LIHTC Essentials-HOTMA Resource - Key Upcoming Changes

HOTMA Resource - Key Upcoming Changes

Pdf Summary

The document outlines key HOTMA compliance requirements, especially for housing agencies and PHAs.<br /><br />Main deadline: full compliance with HOTMA Sections 102 and 104 is required by January 1, 2027, though agencies may need to begin applying the rules as early as September 2026 because processing changes often starts 90–120 days in advance.<br /><br />Eligibility rules: A family is ineligible if its net assets exceed the annual statutory limit or if it owns disqualifying real property. Some assets are excluded, including retirement accounts and certain education savings accounts. At admission, agencies must deny applicants over the limit. At recertification, agencies may choose full enforcement, limited cure periods, or no enforcement.<br /><br />Annual reexamination uses a three-step look-back process involving the EIV income report, prior HUD forms, and family-certified prior-year income. If nothing changed, prior income may be reused. If an interim reexam occurred and nothing else changed, that information can be reused. Otherwise, the family is asked directly and verification rules apply if changes are reported or records conflict.<br /><br />Income calculation rules remain mostly the same in some areas: asset income is always anticipated, and SSA/SSI COLAs are always treated as income changes. The 2026 asset threshold is 52,787 and the passbook rate is 0.40%.<br /><br />Deduction updates include inflation-adjusted dependent and elderly/disabled family deductions, and a higher 10% threshold for medical/disability deductions, replacing the old 3% threshold. Some households transition through a 24-month phase-in at 5%, then 7.5%, then 10%. General hardship relief is available separately.<br /><br />Interim reexaminations now have a general 10% threshold for income changes, but any household composition change requires an interim with no threshold. Certain changes are not handled as interim reexams and instead wait for annual review or are reported separately.

Keywords

HOTMA compliance

housing agencies

PHA requirements

January 1 2027 deadline

asset eligibility rules

annual reexamination

income calculation

deduction updates

interim reexaminations

HUD regulations