Last week, the U.S. Department of Housing and Urban Development issued more detailed guidelines to assist in the enactment of the Housing Opportunity Through Modernization Act (HOTMA) of 2016. This Act aims to simplify procedures and lessen the responsibilities of public housing authorities (PHAs), private affordable housing owners, and residents. The recent Notice H 2023-10 introduces a range of technical adjustments and clarifications, sets the commencement date as January 1, 2024, and outlines the compliance timeline and necessary measures for owners of affordable multifamily rental properties, which include those financed by the low-income housing tax credit (LIHTC) equity. Key clarifications from the Notice include:
- Public housing authorities are required to revise their Annual Plan and Moving to Work (MTW) Plans.
- For Annual Recertification of income, owners may rely on verification from an interim reexamination, provided there have been no changes to the annual income since that interim assessment.
- The new deduction for elderly/disabled families, effective January 1, 2024, will be applied by PHAs and Multifamily Housing (MFH) Owners at the upcoming annual or interim reexamination, whichever occurs first, after the new deduction has been adopted by the PHA/MFH Owner. The phased-in relief will commence concurrently.
- Any tax refund or credit must be deducted from the total net assets of a family, irrespective of the deposit location.
- Owners are not required to apply the new passbook rate until they have updated their software systems.
- It has been clarified that workers’ compensation should always be excluded from annual income calculations, no matter the duration or frequency of the payments.
Owners and managers of properties governed by the HOTMA regulations are advised to examine the revised notice to determine its relevance to their properties.