Knowledge Center

Resources & Regulatory Updates

AkarCore keeps you informed on the regulatory changes that affect your affordable housing portfolio. Updates are reviewed and summarized by our compliance team — so you get what matters, without the noise.

Regulatory Updates 2025–2026
⬤  Current Guidance Period: Q4 2025 – Q2 2026
IRS Effective September 30, 2025

Final Regulations on Average Income Set-Aside (AIT) — Cliff Risk Eliminated

The IRS published final regulations addressing the "cliff risk" associated with the Average Income Test (AIT). Under previous proposed rules, a single noncompliant unit could cause an entire project to fail the minimum set-aside if the average of the remaining units exceeded 60% of Area Median Income (AMI). The new regulations allow owners to submit a corrected qualified group of units to maintain compliance.

Operational Impact: Compliance officers now have a 180-day window from discovery of noncompliance — or 90 days from agency notice — to correct the unit mix. This significantly reduces the risk of total credit loss due to isolated administrative errors or tenant noncompliance.
HUD Federal Compliance Date: January 1, 2027

HOTMA Implementation Extended to January 1, 2027

HUD extended the compliance date for Sections 102 and 104 of the Housing Opportunity Through Modernization Act (HOTMA) to January 1, 2027. This follows several previous delays caused by technical challenges with HUD's TRACS 203A software and owner/agent software readiness.

Operational Impact: While the federal deadline is 2027, many state LIHTC agencies may still mandate earlier implementation. Compliance officers must track state-specific requirements carefully while using the additional time to update Tenant Selection Plans, asset calculation methods, and software systems.
IRS Effective January 1, 2026

2026 LIHTC State Allocation Ceilings Updated (Rev. Proc. 2025-32)

The IRS issued Revenue Procedure 2025-32, updating state housing credit ceilings for 2026. The new per capita multiplier is set at $3.416, with a small state minimum of $3,953,600. These figures reflect a permanent 12% allocation boost enacted through recent federal legislation.

Operational Impact: Increased allocation ceilings mean more tax credit authority is available for new developments and rehabilitations in 2026. Property owners and developers should factor these higher caps into their 2026 application strategies.
HUD Compliance Date: April 20, 2026

Final HOME Rule Streamlining — Layered Property Relief

HUD's Final HOME Rule includes provisions aligning the HOME program with LIHTC requirements. A notable change allows HOME-assisted units to charge the maximum permissible Housing Choice Voucher or Project-Based Voucher (PBV) rent even if it exceeds the standard HOME maximum rent, provided the project also has LIHTC funding.

Operational Impact: This simplifies management of layered properties using both HOME and LIHTC funds. By allowing higher voucher rents and permitting use of Public Housing Authority (PHA) utility allowances for HOME units, HUD has reduced the administrative burden of dual compliance structures.
HUD Scoring Delayed to October 1, 2026

NSPIRE Affirmative Requirements Scoring Delayed to October 2026

HUD announced a delay in scoring new Affirmative Requirements under the National Standards for the Physical Inspection of Real Estate (NSPIRE) until October 1, 2026. This includes requirements for smoke detectors, carbon monoxide alarms, and other specific safety features.

Operational Impact: The delay gives property owners additional time to complete physical upgrades without risking a lower REAC score. However, life-safety violations will still be cited during inspections — properties must still be maintained in a safe and habitable condition.
HUD Delayed until May 1, 2026

FY 2026 Income Limits Delayed

HUD has announced that Fiscal Year 2026 Income Limits will be delayed until May 1, 2026. Property owners must continue to use 2025 limits for all certifications and rent increases until the new limits are officially released and implemented.

Sources: Sidley Austin LLP, Costello Compliance, HousingFinance.com, NCSHA, NAHRO, Novoco. This summary is provided for informational purposes only and does not constitute legal advice. AkarCore Consulting recommends consulting with qualified legal counsel for jurisdiction-specific guidance.
Guides & Tools
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LIHTC

LIHTC Audit Preparation Guide

A comprehensive pre-audit checklist covering tenant file review, physical inspection readiness, regulatory documents, rent compliance, and fair housing requirements. Designed for property management teams preparing for state agency reviews.

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All Programs

Compliance Pain Index Assessment

AkarCore's 22-question operational compliance assessment across six critical domains. Identifies gaps in your compliance program and produces a scored report with prioritized recommendations — delivered within one business day.

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HOME

HOME Program File Checklist

A structured file review checklist for HOME Investment Partnerships Program properties, covering income verification, unit designation, rent compliance, and corrective action documentation standards.

Request Checklist →
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Coming Soon

Section 8 / HUD File Review Checklist

A structured file review checklist for Section 8 and HUD-assisted properties, covering income verification, HAP contract compliance, inspection readiness, and annual recertification documentation standards.

Coming Soon

Have a compliance question?

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