HOTMA Compliance Extension:

• New deadline: January 1, 2027 (extended from January 2026)
• Affects income and asset calculation rules for HUD-assisted households
• Impacts asset limits, income exclusions, hardship exemptions
• Multifamily owners have 12 months to update systems and train staff

Other HUD Updates for 2026:

• 2026 Annual Inflationary Adjustments and Passbook Rate published (effective January 1, 2026)
• FY2026 Annual Adjustment Factors (AAFs) released for Section 8 PBRA contract rents
• Updated Qualified Census Tract (QCT) and Difficult Development Area (DDA) designations for LIHTC
• $129.9 million in Family Self-Sufficiency (FSS) grants awarded to 713 PHAs and owners

Property managers should use this extension to refine HOTMA implementation and ensure staff are fully trained before the new deadline.

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Affordable HOMES Act Key Provisions:

• Passed House 263-147 with 57 Democrats joining Republicans
• Restores HUD authority over manufactured housing energy standards
• Repeals pending DOE energy efficiency rule for manufactured homes
• Estimated $10,000 cost reduction per manufactured housing unit
• Bill now heads to Senate where bipartisan support expected

Related Legislation - Housing in the 21st Century Act:

• Modernizes building codes nationwide
• Increases allowable height for single-stairway buildings from 5 to 6 stories
• Enables more density in mid-rise urban infill projects

For affordable housing developers, manufactured housing components become more viable in LIHTC and subsidized developments, particularly for rural and workforce housing projects.

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GSE LIHTC Investment Expansion:

• Fannie Mae: Cap increased from $1 billion to $2 billion annually
• Freddie Mac: Cap increased from $1 billion to $2 billion annually
• Total GSE LIHTC investment capacity: $4 billion per year

Targeting Underserved Markets:

• 50% of allocations dedicated to underserved markets
• 20% of underserved allocation (10% of total) targeted to rural communities
• Addresses persistent equity gap in secondary and tertiary markets

For rural developers and sponsors working outside major metros, this represents a game-changing capital source. The expanded GSE presence should also help stabilize LIHTC pricing and improve terms for developers across all markets.

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FY2026 Section 8 Funding Proposals:

• House bill: Cuts assistance to 181,900 households
• Senate bill: Cuts assistance to 107,800 households
• Current program serves 2.4 million households—only 1 in 4 who qualify
• Continuing resolution funds program only through January 30, 2026

Proposed Policy Changes:

• Two-year time limits on rental assistance for able-bodied adults
• Stricter income verification requirements
• Potential restrictions for families with undocumented members
• Possible shift to state-managed block grants
• Elderly and disabled exempted from time limits

Property owners with significant voucher exposure and housing authorities should plan for potential volatility in the Section 8 program.

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Key LIHTC Changes in the OBBBA:

• Permanent 12% increase in 9% LIHTC allocations beginning 2026
• Bond financing threshold lowered from 50% to 25% for 4% LIHTC rehabilitation projects
• Estimated 80,000 additional affordable units from 9% credit expansion through 2035
• Over 1 million additional affordable rental homes projected from bond threshold change

State-by-State Impact:

• California: 200,000 new units projected through 2035
• Georgia: 98,000 new units
• Texas: 97,000 new units

For LIHTC developers, syndicators, and tax credit investors, the math on 4% acquisition-rehab deals just got significantly better. Properties placed in service after December 31, 2025 qualify under the new rules.

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