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

Step 4 | Implement HOTMA income calculation methods

HOTMA provides only a basic list of two income inclusions, found in 24 CFR 5.609(a). The first detail listed is that all income that a family receives is counted unless it is excluded in the next section (b) of the regulation. The second detail lays out the new imputed asset income rule when total net assets exceed the asset threshold ($50,000, as adjusted annually by inflation).

The next segment of the regulation at 24 CFR 5.609(b) provides a list of 28 items that are fully or partially excluded from income. Additionally, in 2024 HUD published an updated list of 29 other sources of federal income that are excluded from income for housing programs (Federal Register FR-6410–N–01). A few other recent publications from HUD also provide three additional exclusions: income from ABLE accounts, service-related disability payments for VASH voucher participants, and Medicare Advantage supplemental benefits. Thus, between HOTMA and other federal programs, there are currently 60 exclusions from income. Past articles in this blog have discussed the HOTMA exclusions in more detail, and it is beyond the scope of this article to cover them all here. Below is a simple summary of these, by income types and people who  benefit.

Up next: Step 5 | Implement asset calculation adjustments.

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