News | A. J. Johnson Consulting Services

The Department of Housing & Urban Development (HUD) has released a Final Rule implementing the Housing Opportunity Through Modernization Act of 2016 (HOTMA). This final rule was published in the Federal Register on February 14, 2023. With the exception of changes relating to Non-Public Housing Over Income families (which take effect on March 16, 2023), this final rule takes effect on January 1, 2024.

The Housing Opportunity Through Modernization Act (HOTMA) was signed into law on July 29, 2016, amending many aspects of Multifamily Housing programs (as well as programs administered through the Offices of Public and Indian Housing and Community Planning and Development). HOTMA was intended to streamline processes and reduce burdens on housing providers. On September 17, 2019, HUD issued a proposed rule to update its regulations according to HOTMA’s statutory mandate. The final rule, published on January 9, 2023, considers public comment received on the proposed rule and provides additional guidance for implementing Sections 102, 103, and 104 of HOTMA.

Which Programs will be Affected by the Final Rule?

The Section 8 PBRA (including RAD), Section 202/811 PRAC, 202/8, 202/162 PAC, Senior Preservation Rental Assistance Contract (SPRAC), and Section 811 Project Rental Assistance (811 PRA) programs will see changes due to HOTMA.

This is the eighth in a series of articles I am writing on the sweeping changes that will be made to HUD affordable housing programs. This article will focus on the revised rules regarding the Housing Opportunities for People with Aids (HOPWA) Program.

Since the AIDS Housing Opportunity Act requires that HOPWA rental assistance "be provided to the extent practicable in the manner of" the Section 8 Program, the final rule revises the HOPWA regulations to track the changes in the final rule regarding income determinations, income examinations, income reexaminations, net family asset requirements, and de minimis errors for the HCV program, the Section 8 program that is the most practicable for the largest share of HOPWA-funded projects to track.

However, HUD has determined that some changes are not practical for HOPWA implementation. These exceptions follow:

The value of a home of a HOPWA participant receiving short-term mortgage or utility assistance or other assistance for which homeowners are eligible under the HOPWA program will not be considered as an asset.
Unlike the Section 8 program that makes hardship exemptions for childcare and medical expenses mandatory, the final rule allows HOPWA grantees to make their own determination on whether to grant hardship exemptions. If a grantee elects to allow hardship exemptions, the hardship requirements of the Section 8 program must be followed.
Income verifications must align with the requirements of the HCV program (to the extent possible).
The final rule allows a HOPWA grantee to provide a family with retroactive rent decreases in the event that the family fails to provide a grantee with timely information about a decrease in income that would trigger an interim reexamination. As in the HCV program, grantees will have the option of retroactively adjusting rent as of the date of the change leading to the interim reexamination of family income or the effective date of the family’s most recent interim or annual reexamination (or initial examination if that was the family’s last examination).

Other than the changes noted above, so significant changes have been made to the HOPWA program.

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03/27/2023

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