HOTMA Compliance Changelog

Impacts: Original Printing to 3/7/24
Sessions: August 2023 through March 2024

Slide 15

First bullet – changed “March 31, 2024” to “May 31, 2024”

Slide 31

Fourth bullet – removed “not”

Slide 123

First bullet – removed “be”

Slide 128

Final bullet – changed “tenancy” to “assistance”

Impacts: Original Printing to 2/8/24
Sessions: August through February

Slides 2

Added to the header “and revised on February 2, 2024.”

Bullet 1 – Changed “are” to “may be”

Slide 6

Added final bullet: “The Implementation Guidance was revised on February 2, 2024.”

Slide 9

Added final statement: “Sites operating under these programs should anticipate further guidance directly from the program’s regulatory body.”

Slide 13

Changed page numbers to 8-9

Slide 23

Removed bullet 5 (it has its own slides now)

Slide 27

Bullet 2 – Changed to “The exclusion extends to workers’ compensation payments, regardless of the frequency or length of the payments.”

Slides 31-32

NEW SLIDES

Previous Slide 34 / New Slide 36

Changed page numbers to 83-85

Previous Slide 47 / New Slide 49

Modified middle section to consolidate two bullet points: “If the student is the head of household, co-head, or spouse and is 23 or younger or does not have dependent children, then 479B assistance will be part of the total equation.”

Second-to-last bullet – Added “Again” to beginning of sentence

Slide 50

NEW SLIDE

Previous Slide 52 / New Slide 55

Added final bullet – “Sites are granted flexibility in choosing whether to implement the 0.40% figure immediately, or to continue to use their previous rate until they implement HOTMA.”

Previous Slide 54 / New Slide 57

Bullet 3 – Added “or may borrow the form on pgs. 127-129 of the Implementation Guidance”

Slides 67-71

REMOVED SLIDES

Previous Slide 76 / New Slide 75

Revised entire slide: Excluding Amounts from Assets

If a family certifies that they have received a Federal tax refund or a refundable tax credit in the last 12 months, that amount must be deducted from the family’s net assets.

Example

• Household G currently has a non-interest-bearing checking account with a cash value of $1,000 and a savings account with a cash value of $5,000. The savings account will generate $10 of actual yearly income.
• Their assets total cash value is $6,000.
• During their interview, they disclosed that six months ago, they received a Federal tax refund in the amount of $4,500.
• The site must subtract $4,500 from the family’s assets.
• $6,000 – $4,500 = $1,500
• The countable asset total is $1,500. The site must still count the $10 of actual yearly income, in full.

Previous Slide 77 / New Slide 74

Added Bullet 7 – “Any amounts recovered in any civil action or settlement based on a claim of malpractice, negligence, or other breach of duty owed to a family member arising out of law that resulted in a member of the family being a person with disabilities”

Previous Slide 82 / New Slide 91

Added Bullet 2 – “Families may still only deduct child care costs for children age 12 and younger.”

Previous Slide 90 / New Slide 99

Bullet 2 – Changed to “To ease this burden, the new 10% standard will be phased in over a 24-month period, beginning on the effective date of the household’s next AR or IR following the site’s implementation of HOTMA.”

Previous Slide 91 / New Slide 100

Bullet 1 – Changed to “At their December 2023 AR…”

Bullet 5 – Changed to “At their December 2024 AR…”

Then added a bullet in-between the circumstances to state that the site implements HOTMA in September 2024.

Previous Slide 92 / New Slide 101

Removed chart

Bullet 1 – Changed to “Beginning the first time an existing, qualified household undergoes a reexamination, they will be subject to a 5% threshold.

Bullet 2 – Changed to “One year later, they will be subject to a 7.5% threshold.”

Bullet 7 – Changed to “O/As and PHAs have the discretion to offer continued hardship relief for families who were eligible for it at their previous location, and who would be treated as new admissions in their program.

Previous Slide 100 / New Slide 109

Bullet 4 – Added sentence “The site may use verification documentation obtained for the most recent IR.”

Previous Slide 101 / New Slide 110

Bullet 4 – Changed “Paycheck” to “Paystub”

Previous Slide 102 / New Slide 111

Added final bullet – “Sites utilizing the safe harbor provision are not required to run the EIV Income Report at the time of AR.”

Slide 113

NEW SLIDE

Previous Slide 104 / New Slide 114

Consolidated middle two bullets to emphasize that increases in earned income after a previous reduction in income may warrant an IR, depending on the sites’ policies.

Previous Slide 121 / New Slide 131

Changed page numbers to 114-118

Previous Slide 137 / New Slide 147

Added a final comment: “We encourage you to read through the applicable notices for even more information.”

Impacts: Original Printing to 1/12/24
Sessions: August through January

Slides 2

Bullet 2 – changed “effective” to “enforced”

Slide 12

Changed to:

The Code of Federal Regulations will reflect HOTMA changes as of January 1, 2024, but full compliance is mandatory on January 1, 2025.

• Sites should continue to follow pre-HOTMA regulations until the following:
  • Their software is HOTMA-ready
  • They have made adjustments to their EIV Policies & Procedures and Tenant Selection Plans/Admissions and Continued Occupancy Policies
  • Residents have executed HOTMA-compliant leases
  • Residents have been given proper notice of changes (per local landlord/tenant law)
• HUD has confirmed that it will not issue non-compliance findings based on HOTMA-related changes in 2024.

Moved Slides 120-122 to Slides 13-15

Previous Slide 34 / New Slide 37

Bullet 1 – changed to “There are some adjustments to how student financial assistance will be treated, and now all programs follow the same rules.”

Previous Slide 48 / New Slide 51

Bullet 2 – changed final phrase to “and we will provide the current values for 2024.”

Previous Slide 49 / New Slide 52

Bullet 3 – changed to “In 2024, this is set at 0.40%.”

Previous Slide 64 / New Slide 67

Changed header to “Asset Limitation 1: Specific Restriction on Real Property”

Bullet 1 – changed to “Households may not begin receiving assistance if they own real property that is suitable for occupancy.”

Previous Slide 65 / New Slide 68

Changed header to “Asset Limitation 1: Specific Restriction on Real Property”

Previous Slide 66 / New Slide 69

Changed header to “Asset Limitation 1: Specific Restriction on Real Property”

Previous Slide 67 / New Slide 70

Changed header to “Asset Limitation 2: $100,000* Threshold

Added final bullet: “In several industry meetings, HUD has reminded O/As and PHAs not to make any eligibility-related decisions based on new asset limitation rules until it has issued further guidance.”

Previous Slide 68 / New Slide 71

Changed header to “Asset Limitation 2: $100,000* Ineligibility Remedies”

Previous Slide 69

Removed

Previous Slide 85 / New Slide 87

Bullet 1 – revised to ‘The “medical expense” deduction has been renamed the “health and medical care expense deduction”.’

New Slide 105

Interim Recertification Decision Tree

Previous Slide 103 / New Slide 106

Changed first sentence to “Following HUD’s new IR guidance is all about determining the percentage by which income is changing.”

Previous Slide 104 / New Slide 107

Added bullet 3 – “The household had not undergone an IR previously.”

Previous Slide 110 / New Slide 113

Bullet 1 – Revised to “Households were still eligible to claim the EID leading up to January 1, 2024.”

Previous Slide 113 / New Slide 116

Final bullet – revised to “How to prepare residents for HOTMA changes going forward”

Impacts: Original Printing to 11/17/23
Sessions: August 17-18 through November 16-17

Slides 11-12

Swapped positions of slides

Slide 35

Change “the income is fully excluded” to “fully excludes, with two exceptions we will discuss later)

Slide 51-75

Swapped positions of several slides

Slide 63

First sentence now only says “If a household has assets with a total cash value of more than $100,000*, they are ineligible to begin receiving assistance.”

Slide 64

Replaced sentence about “grandfathering,” with “O/As have discretion not to enforce asset limitations on existing tenants, at all.”

Slide 66

Changed the first sentence to “As of 2024, households may not begin receiving assistance if they own real property that is suitable for occupancy”

Slide 67

Added sentence “O/As may choose not to enforce this policy on existing residents.”

Slide 82

Changed amounts in lower box to reflect Elderly/Disabled family deduction.

Slide 97

Added Note that says “HUD no longer requires 4-6 paycheck stubs to calculate income. The new standard is to use only 2.

Impacts: Original Printing to 10/12/23
Sessions: August 17-18 through October 12-13

*New Slide 53*
The cash value of a checking account is now its current balance; obtain a minimum of one statement that reflects the current balance of banking/financial accounts.

Slide 74

• Remove “NCHM recommends that you third-party verify all assets in 2024 and upon move-in.”
• Add “O/As and PHAs may choose not to allow self-certification, at their discretion (and this must be part of your policies and procedures).”
• Add header to chart “**SAMPLE ASSET VERIFICATION PROCEDURE**”

*New Slide 95*
Annual and Interim Recertifications

One of the most significant changes under HOTMA involves processing certifications.

O/As and PHAs are allowed far more discretion in the process:

• Income calculation and verification
• Determining hardship relief/eligibility
• Income thresholds that trigger an IR

Sites must outline their procedures and treat all households in the same manner.

(Old Slide) 116

• Add “Remember: a site’s EIV Policies and Procedures ultimately outline how and when each EIV Report will be used.”
• Remove picture (for more space for text).

Impacts: Original Printing to 9/13/23
Sessions: August 17-18, August 24-25, September 7-8, September 14-15

Page 9, Slide 6
Add bullet point: An email update was released July 18, 2023 requiring PHAs to bring their programs into compliance with the HOTMA final rule as quickly as possible, but no later than January 1, 2025.

Page 10, Slide 8
Change the final bullet point to “The Low Income Housing Tax Credit (LIHTC) program*

Page 11, Slide 10
Change “March 14, 2023” to “March 16, 2023”

Page 13, Slide 14
Change “24 CFR 5.60” to “24 CFR 5.609”

Page 17, Slide 21
Add bullet point: “Actual yearly income from retirement savings accounts”

Page 17, Slide 22
Revise all content below regulation boxes to the following:

• This aligns other affordable housing programs’ rules with that of Public and Indian Housing’s rules surrounding fosters in its programs.
• Foster children and foster adults are not family members, therefore none of their income or assets are counted.
  • They will appear on the certification but will not be included when determining income limits.
  • They should be considered when determining appropriate unit size and utility allowance.
• HUD has not changed the rules regarding other family members receiving payments to care for foster children.

*New Slide 23*
EXAMPLE

Household K consists of a Head of Household and their Foster Child.

The Head of Household earns $30,000 annually as a part-time receptionist. They receive $1,000 monthly in foster care payments from the state Office of Child and Family Services for providing care for the Foster Child.

A couple of afternoons each week, the Foster Child works at an ice cream shop, where they earn $10,000 per year. Their paternal grandparents send him $100 cash each month.

Only the HOH’s wages of $30,000 are counted.

Page 18, (New) Slide 24
Delete existing examples; revise to just one: “An applicant is currently unhoused, living out-of-doors. Once he has a permanent residence and thus storage, he will visit various community resource centers to receive donations of hygiene items, cleaning supplies, clothing, and other necessities free of charge on an ongoing basis.”

Page 19, (New) Slide 26
Revise “New Regulation” to “Insurance payments and settlements for personal or property losses, including but not limited to payments through health insurance, motor vehicle insurance, and workers’ compensation.”

Revise remainder of content to the following:

“HUD clarified that any insurance payments or settlements received for a personal or property loss (typically through an insurance company) are specifically excluded from income.

This was only implicitly excluded as covered under the “lump sum” rules of the past.

EXAMPLES

A resident was involved in a workplace accident and receives workers’ compensation payments of $454 weekly. This is excluded.

A renter’s insurance policy initially paid a household $10,000 for property loss when their unit was involved in a fire, then adjusted the claim upon appeal. The household receives another $5,000 later. Both these amounts are excluded.”

Page 21, (New) Slide 30
Third-to-last bullet point: correct spelling of “distribution”

Page 23, (Old) Slide 33
Clarify topic phrase to say “FORMS OF STUDENT FINANCIAL ASSISTANCE THAT ARE ALWAYS EXCLUDED”

Page 23, (Old) Slide 34
Remove “Money from friends or family”

Page 25, (Old) Slide 37
Revise final three bullets for grammatical errors:
“Always use Bucket 1 first. Only use Bucket 2 if you need to. Anything leftover in Bucket 2 is counted as excess income.”

Page 30
Revise first sentence to “The Hill Family lives in apartment #404, a two-bedroom project-based Section 8 unit at Forest Meadows Apartments.”

Page 34, (Old) Slide 48
[Asset Verification Procedures are now filled in]:
Verify all assets
Self-certify
Self-certify
Verify all assets
Self-certify
Self-certify
Verify all assets

Page 37, (New) Slide 54
Revise second bullet point to “This rule applies to Section 8 PBRA and to housing offered under any PIH program.”

Page 37, (New) Slide 55
Add final bullet point: “Remember: this rule only applies to Section 8 PBRA and to housing offered under any PIH program.”

*New Slide 56*
If a household has assets with a total cash value of more than $100,000*, they are ineligible for assistance.

EXAMPLE

Household L is a current tenant at a Section 8 PBRA property. They are due for annual recertification effective 3/1/2024, and their assets are listed below:

What is the correct course of action?

1. Give them notice to vacate the unit; they are no longer eligible for tenancy.
2. Tell them they are no longer eligible for assistance effective 3/1/2024.
3. Follow the O/A’s nonenforcement/exception policy and allow them to cure their asset ineligibility by 9/1/2024.
4. No action is needed; the asset threshold does not apply to Section 8 PBRA properties.

Page 38, (Old) Slide 55
Add first sentence: “HUD has imposed further asset restrictions for Section 8 PBRA and housing offered under any PIH program.”

Item d has been moved to the slide that follows.

Page 39, (Old) Slide 57
Add ribbon to bottom of slide: “Remember: this rule only applies to Section 8 PBRA and to housing offered under any PIH program.”

Page 39, (Old) Slide 58
Add after bullet point three: “If the total amount that these items are worth exceeds $50,000*, count them all.”

Remove final two bullet points.

*New Slide 62*
VALUE OF RETIREMENT ACCOUNTS AND AMOUNTS EARNED BY SUCH ACCOUNTS

PREVIOUS REGULATION: Balances held in retirement accounts are counted if the money is accessible to the family member. The income earned by the account is included as asset income.

NEW REGULATION: The value of any retirement accounts recognized as such by the IRS are not included in net family assets.

• Retirement accounts accessible to family members, like 401(k)s, 403(b)s, IRAs, and Keoghs, have amounted to significant assets in the past.
• HUD has clarified under Section 5.603(b) that these will no longer be included as assets.
• The income generated by such accounts (interest, dividends, etc.) is therefore not to be included.
• Once periodic payments are received, those payments are included as non-asset income.

*New Slide 63*
VALUE OF RETIREMENT ACCOUNTS AND AMOUNTS EARNED BY SUCH ACCOUNTS

EXAMPLES

• A resident has a 401(k) to which they contributes 3.5% of their weekly pay. It has a cash value of $43,158.00. It earns 6% on average annually as invested. Although they could access it with a penalty, they will not retire or take periodic payments for another 25 years. This is not an asset.
• A retired resident has an IRA with a cash value of $215,750.00. It earns 8.25% annually as invested. They take quarterly distributions of $3,000.00, for an annual total distribution of $12,000.00. This is not an asset. The $12,000.00 in distributions is non-asset income.

Page 40, (Old) Slide 60
Add final bullet point: “Retirement savings accounts, such as 401(k)s, 403(b)s, and IRAs.”

Page 42
Revise typo on Passbook Savings Rate to “0.06%”

Page 50
Under “Income” portion, revise “January to August” to “May to December”

Page 52
Question 7, option d – change to “$63,135”

Page 55
Question 7, option c – change to “$63,135”

Page 60, (Old) Slide 67
Second bullet point – remove “(and will be rounded down to the nearest multiple)”

Page 61 (Old) Slide 69
Revise each instance of “exception” to “exemption”

*New Slide 74*
Child Care Deduction Hardship Exemption

EXAMPLE

Household I consists of a disabled Head of Household and their eight-year-old son. The Head of Household receives SSDI income. They had been looking for part-time work for several months and were benefitting from the child care deduction during this time.

Annual Income: $10,800

Adjusted Income: $3,000

TTP: $90              TR: $0

UA: $100             UR: $10

They were involved in an accident that exacerbated their disability and they had to pause their job search. This makes them ineligible for the child care deduction.

Annual Income: $10,800

Adjusted Income: $10,752

TTP: $269            TR: $169

UA: $100             UR: $0

If the household cannot afford its Tenant Rent, they can request a hardship exemption and continue benefitting from the child care deduction for 90 days.

Page 63, (Old) Slide 73
REMOVED

Page 63, (Old) Slide 74
Add to top of slide: “The final rule allows sites to add together a household’s eligible health and medical care expenses and disability expenses, prior to subjecting them to the threshold.”

*New Slide 80*
The Final Rule acknowledges that the increased threshold may place an undue burden on existing subsidized residents that are currently qualified to deduct their expenses.

To ease this burden, the new 10% standard will be phased in over a 24-month period, beginning in 2024.

Page 65, (Old) Slide 78
Change “EXAMPLE” to “EXAMPLES OF POTENTIAL HARDSHIPS”

Page 72, (Old) Slide 83
Revise first two bullets to the following:

• When a site is executing an Annual Recertification/ Reexamination (AR), they must examine the prior year’s income and make adjustments to reflect current income if there have been any changes during the year.
• For a Move-In (MI), Initial Certification (IC), or a New Admission, sites use anticipated income

*New Slide 91*
Following HUD’s new IR guidance is all about determining 10% of income and comparing it to the proposed increase.

EXAMPLE

• Household F’s annual gross income is $40,870. This includes $26,000 from the Head of Household’s annual salary and $14,870 from the Spouse’s Social Security benefits.
• The Spouse reports she is now also receiving SSI benefits in the amount of $6,648 per year.
  • Calculate 10% of the household’s current income.

$40,870 × 10% = $4,087

• Compare the amount of the increase to the 10% threshold.

$6,648 > $4,087

• This household must undergo an IR.

*New Slide 92*
Not all income increases will require an IR.

EXAMPLE

• Household J had no income upon move-in. Two months later, the Head of Household reports that he got a job with a salary of $23,500 per year.
• Though this is an increase that amounts to more than a 10% difference in income, this increase is due to earned income.
• No IR is required.

Page 73, (Old) Slide 86
Second bullet point – remove typo “is”

Page 74, Slide 87
REMOVED

Page 73, (Old) Slide 88
Revise first sentence to “An O/A has adopted a policy that only allows IRs for income decreases when the decrease amounts to 10% of their annual income.”

Revise final bullet point to “This household would not be granted an IR under the site’s policies.”

Page 75, (Old) Slide 89
Remove final bullet point.

Add two bullet points:

• Remember: Any time an IR is triggered, you still must ask the household to verify all changes.
• Continue to execute IRs for changes in family composition (e.g.: move-ins/move-outs).

*New Slide 96*
Executing Multiple IRs

Page 76, (Old) Slide 92
Revise typo to “income”

Page 78, (New) Slide 102
Add to second bullet point “They are still counted for purposes of determining unit size and utility allowances.”

Change third bullet point to “EIV does not need to be run at the time of an Interim Recertification.”

*New Slide 103*
As of September 2023, there has been very limited guidance surrounding how EIV is changing.

A few reports will require new official guidance to align with HOTMA requirements:
Income Discrepancy Report
Income Validation Tool (IVT)
New Hires Report
Multiple Subsidy Report & Existing Tenant Search (in the context of Fosters)

Continue to run and use EIV reports as before.

Page 78, (Old) Slide 96
SWAP WITH SLIDE 97

Page 79, (Old) Slide 97
Remove “HUD-9887” from forms list

Change eighth bullet point to “The 9887 and 9886 will be changing.”

Add asterisk after “tenancy”

Add bullet “It’s unclear how the 9887-A will be changing.”

Add asterisk clarifier “*Sometimes a household’s subsidy is terminated, but the household chooses to remain in their unit. If they qualify for subsidy again later in their tenancy, they would need to sign the form again.”

SWAP WITH SLIDE 96

Page 80, (Old) Slide 99
Remove “September” from first bullet point.

Page 80, (Old) Slide 100
Change “October” to “September” in first bullet point.

Change bullet points 2 to 6 to the following:

• Make tenants aware of the following:
  • New HUD Model lease
  • New 9887 terms
  • Revised HUD Fact Sheet for Determining Rent and EIV & You Brochure
  • Your updated Tenant Selection Plan (TSP)
  • Your revised Income Questionnaire

*New Slide 109*
Historically, HUD has been “hands-off” when it comes to waiting list management.

Sites need to decide the extent to which they will directly inform applicants and pre-applicants of HOTMA’s changes.

Ultimately, sites will need to update their applications for new residents as well as any standard communications they use with their waiting list population.

It is up to the O/A or PHA’s discretion how to handle current applicants who will be ineligible for subsidy once HOTMA is in effect.

Page 83, (Old) Slide 105
Change “March 14, 2023” to “March 16, 2023”

Page 83, (Old) Slide 106
Remove numbering paradigm; revert to bullets

*New Slide 116*
Alternative Rent

The alternative non-public housing rent (alternative rent) is a monthly amount equal to the greater of:

The applicable fair market rent for the unit; or

The amount of monthly subsidy provided for the unit.

Each year, HUD will provide PHAs with guidance on calculating the amount of “monthly subsidy” provided to the unit.

Page 84, (Old) Slide 107
Remove numbering paradigm; revert to bullets

Page 84, (Old) Slide 108
Change header to “NPHOI Consequences”

Page 85, (Old) Slide 109
Remove final three bullet points

Add bullet point to the end: “See PIH Notice 2023-03 for more information on the NPHOI lease.”

Page 86, (Old) Slide 111
Change “3/14/2023” to “3/16/2023”

Page 88, Question 2
Change “August 1” to “8/1/2024”

Page 88, Question 4
Add “care” after “medical”

Page 89, Question 7
Add as second-to-last sentence in the question: “The site creates an IR to reflect these changes.”

Page 89, Question 8
Revise Extremely Low Income typo “80%” to “30%”

Page 94, Question 4
Add “/disabled” next to “elderly”

Page 94, Question 6
Change option b to “$60,650”