HUD Issues HOTMA Final Rule; Aims to Streamline HCV and PBV Program While Increasing Affordable Housing Supply
On May 7, 2024, HUD issued a Final Rule in the Federal Register that it claims will result in collaboration between HUD and its stakeholders to build more affordable housing and make existing housing more affordable.
HUD says that the HOTMA Final Rule makes enhancements and reduces barriers in the Housing Choice Voucher (HCV) and Project-Based Voucher (PBV) Program, which has become a vital strategy for communities to increase the supply of affordable housing. PHAs can choose to tie long term federal PBV rental assistance to specific units or developments rather than to a tenant. Project owners can secure additional private and public financing by leveraging the PBV assistance.
Some Key Points in the Final Rule
- It allows for PBV assistance to be paired with manufactured housing.
- It permits PHAs to use Small Area Fair Market Rents (SAFMRs) in non-metropolitan areas. In essence, helping PHAs establish rent standards that better reflect the local rental market conditions. This decision may make more neighborhoods accessible to voucher holders.
- Changes to PVBs are intended to attract a more significant investment in affordable housing. The Final Rule allows PHAs to link long-term federal PBV rental assistance directly to specific housing units or developments, providing more certainty to investors and developers. This could attract more private and public financing.
- A major point of the Final Rule is to streamline processes to increase the availability of affordable housing. It also improves tenant protections by setting up local project-specific waiting lists, which is expected to help families move into units more quickly. The rule also codifies safeguards around inspections and property management.
- The rule addresses the critical affordable housing shortage by facilitating both the preservation and expansion of housing supply. HUD expects to achieve this by equipping PHAs with new tools needed to expand community housing availability.
In a press release, HUD Acting Secretary Adrianne Todman said that “HUD is meeting the moment to address the Nation’s affordable housing supply shortage. This Final Rule comprehensively modernizes our voucher programs to meet the needs of housing providers and deliver greater support for tenants.”
The Final Rule goes into effect June 6, 2024, with the exception of instruction 69, § 982.451(c); instruction 98, § 983.154(g) and (h); instruction 100, § 983.157; and instruction 103, § 983.204(e).
