Purging Files at Year-End? Better Review HUD’s Record Retention Rules First

Applicant and tenant file records are important pieces of source documentation that’s used as evidence to support determinations and conclusions in all areas of occupancy. It’s important for a manager to ensure that all tenant application and occupancy files are maintained in accordance HUD rules and with an owner’s standard operating procedures. These files are subject to inspection by HUD to assure compliance with funding requirements and fair housing regulations.

As year-end approaches, owners and staff may want to conduct a cleaning of files. We’ll go over HUD’s document retention requirements for applicant and tenant files and discuss how to dispose of documents to protect tenant and applicants’ personal information.

Applicant File Retention

Applicant files must be maintained from the time the application is accepted, for the entire time an applicant is on the waiting list, and for three years after the applicant is removed from the waiting list. According HUD Handbook 4350.3, par. 4-22:

• The current application must be retained as long as the applicant is active on the waiting list.
• Once the applicant is removed from the waitlist, then the application, Supplement to Application (HUD 92006), initial rejection notice, applicant reply, copy of the owner’s final response, and all documentation supporting the reason for removal must be retained for three years.
• When an applicant moves in and begins to receive assistance, the application and form HUD-92006 the applicant completed must be maintained in the tenant file for the duration of the tenancy and for three years after the tenant leaves the site.

Resident File Retention

Resident files (all documentation) must be maintained for the term of tenancy and for three years after tenancy ends for any reason. According to HUD Handbook 4350.3, par. 5-23, at a minimum, owners must keep the following documentation in the resident file:

• All original, signed HUD 9887s and 9887-As;
• A copy of signed consent forms;
• A copy of the EIV Income Report, regardless of whether or not any income is reported for the household, along with the HUD-50059 and any other documentation obtained supporting income and rent determinations; and
• Any third-party verifications received from third-party sources.

Additional record-keeping requirements for Forms HUD-50059, HUD-50059-A, and vouchers are in HUD’s Monthly Activity Transmission (MAT) guide. Owners must keep the signed HUD-50059(s) and copies of the HUD-50059-A(s) for tenants from the time of move-in to move-out and for a minimum of three years thereafter. Owners may move older records off-site when files get large, but, upon request, the files must be made available for review by HUD or the Contract Administrator [HUD MAT Guide, par. 7-7].

The MAT guide also states that owners must keep a signed paper copy of the subsidy vouchers for at least five years after HUD or Contract Administrator action. And owners must dispose of all files and records in a manner that will prevent any unauthorized access to personal information [HUD MAT Guide, par. 7-7].

Retention of EIV Reports

The Income Report, Summary Report showing Identity Verification Status as “Verified,” and the Income Discrepancy Report along with any supporting documentation must be retained in the resident file for the term of tenancy plus three years. According to HUD Handbook 4350.3, par. 9-14:

• Any tenant-provided documentation to supplement the Social Security Administration or National Database of New Hires data must be retained in the resident file for the term of tenancy plus three years.
• Results of the Existing Tenant Search must be retained with the application. If the applicant was not admitted, it must be retained with the application for three years. If the applicant was admitted, it must be retained in the resident file for the term of tenancy plus three years.
• The master file containing the New Hires Report, Identity Verification Reports, Multiple Subsidy Report, and Deceased Tenant Report must be retained for three years.

Storing, Disposing Files Upon Expiration

Many residents may reside at a site for multiple years and this could cause the resident file to become quite large. Owners may choose to reduce the file sizes located at the site. But it’s recommended to keep all move-in documentation along with the most recent five years’ worth of certifications and supporting documentation. If file documentation is removed from the site it must be kept in secure storage—the documentation can’t be destroyed. It’s a good idea to include this policy in your written management procedures.

Once the retention period has expired for all of the above-listed requirements, HUD requires owners to dispose of the data in a manner that will prevent any unauthorized access to personal information. HUD uses the words “burn, pulverize, shred, etc.” to describe the way in which files and records are to be handled to prevent any unauthorized access to personal information. Owners and staff should review the above requirements on a yearly basis to ensure that any unnecessary documentation is not being kept and stored on site.