In a message to affordable housing stakeholders on November 29, the Department of Housing and Urban Development (HUD) clarified timing for implementation of the new asset limitations under the Housing Opportunity Through Modernization Act (HOTMA).

Among other changes to affordable housing rules, HOTMA establishes new restrictions on eligibility for HUD assistance in project-based Section 8 programs. The restrictions, also called “asset limitations,” are based on household assets of the households receiving or applying for federal housing assistance in certain HUD programs, including net household assets over $100,000 (adjusted annually for inflation) or owning real property suitable for occupancy (not yet defined by HUD).

While HUD is moving forward with HOTMA implementation for Multifamily Housing providers during calendar year 2024, full compliance is not mandatory until January 1, 2025.

Housing providers will take steps to become HOTMA compliant during 2024, but HUD made stakeholders aware that Multifamily Housing providers must not enforce the new asset limitations on impacted residents until both the housing community’s software is HOTMA-compliant and the household has signed a model lease detailing the new HOTMA provisions.

Inaccurate Communication with Residents on HOTMA Asset Limits

In some cases, housing providers have inaccurately communicated to residents about forthcoming changes in the household’s eligibility based on HOTMA’s new asset limits, including by telling residents that they will no longer be eligible for assistance beginning January 1, 2024.

In HUD’s November 29 message, the agency clarified that the asset limit compliance must not be enforced on residents until after the new least has been signed and the housing community’s software is compliant with HOTMA using TRACS 203A. This will occur later during calendar year 2024 as additional HOTMA implementation components become available from HUD – even at that time, LeadingAge anticipates there will be both implementation and enforcement discretion available to housing providers that will help protect residents from asset limits.

In HUD’s November 29 message, HUD strongly recommends that providers review HUD’s forthcoming guidance on discretion that owners have regarding implementation and enforcement of the asset limits before making changes to current management practices. LeadingAge anticipates the revised HOTMA implementation notice will be released in late December 2023.

Inaccurate messages to residents about losing housing assistance beginning January 1, 2024, are very harmful to HUD-assisted residents or applicants. An older adult with low incomes may unnecessarily move out of stable, affordable housing, or turn down the chance to move in after waiting on the waitlist for many years.

LeadingAge had urged HUD to clarify the asset limits timing to prevent housing providers from inaccurately communicating or implementing HOTMA-related eligibility restrictions on residents beginning January 1, 2024.

LeadingAge continues to push HUD to clarify the discretionary authority to decline enforcement of the asset limits on currently served residents. For more information on HOTMA, visit LeadingAge’s HOTMA update page here.