HUD Publishes HOTMA Final Rule Preview
On January 31, 2023, HUD posted a preview version of the final rule implementing sections 102, 103, and 104 of the Housing Opportunity through Modernization Act of 2016 (HOTMA) (P.L. 114-201).
Only certain portions of sections 102 and 104 apply to Community Planning and Development (CPD) programs. Specifically, these sections affect current and potential beneficiaries of affordable housing activities, public facilities and improvements, and public service activities funded through CPD programs.
In addition, the rule includes conforming regulatory changes to four CPD programs:
- HOME Investment Partnerships Program (HOME)
- Housing Trust Fund (HTF)
- Community Development Block Grant Program (CDBG)
- Housing Opportunities for Persons With AIDS Program (HOPWA)
The effective date of the provisions applicable to CPD programs will be established upon publication of the final rule in the Federal Register. CPD grantees may not implement these provisions prior to the effective date.
Read the Preview Version of the HOTMA Final Rule
Sections 102 and 104
The changes made by sections 102 and 104 of HOTMA are described below:
- Section 102 revises the definition and calculation of annual and adjusted income and addresses how income and eligibility is determined, including the frequency of income reviews. It also creates a safe harbor to allow the use of an income eligibility determination of another provider of federal public assistance; increases the threshold for certain deductions made when calculating adjusted income; creates financial hardship exemptions for adjusted income; and eliminates the use of the Earned Income Disallowance.
- Section 104 defines net family assets, establishes an asset limitation for families based on the value of net family assets and property ownership, and provides exceptions for certain investments, including retirement savings and modest increases in income.
Additional Guidance and Resources
The applicability of HOTMA varies by CPD program. Program-specific guidance, resources, tools, and training to implement the new HOTMA provisions will be posted on HUD’s website and the HUD Exchange as they become available.