COS Income Calculations & Rent Determination 2 — Questions and Answers
Question 1: A household earns $18,000/year in wages and receives $3,600/year in child support. What is their annual income for HUD purposes?
- $18,000
- $21,600 (Correct answer)
- $14,400
- $3,600
Correct answer: $21,600
Child support received is included in annual income, so $18,000 + $3,600 = $21,600.
Question 2: When calculating income from assets over $5,000, which amount must be used if it exceeds actual income earned?
- Actual income earned from the asset
- Imputed income using the HUD passbook savings rate (Correct answer)
- The asset's purchase price divided by 12
- Zero, since only earned income counts
Correct answer: Imputed income using the HUD passbook savings rate
When total assets exceed $5,000, you must compare actual income to imputed income (assets × passbook rate) and use the higher figure.
Question 3: A family's gross rent is $900 and their Total Tenant Payment (TTP) is $650. What is the Housing Assistance Payment (HAP)?
- $1,550
- $900
- $250 (Correct answer)
- $650
Correct answer: $250
HAP = Gross Rent − TTP, so $900 − $650 = $250.
Question 4: Which of the following is EXCLUDED from annual income under HUD rules?
- Overtime wages
- Social Security benefits
- Sporadic gifts totaling $500 (Correct answer)
- Child support payments received
Correct answer: Sporadic gifts totaling $500
Sporadic or irregular gifts that are not periodic payments are excluded from annual income.
Question 5: A tenant's adjusted income is $12,000. Their TTP equals 30% of adjusted monthly income. What is their monthly TTP?
- $360
- $300 (Correct answer)
- $400
- $200
Correct answer: $300
30% of adjusted monthly income: $12,000 ÷ 12 = $1,000/month × 30% = $300.
Question 6: A household has a savings account with a current cash value of $8,000 earning $160 in actual interest. The HUD passbook rate is 2.5%. What income is used?
- $160
- $200 (Correct answer)
- $8,000
- $0
Correct answer: $200
Imputed income = $8,000 × 2.5% = $200, which exceeds actual $160, so $200 is used.
Question 7: Under HUD rules, the dependent deduction per dependent is:
- $480 (Correct answer)
- $500
- $400
- $1,000
Correct answer: $480
HUD allows a $480 deduction per dependent from annual income when calculating adjusted income.
COS Income Calculations & Rent Determination 2
A household earns $18,000/year in wages and receives $3,600/year in child support.
What is their annual income for HUD purposes?