The Housing Opportunities through Modernization Act (HOTMA) of 2016 includes significant changes to how income, assets, and rent are handled on HUD Programs. HOTMA changes nearly everything in affordable housing compliance – from voucher programs, to HUD project based rental assistance (PBRA) programs, Public Housing, as well as many other programs such as Low Income Housing Tax Credit, USDA/RD, and HOME and HTF.
Housing Opportunities Through Modernization Act (HOTMA)
What is the HOTMA Final Rule?
Signed into law in 2016, HOTMA makes numerous changes to the statutes governing HUD’s rental assistance programs, including Section 8, as well public housing, with the goal of streamlining administration and easing the burden on private owners and public housing authorities (PHAs). The changes under HOTMA touch upon multiple areas, including standards for income determination, resident self-certification, and interim reexaminations.
On July 29, 2016, HOTMA was signed into law. HOTMA makes numerous amendments to Sections 3, 8, and 16 of the United States Housing Act of 1937(1937 Act), including significant changes to income calculation, net family assets, and income reviews.
HUD finalized HOTMA rulemaking in 2023 to put Sections 102, 103, and 104 into effect through revisions to HUD’s regulations found in 24 CFR Part 5 and 24 CFR Part 891.
• Section 102 addresses income reviews, including the frequency of income reviews and revises the definitions of income and assets.
• Section 103 is not applicable to multifamily housing programs.
• Section 104 sets asset limits for both Section 8 Project-Based Rental Assistance and Section 202/8 programs.
The final rule is effective on January 1, 2024.
HOTMA Essentials
The Housing Opportunity through Modernization Act has substantially changed how income is calculated for affordable housing programs.
- Determining household size
- Earned Income (Wages, Self-Employment, Military Pay)
- Unearned Income (Social Security, Periodic Distributions, Unemployment, TANF, Child Support, Cash and Non-Cash Contributions and Student Financial Assistance.
HOTMA's Effect on LIHTC
The Low Income Housing Tax Credit (LIHTC) Program gets many of its rules from the HUD Handbook 4350.3, and HOTMA changes many of the rules affecting LIHTC.
