Note | Charts in this article series are from the HOTMA Audit Toolkit received by attendees of the 2024 and 2025 Costello Compliance Summit.

Step 3 | Develop a system to implement annual adjustment factors

One innovation of HOTMA is to ensure that some factors affected by inflation are adjusted annually. There are eight of these. Also, the passbook savings rate is adjusted annually based on the average FDIC savings rate. We have provided a chart with further details on these factors. 

[Charts in this article series are from the HOTMA Audit Toolkit received by attendees of the 2024 and 2025 Compliance Summit].

Because these factors determine the correct calculations each year, owner/agents need to be informed well ahead of time and prepared to implement the factors for income certifications due on or after the first day of the following year. For this reason, HUD has committed to publishing the factors annually by September 1. For the two years that HOTMA factor adjustments have applied (2025 and 2026), the factors were released early in August.

Compliance professionals who review files from past years will also need a handy reference to check the factors that applied each year. If an auditor’s software does not provide such an archive of factors, a spreadsheet, a word processing document, or other electronic method kept on a computer will likely be a favored method. For an “old-fashioned” approach, a model of a printable worksheet that will cover several years is below.

Next: Step 4 | Implement income calculation adjustments.

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