials are not designed for, nor should be relied upon, as a source of legal guidance or as a final authority with respect to any particular circumstance. Ross Business Development makes no warranty of merchantability or fitness for a particular purpose or any other warranty of any type with regard to these materials. Owners and management should seek competent legal advice in developing and carrying out resident selection and fair housing policies and procedures. While we have been diligent in our efforts to provide comprehensive and accurate regulatory training, Ross Business Development shall not be responsible for errors or inaccuracies. www.rbdnow.com 1 info@rbdnow.com

TRACS 202D INTRODUCTION Since 2003, HUD has introduced many changes via new Handbook releases and new Housing Notices and Final Rules. The most recent major changes include the HUD implemented a new Final Rule changing the Social Security Number disclosure requirements and mandating the use of EIV to identify errors. And, in August 2013, HUD introduced additional changes in HH 4350.3 R1, Change 4. TRACS has not been updated since 2009 and major changes to this database are required. TRACS resident certification process modifications include new, modified and activated features that allow TRACS to verify certification transactions in a manner more consistent with the HUD 4350.3 REV-1. The TRACS 202D revisions also modify requirements for transmission of vouchers from sites to CAs, eliminating the need for sending paper vouchers and requiring CAs to transmit full approved electronic vouchers to sites for reconciliation purposes. In addition, a new History Baseline format is implemented to facilitate the exchange of data between and among sites and CAs. This class provides detailed discussion of the 202D Changes. SCHEDULED IMPLEMENTATION HUD and the Industry TRACS Working Group have been working diligently to finalize specification documents for the next TRACS release 202D. This document is in the finalfinal stage of edit. Projected release dates were published as follows. Vendor testing began in April 2013. Contract administrators and software vendors will be required to process TRACS 202D files once OMB approves the new HUD Forms. TRACS will accept both TRACS 202C and TRACS 202D files for six months from the implementation date. However, things have changed again. The rollout date has changed and we don t really know the start date. OMB has not approved the new 50059 and 50059A. Until OMB approves, HUD cannot move forward with public release (although TRACS was updated the first week in September 2013). Once OMB approves the form, HUD will make an announcement to the industry saying that the 202D rollout will start the first of the following month that is no less than 30 days from the date of the announcement. The industry will have a six month implementation period from the start date. For example: If OMB approves on April 15, the rollout will be June 1. The implementation deadline will be December 1 (January vouchers) www.rbdnow.com 2 info@rbdnow.com

TRACS 202D Overview of General Changes Some changes to TRACS 202D are documentation edits clarifying HUD s guidance regarding the certification process including how assistance is calculated, how certifications are submitted, when certifications must be signed and changes to Notice requirements. This lesson provides in-depth discussion of those changes. NEW SUBSIDY TYPES There is one new subsidy type (811 PRA Demo) and two new Section 8 sub-types (RAD and SPRAC) that are in various stages of implementation. Key information relative to rent calculation rules and eligibility will be included in The TRACS 202D Specification Document Appendix K as it becomes available. Future MAT Guide updates will incorporate this information in the applicable portions of chapters 4, 5 and 6. K.2 811 PRA Demo (811 Project Rental Assistance Demo) The 811 PRA Demo subsidy type has been assigned a value of 6 in the Subsidy Type field in the TENHR and VCHHR records. K.3. RAD (Rental Assistance Demonstration) RAD is a new Section 8 sub-type. K.4. SPRAC (Senior PRAC) SPRAC is a new Section 8 sub-type. OWNER AND PARENT COMPANY DUNS NUMBERS AND TINS ADDED TO HEADER RECORDS Reporting of DUNS numbers is now mandatory for owners with project based Section 8, PRAC, Rent Supplement and RAP contracts. HUD instituted a requirement for owners to obtain a DUNS number and transmit it to TRACS. In addition, fields to hold the Taxpayer Identification Number (TIN) of the project owner and parent company have been added to the header records. The MAT Header records for tenant and voucher submissions have been modified to hold these numbers. Provision has been made for both an owner number and a parent company number. INFORMATION ABOUT SAM In April 2012, HUD released HSG Notice 12-06 Requiring Owners with Project-Based Section 8 Rental Assistance Contracts or Section 202 or 811 Project Rental Assistance Contracts (PRAC) or Rental Assistance Payments (RAP) or Rent Supplement Contracts to Obtain Dun and Bradstreet Number System (DUNS) numbers and to register in the Central Contractor Registration (CCR). On Wednesday, November 21, 2012, HUD Released RHIIP ListServ #285 - System for Award Management (SAM) now LIVE! This ListServ provides information about the switch from CCR to the System for Award Management (SAM). SAM went live on July 29, 2012. If you had an active record in CCR, you should have an active record in SAM. You do not need to do anything in SAM at this time unless a change in your business circumstances requires updates to your Entity record(s). www.rbdnow.com 3 info@rbndow.com

SAM will send notifications to the registered user via email 60, 30, and 15 days prior to expiration. To update or renew your Entity records(s) in SAM you will need to create a SAM User Account and link it to your migrated Entity records. If you need to update/renew/change your record, start by going to www.sam.gov, click on Create an Account, and follow the prompts to create an individual account. You may find answers to other question on the SAM web site at https://www.fsd.gov/app/sam/session/l3rpbwuvmtm1mzc3mdi4oc9zawqvytg2zem0y2w%3d. This site also includes a Frequently Asked Questions document. If you have any problems with registration or updates, contact the Federal Service Desk (FSD) www.fsd.gov. It is recommended you submit a ticket online rather than by phone. FSD Hours are 8am - 8pm (Eastern Time). US Calls: 866-606-8220, International Calls: 334-206- 7828 DSN: 866-606-8220 If you don't have an account with FSD already, you'll need to create one on the Your Account page https://www.fsd.gov/app/utils/login_form/redirect/account%252foverview in order to submit a ticket. The FSD Account is not the same as the SAM account. Please note that registration and use of SAM is completely free of charge. HOUSEHOLDS OVER INCOME AT MOVE-IN If investigation determines that a household was over income at MI, the household is allowed to remain in the unit and subsidy is recalculated. If recalculation of the MI certification, in light of newer income determinations, results in the household being at $0 subsidy, the household should be terminated effective on the MI date and using the new NS termination code. Should the household s income subsequently drop such that they are eligible for subsidy, an IC should be created. Keep in mind that, because this household was not eligible at move-in, the household s income would have to drop to or below the current income limit requirement in effect at the time of certification. SECURITY DEPOSITS When a MI or IC (that originally established a security deposit) is corrected, the security deposit is to be recalculated. Both the owner/agent and the resident(s) should initial the change on the lease. www.rbdnow.com 4 info@rbndow.com

INCLUDING UNIT TRANSFERS WITH A FULL CERTIFICATION (AR, IR, IC) The new MAT guide includes new guidance regarding unit transfers and ARs and unit transfers and interim certifications. These changes require user action and it is imperative that owner/agents understand the old and the new rules under TRACS 202D. A new lease is required and must be signed by all adult household members. Owner/agents have the choice of whether they want to transfer the current security deposit or if they want to charge a new deposit. The new rent MUST take effect when the resident takes possession of the new unit. See HH 4350.3 R1, C4, Paragraph 7-15. If the rent changes (up or down) as a result of the change in household composition or household income, the rent change will be effective on the same date as the unit transfer. In the case of a unit transfer, both the change in rent and change in the assistance payment are effective on the day the resident actually occupies the new unit. UNIT TRANSFER AND ANNUAL CERTIFICATION COMBINATIONS First of all, annual certifications (AR) are always effective on the first. If an AR and UT are combined, the UT must have occurred on the first of the month. UNIT TRANSFER AND INTERIM CERTIFICATION COMBINATIONS Normally, changes in household composition and /or household income drive interim certifications (IRs) and the effective date of those interim certifications is specified in HH 4350.3 R1, C4, Paragraph 7-13. When the family has a change in composition or income, it may be appropriate to complete an IR/UT. If the change in household composition and/or household income occurred on or before the unit transfer date, an IR must be created with the unit transfer flag set to Yes. This means that a mid-month IR/UT is required when there is a change in household income and/or household composition and the transfer date is other than the first of the month. This policy is based on HH 4350.3 R1, C4, Paragraph 7-15.C. Assuming that the resident reported in a timely manner, increases in rent begin the first of the month after a 30-day notice is provided. Decreases in rent begin the first of the month following the date of the action that caused the interim. The exception would be when an action that would normally drive an interim certification occurs on or before the date of a unit transfer and before the anticipated effective date of the IR. These changes are reported on the full certification UT so that the new lease includes current household circumstances. There are several scenarios to consider. www.rbdnow.com 5 info@rbndow.com

Scenario 1 UT occurs On the Same Date as Change in Income/Adjusted Income/Household Composition If the change of household composition or household income happens on the UT date, include the new household composition and financial information on the IR. In this case, the IR IS NOT effective on the first of a month. Do not submit a UT followed by an IR. For example: Ray (HOH) and Rachel (spouse) live in unit 1-A Rachel s 12 year old son Ryan is moving in with them Unit 2-B becomes available Ray and Rachel move in to unit 2-B on June 14 and Ryan moves in the same day (decreasing rent) TRACS 202C A UT is completed UT Effective June 14 An IR adding Ryan is created IR reducing rent effective July 1 TRACS 202D An IR adding Ryan is created The unit transfer flag is set to Yes Enter New Unit Number 2B The IR reflecting the decrease in rent and the unit transfer is effective on June 14 Scenario 2 UT occurs After Change in Income/Adjusted Income/Household Composition If the change of household composition/household income occurs prior to the UT date there are two cases that involve the IR: The change in household income/household composition occurred before the UT date. If traditional IR rules applied, the IR would be effective after the UT date. However, with 202.D, if the UT occurs after the change but before the traditional IR effective date, a mid-month IR is created with the UT flag set to yes. Any changes to rent are effective the same date at the UT. For example: Mary (HOH), Mark (co-hoh) and Marvin (dependent child) live in unit 100-A Mary gets a new job on October 5 and her income increases by $15000 per year Mary, Mark and Marvin transfer to unit 315-B on October 30 TRACS 202C TRACS 202D IR adding Mary s income is created An IR adding Mary s income is created Effective date December 1 The unit transfer flag is set to Yes Enter New Unit Number 315-B UT created Effective Date October 30 Effective Date October 30 Rent increase effective same day as unit transfer October 30 IR correction is generated changing the unit number to 315-B New rent effective December 1 instead of the day the resident transferred (October 30) www.rbdnow.com 6 info@rbndow.com

HUD PROJECTS WITH TAX CREDITS Tax credit rules for unit transfers depend on whether the transfer is within a building or between buildings. Building-to-building transfers may be handled differently depending on whether the two buildings are part of a tax credit multiple building project. In some cases tax credit rules require a requalification event instead of a UT. This is often implemented as a MO/MI on the tax credit side. HUD does NOT want to see a MO/MI in those situations. HUD rules prevail for HUD transactions and a UT must always be implemented as a UT. From a HUD point of view, the household is not re-qualifying, they are just changing units. GROSS RENT CHANGES GROSS RENT CHANGES VOUCHER REPORTED ON DATE It is good practice to submit gross rent changes on or after the effective date of the change. To enforce this, the entire gross rent change submission process was radically changed with the release of TRACS version 202C in 2009. In TRACS 202C, owner/agents could not enter GR transactions before the effective date, and these GRC certifications could not be submitted or included on an earlier voucher. For example: GRC effective date is 7/1 OA receives approval on 5/28 Most software would not allow the transaction to be entered prior to 7/1 This means the transaction was initially submitted on the August voucher creating the need for adjustments for all units when rent or utility allowance was adjusted In TRACS 202D, GRC transactions can be entered and submitted in advance of the effective date. Using the same scenario: GRC effective date is 7/1 OA receives approval on 5/28 Most software will allow the transaction to be entered on 5/28 or later This means the transaction can be submitted at the beginning of June when the July voucher is created This eliminates most of the adjustments INCLUDING GROSS RENT CHANGES WITH A FULL CERTIFICATION (MI, AR, IR, IC) When a gross rent change or utility allowance change is effective on the same date as a full certification (MI, IC, AR, IR), then the change is included on the full certification. The 50059-A is used when a partial certification is sent alone. If the partial certification has the same effective date as a full certification, then owner/agents will use HUD Form 50059. For example: Mr. Jones AR is effective May 1, Mr. Jones AR is sent on HUD Form 50059 GRC is sent on HUD Form 50059-A. Mrs. Stevens AR is effective on June 1, Only HUD Form 50059 is sent and the MAT 10 (full certification) will include the rent change www.rbdnow.com 7 info@rbndow.com

SIGNATURES WHEN A GROSS RENT CHANGE CORRECTS A PREVIOUSLY TRANSMITTED FULL CERTIFICATION If a certification has already been completed, signed by the owner/agent and all adult household members, and transmitted to a Contract Administrator and/or HUD, the certification must be corrected. When a 50059 MAT 10 is corrected ONLY because a Gross Rent Change transaction changes the operating or contract rent and when there is NO CHANGE in TTP, Tenant Rent or UA, there is no tenant signature required. You will use the Extenuating Circumstances Code 8 No signature required. For example: Mr. Kelly s Annual Certification (AR) is effective 10/1/2014 The certification is completed on 9/1/2014 The owner/agent sends the AR on 9/5/2014 with the 10/1 voucher On 9/30 the owner/agent receives a new approved rent schedule increasing rent for all the units. The effective date of the rent change (GR) is 10/1/2014 The owner/agent applies the GR on 9/30/2014 The software will not create a 50059-A GR for Mr. Kelly; rather, the software will correct the AR and incorporate the new rent. This creates a corrected 50059 In this case, when the only change is the rent change, the owner/agent must sign the certification Mr. Kelly is not required to sign the certification The owner/agent must provide Mr. Kelly with a copy of the 50059 When a 50059 MAT 10 is corrected ONLY because a Gross Rent Change transaction changes the utility allowance and when there is AN INCREASE OR DECREASE in Tenant Rent, tenant signatures must be obtained within 60 days from the date the gross rent change is implemented by the owner, as evidenced by the owner s submission of the voucher whereby the owner begins vouchering for assistance based on the new rents. You will use the Extenuating Circumstances Code 9 No signature required for 60 days. RE-DEFINING ERRORS As part of the 202D project, HUD, with the help of the 202D working group, is editing the error messages. These edits include: Eliminating unnecessary and outdated errors Eliminating confirmation errors Re-wording errors Re-categorizing errors Adding 202D errors These new errors will be listed in the MAT Guide. www.rbdnow.com 8 info@rbndow.com

TRACS 202D GENERAL CHANGES SUMMARY This lesson incorporated some existing rules and some changes to the HUD requirements for TRACS submissions. Be sure to remember that, since the release of Change 4, all HUD rules regarding 50059 transmissions are incorporated in to the current MAT Guide. The current 202C MAT Guide can be found on the HUD/TRACS web site at http://www.hud.gov/offices/hsg/mfh/trx/trxmatg.cfm. The TRACS 202 D MAT Guide (Draft) is part of the TRACS 202 D Specification documents which can also be found on the HUD/TRACS web site at http://portal.hud.gov/hudportal/hud?src=/program_offices/housing/mfh/trx/trxsum. www.rbdnow.com 9 info@rbndow.com

TRACS 202D Voucher & Voucher Process Changes Voucher functionality will be greatly enhanced with the release of TRACS 202D. Many industry requests have been addressed with the design of this release. Not only has the HUD Form 52670 been enhanced, but the process for submitting vouchers has been improved as well. This lesson reviews major changes to the voucher and the voucher process. VOUCHER DETAIL AND ADJUSTMENTS ADDED TO THE ELECTRONIC TRANSMISSION (MAT 30) In 202D, the full HAP voucher will be transmitted to a contract administrator from an owner/agent eliminating the need for sending paper or emailed copies of printed vouchers. The owner/agent must maintain the original signed voucher for at least five years. For the contract administrator, the advantage of the full electronic voucher is that it permits an automated compare between the owner/agent voucher and the one generated by contract administrator software. This comparison should be faster, more accurate and more complete than the current manual compare. The contract administrator is required to send an electronic version of the final approved voucher to the owner/agent for use in reconciliation activities at the property. In addition, the contract administrator may optionally send a preliminary voucher to the owner/agent if the contract administrator allows changes to the current voucher before closing it out. During an initial transition period, HUD acknowledges that the contract administrator may need a paper voucher. In these cases, both paper vouchers and full electronic ones may be required by the contract administrator. After the transition, only the electronic records will be required. At any point, during the transition a contract administrator will be free to eliminate the paper requirement for files from specific site software if it is comfortable that there are no issues with that software s implementation. TRACS & ELECTRONIC VOUCHER DETAIL (NON-SECTION 8) The current proposal does have TRACS receiving, processing and storing the new voucher detail and adjustment records. However, TRACS will not return an approved voucher to either the owner/agent or contract administrator. TOTALING COLUMN ADDED TO HUD-52670-A PART 3 ADJUSTMENTS TO SCHEDULE OF TENANT ASSISTANCE PAYMENTS DUE This form now includes a new Item 11a which provides the sum of the values in the Amount field for any given household/unit combination. See the Appendix for an illustration. www.rbdnow.com 10 info@rbndow.com

MISCELLANEOUS ACCOUNTING REQUESTS After extensive analysis, it has been determined that there is need for more detail when entering or reviewing miscellaneous accounting requests. In response to that discovery, HUD has added new Miscellaneous Accounting Request Codes. Old Codes SERV = Service Coordinators DRUG = Drug Related Expenses FORQ = Field Office initiated accounting adjustment OARQ = Owner/Agent initiated accounting adjustment Additional New Codes RGRC = Adjustment for a Retroactive GRC that includes a UA decrease that drives a requirement to provide a 30-day notice to affected residents. This code can only be used for 75 days from the approval date of the schedule UUTL = Unclaimed Utility Check RSPC = Recouped Special Claims Funds CEAD = Contract Expiration Adjustment EIVP = EIV Penalty. 5% of the voucher is subtracted to cover EIV noncompliance when applicable. Important Note: The amount of the EIV penalty is to be calculated based on the total voucher amount before calculating the penalty and before applying any RESR transaction that may be needed. RESR = Residual Receipts. Used to offset part of the voucher billing. Awaiting instructions from HUD as to when and how to calculate the amount. INTA= Interest adjustment submitted by PBCA Note: No matter what the Misc. Request Type, the amount field can be positive or negative. This is to allow for reversals or corrections of previously submitted requests. For example, EIVP is used both to assess the penalty and to recover the funds when back in compliance. RETROACTIVE GROSS RENT CHANGES UTILITY ALLOWANCE REDUCTIONS RETROACTIVE RENT INCREASE There are some cases where an annual rent review results in a reduction in the utility allowance amount. This means that the resident rent payment will increase. In accordance with the lease, the resident must be provided with a 30-day notice. Usually, this type of transaction is completed well before the effective date and required notices are provided in compliance with lease requirements. However, in rare cases, formal approval may not be obtained in time for the owner/agent to provide such notice. In these cases, assuming complete owner/agent compliance with HUD s notice requirements, the owner/agent will remain whole until the notice period is complete. Retroactive adjustments to assistance, caused by the UA decrease, can be reversed using the RGRC Miscellaneous Accounting Request Code. www.rbdnow.com 11 info@rbndow.com

UTILITY REIMBURSEMENTS HUD rules in the 4350.3, 9-13.B says If the utility reimbursement is not disbursed to the resident or utility provider (e.g., resident never picks up the check, resident never cashes the check or resident moves-out), the funds must be returned to HUD. In TRACS 202D, this will be accomplished by creating a Miscellaneous Accounting Request and using the new UUTL code. NEGATIVE RENTERS AND MO ADJUSTMENTS It is also important to remember that a mid-month move-out adjustment for a unit with negative rent will automatically return some of the utility reimbursement to HUD. If this is not what is called for under the rules, the owner/agent may want to recapture the proper amount with a miscellaneous accounting request on the voucher. RSPC = RECOUPED SPECIAL CLAIMS FUNDS HUD has added a Miscellaneous Accounting Request Code to allow owner/agents to return Special Claims payments to HUD. When a resident does not pay for rent or damages, owner/agents can apply for a Special Claim to help recoup the loss. Part of the process is for the OA to attempt to pay the amount through a collection agency. In some cases, the resident will return to pay the owner/agent after HUD has paid the Special Claim request. When this happens, use the new RSPC code to return some or all of the money to HUD. RESIDUAL RECEIPTS AND THE RESR CODE With the implementation of TRACS version 202D, the RESR Residual Receipts will be used to offset part of the voucher billing. Prior to 202D, owner/agents used the FORQ Miscellaneous Accounting Request Code to perform this task. Implementation of 202D replaces that instruction. Owner/Agents will now use RESR. See Notice H 2012-14 for instructions pertaining to the use of residual receipts in this context. NEW HUD-52670-A PART 6 - REPAYMENT AGREEMENTS FOR SCHEDULE OF TENANT ASSISTANCE PAYMENTS DUE When a resident or an owner/agent receives too much housing assistance, the overpayment must be returned to HUD. HUD s guidance is provided in HH 4350.3 R1, C4 Paragraph 8-20. It is common to see such assistance returned to HUD via repayment agreements. To allow for improved tracking and reporting, these repayment agreements will no longer be reported as OARQ Miscellaneous Accounting Request transactions. Instead, they will be accounted for with a new HUD-52670-A Part 6 - Repayment Agreements for Schedule of Tenant Assistance Payments Due. www.rbdnow.com 12 info@rbndow.com

For TRACS 202D, all site software vendors are required to add or modify current repayment functionality. All repayment agreements must be entered in to the site software. The site software will assign a repayment agreement number. Site software will create a recurring entry for the monthly payment amount. AS payments are made, they will be entered in the software and appropriate voucher entries will be included on the monthly transmission. It is important to note that the method described in this section pertains only to return of assistance-paid-in-error. If a resident enters in to a repayment agreement to make payments for other charges that do not affect the assistance payment - such as damages to the unit or to the property - those payments are handled in the traditional manner. There are three types of repayment agreements: 1. Tenant 2. Owner 3. None For additional information see HH 4350.3 R1, C4, Paragraph 8-20 and the current HUD HSG EIV Notice. IMPLEMENTING 202D-EXISTING REPAYMENT AGREEMENTS It will take a little bit of time to prepare to transition from the current repayment agreement process described in HH 4350.3 to the repayment process defined in TRACS 202D. You will need to understand how to report current repayment agreements and payments on the new 52670 Part 6. Let s look at an example of the values included on Part 6 when reporting information for a repayment agreement that was executed before TRACS 202D. For our example: Kylie Kraft originally signed a repayment agreement for $1000.00 six months ago. The current balance for the repayment agreement is $700.00 Her monthly payment is $50.00 per month The owner/agent s total expenses to date is $120.00 They have been reducing that amount by $10.00 per month (20% of the $50.00 payment) You have received the next $50.00 payment from Kylie NEW REPAYMENT AGREEMENTS New repayments take a little more explanation. So, let s take the transactions as they are entered now and apply them using the new 202D process Let s say you have a resident who failed to fully and accurately report income for a number of years. Once assistance is recalculated, the resident owes assistance-paid-in-error totaling $3511.00. After verifying the resident s income, the owner/agent must complete corrections to a prior certification(s) affected by the income change. Owner/agents must not fail to correct the prior certification(s) in an attempt to avoid having large negative adjustments appear on the HAP voucher. www.rbdnow.com 13 info@rbndow.com

Prior to TRACS 202D, if the resident is subject to a repayment agreement, the owner/agent first reversed the full amount of the voucher adjustment created by correcting the prior certification(s). For example: Total of the adjustments is -$3,511 (indicating that $3,511 in subsidy is being returned) The OARQ request will be for $3.511. This leaves the voucher unaffected by the retroactive corrections to a recertification(s). The comment field must be completed describing the transaction, e.g., Reversal of adjustments subject to repayment Unit 1023, Sandra Saunders. Prior to 202D, as the resident makes payments per the repayment agreement, the owner/agent entered them as negative amounts on the voucher as OARQ Miscellaneous Accounting Requests with the comment field completed explaining payment and costs retained even if zero costs are retained. Example: The resident pays $138; the OARQ will be for -$138. The comment field must be completed describing the transaction, e.g., Repayment Unit 1023- Sandra Saunders zero cost retained. RESIDENTS WHO REFUSE TO ENTER INTO A REPAYMENT AGREEMENT In some cases, residents will sign appropriate certifications but will refuse to enter in to repayment agreements; the resident may move out or skip. In other cases, the owner/agent may initiate eviction. Since the certifications are signed, there is really no way to avoid the adjustments on the voucher. If the certifications have been signed the owner/agent must transmit them to HUD. However, assuming owner/agent compliance, the owner/agent is not required to return assistance paid in error to HUD. In this case, add a repayment type None to create the appropriate reversal of those adjustments. What happens if Michelle finds out that the owner/agent has reported her payment performance information to the credit bureau? In an attempt to improve her credit, she might contact the owner/agent and enter in to a repayment agreement to return the assistance paid in error. The repayment agreement in the system will be converted from repayment type None to repayment type Tenant. If she makes a payment, the payment amount can be returned to HUD via the voucher. SENDING REPAYMENT AMOUNTS OUT FOR COLLECTION When a resident leaves with a balance due for the repayment agreement, the owner/agent should do some analysis before sending the amount due to a collection agency. Remember, this is not unpaid rent and the collection of this money has nothing to do with the Special Claims process. The problem is that a collection agency s fees usually exceed the 20% expense cap set forth by the federal government. This means that the owner/agent would be paying for all or part of the collection. www.rbdnow.com 14 info@rbndow.com

For example: Resident moves out owing HUD $1500.00 in assistance-paid-in-error. Owner/agent contacts collection agency to collect the $1500.00 Collection agency charges 35% of any amount collected Resident pays collection agency $1500 Collection agency retains $525 Owner agent must show amount collected as $1500 since this is what the resident paid Maximum payment retention is $300 (20% of amount collected) This means that the owner/agent would pay the collection agency $225 See HUD s guidance in HH 4350.3 R1, C4, Paragraph 8-21-B. As with all income and expenses of the project, O/As must keep records of the receipt and disbursement of all amounts collected from the tenant for audit purposes. At a minimum, the owner must record: (1) Date and amount(s) received from the tenant; (2) Expenses incurred; Examples of types of expenses incurred include staff time for verifying the unreported income; meeting with tenant; drafting repayment agreements; generating and sending monthly invoices to tenant; generating manual voucher adjustments; collection agency fees, if applicable; and, meeting state requirements. (3) Amount(s) retained; and (4) Voucher date(s) and amount(s) of reimbursement made to HUD. SUMMARY - TRACS 202D VOUCHER CHANGES This lesson provided information about major changes to the voucher submission process. The voucher submission process, tweaks to the voucher form and the addition of a new form to track repayments are all part of the upcoming release. www.rbdnow.com 15 info@rbndow.com

APPENDIX A REFERENCES HUD s TRACS web site: http://portal.hud.gov/hudportal/hud?src=/program_offices/housing/mfh/trx/trxsum HUD Handbook 4350.3 Revision 1 http://portal.hud.gov/hudportal/hud?src=/program_offices/administration/hudclips/handbooks/hsgh/435 0.3 TRACS 202D MAT User Guide - http://www.hud.gov/offices/hsg/mfh/trx/trxmatg.cfm TRACS 202D Cross Reference (part of the Industry Specification Documents) TRACS 202D Final Industry Specification Documents http://portal.hud.gov/hudportal/hud?src=/program_offices/housing/mfh/trx/trxdocs TRACS Discussion Forum A page where industry stakeholders ask questions and discuss challenges surrounding TRACS http://ptp.hud.gov/forumswww/main.cfm?cfid=7203371&cftoken=70548446&cfapp=34& HUDClips HUD forms are accessed from this page. This is where you can download current versions of HUD Forms 50059 and 50059A. http://portal.hud.gov/hudportal/hud?src=/program_offices/administration/hudclips/forms HUD s Forms Matrix providing owner/agents permission to remove the OMB Approval Number and OMB Expiration Date from the lease and certain TRACS forms. http://portal.hud.gov/hudportal/documents/huddoc?id=doc_20481.pdf www.rbdnow.com 16 info@rbndow.com

APPENDIX B: 202D 52670 VOUCHER ADJUSTMENTS www.rbdnow.com 17 info@rbdnow.com

APPENDIX C: 202D 52670 SECTION 6 REPAYMENTS www.rbdnow.com 18 info@rbdnow.com

ACTION ITEMS 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. www.rbdnow.com 19 info@rbdnow.com