HOTMA Compliance Delayed for HUD Multifamily Housing

On May 29, 2025, HUD issued notice H-2025-03 Extension of Mandatory Compliance Date: Sections 102 and 104 of the Housing Opportunity Through Modernization Act of 2016 (HOTMA). This notice extends the HOTMA final rule compliance date from July 1, 2025, to January 1, 2026, for multi-family housing programs.

This does not directly apply to RD, LIHTC or HOME/NHTF programs. The individual monitoring agencies dictate the HOTMA compliance date for those programs. Many agencies that have not implemented HOTMA already and were going with the July 1, 2025, date have indicated that they will not delay implementation any further beyond July 1, 2025. Rural Development has also announced that it will not delay implementation for RD properties past July 1, 2025. Please check with your monitoring agency if you have not received notice of the implementation date.

For properties that are combined with other funding (e.g., LIHTC/Section 8, RD/Section 8) and are planning on implementing HOTMA on July 1, 2025, but not implement HOTMA for multi-family housing programs until January 1, 2026, two separate certifications will have to be completed. For LIHTC, RD, HOME/NHFT funding, certification will be completed using HOTMA regulations. For Multifamily housing, certifications will be completed using the pre-HOTMA regulations. For example, if you have a Section 8/LIHTC unit, you will be completing the LIHTC certification calculating net family assets under HOTMA using the imputed asset threshold of $51,600. Under pre-HOTMA rules for your Section 8 certification, you will be using the imputed asset threshold of $5,000.

Section 8 MFH owners who wish to implement HOTMA before the release of TRACS version 203A must follow HUD guidance on the use of the rent override function in TRACS. This function is to be used if a family’s HOTMA-calculated tenant rent differs from their pre-HOTMA calculated tenant rent. The tenant file must also be documented stating HOTMA and Notice H 2023-10 provisions were implemented, how the family’s income, assets, and mandatory deductions were determined under the implemented HOTMA provisions, and, if applicable, what the tenant rent would have been under the pre-HOTMA rules, and the HOTMA tenant rent amount that was entered using the “rent override” function.

M & L Compliance Management will keep you posted on any updates as they are received.

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 and training regarding the various affordable housing programs impacted by the implementation of HOTMA. For more information on these services don’t hesitate to contact us.

The information presented in this post is intended solely for informational purposes and should not be construed as consulting advice from M&L Compliance, LLC or McKonly & Asbury, LLP.

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