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New HOTMA Provisions to be Implemented

Tomorrow, HUD will publish in the Federal Register a proposed rule titled “Housing Opportunity Through Modernization Act of 2016: Implementation of Sections 102, 103, and 104” (pre-publication copy). This proposed rule is the first regulatory step toward implementing certain provisions of the Housing Opportunity Through Modernization Act of 2016 (HOTMA). The Department is seeking comment on certain aspects of the implementation. Comments on the proposed implementation of these provisions will be due 60 days after official publication.

A brief, non-exhaustive list of the topics covered by the proposed rule can be found below. The National Association of Housing and Redevelopment Officials will provide additional details as staff continue to examine the proposed rule.

The proposed rule will touch on the following topics:

  • Section 102 of HOTMA;
    • Income Reexaminations – changes how PHAs are required to review incomes;
      • Reviews of family incomes may be made at the request of the family when it is estimated that a change in income or deduction  will result in a decrease of 10 percent or more in annual adjusted income;
      • PHAs may still process a family request for a smaller decrease, if the PHA has established a more generous standard;
      • PHAs must conduct a review when the family’s adjusted income is estimated to have increase by 10 percent or more;
    • Calculation of Family Income – PHAs will estimate the income of the family for the upcoming year to determine family income for initial occupancy, initial provision of housing assistance, or an interim reexamination;
    • Annualization of Income – removes a provision on the annualization of income;
    • De minimis errors – states that PHAs will remain in compliance with new provision related to income review and income calculation, if errors made by agency are within 5 percent of the correct income;
    • Earned Income Disallowance – removes the earned income disallowance, but proposes to allow families currently using it to complete their use of it;
    • Definition of “Annual Income” – provides a broader definition of income from HOTMA;
    • Income Exclusions – updates the list of income exclusions to mirror HOTMA and eliminates certain non-statutory, discretionary exclusions;
    • Adjusted Income – makes changes to the deductions that determine how adjusted income is calculated;
  • Section 103 of HOTMA;
    • Over-income Families – implements HOTMA’s provisions on over-income families in public housing;
  • Section 104 of HOTMA;
    • Assets restrictions – families with net assets over $100,000 (after adjusted for inflation) would be barred from public housing or Section 8 assistance;
    • Real property – families would be ineligible for assistance, if they had real property suitable for occupancy by that family and met certain conditions (had an ownership interest, legal right to reside in, and authority to sell the property);
    • Self-certification of Assets – self-certification for assets less than $50,000 (after adjusted for inflation);
    • Discretion on Enforcing the Asset Limitation – PHAs may adopt plans to either not enforce limitations on eligibility or establish exceptions;
    • Net Family Assets – revises the definition of “net family assets” to include certain exclusions;
    • Authorization for Financial Disclosures – amends regulations to allow PHAs to obtain financial records from financial institutions and states that a consent form must contain a statement that the authorization to release the information remain effective until certain events have occurred;
  • CPD Program Changes – the proposed rule also outlines how the changes will impact programs including Housing Opportunities for Persons with AIDS (HOPWA),  the HOME Investment Partnerships Program, and the Housing Trust Fund (HTF).

A pre-publication copy of the proposed rule can be found here.

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