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Real Estate Income - TAFDC

 

When the client receives Real Estate Income from a rented apartment or house, he or she is considered self-employed.  The rental income can be earned or unearned. 

When the client manages the property by collecting rents and providing services to maintain the property, Real Estate Income is earned.  In this situation, the client is allowed the Work-related Expense Deduction, and the 50% Earned Income Disregard from Earnings, if applicable.

Either type of Real Estate Income, less business expenses, shall be considered in determining eligibility and the amount of assistance. 

Earned or unearned rental income received is not counted in its entirety.  Business expenses must be deducted from the rental income before the income is entered.  Business expenses are certain expenses that are deducted from the earned or unearned rental income received by the client.  You must calculate the business expenses and enter them in BEACON.  Business expenses and how to calculate them are described in the table below.

 

 

Business Expense

 

Definition

How to Calculate

Carrying Charges

 

Carrying charges are current taxes minus any abatements, betterment taxes, interest and principal mortgage payments, water bills and fire insurance payments.  You must use a monthly amount and verify each expense when figuring the countable rental income.

To determine the carrying charges portion of the countable rental income, you must use:

·   the total amount, when the client does not live in the same property; and

·   the prorated amount, when the client occupies an apartment in the same house.

 

Fuel Costs

 

Fuel costs are the cost of the heating fuel the client provides to the tenant.  You must use the actual costs averaged on a yearly basis and determine a monthly amount, or a projected monthly amount.  You must verify the actual cost.  If you use projected amounts, obtain a written statement of the projected costs from the client.

To determine the fuel costs portion of countable rental income, you must use either:

 

  • the total heating costs, when the client provides his or her own heat from a separate heating unit than the tenant’s heating unit, or when the client does not live in the same property, or

 

  • the prorated heating costs, when the client provides his or her own heat and the client’s from a single heating unit

 

Utilities Costs

 

Utility costs are the cost of the utilities the client provides to the tenant.  You must use the actual costs averaged on a yearly basis and determine a monthly amount or a projected monthly amount and verify the actual costs.  If you use projected amounts, obtain a written statement of the projected costs from the client.

To determine the utilities costs portion of countable rental income, you must use:

  • the total utilities costs, when the client provides his or her own utilities from separate meters than the tenant’s meters, or when the client does not live in the same property, or

 

  • the prorated heating amount, when the client provides his or her own utilities and the client’s from separate meters.

 

Maintenance and Repair Costs

 

Maintenance and repair costs are the costs the client pays for the regular upkeep of the property.

You must use $20 a month per rental unit with one exception.  When the client verifies that the costs exceed and average of $20 a month, you must use the higher amount.

 

Prorating Carrying Charges, Fuel and Utilities Costs

When the client occupies an apartment in the same building from which the rental income is received, his or her portion of the expenses is not considered when calculating carrying charges, fuel and utilities costs.  You must only consider a portion of the carrying charges, fuel and utility costs to determine how much to consider towards the grant.  For example, if a two-family dwelling, use only one-half the carrying charges, fuel and utilities costs; in a three-family dwelling, use two-thirds the carrying charges, fuel and utilities costs; in a four-unit dwelling, use three-fourths the carrying charges, and so forth.

 

Obtain verifications for up to the four previous weeks, if the applicant has countable income.  Enter the weekly amounts as described in the procedures below.  For current clients, enter verified countable income as soon as it is reported.

 

To enter unearned Rental Income in the Other Income Status page, you must:

 

  1. go to the Assessed Person Income and Expenses workflow

  2. select the Other Income Status page

  3. on the Source tab, click the Type drop-down box

  4. check the Rental Income Type next to the Type field

  5. select the frequency of payments by clicking the Frequency drop-down box 

  6. select Active from the Status drop-down box

  7. click the Yes radio button in the Countable TAFDC field

  8. select or enter the date in the Status (date) drop-down box

  9. click either the Yes or No Countable FS radio button.  See Rental, Roomer, Boarder Income in the SNAP Income book for information on how rental income is counted for SNAP

  10. select Third Party from Form of Payment if the rent is considered unearned because a rental agency is managing the property, otherwise, select Direct

  11. click the No radio button in the Earned field

  12. enter the number of rental units in the Number of field.  These are the number of units managed by the client, not including any unit in which the client resides

  13. click Save

  14. click the Income tab

  15. click the Yes or No radio button for Garnished

  16. enter the amount of Rental Income for the most recent periods displayed, but not for any period after the current date.  The period displayed is determined by the frequency selected in the Frequency drop-down box

  17. click the Prospective tab

  18. check the Prospective Averaging check box(es) for each period

  19. click Calculate.  This will provide the monthly prospective amount for calculating the grant, once all income has been entered.  When the client’s total countable monthly income exceeds the Need Standard, the client is ineligible for cash benefits.  The monthly prospective amount will appear

  20. click Save

  21. click the Expenses tab

  22. enter expenses, click the Detail popup.  The Other Income Status Expenses popup page will appear

  23. in the Expenses popup, enter Type, Start, Frequency, and Amount and click the Yes radio button in the Allowable cash field.  Click the Yes or No radio button for Allowable FS

  24. click Calculate.  This will calculate the Allowable Amount and will populate a line in the Expenses tab.  Repeat the steps above for each expense

  25. click Save

Always remember to verify information the client provides on the Verification tab and complete Interview Wrapup

 

To enter earned Rental Income in the Earned Income page, you must:

 

  1. go to the Assessed Person Income and Expenses workflow

  2. open the Earned Income page

  3. on the Employed tab, select Self-Employment from the Type drop-down box

  4. select or enter the date in the Start field

  5. select the frequency of the Self-Employment payments in the Frequency drop-down box

  6. enter the client’s Hourly wage and Weekly hours (calculated offline. For hours, do not use more than 40 hours) in their respective fields

  7. select the Job title of Property managers from the list in the pop-up (found by typing in Property in the Search box at the bottom of the pop-up page)

  8. click the Yes Countable Cash radio button

  9. click either the Yes or No Countable FS radio button.  See Rental, Roomer, Boarder Income in the SNAP Income book for information on how rental income is counted for SNAP

  10. click the Yes or No radio button for Permanent job

  11. click the Yes or No radio button for Job held > thirty days

  12. click Save

  13. on the Employer tab, enter the client’s name in the Employer field and select the Yes or No radio button for Health Insurance offered.  The other fields are optional

  14. click Save

  15. on the Earnings tab, enter the amount of Gross Income and Hours for the most recent periods displayed, but not for any period after the current date.  The period displayed is determined by the frequency selected in the Frequency drop-down box

  16. click the Yes or No radio button for Garnished

  17. click the Lump Sum check box if the amount is a lump sum

  18. on the Prospective tab

  19. check the Prospective Averaging check box(es) for each period

  20. click Calculate.  This will provide the monthly prospective amount for calculating the grant, once all income has been entered.  When the client’s total countable monthly income exceeds the Need Standard, the client is ineligible for cash benefits.  The monthly prospective amount will appear

  21. click Save

  22. click the Expenses tab

  23. to enter expenses, click the Detail popup.  The Earned Income Expenses popup page will appear

  24. in the Earned Income Expenses popup, enter Type, Start, Frequency and Amount

  25. click the Yes radio button for Countable cash

  26. click the Yes or No radio button for Allowable FS.  See Rental, Roomer, Boarder Income in the SNAP Income book for information on how rental income is counted for SNAP

  27. click Calculate.  This will calculate the Allowable Amount and will populate a line in the Expenses tab.  Repeat pages 23 through 26 for each expense

  28. click Save in the popup

 

Always remember to verify information the client provides on the Verification tab and complete Interview Wrapup

 

 

Income Policy and Procedures

 

 

  Last Update: October 26, 2018