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What to know about HOTMA's new income limits

On July 26, 2018, HUD published Housing Opportunity Through Modernization Act of 2016: Final Implementation of Public Housing Income Limits in the Federal Register, which placed an income limitation on public housing tenancy. The rule requires that after a family’s income has exceeded 120 percent of area median income (AMI), or a different limitation established by the Secretary based on local housing costs, for two consecutive years, the PHA must either:

  • Terminate the family’s tenancy within 6 months of the second income determination; or
  • Charge the family a rent equal to the greater of the:
    • Applicable fair market rent
    • Amount of monthly subsidy for the unit, including amounts from the operating and capital fund

For annual or interim recertifications performed on or after the applicable date of the notice (September 24, 2018), the PHA must determine whether the family’s income exceeds the applicable HUD-published over-income limit. If so, the PHA must document the family’s file. If, 12 consecutive months from the annual or interim recertification, the family’s income continues to exceed the over-income limit, the PHA must notify the family in writing that their income has exceeded the over-income limit for one year, and that if the family’s income continues to exceed the over-income limit for the next 12 consecutive months, the family will be subject to the PHA’s over-income policies. The PHA may not exempt any public housing families from the over-income limitation.

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