HUD posted a “preview version” of the final rule implementing all but one of the remaining provisions of the “Housing Opportunity Through Modernization Act of 2016” (HOTMA) on January 31. While other HOTMA provisions were previously implemented (see Memo, 10/13/20), Sections 102, 103, and 104 still required formal public review and comment prior to implementation. A proposed rule to implement these provisions was published on September 17, 2019 (see Memo, 9/23/19). HUD anticipates the final rule will not be officially published in the Federal Register until later this month. The provisions will not take effect until January 1, 2024. The preview version offers residents and advocates more time to review the extensive final rule. NLIHC will provide a comprehensive summary of the final rule after it is published.
The purpose of HOTMA, signed into law on July 29, 2016, is to streamline processes and reduce administrative burdens on housing providers, thereby also reducing burdens on assisted residents. Various provisions of HOTMA have been implemented by other HUD actions:
- A Federal Register notice published on October 24, 2016, announced provisions that were effective immediately.
- A Federal Register notice published on January 18, 2017, implemented multiple voucher program provisions unrelated to Sections 102, 103, and 104.
- A Federal Register notice published on July 14, 2017, provided technical corrections to the January 18, 2017, notice.
- Housing Quality Standards (HQS) Implementation Guidance (Notice PIH 2017-20) has been published.
- Housing Choice Voucher (HCV) and Project-Based Voucher (PBV) Implementation Guidance (Notice PIH 2017-21) has also been published.
- Housing Choice Voucher Program Guidance on Manufactured Home Space Rentals (Notice PIH 2017-18) has been made available.
- Implementation of Minimum Heating Standards in Public Housing Properties (Notice PIH 2018-19) has also been made available.
While Sections 102, 103, and 104 do not apply to all HUD programs, most of HUD’s key programs will be affected to some degree, including:
- Office of Public and Indian Housing (PIH), public housing, and Housing Choice Vouchers.
- Office of Multifamily Housing Programs (Multifamily); Project-Based Section 8 Rental Assistance (PBRA), including PBRA in Rental Assistance Demonstration (RAD); Section 202 Housing for Low-Income Elderly; and Section 811 Housing for Low-Income Persons with Disabilities.
- Office of Community Planning and Development (CPD), HOME Investment Partnerships Program (HOME), national Housing Trust Fund (HTF), and Housing Opportunities for Persons with AIDS (HOPWA).
Section 102, applies primarily to public housing, HCV, and PBRA, but some of its provisions also apply to HOME, HTF, and HOPWA. In short, it reduces the frequency of income reviews and modifies the definition of income and assets. For example, the HOTMA statute:
- Created a 10% adjusted income increase or decrease threshold for conducting interim income reexaminations. In most situations, increases in earned income (e.g. wages) will not be processed until a resident’s next annual income reexamination.
- Increased the standard deduction for households with a head, co-head, or spouse who is elderly or is a person with a disability.
- Excluded income received from Medicaid or other state or local programs designed to keep at home a household member who has a disability.
- Increased the allowance for unreimbursed health and medical care expenses from 3% to 10% of annual income (phased in over two years).
- Provided hardship relief for expense deductions, lessening the impact of the above increased threshold for medical expenses. Public housing agencies (PHAs) may grant hardships for households unable to pay rent due to unanticipated medical or disability expenses, as well as for households no longer eligible for the childcare expense deduction.
Section 103 modifies the continued occupancy standards for public housing households whose income exceeds the statutory limit (known as the “over-income” provision). (See Memo, 2/8/16 and NLIHC’s 2016 comment letter.)
Section 104, which applies to public housing, HCV, PBRA, HOME, HTF, and HOPWA, sets maximum asset limits for eligibility and continued occupancy and implements deductions and exceptions for certain investments such as retirement savings. Retirement accounts and educational savings accounts will not be considered “net family assets.”
In late spring of this year, both Multifamily and PIH will publish comprehensive implementation guidance, and both offices will host webinars during the spring and summer.
Read the preview version of the final HOTMA rule at: https://bit.ly/3WZjK7k
Read the Multifamily listserv email at: https://bit.ly/40mLshu
Read Multifamily’s one-page summary at: https://bit.ly/3JwNRAb
Multifamily’s HOTMA webpage is accessible at: https://bit.ly/3wJI9Dp
Read the PIH email to PHA directors at: https://bit.ly/3DxirFV
Read a PIH two-page highlight of the proposed rule at: https://bit.ly/3JCkpc5
Read a PIH question-and-answer paper regarding income and asset provisions at: https://bit.ly/40nXGpW
PIH’s HOTMA webpage is accessible at: https://bit.ly/3XTanHv
Read NLIHC’s 2019 “Summary of Some of the Major Provisions of the HUD’s Proposed Rule” at: https://bit.ly/34UphRW
Read NLIHC’s formal comment letter regarding the proposed rule at: https://bit.ly/3jrQDMb
More information about HUD programs affected by the proposed rule is accessible in Chapter 4 of NLIHC’s 2022 Advocates’ Guide.