October 18, 2023

OHFA Housing Opportunity Through Modernization Act of 2016 (HOTMA) Guidance

Background

The Ohio Housing Finance Agency (OHFA) like all other housing finance agencies (HFAs) has been waiting for the U.S. Department of Housing and Urban Development (HUD) to release guidance on when and how to implement the HOTMA final rule since it was officially published on February 14, 2023.

• HOTMA sections 102 and 104 provisions become effective January 1, 2024. 

• The HUD Office of Public and Indian Housing released notice giving a grace period of up to January 1, 2025, to implement changes outlined in sections 102 and 104 of HOTMA for public housing authorities (PHAs).

• On September 29, 2023, the HUD Multifamily (MFH) Office released Notice PIH 2023-27. This notice states: 

• By March 31, 2024, MFH owners must update their Tenant Selection Plans (TSPs) and Enterprise Income Verification (EIV) policies and procedures to reflect HOTMA rules.

• Once the owner’s software is HOTMA compliant, MFH owners must provide tenants at least a 60-day notice that their leases will be modified at the end of the lease terms for projects with HUD funding.

• Owners must begin using the revised HUD model lease at the expiration of a household’s current lease term.

• Owners must implement their revised TSPs and EIV policies/procedures.

• All tenant data submissions must comply with the HOTMA regulations and owners must inform households that their incomes will now be determined as outlined in the HOTMA final rule.

• MFH owners will not be penalized for HOTMA-related tenant file errors prior to January 1, 2025. 

• Full compliance with the HOTMA final rule is mandatory effective January 1, 2025.

OHFA’s Guidance 

The 8823 Guide 1-2 states, “The guide, or chapters of the guide, may become obsolete if the underlying authority is revised subsequent to the Guide’s revision date. Examples include: (1) IRC §42 is revised by Congress, (2) the IRS provides formal guidance, or (3) HUD revises the definition or treatment of income (as explained in HUD Handbook 4350.3, Chapter 5). The guide (or chapter) is obsolete as of the effective date of the revised legal authority. State agencies and owners should disregard affected text and legal references.”

In the absence of IRS guidance and the context of the 8823 Guide above, OHFA will implement the HOTMA final rule changes as outlined in Notice PIH 2023-27 for all OHFA-funded projects. OHFA will make any necessary changes in the event formal guidance is released from the IRS.

National Standards for the Physical Inspections of Real Estate (NSPIRE) Implementation

On September 18, 2023, HUD’s Community Planning and Development (CPD) Office extended the compliance date for NSPIRE to October 1, 2024, for programs, such as the HOME Investment Partnership Program (HOME), National Housing Trust Fund (NHTF), Housing Opportunities for Persons with AIDS (HOPWA), Emergency Solution Grants (ESG), Continuum of Care (COC), and other CPD programs. 

Since OHFA is the Participating Jurisdiction (PJ) for HOME and NHTF units, we plan to follow this timeline for implementing NSPIRE for HOME, NHTF, Low-Income Housing Tax Credit (LIHTC), Ohio Housing Trust Fund (OHTF) , 811, and any other OHFA-funded programs that require physical inspections. OHFA will make any necessary changes in the event formal guidance is released from the IRS about implementing NSPIRE for LIHTC projects. 

OHFA highly recommends our industry partners train their staff on the new NSPIRE protocol. Be proactive over the next 11 months to attempt to get your projects “functionally adequate, operable, and free of health and safety hazards.” U.S. Housing Consultants has provided a free NSPIRE manual that is available to the public. You can access this manual here. 

OHFA will sponsor an NSPIRE training with U.S. Housing Consultants for industry partners within the next several months. Additional details will be issued soon. 

Compliance Trainings Suspended

OHFA’s compliance training webinars are suspended until further notice. These trainings include: Annual Owner Reporting, Compliance Policies and Regulations, Conquering Acquisition/Rehab, and LIHTC Essentials. Please look into other available training resources to keep up-to-date with the vast changes with which our industry is currently faced. Given that OHFA has suspended trainings, we will accept an LIHTC training offered by nationally recognized trainers or consultants (e.g., National Center for Housing Management, U.S. Housing Consultants, E&A Team, Costello Compliance, Zeffert & Associates, Quadel, Karen Graham Consulting, etc.) to fulfill the Qualified Allocation Plan (QAP) 8609 training requirement. The training must incorporate such topics as LIHTC fundamentals, qualifying tenants, assets and income, and IRS regulations. An owner must certify required attendance through the submission of the Annual Owner Certification.

2024 Cost-of-living Adjustment (COLA) Increase Announcement

The latest cost-of-living adjustment (COLA) is 3.2% for Social Security benefits and Supplemental Security Income (SSI) payments. Social Security benefits will increase beginning with the December 2023 benefits, which are payable in January 2024. Federal SSI payment levels will also increase effective for payments made for January 2024. You can read more about the COLA here.

OHFA Tenant Income Certification (TIC) Requirements

OHFA has received numerous inquiries from management agents to make minor changes to OHFA’s Tenant Income Certification (TIC) or receive a copy of the TIC for compliance software purposes. OHFA does not permit any changes to our TIC and will not provide a blank TIC directly to owners or management agents. Compliance software representatives must contact OHFA's Helpdesk directly to receive a copy of the OHFA TIC.

The management representative must detail why a copy of the TIC is needed.