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HUD Issues New HOTMA Regulations

The Housing Opportunity Through Modernization Act of 2016 (HOTMA) was enacted on July 29, 2016. HUD published a Proposed Rule on September 17, 2019 that would implement sections 102 (income reviews), 103 (public housing income limits) and 104 (asset limits) of HOTMA. The rule will have the greatest impact on income calculations and reviews for the public housing and section 8 programs. Comments are due by November 18, 2019.

 

Key aspects of the Proposed Rule include:

 

Section 102

·         Gives the PHA or the owner discretion not to reexamine income at the tenant’s request if the PHA or owner estimate that the tenant’s income will decrease by less than 10%.

·         Requires PHA or owner to reexamine income “within a reasonable time” after either becomes aware of an estimated change in income of at least 10%.

·         Seeks comment on whether HUD should continue to require PHAs and owners to use the Enterprise Income Verification (EIV) System for all income examinations, including interim reexaminations.

·         Seeks comment on the use of income determinations from other programs.

·         Defines “de minimis error” as an error for purposes of excusing such errors in income calculations.

·         Simplifies the definition of “annual income.”

·         Eliminates certain discretionary exclusions from income including gifts and sporadic income.

·         Revises certain adjustments to income, including mandatory deductions, and allows hardship exemptions for medical and child care expenses.

 

Section 103

·         Calculates HOTMA’ income limit of 120% of AMI for public housing by multiplying the very low-income limit by 2.4.

·         Implements HOTMA’s provisions for terminating the tenancies of over-income families or charging them a higher rent.

 

Section 104

·         Limits an eligible family’s assets to $100,000.

·         Permits PHAs or owners to rely on family’s self-certification regarding assets.

·         Expands a PHA’s discretion to obtain financial records.

 

More than three years after the enactment of HOTMA, HUD has not implemented other provisions of the law, including the authority under section 106 for a PHA and owner to agree to annual OCAF increases in PBV rents.

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