HUD Passbook Savings Rate: Asset Threshold and Rent Impact

For 2026, the HUD passbook savings rate is 0.40%, and it applies only when a household’s net family assets exceed $52,787. Public Housing Agencies (PHAs) use the rate to estimate income from assets that don’t produce trackable returns, and that estimated income is added to your annual income when your rent is calculated. If your assets sit at or below the threshold, the rate never touches your rent.¹

The rate reaches well beyond Housing Choice Vouchers. It applies to Public Housing, Section 8 Project-Based Rental Assistance, Section 202 and 811, HOPWA, HOME, the Housing Trust Fund, and several other programs, and your PHA must use the HUD-published rate in effect at the time of your annual examination or interim recertification.¹

When the Rate Actually Applies to Your Rent

The $52,787 threshold is the switch. If your net family assets total that amount or less and the PHA can’t determine any actual income from them, no imputed income is added to your annual income at all. If those under-threshold assets do produce income (interest, dividends, and the like), only the actual income counts.²

Above the threshold, the PHA looks at each asset one at a time. Where actual returns can be calculated, the PHA uses those actual returns. Imputed income enters only for assets where actual returns cannot be determined, and for those the PHA multiplies the net cash value by 0.40%. Your total asset income is the sum of the actual returns and the imputed returns, and it joins wages, Social Security, and other income to produce the annual income used for rent.²

This is a common point of confusion. Older guidance described a “greater of” test in which PHAs calculated actual and imputed income on every asset and used whichever was higher. That approach no longer applies. Under the current rule, imputed income is a gap-filler for assets that don’t produce trackable returns, not a worst-case comparison run against everything you own.

The threshold itself is not fixed. HUD adjusts it each year using the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), so it moves with inflation.¹

Assets That Don’t Count Toward the Threshold

Plenty of what you own is excluded from net family assets, and this is where tenants often panic at recertification when they don’t need to.

Retirement Accounts

Any retirement account recognized by the IRS is excluded. That covers 401(k) plans, IRAs, 403(b) plans, and retirement plans for the self-employed.³ Retirement savings won’t push you over the threshold or raise your rent.

Trusts You Don’t Control

A trust is excluded if no family member can revoke or control it. Irrevocable trusts qualify automatically. A revocable trust also qualifies when the family member has no control, such as a trust set up by a grandparent for a minor that becomes accessible at age 21. Income actually distributed from an excluded trust still counts as income, unless the distribution pays for a minor’s health or medical expenses.⁴

Education and Disability Savings

Accounts under IRS Code sections 529 (education), 529A (ABLE accounts for people with disabilities), and 530 (Coverdell) are excluded. So are settlement funds from a civil claim based on malpractice, negligence, or a similar breach of duty that resulted in a disability.³

Necessary Personal Property

Items essential for daily life don’t count. HUD defines these as things needed for your home, employment, education, or health, along with items that assist people with disabilities. Vehicles used for transportation, furniture, appliances, computers, phones, clothing, medical equipment, professional tools, musical instruments, and exercise equipment all qualify.⁴

Non-necessary personal property (recreational vehicles, collectibles, expensive jewelry without cultural significance, boats) is also excluded as long as the combined value stays at or below $52,787 for 2026. Only when the combined value of non-necessary items exceeds that amount does it fold into net family assets.¹

What the Math Looks Like

Say your household has $70,000 in net family assets for 2026. That’s above $52,787, so the PHA looks at each asset. A savings account pays $180 per year in interest, which is calculable, so the PHA uses the actual $180. You also hold $15,000 in cash that earns nothing. Actual returns can’t be determined on the cash, so the PHA multiplies $15,000 by 0.40%, producing $60 of imputed income. Your total asset income is $240.

That $240 is added to wages, Social Security, pensions, and any other income covered by 24 CFR 5.609. The combined annual income drives your rent. In most programs, tenant rent is 30% of adjusted monthly income, so even a small imputed figure moves the number.

“Net cash value” is what you’d actually receive after subtracting the costs of converting an asset to cash, including broker fees, early withdrawal penalties, and legal expenses.⁵ Keep records of those costs so the PHA doesn’t inflate your asset total.

Documenting Assets at Recertification

If your net family assets total $52,787 or less, your PHA may accept a signed self-certification instead of bank statements and appraisals for every account. Not every PHA offers this; it must be in their written policies. Even where self-certification is used, the PHA must verify your assets through third-party documentation at least once every three years.⁴

Above the threshold, the PHA must verify assets annually with third-party documentation: recent bank statements, investment summaries, and current appraisals or tax assessments for real estate. Appraisal costs are yours, but you can deduct them from the asset’s value when calculating net cash value.

You also have to disclose any assets you sold or gave away for less than fair market value during the two years before your application or recertification. If you sold a $30,000 car to a relative for $5,000, the PHA treats the $25,000 difference as though you still hold it. Foreclosures and bankruptcy sales are excluded from this lookback. The regulation sets no minimum dollar amount, so smaller below-market transfers within the two-year window are reportable too.⁵⁶

If You Think the PHA Got It Wrong

You can request an informal hearing to challenge how your assets or imputed income were calculated. Federal regulations give you the right to contest any determination of annual or adjusted income, which includes the asset calculations behind your rent.⁷

The PHA’s written notice sets a deadline for requesting the hearing, so watch the timeline. Before the hearing, you can examine and copy PHA documents relevant to your case, and if the PHA refuses to share them, it can’t use them against you at the hearing. You can bring a lawyer or other representative at your own expense. The hearing officer issues a written decision with reasoning, and you receive a copy.

Grounds worth raising include the PHA counting an excluded asset (a retirement account, an ABLE account, an irrevocable trust) toward net family assets, using an outdated passbook rate, applying imputed income when your assets fall below the threshold, or failing to deduct legitimate conversion costs from an asset’s value.

What Happens If You Hide Assets

Deliberately concealing assets or understating their value is fraud under federal housing rules. A PHA can terminate assistance if any family member commits fraud in connection with a federal housing program, which means losing your voucher or public housing unit rather than a simple rent adjustment.⁸

You’ll also owe repayment for the entire period you underpaid rent as a result of unreported assets. The PHA calculates the difference between what you paid and what you should have paid, and that becomes a formal debt. If you refuse to pay or abandon the unit, the PHA can pursue civil collection. Willful misrepresentation or substantial underpayments across multiple years can be referred for criminal prosecution at the local, state, or federal level.⁹

Disclose everything and let the exclusions do their work. Retirement accounts, trusts you don’t control, ABLE accounts, and necessary personal property are already off the table. Hiding assets you didn’t need to hide carries risk with no upside.

1
HUD User. 2026 HUD Inflation-Adjusted Values and Passbook Rate
2
eCFR. 24 CFR 5.609 – Annual Income
3
HUD Exchange. HOTMA Assets, Asset Exclusions, and Limitation on Assets Resource Sheet
4
U.S. Department of Housing and Urban Development. HOTMA Net Family Assets
5
U.S. Department of Housing and Urban Development. HUD Occupancy Handbook – Exhibit 5-2: Assets
6
eCFR. 24 CFR Part 5 Subpart F – Family Income and Family Payment
7
eCFR. 24 CFR 982.555 – Informal Hearing for Participant
8
eCFR. 24 CFR 982.552 – PHA Denial or Termination of Assistance for Participant
9
eCFR. 24 CFR Part 792 – Public Housing Agency Section 8 Fraud Recoveries