HUD CPD Notice Extends HOTMA Compliance Deadline to January 1, 2025

HUD’s Office of Community Planning and Development (CPD) published a Federal Register notice on December 8, extending the date by which CPD programs must fully implement and comply with the income and asset requirements of the “Housing Opportunity Through Modernization Act of 2016” (HOTMA) final rule. The HOTMA final rule regarding changes to income requirements (Section 102) and asset limits (Section 104) was published on February 14, 2023 (see Memo, 2/27), and established January 1, 2024, as the date by which changes should be made. However, the December 8 notice extends the date for full compliance to January 1, 2025, in order to provide CPD program administrators time to develop and/or update software and program policies, procedures, and internal systems.

The notice applies to the following CPD programs: the Housing Trust Fund (HTF), HOME Investment Partnerships (HOME), HOME-American Rescue Plan (HOME-ARP), Housing Opportunities for Persons With AIDS (HOPWA), Community Development Block Grant (CDBG) program, Emergency Solution Grants (ESG), Continuum of Care (CoC) homelessness programs, and CPD programs funded through competitive processes (“CPD programs”).

The notice also states that CPD grantees must comply with all applicable HOTMA requirements to establish policies and procedures, including: hardship policies; policies prescribing when and under what conditions a household must report a change in household income or composition; and policies describing income verification if using “safe harbor provisions,” such as those using income determinations for other subsidy programs such as the Supplemental Nutrition Assistance Program (SNAP), Temporary Assistance for Needy Families (TANF), and Social Security Income (SSI). CPD also intends to issue supplemental guidance for HTF and HOME grantees.

In brief, Section 102 reduces the frequency of income reviews and modifies the definition of income and assets. For example, the HOTMA statute:

  • Created a 10% adjusted income increase or decrease threshold for conducting interim income reexaminations. In most situations, increases in earned income (e.g., wages) will not be processed until a resident’s next annual income reexamination.
  • Increased the standard deduction for households with a head, co-head, or spouse who is elderly or is a person with a disability.
  • Excluded income received from Medicaid or other state or local programs designed to keep at home a household member who has a disability.
  • Increased the allowance for unreimbursed health and medical care expenses from 3% to 10% of annual income (phased in over two years).
  • Provided hardship relief for expense deductions, lessening the impact of the above increased threshold for medical expenses. Public housing agencies (PHAs) may grant hardships for households unable to pay rent due to unanticipated medical or disability expenses, as well as for households no longer eligible for the childcare expense deduction.

Section 104 sets maximum asset limits for eligibility and continued occupancy and implements deductions and exceptions for certain investments, such as retirement savings. Retirement accounts and educational savings accounts will not be considered “net family assets.”

Read the Federal Register notice at

Information about each of the CPD programs is available in NLIHC’s 2023 Advocates’ Guide at Chapter 3 (HTF), Chapter 4 (HOPWA, CoC, and ESG), Chapter 5 (HOME), and Chapter 9 (CDBG).