Asset/Income Calculation for Senior Housing Program

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MandyLuna
Posts: 61
Joined: Sat Oct 02, 2021 7:37 am

Asset/Income Calculation for Senior Housing Program

Post by MandyLuna »

I'm trying to advise/help my sister on her situation. I am somewhat versed in issues related to finance, but she has even less knowledge.

She's soon to be 62, recently retired and lives in a home she rents at a market rate, and we know rates in many areas are climbing rapidly.

A friend of hers recently told her about a brand new age-restricted & income-restricted senior housing complex that is in a great location.

Since she's currently under the maximum income limit for a household of 1, she applied and received a call with a voice mail that she was approved. Also, the age limit is 62+, so this will work for her too.

The caller indicated that there will be an income/asset review coming in the spring. She has called back the number for more details, but no one picks up or returns the calls. She has left several messages.

From what we can gather, this development falls under a federal housing program known as a Low Income Housing Tax Credit program. It looks like Section 42. A private developer/public partnership type of arrangement.

The complex she has applied for will be 100% occupied by low income seniors.

All we have read indicates there are no asset limitations to be eligible to rent there. We have been wracking our brains trying to understand which categories of assets will be applied to the income calculation. Interest payments are added for sure. Retirement accounts, dividends and bonds that don't pay interest, but increase in value - such as I bonds appear to be classified as assets, not income.

She has a small pension, so we know that is income
She has a 401k and an IRA and Roth - she has not taken withdrawals, but it seems only "periodic payments" from these are added to the income column.
She has a taxable stock account - it generates interest, so we know this would be added to income, not sure about dividends?
She has not yet begun receiving social security, so it appears it is not counted since there has been no receipt.

In this first year of retirement, she has been meeting her living expenses via her pension and taking money from her checking & savings accounts.

Does anyone here have experience with this process? Someone with knowledge who might be able to speak to the issue of what happens with income generated by stocks or retirement accounts in general?
Thank you very much.
iamblessed
Posts: 1462
Joined: Sat Jun 09, 2018 11:52 am
Location: St. Louis

Re: Asset/Income Calculation for Senior Housing Program

Post by iamblessed »

I had a friend in one. The other thing is lets says you have 100k in a savings account. The government has a rate higher than the rate you can get in real life. It think it was 2% when the real rate was .5 Then they could count that as 2k in income even if you did not get the 2k. So you could not have big money in a checking account and have it not counted as income. It is hard to explain but that is how they did it. I think it was to keep people from gaming the system. But if she is not worth to much I think she will be fine. I am sure others can explain it better than I. Maybe it is 2% of asset as a minimum income from your assets. That rate also changes with the current interest rates.
iamblessed
Posts: 1462
Joined: Sat Jun 09, 2018 11:52 am
Location: St. Louis

Re: Asset/Income Calculation for Senior Housing Program

Post by iamblessed »

How much in assets does she have?
They will want 30% of all income for rent.
mnnice
Posts: 640
Joined: Sat Aug 11, 2012 5:48 pm

Re: Asset/Income Calculation for Senior Housing Program

Post by mnnice »

iamblessed wrote: Fri Jan 14, 2022 12:23 am How much in assets does she have?
They will want 30% of all income for rent.
Income restricted is different than section 8. Each property has both max and min income requirements to live there and there is a price that is typically below market but not crazy low.

How assets “translate” to income I know way less about which is the OP’s question.
Topic Author
MandyLuna
Posts: 61
Joined: Sat Oct 02, 2021 7:37 am

Re: Asset/Income Calculation for Senior Housing Program

Post by MandyLuna »

Income restricted is different than section 8. Each property has both max and min income requirements to live there and there is a price that is typically below market but not crazy low.

Exactly this. What they're charging is not super low, just about 30% lower than market by my estimates.

Curious about the 2% conversion. I am having some challenges locating the federal & state guidelines for these calculations, for this type of housing program. Looks like they leave that up to mere mortals working in rental offices ;)
iamblessed
Posts: 1462
Joined: Sat Jun 09, 2018 11:52 am
Location: St. Louis

Re: Asset/Income Calculation for Senior Housing Program

Post by iamblessed »

MandyLuna wrote: Fri Jan 14, 2022 5:08 am Income restricted is different than section 8. Each property has both max and min income requirements to live there and there is a price that is typically below market but not crazy low.

Exactly this. What they're charging is not super low, just about 30% lower than market by my estimates.

Curious about the 2% conversion. I am having some challenges locating the federal & state guidelines for these calculations, for this type of housing program. Looks like they leave that up to mere mortals working in rental offices ;)
If you find out please report back. I would like to know more about the details.
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