HOTMA Extension

As many of you know, last week, HUD released HSG Notice 2024-09 Revised Compliance Date: Implementation of Sections 102 and 104 of the Housing Opportunity Through Modernization Act of 2016 (HOTMA) extending the HOTMA compliance deadline from January 1, 2025 to July 1, 2025. HUD has also announced that they will soon release an updated Notice and answers to Frequently Asked Questions (FAQs) providing additional information.  

RBD has received many inquiries as to what that really means.  

At this point, the following is our interpretation of instruction provided by HUD. 

Property Tenant Selection Plans and property EIV Policies must be updated to include HOTMA provisions. However, owner/agents are not to implement those policies until new site software is available. This means you won’t implement HOTMA changes that affect how you select new residents or how you use EIV. 

If you have not updated EIV policies or TSP policies, check out our FASTForms Page to see the options available from RBD. In addition, HUD’s Office of Multifamily Housing Programs has created a Discretionary Tenant Selection Plan and EIV Policies Guide that mirrors the discretionary authority given to owners in the HOTMA Implementation Notice. If you need help making decisions about Discretionary Policies, we have created a worksheet entitled EIV & TSP Discretionary Policies to assist with compliance team discussions.  

HUD has clarified that owner/agents can receive Management & Occupancy Review (MOR) findings if they have made no attempt to update their TSP or EIV Policy. However, if an owner/agent has updated policies, and a Reviewer feels that the change is not complete or compliant, the Reviewer should issue observations related to the policy edits (not findings). 

Once owner/agents have updated the TSP and the EIV policy, owner/agents are not required to address any other HOTMA changes until new HOTMA compliant site software is available and implemented (no later than July 1, 2025).  

Many owner/agents have asked why software vendors have not released HOTMA compliant software. To provide a little more insight, owner/agents and other industry stakeholders should understand that, until HUD provides additional information and forms, software vendors are in a kind of “holding pattern." Both CA and site software vendors need: 

  1. The new HUD Forms 50059/50059A;
  2. The new HUD Form 52670 voucher;
  3. An updated Monthly Activity Transmission (MAT) Guide providing specifications and requirements. 

HUD must submit some of the new forms to comply with the Office of Management & Budget’s (OMB) comment and approval process. This includes the 50059, 50059A and all five of the HUD leases. HUD also has plans to release updated versions of other documents that are provided to residents including an updated FACT Sheet – How Your Rent is Determined. 

That’s not to say that the software vendors have done nothing. HUD provided information about proposed requirements for TRACS 2.0.3.A in 2023, but HOTMA requirements still need to be added or modified. Once that is done, vendors can complete programming, start testing and develop plans for site implementation.   

Current HUD guidance specifically states that, aside from the TSP and EIV Policy updates, owner/agents may wait to implement all HOTMA changes until site software is available - no later than July 1, 2025.  

But what if you want to implement some of the HOTMA changes now? Based on HUD guidance provided in HSG Notice 2023-10 Implementation Guidance: Sections 102 and 104 of the Housing Opportunity Through Modernization Act of 2016 (HOTMA), owner/agents cannot implement the HOTMA changes to EIV policies or HOTMA changes to tenant selection until new HOTMA compliant site software is available – no later than July 1, 2025. However, there are a lot of very positive changes introduced through HOTMA including, but not limited to: 

  • HUD has reduced the verification burden;
    • For financial accounts (e.g. checking accounts), owner/agents may use the balance from a single current bank statement instead of average the balance from six bank statements.
    • Federal award letters may be used for the entire award year instead of expiring in 120 days.
  • Owner/agents may exclude Retirement Accounts (as defined by the IRS) when determining the value of assets and income from assets;
  • Owner/agents may implement new HOTMA income exclusions, etc.

If an owner/agent wishes to implement any HOTMA changes before site software is released, the tenant file must be documented to show which changes have been implemented and, if appropriate, what the TTP would have been if the changed had not been implemented. Failure to document the tenant file when HOTMA changes have been implemented can result in MOR findings. To assist, we have developed a new Note to File (NTF) which is available on our HOTMA Resources Page. This NTF is designed to get you started as you create a standard form to attach to certifications in the tenant file.  

We hope this answers some of your questions related to the new HOTMA implementation deadline.

We’ll let you know as HUD releases new guidance. In the interim, if you have questions related to HOTMA’s effect on HUD’s Multifamily Housing programs (MFH), they should be directed to MFH_HOTMA@hud.gov.