HOTMA Final Rule
Brief Description of the Final Rule Implementing Sections 102, 103, 104 of HOTMA:
The Final Rule implementing Sections 102, 103, and 104 of the Housing Opportunity Through Modernization Act of 2016 (HOTMA) delivers important benefits to tenants and reduces administrative burdens for public housing agencies (PHAs), multifamily housing owners (MFH owners), and participating jurisdictions. The highlights of the Final Rule are outlined below:
Section 102: Income Reviews
- Fewer Interim Reexaminations: HOTMA creates a 10% adjusted income increase/decrease threshold for conducting Interim Reexaminations, and in most cases requires that increases in earned income are not processed until the next Annual Reexamination, allowing families to keep more of their earnings before receiving a rent increase. The new requirements should lead to fewer Interim Reexaminations overall, alleviating burden for both participants and PHAs.
- Streamlined Verifications: Several provisions will streamline the verification process for housing providers.
- Adults Only Need to Sign Consent Form Once: HOTMA revises the required consent form that all adult household members sign, allowing them to sign the form only once instead of annually.
- Use of Income Determinations from Other Programs: HOTMA allows PHAs to use income determinations made under other federal benefits programs for
- Review of EIV Not Required at Interim Reexamination: HOTMA eliminates the requirement for PHAs to use EIV to verify tenant employment and income information during an interim reexamination, significantly reducing administrative burden.
- Increased Standard Deduction for Elderly/Disabled Households: HOTMA increases standard deductions for families with a head, co-head, or spouse who is elderly or a person with a disability.
- Additional Income Exclusions: The rule codifies additional income and asset exclusions, including:
- Amounts received from Medicaid or other state/local programs meant to keep a family member with a disability living at home.
- Veterans' aide and attendant care
- Distributions of principal from non-revocable trusts, including Special Needs
- Threshold for Claiming Medical/Disability Expenses Increased: HOTMA increases the allowance for unreimbursed health and medical care expenses from 3% of annual income to 10%, phased-in over two years.
- Higher Threshold for Imputing Asset Income: HOTMA raises the imputed asset threshold from $5,000 to $50,000, incentivizing families to build wealth without imputing income on those assets.
- Hardship Relief: HOTMA provides hardship relief for expense deductions, lessening the impact of the increased threshold for medical expenses. HOTMA permits PHAs to grant hardship relief to families unable to pay rent because of unanticipated medical/disability expenses and families who are no longer eligible for the childcare expense deduction.
Section 103: Public Housing Income Limit
- Public Housing Income Limitation: HOTMA imposes continued program participation limits for families exceeding the statutory income limitation in the Public Housing program, also known as the "over-income" provision.
Section 104: Asset Limits
- Asset Limitation: HOTMA imposes a $100,000 asset limit for eligibility and continued assistance. Families are also ineligible for assistance if they own real property suitable for occupancy. PHAs have the option of delaying enforcement/termination for up to six months if the family is over the asset threshold at the time of annual reexamination.
- Exclusion of Retirement and Educational Savings Accounts: Retirement accounts and educational savings accounts will not be considered a net family asset. This is a major benefit to families, incentivizing savings for important life milestones and opportunities. This will also provide significant administrative relief to PHAs by allowing them to stop verifying and calculating these assets altogether.
- Self-Certification of Assets under $50,000: HOTMA allows self-certification of net assets if estimated to be at or below $50,000. This will be a time-savings for families and lower administrative burden for PHAs recertifying income.
- Adjustments for Inflation: Deductions and the asset limitation will be adjusted for inflation annually, ensuring that deductions do not lose value over time and that families are able to build more wealth without losing program assistance. The current deduction amounts have never been adjusted.
These changes are required to be made on or before 1/1/24 in the Housing Authority's ACOP and/or Administrative Plans. We have been notified that we cannot implement these required changes since our 50058 Transmission software vendor is not ready for us to transmit the data to the new HIP system.
As a result of this issue, HUD has allowed us to delay the implementation of the above-listed changes until our Software Vendor makes the necessary changes to our 50058 Transmission software to HIP.
Until such time that we are ready to implement the changes required, we will be conducting annual and interim reexaminations using the current (pre-HOTMA) ACOP and/or Administrative Plan. As a result, the changes required by the above HOTMA changes will not take effect until your next annual or interim reexamination that takes place after January 1, 2024.
NOTICE TO FAMILIES
HOTMA became a final rule on February 14, 2023. It has a final effective date for Housing Authorities of January 1, 2024. Certain parts of the rule became effective June 16, 2023, for Over Income families for Public Housing families only.
On July 18, 2023, HUD sent an email letter to all Executive Directors updating the implementation of HOTMA for Sections 102 and 104. While Public Housing entities are required to make changes to their ACOP (ADMISSIONS AND CONTINUED OCCUPANCY POLICY) and/or ADMINISTRATIVE PLAN on or before January 1, 2024, HUD has allowed us, via the ED letter of July 18, 2023, to suspend implementation of the rule due to the inability to transmit 50058s to the new HIP system because our transmission software vendor is not ready for us to accomplish that action.
A. The ENTERPRISE HOUSING AUTHORITY will be conducting your annual reexamination using the ACOP adopted on October 21, 2019, which does not comply with Sections 102 and 104 of HOTMA. All annual and or interim re-exams conducted after January 1, 2024, will be accomplished using the ACOP/Admin Plan as noted above until we are ready to transmit using the HIP submissions. We will notify you of this change when we are able to transmit data to HUD using the new HIP system.
B. The ENTERPRISE HOUSING AUTHORITY will be conducting your annual reexamination using the ACOP adopted on January 23, 2023, which does comply with Sections 102 and 104 of HOTMA.
C. The ENTERPRISE HOUSING AUTHORITY adopted Section 103 for Over Income limits on April 17, 2023, which is for PUBLIC HOUSING only. These limits will be used for admission and continued occupancy of our Public Housing Units and Leases.
Any reexaminations either annual or interim will be conducted using either A or B above and the PHA will notify you when they are ready to transmit family information to HUD which will mean that Sections 102 and 104 will be effective. Section 103 is already in effect as of the date shown above.