HOTMA Asset Limits and Restrictions for Assisted Housing

Under the Housing Opportunity Through Modernization Act of 2016, HOTMA asset limits cap a family’s countable net assets at $105,574 for 2026 and generally bar families from owning a home suitable for them to live in while receiving federal housing assistance. These rules apply across Public Housing and Section 8 programs, including Housing Choice Vouchers. Many common assets, including retirement accounts and necessary personal property, are excluded from the calculation, and several exceptions soften the property rule.¹²

The 2026 Net Asset Cap

The ceiling starts at a statutory base of $100,000 and is adjusted annually for inflation. The 2026 figure of $105,574 takes effect January 1, 2026. If countable assets exceed that amount, the housing agency cannot provide assistance, whether the family is applying for the first time or going through a scheduled income reexamination.¹²

“Net family assets” means the cash value of what a family owns, minus reasonable costs to convert those holdings into cash. Savings accounts, stocks, bonds, brokerage accounts, and real estate equity all fall inside that definition. Reasonable conversion costs include brokerage fees, legal expenses, and early withdrawal penalties. Not every dollar counts, though. Federal rules exclude entire categories of assets, and those exclusions are the reason many families with meaningful savings still qualify.³

The Real Property Restriction

Separate from the dollar cap, families receiving assistance generally cannot own residential property suitable for them to live in. Three conditions have to be present for the restriction to bite: the family has an ownership interest, has a legal right to reside there, and has the legal authority to sell the property under applicable law.¹

Four exceptions carve out situations where the restriction does not apply regardless of the property’s value:

The property is actively offered for sale at fair market price.
A family member is a victim of domestic violence, dating violence, sexual assault, or stalking.
A family member co-owns the property with someone outside the household who actually lives there.
The family receives Housing Choice Voucher assistance for a manufactured home or is participating in the Homeownership Option.

When a Property Is Not Suitable to Live In

Even without one of the exceptions above, a family can argue the property is not suitable for occupancy. Regulations presume a property is suitable unless the family shows otherwise, and list five grounds for unsuitability:

The property does not meet a family member’s disability-related needs, such as wheelchair access or proximity to accessible transportation.
The property is too small for the family.
The location would impose real hardship, for example an unreasonable commute to work or school.
The physical condition is unsafe and the problems are not easily fixable.
State or local law prohibits the family from residing there, such as a commercial-only zone.

The housing agency makes the final call. Documentation matters: medical records, floor plans, code violations, or zoning letters can support the family’s position.¹

Assets That Do Not Count

The exclusion list in 24 CFR 5.603(b)(3) is broad. Retirement accounts recognized by the IRS, including 401(k) plans, traditional and Roth IRAs, employer pensions, and self-employment retirement plans, are fully excluded no matter the balance.³

Education and disability savings accounts also stay out of the calculation: 529 college savings plans, Coverdell education savings accounts under IRC Section 530, and ABLE accounts under IRC Section 529A. Baby bond accounts created or funded by any level of government are excluded too.

Necessary personal property is excluded outright. HUD treats items as necessary when they support employment, education, or health and wellness. A car used for commuting, professional tools, and medical devices all qualify. Non-necessary personal property, such as a recreational boat or a collectible, is excluded as long as the combined value of all such items stays below $52,787 for 2026. Once that threshold is crossed, the full amount counts toward net family assets.³²

The rest of the exclusion list covers trusts that no family member can revoke or control, interests in Indian trust land, equity in a manufactured home where the family receives Section 8 voucher assistance, equity in property under the Homeownership Option, Family Self-Sufficiency program accounts, civil lawsuit recoveries tied to a disability caused by malpractice or negligence, and federal tax refunds for twelve months after receipt.³

The Two-Year Lookback on Assets You Gave Away

Transferring assets out of your name does not remove them from the calculation. Housing agencies look back two years from the date of application or reexamination and count the difference between what an asset was worth and what the family actually received for it. Sell a $30,000 car for $5,000, and the agency adds $25,000 to net assets. Moving property into a trust that a family member controls counts as a disposition as well.³

Three situations are carved out of the below-market rule:

Assets lost through foreclosure or bankruptcy sale.
Property divided as part of a divorce or separation settlement, if the family member received something of value that cannot be measured in dollars, such as custody arrangements.
Transfers into an IRS-recognized retirement account held by a family member.

The lookback continues to run during any cure period, so moving money to a relative to come back under the cap does not work.⁴

How Assets Affect Rent

Each asset’s cash value is its current market price minus reasonable liquidation costs. For real estate, that means market value minus mortgage balance and estimated selling costs. When a family’s total net assets exceed $52,787 for 2026 and the actual return on a particular asset cannot be determined, the agency calculates imputed income using HUD’s passbook savings rate of 0.40% for 2026. If actual income from the asset (interest, dividends, rental income) is higher than the imputed figure, the agency uses the actual number instead. Below $52,787 in net assets, no imputed income is added.⁵²

Self-Certification and Verification

Families with net assets at or below $52,787 can self-certify their totals. Instead of producing bank and investment statements every year, the head of household signs a sworn statement affirming the numbers. Self-certification is permitted at move-in and during two out of every three annual reexaminations.⁶²

At least once every three years, and any time the agency has reason to doubt the self-certification, the family must provide full third-party documentation: account statements, tax forms, and similar records. Misrepresenting values or refusing to produce documents can terminate assistance. Knowingly making false statements to a federal housing program can also trigger criminal liability under 18 U.S.C. § 1001, which carries fines and up to five years in federal prison.⁶⁷

If You Go Over the Limit

Exceeding the cap does not always mean immediate loss of housing. Under 24 CFR 5.618(c), an agency may decide not to enforce the asset and property restrictions at all, or may adopt exception policies that weigh factors like age, disability, income level, and access to alternative housing. Any such policy must comply with fair housing laws.¹

When an agency does enforce the limit, it may delay eviction or termination for up to six months to let the family cure the non-compliance. Legitimate ways to spend down include paying off debt, contributing to excluded retirement accounts, or covering medical expenses. Transferring wealth to a relative does not work, because the two-year lookback still applies during the cure window. Contact the housing agency early rather than waiting for a termination notice.¹

Appealing a Denial or Termination

Families denied admission or facing termination over the asset rules have the right to an informal hearing. The agency must send prompt written notice of the adverse decision that includes the deadline for requesting a hearing. Federal regulations do not set a universal deadline; each agency sets its own in its Administrative Plan, so read the notice carefully and act quickly.⁸

At the hearing, families have several protections:

The family can examine and copy any agency documents directly relevant to the case before the hearing. If the agency refuses, it cannot rely on those documents at the hearing.
The family may bring a lawyer or other representative at their own expense.
Both sides can present evidence and question witnesses. Formal rules of evidence do not apply.
The hearing officer must issue a written decision with stated reasons, based on the preponderance of the evidence.

The hearing matters most when the dispute turns on facts: whether a property is suitable for occupancy, how a particular asset should be valued, or whether a past transfer really was below fair market value. Bring the documents.⁸

1
eCFR. 24 CFR 5.618 – Restrictions on Assistance to Noncitizens
2
HUD User. 2026 HUD Inflation-Adjusted Values
3
eCFR. 24 CFR 5.603 – Definitions
4
HUD Exchange. HOTMA Assets, Asset Exclusions, and Limitation on Assets Resource Sheet
5
eCFR. 24 CFR 5.609 – Annual Income
6
HUD Exchange. HOTMA Resident Fact Sheet – Asset and Real Property Limitations
7
Office of the Law Revision Counsel. 18 USC 1001 – Statements or Entries Generally
8
eCFR. 24 CFR 982.555 – Informal Hearing for Participant