HUD Clarifies Owner-Created HOTMA Lease Addenda
HUD will not review owner-created HOTMA lease addenda until OMB approves new model leases. See what PBRA owners and agents should do now.
HUD Clarifies Owner-Created HOTMA Lease Addenda
HUD has clarified how it will handle owner-created lease addenda intended to implement the Housing Opportunity Through Modernization Act of 2016, or HOTMA. For now, HUD will not review or approve those addenda while updated model leases and related forms remain under Office of Management and Budget review.
Therefore, owners and agents should not treat a custom HOTMA addendum as approved or ready for use. However, they should continue preparing for the January 1, 2027, compliance date and follow HUD’s current guidance for manual rent calculations and TRACS reporting.
What HUD Clarified About HOTMA Lease Addenda
Some owners and agents submitted their own lease addenda to support HOTMA implementation. They requested HUD approval because current requirements call for HUD review before an owner revises a HUD lease through an addendum. HUD has now closed that approval path temporarily. Specifically, HUD will not review or approve HOTMA-related lease addenda until OMB approves the new model leases and related forms.
As a result, owners and agents should understand two important points.
First, HUD has not approved an owner-created HOTMA addendum simply because an owner submitted it. Second, HUD has not permanently rejected all HOTMA lease modifications. Instead, HUD tied the pause to the pending federal review process.
At the time of this writing, OMB’s public record still lists the related information collection package as “Received in OIRA.” Therefore, owners should continue monitoring HUD for the final forms and release instructions.
What the Clarification Changes—and What It Does Not
How the HOTMA lease addenda pause affects owners
Owners and agents should not use an owner-created HOTMA lease addendum without HUD approval. The HUD memorandum confirms that owners must receive approval before revising a HUD lease through an addendum.
Similarly, owners should not assume that a previously submitted addendum remains under active review. Instead, they should document the submission and confirm its status with the appropriate HUD office or contract administrator.
The memorandum addresses HOTMA-related addenda. However, it does not address other lease addenda that HUD previously approved or addenda unrelated to HOTMA.
What remains in effect
The January 1, 2027, mandatory compliance date has not changed. Notice H 2025-07 moved the date from January 1, 2026, to January 1, 2027. The lease-addendum memorandum does not provide another extension.
Meanwhile, owners may continue other HOTMA preparation. For example, teams can review procedures, train staff, coordinate with software providers and assess documentation practices.
Owners that have adopted some HOTMA early should continue following HUD’s current instructions. HUD’s Multifamily HOTMA page allows early adopters to calculate income and rent manually. When applicable, owners enter the results in TRACS 202D through the rent-override function and annotate tenant files.
Unless HUD provides different instructions, owners should continue using current HUD-approved lease documents while they wait for the revised leases.
What Owners and Agents Should Do Now
1. Do not use unapproved HOTMA lease addenda. Do not begin a lease modification process with an owner-created HOTMA addendum that HUD has not approved. Also, do not present custom language to residents as an approved HUD requirement. Instead, wait for HUD to release the approved model leases and related instructions.
2. Check previously submitted addenda. Create a record of any HOTMA-related addendum your organization already submitted. Include the submission date, property, recipient and any response. Next, ask the appropriate HUD office or contract administrator to confirm the submission’s status. However, do not assume that the original submission created an approval or authorization.
3. Continue using approved lease documents. Review your lease files and confirm that staff use the current HUD-approved lease and any properly approved addenda. In addition, separate existing approved addenda from draft HOTMA language. This step can prevent staff from using an unapproved document by mistake.
4. Keep broader HOTMA preparation moving. The approval pause applies to owner-created lease addenda. It does not pause the full HOTMA implementation process. Therefore, owners and agents should continue reviewing:
- Staff responsibilities and training needs
- Tenant Selection Plans and EIV policies
- Income and asset calculation procedures
- Tenant-file documentation
- Software readiness
- Quality-control processes
- Resident communication plans
- Lease anniversary and renewal dates
These steps can help teams prepare without issuing an unapproved lease modification.
5. Follow current early implementation guidance. Properties that have started early implementation should review HUD’s current manual calculation and TRACS instructions. Because early implementation can affect income calculations, rent, documentation and reporting, owners should also coordinate with their compliance and software teams. Property-specific questions may require additional HUD or contract administrator review.
6. Prepare for the revised lease rollout. HUD’s current implementation notice describes the process owners must follow once the new HUD-approved leases become available and a property fully implements HOTMA. For example, current guidance requires owners to provide families with the new HUD-approved lease at least 60 days before the end of the lease term. It also describes a 30-day response period and specific delivery procedures.
However, owners should not start that process with an owner-created document. Instead, they can prepare by reviewing lease expiration dates, assigning staff responsibilities and developing a tracking process.
HUD’s clarification creates a waiting period for custom lease language. It does not create a reason to stop HOTMA preparation. Therefore, owners and agents should document prior submissions, avoid using unapproved addenda and remain ready for HUD’s final model leases.
Review HUD’s Multifamily HOTMA resources and Navigate’s latest HOTMA updates. Then, share this clarification with your compliance, property management and software teams.
Frequently Asked Questions
No. HUD states that it will neither review nor approve HOTMA-related lease addenda while OMB reviews the new model leases and related forms.
Owners and agents should not treat a custom addendum as approved or use it to revise a HUD lease. HUD’s memorandum confirms that owners must receive approval before revising a HUD lease through an addendum.
The owner should document the submission and contact the appropriate HUD office or contract administrator. However, the owner should not assume that submitting the addendum created an approval.
No. The current mandatory compliance date for applicable Multifamily Housing owners remains January 1, 2027. Notice H 2025-07 established that date.
HUD has not announced a final release date. HUD will release the model leases after OMB completes its review and approves their use. At the time of this publication, the OMB package remains listed as “Received in OIRA.”
Owners can review lease expiration dates, notice procedures, staff roles and document-tracking systems. They can also prepare resident communication workflows. However, they should wait for the HUD-approved documents before starting HOTMA lease modifications.
