OHFA Housing Opportunity Through Modernization Act of 2016 (HOTMA) Guidance
Background
The Ohio Housing Finance Agency (OHFA) like all other housing finance agencies (HFAs) has been waiting for the U.S. Department of Housing and Urban Development (HUD) to release guidance on when and how to implement the HOTMA final rule since it was officially published on February 14, 2023.
OHFA's Guidance
HUD issued a delay in HOTMA implementation for sections 102 and 104 through Notice H 2023.10/ PIH 2023-27 on September 29, 2023. In this notice, HUD instructed owners must bring their programs into compliance with the HOTMA final rule as quickly as possible, but no later than January 1, 2025. Compliance means administering all aspects of the affected programs in accordance with the HOTMA final rule.
On September 20, 2024, HUD issued a Notice found HERE delaying HOTMA for Multifamily programs, pending the release of TRACS 203A. The previous deadline to come into compliance from the most recent version of HUD Notice H 2023-10 was January 1, 2025. The new deadline is July 1, 2025. HUD guidance for HOME, the NHTF, and other HUD grant programs is still pending.
While HUD has delayed implementation and in the absence of IRS guidance, OHFA will implement HOTMA on January 1, 2025. However, mandatory use of HOTMA rules will only be applicable for initial tenant certifications and recertifications effective May 1, 2025, onward. Because all verifications must be dated within 120 days of the effective dates of household certifications, those effective between January 1 and April 30, 2025, may use "pre-HOTMA" rules. For example, if a certification is due in April 2025, the paperwork should be started in December 2024 and can use pre-HOTMA rules. For a certification effective May 1, 2025, the paperwork should be started February 1, 2025, and must use HOTMA rules.
All move-in certifications and recertifications effective prior to January 1, 2025, should be conducted using pre-HOTMA rules for OHFA-funded projects or until the owner's software is HOTMA compliant. However, OHFA will not prohibit owners from implementing all or parts of the HOTMA rule prior to 2025.
- If an owner decides to implement some of the HOTMA final rule (i.e., hybrid approach) regarding income and asset calculations (Sections 102 and 104) prior to January 1, 2025, an OHFA clarification record must be placed in the tenant file explaining which parts of the HOTMA final rule were used to certify the tenant.
- If an owner decides to implement all of the HOTMA final rules prior to January 1, 2025, an OHFA clarification record must be placed in the tenant file stating certification was conducted using HOTMA final rules.
Importantly, OHFA will not enforce HOTMA-related file errors (i.e., will not issue 8823's) discovered prior to July 1, 2025.
HOTMA Resources
- Ohio Housing Conference – HOTMA Training (3.54 MB Adobe PDF File) New
- Affordable Housing Program Resource Manual
- Costello Compliance HOTMA Crosswalk
- HOTMA and HUD Passbook Rate-Implementation Guidance
- FAQs for HUD Assisted Projects (267 KB Adobe PDF File) New
- HUD's Income Exclusions – On February 1, 2024, HUD published a list of income exclusions that are complementary to the HOTMA regulatory exclusions. HOTMA 24 CFR §5.609 (b)(22) excludes income that is excluded per other federal laws but did not provide a list. Upon the publishing of the final HOTMA guidance, HUD promised a federal register that would provide an updated list. HUD last published a notice that listed federally mandated exclusions from consideration of income on May 20, 2014. This notice replaces the previously published version, adds new exclusions, and removes exclusions that are now codified in HUD regulations.
- HUD Residential Fact Sheet (179 KB Adobe PDF File)
- HUD HSG Notice 2023 – 10 HUD released this notice on 9/29/2023 clarifying HOTMA implementation.
- Multifamily HUD Announces Delays for HOTMA
- HOTMA Final Rule
- HUD's Email for HOTMA Questions
- Imputing Assets Decision Chart
- PIH Notice 2023-27 Implementation Guidance: Section 102 and 104 of HOTMA Updated 2/2/24
- PIH HOTMA Section 102 and 104 Implementation FAQs
- PH and HCV List of Discretionary Policies to Implement HOTMA Revised 2/29/24
- Be sure to check out Costello Compliance blog for many articles on HOTMA