The U.S. Department of Housing and Urban Development (HUD) has announced an extension of the compliance deadline for implementing specific provisions of the Housing Opportunity Through Modernization Act (HOTMA) final rule for Community Planning and Development (CPD) programs. This extension will be official when published in the Federal Register on December 31, 2024.
Key Points:
- The extension applies to multiple programs including HOME Investment Partnerships, HOME-American Rescue Plan, Housing Trust Fund (HTF), Housing Opportunities for Persons With AIDS (HOPWA), Community Development Block Grant (CDBG), Emergency Solution Grants (ESG), and Continuum of Care (CoC) programs.
- CPD grantees must comply with the HOTMA final rule by January 1, 2026, but they may choose to implement the changes earlier, starting from January 1, 2024.
- HUD cited delays in updating its systems and the need to provide grantees additional time to incorporate new income and asset requirements into their programs as reasons for the extension.
Safe Harbor Provisions:
The notice also allows certain CPD grantees to implement income safe harbor provisions before the extended compliance date:
- HOPWA, ESG, and CoC program grantees may use the safe harbor provision at 24 CFR 5.609(c)(3).
- HOME and HTF grantees can implement specific safe harbor provisions under their regulations.
- Grantees must update their program guidelines and establish appropriate policies before using these provisions.
Background:
This extension follows earlier announcements affecting other HUD programs:
- In September 2024, the Office of Public and Indian Housing (PIH) announced that Public Housing Agencies would not need to implement certain HOTMA provisions by January 2025.
- The Office of Housing issued a similar notification extending the deadline to July 1, 2025 for multifamily owners.
Until their new compliance dates, CPD grantees must continue following existing regulations as they were before January 1, 2024, while having the option to implement the new safe harbor provisions described in the notice.
The extension aims to ensure a smoother transition to the new requirements while reducing the administrative burden on grantees who may otherwise need to maintain two different income requirements for the same units.