Corrections re: HOTMA Asset Limit Enforcement Against Current Residents

Affordable housing compliance consultant and Insider Advisory Board member Gwen Volk pointed out and asked us to correct problems in How to Apply HOTMA’s Asset Rules to Tenant Certification, Eligibility Decisions, which appeared in our August 2025 issue.  

Context

The article discusses the updated inflation-adjusted asset thresholds under the Housing Opportunity Through Modernization Act (HOTMA) that determine how income, asset limits, and deductions are treated for households across different HUD-assisted housing programs. The focus of the analysis is on how and when owners should enforce those adjustments, particularly against residents in place after the adjustment takes effect. 

1. No Mention of Owners’ Existing Residents Enforcement Options 

Problem: The article doesn’t make reference to the choices HUD has given owners with regard to existing residents.

Correction: Residents must meet HOTMA asset limits to qualify for federally assisted housing. So, annual adjustments may cause current residents living in PHAs, PBRAs, and other federally assisted communities to lose their eligibility and face risk of eviction. To prevent this, HUD implemented a new policy in February 2024 that gives owners options in enforcing asset restrictions against current residents who are in place when HOTMA adjustments are implemented: 

• Option 1: Total Non-Enforcement, which must apply to all households;
• Option 2: Enforcement, meaning that the owner must initiate eviction or termination of housing assistance proceedings within six months of the reexamination that determines that the household doesn’t meet asset limits; and
• Option 3: Enforcement with an Option to Cure, under which all households not compliant with HOTMA asset limits at reexamination would have up to six months to “cure” the problem and get back into compliance.  

2. Clarification of Post-HOTMA Adjustment Recertification Enforcement 

Problem: The article also implies that owners must enforce asset restrictions against existing residents every time they’re recertified after HOTMA adjustments.

Correction: This is not correct. Moreover, if the owner selects the Total Non-Enforcement option (as many have done), the Total Non-Enforcement protection applies to all households, including those that move in after the selection and later show an increase in assets at a future recertification.    

We hope that this clarifies things and thank Gwen for bringing these problems to our attention.

If you have comments or feedback to any of our articles, please send them to executive editor Heather Stone, at hstone@www.thehabitatgroup.com.