nyc housing lottery: is self employed income averaged? (2015, apartments)

[ss5050]

Hello! I've been called in for a lottery (log # 18 but I am not in the CB nor do I have other qualifying factors in my favor-- and there are only 10 apartments in the building).

I am self employed and my 2014, 2015 and 2016 net income land me just a tad low on the income bracket. However, my projected 2017 income is higher. Will they average my 2017 projected income with the other years-- landing me squarely in the bracket I need? Or will I look "too high" and "too low"?

Any ideas or experiences would be appreciated.

[deslove]

They will always go with the higher income. If your projected income for 2017 is higher than the rest, then they will go by that and you should be okay as long as you are still in the income bracket. If for some reason they calculated your income and it's TOO high (going over the bracket), you will always have the option to appeal..

good luck

[ss5050]

Thank you for this! Just to clarify. They will take the highest income, NOT the average of all four years?

[deslove]

Originally Posted by ss5050

Thank you for this! Just to clarify. They will take the highest income, NOT the average of all four years?

Yes. For example:

2014: 36,158
2015: 37,785
2016: 35,162
Projected 2017: 39,980 *They would take this - which would include any future bonuses, overtime (if applicable) for the year.

[deslove]

Here's what I found:

An alternate calculation method may be warranted in the following
example: The incomes for the past three years for a self-employed
applicant were $30,000; $32,000 and $34,000. The straight average
would be $32,000. However, there is a clear pattern reflecting a gradual
increase in this income source and so, consistent with that pattern, a
logical evaluation of this applicant’s income would conclude that $36,000
would be the current/next year’s income.

[ss5050]

I see, that's interesting. In my case I have a new self-employment gig this year which significantly increases my earnings so the straight averages of my last three years don't point to an accurate projection.

It would be as though I had (after deduction income of) $30,000, $32,000, $34,000 and then all of a sudden 2017 comes along and BAM: $42,000.

I have a signed letter from my accountant attesting to the $42,000 (after deductions) but it's still just a *projection* so that concerns me. What will they want to see in support of this? Anything beyond bank statements and pay-stubs?

[deslove]

I'm not familiar with the self-employment income process so I don't want to give you wrong information. Here is the marketing handbook that the interviewer should be going by:

https://www1.nyc.gov/assets/hpd/down...g-handbook.pdf

C. SELF-EMPLOYMENT INCOME
1. Because self-employment income is more difficult to document via third party
and subject to more variables and potential manipulation, special care must be
given in the review of such income. The Marketing Agent must require that all
adult household members reporting self-employment income provide both of
the following:
a. Projected Self-Employment Income: An estimate of current year’s net selfemployment
earnings certified in (a) a letter from the applicant’s
accountant, tax preparer or business manager OR (b) a notarized self-
statement. If (b), the self–statement must be accompanied by additional
documentation such as income receipts, a current financial
statement/budget, or other information which supports the projection.
This income will be “the projected self-employment income.”
b. Historical Self-Employment Income: Most recent tax returns for the last
three years. (If after May 1, the most recent year due to be filed by the
preceding April deadline must be provided unless documentation of an
IRS extension filing is provided). If the applicant reported selfemployment
income in the same line of work for each of the three years,
then all three must be averaged and evaluated. If only the most recent
two years reflect self-employment income in the same line of work, then
those two years must be averaged and evaluated. The income calculated
through these averages and evaluations will be “the historical selfemployment
income.”
2. Comparison and Determination: The projected and historical incomes are
compared, and the higher amount is what is used as income for the purposes of
income eligibility.
a. “Evaluated” means that the Marketing Agent must make an effort to
identify any patterns that may logically result in a conclusion that the
current or next year’s income will increase beyond the three (or two)
year average.
b. An alternate calculation method may be warranted in the following
example: The incomes for the past three years for a self-employed
applicant were $30,000; $32,000 and $34,000. The straight average
would be $32,000. However, there is a clear pattern reflecting a gradual
increase in this income source and so, consistent with that pattern, a
logical evaluation of this applicant’s income would conclude that $36,000
would be the current/next year’s income.
c. The Marketing Agent must compare the average or projected income to
the applicant’s most recent tax return. If the tax return is higher, that
amount should be used as income unless there is a compelling argument
as to why an applicant’s income is expected to decrease. Such a
compelling argument must be supported by documentation.
d. If self-employment is the primary source of income at least the most
recent two years of tax returns must document that the applicant’s
income has come from self-employment in the same line of work.
Applicants who do not meet this “time test” have not established a
suitable income-earning history through their self-employment, and
there is insufficient data to accurately evaluate their income.
e. If self-employment is not the primary source of income, or if an
applicant’s historical income is a combination of wages and self-
employment and the self-employment income can be documented by a
third party, the time test may not apply and the Agencies should be
consulted for guidance.

[livingsinglenyc]

Honest self employed people tend to get shafted a lot since their income isn't clear cut.
Ive been to many interviews and every development has handled it differently.
My advice is to go in with everything required and a positive mind set but not to bank on anything till you sign a lease and get keys. Good Luck.