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HUD has issued Notice H 2024-09 delaying HOTMA for Multifamily Housing programs. The previous deadline to come into compliance that came from the most recent version of HUD Notice H 2023-10 was Jan. 1, 2025. Now, the new compliance deadline is July 1, 2025.
HUD is required by law to set Fair Market Rents (FMRs) every year. In general, the FMR for an area is the amount that a tenant would need to pay the gross rent (rent plus utilities) of privately owned, decent, and safe rental housing of a modest (non-luxury) nature with suitable amenities. The published FMRs represent HUD’s best effort to estimate the 40th percentile gross rent paid by recent movers into standard quality units in each FMR area.
2025 DDAs and QCTs are effective for LIHTC allocations made after Dec. 31, 2024.
HUD recently published a notice in the Federal Register establishing 2025 difficult development areas (DDAs) and qualified census tracts (QCTs) for purposes of the low-income housing tax credit (LIHTC). HUD is required to designate these areas under Internal Revenue Code Section 42. Both QCTs and DDAs are eligible for an increase in basis and available tax credits of up to 30 percent for new construction and rehabilitation costs.
In the last issue, we highlighted a letter concerning rising insurance costs from a broad coalition of housing providers to members of Congress and the Biden administration. The letter highlighted the fact that as of the fourth quarter 2023, U.S. property insurance rates have increased for 25 consecutive quarters. And U.S. casualty insurance rates have increased for 17 consecutive quarters.
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