HOTMA section 102 reaches 202 PRAC, but section 104 - the asset limits and the 100,000 dollar cap - EXPRESSLY DOES NOT

s202prac.income_calculation.hotma_section_102_applies_but_the_section_104_asset_limits_do_not · v1.0.0

This is a boundary that costs real money to get wrong, and the HUD Occupancy Handbook 4350.3 REV-1 CHG-4 (2013) cannot resolve it because it predates HOTMA entirely. Notice H 2023-10 / PIH 2023-27 Revision 3 (issued 16 April 2026) draws the line in its Background section. SECTION 102 of HOTMA - the income definition, the interim reexamination thresholds, the safe harbours, the streamlined determinations - APPLIES to the Section 202/811 Capital Advance with Project Rental Assistance Contract programme, effective 1 January 2024. SECTION 104 of HOTMA - the asset limitation, the 100,000 dollar net family asset ceiling and the real-property restriction - DOES NOT APPLY to 202/811 PRAC. The notice names the programme in the excluded list expressly. An owner that imposes a HOTMA asset limit on a PRAC applicant is applying a rule that does not exist for this programme. Compliance timing follows section 6.2 of the same notice: owners had to update Tenant Selection Plans and EIV policies by 31 May 2024 and make the revised plan publicly available, but continue under the existing plan until their software is TRACS 203A compliant; before 1 January 2027 Contract Administrators issue observations with corrective actions rather than findings at MORs; from 1 January 2027 full compliance is mandatory, earlier observations must have been corrected, and failure to implement may put the owner in default of its business agreements with HUD.

Confidence

high

Effective from

2024-01-01

Compliance date

2027-01-01

Consequence model

agency finding with cure

Last reviewed

2026-08-22