New HOTMA Notice - Change to Section 8 Asset Restrictions

Under the Housing Opportunity Through Modernization Act (HOTMA), HUD introduced Section 8 Asset Restrictions making applicants and residents ineligible for assistance if:

  1. The net cash value of all included assets exceeds $100,000; and/or
  2. Any family member owns real property suitable for occupancy that the member has the right to sell (certain exceptions apply). 

This rule applies to all Section 8 programs including PBRA RAD and 202/8. 

In HUD's revised HSG Notice 2023-10, HUD has altered previous guidance. 

Once an owner/agent implements HOTMA, when reviewing applicant eligibility, the owner/agent must deny admission and/or assistance to applicants who own real property suitable for occupancy and/or applicants whose net cash value of included assets exceed $100,000 (as adjusted). 

Note: Special Rules apply for PBRA RAD Conversions. 

For existing residents, owners have discretion with respect to the application of the Asset Restrictions at Annual Recertification or Interim Recertification. Owner/agents may adopt a written policy of total non-enforcement, enforcement, or limited enforcement, as described in the Notice. 

Policies explaining application of Section 8 Asset Restrictions for applicants and existing residents must be described in the TSP no later than 5/31/2024 (HUD extended the date from 3/31/24). However, new TSPs are not to be implemented until site software is updated. 

Owner/agents who have already advised residents that they may no longer be eligible for housing assistance based on HUD's previous guidance, who have determined that they will NOT enforce the Section 8 Asset Restrictions for existing residents, should contact those residents and advise them of the change to HUD's guidance. We have created a sample Notice, available on our HOTMA Resources Page, to assist you with creation of your own Notice. 

When discussing HOTMA changes, keep in mind that while the changes are effective on 1/1/2024, HUD has extended the implementation deadline so that owner/agents have until site software is updated to comply with HOTMA changes. Site software updates must be implemented no later than 1/1/2025 

HUD’s latest Notice – HSG Notice 2023-10 Implementation Guidance: Sections 102 and 104 of the Housing Opportunity Through Modernization Act of 2016 (HOTMA)

Check out our HOTMA FASTForms Package

Check out additional RBD HOTMA Resources available on our HOTMA Resources Page

Additional information is available on HUD’s MFH/HOTMA web site.

 

 

RBD does not act as a legal advisor nor as a regulatory governing agency.  The recipient should understand that any materials or comments contained herein are not designed for, nor should be relied upon as a source of legal guidance or as a final authority with respect to any particular circumstance.  Ross Business Development, Inc. makes no warranty of merchantability or fitness for a particular purpose or any other warranty of any type.  Owners and management should seek competent legal advice in developing and carrying out policies and procedures.  While we have been diligent in our efforts to provide comprehensive and accurate regulatory information, Ross Business Development, Inc. shall not be responsible for errors or inaccuracies.