[Code of Federal Regulations]
[Title 24, Volume 1]
[Revised as of April 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 24CFR5.236]

[Page 51-52]
 
                 TITLE 24--HOUSING AND URBAN DEVELOPMENT
 
PART 5--GENERAL HUD PROGRAM REQUIREMENTS; WAIVERS--Table of Contents
 
 Subpart B--Disclosure and Verification of Social Security Numbers and 
    Employer Identification Numbers; Procedures for Obtaining Income 
                               Information
 
Sec. 5.236  Procedures for termination, denial, suspension, or reduction of assistance based on information obtained from a SWICA or Federal agency.

    (a) Termination, denial, suspension, or reduction of assistance. The 
provisions of 42 U.S.C. 3544(c)(2)(B) and (C) shall govern the 
termination, denial, suspension, or reduction of benefits for an 
assistance applicant or participant based on income information obtained 
from a SWICA or a Federal agency. Procedures necessary to comply with 
these provisions are provided in paragraph (b) of this section.
    (b) Procedures for independent verification. (1) Any determination 
or redetermination of family income verified in accordance with this 
paragraph must be carried out in accordance with the requirements and 
procedures applicable to the individual covered program. Independent 
verification of information obtained from a SWICA or a Federal agency 
may be:
    (i) By HUD;
    (ii) In the case of the public housing program, by a PHA; or
    (iii) In the case of any Section 8 program, by a PHA acting as 
contract administrator under an ACC.
    (2) Upon receiving income information from a SWICA or a Federal 
agency, HUD or, when applicable, the PHA shall compare the information 
with the information about a family's income that was:
    (i) Provided by the assistance applicant or participant to the PHA; 
or
    (ii) Obtained by the owner (or mortgagee, as applicable) from the 
assistance applicant or participant or from his or her employer.
    (3) When the income information reveals an employer or other income 
source that was not disclosed by the assistance applicant or 
participant, or when the income information differs substantially from 
the information received from the assistance applicant or participant or 
from his or her employer:
    (i) HUD or, as applicable or directed by HUD, the PHA shall request 
the undisclosed employer or other income source to furnish any 
information necessary to establish an assistance applicant's or 
participant's eligibility for or level of assistance in a covered 
program. This information shall be furnished in writing, as directed to:
    (A) HUD, with respect to programs under parts 215, 221, 235, 236, or 
290 of this title;
    (B) The responsible entity (as defined in Sec. 5.100) in the case of 
the public housing program or any Section 8 program.
    (C) The owner or mortgagee, as applicable, with respect to the rent 
supplement, Section 221(d)(3) BMIR, Section 235 homeownership 
assistance, or Section 236 programs.
    (ii) HUD or the PHA may verify the income information directly with 
an assistance applicant or participant. Such verification procedures 
shall not include any disclosure of income information prohibited under 
paragraph (b)(6) of this section.
    (4) HUD and the PHA shall not be required to pursue these 
verification procedures when the sums of money at issue are too small to 
raise an inference of fraud or justify the expense of independent 
verification and the procedures related to termination, denial, 
suspension, or reduction of assistance.
    (5) Based on the income information received from a SWICA or Federal 
agency, HUD or the PHA, as appropriate, may inform an owner (or 
mortgagee) that an assistance applicant's or participant's eligibility 
for or level of assistance is uncertain and needs to be verified. The 
owner (or mortgagee) shall then confirm the assistance applicant's or 
participant's income information by checking the accuracy of the 
information with the employer or other income source, or directly with 
the family.

[[Page 52]]

    (6) Nondisclosure of Income information. Neither HUD nor the PHA may 
disclose income information obtained from a SWICA directly to an owner 
(unless a PHA is the owner). Disclosure of income information obtained 
from the SSA or IRS is restricted under 26 U.S.C. Sec. 6103(l)(7) and 42 
U.S.C. 3544.
    (c) Opportunity to contest. HUD, the PHA, or the owner (or 
mortgagee, as applicable) shall promptly notify any assistance applicant 
or participant in writing of any adverse findings made on the basis of 
the information verified in accordance with paragraph (b) of this 
section. The assistance applicant or participant may contest the 
findings in the same manner as applies to other information and findings 
relating to eligibility factors under the applicable program. 
Termination, denial, suspension, or reduction of assistance shall be 
carried out in accordance with requirements and procedures applicable to 
the individual covered program, and shall not occur until the expiration 
of any notice period provided by the statute or regulations governing 
the program.

[61 FR 11113, Mar. 18, 1996, as amended at 65 FR 16715, Mar. 29, 2000]