What Is HOTMA?

The Housing Opportunity Through Modernization Act of 2016 (HOTMA) was signed into law on July 29, 2016. It is a piece of legislative reform aimed at modernizing and streamlining various aspects of housing policies in the U.S. by amending sections of the United States Housing Act of 1937. Overall, it seeks to make affordable housing more accessible, efficient, and responsive to the needs of both residents and housing authorities.

The U.S. Department of Housing and Urban Development’s (HUD’s) final rule plays a crucial role in translating the objectives of HOTMA into actionable policies. It ultimately contributes to the improvement of affordable housing programs and services.

HOTMA amends several sections of the United States Housing Act of 1937, bringing forward substantial changes and reforms to several federal housing programs. This includes other HUD programs like Section 8 Housing Choice Voucher Program (HCV) and Section 9 Public Housing Program.

HOTMA provisions have been released in phases over the last few years because the law was so expansive. View the law in full here. The overall goal of The Housing Opportunity Through Modernization Act is to streamline administration, ensure consistency and alignment, improve accessibility, encourage asset building, and prepare for future challenges.

In 2023, HUD finalized rulemaking for implementation of sections 102, 103, and 104, which impacted the regulations found in 24 CFR Part 5 and 24 CFR Part 891 and focused on income calculation, net family assets, and income reviews.

More specifically, section 102 focuses on income reviews, encompassing the frequency of these reviews and refining the definitions of income and assets. Section 103 does not pertain to multifamily housing programs. Section 104 establishes asset limits for both Section 8 Project-Based Rental Assistance Programs and 202/8 programs.

On this page, you’ll find information on the latest changes implemented on January 1, 2024, resulting from the May 2023 Final Rule Summary.

Income Verification Changes

• Applicants for HUD programs like Section 8 Vouchers and Section 8 Public Housing can now utilize income eligibility from other means-tested programs to prove their qualification for rental assistance programs.
• Public Housing Authorities (PHAs) are no longer required to use HUD’s digital verification system, EIV when verifying significant changes in residents’ income levels.

Income Calculation Changes

• Public Housing Authorities (PHAs) must now base income calculations for annual reviews on the previous year’s income instead of projecting future income for public housing families and residents.
• Public housing families deemed “over income” for 24 consecutive months are no longer eligible to stay in public housing. However, it’s up to PHA’s discretion on whether or not they can remain in their current unit.
• Most disability payments intended to support a disabled family member residing at home are excluded from income calculations.
• HUD offers clarification on “non-recurring income,” which is exempt from inclusion in a family’s annual income assessment for determining eligibility or rent.
• Student Aid is not included when assessing public housing residents’ income for eligibility and rent calculation purposes.
• Retirement account funds are not considered income until they are withdrawn.

Family Definition Changes

• Public housing and Section 8 can now be utilized by foster children and homeless or at-risk youth.
• HUD provides clear definitions for foster children and adults.

Asset Changes

• Personal property and participation in Family Self-Sufficiency (FSS) programs are exempt from consideration when assessing a family’s assets.