HUD is working to release supplemental guidance related to the Housing Opportunity Through Modernization Act (HOTMA). This guidance is related to the asset limitation described in Attachment A in Notice H 2023-10.
On November 29th, HUD issued a reminder to owner/agents of HUD Multifamily Housing regarding the new Asset Limitation rule. HUD emphasizes that this rule must not be implemented until the owner/agent’s software is fully compliant with HOTMA, and the household signs a new updated model lease. This anticipated guidance will define the discretion owners have regarding implementation and enforcement of the provision (24 CFR §§ 5.100; 5.603; and 5.618). It is vital for multifamily housing owners and operators to review this guidance when it is released, especially before making any changes to current management policies.
Full compliance with the HOTMA final rule — issued September 29, 2023 — is mandatory starting January 1, 2025. As is known, HOTMA introduces various statutory changes aimed at improving and modernizing federal housing programs. Until new guidance is released, please be aware of the following: MFH Owners must not enforce the asset limitation or the real property exemption until both the owner’s software is HOTMA compliant (with TRACS 203A), and the family has signed a model lease detailing the new HOTMA provisions. Additionally, HUD advises owner/agents to wait for forthcoming guidance from HUD regarding the discretionary authority owners possess to enforce or not enforce the asset limitation during annual recertification. While we wait for HUD to issue additional guidance to fill in the blanks regarding enforcement, here is what we do know about the asset limitation.
The asset limitation only applies to Public Housing and Section 8 Programs (project-based or tenant-based) including Section 202/8. The limitation does NOT apply to Section 202/811 PRAC, Section 236 IRP, Section 811 PRA, SPRAC. Further, the limitation does NOT apply to LIHTC, HOME, RD, HTF, or Bond Programs. The Asset Limitation prohibits households from receiving Section 8 Assistance, or occupying a public housing unit, if the household has a combined net family assets that exceed $100,000, or if the household owns a home that is suitable for occupancy (exceptions apply). Limitation must be met at initial eligibility determination, however, PHA and MFH owner/agents have discretion whether to enforce the limitation during annual recertification. PHA and MFH owner/agents must outline their policy regarding asset limitation enforcement in their ACOP, Admin Plans and Tenant Selection Plans.