HUD Extends HOTMA Compliance Date for Multifamily Programs to January 1, 2028

Nov 2, 2026

By A.J. Johnson

HUD has made it official: HOTMA compliance for Multifamily Housing is now mandatory for certifications effective January 1, 2028, or later. HUD's Office of Multifamily Housing Programs has published a Housing Notice that moves the date back a full year from January 1, 2027. The change applies to every owner participating in HUD Multifamily project-based rental assistance programs, including Section 8 PBRA, Section 202, and Section 811 properties.

The extension was not a surprise. At PHADA's 2026 Legislative Forum in September, Office of Housing staff told the industry that a 2028 date was coming. The notice adds certainty and a few transition rules that owners and management agents need to understand before deciding how to use the extra year.

What the Notice Says

The new notice revises the full-compliance date for HOTMA Sections 102 and 104, the income review and asset provisions implemented by the February 14, 2023 final rule (88 FR 9600) and Notice H 2023-10. Three points are most important:

• The trigger is the certification's effective date. Full compliance with the HOTMA final rule and the owner's discretionary HOTMA policies is mandatory for all certifications dated January 1, 2028, or later.
• Early adoption remains permitted. Owners may become fully compliant before 2028 by calculating income and rent under HOTMA and entering the result via the rent override function in TRACS.
• Existing policies remain in effect until you convert. Owners should continue to follow their current Tenant Selection Plans and EIV policies and procedures until they are fully HOTMA-compliant.

This is the fifth compliance date HUD has set for Multifamily since the final rule was published.

The root cause has not changed. HUD is not ready to implement its own changes. The updated forms, model leases, and TRACS 203A are not ready, and HUD cannot require HOTMA-compliant certifications that its own system cannot process.

MORs During the Transition: Observations, Not Findings

HUD will not penalize owners for HOTMA-related tenant file errors during Management and Occupancy Reviews conducted before January 1, 2028. Instead, the Contract Administrator will issue observations and corrective actions.

That is meaningful protection for early adopters, but it is not a free pass. An observation still requires corrective action, and the documentation rules for early adoption remain in place. Owners using the rent override must annotate each tenant file with the HOTMA provisions implemented, how income, assets, and deductions were determined, and the tenant rent under both pre-HOTMA and HOTMA rules. Reviewers will continue to examine both the pre-HOTMA and the HOTMA-compliant Tenant Selection Plans. Once January 1, 2028 arrives, the grace period ends: errors in certifications from that date forward are subject to standard findings.

What the Extension Does Not Change

This notice is from the Office of Housing and applies only to HUD Multifamily programs. Headlines will shorten it to "HOTMA got pushed to 2028." For many readers, that shorthand is inaccurate.

• Public Housing and Housing Choice Vouchers. PIH programs remain on the January 1, 2027 compliance date. Housing authorities should not slow down.
• HOME and other CPD programs. CPD's January 1, 2027 date, published in the Federal Register on December 30, 2025, is not changed by a Housing Notice. Follow your Participating Jurisdiction's guidance.
• USDA Rural Development. RD operates under its own HOTMA schedule and guidance, and this notice does not affect it.
• LIHTC. IRC §42(g)(4) incorporates §142(d)(2)(B), which ties tax credit income determinations to Section 8 methods, but no federal HOTMA date governs LIHTC alone. State HFA policy controls. For layered LIHTC/PBRA properties, confirm whether your HFA expects HOTMA methods for the tax credit certification before the HUD date. Most HFAs have already implemented HOTMA for LIHTC purposes.

Owners with mixed portfolios may now run three or more calculation standards simultaneously. Each property needs a clear record of which rules apply to each certification.

What Owners and Agents Should Do Now

1. Make a formal early-adoption decision. Choose between converting now via the rent override and waiting until 2028. Put the decision in writing and notify your Contract Administrator; HUD has strongly encouraged owners to provide that notice.
2. Count back from the actual deadline. The rule applies to certifications effective January 1, 2028, so process January 2028 annual recertifications under HOTMA. Given the 120-day recertification cycle, that work begins around September 2027.
3. Keep both Tenant Selection Plans current. Maintain the pre-HOTMA TSP and EIV policies you are operating under, and keep the HOTMA-compliant versions ready for adoption.
4. Use the year for training, not as a pause. The asset, interim recertification, and deduction changes represent the largest shift in income determination in decades. Staff who learn them now will make fewer errors when findings resume.
5. Test your software. Confirm your vendor's TRACS 203A timeline and whether the platform can run pre-HOTMA and HOTMA calculations side by side.
6. Plan for another delay, but do not count on it. HUD has moved this date four times. Build schedules that work if January 1, 2028 holds.

Final Thoughts

The extension gives Multifamily owners breathing room, and the observation-only MOR treatment lowers the risk of adopting early. It also extends the period during which owners must run two rulebooks and widens the gap between HUD Multifamily and the PIH, CPD, and tax credit programs that often share the same buildings. The owners best positioned in 2028 will be those who treat this year as implementation time.

Questions about the notice can be directed to HUD at MFH_HOTMA@hud.gov. For help with HOTMA conversion planning, TSP revisions, or staff training, contact A.J. Johnson Consulting Services at ajjcs.net.

Sources

• HUD Multifamily HOTMA resource page
• HUD Notice H 2025-03
• NAHRO: Notice H 2025-07 extends Multifamily date to 2027
• NCHM: CPD extends HOTMA compliance to January 1, 2027
• AMA Consulting Group: PHAs still due January 1, 2027