Updated August 21, 2026: HUD has extended the mandatory HOTMA compliance date for Multifamily Housing owners to January 1, 2027.
Do owners need both a current and a HOTMA-compliant Tenant Selection Plan?
Yes. During the transition, owners should maintain both the current pre-HOTMA TSP and the updated HOTMA-compliant TSP.
Contract Administrators must review both plans during Management and Occupancy Reviews. This continues until TRACS 203A is released and the owner operates fully under HOTMA.
HUD also encourages owners to redline the pre-HOTMA TSP. This helps reviewers identify the HOTMA changes.
Review HUD’s Multifamily HOTMA FAQ and Notice H 2025-07 for current guidance.
HOTMA changes income calculations, asset requirements, income reviews, and other Multifamily Housing procedures. HUD continues to update its implementation guidance. Therefore, owners should rely on current HUD notices and maintain required transition documents. Mandatory full compliance is now scheduled for January 1, 2027.
1. Early Adoption and Transition Period
Navigate recommends you do not implement HOTMA provisions manually. We suggest you wait until the software is up-to-date!
Before the release of TRACS 203A, MFH Owners can implement HOTMA provisions manually:
- Manual Calculations: Using the rent override function, family incomes and tenant rents can be calculated manually and entered into TRACS 202D. Detailed instructions are available in HUD’s one-pager on this topic here.
Again, we suggest you wait until the software is up-to-date! Please watch the video below to learn why we recommend patience.
2. Tenant Selection Plans (TSPs)
During Management and Occupancy Reviews (MORs), both pre-HOTMA and HOTMA-compliant TSPs must be reviewed. Key points:
- During the transition, Contract Administrators review both the pre-HOTMA and HOTMA-compliant TSPs. Owners should follow current HUD guidance concerning findings, observations, and corrective actions.
- Owners must update and publicize their TSPs and EIV Policies by May 31, 2024, to avoid findings during MORs.
Recommendation: Redline your pre-HOTMA TSPs to align with HOTMA changes for smoother MOR processes.
3. HOTMA Model Leases and Forms
HUD will provide updated model leases and forms that are compliant with HOTMA. Until the compliance date:
- Owners who adopt HOTMA provisions must use the new forms as they become available.
- Families must receive at least 60 days’ notice about lease modifications, with clear instructions on accepting or refusing changes.
4. Inflationary Adjustments and Passbook Savings Rate
HOTMA introduces adjustments tied to inflation:
- Adjusted rates for 2025 can be found here.
- The Passbook Savings Rate is updated to 0.45% under HOTMA but remains at 0.06% for non-HOTMA properties until compliance is mandatory.
5. Safe Harbor and Hardship Provisions
MFH Owners can apply safe harbor provisions for income determinations based on means-tested federal assistance programs. Additionally:
- Medical hardship relief applies to families with deductions before January 1, 2024.
- General hardship provisions allow discretion in addressing significant deduction drops.
6. Key Dates to Remember
- May 31, 2024: Deadline for updating and publicizing TSPs and EIV Policies.
- January 1, 2027: Current mandatory compliance date under Notice H 2025-07.
- TRACS 203A: Monitor HUD announcements for current release and implementation instructions.
7. Additional Resources and Next Steps
MFH Owners are encouraged to:
- Subscribe to HUD’s Multifamily Housing mailing list for updates here.
- Review notices such as Notice H 2023-10 and Notice H 2024-04 for detailed guidance.
