New HOTMA Requirements Set for January 2025 – Are You Ready?

By Ravi Melwani, CPA, Partner

Originally scheduled to be effective January of this year, the Housing Opportunity Through Modernization Act (HOTMA) signed into law in July 2016 will go into effect starting January 1, 2025. It significantly impacts and updates the United States Housing Act of 1937 regulations with direct impacts on public housing Section 8 and U.S. Department of Urban Development (HUD) programs. The upcoming implementation of various changes is designed to streamline the administration of HUD programs and create consistency. For example, HUD will be providing new model lease forms to comply with HOTMA requirements.

Starting on January 1, 2025, compliance is mandatory and any non-compliance will be reported as a finding and require corrective action.

Changes Resulting from Passage of HOTMA

Some of the significant changes and clarifications following HOTMA are:

• Income calculation changes under HOTMA provide more clarity on who is eligible to receive HUD subsidies.
  
  
• HUD clarified that both foster adults and foster children are no longer considered members of the assisted family and, as such, their income and assets are excluded.
  
  
• HUD is expected to make its Tenant Rental Assistance Certification System Version 203A HOTMA-compliant to its Multi-Family Housing operators (MFH). This system update is expected to be released shortly.
  
  
• Tenant Selection Plans must be updated by MFH operators to reflect the applicable requirements of HOTMA and ensure that tenants selected meet HOTMA requirements. Plans should be made publicly available by the MFH operator.
  
  
• MFH operators must continue to use the Enterprise Income Verification (EIV) system; however, EIV policies and procedures should be updated to reflect discretionary use of EIV reports.
  • Public Housing Authorities (PHAs) are not required to use the EIV system when verifying changes in resident income levels.
    
    
• To comply with HOTMA, PHAs must be able to submit transactions to the Housing Information Portal (HIP). This requires the PHA’s software vendor to make system updates, set an implementation date and fully convert to making all submissions to HIP.
  
  
• HUD is performing management occupancy reviews in 2024 to review the implementation of new compliance requirements. Any noncompliance will be noted as an observation, and corrective actions will be suggested.

HUD has been updating HOTMA-based questions it has received, and so these requirements are subject to change.

Specific HOTMA-related inquiries can be emailed to HUD at HOTMAQuestions@hud.gov.

Contact Us

If you require accounting, auditing, tax or consulting assistance with your HUD or affordable housing property, please contact your PKF O’Connor Davies client engagement team or:

Ravi Melwani, CPA
Partner
rmelwani@pkfod.com | 240.534.2808

Jennifer M. Galasso, CPA
Partner
jgalasso@pkfod.com | 914.341.7067