HUD Delays HOTMA Compliance Date for MFH Programs

Six-month delay gives HUD time to release additional implementation tools.

HUD has issued Notice H 2024-09 delaying HOTMA for Multifamily programs. The previous deadline had been Jan. 1, 2025. Now, the new compliance deadline is July 1, 2025. Owners of sites assisted with Section 8 Project-Based Rental Assistance must comply with HOTMA’s household income and asset requirements for income certifications on or after July 1, 2025.

HOTMA is a major rule change in affordable housing impacting property procedures and tenant income and eligibility calculations. On HUD’s end, it had experienced delays in finalizing software specifications, key forms, and training materials. The delay in implementation tools or resources meant that owners aren’t able to move forward with implementation.

This delay follows a similar one issued by HUD’s Office of Public and Indian Housing (PIH), which informed public housing agencies (PHAs) that compliance with the HOTMA household income and asset limits for public housing and Housing Choice Voucher residents was postponed. However, PIH didn’t provide a future date for PHAs to comply with HOTMA. PIH had postponed the compliance date because an outside contractor wasn’t finished creating the new Housing Information Portal (HIP) necessary for PHAs to comply with HOTMA.

Impacted HUD Housing Programs

HOTMA updates and creates new rules for Housing Choice Vouchers (including Project-Based Vouchers), Moderate Rehabilitation, Moderate Rehabilitation SRO, Public Housing, and Multifamily Housing (MFH) programs. This recently issued notice delaying HOTMA implementation applies to the following programs:

• Housing Choice Voucher (HCV)
• Public Housing
• Section 8 Moderate Rehabilitation (Mod Rehab) or Section 8 Moderate Rehabilitation Single Room Occupancy (SRO)
• Section 8 Project-Based Rental Assistance (PBRA)
• Section 202/8
• Section 202/811 Capital Advance with Project Rental Assistance Contracts (202/811 PRAC)
• Non-insured 236 projects with Interest Reduction Payments (236 IRP)
• Section 811 Project Rental Assistance (811 PRA)
• Senior Preservation Rental Assistance Contracts (SPRAC)

It’s important to note that the asset limitation provision applies only to Section 8 PBRA and 202/8. It doesn’t apply to any other MFH programs. Section 104 of HOTMA, 24 CFR 5.618, creates a restriction on the eligibility of a family to receive assistance if a household owns real property that’s suitable for occupancy by the family as a residence or has assets in excess of $100,000, as adjusted annually for inflation. The new asset limits will apply to project-based Section 8 sites and Section 202/8 sites.

How HUD Will Monitor Compliance Before Deadline

Prior to July 1, 2025, Multifamily owners won’t be penalized for HOTMA-related tenant file errors during Management and Occupancy Reviews (MORs). Instead, the site’s contract administrator will issue observations with corrective actions.

After July 1, 2025, contract administrators will issue HOTMA-related findings during MORs and owners must correct all HOTMA-related observations that were issued by contract administrators during 2024. After July 1, 2025, owners who fail to implement HOTMA may be found in default of their business agreements with HUD.

Impending HUD MFH Actions

According to HUD’s Office of Multifamily Housing Programs, the office will soon release a series of Frequently Asked Questions to address questions that have been submitted to MFH_HOTMA@hud.gov. In addition, the office will publish a series of forms, including the 50059 and Model Leases that have been revised to reflect HOTMA requirements.