Updated July 2025

Disclaimer:

  • MRI is not providing a comprehensive list of HUD/compliance changes.
  • Any compliance changes noted herein may not apply to all agencies, programs or organizations. 
  • News is changing daily so please keep an eye out on the HUD website for updates.

Public Housing Compliance Updates

HOTMA (Housing Opportunities through Modernization Act)
  • Certain provisions of HOTMA, specifically Sections 102 and 104, have a compliance date of July 1, 2025. However, many provisions are on hold due to existing PIC errors and the inability to make changes to IMS PIC.
  • A blog post from Nan McKay provides a clear outline of what must be done, what may be done, and what is on hold. The blog post is particularly useful for understanding the current status of HOTMA provisions and what actions need to be taken by agencies. Click here to access other resources from Nan McKay's HOTMA Resource Page.
    • What must be done: These are the provisions that are mandatory and have a compliance date.
    • What may be done: These are optional provisions that agencies can choose to implement.
    • What is on hold: These are provisions that cannot be implemented due to existing PIC errors and the inability to make changes to IMS PIC.
HIP (Housing Information Portal)
  • Experiencing delays and issues with the HIP test site, including performance issues and the resignation of key team members.
    • Resignation of Key Team Members: At the beginning of January, it was announced that some high-level team members specifically working on HIP had resigned. This has put vendor meetings on hold and created uncertainty about the project's future.
    • Performance Issues: The HIP test site was experiencing significant performance issues. The validation process for submissions to HIP was taking about 30 seconds per 50058 form, which was not feasible given the volume of submissions (about seven million 50058s on PIC daily). This led to the decision to push the test site availability to at least April.
    • Executive Order for Gender DEI Changes: Due to an executive order for gender/DEI changes, the 2024 HUD 50058 form and the technical reference guide were pulled from the HUD site in late January. This means that software developers cannot write the necessary changes to make the new form submit to HIP because the technical reference guide, which serves as a map for data submission, is unavailable.
    • Unavailability of the Test Site: The test site for HIP is still unavailable, and vendor meetings have been on hold for about a month. Without key members who were advocates for the agencies and vendors, the status of the HIP team is uncertain.
  • These issues have created a state of flux for the HIP project, and it is unclear when the test site will be available or when the project will move forward.
NSPIRE (National Standards for Physical Inspection of Real Estate)
  • Agencies can currently implement NSPIRE Voucher if they want to, although the required date is October 1, 2025.
Public Housing Product Updates
  • All Public Housing software packages are up to date to meet the 2024-38 PIH notice.
  • PHA Pro, Lindsay Software, Tenmast: These software packages did not require changes to support PIH Notice 2024-38. They are ready to implement the minor policy changes outlined in the notice, which must be implemented by July 1, 2025.
  • HIP Readiness: All software packages are prepared to test with the original 50058 form, but the 2024 version is on hold due to the lack of a final technical reference guide.
  • HOTMA Changes: The implementation of HOTMA changes is on hold until the new version of the 2024 form and HIP are ready.

Affordable Housing Compliance Updates

HOTMA (Housing Opportunities through Modernization Act)
  • Implementation of Sections 102 and 104 of HOTMA have a compliance date of January 1, 2026; however, many provisions are on hold due to existing PIC errors and the inability to make changes to IMS PIC.
  • The provisions available to implement in PIH Notice 2024-38 are those that have no real impact on the 50058 rent calculations. These are more agency policy changes.
TRACS 203A
  • The specification guide for TRACS 203A was rescinded in October, with new dates set for January, March, and April. HUD has indicated that full compliance is expected by January 2026.
  • Compliance Timeline: Normally, HUD provides six months' notice before requiring full compliance. However, based on conversations with HUD, it is expected that the compliance date may be changed.
  • Program Enhancements: We have made 65 program enhancements, equating to almost a year's worth of work, to ensure compliance with TRACS 203A.
  • Gender/DEI Policies: There are questions about whether the new gender options will need to be removed due to DEI policies.
    • Current DEI Administration Protocol: For example, the 50059 field 44 now includes two more variables: "owner agent didn't ask for the gender" and "non-binary".
  • Waiting for Specifications: Waiting for updated forms, specifications, and OMB approval before finalizing the rollout plan and providing training.
  • We are prepared to implement the changes quickly and efficiently once the specifications are released.
About the HUD Website
  • Removal of Previous Specifications: HUD has removed all previous specifications from their website. This means that even if they wanted to refer back to the previous specifications for TRACS 203A and HOTMA, they cannot do so because the pages are no longer available.
  • Waiting for Updated Forms and Specifications: We are waiting for updated forms, specifications, and OMB approval before they can finalize the rollout plan and provide training. This delay is causing uncertainty and hindering progress.
Affordable Housing Product Updates
  • Compliance with Regulatory Guidelines: Compliance with regulatory guidelines is always the top priority. This includes ensuring that all affordable housing products meet the necessary regulations and standards.
  • Parity Between Bostonpost and MRI Affordable Housing: There is a focus on ensuring parity between Bostonpost and MRI Affordable Housing. This means that whatever can be done in Bostonpost should also be possible in MRI Affordable Housing, with the goal of making the systems better, faster, and more efficient.
  • Enhancing the Product: Product enhancements are driven by client feedback. At Ascend, client responses were collected and applied to the roadmap for future enhancements.
  • Program Enhancements: We have made 65 program enhancements, equating to almost a year's worth of work. This includes 1,750 man-hours of programming to ensure compliance and improve the product.

Federal Funding Updates

July 2025 Federal Funding Update

As of July 1, 2025, major federal legislative moves are reshaping the affordable and public housing landscape. This month’s key updates focus on the Senate’s finish line for the “One Big, Beautiful Bill” (OBBB) and the FY 2026 federal budget outlook.

"One Big, Beautiful Bill" — Senate Approval, House Reconciling Ahead

Senate Passage: On July 1, 2025, the Senate approved its version of OBBB by a 51–50 vote, with the Vice President casting the tie-breaker. This marks a major shift from the House-passed version of May 22 (215–214)

  • Key Changes Since House Vote
    • Expanded LIHTC: Senate Finance Committee’s June 16 draft makes LIHTC expansion permanent, likely generating 1.22 million affordable rental units over 2026–35.
    • Bond Financing Thresholds: Private activity bond requirement for 4% LIHTC reduced from 50% to 25% — permanent under Senate plan.
    • Basis Boosts: Permanent 50% basis boost for extremely low-income projects, 30% boost in Indian areas.
    • Opportunity Zones Extended: Continued incentives in Senate version.
  • Medicaid & Social Safety Net Reforms
    • Both House and Senate install stringent work requirements for Medicaid and SNAP—Senate version applies work rules to adults with children aged 14 and older.
    • Senate delays Medicaid cuts via temporary fix and $50 billion rural hospital fund, but deeper reductions remain.
  • Next Steps
    • The measure returns to the House as early as July 2–3. A July 4 deadline looms.
    • If approved, the plan heads to the President for signature.

Housing Takeaway: The package includes the most significant affordable housing tax-credit expansion in decades, potentially enabling half a million to over a million new units.

Summary of Senate-Passed LIHTC Expansion Provisions
  • Permanent Increase in Housing Tax Credits: Makes a 50% increase in LIHTC funding permanent for states (instead of just for two years). States get a lot more money every year to fund affordable housing projects. This means more apartments can get built or preserved, especially where demand is highest.
  • Lower Requirement for Bond Financing (for 4% Credits): Cuts in half the amount of bond funding a project must use to qualify for the 4% housing credit—from 50% down to 25%. It’s now much easier for housing developers to qualify for this important funding tool. That opens the door for more rehab and preservation projects, not just new builds.
  • Extra Incentives for the Most Underserved Areas: Gives a 50% funding boost for developments that house extremely low-income families. Gives a 30% boost to projects on tribal lands or in Native communities. These areas often get overlooked because rents are so low, the math doesn’t work for developers. These boosts make those projects financially viable, helping ensure the most vulnerable get safe, affordable homes.
  • Built-In Protections for Residents: Strengthens protections for renters—especially veterans, survivors of domestic violence, and others at risk of discrimination or eviction. These protections make sure people living in LIHTC housing can stay safe, stable, and housed, even in tough personal circumstances. It also ensures housing providers follow fair housing rules.
  • Projected National Impact Experts estimate the expanded LIHTC could fund 1.22 million new affordable homes over the next 10 years (2026–2035). If you live in or near a city with rising rents, this could bring more affordable apartments online faster — and help reduce housing instability and homelessness.
Proposed FY 2026 Budget: Potential Cuts to HUD Programs

The FY 2026 HUD budget is expected to be determined separately from the "One Big, Beautiful Bill." While the exact timeline for approval is uncertain, discussions and negotiations are anticipated to intensify in the coming months. Stakeholders should monitor developments closely to stay informed about potential impacts on housing programs and funding allocations.

The administration's proposed FY 2026 budget introduces several changes that could impact housing programs:

  • State Rental Assistance Block Grant: The proposal includes a 43% cut—approximately $26.7 billion—to federal housing assistance programs like Section 8 vouchers. These funds would be reallocated to states to design their own support systems, raising concerns about the capacity of states to manage these responsibilities effectively.
  • Elimination of CDBG and HOME Programs: The budget suggests eliminating the Community Development Block Grant (CDBG) and HOME Investment Partnerships Program, which are vital for local housing initiatives.
  • Staffing Reductions at HUD: The proposal also recommends halving the Department of Housing and Urban Development's (HUD) workforce, potentially affecting over a dozen programs, including disaster recovery and rental subsidies. Source: AP News

These proposed changes have raised alarms among housing experts and advocates about potential disruptions to housing services and increased challenges for low-income households.

MRI Software's Strategic Response

In light of these developments, MRI Software is committed to supporting our clients in navigating the evolving housing landscape. Our solutions are designed to enhance operational efficiency and reduce dependency on federal funding:

  • PHA Pro: Streamlines public housing authority operations, improving management and compliance.
  • MRI Affordable Housing: Facilitates the development and management of affordable housing projects.
  • Assistance Connect & WaitlistCheck: Enhance communication and transparency in tenant assistance programs.
  • Secure Sign & The Work Number: Simplify documentation and verification processes.
  • MRI Energy & Accounting Services: Optimize energy usage and financial management.

These tools are not merely supplementary; they are essential for housing agencies aiming to maintain service levels amidst funding uncertainties.

For more information on operational best practices and software products helping MRI clients navigate the federal funding uncertainty, read our latest blog: A Strategic Ascent for Affordable and Public Housing Organizations Amid Federal Budget Challenges.

Stay Informed

For ongoing updates and detailed analyses, consider following reputable sources such as the National Low Income Housing Coalition and Novogradac. These organizations provide in-depth coverage and expert insights into housing policy and funding developments.

Should you have questions or need further information on how these changes may affect your operations, please do not hesitate to contact us.