HOTMA: An In-Depth Review of Programmatic Changes-Presentation

Presentation - HOTMA In Depth
Pdf Summary
The National Association of Housing and Redevelopment Officials (NAHRO) offers an in-depth training on the Housing Opportunity Through Modernization Act (HOTMA), which aims to improve housing program efficiency and reduce administrative burdens across HUD programs including Public Housing (PH), Housing Choice Voucher (HCV), Project-Based Rental Assistance (PBRA), and Multifamily Housing (MFH).<br /><br />Key programmatic changes under HOTMA include updated definitions for family and household members, notably distinguishing foster youth and adults as household members, not family members, affecting eligibility, unit size, income counting, and deductions. The Act sets asset limits for initial admissions, making families owning suitable real property or exceeding net asset thresholds ineligible, with enforcement options at reexaminations ranging from non-enforcement to full enforcement.<br /><br />HOTMA enhances verification processes, allowing optional use of “safe harbor” income verifications from federal means-tested programs, broader acceptance of self-certifications (including for Social Security Numbers and zero income), and mandates less frequent third-party verification if self-certifications are used. New HUD authorization forms (HUD 9886-A and 9887-A) reduce annual re-signing requirements.<br /><br />Income definitions and calculations are refined: all income sources are included unless specifically excluded, with new narrow definitions for exclusions such as nonrecurring income, live-in aide/foster care income, certain veteran aid, home-based care payments, replacement housing gap payments, insurance settlements, loan proceeds, and tribal payments. Student financial aid is categorized into Title IV HEA assistance and other aid, with rules on which amounts count as income.<br /><br />Asset definitions and exclusions are expanded. Retirement accounts, certain real properties when lacking legal sale authority, trusts, education accounts, ABLE accounts, baby bonds, and Indian trust lands are excluded. Personal property is now classified as necessary (excluded) or non-necessary, with a combined value threshold for counting non-necessary assets. Asset income includes actual earnings and imputed returns based on HUD rates.<br /><br />Adjusted income deductions are updated with inflation-adjusted dependent and elderly/disabled allowances, revised childcare deduction criteria with hardship exemptions, new definitions for reasonable attendant care expenses, and phased-in raising of medical expense deduction thresholds from 3% to 10%.<br /><br />Interim reexaminations are now required only for income decreases or increases of at least 10%, with earned income increases generally excluded from triggering interim reviews. Non-interim reexaminations address certain household or income changes not meeting interim criteria. PHAs have guidance on timely processing of interim updates and may adopt individualized thresholds.<br /><br />Annual reexaminations must reconcile all income changes, including those not triggering interim reviews. Asset limitations post-admission have flexible enforcement options, with policies to help families comply through asset disposition or transfers, ensuring fair but manageable program participation.<br /><br />HOTMA sets clearer rules on HCV payment standard adjustments, allowing phased or delayed reductions and timely increases consistent with household changes. For public housing, families exceeding income limits (2.4 times very-low income) for 24 months must either face termination or pay alternative rents.<br /><br />De minimis income errors within $30/month are tolerated without HUD penalties, though agencies must correct errors retroactively. EIV use is optional for interim exams but remains valuable for verification.<br /><br />The Act’s changes affect program administration compliance, including definitions of PHA-owned housing, with legal opinions required for ownership status changes. HOTMA provisions also apply to related HUD programs like Rural Development multifamily housing, HOPWA, and Family Unification Program with some variations.<br /><br />Overall, HOTMA mandates phased implementation dates, with many provisions effective by mid-2025, requiring agencies to update policies, training, and systems accordingly to ensure compliance, improve accuracy, reduce administrative burdens, and provide fair housing assistance aligned with current needs.
Keywords
Housing Opportunity Through Modernization Act
HOTMA
National Association of Housing and Redevelopment Officials
NAHRO
HUD housing programs
Public Housing
Housing Choice Voucher
asset limits
income verification
program compliance