2026 HOTMA Annual Adjustment Factors

According to HUD Notice H 2023-10/PIH 2023-27 2023-10hsgn, also known as the HOTMA Implementation Notice, HUD will annually publish the eight inflation-adjusted items below and the annual savings passbook rate no later than September 1 every year; updated values will be shared online at the HUDUser Website: 2026 HUD Inflation-Adjusted Values (Table 1): Effective January 1, 2026. The publication will apply to both Multifamily Housing (MFH) and Public and Indian Housing (PIH) programs. The revised amounts will be effective on January 1 of the following year.

The HOTMA Annual Adjustment Factor changes that are effective January 1, 2026, are as follows:

Annual Passbook Rate: The passbook savings rate will be 0.40 %. This will apply to both MFH and PIH programs. PHAs/MFH Owners must use the HUD-published passbook rate when calculating imputed asset income for net family assets that exceed $52,787.

Eligibility Restriction on Net Family Assets: Public housing units may not be leased to or provided rental assistance under Section 8 (tenant-based and project-based) programs if they have the assets listed below. Note: The asset limitations do not apply to HOME, HTF, RD or LIHTC households.

1. The household’s net assets exceed $105,574 OR
2. The household has a present ownership interest in real property. The property must be suitable for occupancy by the family as a residence. They must have a legal right to reside in, and the legal authority to sell, based on State or local laws where the property is located.

Threshold Above Which Imputed Income Must Be Calculated on Net Family Assets: Imputed asset income is only calculated if the total of net family assets exceeds $52,787. When this is the case, income is imputed only on individual assets when income cannot be calculated for the specific asset.

Notice H2023/-10/PIH 2023-27, F.6.b. states “imputed asset income must be calculated for specific assets when three conditions are met:

1. The value of net family assets exceeds $52,787;
2. The specific asset is included in net family assets; and
3. Actual asset income cannot be calculated for the specific asset.”

The Threshold Above Which the Total Value of Non-Necessary Personal Property Is Included in Net Family Assets: Items of personal property that do not qualify as necessary personal property will be classified as non-necessary personal property. Non-necessary personal property is excluded if total non-necessary personal property does not exceed $52,787. If total non-necessary personal property exceeds the threshold, the items of property are counted as assets. In either case, any income earned by the assets is counted. A final implication of exceeding the $52,787 threshold is that if any item of personal property has income that cannot be determined that asset will have asset income imputed at the passbook savings rate of 0.40%.

The Amount of Net Assets the PHA/MFH Owner May Accept Self-Certification by The Family: When the combined value of all net family assets has a total value of $52,787 or less, the Owner may allow the family to self-certify that their family net assets do not exceed $52,787. The amount of actual income the family expects to receive from assets must be listed on the self-certification, and this amount is to be included in the family’s income.

Note: HOME and HTF require two (2) months source documentation for verification of income at move-in and at every 6-year full recertification, except for TBRA and PBRA units. If a unit has Housing Trust Funding (HTF), the PHA/Administrator income determination must be utilized. If a unit has HOME funding, the Participating Jurisdiction (PJ) may choose to use the PHA/Administrator income determination (check with the property’s PJ for their requirements).

Mandatory Deduction for Elderly and Disabled Families: The elderly/disabled family deduction will increase from $525 to $550. Note: Not applicable to the LIHTC and HTF programs.

Mandatory Deduction for a Dependent: The dependent deduction will increase from $480 to $500. Note: Not applicable to the LIHTC and HTF programs.

Income Exclusion for Earned Income of Dependent Full-Time Students: The dependent full-time student deduction will increase from $480 to $500.

Income Exclusion for Adoption Assistance Payments: The deduction will increase from $480 to $500.

Owners and Management Agents should be well trained in understanding the HOTMA requirements as they relate to maintaining compliance in affordable housing. MLCM offers consulting services regarding the various affordable housing programs impacted by the implementation of HOTMA. For more information on these services, don’t hesitate to contact us.

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