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So I was just accepted and signed a lease for an affordable housing unit, 130% AMI. It was a little tricky because I'm self-employed and on top of that was unemployed until last summer, but it all worked out. I haven't seen any guides online about this so I thought I'd share some tips.
1. Submit all the docs
If you're self-employed, you're going to need to submit a lot of docs. My building asked for 3 years of full tax returns, including all W2's, 1099s, etc. Make sure to have these all ready. You should also submit statements from any payment apps (Venmo, Zelle, Cash app, Apple Cash, etc.) that you use, even if the balance on them is zero. They do scrutinize every single document; they asked me questions about obscure things like converting an IRA three years ago.
2. Submit receipts from your clients
You should submit anything that remotely resembles a "pay stub" to prove your income, even some of them are just PDFs of an email that says money is on the way from a client.
3. Calculate anticipated annual income
This is the most important element, and the trickiest. According the HPD Marketing Handbook, there are a few different tests they use to calculate anticipated self-employment income. They take the highest number out of all the tests.
The simplest test is to look at your tax returns. Assuming that your only income right now is self-employment income, they look at your net profit (gross minus expenses). If your net profit in your last three years all fall under the building's income range, then congrats, you're good to go.
But if not all of the tax returns fall within the income range, then they try to calculate a trend line. So if you made enough two years ago but then last year you made too little, you might fail this test.
The final method is to just look at your recent earnings and then annualize them. This is what they'll do if you fail the tax return test for any reason (as I did). To pass the recent earnings test, it will be very helpful to submit all checking account/Venmo/Zelle/etc. statements that clearly show the money coming in (see step 1), and submit pay receipts (see step 2). I did all of that and also typed up a table of my earnings over the last six months that I attached to my self-employment affidavit (see step 4).
It's also important that the income looks relatively consistent month-to-month. My building actually made me submit letters from my clients that basically said "We plan to keep working with [my name] for the foreseeable future]." So if you have regular clients, it may be helpful to prepare these letters in advance.
4. Submit a notarized self-employment affidavit.
You can also submit a CPA letter, but I don't have a CPA, so I had to write an affidavit. I made a template that you are free to use:
Quote:
Self Employment Affidavit
Application for [INSERT BUILDING NAME HERE]
I, [FULL NAME], born [DATE], do hereby certify that I am self-employed as a [NAME OF JOB], as a [sole proprietorship / LLC / etc] since [DATE], located at [ADDRESS]. My tax ID number is [YOUR SSN].
My anticipated gross annual income is [$X], based on [insert reasoning here, depending on what test you used in Step 3. Common answers would be "my tax returns" or "my self employment receipts over the last X months, annualized"].
My anticipated annual business expenses is [$X], based on [insert reasoning here. I went with a round number similar to my expenses from the previous year].
Therefore, my anticipated annual profit is [$(Gross income minus expenses)].
As supporting documents, I hereby attach [names of documents].
I declare that the statements contained in this document and accompanying information is true and complete to the best of my knowledge. I have not withheld, falsified, or otherwise misrepresented any information. I fully understand that any and all information I provide during this application process is subject to review by the New York City Department of Investigation (DOI), a fully empowered law enforcement agency which investigates potential fraud in City-sponsored programs. I understand that the consequences for providing false or knowingly incomplete information in an attempt to qualify for the program may include the disqualification of my application, termination of my lease (if discovery is made after the fact), and referral to the appropriate authorities for potential criminal prosecution.
As I mentioned above, I attached a table of my recent self-employment earnings, to show how I arrived at my anticipated annual income.
I notarized the letter through an online notary service that took 10 minutes and cost $25.
5. Explain job terminations
If you had a normal W-2 job at any point over the last three years that ended, they will ask you to provide some kind of document or letter that shows why that job ended. I'm not sure if this affects anything, but my guess is they're making sure you're not still secretly working somewhere. So just be ready for that.
6. Study the HPD marketing handbook closely!
If your application is complicated, you really need to be prepared to justify your case. I was challenged by my leasing agent multiple times through the process; they don't deal with a lot of self-employed people and don't always all the rules. I actually cited some rules from the handbook to my agent. HPD is pretty easy to reach by phone if you need clarification.
That's all I can think of for now: others feel free to weigh in with your own tips or experiences. It is definitely a pain in the ass to apply as a self-employed person, but boy did it feel good to finally sign that lease. Good luck!!
Last edited by grandstreet; 04-07-2022 at 01:43 PM..
So I was just accepted and signed a lease for an affordable housing unit, 130% AMI. It was a little tricky because I'm self-employed and on top of that was unemployed until last summer, but it all worked out. I haven't seen any guides online about this so I thought I'd share some tips.
1. Submit all the docs
If you're self-employed, you're going to need to submit a lot of docs. My building asked for 3 years of full tax returns, including all W2's, 1099s, etc. Make sure to have these all ready. You should also submit statements from any payment apps (Venmo, Zelle, Cash app, Apple Cash, etc.) that you use, even if the balance on them is zero. They do scrutinize every single document; they asked me questions about obscure things like converting an IRA three years ago.
2. Submit receipts from your clients
You should submit anything that remotely resembles a "pay stub" to prove your income, even some of them are just PDFs of an email that says money is on the way from a client.
3. Calculate anticipated annual income
This is the most important element, and the trickiest. According the HPD Marketing Handbook, there are a few different tests they use to calculate anticipated self-employment income. They take the highest number out of all the tests.
The simplest test is to look at your tax returns. Assuming that your only income right now is self-employment income, they look at your net profit (gross minus expenses). If your net profit in your last three years all fall under the building's income range, then congrats, you're good to go.
But if not all of the tax returns fall within the income range, then they try to calculate a trend line. So if you made enough two years ago but then last year you made too little, you might fail this test.
The final method is to just look at your recent earnings and then annualize them. This is what they'll do if you fail the tax return test for any reason (as I did). To pass the recent earnings test, it will be very helpful to submit all checking account/Venmo/Zelle/etc. statements that clearly show the money coming in (see step 1), and submit pay receipts (see step 2). I did all of that and also typed up a table of my earnings over the last six months that I attached to my self-employment affidavit (see step 4).
It's also important that the income looks relatively consistent month-to-month. My building actually made me submit letters from my clients that basically said "We plan to keep working with [my name] for the foreseeable future]." So if you have regular clients, it may be helpful to prepare these letters in advance.
4. Submit a notarized self-employment affidavit.
You can also submit a CPA letter, but I don't have a CPA, so I had to write an affidavit. I made a template that you are free to use:
As I mentioned above, I attached a table of my recent self-employment earnings, to show how I arrived at my anticipated annual income.
I notarized the letter through an online notary service that took 10 minutes and cost $25.
5. Explain job terminations
If you had a normal W-2 job at any point over the last three years that ended, they will ask you to provide some kind of document or letter that shows why that job ended. I'm not sure if this affects anything, but my guess is they're making sure you're not still secretly working somewhere. So just be ready for that.
6. Study the HPD marketing handbook closely!
If your application is complicated, you really need to be prepared to justify your case. I was challenged by my leasing agent multiple times through the process; they don't deal with a lot of self-employed people and don't always all the rules. I actually cited some rules from the handbook to my agent. HPD is pretty easy to reach by phone if you need clarification.
That's all I can think of for now: others feel free to weigh in with your own tips or experiences. It is definitely a pain in the ass to apply as a self-employed person, but boy did it feel good to finally sign that lease. Good luck!!
Very helpful. I'm going through the process now having been fully self-employed for only about 9 months and it's been a lot but I'm glad to hear it's possible! Thank you!
So I was just accepted and signed a lease for an affordable housing unit, 130% AMI. It was a little tricky because I'm self-employed and on top of that was unemployed until last summer, but it all worked out. I haven't seen any guides online about this so I thought I'd share some tips.
1. Submit all the docs
If you're self-employed, you're going to need to submit a lot of docs. My building asked for 3 years of full tax returns, including all W2's, 1099s, etc. Make sure to have these all ready. You should also submit statements from any payment apps (Venmo, Zelle, Cash app, Apple Cash, etc.) that you use, even if the balance on them is zero. They do scrutinize every single document; they asked me questions about obscure things like converting an IRA three years ago.
2. Submit receipts from your clients
You should submit anything that remotely resembles a "pay stub" to prove your income, even some of them are just PDFs of an email that says money is on the way from a client.
3. Calculate anticipated annual income
This is the most important element, and the trickiest. According the HPD Marketing Handbook, there are a few different tests they use to calculate anticipated self-employment income. They take the highest number out of all the tests.
The simplest test is to look at your tax returns. Assuming that your only income right now is self-employment income, they look at your net profit (gross minus expenses). If your net profit in your last three years all fall under the building's income range, then congrats, you're good to go.
But if not all of the tax returns fall within the income range, then they try to calculate a trend line. So if you made enough two years ago but then last year you made too little, you might fail this test.
The final method is to just look at your recent earnings and then annualize them. This is what they'll do if you fail the tax return test for any reason (as I did). To pass the recent earnings test, it will be very helpful to submit all checking account/Venmo/Zelle/etc. statements that clearly show the money coming in (see step 1), and submit pay receipts (see step 2). I did all of that and also typed up a table of my earnings over the last six months that I attached to my self-employment affidavit (see step 4).
It's also important that the income looks relatively consistent month-to-month. My building actually made me submit letters from my clients that basically said "We plan to keep working with [my name] for the foreseeable future]." So if you have regular clients, it may be helpful to prepare these letters in advance.
4. Submit a notarized self-employment affidavit.
You can also submit a CPA letter, but I don't have a CPA, so I had to write an affidavit. I made a template that you are free to use:
As I mentioned above, I attached a table of my recent self-employment earnings, to show how I arrived at my anticipated annual income.
I notarized the letter through an online notary service that took 10 minutes and cost $25.
5. Explain job terminations
If you had a normal W-2 job at any point over the last three years that ended, they will ask you to provide some kind of document or letter that shows why that job ended. I'm not sure if this affects anything, but my guess is they're making sure you're not still secretly working somewhere. So just be ready for that.
6. Study the HPD marketing handbook closely!
If your application is complicated, you really need to be prepared to justify your case. I was challenged by my leasing agent multiple times through the process; they don't deal with a lot of self-employed people and don't always all the rules. I actually cited some rules from the handbook to my agent. HPD is pretty easy to reach by phone if you need clarification.
That's all I can think of for now: others feel free to weigh in with your own tips or experiences. It is definitely a pain in the ass to apply as a self-employed person, but boy did it feel good to finally sign that lease. Good luck!!
Thank you, thank you, THANK YOU for sharing!! This is so helpful! Now I just need to keep crossing my fingers that I'll get picked!
Very helpful. I'm going through the process now having been fully self-employed for only about 9 months and it's been a lot but I'm glad to hear it's possible! Thank you!
Oh do keep us updated as well! I am also newly self-employed so curious how the process might be different.
Oh do keep us updated as well! I am also newly self-employed so curious how the process might be different.
Only in the last couple of years did they even allow you to qualify if you couldn't provide self-employed tax returns for the past 2 years. The most recent handbook details what you have to provide instead. The only big difference i've found since I did the process when I was a w2/one job, applicant in 2019 is the agent definitely seems to be trying to get me to give up/miss deadlines etc so he doesn't have to deal with my more complicated situation. I have also had to remind him of the rules he has to follow multiple times. Pretty annoying but I'm just moving forward and sending him whatever extra documentation I need and following up regularly. We'll see, I will keep you all updated.
Thanks, grandstreet. I'm sure this will be helpful for anyone who falls into your sort of situation. Love to see applicants effectively advocating for themselves against agents who don't know/follow/want to follow the rules, too!
I am also freelancer/self employee my income won't be the same every year so I am wondering how do they calculate the income? Based on last year's tax return (last year net income) or projected income?
I am also freelancer/self employee my income won't be the same every year so I am wondering how do they calculate the income? Based on last year's tax return (last year net income) or projected income?
There's more than enough information both in this forum and online that pretty much spells out how freelance or self-employed income is calculated.
Besides supply two or whatever years worth of past tax returns city wants to know (and see) projected income. Applicants cannot just pull those numbers out of thin air but must supply documented proof in aid of supporting whatever claims of income.
Issue with self-employed, freelancers and others not employed by someone else is potential to manipulate numbers (especially with future predicted income) in order to qualify for a unit.
Besides supply two or whatever years worth of past tax returns city wants to know (and see) projected income. Applicants cannot just pull those numbers out of thin air but must supply documented proof in aid of supporting whatever claims of income.
Issue with self-employed, freelancers and others not employed by someone else is potential to manipulate numbers (especially with future predicted income) in order to qualify for a unit.
The article is very helpful. Thank you for sharing the information.
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