An official State of Texas website.
Revision 09-4; Effective December 1, 2009
In rent-free shelter, no household member has ownership interest or rental liability. This type of S/M is subject to the maximum of 1/3 of FBR + $20.
In rent-free shelter situations, a person outside the household provides the dwelling, but the household has no obligation to pay rent in return for shelter.
If the household contributes nothing for shelter, count 1/3 FBR + $20 as S/M. If the person is income-eligible, no further development is needed. If counting 1/3 FBR + $20 results in ineligibility, prior to denial the person must be given an opportunity to rebut and show that the actual value is less. Actual value is based on the current market rental value (CMRV).
Example: Margie Ballard lives in a house owned by her son. She purchases her food and pays all utilities. Her son allows her to live in the home without paying rent. The son reports the CMRV (without utilities) to be $250. Count 1/3 FBR + $20 as S/M. If the person is income-eligible, no further development is required. If counting 1/3 FBR + $20 results in ineligibility, prior to denial Ms. Ballard must be given an opportunity to rebut and show that the actual value is less. In this situation, the actual value is the CMRV of $250. Count the maximum S/M of 1/3 FBR + $20 if this is less than the actual value.
Example: Keith Linder lives in a house owned by his son. The son has requested that Mr. Linder pay his (the son's) monthly mortgage payments of $150 directly to the mortgage-holder in lieu of rent. Mr. Linder pays his own utilities. The son reports the CMRV (without utilities) to be $175. Since the son has requested that Mr. Linder pay his mortgage payment in lieu of rent, this is allowed as a shelter expense. Count 1/3 FBR + $20 as S/M. If Mr. Linder is income-eligible, no further development is needed. If counting 1/3 FBR + $20 results in ineligibility, prior to denial Mr. Linder must be given an opportunity to rebut and show that the actual value is less. The actual value is $25 ($175 CMRV - $150 payment on loan = $25).
The actual value of S/M may be reduced by the amount of the household's voluntary payments directly to the provider only for the property owner’s mortgage, real property taxes or rent (in sublease situations). Use only these voluntary payments made directly to vendors to reduce the actual value of the S/M.
Example: Barry Williams lives in a house owned by a relative. He pays his own utilities. The relative allows him to live there free of charge, but states that the CMRV (without utilities) is $300 per month. Although Mr. Williams pays no rent, last month he voluntarily paid his relative's annual real property taxes of $1,000 (or $83.33 monthly prorated taxes) directly to the taxing authority. Mr. Williams' payment of $83.33 for taxes does not equal the CMRV ($300). Count 1/3 FBR + $20 as S/M. If he is income-eligible, no further development is needed. If counting 1/3 FBR + $20 results in ineligibility, Mr. Williams must be given an opportunity to rebut and show that the actual value is less. In this situation, the actual value of the S/M is $216.67 ($300 CMRV - $83.33 client's voluntary payment = $216.67). Count the maximum S/M of 1/3 FBR + $20 if this is less than the actual value.