When determining income eligibility for the HOME program, 24 CFR 5.609(b)(3) requires PJs to include in calculating annual income the greater of either: (1) actual income resulting from all net family assets; or (2) a percentage of the value of such assets based upon the current passbook savings rate as determined by HUD when a family has net assets in excess of $5,000.
The PJ has three options in setting the rate to be used as its passbook savings rate for HOME program income eligibility determinations:
- The PJ may use the same passbook savings rate used by their local PHA;
- The PJ may use the passbook savings rate published by HUD’s Office of Multifamily Housing.
As described in Notice H 2014-15, the Office of Multifamily Housing will publish a passbook savings rate and its effective date through a Housing program notice at least annually; or
- The PJ may establish its own passbook savings rate.
If a PJ chooses to establish its own rate in calculating imputed income from assets, then the PJ should review its passbook savings rate at least annually to determine that it is allowable. The PJ may establish a passbook savings rate within 75 basis points (plus or minus .75 percent) of the Savings National Rate in effect at the time the PJ establishes the passbook savings rate, and the passbook savings rate may not be less than 0 percent. The Savings National Rate is a simple average of rates paid by United States (US) depository institutions as calculated by the Federal Deposit Insurance Corporation (FDIC). The FDIC publishes this rate on a weekly basis. Historical and current Savings National Rates can be accessed on the FDIC website.
No matter which option a PJ chooses in establishing its passbook savings rate, the PJ must apply its policy on calculating imputed income from assets consistently to all participants, and it is suggested that PJs maintain supporting documentation for establishing their rate.