Skip to main content

New Rule: Department of Housing and Urban Development Housing Opportunity Through Modernization Act (HOTMA)

Submitted by ejenn on Mon, 02/27/2023 - 16:44
Image
New Rules HOTMA

NSSTA is proud to report a major new federal regulatory development now establishes the ability to receive a structured settlement without jeopardizing housing assistance provided by the federal government.  In 2019, John McCulloch with IFS led the effort with NSSTA and the American Association of People with Disabilities (AAPD) to encourage the Department of Housing and Urban Development (HUD) to add new income exclusion language to the “Housing Opportunity Through Modernization Act.” 

This week the Department of Housing and Urban Development (HUD) announced it now excludes from income any amounts a family may receive from civil rights settlements or judgments, regardless of how the settlement or judgment is structured. This reflects that sometimes settlements or judgments of this nature are not lump-sum payments but may have a payment schedule.  Thanks to John McCulloch, NSSTA, and AAPD, many families no longer have to choose between financial security and having a roof over their heads.

In 2019 NSSTA prepared a Response to Proposed Rulemaking: Housing Opportunity Through Modernization Act of 2016: Implementation of Sections 102, 103, and 104.  On Tuesday, February 14, 2023, the Federal Department of Housing and Urban Development (HUD) announced it is adding a new income exclusion in § 5.609(b)(25) that broadly excludes from income any amounts the family may receive from civil rights settlements or judgments regardless of how the settlement or judgment is structured. This reflects the fact that sometimes settlements or judgments of this nature are not lump-sum payments but instead may have a payment schedule.

The new HUD ruling states: “As discussed above, because there has been some confusion, HUD is adding an exclusion in § 5.609(b)(25) to make clear HUD's existing practice of excluding civil rights settlements or judgments, including settlements or judgments for back pay. The wording of this exclusion reflects the fact that resolutions of civil rights matters may be structured settlements instead of lump-sum payments.”

Click here to read the 2019 letter to the Department of Housing and Urban Development from NSSTA and AAPD. 

 

Click here to read the new Department of Housing and Urban Development “HOTMA” Rule.