[Federal Register Volume 88, Number 235 (Friday, December 8, 2023)]
[Notices]
[Pages 85648-85649]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-27026]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-6057-N-05]
RIN 2577-AD03


Housing Opportunity Through Modernization Act: Implementation of 
Sections 102, 103, and 104; Extension of Compliance Date

AGENCY: Office of the Assistant Secretary for Community Planning and 
Development, U.S. Department of Housing and Urban Development (HUD).

ACTION: Notice.

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SUMMARY: This notice extends the compliance date for HUD's final rule 
entitled ``Housing Opportunity Through Modernization Act of 2016: 
Implementation of Section 102, 103, and 104'' (``HOTMA final rule'') 
for Community Planning and Development (``CPD'') programs. 
Specifically, HUD is extending the compliance date for the HOME 
Investment Partnerships Program (``HOME''), HOME-American Rescue Plan 
program, Housing Trust Fund (``HTF''), Housing Opportunities for 
Persons With AIDS (``HOPWA''), Community Development Block Grant 
Program (``CDBG''), Emergency Solution Grants (ESG), Continuum of Care 
(CoC) programs, and CPD programs funded through competitive process 
(``CPD programs'') until January 1, 2025. HUD is taking this action to 
allow jurisdictions, participants, and grantees additional time to 
incorporate HUD's income and asset requirements into their own programs 
and the flexibility to transition implementing HOTMA requirements under 
their own timelines.

DATES: Compliance Date: CPD participating jurisdictions, participants, 
and grantees (``CPD grantees'') subject to 24 CFR parts 5, 92, 93, 570, 
574, 576, and 578, or who apply the income requirements in 24 CFR part 
5 pursuant to Notices of Funding Opportunity are not required to comply 
with the changes to these parts in the HOTMA final rule until January 
1, 2025.

FOR FURTHER INFORMATION CONTACT: For the HOME Investment Partnerships 
Program and the Housing Trust Fund Program, Milagro Fisher, Senior 
Affordable Housing Specialist, Office of Affordable Housing Programs, 
at telephone (202) 708-2684, Room 7160; for the Housing Opportunities 
for Persons With AIDS program, Lisa Steinhauer, Senior Program 
Specialist, Office of HIV/AIDS Housing, at telephone (215) 861-7651, 
room 7248; for the Community Block Grant Program, B. Cory Schwartz, 
Deputy Director, State & Small Cities Division, at telephone (202) 402-
4105, room 7282. The mailing address for each office contact is 
Department of Housing and Urban Development, 451 Seventh Street SW, 
Washington, DC 20410-7000. HUD welcomes and is prepared to receive 
calls from individuals who are deaf or hard of hearing, as well as 
individuals with speech or communication disabilities. To learn more 
about how to make an accessible telephone call, please visit: https://www.fcc.gov/consumers/guides/telecommunications-relay-service-trs.

SUPPLEMENTARY INFORMATION:

I. Background

    The HOTMA final rule was published on February 14, 2023 (88 FR 
9600). The HOTMA final rule revises HUD's 24 CFR part 5 income 
regulations for Section 8, public housing, and other HUD programs. The 
HOTMA final rule included amendments to 24 CFR parts 92, 93, 570, and 
574 to align income requirements to implement sections 102 and 104 of 
the Housing Opportunity Through Modernization Act of 2016 (HOTMA) (Pub. 
L. 114-201, 130 Stat. 782). Additionally, the HOTMA final rule changed 
the income requirements for programs subject to 24 CFR parts 576 and 
578, as well as competitive programs using Notices of Funding 
Opportunity (``NOFOs'') that reference the regulations in 24 CFR part 
5. The final rule established an effective date for these amendments of 
January 1, 2024.
    On September 29, 2023, HUD's Office of Public and Indian Housing 
(``PIH'') and Office of Housing announced that HUD would allow for a 
later compliance date than the effective date of the HOTMA final rule 
in Section 6 of Notice H 2023-10/PIH 2023-27 (``HOTMA Notice''). This 
was in response to requests from PHAs, owners, and related housing 
partners for additional time to prepare for HOTMA final rule 
implementation. Through the HOTMA Notice, HUD allowed PHAs the 
flexibility to establish their own compliance date for sections 102 and 
104 of HOTMA as early as January 1, 2024, and no later than January 1, 
2025.\1\ HUD has determined that CPD grantees receiving assistance 
through CPD programs must be provided similar flexibilities as PHAs and 
is communicating these flexibilities through this notice.
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    \1\ See Section 6.1 of Section 6 of Notice H 2023-10/PIH 2023-
27.
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II. Delay of Compliance Date

    CPD programs serve a broad group of beneficiaries through a range 
of activities not generally authorized under other HUD programs, 
including but not limited to downpayment assistance, homeowner 
rehabilitation, rental assistance for tenants, emergency shelter, 
homeless prevention activities, public services, construction of public 
facilities and improvements, and installation of infrastructure. CPD 
funds used for housing development are often layered in the same 
projects or units that also receive funding under HUD's PIH and Housing 
programs, including the Section 8 voucher and rental assistance 
programs. Moreover, rental units developed with CPD funds may be 
occupied by families who also receive Federal tenant-based rental 
assistance (``TBRA''), including CPD-funded TBRA.
    Under the HOTMA final rule, CPD programs that reference or use 24 
CFR 5.603, 24 CFR 5.609, 24 CFR 5.611, 24 CFR 5.617, or 24 CFR 5.618 
are subject to new or different requirements on January 1, 2024.\2\ 
Additionally, HUD issued conforming regulations to 24 CFR parts 92, 93, 
570, and 574 that are also effective January 1, 2024. To fully 
implement and comply with the HOTMA final rule no later than January 1, 
2025, CPD program administrators must develop and/or update program 
guidelines, including policies, procedures, and internal systems, and 
conduct software updates to incorporate the new income and asset 
requirements prior to implementing these requirements for their 
programs. CPD program administrators must also identify ways in which 
CPD grantees can obtain income determinations from other HUD programs 
in order to implement program flexibilities that were built into the 
HOTMA final rule for those programs.
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    \2\ When a grantee in CPD programs has a choice in applying a 
definition of annual income under their program regulations and the 
grantee chooses the definition in 24 CFR 5.609, then the grantee is 
subject to the applicable requirements in 24 CFR 5.609, as revised 
by the HOTMA final rule and applied in accordance with this Notice.
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    HUD recognizes that until HUD has provided the guidance and 
performed the software updates necessary for CPD

[[Page 85649]]

grantees to implement the HOTMA final rule, CPD grantees may not be 
able to comply with the requirements of the HOTMA final rule. Even 
after the necessary guidance and system updates are made, CPD grantees 
will still need additional time to incorporate this information into 
their program policies and procedures and update their systems and 
software. In recognition of these operational issues and challenges, 
HUD will allow CPD grantees to set their own compliance date for the 
applicable HOTMA final rule provisions. This compliance date may be as 
early as January 1, 2024, and no later than January 1, 2025. CPD 
grantees may continue to implement the requirements of the prior 
version of their program regulations and regulations in 24 CFR 5.603, 
24 CFR 5.609, 24 CFR 5.611, and 24 CFR 5.617, as applicable, until the 
CPD grantee's compliance date.

III. Instructions for CPD Programs

    HUD provides the below instructions and guidance for CPD programs. 
Before implementing the HOTMA final rule, CPD grantees must comply with 
all applicable HOTMA requirements to establish policies and procedures, 
including establishing hardship policies for programs implementing the 
hardship provisions contained in 24 CFR 5.611(c)-(e), policies 
prescribing when and under what conditions a family must report a 
change in family income or composition in accordance with 24 CFR 
574.310(e)(4)(iv), and/or policies describing income verification when 
using the safe harbor provisions in 24 CFR 5.609(c). In addition, CPD 
grantees must perform the following, as applicable, to implement the 
HOTMA final rule:
     Conduct any public process necessary to comply with the 
consolidated plan requirements.
     Update program guidelines, policies and procedures, 
templates, income and asset forms, and applications.
     Conduct internal and external system and software updates.
     Update income and asset regulatory citations and 
requirements in written agreement templates.
     Require owners to send notices to tenants of any expected 
changes to leases or rents required by the HOTMA final rule.
     Train staff, subrecipients, and contractors on the new 
income requirements and perform outreach to housing partners (e.g., 
project owners) to implement the HOTMA final rule.
    To assist CPD grantees in implementing these requirements, HUD 
intends to issue supplemental guidance to HOME participating 
jurisdictions and HTF grantees, including guidance on obtaining income 
eligibility determinations made by PHAs, owners, and providers of HUD 
rental assistance or subsidy programs. HUD also intends to publish, 
through a Federal Register notice, guidance on implementing HOTMA 
standards applicable to the HOPWA program.

IV. Conclusion

    Accordingly, HUD revises the January 1, 2024 compliance date for 
the changes made to 24 CFR parts 5, 92, 93, 570, and 574 for the CPD 
programs described in this notice to January 1, 2025, at which time CPD 
grantees subject to these parts must comply with the HOTMA final rule. 
Until January 1, 2025, CPD grantees subject to these parts may instead 
choose to comply with these parts as they existed prior to January 1, 
2024.

Marion McFadden,
Principal Deputy Assistant Secretary for Community Planning and 
Development.
[FR Doc. 2023-27026 Filed 12-7-23; 8:45 am]
BILLING CODE 4210-67-P