USDA Rural Development Announces Passbook Savings Rate Change for Multifamily Housing

HOTMA Implementation Guide- Key Updates for Multifamily Housing Owners

The U.S. Department of Housing and Urban Development (HUD) has released updated guidance on implementing the Housing Opportunity Through Modernization Act of 2016 (HOTMA). This comprehensive overview highlights essential deadlines and requirements for Multifamily Housing (MFH) owners, as outlined in the updated HOTMA FAQ. Key Implementation Dates July 1, 2025: Mandatory compliance date for HOTMA provisions. May 31, 2024: Deadline for updating Tenant Selection Plan (TSP) and EIV Policies. Early 2025: Expected release of TRACS 203A system. January 1, 2024: Phased-in medical hardship relief application date. The HOTMA final rule requires the phased-in medical hardship relief to be applied only to families who received the medical deduction based on their most recent income review before January 1, 2024. However, MFH Owners may, at their discretion, utilize the general hardship provision as outlined on pages 43-45 of Notice H 2023-10 to assist affected families, including those who receive a medical deduction but are ineligible for phased-in relief and will otherwise see their deduction drop significantly. HUD reserves the right to permit medical hardship relief waivers on a case-by-case basis. Interim Implementation Options MFH owners can begin implementing HOTMA provisions before the mandatory compliance date. During this transition period: Owners may calculate family incomes and tenant rents manually. The current TRACS 202D system can be used with the rent override function. Both pre-HOTMA and HOTMA-compliant TSPs will be reviewed during Management and Occupancy Reviews (MORs). Management and Occupancy Reviews Contract Administrators will handle HOTMA-related issues during MORs as follows: Before July 1, 2025: HOTMA-related tenant file errors will result in observations rather than penalties. TSP compliance with Notice H 2024-04 was mandatory by May 31, 2024; non-compliance will result in findings. Minor HOTMA-related errors unrelated to Notice H 2024-04 will only receive observations until the TRACS 203A release. Model Leases and Forms New HUD-approved model leases will be released before the mandatory compliance date. When implementing new leases: Families must receive copies 60 days before the lease term ends. A clear explanation letter must be provided. Families have 30 days to accept or refuse modifications. Non-response within 30 days may lead to tenancy termination procedures. Financial Considerations Inflationary Adjustments Properties implementing HOTMA must use adjusted values for the calendar year 2025. Pre-HOTMA amounts remain valid until July 1, 2025, for non-implementing properties. Passbook Savings Rate The rate of 0.06% (effective February 1, 2015) may be used by owners who still need to implement HOTMA. Owners making manual adjustments will not be penalized for using the current imputed rate of 0.40%. HOTMA 2025 rate: 0.45% Medical Hardship Provisions Phased-in medical hardship relief applies only to families with medical deductions reviewed before January 1, 2024. General hardship provisions may be utilized for affected families. HUD may permit case-by-case medical hardship relief waivers. Looking Ahead MFH owners should: Subscribe to the MFH mailing list for updates. Monitor for TRACS 203A release. Prepare for full compliance by July 1, 2025. Review and implement necessary policy updates. Stay informed about new form releases and system changes. This guidance represents a significant transition in multifamily housing administration. Property owners and managers should carefully review all requirements and prepare for full implementation while taking advantage of available flexibility during the transition period.

Federal Housing Policy Response to America's Housing Crisis- Key Takeaways from the National Housing Task Force Report

The National Housing Crisis Task Force, a bipartisan coalition of practitioners and policymakers, has released a comprehensive federal policy agenda to address America's deepening housing crisis. The report, released in November 2024, and titled "From Crisis to Transformation: A Federal Housing Policy Agenda," outlines 40 specific policy recommendations organized around five key themes. It calls for immediate federal action to address acute and structural housing challenges. The report is intended to serve as a roadmap for the incoming Trump administration s approach to the affordable housing crisis. The Scale of the Crisis According to the report, the housing crisis in America has reached critical levels: Home prices have doubled in the last decade Nearly half of all renters are cost-burdened Homelessness has hit record highs The median house is now 45 years old, with significant maintenance needs Housing construction is down 60%, while population has grown 65% Core Policy Recommendations The Task Force organizes its recommendations into five strategic areas: 1. Lead and Focus the Nation Create a Housing Crisis Council in the White House Develop national housing production goals Implement real-time housing market data tracking Address the property insurance crisis Ensure Fair Housing Act compliance 2. Reduce Barriers to Production and Eliminate Complexity Modernize HUD programs for faster housing production Unlock Department of Transportation and Energy programs for housing Reform housing choice voucher programs Streamline federal land disposition for affordable housing Update building codes and regulations 3. Mobilize Federal Capital for Production & Preservation Authorize new financing mechanisms through Fannie Mae and Freddie Mac Provide low-cost debt for mixed-income housing developments Expand access to financing for housing agencies and CDFIs Create grants for adaptive reuse of buildings Reform and expand the Low-Income Housing Tax Credit The recommendations related to the Low-Income Housing Tax Credit (LIHTC) include: Expand the 9 Percent Credit: Increase the 9 percent LIHTC available nationally to address rising housing costs and build more affordable homes. Exempt Affordable Housing from the State Private Activity Bond Cap: Lift the artificial limit on the number of tax-exempt Private Activity Bonds (PABs) issued in each state to finance affordable housing projects. Increase the "Basis Boost for Difficult Development Areas: Authorize an increase in the Basis Boost for DDAs, Native American housing, Extremely Low-Income housing, and rural areas from 30 percent to 50 percent. Streamline Income Verification: Simplify the income verification requirements for prospective tenants of deed-restricted affordable units to reduce administrative burdens and increase accessibility. The provision also recommends excluding the Basic Allowance for Housing (BAH) for all military members. Strengthen Cost Oversight Provisions: States should be required to consider cost reasonableness as part of their selection criteria when determining which developments will receive LIHTC allocations each year. These recommendations aim to adapt and expand LIHTC to effectively meet the current housing crisis. 4. Innovate with an Industrial Policy Lens Develop a national housing industrial strategy Create a Housing Innovation Unit within HUD Establish national building codes for modular housing Support construction workforce development Research and implement cost-reducing building practices 5. Provide a Housing Safety Net Make housing choice vouchers available to all eligible households Invest in immediate homelessness solutions Create tax credits for rent-burdened households Provide $100 billion for affordable housing rehabilitation Implement new affordability measures Implementation Timeline The Task Force proposes a one-year roadmap with specific actions: Day One Executive Actions: Including creating the Housing Crisis Council and ordering the development of a national housing strategy First 100 Days Legislative Priorities: Including emergency appropriations and authorization legislation Year One Administrative Actions: Including regulatory reforms and program modernization Tax Reform Priorities: Including expanding housing tax credits and creating new incentives The Federal Role The report emphasizes that the federal government is uniquely positioned to address the housing crisis through: Coordinating across multiple agencies and departments Providing substantial capital resources Setting national standards and goals Creating incentives for state and local action Protecting vulnerable populations Looking Forward The Task Force emphasizes that while immediate action is crucial, creating lasting change requires: Permanent commitment to housing as a national priority Partnership with state and local governments Engagement with private and civic sectors Focus on both supply expansion and affordability Investment in innovation and workforce development The report concludes that treating the housing crisis like a true crisis requires immediate federal action and long-term structural reforms. Success will require coordination across all levels of government and sectors of society, with the federal government playing a crucial leadership role in driving transformative change in America's housing ecosystem.

USDA Rural Development Announces Passbook Savings Rate Change for Multifamily Housing

USDA Rural Development has announced a change in the Multifamily Housing Passbook Savings Rate. Effective January 1, 2025, the rate will be adjusted to 0.45%. What This Means for You This change will impact how asset income is calculated for net family assets. Property owners and management agents must use the new rate for all tenant certifications effective on or after January 1, 2025. Key Points to Remember: The new passbook savings rate is 0.45%. This rate will be in effect until the Department of Housing and Urban Development (HUD) publishes a new rate. The change impacts calculations for imputed asset income. For More Information Please refer to the full announcement on the USDA Rural Development website for detailed information and guidance. If you have specific questions about your property, please get in touch with your assigned Servicing Specialist. Stay Informed We encourage you to stay updated on USDA Rural Development announcements by subscribing to their updates.

A. J. Johnson Partners with Mid-Atlantic AHMA for December Training on Affordable Housing - December 2024

During December 2024, A. J. Johnson will partner with the MidAtlantic Affordable Housing Management Association for two live webinar training sessions for real estate professionals, particularly those in the affordable multifamily housing field. Following the webinars, AJ will review testable areas and in-person administration of the Housing Credit Certified Professional (HCCP ) exam. The following sessions will be presented: December 10: Intermediate LIHTC Compliance - Designed for more experienced managers, supervisory personnel, investment asset managers, and compliance specialists, this program expands on the information covered in the Basics of Tax Credit Site Management. A more in-depth discussion of income verification issues is included, as well as a discussion of minimum set-aside issues (including the Average Income Minimum Set-Aside), optional fees, and use of common areas. The Available Unit Rule is covered in great detail, as are the requirements for units occupied by students. Attendees will also learn the requirements for setting rents at a tax-credit property. This course contains some practice problems but is more discussion-oriented than the Basic course. A calculator is required for this course. December 11: Advanced LIHTC Compliance - This full-day training is intended for senior management staff, developers, corporate finance officers, and others involved in decision-making concerning how LIHTC deals are structured. This training covers complex issues such as eligible and qualified basis, applicable fraction, credit calculation (including first-year calculation), placed-in-service issues, rehab projects, tax-exempt bonds, projects with HOME funds, Next Available Unit Rule, employee units, mixed-income properties, the Average Income Minimum Set-Aside, vacant unit rule, and dealing effectively with State Agencies. Individuals who take both training days will be provided with study materials and a practice exam to assist in preparation for the HCCP exam, which will be administered on December 12. December 12: Review of testable areas and administration of the Housing Credit Certified Professional (HCCP ) exam (In-person exam in Richmond, VA). After two days of intensive and comprehensive LIHTC training, AJ will review program requirements and administer the HCCP exam in person. These sessions are part of the year-long collaboration between A. J. Johnson and MidAtlantic AHMA and is designed to provide affordable housing professionals with the knowledge needed to effectively manage the complex requirements of the various agencies overseeing these programs. Persons interested in any (or all) training sessions may register by visiting either www.ajjcs.net or https://www.mid-atlanticahma.org.