1. (a)

   1. (1) The net income from assets must be considered when determining the tax credit eligibility of a household.
   2. (2) Asset information for all household members (including minors) should be obtained at the time of application.
   3. (3) Please refer to the latest revision of the Department of Housing and Urban Development Handbook 4350.3 for a discussion of assets.

2. (b)

   1. (1) For LIHTC program purposes, third-party verification of assets is required only if assets exceed five thousand dollars ($5,000) per household.
   2. (2) The Arkansas Development Finance Authority will accept the Under $5,000 Asset Certification for tax credit units only.

   3. (3)

      1. (A) Under the HOME or other federal programs, all assets, regardless of value, must be documented by third-party verification.
      2. (B) For example, if a tax credit unit is also HOME-assisted, the owner must comply with the stricter HOME verification requirement.

3. (c)

   1. (1) The Under $5,000 Asset Certification must be completed accurately.
   2. (2) There should be no blank lines.
   3. (3) Owners or managers should always question the reasonableness and compare the amounts on the form to the application.

4. (d)

   1. (1) If net family assets total five thousand dollars ($5,000) or less, owners must count the actual income derived from net family assets.
   2. (2) If net family assets exceed five thousand dollars ($5,000), owners must impute the asset income by multiplying the net family assets amount by the passbook rate specified by the Department of Housing and Urban Development, which is currently two percent (2%).

   3. (3) The income to be included in household income will be the greater of:

      1. (A) Actual asset income; or
      2. (B) The imputed income from assets.

5. (e)

   1. (1) At each certification and recertification, applicants and tenants must declare whether or not an asset has been disposed of for less than fair market value during the two (2) years preceding the:

      1. (A) Date of application; or
      2. (B) Effective date of the recertification.

   2. (2)

      1. (A) An asset is considered to be disposed of for less than fair market value if the cash value of the disposed asset exceeds the gross amount the family received by more than one thousand dollars ($1,000).
      2. (B) If it does, for a period of two (2) years owners must include in the total household assets the difference between the cash value of the asset and the amount received.
   3. (3) For examples of assets disposed of for less than fair market value, you should refer to the latest revision of the Department of Housing and Urban Development Handbook 4350.3.

Codification Notes: "LIHTC" means low-income housing tax credit.