HUD and TRACS have released new guidance affecting certifications, deductions, passbook rates, and implementation timelines. CMS is providing clarification to help Owner/Agents avoid errors and ensure compliance.

Elderly/Dependent Deduction Guidance

Owner/Agents began submitting 2026 HUD Inflation-Adjusted Values for Elderly and Dependent Deductions. CMS reached out to TRACS/HUD for confirmation, and HUD clarified that Owner/Agents are not to use the 2026 values until the release of TRACS version 203A (release date unknown; we are currently in version 202D).

CMS cannot process certifications using incorrect Elderly or Dependent deduction amounts.
For certifications under TRACS 202D, continue using:

• Elderly Deduction: $400
• Dependent Deduction: $480

HUD Passbook Rate Guidance

HUD has issued recent guidance encouraging Owner/Agents to use a .06% passbook rate regardless of annual inflation adjustments until TRACS version 203A is released.

While CMS will continue to accept other passbook rates due to historical variations, we strongly encourage Owner/Agents to adopt the .06% rate now to align with HUD intent and avoid future corrections once 203A becomes active.

HOTMA Sections 102 and 104 (2026 Inflation Adjustment Values for PBCAs)

HUD has clarified that Owner/Agents should not implement Sections 102 and 104 of HOTMA at this time. TRACS is not yet capable of supporting the requirements, and early implementation may lead to processing errors and compliance issues. HUD will issue updated guidance once TRACS is fully prepared to accommodate these changes.