The HOTMA Transition and What it Really Means for Your PHA

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I’m sure you have heard the buzz about HOTMA. In 2024, HOTMA is taking center stage with some significant updates that all PHAs need to be aware of. 

Understanding HOTMA and Its Impact 

Let’s start with the basics. HOTMA isn’t just another piece of legislation collecting dust on bureaucratic shelves. It’s a beacon of hope for housing reform, aiming to streamline processes, improve affordability, and enhance access to decent housing. When HOTMA first made its debut, it signaled a shift towards a more efficient and responsive housing system. 

What Does HOTMA Stand for and What Does It Mean

in Housing? 

HOTMA stands for Housing Opportunity Through Modernization Act. This legislation isn’t about maintaining things as usual; it’s about shaking things up for the better. HOTMA seeks to tackle issues like bureaucracy, inefficiency, and inadequate housing supply head-on, ushering in a new era of possibility for both housing providers and residents alike. 

The HOTMA Asset Rule Explained 

Now, let’s talk about the elephant in the room—the HOTMA asset rule.

Ah, the HOTMA asset rule—a crucial piece of the puzzle. This rule is a game-changer, folks. It’s not just about how much money you make; it’s about what assets you own and how they impact your eligibility for housing assistance.  

It includes a look at savings, investments, and property beyond a primary residence. If assets exceed certain limits, eligibility or benefits may be affected. However, there are exceptions for retirement or disability-related funds. Overall, it aims to ensure assistance targets those in need while encouraging financial stability. 

Whether you’re a prospective tenant or a PHA, understanding the ins and outs of the asset rule is crucial for navigating the new landscape of housing policy. 

Programs Affected by HOTMA 

HOTMA isn’t playing favorites—it’s shaking up the whole housing ecosystem. From Section 8 to public housing to LIHTC, no stone is left unturned. These programs will see changes big and small, from revised eligibility criteria to updated funding mechanisms.  

PHAs and their programs can ensure they are adapting well to the changes by:  

  • Updating eligibility criteria to include assets. 
  • Training staff and informing applicants about changes. 
  • Adjusting policies to fit HOTMA guidelines. 
  • Ensuring compliance through audits. 
  • Using technology for easier processing. 
  • Offering support services for understanding. 
  • Monitoring progress and making improvements as needed. 

Key HOTMA Changes You Need to Know 

Alright, let’s cut to the chase—what’s new?  

Here’s the lowdown: 

  • Streamlined Processes for Affordable Housing Development: Making it easier and faster to build affordable housing units by cutting red tape and offering incentives for developers. 
  • Enhanced Flexibility for Housing Authorities: Giving housing authorities more freedom to adapt programs to fit local needs, like adjusting policies and allocating resources as needed. 
  • Improved Access to Housing for Vulnerable Populations: Helping low-income individuals, seniors, and people with disabilities find housing by expanding support services and making housing options more accessible. 
  • Strengthened Accountability Measures to Prevent Fraud and Abuse: Tightening oversight and penalties to ensure that housing programs are used properly, and funds aren’t misused. 

HOTMA Changes for LIHTC (Low-Income Housing Tax Credit) 

We know you’ve heard of LIHTC. It’s one of the hottest topics in affordable housing right now. This program is a lifeline for developers looking to create affordable housing options for low-income individuals and families.  

With HOTMA in the mix, LIHTC is getting a makeover, with changes aimed at increasing efficiency, promoting innovation, and expanding access to affordable housing: 

Allocation and Distribution 

HOTMA introduces changes to the allocation and distribution of LIHTCs, aiming to make the process more efficient and responsive to market needs. This may involve adjusting allocation criteria, streamlining application procedures, and ensuring equitable distribution of credits to support affordable housing projects in underserved areas. 

Compliance and Reporting 

HOTMA includes provisions to enhance compliance and reporting requirements for LIHTC projects. This may entail implementing stricter monitoring mechanisms, conducting regular audits, and imposing penalties for non-compliance. By strengthening accountability measures, HOTMA aims to safeguard the integrity of the LIHTC program and ensure that affordable housing goals are met. 

 Income Averaging 

One notable change introduced by HOTMA is the authorization of income averaging within LIHTC properties. This allows developers to serve a broader range of income levels within a project, making it easier to meet the diverse needs of low-income households. Income averaging provides flexibility and may increase the financial feasibility of LIHTC developments. 

 Innovation and Flexibility 

Overall, HOTMA encourages innovation and flexibility within the LIHTC program to address evolving housing needs and market conditions. By providing greater autonomy to developers and stakeholders, HOTMA aims to promote creative solutions and maximize the impact of LIHTC investments in providing affordable housing opportunities for low-income households. 

Preparing for the HOTMA Transition 

Understanding the HOTMA Final Rule 

In addition to all we have talked about already, the HOTMA final rule introduces measures to enhance flexibility for housing authorities, streamline processes for affordable housing development, and strengthen accountability measures to prevent fraud and abuse. Overall, it seeks to promote efficiency, fairness, and effectiveness within housing assistance programs while advancing the goal of providing safe, affordable housing for low-income individuals and families. 

Reading and Understanding the HOTMA

Implementation Notice 

The HOTMA implementation notice, which you can find here among other valuable resources, plays a critical role in facilitating the smooth and effective implementation of the legislation’s provisions. It provides essential guidance, clarity, and instructions for stakeholders, ensuring that housing assistance programs operate efficiently, transparently, and in accordance with the law. 

It will: 

  1. Explain how HOTMA will work in practice. 
  1. Guide stakeholders on complying with HOTMA. 
  1. Provide timely updates for preparation. 
  1. Ensure consistency in rule application. 
  1. Help enforce HOTMA and ensure accountability. 

Steps for a Smooth HOTMA Transition 

So, how can you prepare for the HOTMA shake-up?  

Here are a few steps to get you started: 

  • Familiarize yourself with the HOTMA final rule and implementation notice. 
  • Stay up-to-date on training and educational opportunities. 
  • Review your organization’s policies and procedures to ensure compliance. 
  • Reach out to HUD and other resources for guidance and support. 


Wow, that was a lot to take in! But don’t be intimidated. While HOTMA may seem daunting at first glance, it’s ultimately a step in the right direction for the affordable housing sector. By staying informed and proactive you can navigate the HOTMA transition and build a brighter future for housing in your community. 

Speaking of being proactive, we are here to help! Whether through compliance or updating your administrative plan, we have experts ready to help you get ready. Reach out to us for personalized guidance. Together, we can make a difference in the world of housing! 


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