The U.S. Department of Housing and Urban Development (HUD) has issued a new deadline for owners and operators of HUD Multifamily Housing programs to fully comply with the key income and asset provisions of the Housing Opportunity Through Modernization Act of 2016 (HOTMA). Under Notice H-2025-03, released May 29, Multifamily stakeholders now have until Jan. 1, 2026, to implement the final rule requirements under Sections 102 and 104.

These two sections of HOTMA represent a major overhaul of how eligibility, income, and assets are assessed in federally assisted housing. Section 102 introduces a standardized process for calculating annual income and determining adjusted income across HUD programs. It changes how recurring and nonrecurring income is treated, streamlines the frequency of income reviews, and establishes new thresholds for medical and disability expense deductions.

Section 104, meanwhile, imposes asset limits for applicants and current tenants, including a $100,000 cap on net family assets (adjusted for inflation) and restrictions on real property ownership for assisted households. Together, these provisions aim to reduce administrative burden, promote program integrity, and ensure assistance is better targeted to families with the greatest need.

While this six-month extension provides breathing room for Multifamily properties to align with these complex regulatory changes, the picture is different for Public Housing Agencies (PHAs) and Housing Choice Voucher (HCV) programs. In a separate communication issued June 16, HUD reiterated that PHAs must comply with a defined set of HOTMA provisions by July 1, 2025, and that this compliance deadline remains firm.

Background on HOTMA Compliance

Signed into law in 2016, HOTMA was designed to streamline and modernize federal housing assistance programs. The goal of these reforms is to reduce administrative burden for housing providers and to ensure a more equitable and efficient allocation of rental assistance. For example, the new rules create standardized income exclusions, impose asset limits for eligibility, and establish clearer timelines for verifying tenant income. Over time, these changes are expected to improve data quality, reduce errors, and help HUD better target resources to households most in need.

Although Congress passed HOTMA nearly a decade ago, its full rollout has been slowed by the complexity of aligning HUD’s internal data systems. HUD’s multifamily programs rely on the Tenant Rental Assistance Certification System, or TRACS, which records every certification, subsidy payment, and contract action for project-based rental assistance. And Public Housing and HCV programs are moving to the newer Housing Information Portal (HIP) to replace the aging IMS/PIC database.

Until TRACS and HIP can “speak HOTMA,” HUD can't flip the switch on other downstream tasks such as issuing model leases that mirror the new asset-cap language or publishing updated fact sheets and consent forms. This re-engineering work along with the need to retrain owners is a major reason why the final implementation timetable keeps sliding even as the statute itself approaches its tenth birthday.

Two Compliance Timelines

For Multifamily Housing providers such as those managing Section 8 Project-Based Rental Assistance (PBRA), Section 202, Section 811, and similar HUD programs, the deadline extension applies to all income certifications with an effective date on or after Jan. 1, 2026. These owners are still expected to complete updates to their tenant selection plans, recertification procedures, and software systems, but HUD is offering more time to ensure they can do so accurately, especially given ongoing delays with TRACS software updates.

In contrast, PHAs must begin implementing a narrower set of HOTMA reforms by July 1, 2025. These include updated income exclusions at 24 CFR 5.609(b), new definitions at 24 CFR 5.100, 5.403, and 5.603, and policies around de minimis errors. According to HUD’s email to PHA executive directors, these provisions were chosen because they can be implemented without needing system changes to the legacy HUD-50058 reporting system (IMS/PIC). Other elements of the HOTMA final rule, such as changes to asset calculations and recertification thresholds, are still pending due to technical limitations and will be enforced at a later date.

The staggered compliance deadlines reflect the differing levels of system readiness and program administration structures between HUD’s Public and Indian Housing and the Office of Multifamily Housing. For now, with both systems undergoing substantial upgrades to accommodate HOTMA’s requirements, HUD opted to move forward with enforceable provisions that don’t require back-end changes. Questions about the Multifamily compliance timeline can be directed to MFH_HOTMA@hud.gov, while PHAs should use HOTMAQuestions@hud.gov for program-specific support.