Frequently asked questions about HOTMA implementation for CHFA Multifamily Loan, Housing Tax Credit, and Section 8 properties.
Multifamily Program Compliance HOTMA FAQs
This is a case where there will need to be more documentation in the file, and you will likely need to follow up with the employer, so you are able to do your best on the calculation. You will need to do your best to get the start and end of season (from the employer) so you can annualize the full 12 months appropriately as there can be times where income is higher or lower than other times.
Correct, if the NNPP exceeds $50K, it is included in Net Family Assets. If NNPP totals $50K or less, it would not be included in Net Family Assets.
This question will need to be addressed by your owner or management company on how they will revise their policy with regard to the new HOTMA guidance and the minimum income requirement. CHFA does not review or approve internal policies. We can only speak to the HOTMA regulations and requirements.
The recommendation is to reach out to your tax credit consultant. HUD Appropriations are passed annually, but we don't know how often the Section 8 student aid limitation will change.
Yes, we will do our best to monitor and keep our customers current on any updates to the HUD Appropriations Act. We encourage you to sign up for CHFA eNews to receive updates as we receive them.
This question refers to a rule that applies only to Section 8 properties. All HTC and CHFA loan properties will verify at move-in if net family assets exceed $50K. For 100 percent affordable properties, verification is not required after move-in. For Mixed-income developments in the initial 15-year compliance period, they will verify annually.
This question will need to be addressed by your owner or management company on how they will revise their policy with regard to the new HOTMA guidance and the minimum income requirement. CHFA does not review or approve internal policies. We can only speak to the HOTMA regulations and requirements.
Software generated TICs are allowed. Owners are not required to use CHFA forms, provided the owner's forms contain all the same content as CHFA forms. For example, if your software TIC does not list the applicable maximum rent, which is included on CHFA's TIC, you will need to add it manually.
It can be provided by either. A bank statement is considered a tenant-provided verification.
For the HTC and CHFA Loan programs, CHFA is following all HOTMA guidance in regards to income and assets. We do have some additional requirements for seasonal employment and self-employment. You can find these in our Compliance Manual.
Statements, written verification and verbal verification are all accepted for the HTC and CHFA Loan programs. However, Owners must treat all households consistently when verifying assets and attempt the same forms in the same order. See Section 6.7 in the Compliance Manual.
If Net Family assets is $50,000 or less verification is not required-the owner/agent can rely on the resident's statement of the date and amount as documented in the file. If Net Family Assets exceeds $50,000, the owner/agent must third-party verify the amount and date of the family's federal tax refund. This could include a copy of the federal tax return that has third-party receipt of transmission (i.e., tax preparer’s transmittal receipt, summary of transmittal from
online source, etc.), or a statement from the account into which the refund was deposited showing the federal refund date and amount.
All amounts received by a family in the form of federal tax refunds or refundable tax credits are excluded from a family’s net family assets for a period of 12 months after receipt by the family. You need to know the amount received so that you can subtract it from your calculation of total Net Family Assets.
No, this is a rule under Section 8. The real estate and asset limitations for Section 8 do not apply to the Housing Tax Credit program
The Housing Tax Credit program only requires a minimum of two paystubs to verify employment income. If your internal screening criteria requires additional verification or paystubs to document length of employment, we ask you to have a specific policy in place and be consistent with all certifications.
If you are unable to verify this information with the first two types of verification on the hierarchy, then it would be acceptable to reach out to the employer for verification and/or ask for a few additional paystubs. Just be sure to document the file well as to why you had obtained more than two paystubs. The goal of HOTMA is to help relieve some of the administrative burden on folks. Again, just ensure there is a detailed clarification from speaking to the employer.
Correct, since workers compensation is excluded from income, no verification is needed.
Benefits that have a specific end date during the next 12 months are considered non-recurring income and are excluded from household income.
You would only use the data given for the two most recent pay cycles, unless you have an internal policy that states that you are using a different number.
You will need to look at the Paystub to determine the pay cycle (i.e. weekly, bi-weekly or bi-monthly). If the applicant is paid weekly, you would use 52, if the applicant is paid semi-monthly you would use 24, and if the applicant is paid bi-weekly you would use 26.
CHFA recommends that there is an internal policy that addresses situations like this. If one of the two most recent pay periods is partial, you could use the next most recent pay period. If this is done be sure to document the file with a clarification record and follow your internal policy.
No, you will take the average of the check stubs. Additional clarification of anticipated pay increases is not required when using these verification types.
CHFA does not have a list and is not currently aware of any free UIV systems. We would only require you to check the specific UIV system used by your applicant's employer, and then paystubs can be used. Be sure to add a clarification record to the file and be consistent on all certifications. Also note that CHFA does not require owners to use a UIV system that charges a fee.
This would be one of those situations in which additional information may be required. We would recommend reaching out to the employer to complete a clarification record confirming how often the bonus is received and document the file accordingly.
No, retirement accounts are no longer counted as assets. However, you should still have a question regarding income distributions from retirement accounts on your application or questionnaire. Please refer to section 5.19 of the Compliance Manual for additional information.
Please see the updated TIC and instructions on the CHFA website. Actual income from assets when Net Family Assets are $50,000 or less is reported in part IVA on the TIC.
If a resident certifies they receive court ordered Child Support the owner must: obtain third-party verification in the form of a 12-month history via Human Services Department and/or the Family Support Registry to document the amount actually received. We no longer require a copy of the Court Order.
That is correct. Remember to include any income earned on these assets in part IVA on the TIC (interest).
HUD will adjust these figures annually based on the inflation rate.
That is correct, when Net Family Assets total $50,000 or less. But you will include any actual income (interest/dividends) earned.
No, all bank account cash values are now based on current balance.
No, follow CHFA's policy on how to verify self-employment as stated in our MF Program Compliance Manual. Our requirement for verifying self-employment has not changed; however we have updated our Certification of Income for Self-employed Persons to include a Business Plan Summary and a Profit and Loss form.
Yes, but make sure your policy states how many management requires and be consistent with all certifications. It is not acceptable to collect different numbers of paystubs for different applicants.
If the applicant/resident discloses they receive cash tip income, it should be included on the TIC.
That is correct. If the "gift" will not continue for the 12 months, then it is not included in annual income. Make sure the file is properly documented.
Yes, a minimum of two pay periods per HUD guidance.
Yes, that is correct.
DOH has not implemented any HOTMA changes. These changes are CHFA program specific for HTC and CHFA loan properties.
First and foremost send verification to the institution and document attempts. Then ask applicant to go to their student portal.
Yes, these are on the website now.
EIV does not apply to the housing tax credit/CHFA loan program. That will be used only for developments with Section 8.
Yes, HOTMA may be partially implemented prior to the July 1, 2025 deadline. However, each tenant certification must include a file clarification record explaining which parts of HOTMA and which HOTMA compliance forms have been implemented on which dates. Once an element of HOTMA, including a related form, is implemented, it must be utilized consistently for all households certified after that date. This could include, for example, beginning to use a minimum of two current consecutive paystubs to verify employment income instead of a Verification of Employment form as of December 1, 2024.
Yes, properties may fully implement HOTMA on or before July 1, 2025. If before July 1, management should document the date in which the implementation took place
HUD has a website with training videos and resources. https://www.hud.gov/program_offices/housing/mfh/hotma/Training_Videos_and_Resources. As well as H2023-10.
That is correct. If you have paystubs, no additional verification is needed unless there is something that needs further clarification. Paystubs are now preferred over both written and verbal verification forms.
Section 8 HOTMA FAQs
Yes, the 50059 is not complete until the tenant signs it.
"The notice states-
“Effective the day after SSA has announced the COLA, PHAs/MFH Owners are required
to factor in the COLA when determining SS and SSI annual income for all annual
reexaminations and interim reexaminations of family income that have not yet been
completed and will be effective January 1 or later of the upcoming year.” So the simple answer is no it does not need to be corrected.
This should already be implemented as it is not software reliant."
HUD has stated that for items that are software compliant you should continue to process in the current manor. Using the new passbook rate will cause the certifications to fail. In addition, since the software does not know to only apply the higher rate to only assets with unknown incomes, it would calculate incorrectly for the HOTMA rules.
However, from HUD’s guidance-Use of Rent Override Function.
We need clarification on what is meant by this question. However, Yes if Real property does not meet one of the exemptions it would disqualify an applicant.
The LIHTC forms are great forms but are not designed for the section 8 program and do not include all relevant content. Program Compliance is currently working to have the forms available in word format that can be edited and used by the properties. These will need to be requested from the program compliance officer.
We need to correct our answer to this question. HUD does require all tenant files to be documented. Documentation in Tenant Files Owners who implement HOTMA prior to the release of TRACS version 203A must annotate tenant files with the following information:
- Which HOTMA and other Notice H 2023–10 provisions were implemented, regardless of whether they resulted in a different tenant rent than would have resulted using pre-HOTMA rules (owners are cautioned that many aspects of HOTMA are interrelated; implementation of some without others may be infeasible and/or may affect tenant rents);
- How the family’s income, assets, and mandatory deductions were determined under the implemented HOTMA provisions; and
- If applicable, what the tenant rent would have been under the pre-HOTMA rules, and the HOTMA tenant rent amount that was entered using the “rent override” function.
It may be a good practice to follow up on large and consistent deposits to discover unreported income, but there has never been a “requirement” to verify deposits.
July 31, 2025
July 31, 2025
Please refer to your Program compliance officer.
For now Officers will be only be doing observations with corrective actions for HOTMA related tenant file errors.
An owner who implements HOTMA prior to the release of TRACS version 203A must utilize the “rent override” function in TRACS if a family’s HOTMA-calculated tenant rent differs from their pre-HOTMA calculated tenant rent. An owner employing the rent override function must:
- Submit accurate information in Sections B (Summary) and C (Household Information) of the 50059. Section C must accurately reflect the circumstances of the household so that HUD can continue income data-matching with other agencies;
- Enter the data in the remaining sections D (Income Information), E (Asset Information), and F (Allowances & Rent Calculations) of the 50059 from the family’s most recent reexamination (either annual or interim); and
- Submit non-interim transactions (see subtopic I.4 in Attachment I of Notice H 2023–10) as interim reexaminations, when applicable.
Use of the rent override function may result in the generation of specific, limited discrepancy codes, which owners may disregard. HUD has instructed Contract Administrators to process vouchers despite these specific discrepancy codes, after ensuring that all other information is correct. HUD strongly encourages owners to provide their Contract Administrators with notice that they intend to use the rent override function."
Yes, HUD is working on updating the handbook, but we have not heard when that will be completed.