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1242 (07/2026) Chapter 8: Examples • Chapter 8: Examples Example 3: Individual rents an apartment and is solely named on lease. Individual pays utilities. Lodger rents one room. James rents an apartment; his rent is $850 a month. James is the only person on the rental agreement. James pays the utilities and has provided documentation to show they are $220 total. James’s rent payment as well as the utilities are allowable expenses. This brings James’s total allowable expenses to $1070. James rents a single room to Tony for $425 a month. The apartment has 2 bedrooms, 1 bathroom, 1 living room and 1 kitchen. That’s 4 rooms in total as the bathroom is excluded. Prorate this by dividing the allowable monthly expense of $1070 by the number of livable rooms, 4. This gives you the prorated lodger expense of $267.50. Subtract this prorated expense of $267.50 from the monthly lodger rental income of $425 to get the reduced lodger income of $157.50. This is the countable lodger income amount. Calculation: Monthly rent $850 and all utilities, verified to be $220. The rent and utilities are allowable expenses. This brings the total allowable housing expense to $1070 ($850 + $220 = $1070) Apartment: 2 bed, 1 bath, 1 living room and 1 kitchen. There are 4 total rooms (2 bedrooms + 1 living room + 1 kitchen) (bathroom is excluded) and 1 room is being rented to a friend for $425. $1070/4 = $267.50 Allowable housing expense divided by number of livable rooms = prorated Lodger reduction $425 - $267.50 = 157.50 Lodger income minus prorated Lodger reduction = Adjusted Lodger income Sale of a resource OSIPM Proceeds from the sale of the home of the financial group