Question from a Blog Reader

"I know that owners/agents are required to apply the phase-in hardship in HOTMA. However, I attended a conference and heard HUD officials say that the other two hardship exemptions in HOTMA are optional. On the other hand, some people I trust are saying this is untrue and that we must have all of the HOTMA hardship exemptions in our Tenant Selection Plan. Which is it?

Answer

Summary answer: The hardship exemption is required. 

Understandably, this has created some confusion. In our observation, there have been mixed signals on this issue from housing officials and others. After considering the issue, HUD posted a memo and emailed stakeholders on July 22, 2024, to help get this resolved. The entire text of that memo is below.

Hardship Exemptions

We understand there has been some confusion about the Financial Hardship Exemption (General Relief) and the Childcare Hardship Exemptions of the Housing Opportunity Through Modernization Act of 2016 (HOTMA). To clarify, both of these exemptions are required. While Owners have some discretion as to how the exemptions are offered, they must offer these exemptions. When reviewing an Owner’s Tenant Selection Plan after they have elected to implement the exemptions, you should verify that the exemptions are clearly laid out and in line with the below requirements.  

For the Child-Care Expense Deduction, outlined in C.5 of Notice H 2023-10, Owners must offer a deduction for any reasonable child-care related expenses for the care of children under 13 when the care is necessary to enable a family member to be employed or to further his or her education and the expense is not reimbursed by an agency or individual outside the household. Owners should develop policies requiring families to report if the circumstances that made the family eligible for the hardship exemption are no longer applicable. The Owner may also extend the hardship exemption for additional 90-day periods based on family circumstances as stated in their written policies.  

For General Relief, Owners must describe their policy for determining eligibility for general hardship in their updated Tenant Selection Plans. 

If you have any questions, please contact [email protected]. 

The memo can be read as a webpage HERE.

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