The new compliance deadline is July 1, 2025. HUD has issued Notice H 2024-09 delaying HOTMA for Multifamily Housing programs. The previous deadline to come into compliance that came from the most recent version of HUD Notice H 2023-10 was Jan. 1, 2025. Now, the new compliance deadline is July 1, 2025.
The FMRs go into effect on Oct. 1. HUD is required by law to set Fair Market Rents (FMRs) every year. In general, the FMR for an area is the amount that a tenant would need to pay the gross rent (rent plus utilities) of privately owned, decent, and safe rental housing of a modest (non-luxury) nature with suitable amenities. The published FMRs represent HUD’s best effort to estimate the 40th percentile gross rent paid by recent movers into standard quality units in each FMR area.
2025 DDAs and QCTs are effective for LIHTC allocations made after Dec. 31, 2024. HUD recently published a notice in the Federal Register establishing 2025 difficult development areas (DDAs) and qualified census tracts (QCTs) for purposes of the low-income housing tax credit (LIHTC). HUD is required to designate these areas under Internal Revenue Code Section 42. Both QCTs and DDAs are eligible for an increase in basis and available tax credits of up to 30 percent for new construction and rehabilitation costs.
In the last issue, we highlighted a letter concerning rising insurance costs from a broad coalition of housing providers to members of Congress and the Biden administration. The letter highlighted the fact that as of the fourth quarter 2023, U.S. property insurance rates have increased for 25 consecutive quarters. And U.S. casualty insurance rates have increased for 17 consecutive quarters.
More state and local programs are being designed to address middle-income housing. As a result of state legislation passed in May 2024, Colorado is creating a pilot program to help spur the development of rental housing for middle-income families. The legislation defines middle-income as annual household incomes between 80 percent to 120 percent of the area median income (AMI), or 80 percent to 140 percent for rural resort counties.
Rents continue to rise far faster than wages. The Joint Center for Housing Studies of Harvard University recently released the latest version of its annual report, The State of the Nation’s Housing 2024. The report finds that housing costs continue to rise for both the for-sale and the for-rent housing markets.
Annual premium increases for affordable housing sites are ranging from 30% to 100%. A broad coalition of groups representing America’s housing providers, lenders, and residents recently sent members of Congress and the Biden administration a letter outlining a number of bipartisan policies to address the causes of rising insurance premiums across the nation’s housing market.
Will other states follow suit? When New York State lawmakers enacted its fiscal year 2025 budget last month, it included legislation intended to support housing statewide and address the state’s housing crisis. One part of the passed legislation was a measure to ban insurance carriers from discriminating against affordable housing providers.
