Ebony Hall (00:00) And what is the keyword? Wait, wait. Vickie Bell (00:03) Wait, W-A-I-T, wait y'all. Ebony Hall (00:13) Welcome back everybody to another Tuesday tip. So for the month of December, you'll have me and Vickie Bell. Hey Vickie. Vickie Bell (00:20) Hi Ebony, how are you? Ebony Hall (00:22) I'm doing well. Our first topic for December is the 2025 HUD inflation adjusted values. That's a mouthful. Vickie Bell (00:30) Yes, it is a mouthful and we were wondering if HUD was going to get things out on time and they did. Ebony Hall (00:38) Okay, so let's talk about it a little bit. So what are some of the key updates in the document? I'm going to put it up on the screen while you're talking. Vickie Bell (00:45) Okay, because of inflation and way inflation works in the housing industry, had promised that they would publish these 2025 HUD inflationary adjustment values. And it's because of HOTMA. In the HOTMA program, it tells us that... and they were supposed to put in their tenant selection plan, that some values will change because of inflation. And so we're just going to go over a couple of those in this table. The table covers calculation components for asset limitations, what your assets are limited to to participate in the program, annual income, and how the inflationary values affect annual income. and the adjusted income, how it affects the adjusted income, which is the bottom line and the line that we use to determine the resident's rent. Within these components, and we want everybody to get a copy, and I'm sure you're going to post it to our website, but it's divided into five parts. There's a part that has the calculation component, It has the adjustable amount, the regulatory reference, the amount in which they are to use. And last but not least, it tells you about which programs are participating in it or with this table. Table two is the 2025 HUD passbook savings rate. Ebony Hall (02:28) can. Vickie Bell (02:36) of 0.45 percent and that rate will be effective January 1, 2025. That's the passbook rate for imputing the asset income. Just a reminder though, Ebony. Some components in tables one and two may also apply to other HUD programs not listed to the table. So you'll really have to read your HOTMA reference to see if your program is not listed on this table, if you're affected by these discretionary amounts. Ebony Hall (03:14) so let's talk about the significance of the inflationary adjustments that are mentioned in this document. Vickie Bell (03:20) Okay, well, the significance is that it's to aid the owner agents in staying in compliance with the new provisions of Section 102 and 104 of the HOTMA rules. As you know, ever since 2023, we've been HOTMA, HOTMA, HOTMA, HOTMA. HOTMA's coming, HOTMA's almost here. HOTMA, HOTMA, HOTMA. So this is a guide that they use to help Ebony Hall (03:39) Mm-hmm. Vickie Bell (03:49) owners and agents stay in compliance. It has changed the numbers for 2024, even though we didn't implement HOTMA in 2024, there were some figures out there for it. And we'll run across a couple of those a little later on as we discuss. Ebony Hall (04:07) Okay, so how do the new asset limitation income thresholds affect people's eligibility for the HUD programs? Vickie Bell (04:14) Well, if your agency, property, or program, administrator is not yet complying with sections 102 and 104 of HOTMA, and I know that there aren't because HUD has asked us and Navigate, and a lot of the contract administrators have asked the owners and agents not to implement any HOTMA rules until your software is ready. Now, they're working mightily on the software. They tell us, that HUD HOTMA should go into effect July 1 of 2025. We're looking forward to that deadline as we have looked forward to the past deadlines that we have not met yet. One of the things you want to keep in mind though is progress is being made. HUD did put some documents out there and that's the biggest holdup is the TRACS portion and the document portion. from us implementing HOTMA. And so they did put some documents out there and some of them needed a little tweaking and they asked for comments on those documents and it closed the end of November. So we'll have to see what becomes of that if they're gonna change any of those documents that they put out there or what. Ebony Hall (05:28) Okay. So as a program administrator, what should they understand or know about the self-certification threshold for net assets now? Vickie Bell (05:44) Well, what they should keep in mind is that that should be in your tenant selection plan, the self-certification part. And they need to tell the residents that it will change yearly. You know, our residents get stuck sometimes. You told me it was going to be this. Yes, I did tell you that, it's not going to be that forever. They need to let the residents know. that it's going to be based on the inflation, that it's going to be based on the table that we're talking about today. For instance, right now to qualify, your assets can't be over $100,000. Well, that's 2024. 2025, it's going to be 103. So it went up by $3,000, things of that nature. They need to make sure that the residents understand what all is involved. Ebony Hall (06:47) This is gonna be very important to prepare them for these changes. And that'll save them some headache on the back end. Plus people get upset about their money. Vickie Bell (06:51) Yes. Yes. Yes, because they do. And sometimes the residents can be really out there. Ebony Hall (07:03) Mm-hmm. Mm-hmm. Well, let's talk about some income exclusions and I'm going to pull up the next page. Let's see. Should be this one. Does this one have exclusions? Yes, it does. So what are the changes that we can expect for dependent full-time students in those adoption assistance programs? Vickie Bell (07:17) Okay. Guess what? There was no change. Ebony Hall (07:28) Yay. Vickie Bell (07:30) In 2024, it was 480. In 2023, it was 480. And in 2025, it will stay 480. So that's a great thing, especially for the kids who are in school who have income, might have part-time jobs. If they're a full-time student, you can only count $480 of that income. So that's a great thing. Ebony Hall (07:56) Yeah, and we're going to talk about how that benefits the participants. That can be a lot of help, especially for a college student. Vickie Bell (08:06) It could be. It could be for their parents too. That makes the rent a lot lower. Ebony Hall (08:11) Very good. So let's talk about the adjusted income deductions. So I want you to elaborate, if you will, on the mandatory deductions for elderly and disabled families and also for dependents. Vickie Bell (08:25) Okay. If you are over 62 years of age and disabled, head of household, co-head, then you can take what's called a disability or a disabled allowance. Prior to now, it has always been $400. With HOTMA and 2025 inflation, That figure is going to go from $400 to $525. Now what that's doing to the bottom line and to that adjusted cause is it's raising that by a couple of dollars. Ebony Hall (08:59) Okay. Okay. And for the dependence, it's the same. Vickie Bell (09:12) For the dependents, it remains at the same $480. Ebony Hall (09:16) Okay, all right. And passbook savings rate. So let's talk about the updated savings rate. And you mentioned this earlier. Vickie Bell (09:28) Yes, right now the passbook rate for 2024 is 0.40. For 2025 it will be 0.45, which is a little bit higher, about .05 percent, but what happens is that any assets you have, assets from interest earned, If your assets total more than, it used to be in 2024, $50,000, but now it's going to be $51,600 for 2025. So any assets that you have for, let me make sure I get you straight now, for the imputed amount. will be $51,600. So anything over $51,600 in terms of asset value, they have to impute. And the amount that they impute is called income from that asset. And it will be added to the annual income, such as wages, social security, or anything like that. Ebony Hall (10:30) Okay. Okay. So for agencies that are not yet complying with like sections 102 and 104 of HOTMA, how do they prepare for these changes? Vickie Bell (10:55) Hmm, well, the best thing is that Navigate is suggesting that they don't do anything until HUD is ready. And when I say they don't do anything until HUD is ready, and when I say HUD is ready, that means until they're on the 203A software and TRACS is receiving it. Ebony Hall (11:07) Say that again. Mm-hmm. Vickie Bell (11:21) and they have gotten with their software provider and they've run one or two tests and it's going through smoothly. I also would like to remind them, as I just said, there are documents that we have not gotten yet. There are documents that we have gotten that HUD has asked the industry to make comments on. So it was out for public review and public comment. and that comment period closed the end of November. So once HUD reads this, then we have to see what type of changes they will make to those drafted documents and what they suggest. So in other words, practice a little bit on paper, but sit still. Ebony Hall (12:11) Mm-hmm. Yeah, because that could create a lot of headaches. You're trying to implement it before time. Vickie Bell (12:16) It could. And a lot of backtracking. For instance, we've received vouchers that are just failing the TRACS system because the software won't handle the figures that are being sent to us on the five nines. So we all have to work this together. And I know it's been a long 2024. Ebony Hall (12:20) Mm-hmm. Vickie Bell (12:44) It's a long way from January 1, 2024 when it was supposed to be implemented to July 1, 2025. But we want to get it right. And we don't want to do a lot of backpedaling. So just be patient. Just get together on your terms. Know what you're supposed to do. And as soon as that software is ready, then you will be able to do it. Remember that the software. is going to do a lot of the heavy lifting for the owners and agents. Ebony Hall (13:15) which is good to know because when we first started talking about HOTMA I was just like, how is anybody supposed to do this all by themselves? Vickie Bell (13:20) Yeah. And everybody was calling it a hot mess, not HOTMA hot mess. Yes, that's a name that it had received for itself. But there are people who have jumped the gun on some other things, not necessarily on all of the training, but some of the training that you got early on is not even effective now because things have changed. Ebony Hall (13:25) Mm-hmm. Hot mess. Yes, indeed. Mm-hmm. Vickie Bell (13:48) So a lot of companies are waiting to see what the changes are before they start doing training. We're waiting before we start training our people. We need to know what the bottom line is. Ebony Hall (14:01) Very good. So while we're in this holding pattern, I mean, there's a lot that we know already about the changes coming and some that we don't know, but how do we prepare to talk to our residents about everything that's about to happen? Vickie Bell (14:16) Well, that's a very good question, Ebony. And I say that's a very good question because the staff, the managers, assistance managers, occupancy managers, contract administrators, we all know that HOTMA's coming and we get a little bit by little bit of it. But the people that we're serving, they have no earthly idea. Ebony Hall (14:40) Mm-hmm. Vickie Bell (14:42) And some people don't like changes. I think the older I get, the more I hate changes too. Some people really don't like surprises and changes, especially when it has to do with their livelihood, when it has to do with their rent and their rents affected by their income. So let's not give them these earth shattering changes. Let's have resident meetings. You could have a property newsletter. Ebony Hall (14:48) Not you! Mm-hmm. Vickie Bell (15:11) Well, we don't have a newsletter. Start one and just let them know that there are some changes that are going to be coming. They're not in ink yet. They're still in pencil. There's still a lot of erasing. But you want them to be aware that they're coming. they can kind of, you know how people who hate changes are, they can kind of get settled and into the mood. So if you don't have a property newsletter, it would be great to start one. Ebony Hall (15:15) Mm-hmm. Vickie Bell (15:40) You have postings of information wherever you post your information. If you post it on the bulletin board, if you post it out by the mailbox, wherever you post information, let them know that there's a new change coming or a new sheriff in town that's going to be called HOTMA and it will affect them. Now, all of the changes are not negative changes. Some of them are positive. So I would start out listing the positive changes. Ebony Hall (16:09) huh. Vickie Bell (16:09) You know, getting them all happy and smiling and everything. that's great. And then you let them know that they're going to have limitations on their assets and things of that nature. I think most of the residents would be happy to know that they only have to provide one checking account statement, opposed to trying to get up six so that management can average it. So give them the plus before you give them the minuses. Ebony Hall (16:28) Mm-hmm. Vickie Bell (16:38) You could give handouts. You could just have something out by the mailbox or on the desk in the office that says, one, and explain to them the system. However, the owners and agents have disseminated their information to their residents. That's what they need to do. Ebony Hall (16:56) All right, and we wish you well as you do that. Anything else you want to talk about this week, Miss Vickie? Vickie Bell (16:59) We wish you very well. Well, no, that's mostly it that we're waiting. There are some things that we're just really waiting to see what the changes will be to the documents that were out for discussion. Yeah. And so that's it for today. Just know that you have new changes from 2025 and that, for instance, let me read some of them to you. Ebony Hall (17:20) Yes. Vickie Bell (17:33) The return on the assets, it started out that it was limited at 50,000. Now for 2025, it's 51,600. The same thing on the personal, the non-necessary is what they call it, non-necessary personal items. Things that they're saying that the residents don't have to have. That limit is $51,600. And don't get those things confused with things like a automobile or a coin collection and things of that nature. And also, we mentioned starting off about the self-certification of assets. Right now for 2024, it's $50,000, but 2025, it will be $51,600. Now the thing is that in July, it will be $51,600. Since we haven't implemented HOTMA because our software is not ready, at least you will know these figures. And if your office or your staff want to just do some examples or some samples of calculations, they can. Ebony Hall (19:00) Okay. And what is the keyword? Wait, wait. And they should wait until what happens. Vickie Bell (19:04) Wait, W-A-I-T, wait y'all. They need to wait until their software, their 203A software is ready and they have gotten with their software vendors and they've done all the testing and HUD TRACS has accepted it. Ebony Hall (19:27) Okay, so let me ask you this because on the document it says it's effective January 1. So if the software isn't updated by then, do we still use these new numbers? Okay, just wanted to make sure I understood that. So it says effective January 1st, 2025, but if the software hasn't been updated, we suggest that you wait until it is updated because it's... Vickie Bell (19:39) No. No. Wait, I say. Ebony Hall (19:56) on HUD. all right. Anything else, Ms. Vickie? All right. We will see you all next week for another Tuesday tip. Vickie Bell (19:57) Yes, wait upon HUD That's it for today. We appreciate y'all tuning in.