HUD News: Office of Multifamily Housing Releases Draft of HOTMA Final Rule
A draft for the final rule implementing sections 102, 103 and 104 of the Housing Opportunity Through Modernization Act (HOTMA) of 2016 has been released by the Office of Multifamily Housing Programs.
Published on January 9, 2023, the draft is still pending publication in the Federal Register, but is currently set to take effect January 1, 2024 except for revisions to: §§ 5.520(d); 5.628(a); 960.102(b); 960.206(b); 960.253; 960.257(a) and (d); 960.507, 960.509, 960.600; 960.601(b); 964.125(a); 966.4(a) and (l); and the removal of § 960.261, the effective date for which will be 30 days after publication. A Fact Sheet released on the HUD.gov website states:
“Owners must implement the revised regulations for all tenant certifications of income effective January 1, 2024 and after. Additional guidance will be forthcoming about the timing of submitting January 1, 2024 certifications to TRACS.”
Some of the key changes to Multifamily Housing Programs are:
- Definitions – HOTMA amends the definitions of family and earned income.
- Enterprise Income Verification (EIV) – HOTMA states that owners are no longer required to use EIV to verify tenant employment and income information during an interim reexamination.
- Hardship Relief – HOTMA creates hardship relief provisions for childcare, health & medical care, and attendant care & auxiliary apparatus expense deductions.
- Imputed Asset Income – HOTMA raises the imputed asset threshold from $5,000 to $50,000 (adjusted annually for inflation).
- Income & Asset Exclusions – HOTMA codifies additional income and asset exclusions.
- Income Reviews – HOTMA creates a 10% adjusted income increase/decrease threshold for conducting Interim Reexaminations.
- Mandatory Deductions – HOTMA increases the elderly/disabled family deduction to $525. The dependent deduction and the elderly/disabled family deduction will be adjusted for inflation on an annual basis.
- Self-certification of Assets – HOTMA permits owners to accept self-certification of net assets if estimated to be equal to $50,000 (adjusted for inflation on an annual basis) or less.
More information on HOTMA and a preview of the newly released draft of the final rule can be found at: https://www.hud.gov/program_offices/housing/mfh/hotma.
CMS takeaways
What does this mean for you? If you are an Owner/Agent participating in Public Housing or Section 8 Rental Assistance Programs, you will soon see changes made to the Tenant Rental Assistance Certification System (TRACS) and HUD forms frequently used by Owners/Agents and HUD (e.g., Form HUD-50059, Form HUD-50059A, Form HUD-9887/9887A, Form HUD-9834, Model Leases, etc.) to conform with HOTMA’s requirements.
Check the TRACS webpage for additional information on system updates, or reach out to your PBCA for more details on how this will effect you and your tenants.
About HOTMA
On July 29, 2016, the Housing Opportunity Through Modernization Act of 2016 was signed into law making sweeping changes to the United States Housing Act of 1937. Title I of HOTMA has 14 sections that affect the Public Housing and Section 8 Rental Assistance programs, including sections 102, 103, and 104 which make amendments to the way income calculations and reviews are to be conducted. A draft of a proposed rule to implement these sections was published on September 17, 2019, opening a brief comment period that was closed on November 18, 2019. Recently a draft the final rule was released that would revise HUD regulations to put sections 102, 103, and 104 into effect.
The Office of Multifamily Housing will be publishing a pre-recorded webinar introducing stakeholders to HOTMA in February of 2023. Readers are encouraged to sign up for the Office of Housing’s mailing list to stay up to date on webinars and additional resources.