News | The HOTMA Implementation Notice is Out!

HUD has released the HOTMA implementation Notice. It is HERE.

In part, it says "The final rule’s effective date is January 1, 2024. HUD recognizes, however, that HOTMA includes significant program and systems changes and that PHAs/MFH Owners and families need time to understand the changes and implement them. HUD understands that the system development timeframes for the Housing Information Portal (HIP) and Tenant Rental Assistance Certification System (TRACS) make full implementation and compliance with the final rule by the January 1, 2024, deadline unlikely. Additionally,
because these HOTMA changes apply to all current participants and new admissions, implementation of the HOTMA final rule cannot be achieved immediately on a universal basis but rather is an ongoing process that will happen over the course of a year as routine program activities occur. Subparagraphs 6.1 and 6.2 describe HUD’s implementation requirements by program office." 

It goes on to say regarding multifamily programs, like Section 8 PBRA

"By March 31, 2024:

• By March 31, 2024, MFH Owners must update their Tenant Selection Plans and EIV
  policies and procedures to reflect HOTMA rules and discretionary policies.
• MFH Owners must make the revised Tenant Selection Plan publicly available.
  Note: MFH Owners must continue to follow their existing Tenant Selection Plans and
  EIV policies & procedures until the MFH Owner’s software is compliant with TRACS
  203A.

What MFH Owners must do once their software is HOTMA compliant:
Once a MFH Owner’s software is HOTMA compliant (i.e., TRACS 203A system
requirements have been fully implemented), the following things must happen:

• MFH Owners must provide tenants at least 60 days’ notice that their lease will be
  modified at the end of the lease term after the expiration of the 60 days’ notice. Once proper notice is given, MFH Owners must begin using the revised Model Leases at the expiration of a family’s lease term.
• MFH Owners must implement their revised Tenant Selection Plans and EIV policies
  and procedures.
• All tenant data submissions must comply with the HOTMA regulations. Prior to their
  first reexaminations under HOTMA, MFH Owners must inform families that their
  income determinations will be conducted in accordance with the HOTMA final rule
  As a best practice, HUD recommends that MFH Owners describe to families how
  their income determinations will change with the implementation of the final rule.
• MFH Owners must use the revised Tenant Consent form (form HUD–9887/9887A)
  and Fact Sheets (“How Your Rent is Determined”).

How HUD will monitor MFH Owner compliance prior to January 1, 2025:

• Prior to January 1, 2025, MFH Owners will not be penalized for HOTMA-related
  tenant file errors during Management and Occupancy Reviews (MORs). Instead,
  the Contract Administrator will issue observations with corrective actions.

By January 1, 2025:

• Full compliance with the HOTMA final rule is mandatory effective January 1, 2025.
  How HUD will monitor owner compliance on or after January 1, 2025:
• Contractor Administrators will issue HOTMA-related findings during MORs.
• MFH Owners must correct all HOTMA-related observations that were issued by
  Contract Administrators during 2024.
•  MFH Owners who fail to implement HOTMA may be found in default of their
  business agreements with HUD. 

Also interesting to note is that this notice replaces relevant portions of the HUD Hanbook 4350.3.

We will publish more as we digest the Notice. 

We will discuss this Notice thoroughly at next week's Summit! Online seats are still available! If you cannot make it live, replays will be available within hours. Click on the image below or HERE.