HOTMA Compliance Deadline Is Approaching
The Housing Opportunity Through Modernization Act (HOTMA) deadline is coming up on January 1, 2026. The goal behind HOTMA is simple but important: to make U.S Department of Housing and Urban Development (HUD) programs more consistent, efficient, and easier for families to navigate. The act is designed to streamline processes and modernize documentation requirements for households seeking or receiving housing assistance.
Policy Updates Already Required
Some aspects of HOTMA implementation should already be in place. Specifically, Tenant Selection Plans (TSP) and Enterprise Income Verification (EIV) policies were required to be updated by May 31, 2024. Any remaining policy or procedural updates should now be focused on meeting the final compliance deadline in 2026.
Early Adoption and System Updates
According to HUD, owners and agents who wish to adopt HOTMA prior to January 1, 2026, may do so using the rent override function in TRACS version 202D until TRACS 203A becomes available. The updated TRACS 203A system is expected to be operational by late 2025, providing sufficient time for properties to adjust before full compliance is required.
In August 2025, New Hampshire Housing (NHH) confirmed its intention to apply HOTMA consistently across all housing programs and will adhere to the January 1, 2026, implementation date.
Key Areas of Change Under HOTMA
HOTMA introduces several adjustments to the calculation of income and rent. The most significant updates include:
- Asset limitations
- Income definitions and exclusions
- Net family assets
- Deductions
- Rent calculation provisions, including de minimis errors, annual passbook rates, inflationary adjustments, and self-certifications
- Annual and interim reexaminations
- Safe Harbor provisions
These changes are designed to improve consistency and reduce administrative burden while maintaining accuracy in determining eligibility and rent amounts.
Lease and Tenant Communication Requirements
HUD has stated that HUD-approved model leases will be made available before the compliance deadline. Property owners and agents will be required to provide tenants with copies of these HUD-approved leases at least 60 days prior to the end of the tenant’s lease term.
Each tenant must receive a letter explaining the lease modification, noting that they may accept the changes or move out. A response is required within 30 days. If no response is received, procedures for terminating tenancy may begin.
As of the date of this article, updated HOTMA-compliant forms and leases have not yet been released by HUD.
Steps to Prepare for HOTMA Compliance
To stay on track for the upcoming deadline, housing providers and property managers should take the following steps:
- Confirm software readiness: Check with your property management software provider to ensure they have plans to implement HOTMA functionality.
- Invest in training: Sign up for a HOTMA training course from a reputable training provider to stay informed and ensure staff readiness.
- Stay informed: Subscribe to receive email updates from the Office of Housing through HUD’s subscription page.
- Communicate early: Begin informing tenants about upcoming policy and procedure changes to help ensure a smooth transition.
Stay Ahead of the HOTMA Deadline
With the January 1, 2026, HOTMA compliance date quickly approaching, preparation now will help avoid last-minute challenges later. Reviewing internal policies, training staff, and maintaining clear communication with tenants will make implementation smoother when the final updates take effect.
If you have questions about HOTMA readiness or need guidance aligning your policies and procedures with the upcoming requirements, contact the team at LMRPA. We’re here to help you stay compliant, informed, and confident as the deadline approaches.
