As HUD professionals across the country are working to adjust Tenant Selection Plans for HUD properties to prepare for the HOTMA era, many have asked about what happens when a family qualifies for the phase-in of the threshold for health and medical expenses or reasonable attendant care or auxiliary apparatus expenses at the HOTMA 1/01/2024 deadline, but then moves to another unit, building, or moves to another property altogether. The answers depend on the type of transfer and also on a discretionary policy Owner/Agents/PHAs may implement. We will cover these variations here. 

For context, all families who received a deduction for unreimbursed health and medical care and/or reasonable attendant care or auxiliary apparatus expenses based on their most recent income review prior to January 1, 2024, will begin receiving the 24-month phased-in relief at their next annual reexamination or interim reexamination, whichever occurs first after the date on which the PHA/Owner/Agent implements the phased-in relief. This will be the date that owners generally come into compliance after HUD and the Owner/Agent's software is HOTMA-compliant. Families who receive phased-in relief will have eligible expenses deducted that exceed 5 percent of annual income for 12 months. Twelve months after the 5 percent phase-in began, families will have eligible expenses deducted that exceed 7.5 percent of annual income for the immediately following 12 months. After those 12 months, the threshold will be at the 10% imposed by HOTMA. People new to the program once HOTMA takes effect or who are in the phase-in process but lose assistance and then seek to be reinstated, will have a 10% threshold immediately when they begin assistance. 

When an eligible family's phased-in relief begins at an annual reexamination, it will be a simple matter to track each phase of the phase-in at the three involved annual reexaminations. However, when an eligible family’s phased-in relief begins at an interim reexamination, the PHA/Owner/Agent will need to process another transaction one year later to move the family to the next phase. The transaction can be either an interim reexamination if triggered by changed adjusted income, or a non-interim reexamination transaction. 

The phase-in for transfers within the same multifamily property or PHA program

The right to the phase-in continues if a household transfers to another unit within a HUD property. This also applies in Public Housing when a family transfers Public Housing units within the same PHA and when a Housing Choice Voucher family moves with continued assistance in the HCV program with the same PHA or ports to a new PHA. 

The phase-in for transfers to another HUD property or program

The family is treated as a new admission and is subject to the 10% threshold unless the Owner/Agent/PHA has a policy to the contrary. They may establish a policy to continue the phased-in hardship relief for families who were eligible for relief as of January 1, 2024, and who are treated as new admissions under a different HUD program. This is an area where HUD allows a discretionary policy that must be explicitly spelled out in the Owner/Agents Tenant Selection Plan or the PHA ACOP or HCV Administrative Plan.   

Documenting a right to the phase-in after transfer

If the PHA/Owner/Agent elects to continue the phased-in hardship relief, then the following documentation is required: A copy of forms HUD–50058 or 50059 from the family showing phased-in relief. If the forms are unavailable, then the PHA/Owner/Agent may obtain self-certification from family declaring the effective date of the 5% or 7.5% phase-in that they are at. The PHA/Owner/Agent must also document in the file the reason that the forms HUD-50058 or 50059 were unavailable. 

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