An existing HOME tenant whose income rises over the program’s limit does not automatically have to leave. Rent may change, but HUD expressly says an income increase alone is not good cause to refuse renewal. The owner must also restore the project’s required mix of affordable units as opportunities arise. Tenant treatment, rent calculation and unit replacement are separate decisions. HUD’s explanation.

This guide addresses existing tenants in HOME-assisted rental housing during its affordability period, as of September 22, 2026. The main scenarios assume no rental subsidy or tax credits; layered low-income housing tax credit (LIHTC) assistance is addressed separately. Public-housing over-income timelines do not govern this HOME process.

Establish which HOME rules govern the project

Start with the written agreement between the owner and the participating jurisdiction, or PJ—the state or local government administering HOME. Confirm the commitment date, amendments, required High and Low HOME units, and whether assistance is fixed or floating.

Most provisions of HUD’s 2025 HOME rule took effect April 20, 2025. PJs could retain earlier requirements for commitments made on or before April 20, 2026; earlier agreements may also be amended within specified limits. An existing property therefore does not automatically acquire every new provision. Applicability provisions, corrected dates.

The revised over-income rule is §92.252(h); older agreements may reference §92.252(i). The basic HOME-only rent formula and fixed/floating distinction remain. Separately, HUD indefinitely delayed the 2025 revisions to §92.253 on April 29, 2026. Those delayed tenant-protection provisions are not operative. HUD’s delay.

Identify which income limit the tenant exceeded

HOME distinguishes very low-income households, generally at or below 50% of area median income, from low-income households, generally at or below 80%. Use HUD’s published limits for the location and household size. The regulation allows adjustments, so multiplying a headline median by 50% or 80% is insufficient. HOME definitions.

The threshold crossed determines the response:

• Above the very low-income limit but still low-income: A tenant in a Low HOME unit creates a Low HOME unit-mix issue. This does not trigger the rent formula for households that no longer qualify as low-income.
• Above the low-income limit: The over-income rent rule applies, subject to its exceptions, whether the household occupied a High or Low HOME unit.

For a HOME-only Low HOME unit in the first situation, retain the Low HOME rent restriction until a replacement Low HOME unit is designated. The original unit can then become High HOME, with any increase subject to lease and notice requirements. HUD’s owner guide, sections 3.5–3.6.

Income recertification is generally annual. The revised rule permits specified alternatives, including PJ-authorized small-scale schedules and acceptance of other programs’ income determinations. Follow the method governing the project. Section 92.252(g).

Calculate HOME over-income tenant rent

For a household that no longer qualifies as low-income, the baseline is the lesser of:

1. The rent payable under state or local law.
2. Thirty percent of the household’s adjusted monthly income.

“Adjusted” income incorporates applicable deductions; it is not simply gross wages or take-home pay. The statutory formula expressly uses monthly income. 42 U.S.C. §12745(a)(3).

A floating HOME unit has an additional ceiling: the fair market rent for comparable, unassisted units in the neighborhood. The fixed-unit rule does not provide that additional ceiling. Account for applicable utility allowances when determining the amount payable to the owner. Section 92.252.

Before using a worksheet, confirm the PJ’s income-calculation policy. HUD’s December 30, 2025 notice extended HOME’s full HOTMA income-rule compliance deadline to January 1, 2027, while permitting earlier implementation and certain income-verification flexibilities. A worksheet copied from HUD’s 2009 guide may therefore use deductions inappropriate for the project’s adopted method. HOME’s HOTMA extension.

A hypothetical rent comparison

Assume a household exceeds its applicable HOME low-income limit and has verified adjusted annual income of $84,000. All utilities are included; there is no LIHTC or rental subsidy, and state or local law imposes no lower rent.

The calculation is $84,000 ÷ 12 × 30% = $2,100 monthly. In a fixed HOME unit, that is the formula amount. If comparable unassisted neighborhood rent is $1,700, a floating HOME unit is capped at $1,700 while it remains HOME-assisted. These are illustrative assumptions, not published income or rent limits.

Determine when the rent may increase

A recertification does not override the lease. The revised §92.252(e)(3) requires at least 60 days’ prior written notice of an increase; the earlier §92.252(f)(3) requires at least 30 days. Apply the version governing the project, plus any longer applicable requirement. Revised rule, earlier regulation.

The PJ reviews and approves or disapproves rents annually. Before billing the new amount, document the calculation, required approval, lease authority, notice and effective date alongside the owner’s other rental management obligations.

Restore the unit mix: fixed versus floating HOME units

HOME permits temporary noncompliance caused by an existing tenant’s increased income if the owner takes satisfactory action to fill vacancies correctly until compliance is restored. Increasing rent alone does not complete that work. Section 92.252(h)(1).

Fixed units: the assisted apartment stays designated

Suppose Unit 101 is a fixed High HOME unit and its tenant exceeds the low-income limit. The owner adjusts rent when permitted, but Unit 101 remains HOME-assisted. A vacant unassisted Unit 102 cannot substitute for it. When Unit 101 becomes vacant, it must be rented to an eligible household.

Fixed status does not freeze the High/Low designation within the assisted inventory. If the over-income household occupied a Low HOME unit, the owner must also restore the Low HOME count—for example, by redesignating the next available High HOME unit and renting it to a very low-income household. That restores the Low HOME allocation but does not resolve the original fixed unit’s over-income occupancy issue. HUD owner guide, section 3.5.

Floating units: substitute a comparable apartment

If Unit 101 instead has floating HOME assistance, designate the next vacant, comparable unassisted apartment as HOME-assisted and rent it to the appropriate eligible household. Preserve the required High/Low mix. Comparability includes size, features and bedroom count.

Once the replacement is properly designated, the over-income tenant’s original unit becomes unassisted for HOME purposes. HOME rent restrictions then cease for that unit, but lease terms, applicable law and restrictions from other funding continue. The tenant need not physically transfer; the assistance designation changes. HUD owner guide, section 3.6.

Layered LIHTC assistance changes the rent analysis

HOME expressly excepts units subject to Section 42 tax-credit rent restrictions from its ordinary over-income rent formula. Do not impose 30% of actual adjusted income where that conflicts with the applicable LIHTC restriction. Statutory exception.

LIHTC also has its own available-unit rules. For conventional 20–50 and 40–60 elections, the familiar threshold is income above 140% of the applicable limit; average-income and deep-rent-skewed projects have distinct provisions. That threshold is not HOME’s standalone over-income test. Section 42(g)(2)(D).

Keep both programs’ housing program requirements in the compliance file. Before issuing a layered-property rent notice or redesignating units, resolve the treatment with the HOME PJ and housing credit agency, consulting qualified compliance counsel where their requirements need interpretation.