Happy New Year, DeSilva Housing Group clients! With a new administration and sweeping regulatory changes on the horizon, 2025 will be a big year with crucial dates and shifts for HUD Multifamily owners.
Below are our thoughts on key things that may be weighing on your mind…
HOTMA, HOTMA, HOTMA: What’s Going On?
We’ve received several questions about the final implementation date for HOTMA, especially in light of HUD’s announcement on December 31, 2024, regarding an “Extension of Compliance Date and Safe Harbor Implementation.” Very important: this only applies to CPD Programs (HOME, CDBG, and HTF most commonly). While it could signal an expected delay from HUD Multifamily, there is nothing official. As of the publish date of this blog post, the HUD Multifamily implementation date remains 7/1/2025 for PBRA programs. We will be the first to let you know if we see any changes.
You may be wondering what you can do now to prepare for HOTMA. You may also be feeling HOTMA fatigue. We get it! But please heed our advice:
- Comprehensive and detailed training is needed now to understand the discretionary options that owners and managers can decide to implement. This is especially relevant for Tenant Selection Plans and EIV Policies (note: these should have been updated by 05/31/24, but if you haven’t done so yet, we can help. View the customized Policies we create for clients here).
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- For example, do you have a clear understanding of means-tested verification and what it entails? Will your property accept the self-certification of net family assets under $50,000? These are just a few of the decisions you need to make now so that you can train your team on the logistical shifts that will happen to their everyday leasing and occupancy activities. You will also want to create a list of what policy decisions you potentially want to include in your House Rules vs. what’s sufficient to be included only in your Tenant Selection Plan.
- Our HOTMA Express trainings will occur in February and May leaving you ample time to digest the regulatory changes and discretionary options.
- For clients who have taken our HOTMA training before, we are also offering a 4-hour refresher course designed to remind you of the most important takeaways as well as provide updates on HUD guidance that may have been released since you last took our training. If you prefer private training, we have a limited number of weeks left in 2025 for clients to schedule these. If your team would like to be added to the private training schedule for 2025, act fast and reserve your dates now before all are secured.
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- Next, you can actively communicate high-level HOTMA changes with your residents. We strongly encourage property managers and site-level staff to summarize the most important changes that will impact them. Communicating multiple times over the course of several months with your residents can increase the likelihood that they truly absorb what’s changing. If you need help determining how to deliver updates to your residents, check out our High-Level General Tenant Notice About HOTMA, available for instant download. We have translated it into Spanish as well.
- Finally, 120-Day Notices for Annual Recertifications are coming up. For annual recertifications effective July 1, you’ll need to send Notices to residents no later than March 3, 2025. We’ve received many questions about whether these notices should include or exclude any specific language pertaining to HOTMA. As of the publishing date of this blog post, we recommend moving forward with performing the July annual recertification following pre-HOTMA procedures, with no changed language or processes for your July 2024 ARs.
Other Areas of Interest:
30-Day Notification Requirement Prior To Termination of Lease for Nonpayment of Rent – During Covid, the CARES Act required that NOTs (Notices of Termination) for Non-Payment of rent be 30 days. This was considered a temporary change at the time, but it was never repealed. HUD’s Final rule on the 30-Day Notification, released 12/13/2024 and effective 01/13/2025, makes it a permanent change. In conjunction, HUD also identified specific elements that need to be in the termination letter. We highly recommend that our audience reads the new rule to ensure notices comply with these requirements.
Criminal Screening: On April 10, 2024, HUD published a Rule for public comment in the Federal Register (Reducing Barriers to HUD-Assisted Housing). On January 16th, 2025, HUD rescinded the original proposed rule, opting to not pursue it. The rule would have sought to “help standardize practices within HUD programs with respect to prospective tenants.” The April 4, 2016 Office of General Counsel Guidance on Application of Fair Housing Act Standards to the Use of Criminal Records by Providers of Housing and Real Estate-Related Transactions is HUD’s most recent guidance as it relates to Criminal Screening Criteria.
LEP Policy – Got One? HUD recently solicited industry comments related to updating the Affirmative Fair Housing Marketing Plan (AFHMP) form. Part of the form required property owners and managers to detail their LEP Policy. In case you need a refresher: Federal Law requires housing professionals provide equal access and effective communication to applicants/residents who do not speak, write, or understand English. How do you track the language diversity in your area and applicant traffic? What alternative methods do you use to communicate verbally and in writing with LEP persons? If you need help developing a policy, we’re happy to help.
HUD Updating Multifamily Asset Management Handbook – HUD plans to update the Multifamily Asset Handbook 4350.1 over the next year, plus. Note: This is different than the Occupancy Handbook 4350.3. The 4350.1 Handbook contains many chapters that are often cited in MOR findings, to include Pet Requirements, Utility Reimbursement Requirements, Budget Based Rent Increases, Emergency/Disaster Management, and more. The first four chapters have been published to the HUD Drafting Table for review and comment:
- Asset Management Lifecycle
- Asset Management Systems
- Affirmative Fair Housing Marketing Plan
- Loan Sales
We encourage our clients to review these chapters, particularly the chapter regarding Affirmative Fair Housing Marketing Plans. We will be submitting comments on our clients’ behalf, based on the hundreds of AFHMPs we complete every year.
That’s a lot to stay on top of, but that’s what we’re here for. Make sure you’re signed up for our email list – and feel free to send this post to your colleagues and peers who may find it helpful. We’ll keep you as updated as possible as we head into this new year!
