HOTMA Refresher: What Changed, What Matters, and What to Check Now
Let’s be real—HOTMA has felt like a bit of a moving target. Between the delays, updates, and constant adjustments, a lot of teams have been left trying to figure out what actually sticks. Now that it’s in effect, it’s time to make sure your processes, calculations, and files are fully aligned.
📌 Introduction
HOTMA didn’t just update a few rules—it changed how we calculate income, verify assets, and process certifications.
By now, these updates should be part of your day-to-day operations.
👉🏾 This is your checkpoint to reset and refocus
👉🏾 Identify gaps in your current process
👉🏾 And make sure your team is applying HOTMA consistently
👉🏾 If your team is still relying on pre-HOTMA habits, this is where issues start to show up
🕰️ HOTMA: A Quick Timeline
HOTMA has been a phased rollout—not a single change.
2016: HOTMA (Housing Opportunity Through Modernization Act) is signed into law
2020–2022: HUD releases proposed and final rules
2023: Final rule becomes effective with phased implementation guidance
2024–Present: Full implementation across properties, including updated income, asset, and verification requirements
👉🏾 The rules aren’t new anymore—but inconsistent application still is
📊 Change #1: The $50,000 Asset Threshold
What Changed
The threshold for imputing income from assets increased from $5,000 to $50,000.
What It Means in Practice
Assets ≤ $50,000: Use actual income only
Assets > $50,000: Compare actual vs. imputed income and use the greater
👉🏾 Most households now fall under this threshold—this should simplify your process
Self-Check
✅ Worksheets updated with $50K threshold
✅ No imputation under $50K
✅ Correct calculations over $50K
📂 Change #2: Streamlined Asset Verification
What Changed
Households under $50,000 in assets can self-certify with limited documentation.
What It Means in Practice
Self-certification + one current statement = complete
Full third-party verification only required when over $50K
Applies to move-ins, annuals, and interims
👉🏾 This is where teams either gain efficiency—or over-process
Self-Check
✅ Using compliant self-cert forms
✅ Not over-verifying under $50K
✅ Reviewers aligned with this standard
📊 Change #3: Income Calculation Updates
What Changed
HOTMA clarified how certain income sources are treated.
Key Areas
Student financial aid updates
Lump sum vs. recurring income
Self-employment calculations
Ongoing contributions
👉🏾 These changes directly impact eligibility, rent, and compliance
👉🏾 For Income Averaging properties, this can affect AMI qualification and AUR triggers
Self-Check
✅ Updated calculation methods in use
✅ Consistent application across files
✅ IA tiers reviewed correctly
📈 Change #4: Over-Income & the Available Unit Rule
What Changed
The 140% threshold now reflects HOTMA income calculations.
What It Means in Practice
Some households may no longer be over-income
IA properties must evaluate against the unit-specific AMI, not property-wide
👉🏾 If you haven’t re-evaluated your AUR list, now is the time
Self-Check
✅ Over-income households re-reviewed
✅ IA calculations tied to correct AMI tier
✅ AUR tracking updated
📉 Change #5: Hardship Exemptions
What Changed
HOTMA introduced formal hardship provisions.
What It Means in Practice
Households may request temporary relief
Properties must have a defined process
Exemptions must be tracked and documented
👉🏾 This should already be built into your workflow
Self-Check
✅ Policy in place
✅ Staff trained
✅ Tracking system in use
🔄 Change #6: Interim Recertification Updates
What Changed
HOTMA streamlined interim processing and reporting expectations.
What It Means in Practice
Minor income changes may not require an interim
Asset self-certification applies here as well
Reporting thresholds must be defined in your policy
👉🏾 Interims should be more efficient—not more complicated
Self-Check
✅ Safe harbor applied correctly
✅ Lease language updated
✅ Streamlined verification in use
🧠 Team Training Exercise
Use these scenarios to test your team:
Scenario 1
Household has $35,000 in assets earning $180/year
👉🏾 Answer: Count $180 only (no imputation under $50K)
Scenario 2
IA unit at 50% AMI → household now earns $55,000
👉🏾 Answer: AUR triggered if income exceeds 140% of that unit’s AMI limit
Scenario 3
Household assets total exactly $50,000
👉🏾 Answer: Still qualifies for self-certification (not over threshold)
Scenario 4
Elderly household Income: $24,000 Medical expenses: $4,500
👉🏾 10% threshold = $2,400👉🏾 Deduction = $2,100
🔄 A Practical Approach
👉🏾 Knowing the rules isn’t enough—your process needs to reflect them consistently.
Update your forms
Align your policies
Train your team regularly
Reinforce HOTMA in daily file reviews
Document everything clearly
📋 Quick Checklist
✔️ Asset threshold applied correctly
✔️ Self-certification used where allowed
✔️ Income calculated using updated rules
✔️ AUR reviewed under HOTMA methodology
✔️ Hardship policies implemented
✔️ Interim processes updated
✔️ Staff trained and aligned
✔️ Files reflect current requirements
🔗 Resources
HUD HOTMA Overview: https://www.hud.gov/program_offices/public_indian_housing/programs/ph/hotma
HUD Final Rule Guidance: https://www.hud.gov/sites/dfiles/OCHCO/documents/2023-01hsgn.pdf
Federal Register Final Rule: https://www.federalregister.gov/documents/2023/02/14/2023-01624
🎯 The Bottom Line
HOTMA isn’t new—but inconsistent implementation is still a risk.
👉🏾 The rules are clear
👉🏾 The expectations are higher
👉🏾 And your files should reflect both
The teams that stay ahead are the ones that review, adjust, and stay consistent.
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💼🏾 Need help getting your team fully aligned with HOTMA?
Whether you're preparing for an upcoming state agency monitoring review, need HOTMA training and implementation, working through overdue certifications, or simply want confidence that your files are where they should be, The TCC Firm is here to help.
Our team provides:
📂 Comprehensive tenant file audits
📝 Compliance file corrections and quality reviews
🎓 Practical compliance training
🤝🏾 Ongoing compliance support for affordable housing teams
📊 Audit readiness assessments
Visit www.thetccfirm.com to learn more.
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