HUD Announces 2025 Inflationary Adjustments and Passbook Rate
You’ll use the new figures when calculating household income in 2025.
HUD recently released its annual inflationary adjustments for 2025, impacting tasks such as income certifications and asset level determinations under the Housing Opportunity Through Modernization Act (HOTMA). Prior to Sept. 1 of each year, HUD intends to calculate the inflation factor and post the revised inflation-adjusted values effective for the next calendar year. The revised amounts will then become effective on Jan. 1 of each year.
In addition to the inflationary adjustments, HUD also publishes a passbook rate to become effective on Jan. 1 of each year. The passbook rate is based on the Federal Deposit Insurance Corporation (FDIC) National Deposit Rate for savings accounts, which is an average of national savings rates published monthly. PHAs and owners use this figure when calculating imputed asset income for all income examinations.
We’ll go over the newly updated figures that you’ll use to ensure that household income calculations reflect current economic conditions. It’s important to note that depending on the result of HUD’s calculation of the inflation factor, some values may not increase from the prior year.
Inflationary Adjustments
The publication of the inflation-adjusted thresholds applies to both Multifamily and Public and Indian Housing programs. The following revised amounts will be effective Jan. 1, 2025.
Eligibility restriction on net family assets. HOTMA restricts families from receiving assistance in the Public Housing or Housing Choice Voucher program if their net family assets exceed a certain amount or if the family owns real property suitable for the family to live in. For 2025, this asset limitation threshold increased from $100,000 to $103,200.
Imputed income from assets threshold. The asset income threshold for 2025 is $51,600. This is an increase of $1,600 from 2024’s threshold of $50,000. In general, income from assets is considered income. If it’s possible to calculate actual returns from an asset, you should use that amount.
If it isn’t possible to calculate an actual return on an asset, and the net family assets are $51,600 or less, the imputed income from that asset is excluded. But if the net family assets are over $51,600, you must impute income for the asset based on the current passbook savings rate, as determined by HUD.
Non-necessary personal property threshold. For 2025, the threshold above which the total value of non-necessary personal property is included in net family assets is $51,600. The threshold for 2024 was $50,000.
For this category, the combined total value of non-necessary items of personal property not exceeding $51,600 is considered an excluded asset. Examples of these items are vintage baseball cards, recreational boats, coin collections, and art—so long as the total value is under the limit.
Self-certification of assets threshold. The self-certification of assets threshold increased from $50,000 to $51,600. This is the amount of net assets for which a PHA or Multifamily owner may accept self-certification by the family. In other words, owners may determine net family assets based on a self-certification by the family that the family’s total assets are equal to or less than $51,600, adjusted annually for inflation, without taking additional steps to verify the accuracy of the declaration at admission or reexamination. Owners aren’t required to obtain third-party verification of assets if they accept the family’s self-certification of net family assets. When owners accept self-certification of net family assets at reexamination, the owner must fully verify the family’s assets every three years.
Mandatory deduction for elderly and disabled families. The mandatory deduction for elderly and disabled households remains unchanged in 2025 at $525.
Mandatory deduction for a dependent. The dependent deduction amount for 2025 remains unchanged at $480.
Income exclusion for earned income of dependent full-time students. With HOTMA, income is now defined broadly with an expanded and clarified list of income exclusions. Earned income of dependent full-time students in excess of the amount of the deduction for a dependent is excluded. For 2025, the deduction remains unchanged at $480 per dependent.
Income exclusion for adoption assistance payments. Earned income in excess of the amount of the deduction for a dependent is excluded. For 2025, the deduction is unchanged at $480 per child.
Passbook Savings Rate Update
Along with the inflation-adjusted thresholds, HUD has updated the passbook savings rate. The new passbook rate for 2025 has been set at 0.45 percent, up from 0.4 percent in 2024. PHAs and owners must use this updated rate for income certifications involving assets exceeding $51,600.
To ensure updated passbook rates may be used for reexaminations with an effective date of Jan. 1, HUD will calculate the update in July each year, using FDIC data from April, May, and June.
See our related chart: HUD Program Applicability of 2025 HUD Inflation-Adjusted Values