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HOTMA Voucher Final Rule

Impact on PHAs and HCV Programs

By on Feb 26, 2025 in News

As you know, the U.S. Department of Housing and Urban Development (HUD) is constantly keeping us on our toes and for good reason. The HOTMA voucher final rule introduces changes as part of a collective effort to enhance housing stability and address rising rents. For Public Housing Agencies (PHAs), keeping up with HUD changes is key to staying compliant and providing the best possible support to families. 

Family of three reviews housing option on their laptop, representing how the HOTMA voucher final rule improves access to affordable housing

Gabrielle Van Horn, senior director at Yardi and an expert in PHA compliance and operations, explains, “Our goal at Yardi is to help PHAs navigate HUD’s evolving requirements. The latest changes reflect greater flexibility and responsiveness in the HCV program.”

Let’s take a closer look at these recent changes and how they may impact your agency.

Notice PIH 2024-34

HUD recently released Notice PIH 2024-34, which provides guidance for PHAs on Housing Choice Voucher (HCV) payment standards as part of HOTMA voucher final rule. These changes are mandated by the Housing Opportunity Through Modernization (HOTMA) Act of 2016 and are designed to increase flexibility and equity in the HCV program.

Relevant changes include how PHAs manage increases and decreases in payment standards, as well as adjustments to family composition and voucher size.

Payment standard increase

Under the notice, PHAs are now required to implement increases in payment standards during interim reexaminations, rather than waiting until annual reexamination or when moving into a new unit. This adjustment allows families to get help faster when rents go up.

If the payment standard increases for households under a Housing Assistance Payments (HAP) contract, they will get the benefit of the new payment standard at the earliest of:

  1. A change in the gross rent or family share
  2. An interim or annual reexamination
  3. One year after the effective date of the new payment standard

By aligning payment standards with current market rents sooner, people have a better chance of securing affordable housing and avoiding displacement.

Payment standard decrease

The notice also revised how PHAs can manage decreases in payment standards. Agencies now have two main options:

  1. Hold Harmless Policy: Households can keep the higher payment standards as long as they remain in their current unit. This protects tenants from sudden rent increases due to a reduced subsidy.
  2. Two-Year Phase-In: If the hold harmless option is not applied, PHAs must wait two years from the effective date of the payment standard change. HUD also requires that the PHA notify tenants about the upcoming decrease no later than 12 months before the decrease is applied. This way, tenants have time to plan accordingly.

Family composition changes and voucher size

An important update concerns changes in family composition. If a household loses or gains family members, PHAs must adjust the voucher accordingly. This ensures the rental assistance accurately reflects the household’s current needs.

Another change allows agencies to consider current voucher size when determining the payment standard during an interim reexamination. Previously, payment standards did not change during an interim reexamination, and voucher size changes were only considered during annual reexaminations.

Final remarks

The HOTMA voucher final rule offers greater flexibility for households to adjust to payment standard updates. They also help PHAs ensure that assistance remains fair and effective while making the best use of resources.

Yardi is here to help you navigate these changes with solutions like Yardi Voyager 8, which is designed to ensure all your compliance measures are met.

Stay ahead of future HUD changes — explore our PHA solutions.