HOTMA introduced something HUD-assisted housing never had before: an enforceable cap on household assets. Families with net family assets above $100,000 (indexed annually for inflation, so check the current figure) — or with ownership of a suitable home — face restrictions on admission and continued occupancy. Here's how to apply it without generating findings.
Who the limit applies to
The asset limitation applies at admission (applicants over the limit can be denied) and at recertification (existing tenants over the limit are subject to your property's enforcement or non-enforcement policy, within the discretion HUD allows). Your Tenant Selection Plan and policies must state how your property handles each scenario — silence is itself a finding.
Calculating "net family assets" under HOTMA
HOTMA also changed what counts as an asset. Key points staff miss:
- Retirement accounts are excluded from net family assets in most cases
- Real property the family could legally sell counts; the "suitable for occupancy" home ownership test is separate from the dollar cap
- Personal property below the threshold isn't counted item-by-item
- Necessary items and certain trusts are excluded
Applying pre-HOTMA asset worksheets to a post-HOTMA file is one of the most common ways properties fail this test.
Discretion and documentation
HUD gave owners flexibility in enforcing the limit for in-place tenants, including delayed enforcement options. Whatever you choose, the compliance requirement is the same: your written policy must match your actual practice, and each affected file must document the asset determination and the action taken.
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FAQ
Is the limit exactly $100,000? That's the base figure; HUD indexes it annually for inflation. Always verify the current year's amount before denying anyone.
Does owning any home disqualify a family? Only ownership of a home suitable for occupancy triggers the restriction, and there are exceptions (e.g., domestic violence situations, homes the family cannot legally occupy or sell).
Do retirement accounts count toward the limit? Generally no — HOTMA excluded retirement accounts from net family assets. This is one of the biggest changes from the old rules.
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