HUD Rental 401K - Foreclosed House

[skmom]

What is the name of your state (only U.S. law)? OH

I have started the application for a HUD rental in my community.

I currently own my own home, am 5 months behind in the mortgage and will file bankruptcy. The foreclosure process has not started.

I also have a 401K from when I was employed. (currently unemployed)

Does my 401K have to be liquidated and used before I am eligible?
Do I have to wait until my home is foreclosed upon before I eligilble for this housing?

Thank you

[DeenaCA]

Rules on assets for the voucher program and HUD multifamily programs are at 24 Code of Federal Regulations 5.603 and 5.609 ([url=http://ecfr.gpoaccess.gov/cgi/t/text/text-idx?c=ecfr&sid=47bd52148c8f170e95e09d31b049a67d&rgn=div5&view=text&node=24:1.1.1.1.5&idno=24]Electronic Code of Federal Regulations:[/url]).

There is no limit on the amount of assets an assisted family may own. For a 401(k) account, the interest is counted as income and added to any other family income. In the case of real estate, an interest rate is applied to the equity in the property and this "interest" is also added to income. If there is no equity, nothing is counted. After foreclosure nothing is counted.

Total annual income, including income from assets, cannot exceed the applicable income limit for your area. If you know which program you're applying for, I can provide links to additional information.

[skmom]

May I apply to the program before the foreclosure process? I just spoke with a bankruptcy lawyer yesterday

[DeenaCA]

It depends upon which program it is, but most likely, yes.