Tracking affordable housing payments

1. Add a new income account to your Chart of Accounts called Section 8 Income. see "Chart of accounts".

   You will use this income account to represent money paid by the government.

2. On the tenant's lease ledger, add a recurring charge for Section 8 Income. see "Tenant recurring charges"

   The amount of this recurring charge will be equal to the money for which the housing authority is responsible. The other attributes of the recurring charge, such as the duration and frequency, should follow the terms outlined in the tenant's lease.

3. On the tenant's lease ledger, add or edit the recurring charge for Rent Income.

   The amount of this recurring charge will be equal to the money for which the tenant is responsible. The other attributes of the recurring charge, such as the duration and frequency, should follow the terms outlined in the tenant's lease.

When you're done, the total of the two recurring charges should equal the total amount of rent due on the lease. In the example below, the tenant is responsible for $750 and the housing authority pays $250 each month.

You may need to adjust the late fee policy for the lease. For example, should the tenant be held responsible for a late payment by the government?

1. Receive the payment as usual. see "Tenant payments". Use the following criteria when receiving the payment.

• If the payment is from the tenant, use Rent Income.

• If the payment is from the housing authority, use Section 8 Income.

On the tenant's lease ledger, add a recurring credit. see "Tenant recurring credits".

• The date, amount, frequency, and duration of this credit should match what's happening in the real world.

• The Credit Action for this credit should be "Issue credit for payments previously deposited." Choose Owner Draw equity as the offsetting account.

• Apply the credit to Section 8 Income.

This transaction will automatically record income and an owner draw on the property. The suggested owner draw total will not be affected by this transaction.

From time to time, Section 8 may request that a previous payment be allocated to a different lease ledger. For example, in June, they credited Bob's ledger with a payment. When July's payment comes through, they've learned that Bob moved out two months ago and the credit was made in error.

To complete this adjustment:

1. Go to the old lease ledger, the one from which the previous payment is being removed.
2. Issue a refund. Add a memo that indicates this is a section 8 adjustment and that the refund was not actually written in the real world.
3. Go to the new lease ledger.
4. Receive a payment on that ledger. Add a memo that indicates this payment is a section 8 adjustment.

The refund on the old lease ledger and the payment on the new ledger should balance out.

From time to time, Section 8 may take back money that had been allocated to a lease ledger. For example, the authority might realize that a previous payment had been made in error and a later check contains the correction.

To record this adjustment:

1. Go to the affected lease ledger.
2. Issue a refund. Add a memo that indicates this is a section 8 adjustment and that the refund was not actually written in the real world.
   

This refund transaction is effectively a journal entry. When you complete your monthly bank reconciliation, you should include this refund as a component of the larger Section 8 bank transaction.