New Section 8 Rules: Asset Limits, NSPIRE, and SAFMRs

Two federal overhauls now govern the Housing Choice Voucher program, and together they are the new Section 8 rules that every tenant and applicant needs to understand. The Housing Opportunity Through Modernization Act (HOTMA) rewrote how housing authorities count your income, value your assets, and calculate your rent share, with full implementation required by January 1, 2024.¹ The National Standards for the Physical Inspection of Real Estate (NSPIRE) replaced the older Housing Quality Standards, changing what an inspector looks for and how quickly your landlord must fix problems. A third change, the expansion of Small Area Fair Market Rents, lets voucher payment amounts vary by zip code instead of averaging across an entire metro area.

The $100,000 Asset Limit

Your household cannot hold more than $100,000 in net family assets and keep voucher assistance. The cap adjusts annually for inflation.² Net family assets include the cash value of bank accounts, stocks, bonds, certificates of deposit, and equity in real property, minus the reasonable costs of converting those assets to cash. If your household crosses the limit at any point — annual review, interim review, or initial application — the housing authority must deny or terminate assistance.³

Some assets are excluded. Funds held in IRS-recognized retirement accounts, including 401(k)s, IRAs, and 403(b) plans, do not count.⁴ Income earned inside those accounts is also excluded, though any withdrawal is counted as income when you take it. ABLE accounts and educational savings accounts are excluded too.

Owning a Home That You Could Live In

Owning a home suitable for your family to live in generally disqualifies you from voucher assistance. The rule applies when you have an ownership interest, a legal right to live in the property, and the legal authority to sell it under your state’s laws.² All three conditions must be true, so partial or disputed ownership may not automatically disqualify you.

Four exceptions let you keep assistance even while owning livable property:

Any family member who is a victim of domestic violence, dating violence, sexual assault, or stalking is exempt.
If you have the home actively listed for sale, you remain eligible while the sale is pending.
Families already receiving voucher homeownership assistance for that property are not affected.
If a non-household member co-owns the property with you and lives in it, the restriction does not apply.

These exceptions come from the federal regulation itself, so your housing authority cannot override them with a local policy.²

When You Can Self-Certify Assets

If your total net family assets are below $50,000 (adjusted annually), you can self-certify by declaring the total value of your assets and the income they generate on a simplified form.² Your housing authority may accept that self-certification at move-in and for two out of every three years afterward. Regardless of your asset level, the housing authority must fully verify your assets with third-party documentation at least once every three years.⁴

If your assets exceed $50,000, self-certification is not an option. You will need bank statements, investment reports, and property valuations for every account and holding. Falsifying any of this information can end your voucher and, in serious cases, lead to federal fraud charges.

How Income Is Counted Now

HOTMA kept the basic principle — count all income received by household members age 18 and older (plus the head of household and spouse regardless of age), along with unearned income received on behalf of minor dependents — but expanded what gets excluded.

Excluded income now includes nonrecurring payments such as tax refunds, economic stimulus payments, and certain gifts. Lump-sum additions to assets, insurance settlements, civil rights judgments, and income earned inside retirement accounts are excluded too. Student financial assistance and income from ABLE accounts don’t count. But any distribution you take out of a retirement account is counted as income when it comes to you.⁵

The imputed-income threshold changed too. Under the old rules, imputed income kicked in when assets exceeded $5,000. HOTMA raised that to $50,000. Below $50,000 in assets, only actual income from those assets (interest, dividends) counts. Above $50,000, if you cannot document the actual income from some of your assets, the housing authority applies the HUD-published passbook savings rate. For 2026, that rate is 0.40 percent.⁶

Deductions That Lower Your Rent Share

Your rent is calculated from adjusted income, not gross income. HOTMA updated several deductions.

Dependent deduction: each dependent reduces countable income by $500 for 2026, adjusted annually.⁷

li>Elderly or disabled family deduction: a household headed by someone age 62 or older, or a person with a disability, gets a flat $550 deduction for 2026.⁶

Medical expense deduction: elderly and disabled families can deduct unreimbursed medical costs above a percentage of annual income. HOTMA phased in a new threshold — 5 percent in year one, 7.5 percent in year two, 10 percent from year three onward. Households already receiving the deduction before January 1, 2024 got the phase-in automatically.
Childcare deduction: childcare costs are deductible when the care allows a family member to work, look for work, or attend school.⁸

Hardship Exemptions

If the new medical expense threshold would cause severe financial strain, you can ask the housing authority for a hardship exemption. The childcare deduction has its own hardship path: if you were already receiving the deduction and losing the childcare would create a genuine hardship, the deduction can continue even when you are no longer working or in school. Hardship exemptions run in 90-day periods and can be extended as long as the hardship continues.⁸

Reporting Income Changes Between Reviews

You do not wait for the annual reexamination. Housing authorities must conduct an interim reexamination whenever your adjusted income rises or falls by 10 percent or more.⁹ A decrease should lower your rent portion; an increase may raise it. Changes under 10 percent are not federally required to trigger a review, though local policy may still call for one.

One quirk: your housing authority can decline to process an income increase that happens in the last three months before your regular annual reexamination, picking it up at the scheduled review instead. Income decreases at or above the 10 percent threshold must always be processed promptly.

NSPIRE: What Inspectors Now Look For

NSPIRE evaluates three areas: the individual unit, the building interior (hallways, stairwells, common areas), and the property exterior. An inspector will look beyond your apartment at the overall condition of the building and grounds.¹⁰

Smoke Alarms and Carbon Monoxide Detectors

Smoke alarms are required in every bedroom, outside each sleeping area, and on every level of the unit including the basement. Alarms must be hardwired or use sealed, tamper-resistant batteries and must meet the UL 217 standard.¹⁰ That is a step up from the older Housing Quality Standards, which were less specific about placement and battery type.

Carbon monoxide detectors are required in any unit with a fuel-burning appliance (gas stove, furnace, water heater, fireplace) or an attached garage. They must be installed outside each sleeping area and on every level where fuel-burning equipment is present. If a fuel-burning appliance sits inside a bedroom, a detector must be placed in that bedroom as well.

Deficiency Levels and Repair Deadlines

NSPIRE sorts every finding into one of four severity levels, each with a correction deadline:

Life-threatening: high risk of death, such as exposed electrical wiring carrying more than 50 volts or a gas leak. The landlord has 24 hours to fix these.¹¹
Severe: high risk of serious injury or permanent disability, such as large-scale mold (more than four square feet on a single surface) or a missing temperature pressure relief valve on a water heater. In the HCV program, landlords get 30 days.¹¹
Moderate: conditions that could cause temporary harm or worsen a chronic health condition. These also carry a 30-day window in HCV units.
Low: problems critical to habitability but without a substantial immediate health risk. These get 60 days in public housing and multifamily programs.¹²

Miss the deadline on a life-threatening, severe, or moderate deficiency and the housing authority must begin enforcement. That can mean withholding or fully abating housing assistance payments, terminating the landlord’s contract, or relocating the tenant to a passing unit.¹¹ Housing authorities have no discretion to waive enforcement once a deadline passes.

Small Area Fair Market Rents by Zip Code

Traditional Fair Market Rents average across an entire metropolitan area, so a voucher would cover the same maximum rent in high-cost and low-cost neighborhoods alike. Small Area Fair Market Rents (SAFMRs) set payment limits at the zip-code level. HUD requires their use in 65 designated metropolitan areas, and other housing authorities can opt in.¹³

Housing authorities set their payment standard anywhere between 90 and 110 percent of the applicable Fair Market Rent. In areas not designated for mandatory SAFMR use, an authority can still set exception payment standards up to 110 percent of the zip-code SAFMR, or up to 120 percent if it meets HUD criteria.¹⁴ For families with a disabled member, the authority may set a payment standard up to 120 percent of the applicable FMR as a reasonable accommodation without needing HUD approval.

Hold Harmless When a Payment Standard Drops

Payment standards can go down if rents in your zip code decline. A hold-harmless protection prevents sudden rent spikes for tenants already in place. If the payment standard for your zip code decreases while you stay in the same unit, the housing authority freezes your existing payment standard at the higher level.¹⁵ You must also receive written notice at least 12 months before any reduced payment standard takes effect.

The frozen payment standard holds until one of three things happens: the new zip-code rate catches up to or exceeds the frozen level, you move to a different unit, or a change in household composition requires a different voucher bedroom size at your next annual reexamination.

1
U.S. Department of Housing and Urban Development. HOTMA Resources
2
eCFR. 24 CFR 5.618
3
U.S. Department of Housing and Urban Development. HOTMA Net Family Assets
4
HUD Exchange. HOTMA Resident Fact Sheet: Asset and Real Property Limitations
5
U.S. Department of Housing and Urban Development. HOTMA: Determining Income
6
HUD USER. 2026 HUD Inflation-Adjusted Values and Passbook Rate
7
U.S. Department of Housing and Urban Development. Notice PIH 2026-15
8
HUD Exchange. HOTMA Resident Fact Sheet: Health, Medical, and Childcare Deductions
9
HUD Exchange. Interim Income Reexaminations Resource Sheet
10
Federal Register. National Standards for the Physical Inspection of Real Estate: Inspection Standards
11
U.S. Department of Housing and Urban Development. Notice PIH 2024-26 Rev-1
12
U.S. Department of Housing and Urban Development. NSPIRE Terms and Definitions
13
U.S. Department of Housing and Urban Development. Small Area Fair Market Rents (SAFMRs)
14
U.S. Department of Housing and Urban Development. HCV Guidebook: Payment Standards
15
HUD Exchange. SAFMR Sample Administrative Plan Language: Hold Harmless