Regulatory Updates from the Housing Credit Module at HFA Institute

The National Council of State Housing Agencies (NCSHA) hosted its annual HFA Institute from January 12 to 17, 2025, in Washington, DC. This comprehensive event featured four program-specific modules, with the Housing Credit module taking place from January 14 to 16. During this module, many sessions were available that addressed everything from housing credit compliance and development to recent regulatory updates.

The implementation of HUD’s Housing Opportunity Through Modernization Act (HOTMA) and the National Standards for the Physical Inspection of Real Estate (NSPIRE) is bringing significant changes to the affordable housing landscape. In several discussions led by industry experts, key strategies for navigating these updates were outlined, emphasizing the importance of compliance and adaptability. These sessions offered actionable insights for housing professionals. Here’s a closer look at the highlights, challenges, and strategies for success in this evolving regulatory environment.

HOTMA Implementation Strategies

For a discussion on HOTMA implementation strategies, Jillian Toole, Senior Policy and Strategy Manager for the Georgia Department of Community Affairs, was joined by several key players in affordable housing compliance to discuss how to implement HOTMA at Multifamily housing sites. They also provided a breakdown between Required and Discretionary policies. With Asset Limitation, for example, it is required to deny admission if family has more than $103,200 in net family assets OR if they own a disqualifying piece of real property. However, choosing to enforce policy upon annual or initial recertification is will be discretionary under HOTMA.

One challenge of HOTMA implementation denoted by the panel is the large-scale revisions HUD Multifamily Housing sites must undertake for their Tenant Selection Plans and EIV Policies & Procedures. Additionally, new HOTMA guidance adds new provisions to compliance and management as well as changes prior guidance. Panelists also provided clarification on mandatory policies, such as asset limitations and de minimis errors. You can view the presentation materials here.

Visit the HUD website to stay up-to-date on the latest HOTMA changes.

Physical Inspections Under the NSPIRE Protocol

Susan Westbrook, Manager of Rental Assets at North Carolina Housing Finance Agency, led a discussion on the National Standards for the Physical Inspection of Real Estate (NSPIRE) featuring panelists from the U.S. Department of Housing and Urban Development  (HUD), US Housing Consultants and Zeffert & Associates.

This session provided attendees a comprehensive understanding of the implementation timeline for NSPIRE and new scoring procedures. Panelists also reflected on NSPIRE one year in. Here are some highlights:

• Out of the top 10 defects causing the largest score deductions, 6 are Life-Threatening. The largest is “Exposed electrical conductor” with a deduction of 14.73 points per 100 units inspected.
• Out of the top 10 most commonly cited defects, 2 are Life-Threatening. The most common is “Smoke alarm is not installed where required” with an average defect count of 16.25 citations per 100 units inspected.
• Electrical, Egress, and Fire Safety defects impacted NSPIRE scores more than other types of defects.

You can view the presentation materials here.

The Housing Credit module at HFAi provided an in-depth look into the evolving regulatory landscape of affordable housing. The discussions on HOTMA and NSPIRE underscored the critical need for housing professionals to stay informed and adaptable. By embracing these changes and implementing the strategies shared by industry experts, stakeholders can effectively navigate the complexities ahead, ensuring continued compliance and the provision of quality affordable housing. Staying engaged with ongoing regulatory updates and participating in future industry events will be essential for success in this dynamic environment.