Hello and welcome to today's Tuesday tip. Today we're going to be taking a look at an issue that is frequently confusing for new managers and also has some commonly seen findings on MLRs. Gonna look today at certification designations and when the different certifications are used.

Common MOR findings that we're seeing related to this are incorrect certification type, most commonly with interims instead of ICs, or interims instead of corrections. The effective dates are sometimes incorrect, and there's some confusion on the 15-month rule for submitting annual research. We have a separate Tuesday tip for this coming up.

We are going to just cover that very briefly and then leave the rest of the details for that Tuesday tip. The certification types that we have. We have initials, I see, which is used to assign subsidy. So for instance, if somebody moves into the property, they don't have subsidy when they move in. An initial is what you use to assign subsidy for the very first time. It is also used if subsidy has been terminated.

And you reinstate it at some point down the road. That becomes an initial. Move-in is admission. So a move-in is the very first time someone comes into the property that can include subsidy sometimes and other times it doesn't. And an AR is a normal annual recertification. We also have an IR, which is an interim re-certification. This means that something significant has changed between annuals.

That can be getting a new job, losing a job, a change in household composition, or a change in expenses that's going to affect rent. It's important to note that HOTMA does change what we do here a little bit. So bear in mind that you need to refer to the HOTMA notice for what to do once HOTMA kicks in. But right now you are going to do an interim for the changes that are described in the 4350.3. A termination.

Is ending subsidy for someone, and there are several different codes for terminations. You can look in the TRACS MAT guide or in your software for what those designations are. A UT is a unit transfer from one unit to another inside the same program. An IR versus a correction. Okay, an interim research is only going to change the tenant rent.

and the assistance payment going forward. So an interim is from now on. Things that will prompt an interim are things like a new job or a new expense. The change has happened between annual research and you're going to go from the point of the change forward. So for instance, resident gets a new job effective January 1st, they report it to you and bring documentation on January 5th. That's an increase in income. So we're going to need to give them 30 days notice.

That interim takes place on March 1st. And importantly, in the HUD Section 8 housing, an interim does not change the recertification date. Some of you USDA R D folks, that's going to be a little different for you, but anybody who has section 8, an interim does not change the annual recertification date. So a correction, what's the difference?

A correction is when you spot either an owner error or a tenant error. That means that the numbers you had on the previous certification were incorrect. So let's say I have somebody who failed to report a job. I'm going back to fix that. And it can include a repayment plan if that is necessary. It fixes inaccurate numbers on the previous cert. Now that previous cert could have been an interim.

It could have been an annual, could have been a move-in, could have been an initial. So it just fixes an error on a previous certification. It is put into the software for the same date as the certification it's correcting. So if I had somebody that moved in on April 1st and I discover that instead of their income

being fifteen thousand, I accidentally only put in five thousand. I've got to go back and correct that to the move in date. That's a correction. I'm gonna put it in as another annual for that same date. And I either check a box that says it's a correction or you may have something that pops up in your software and asks if it's a correction.

So, an example of a correction is I did an annual effective May 1st. It includes an anticipated $500 expense. On 513, so right away, the resident comes in and says, my gosh, I'm so sorry. That number should have been 3,500. I realized I forgot to give you something. Depending on the situation, what your policies are, all of that, I can do a correction to that annual.

So since it reduces rent, it's allowable, it's in less than 30 days, and it should have been on that original certification. I'm going to do a correction, another May 1st certification that I note as a correction that includes the correct numbers. How do I choose? It's pretty simple. It's all about when the change takes effect.

A correction is fixing the numbers in a cert that are inaccurate and it goes back to that certification date. An interim is something new and it's from this point moving forward.

Sometimes you can get retroactive amounts that are owed as a result of these corrections. The tenant is going to repay when the issue was within their control. Failing to report something, if you have to go back, the tenant is responsible for that. If it's a third-party error or an owner error, agent error.

The tenant does not pay for those. So it all depends on who caused it to be incorrect. And whenever the tenant owns owes something, you are going to do a repayment agreement.

Okay, the 15-month rule really quickly. Again, we have a Tuesday tip on this. That if this is confusing for you, you want to look for. The 15-month rule says you have 15 months to input the next for certification. That's only about data entry. Because when you have something that causes it to be signed late, you're gonna input it within 15 months, but it doesn't change the effective date of the annual. So let's say I

I had somebody who had a January resert. They were in the hospital. They didn't actually get everything processed until February. That is still a January recert.

That becomes really important if you need to do repayment agreements and all of that. And if you need to terminate subsidy because the person never came in, that goes back to that original recertification date. You're going to get some more details on this again in that Tuesday tip. But just remember that that 15-month rule is about data entry. It doesn't change the recertification date.


So, some resources for these certification designations. You have the HUD 4350.3, revision one, chapter seven, which is all about research. paragraph 7 -4 is annuals, paragraph 7- 10 is interims, 7- 15 covers unit transfers, and 7- 17 covers gross rent changes. You also have the tracs mat guide.

All of these can be found on HUD Clips, so I recommend you get yourself a copy to refer to if you're going to need it. That's going to do it for today. We'd love to hear from you as far as what you would like to see on the next Tuesday tip. You can drop us an email. Both of our emails are on the screen. You can also give those suggestions through the navigate portal or through a comment on wherever you saw this Tuesday tip. Thank you so much, and we'll see you on the next one.