[Federal Register Volume 89, Number 250 (Tuesday, December 31, 2024)]
[Rules and Regulations]
[Pages 106998-106999]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-31401]
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
24 CFR Parts 5, 92, 93, 570, 574, 576, and 578
[Docket No. FR-6057-N-06]
Housing Opportunity Through Modernization Act: Implementation of
Sections 102, 103, and 104; Extension of Compliance Date and Safe
Harbor Implementation
AGENCY: Office of the Assistant Secretary for Community Planning and
Development, U.S. Department of Housing and Urban Development (HUD).
ACTION: Final rule; extension of compliance date.
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SUMMARY: This document extends the compliance date for HUD's final rule
entitled ``Housing Opportunity Through Modernization Act of 2016:
Implementation of Sections 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 processes (Competitive Programs). HUD is extending
the compliance deadline for all grantees and allowing grantees that are
ready to comply to set an earlier compliance date between January 1,
2024, and January 1, 2026. In addition, HUD is permitting the
implementation of certain income safe harbors established in the HOTMA
final rule prior to the extended HOTMA compliance date. HUD is taking
this action due to delays in updating the HUD systems to comply with
HOTMA and to allow additional time for jurisdictions, participants, and
grantees to incorporate HUD's income and asset requirements into their
own programs and flexibility to transition implementing HOTMA
requirements under their own timelines.
DATES: The compliance date for the final rule published February 14,
2023, at 88 FR 9600, is extended. 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 (NOFOs), are
not required to comply with the changes established by the HOTMA final
rule until January 1, 2026.
FOR FURTHER INFORMATION CONTACT: For HOME and the HTF, Milagro Fisher,
Senior Affordable Housing Specialist, Office of Affordable Housing
Programs, at telephone (202) 708-2684, Room 7160; for HOPWA, Lisa
Steinhauer, Senior Program Specialist, Office of HIV/AIDS Housing, at
telephone (215) 861-7651, Room 7248; for CDBG, 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
On February 14, 2023, HUD published the HOTMA final rule (88 FR
9600). The HOTMA final rule established a January 1, 2024, effective
date for the revisions it made to HUD's income regulations at 24 CFR
parts 5, 92, 93, 570, and 574. These revisions also affected CPD
programs subject to 24 CFR parts 576 and 578, as well as Competitive
Programs using NOFOs that reference the regulations at 24 CFR part 5.
On September 29, 2023, HUD's Office of Public and Indian Housing (PIH)
and Office of Housing (Housing) issued joint notification PIH 2023-27/H
2023-10, which enabled Public Housing Agencies (PHAs) and multifamily
owners to establish their own compliance dates for sections 102 and 104
of HOTMA as early as January 1, 2024, and no later than January 1,
2025. Similarly, on December 8, 2023, HUD published the Housing
Opportunity Through Modernization Act: Implementation of Sections 102,
103, and 104; Extension of Compliance Date (88 FR 85648) to extend the
compliance date of the HOTMA final rule to January 1, 2025, for all CPD
programs that use HUD's 24 CFR part 5 income regulations.
II. Further Extensions of the HOTMA Final Rule Compliance Date
On September 18, 2024, PIH announced that PHAs were not to
implement and comply with the section 102 and 104 income and assets
provisions in the HOTMA final rule by January 1, 2025. This extension
was due to delays in updating the HUD systems to comply with the rule.
Then, on September 20, 2024, Housing issued notification H 2024-09 to
announce that multifamily owners were not to implement and comply with
the HOTMA final rule until July 1, 2025. This was also due to delays in
updating the HUD systems to comply with the rule. Now, HUD has
determined that CPD grantees receiving assistance through CPD programs,
which often overlap with PIH and multifamily programs, must be provided
with certain flexibilities. HUD is communicating these flexibilities
through this document.
HUD's determination that these flexibilities are necessary was made
in light of the fact that CPD grantees may not be able to comply with
the requirements of the HOTMA final rule until after HUD has provided
the guidance and performed the software updates necessary for CPD
grantees to implement the HOTMA final rule. Even after the necessary
guidance is provided and updates to HUD systems are made, CPD grantees
will still need additional time to incorporate this guidance into their
program policies and procedures and to update their own systems and
software. Therefore, in recognition of these operational issues and
challenges, HUD is allowing CPD grantees to set their own compliance
dates for the applicable HOTMA final rule provisions. These compliance
dates may be as early as January 1, 2024, and no later than January 1,
2026. Until these new compliance dates, CPD grantees must continue to
adhere, as applicable, to the requirements found in both their program
regulations and the regulations at 24 CFR 5.603, 24 CFR 5.609, 24 CFR
5.611, and 24 CFR 5.617 as they existed prior to January 1, 2024.
Furthermore,
[[Page 106999]]
CPD grantees must continue to rely on the instructions provided in the
document published December 8, 2023 at 88 FR 85648 for implementing the
HOTMA final rule.
III. Implementation of the HOTMA Safe Harbor for ESG, COC Programs, and
HOPWA
The HOTMA final rule established an income safe harbor provision at
24 CFR 5.609(c)(3). This provision permits PHAs and multifamily owners
to determine the annual income of a family prior to the application of
any deductions applied in accordance with 24 CFR 5.611 based on income
determinations made under the rules of other Federal programs or means-
tested forms of Federal public assistance. On September 13, 2024, PIH
published updated HOTMA Implementation FAQs \1\ describing that PHAs
may implement the safe harbor provision at 24 CFR 5.609(c)(3).
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\1\ https://www.hud.gov/sites/dfiles/PIH/documents/PIH%20HOTMA%20Implementation%20FAQ%209.13.2024.pdf updated September
13, 2024.
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Now, HUD is allowing certain CPD grantees that have program
regulations that cross reference 24 CFR 5.609(c)(3) to use this safe
harbor provision prior to implementing the HOTMA final rule. Grantees
of the following CPD programs may use this safe harbor provision: HOPWA
(see 24 CFR 574.310(e)), ESG (see 24 CFR 576.401(c)), and the CoC
programs (see 24 CFR 578.77(b) and (c)). Before using this safe harbor
provision, grantees of these CPD programs must update their program
guidelines and establish policies and procedures that describe income
verifications when using this safe harbor provision. HUD is providing
these grantees, and specifically HOPWA grantees, the ability to use
this income safe harbor provision so that its CPD program guidance more
closely aligns with its Section 8 program guidance, as HUD's HOPWA
regulations closely track Housing Choice Voucher program regulations.
IV. Implementation of the HOTMA Safe Harbor for HOME and HTF
The HOTMA final rule also established separate safe harbor
provisions at 24 CFR 92.203(a)(1) and (2) and at 24 CFR 92.252(h) for
HOME and other safe harbor provisions at 24 CFR 93.151(a)(1) through
(3), and 24 CFR 93.302(e) for HTF. Under 24 CFR 92.203(a)(1) and 24 CFR
93.151(a)(3), a participating jurisdiction or HTF grantee must accept a
PHA's, owner's, or rental subsidy provider's income determinations, in
accordance with 24 CFR 5.609, if a family is applying for or living in
a HOME-assisted or HTF-assisted rental unit and the unit is being
assisted by Federal project-based rental subsidy. Similarly, a
participating jurisdiction or HTF grantee must accept a State project-
based rental subsidy provider's income determination under the rules of
that State program. In the same way, under 24 CFR 93.151(a)(1), for
HTF-assisted units that are assisted under the public housing program,
an HTF grantee must accept a PHA's determination of a family's annual
income and adjusted income under 24 CFR 5.609 and 24 CFR 5.611.
Moreover, under 24 CFR 92.203(a)(2) and 24 CFR 93.151(a)(2), a
participating jurisdiction or HTF grantee may accept a Federal tenant-
based rental assistance provider's income determinations if a family is
applying for or living in a HOME-assisted or HTF-assisted rental unit
and the family is being assisted by a Federal tenant-based rental
assistance program.
Now, HUD is allowing participating jurisdictions and HTF grantees
to use the safe harbor provisions in 24 CFR 92.203(a) and 24 CFR
92.252(h), or 24 CFR 93.151(a) and 24 CFR 93.302(e), prior to the new
HOTMA final rule compliance date and upon publication of this document,
even if they have not implemented the remaining provisions of the HOTMA
final rule. Before using the safe harbor provisions, participating
jurisdictions and HTF grantees must update their program guidelines and
establish policies and procedures that describe income verification
when using the safe harbor provisions. HUD is providing participating
jurisdictions and HTF grantees the ability to use these safe harbor
provisions so that its HOME and HTF guidance more closely aligns with
its other HOTMA final rule implementation guidance and to reduce the
administrative burden on CPD grantees associated with having to meet
two different sets of income requirements for the same unit.
V. Conclusion
Accordingly, HUD extends the January 1, 2025, compliance date for
implementing the changes made by the HOTMA final rule to 24 CFR parts
5, 92, 93, 570, and 574 for the CPD programs described in this document
until January 1, 2026. Until January 1, 2026, the grantees of these
programs subject to these parts may instead choose to comply with these
parts as they existed prior to January 1, 2024, and may also implement
the income safe harbor provisions described in this document.
Marion McFadden,
Principal Deputy Assistant Secretary for Community Planning and
Development, Office of Community Planning and Development.
[FR Doc. 2024-31401 Filed 12-30-24; 8:45 am]
BILLING CODE 4210-67-P