Article | One "HOT" Topic - HOTMA | Part 2 | Asset Restrictions

This is the second in a multi-part series discussing the new HUD HOTMA Final Rule.

Note: FAQs 1 & 2 were covered in the first article. 

FAQ 3 | What are the new restrictions on assets owned by HUD-assisted households under HOTMA?

Answer | In general, public housing units may not be rented and assistance under Section 8 (tenant-based and project-based) programs may not be provided to persons if they have the assets listed below.  

1. The household's net assets exceed $100,000. This amount will be adjusted annually by HUD for inflation (in accordance with the Consumer Price Index for Urban Wage Earners and Clerical Workers0). OR
2. The household has a present ownership interest in real property. The property must be suitable for occupancy by the family as a residence. They must have a legal right to reside in, and the legal authority to sell based on State or local laws where the property is located.

FAQ 4 | Are there any exceptions to the rule on home ownership?

Answer | Yes, the exceptions are:

1. Any property for which the family is receiving assistance under HUD's manufactured homes provisions of public housing rules at 24 CFR 982.620, or under the Homeownership Option in the Housing Choice Voucher program (24 CFR part 982; 237).
2. Any property that is jointly owned by a member of the family and at least one nonhousehold member who does not live with the family, if the non-household member resides at the jointly owned property.
3. Any person who is a victim of domestic violence, dating violence, sexual assault, or
   stalking.
4. Any family that is offering such property for sale.

FAQ 5 | I have a household that owns a one-bedroom home that is not big enough for its six household members. When might a property not be "suitable for occupancy" under this rule?
Answer | A property is considered “suitable for occupancy” under this rule unless the family demonstrates that it:

1. Does not meet the disability-related needs for all members of the family (for example, physical accessibility requirements, disability-related need for additional bedrooms, proximity to accessible transportation, etc.). 
2. Is not sufficient for the size of the family. 
3. Is geographically located so as to be a hardship for the family. The distance or
   commuting time between the property and the family’s place of work or school would be a hardship to the family, as determined by the PHA or owner.
4. Is not safe to reside in because of the physical condition of the property. This applies if the property’s physical condition poses a risk to the family’s health and safety and the condition of the property cannot be easily remedied).
5. Is not a property that a family may reside in under the State or local laws where the property is located. An office building zoned for business use that a member of the household owns may be an example. 

FAQ 5 | I have several households that own homes that do not meet any exceptions at my Section 8 PBRA property. Will this affect them?

Answer | This is an ongoing requirement, so it applies initially and upon reexamination of family income for certifications effective starting January 1, 2024. If they do not meet an exception, it appears that they will no longer qualify for assistance and, likely, tenancy. We assume that part of the reason we have a year to ramp up to HOTMA in 2024 is to prepare for these aspects of the rule and to provide fair warning to households affected. 

FAQ 6 | Does this apply to non-public housing or non-Section 8 properties, like HOME, the NHTF, or the LIHTC?

Answer | No. See the first article in this series for more details and an applicability chart. 

Up next: Further asset rules. These WILL apply to the HOME, NHTF, and LIHTC programs.  

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