In late October 2024, our team attended both the NAHMA Biannual Top Issues in Affordable Housing Conference as well as the National Leased Housing Association’s Fall Seminar. Both conferences were attended by HUD Multifamily staff and designed to facilitate discussion between HUD and industry stakeholders with regards to hot topics and ongoing developments in the Multifamily industry.
We were pleased to have had the opportunity to advocate on behalf of our clients as we met face-to-face with HUD executives during such a crucial turning point in the multifamily housing landscape.
Below are key topics that were discussed, along with our insights on what clarifications from HUD mean to you, our clients.
Multifamily HOTMA Implementation Timeline
Jennifer Larson, Director at the HUD Office of Asset Management, clarified that, based on currently published guidance, all HUD Form 50059/50059A certifications effective July 1, 2025, or later must incorporate the HOTMA updates codified in the TRACS 203A version. This is of particular importance because owners begin processing Annual Recertifications effective July 1, 2025, on March 1, 2025, via issuance of the First Reminder Notice.
Our take? The goal of completing implementation by the time the industry is completing certifications effective July 1, 2025, appears very aggressive based on the fact we have not met crucial milestones necessary to initiate the process. HUD briefly posted a draft of the TRACS 203A MAT User Guide on October 31 to the HUD Multifamily Drafting Table, but then quickly issued a correction announcement and took it down on November 1. All software developers require a published TRACS Specification, a final MAT User Guide and accompanying OMB-approved HUD Forms to complete product coding and testing prior to making updates available to their users.
Below is a representation of crucial milestones necessary for implementation to be initiated and successfully completed.
Mandatory Methods of Soliciting Industry Feedback
The Office of Management and Budget (OMB) is charged with overseeing the publishing of new HUD Forms following mandatory comments periods allotted to the industry to submit feedback regarding proposed changes to the forms.
HUD recently posted a summary of proposed form revisions to the Federal Register in July 2024 related to HOTMA updates. However, they did not actually post the forms themselves.
Many stakeholders were concerned that by posting to the Multifamily Drafting Table, HUD would opt to not post to the Federal Register, as required by statute. When asked to clarify their intentions, HUD staff assured the audience that the Federal Register posting protocol would still be followed once the corrected links to the MAT User Guide and Forms were published.
HOTMA-related MOR Findings
Finally, we received a very favorable clarification from HUD regarding the review of HOTMA updated EIV Policies and Tenant Selection Plans by MOR Reviewers in advance of HOTMA Implementation.
HUD clarified that if an owner modified these two policies to include HOTMA elements and provided those drafts to MOR reviewers for MOR site visits after June 1, 2024, the owner should not be issued any findings for minor wording changes deemed necessary by the reviewer. Instead, that feedback should be issued in the MOR report as an observation and the corrective action necessary to revise the wording should occur in response to the observation.
Only after an owner has implemented HOTMA on the HUD Multifamily program should HOTMA-related policy or tenant file Findings be issued during MORs.
HUD indicated that Frequently Asked Questions (FAQs) were forthcoming and would reinforce this guidance being provided.
If you have an MOR coming up soon, make sure to check out our Stress-Free MOR webinar we’re hosting on Thursday, November 7, 2024, to aid in your preparation for your assessment.
What’s Next?
We remain committed to being on the front lines of these industry regulation changes. We’ll keep you updated on HOTMA implementation deadlines and any potential regulatory changes in the coming months.
We’re headed to Mid-Atlantic AHMA in a few weeks – if you’ll be there, make sure to attend one of Jenny DeSilva’s sessions. She’ll be teaching six sessions, ranging from “EIV in the New HOTMA Environment” to “Communicating with Residents Regarding HOTMA.”
