Question

"I saw your post that the law changed and we will no longer count student financial asssistance for Section 8 programs. When will this apply?"

Answer

Summary: It appears to apply immediately. 

According to the bill preamble, it covers "the fiscal year ending September 30, 2026." Technically, this year should have had appropriations in place by October 1, 2025 (the start of fiscal year 2026). It was late while Congress employed a series of continuing resolutions, and two resulting government shutdowns, but the final bill covers the year we are in and thus it is effective now. The old rule doesn't legally exists anymore. Read our post HERE for more details, including a link to a copy of the bill. Check out the first page for when the bill applies. The IRS long ago interpreted the Section 8 student income rule to apply specifically only to Section 8-assisted households [PBRA and HCV] for LIHTC purposes. However, HOTMA more broadly applies a rule to all households in programs affected by HOTMA, including the LIHTC. Subsequent HUD guidance applied the Section 8 rule to Section 8 PBRA/HCV recipients and the HOTMA rule to everyone else until such time as the Section 8 rule was dropped from law. That happened this week.

Followup Question

How does this interact with HOTMA and with programs that aren't in the HOTMA era, yet?

It is completely independent from HOTMA (though it was likely removed to make way for the HOTMA rule). It appears that for HUD programs not yet in the HOTMA era, we may have a student assistance "holiday" until HOTMA applies. For LIHTC, HOME, and NHTF properties, most of which have been moved into HOTMA compliance, this is a great simplification. As student income is one of the few things that may require counting MORE income than was counted pre-HOTMA, making it easier with one rule is a relief!