Rural Development

Joaquin Altoro 

Administrator

Rural Housing Service

1400 Independence Ave, SW 

Room 5011-S

Washington, D.C. 20250

TO: All RHS MFH National Office Directors 

Field Office Staff

Rural Development

ATTN: Leadership Designees

Field Operations Division Program Staff 

Rural Development

FROM: Joaquin Altoro 

Administrator

Rural Housing Service

JOAQUIN 

ALTORO

Digitally signed by 

JOAQUIN ALTORO 

Date: 2024.03.04

14:34:11 -05'00'

SUBJECT: Notification of Administrators Exception related to 7 CFR 3560.153 

and 24 CFR 5.609(c)

PURPOSE

The purpose of this Unnumbered Letter (UL) is to provide notice to Multifamily 

Housing (MFH) staff of the attached Administrators Exception related to an 

upcoming regulation change resulting from the Housing Opportunity Through

Modernization Act (HOTMA).

BACKGROUND

7 CFR Part 3560.153(a) requires the calculation of annual household income to be in 

accordance with 24 CFR 5.609. HOTMA, signed into law on July 29, 2016, makes 

changes to the requirements related to income calculations found in 24 CFR 5.609. 

To incorporate the changes made by HOTMA, the U.S. Department of Housing and

Urban Development (HUD) published a Final Rule updating the existing 24 CFR 

5.609 on February 14, 2023, with an effective date of January 1, 2024.

24 CFR 5.609(c) is a newly added subsection, but the Housing Act of 1949, which 

governs Rural Development Multifamily Housing, does not incorporate the 

requirements of these provisions.

EXPIRATION DATE: FILING INSTRUCTIONS:

December 31, 2024 Housing Programs

USDA is an equal opportunity lender, provider, and employer.
Page 2

IMPLEMENTATION

Effective January 1, 2024, 24 CFR 5.609(c) will be excluded from Rural Development reference to 

24 CFR 5.609. New regulations found at 24 CFR 5.609(c) will not apply to Rural Development 

properties.

This Administrator’s Exception will be in effect until the regulations found at 7 CFR 3560.153 are 

updated to refer only to 24 CFR 5.609(a) and (b).

Further guidance and handbook updates are underway to incorporate the changes made in 24 CFR 

5.609(a) and (b).

Please refer to the attached copy of the Administrator’s Exception for additional information.

If you have any questions regarding the guidance in this UL, please contact Julie Felhofer, Policy 

& Budget Branch Chief, Asset Management Division, (Julie.felhofer@usda.gov) or telephone 715-

295-4069.

Attachment
Rural Development 

Jason Church 

Acting Deputy Administrator 

Multifamily Housing 

Rural Housing Service

1400 Independence Ave SW 

Room 5104-A 

Washington, DC 20250

November 7, 2023

TO: Joaquin Altoro 

RHS Administrator 

Rural Development

FROM: Jason Church

Acting Deputy Administrator 

Multifamily Housing

Telephone (202) 494-5292 SUBJECT: Regulatory Waiver: 7 CFR 3560.153

Calculation of household income and assets

Regulation:

7 CFR 3560.153(a) requires the calculation of annual household income to be in 

accordance with 24 CFR 5.609. The Housing Opportunity Through Modernization 

Act (HOTMA), signed into law on July 29, 2016, makes changes to the requirements 

related to income calculations found in 24 CFR 5.609. To incorporate the changes 

made by HOTMA, the U.S. Department of Housing and Urban Development (HUD) 

published a Final Rule updating the existing 24 CFR 5.609 on February 14, 2023, 

with an effective date of January 1, 2024. 24 CFR 5.609(c) is a newly added 

subsection, but the Housing Act of 1949 does not incorporate the requirements of 

these provisions. Therefore, this exception request is made to clarify the requirements 

of HOTMA and the changes to 24 CFR 5.609. 

Request:

This exception request is made in accordance with 7 CFR 3560.8. The proposed 

exception would be made to 7 CFR 3560.153(a), which states, “Annual income will 

be calculated in accordance with 24 CFR 5.609.” 

Effective January 1, 2024, the newly added 24 CFR 5.609(c) specifies the owner:

(1) must calculate family income at initial occupancy and interim reexaminations 

where adjusted income is estimated to increase or decrease by 10%,

(2) must calculate family income at annual reexaminations except where the owner 

uses streamlined income determinations,

(3) can utilize other program’s determination of income, and

(4) will not be out of compliance solely due to de minimis errors by no more than $30 

per month. 

USDA is an equal opportunity provider, employer, and lender.
JOAQUIN 

ALTORO -05'00'

Page 2 

Rural Development (RD) addresses these specified items within our current 

regulations. Specifically, within 7 CFR 3560.152(e) Tenant certification and 

verification and 7 CFR 3560 Subpart O, Unauthorized Assistance. 

Section 501(b)(5)(A) of the Housing Act of 1949 (42 USC 1471(b)(5)(A)) (the RHS 

governing statute) incorporates the definitions of “income” and “adjusted income” 

found in sections 3(b)(4) and 3(b)(5), respectively, of the United States Housing Act 

of 1937 (42 USC 1437a(b)(4)-(5)) (the HUD governing statute). HOTMA amended 

the Housing Act of 1937 by adding two new sections, 3(b)(6)-(7) to the United States 

Housing Act of 1937 (42 USC 1437a(b)(6)-(7)). The definitions for “income” and 

“adjusted income” are still found in 24 CFR 5.609(a) and (b). Subsection (c) comes 

from newly added sections 3(b)(6) and (7) of the United States Housing Act of 

1937. The RHS statute does not incorporate the requirements of Sections 3(b)(6) and 

(7), and therefore RHS would not be obligated to incorporate subsection (c) of the 

new regulation into its own regulations on income calculation. 

Rural Development will be submitting a regulation update to 7 CFR 3560.153(a) to 

refer specifically to 24 CFR 5.609(a) and (b), excluding 5.609(c) from RD’s annual 

income calculation requirements. Until such time the regulation update is published, 

we are requesting an Administrator’s waiver in accordance with 7 CFR Part 3560.8 to 

specifically exclude the requirements of 24 CFR 5.609(c) from 7 CFR 3560.153(a). 

Recommendation:

Under the authority granted in 7 CFR Part 3560.8 Administrator’s Exception 

Authority, we recommend approval of this request. This request is consistent with the 

applicable statute, does not adversely affect the interest of the Federal Government, 

does not adversely affect the accomplishment of the purposes of the Multifamily 

Housing (MFH) programs, and would not result in undue hardship on the MFH 

tenants. Upon approval, notice will be provided to Agency staff and to Borrowers 

and Management Agents. 

Approve 

Disapprove 

Joaquin Altoro Date

RHS Administrator 

Rural Development