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Valuing Assets <br />The calculation of asset income sometimes requires the PHA to make a distinction between an <br />asset’s market value and its cash value. <br /> The market value of an asset is its worth in the market (e.g., the amount a buyer would pay <br />for real estate or the total value of an investment account). <br /> The cash value of an asset is its market value less all reasonable amounts that would be <br />incurred when converting the asset to cash. <br />SAHA Policy <br />Reasonable costs that would be incurred when disposing of an asset include, but are not <br />limited to, penalties for premature withdrawal, broker and legal fees, and settlement costs <br />incurred in real estate transactions [HCV GB, p. 5-28]. <br />Lump-Sum Additions to Net Family Assets [24 CFR 5.609(b)(24)(viii) as updated for <br />HOTMA; Notice PIH 2023-27] <br />The regulations exclude income from lump-sum additions to family assets, including lottery or <br />other contest winnings as a type of nonrecurring income. <br />In addition, lump sums from insurance payments, settlements for personal or property losses, and <br />recoveries from civil actions or settlements based on claims of malpractice, negligence, or other <br />breach of duty owed to a family member arising out of law that resulted in a member of the <br />family becoming a family member with a disability are excluded from income. <br />Further, deferred periodic amounts from Supplemental Security Income (SSI) and Social <br />Security benefits that are received in a lump sum amount or in prospective monthly amounts, or <br />any deferred Department of Veterans Affairs disability benefits that are received in a lump sum <br />amount or in prospective monthly amounts are also excluded from income. <br />However, these amounts may count toward net family assets. The PHA must consider any actual <br />or imputed returns from assets as income at the next applicable income examination. In the case <br />where the lump sum addition to assets would lead to imputed income, which is unearned income, <br />that increases the family’s annual adjusted income by 10 percent or more, then the addition of <br />the lump sum to the family’s assets will trigger an immediate interim reexamination of income in <br />accordance with Chapter 9. This reexamination of income must take place as soon as the lump <br />sum is added to the family’s net family assets unless the addition takes place in the last three <br />months of family’s income certification period and the PHA chooses not to conduct the <br />examination. <br />For a discussion of lump-sum payments that represent the delayed start of a periodic payment, <br />most of which are counted as income, see sections 6-I.H and 6-I.I. <br />SAHA Policy <br />Any lump-sum receipts are only counted as assets if they are retained by a family in a <br />form recognizable as an asset [RHIIP FAQs]. For example, if the family receives a <br />$1,000 lump sum for lottery winnings, and the family immediately spends the entire <br />amount, the lump sum will not be counted toward net family assets. <br />EXHIBIT 1