How to Document Reason for Third-Party Income Verification’s Absence
When certifying and recertifying households, you must first try to verify the items you include in household income with third-party sources. For example, you must ask a resident’s employer to verify her employment income. But third-party sources don’t always cooperate with you by returning verification forms.
Fortunately, HUD gives you alternatives for verifying income when third-party sources don’t cooperate, such as getting documentation from the household itself. But you must document that you couldn’t get the income verified by a third party.
We’ll tell you when you can switch to an alternative verification method. And we’ll give you a Model Form: Use Form When Unable to Obtain Third-Party Verification, which you can adapt and use to document your reasons for not being able to get a third-party verification.
Third-Party Verification Types
The Handbook says that the owner is responsible for determining if the verification documentation is adequate and credible. If your site doesn’t have access to state or federal databases, acceptable methods of verification, in order of acceptability, are: (1) written third-party verification from source; (2) oral third-party verification from source; and (3) a family certification that’s a notarized or signed affidavit regarding the truth of the information submitted [HUD Handbook 4350.3, par. 5-13(A)].
If third-party verification of an applicant or household reaches down to the level of needing family certification, you must document in the household file why third-party verification isn’t available [HUD Handbook 4350.3, par. 5-13(B)(1)(d)].
Use Form to Document Efforts
Generally speaking, how you must verify household income depends on the type of income. Appendix 3 of the Handbook lists acceptable forms of verification for each income type. If you’ve gotten to a point where you’re unable to get a third-party source to respond in writing, orally, or electronically, you must document in the file “efforts made to obtain the required verification and the reason the verification was not obtained” [HUD Handbook 4350.3, par. 5-18(E)].
According to the Handbook, an owner must include the following documents in the household file:
- A written note to the file explaining why third-party verification isn’t possible; or
- A copy of the date-stamped original request that was sent to the third party;
- Written notes or documentation indicating follow-up efforts to reach the third party to obtain verification; and
- A written note to the file indicating that the request has been outstanding without a response from the third party [HUD Handbook 4350.3, par. 5-18(E)].
To help comply with the Handbook’s requirement that you document your efforts to get third-party verifications, fill out a form to the household file describing your unsuccessful efforts to get third-party verification. We’ve put together a Model Form that you can adapt and use when you find yourself in this situation. Fill out a new form for each item of income that you can’t get verified by third parties. And keep these forms in the household’s file so you can refer to them later if a question arises. Your form, like our Model Form, should include:
Applicant/household name. Identify the household by writing the name of the household and its unit number at the top of the form.
Building number. Add the building identification number (BIN) to identify the building in which the household’s unit is located. Note that, if you have more than one building at your site, each building has its own BIN—even if the owner of your site elected to meet the minimum set-aside on a per-site (not per-building) basis.
Date and staff member name. Put today’s date on the form after you complete it. This shows that you filled out the form promptly after you determined that you couldn’t get the third-party verification you needed. And make sure your name appears on the form in case anyone looking at the form has follow-up questions.
Whether initial certification or annual recertification. Note whether this verification concerns the household’s initial certification or an annual recertification. You must verify income when initially certifying a household to determine its eligibility to occupy a low-income unit at your tax credit site. And, if your site is mixed income and not a 100 percent tax credit site, you must verify its income again at each annual recertification.
Source’s failure to respond. When filling out the form you can say that the third-party source hasn’t responded to your verification request or refused to cooperate.
Follow-up efforts taken to get third-party verification. When filing out the form you can say what you did to get the third-party verification. Also, outline the steps you took to follow up with the verification source after sending the original request. These can include attempts to contact the employer by phone and email.
Attach copy of original verification request. Be sure to attach a copy of the date-stamped original request that you sent to the verification source, along with the verification form you sent for the source to complete. This way, your state housing agency can see that you properly contacted the source to verify the household income.
Documentation of follow-up efforts. Attach written notes or other documentation showing your efforts to follow up with third-party sources after your first attempt. Keep track of all your follow-up attempts to contact sources after you don’t get a response to your original request. To do this, keep a log that includes the following information:
- The date and time of each phone call or email;
- The name and title of the person you’re trying to contact (for instance, Bill Jones, human resources director); and
- The result of the phone call or email. If you called the verification source, then write, for instance, “left message with receptionist” or “spoke to source; promised to return form today.” If you emailed the source and the source emailed you back, write what happened. For instance, write “got email back saying never received verification form—will resend today.” Print out your emails and attach a copy to your log. Also note the date and time of any return emails or phone calls in your log.
Plans for alternative verification. Say how you plan to verify the household income now that you can’t get the third party to cooperate. HUD lets you rely on documents supplied by the household or as a last resort a household’s sworn statement that it has truthfully reported the income you can’t verify [HUD Handbook 4350.3, par. 5-13(B)(1)(d)]. But double check with your state housing agency on how you plan to verify the household income when you can’t get the third party to cooperate.
Your state agency may enforce stricter rules and have specific ways it wants documentation obtained. Though knowing the HUD guidance and regulations is important, it’s just as important to verify with your state as to how it wants verifications obtained and documented.
See The Model Tools For This Article
|Use Form When Unable to Obtain Third-Party Verification