HUD Extends HOTMA Implementation to Jan. 1, 2027—What Should You Do?

HUD is delaying HOTMA yet again. On Dec. 17, 2025, just as affordable housing providers were completing their required Jan. 1, 2026, recertifications, HUD published Notice H 2025-07, pushing back the Housing Opportunity Through Modernization Act compliance date another year until Jan. 1, 2027. The Notice, which applies to Sections 102 and 104 of HOTMA, was published in the Federal Register on Dec. 30. 

What the heck is going on? And what should multifamily housing owners do now? This briefing will offer some answers. 

The New HOTMA Requirements 

It has been nearly 10 years since President Obama signed HOTMA into law on July 29, 2016. The objective was, and remains, to simplify and modernize federal housing assistance programs and make life easier for owners, tenants, and applicants, leading to greater efficiency and better allocation of HUD resources. The sweeping changes to eligibility, income, and asset rules contained in Sections 102 and 104 of the law are essential elements in the strategy:

Section 102, which addresses income review, introduces a standardized process for calculating annual income and determining adjusted income across HUD programs. It also 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 establishes 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. 

The HOTMA Rollout 

HOTMA rollout has been marked by ongoing delays and implementation date extensions. The big challenge has been getting HUD’s internal data systems to “speak HOTMA.” Those systems include the Tenant Rental Assistance Certification System (TRACS), which records all certifications, subsidy payments, and contract actions for project-based rental assistance. Meanwhile, Public Housing and Housing Choice Voucher (HCV) programs are moving to the newer Housing Information Portal (HIP) to replace the aging IMS/PIC database. 

The original implementation plan was for multifamily housing providers to fully comply with HOTMA for income certifications effective on or after Jan. 1, 2025. After extending the deadline to July 1, 2025, HUD issued Notice H 2025-03 (on May 29, 2025) pushing the deadline back again, this time to Jan. 1, 2026. 

The New H 2025-7 Extension 

The recent H 2025-7 notice moves Section 102 and 104 implementation back to Jan. 1, 2027. The extension applies to the following programs: 

• HCV;
• Public Housing;
• Section 8 Moderate Rehabilitation (Mod Rehab);
•  Section 8 Moderate Rehabilitation Single Room Occupancy (SRO); 
• Section 8 Project-Based Rental Assistance (PBRA);
• Section 202/8;
• Section 202/162 Project Assistance Contract (202/162 PAC);
• Section 202/811 Capital Advance with Project Rental Assistance Contracts (202/811 PRAC);
• Non-insured 236 projects with Interest Reduction Payments (236 IRP);
• Section 811 Project Rental Assistance (811 PRA); and
• Senior Preservation Rental Assistance Contracts (SPRAC).

What to Do Now

HUD still has a lot of work to do before multifamily providers will be able to comply with Sections 102 and 104. The HOTMA to-do list includes:

• Publishing final HOTMA-compliant versions of the 50059 income certification and other forms;
• Getting the current version of TRACS to accept HOTMA-compliant income certifications; and 
• Updating TRACS to the 203A standard.

But while further postponement is possible, you should assume that the new Jan. 1, 2027, HOTMA implementation date will stand. In the meantime, continue to follow your pre-HOTMA policies in accordance with current HUD program rules and guidance, e.g., by implementing tenant selection plans that don’t restrict occupancy based on assets. 

Also keep in mind that this latest HUD delay affects the timing rather than the substance of the new HOTMA Section 102 and 104 requirements. Result: HUD is giving you extra time to ramp up for HOTMA while it does the same. Take advantage of the breathing room to ensure you’re prepared for the transition. Action steps:

• Review all software to ensure it’s up to date and capable of functioning in accordance with HOTMA requirements; 
• Ensure that all affected staff receive, understand, and are competent to carry out training on new HOTMA requirements;
• Review and, if necessary, update all income certification and other applicable forms, policies, and procedures;
• Notify tenants and applicants of any policy and procedural changes (see below); and
• Ensure that all leases are HOTMA-compliant.  

Also be aware that once your software is compliant with TRACS 203A updates, you must:

• Give tenants at least 60 days’ notice that their lease will be modified at the end of the lease term after the expiration of the 60-day notice;
• Once you provide proper notice, begin using the revised model leases at the expiration of a family’s lease term;
• Implement your revised tenant selection plans and EIV policies and procedures;
• Ensure that all tenant data submissions comply with HOTMA regulations; 
• Notify families before their first reexaminations under HOTMA that their income determinations will be conducted in accordance with the HOTMA final rule; and
• Use the revised Tenant Consent form (form HUD–9887/9887A) and Fact Sheets (“How Your Rent is Determined”).