HOTMA Update Section 8 Asset Restrictions

Since HUD announced an extension of the deadline to fully implement HOTMA (to January 1, 2025), we have been fielding a variety of HOTMA questions from our customers. 

In response, I'll be sending out new HUDBlasts to provide answers to commonly asked questions. We will be covering all of the latest news in all three HOTMA Today 2024 classes beginning in February. 

Today's HUDBlast addresses Section 8 Asset Restrictions. (Apply to all PBRA Section 8 programs including 202/8 and PBRA RAD). 

Before we go any further, understand that current HUD guidance says that Section 8 owner/agents must not terminate housing assistance for an existing resident based on the Asset Cap or the Real Property Rule. Owner/agents are not to implement the Asset Restrictions until 1) site software is updated to comply with HOTMA and 2) the resident executes a new HUD Model Lease. 

Note: New HUD Model Leases will be released by HUD once edits have been made and the lease is approved by the Office of Management & Budget (OMB). 

Note: Site software vendors can complete programming and testing when HUD releases the final TRACS 2.0.3.A Specification. We expect site software releases no earlier than late 2024 Q2 or 2024 Q3. 

When creating the first AR or IR, after new site software is implemented and once a family executes the new lease, Section 8 residents will go through a new eligibility determination based on the assets owned by the family. Section 8 families will not be eligible for housing assistance if either or both of the following are true:

1)     The family owns real property - Real Property Rule:

  1. a)     Located in the area where the assisted property is located,
  2. b)     That is suitable for occupancy by the family as a residence,
  3. c)      That the family has a right to sell.

2)     The net cash value of Included Assets exceeds $100,000, as adjusted annually in accordance with the Consumer Price Index for Urban Wage Earners and Clerical Workers - Asset Cap.  

Note: Certain exclusions apply to the Real Property Rule. 

HUD has indicated that the next HUD Housing Notice will provide additional guidance for Section 8 owner/agents to use as they develop their own internal policies related to Asset Restrictions. 

If you have already notified existing residents that they will no longer be eligible to receive Section 8 housing assistance, you may want to touch base and let them know that:

  1. HUD has delayed the HOTMA implementation deadline to 1/1/2025; and
  2. New, updated, more comprehensive HUD guidance is pending. 
Confused? Need more information? We will be talking about this, and other HOTMA implementation strategies, in the HOTMA Today 2024 Online Training Workshops offered in February and March.