As the deadline for compliance with the Housing Opportunity Through Modernization Act (HOTMA) looms, LeadingAge continues to call on the Department of Housing and Urban Development (HUD) for guidance. HOTMA is a major rule change in affordable housing impacting property procedures, tenant income and eligibility calculations, and more.

While the current HOTMA compliance date remains January 1, 2025, housing providers begin work in the preceding quarter (beginning in September) on tenant files that are effective January 1. However, HUD continues to experience delays in finalizing software specifications, the associated implementation schedule for TRACS, and key forms and resources used in housing procedures.

The delay in HUD implementation tools means that housing providers are not able to move forward with implementation and are anxiously awaiting instruction from HUD on how to proceed.

Without guidance from HUD, housing communities will risk being out of compliance with key HUD rules, resulting in penalties during oversight procedures like Management and Occupancy Reviews (MORs), and could be found in default of their legal contracts with HUD.

In the absence of guidance, housing providers may attempt to move forward with implementation, but full implementation is not possible without the tools needed from HUD, and housing providers will take actions that create significant confusion (and will likely need to make corrections over the coming months) involving critical tenant processes, like how much rent a person needs to pay in affordable housing or whether they are even eligible to receive HUD rental assistance.

In a letter to the agency dated August 9, LeadingAge called on HUD to take urgent action to improve HOTMA implementation; HUD is likely to delay HOTMA implementation timeline, but no communication has been issued to clear up the current confusion. Housing providers are also experiencing frustration with current file reviews and lack of alignment between HUD and the Low Income Housing Tax Credit (LIHTC).

In the meantime, USDA’s Rural Housing Services (RHS), which provides federal housing assistance for rural areas, sent a communication to stakeholders stating: “RHS expects full implementation of the applicable HOTMA regulations for MFH tenant certifications effective January 1, 2025.”

The rural agency also posted an Unnumbered Letter describing the agency’s implementation process for the fall.