TRACS 202D Nuts and Bolts: Changed Signature Rules

Editor’s note: Jed Graef, Bostonpost Product Manager, provides the latest information on the upcoming TRACS 202D affordable housing industry specification update. For more on the pending TRACS 202D changes, read Jed’s previous post or you can click here for a complete list of Jed’s continuing TRACS 202D coverage.

There is a lot happening in TRACS 202D with respect to signatures and signature rules. First, HUD has reiterated that the owner/agent (OA) must sign all forms prior to submission. This includes full certifications—Annual (AR), Interim (IR), Move-in (MI), Initial (IC)–as well as the so-called partial certifications—Move-out (MO), Termination (TM), Gross Rent Change (GR) and Unit Transfer (UT). Second, the ability to delay obtaining a tenant signature when required after a GR has been extended to full certifications. Third, and finally, the old Tenant Unable to Sign field on the certification form has been repurposed and renamed as Extenuating Circumstances Code.

Up until 202D, handbook rules have required tenant signatures on all full certs prior to transmission. For partial certs, tenant signatures are required on all UTs and certain GRs. Tenant signatures are not required on MOs and TMs. The rule for GRs recognizes two situations. If neither the rent nor the utility reimbursement changes, no tenant signature is required. However if either the rent or utility reimbursement changes, the OA has 60 days to obtain the signature and may transmit the GR cert immediately rather than wait for the signature. In either case, if state or local law mandates a signature, one must be obtained before submitting the certification.

brickbuilding-resized-600With 202D, the partial certification rules remain intact. However it is now permissible to submit a corrected full cert whose only change is the application of a gross rent change in advance of obtaining signatures. The typical scenario here would be an IR or AR that has previously been signed and transmitted. Afterward, a gross rent change, effective on or before the full cert date, corrects the full cert. So long as that is the only change on the cert, it may be submitted in advance of a tenant signature and using an Extenuating Circumstances Code of 8 or 9 as described below.

This brings us to the new Extenuating Circumstances Code on the HUD 50059 that replaces the old Tenant Unable To Sign indicator. The old field was intended to be used when there was a legitimate reason why the tenant could not sign the certification but the data was being submitted anyway. The new field identifies a clear set of situations where a signature might not be available:

1 = Medical

2 = Late annual certification due to accommodation or extenuating circumstances.

3 = Late annual certification due to owner/agent delay

4 = Late annual certification due to third party delay (For example a Guardian)

5 = Military Deployment

6 = Eviction In Progress. Must be for a valid Handbook reason.

7 = Court order

8 = No Signature Required (Retroactive GR done after a MO or a GR correction to a previously transmitted 50059 where the only change is the GR modification of the contract rent and where none of the TTP, Tenant Rent, or Utility Allowance changes). See Par 9-8

9 = No signature required for 60 days (based on anticipated voucher reported on date). An example would be a retroactive GR causing a correction to a previously transmitted 50059 and where any of the TTP, Tenant Rent or Utility Allowance changes. A signature is required but the cert may be transmitted immediately and the signature collected within 60 days.

10 = Other

Before getting into some details, it is important to know that a 50059 with an OA signature and an Extenuating Circumstances Code counts as a “real” certification. In particular, the 15-month rule that goes into effect when an annual recertification is late does not apply if the AR is submitted with one of the ten codes.

Codes 1-7 indicate common reasons why a certification might be submitted without a tenant signature.  Code 1 (Medical) can be looked at as a sub-type of Code 2 (reasonable accommodation or extenuating circumstances). If it applies, use it instead of a 2. Code 10 (Other) is to be used if none of the others apply but still should be for a valid reason under HUD rules.

Code 8 covers two situations. First, it refers to  GRs that correct certifications for moved-out tenants and other changes for those no longer living in the community. Because these households are no longer available, they cannot be asked to sign the 50059 even when normally required. The other situation is a GR that changes none of Total Tenant Payment, Tenant Rent or the Utility Allowance. If all three values are unchanged, the tenant never has to sign the certification.

Code 9 relates to the new policy of allowing a GR correction to a full certification to be transmitted prior to obtaining tenant signatures. Sixty days are allowed to obtain the signatures as is the case for a UT under similar circumstances. This situation only applies if nothing other than the GR is changing the certification. So, if the AR adds a new member and the AR has never been transmitted and is updated with a GR prior to transmittal, it must be signed before submission.

As with many areas of TRACS 202D, the new features and rules are more flexible than the old ones. The main benefit of the signature changes is the ability to send all certifications affected by a GR to HUD or a contract administrator without first having to chase down signatures for all of the full certifications.

For a more in-depth look at all of the changes coming in 202D as well as links to preview the new TRACS forms, download the Industry Bulletin: Affordable Housing Preparedness for TRACS 202D Modification.

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