New Passbook Rate to Be Effective Feb. 1, 2015
On Oct. 31, 2014, HUD issued Housing Notice 2014-15, “Passbook Savings Rate Effective February 1, 2015 and Establishing Future Passbook Savings Rates.” The HUD passbook rate is used to impute asset income on households who have $5,000 or more in assets. Currently, the HUD passbook rate is 2 percent. Effective Feb. 1, 2015, the HUD passbook rate will be reduced to 0.06 percent. Since the LIHTC program is required to follow Section 8 rules regarding household income calculation, you must use the new rate beginning Feb. 1, 2015.
This is a significant change that will lower the income you see on TIC forms for households whose assets exceed $5,000. Under the current passbook rate, a resident with $25,000 in assets had a minimum of $500 in asset income included in their household income calculations. Under the new rate, that figure will now drop to $15.
In the future, HUD’s Office of Policy Development and Research will annually publish the rate and its effective date through a housing notice and will base it on the national average provided by the FDIC. During the year, if the average differs from the established rate by 2 percent or more, Multifamily Housing may publish a new rate to be used in the interim.