Important Changes and Impacts of HOTMA Implementation
This content discusses the implementation, impacts, and schedule of the Housing Opportunities Through Modernization Act (HOTMA). It covers key aspects such as income reviews, eligibility limitations, software updates, and income calculation methods under HOTMA. The information provided outlines how these changes affect multifamily housing and the necessary steps to comply with the new regulations.
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Presentation Transcript
Danielle Garcia HUD Jed Graef HDS February 7, 2017
HOTMA Statute Housing Opportunities Through Modernization Act Became law on 7/29/2016
Impacts and Implementation On October 24, 2016, the Department published a notice in the federal register outlining the implementation strategy for HOTMA. Sections 102 and 104 of HOTMA impact Multifamily and require rulemaking or guidance by HUD.
Impacts on TRACS/Software Title I, Sec 102 Income Reviews Calculation of Income and Adjusted Income Title I, Sec 104 Limitation on Eligibility for Assistance Based on Assets
Implementation Schedule Title I changes must be effective on the first of a calendar year following issuance of rulemaking/guidance expected to be effective January 1, 2019 This would mean that a TRACS update (TRACS 203B) would need to occur in the Summer of 2018 with the usual three-month transition period
Section 102(a): Income Reviews Annual reviews: Incorporates the FAST Act provision: Review income every 3 years for fixed income households (90% or more of income from fixed sources) TRACS impact Interim income reviews No TRACS impact On request when income or deduction changes result in a decrease of 10% or more in annual adjusted income The HUD Secretary may specify a percentage lower than 10% or permit the owner to specify a lower percentage Whenever income or deduction changes result in an increase of 10% or more in annual adjusted income The Secretary may specify a different threshold Increases in earned income are not considered unless they correspond to previous decreases The OA may elect not to review income during the last three months of a certification period
Calculation of Income Use Current Year Income for MI and IC Use Prior Year Income for AR Not a TRACS issue
Section 102(c): Calculation of Adjusted Income Dependent Allowance = unchanged Elderly Allowance = $525 up from $400 Medical and Disability Expenses = amounts in excess of 10% of income up from 3% Hardship exemptions apply possible new field Rules to be defined by the Secretary
Imputed Asset Income Threshold If the total assets are greater than the threshold then the imputed calculation is done and the certification uses the greater of the actual income and the imputed calculation based on the current passbook rate Current threshold is $5,000 Changing to $50,000 under HOTMA
COLAs The values of the following are affected by COLAs: Imputed Asset Income Threshold Dependent and Elderly Allowances Health and Medical Deduction Threshold OA and CA software and TRACS will need to keep track of the values subject to change and the dates that the changes are effective so that calculations and validations are correct
Transition from TRACS 203A to TRACS 203B Transition issues are important to clarify When an deduction or value changes What is the impact on certs already submitted with effective dates on or after the date of the allowance change? Similar issues with income limit and passbook rate changes Existing HUD guidance is that the income limit used to determine eligibility controls for a MI or IC even if the limit drops prior to admission Passbook rate changes have been published well in advance of the effective date
Section 104: Limitation on Eligibility: Assets At MI/IC or AR Tenant is limited to $100,000 in assets (subject to COLAs) Or who owns real property where they could live (except if receiving S8 assistance for the property, or a victim of domestic violence or the property is for sale) The OA may choose not to enforce this provision or provide exceptions The OA may delay eviction for up to 6 months
Contact Information Danielle Garcia danielle.d.garcia@hud.gov 202-402-2768 office Jed Graef jed.graef@hdsoftware.com 954-804-9609 mobile
