What Is Imputed Income
Imputed income is income HUD attributes to a family based on assets exceeding $5,000. The PHA calculates this by multiplying the asset amount over $5,000 by the current passbook savings rate, which HUD updates annually. For example, if a family has $25,000 in assets and the passbook rate is 2%, the PHA imputes $400 annually on the excess $20,000 ($25,000 minus $5,000 threshold).
How the Calculation Works
The PHA applies this formula during recertification and initial eligibility review:
- Subtract $5,000 from total countable family assets
- Multiply the remainder by the current HUD passbook savings rate (published in the Federal Register annually)
- Divide the annual imputed income by 12 for monthly income amount
- Add this to earned income, unearned income, and other asset income to determine total family income
The passbook rate varies year to year. For 2024, it is 0.57%, meaning $20,000 in excess assets generates approximately $114 in annual imputed income. This directly affects rent calculations and continued program eligibility.
Impact on Rent and Eligibility
Higher imputed income raises the family's total income, which increases their rent contribution under the Section 8 formula. Families pay 30% of adjusted gross income (or the applicable fraction of Fair Market Rent, whichever is lower). A $200 monthly increase in imputed income can result in $60 higher monthly rent for a family at the 30% threshold.
For borderline cases, imputed income can push families above local income limits or over the 50% of Area Median Income ceiling for continued assistance eligibility. PHAs recalculate imputed income at each annual recertification and whenever family assets change materially.
What Counts as Assets
- Bank savings and checking accounts
- Certificates of deposit, money market accounts, bonds
- Stocks and investment accounts
- Real estate other than the family's primary residence
- Vehicles beyond the first one
- Business assets and equipment
Life insurance, retirement accounts (401k, IRA), and the primary residence do not count toward the $5,000 threshold.
Common Questions
- If my assets are exactly $5,000, do I have imputed income? No. Imputed income applies only to assets exceeding $5,000. At $5,000 exactly, the excess is zero, so no income is imputed.
- Does the PHA verify my assets annually? Yes. At recertification, families must report all assets. The PHA may request bank statements, investment statements, or other documentation. Intentionally underreporting assets is fraud and can result in overpayment demands and program termination.
- Can I reduce my imputed income by spending down assets? Intentionally reducing assets to qualify or lower rent is not permitted if done solely to avoid income limits. However, normal household spending is not questioned. Consult your PHA or a housing counselor about your specific situation.
Related Concepts
Net Family Assets is the total value of all family assets minus liabilities, and this figure is what the PHA uses to calculate imputed income.
Asset Income includes both imputed income (calculated on excess assets) and actual earned income from assets such as rental property or investment dividends.