,Q1 APPLY HOTMA REGULATIONS TO DETERMINE ELIGIBILITY AND RENT FOR HCV
PARTICIPANTS
Under HOTMA, which of the following is the correct method for calculating annual
income for a family with a net business loss from a sole proprietorship?
A. Add the loss to other income to reduce total income.
B. Disallow the loss entirely and use zero as the business income. CORRECT
C. Subtract the loss from the family's aggregate income, but not below zero.
D. Use the gross business receipts without deducting expenses.
RATIONALE: HOTMA requires that net business losses be disregarded; the family's annual
income cannot be reduced below zero by business losses. Losses are not allowed to offset other
income. Options A and C incorrectly allow offsets, and D ignores expense deductions entirely.
Q2 APPLY HOTMA REGULATIONS TO DETERMINE ELIGIBILITY AND RENT FOR HCV
PARTICIPANTS
A family receives a one-time retroactive Social Security lump-sum payment. For
HCV annual income, the payment should be:
A. Counted as an asset in the month received, then as income if retained.
B. Counted as income in the year received, regardless of the period it covers.
C. Excluded from income but counted as an asset if not spent within 6 months. CORRECT
D. Prorated over the number of months it covers and added to monthly income.
RATIONALE: HOTMA and HUD guidelines treat retroactive lump-sum payments (e.g., Social
Security) as assets, not income, because they are not recurring. If retained past the exclusion
period (typically 6 months), they are counted as assets. Options A and D incorrectly treat as
income; B misapplies the annual income definition.
Page 2
,Q3 APPLY HOTMA REGULATIONS TO DETERMINE ELIGIBILITY AND RENT FOR HCV
PARTICIPANTS
When a family portability moves to a new PHA, which entity is responsible for
issuing the voucher and determining the family's initial rent, and which for final
rent determination?
A. Initial PHA issues voucher; receiving PHA determines initial rent and final rent.
B. Initial PHA issues voucher and determines initial rent; receiving PHA determines final rent.
CORRECT
C. Receiving PHA issues voucher; initial PHA determines initial rent and final rent.
D. Initial PHA issues voucher and determines final rent; receiving PHA determines initial rent.
RATIONALE: Under portability, the initial PHA issues the voucher and calculates the initial rent
(based on the receiving PHA's payment standard). The receiving PHA conducts the final rent
determination at the first annual reexamination. Options A and C reverse responsibilities; D
misassigns final rent.
Q4 APPLY HOTMA REGULATIONS TO DETERMINE ELIGIBILITY AND RENT FOR HCV
PARTICIPANTS
A PHA discovers that a voucher holder committed fraud in the previous year.
Under HOTMA, what is the minimum period of ineligibility for admission?
A. One year from the date of discovery
B. Two years from the date of discovery CORRECT
C. Three years from the date of discovery
D. Five years from the date of discovery
RATIONALE: HOTMA mandates a minimum two-year ineligibility period for families who commit
fraud or program abuse. This is a stricter federal requirement than the previous discretionary
policy. Options A, C, and D are incorrect because they do not match the statutory minimum.
Page 3
, Q5 APPLY HOTMA REGULATIONS TO DETERMINE ELIGIBILITY AND RENT FOR HCV
PARTICIPANTS
In a mixed family, how is the income of a noncitizen spouse treated for the
purposes of determining the family's income eligibility and rent?
A. Only the income of eligible family members is counted.
B. All income, regardless of eligibility, is counted for rent but not for eligibility. CORRECT
C. The noncitizen's income is counted only if they have a Social Security Number.
D. The noncitizen's income is prorated based on the number of eligible members.
RATIONALE: HOTMA and HUD rules require that in mixed families, the income of all family
members (including ineligible noncitizens) is counted for determining rent and the family share.
However, for income eligibility (income limits), only the income of eligible family members is
considered. Options A and D are incorrect; C adds an irrelevant condition.
Q6 APPLY HOTMA REGULATIONS TO DETERMINE ELIGIBILITY AND RENT FOR HCV
PARTICIPANTS
A PHA is calculating the utility allowance for a unit with electric heating and a
water heater. The PHA uses a utility schedule that includes a base allowance for a
2-bedroom unit. The family has a medical need for air conditioning. What
adjustment is required?
A. No adjustment is made; the family must pay for AC themselves.
B. The PHA must add a reasonable allowance for the AC if medically necessary. CORRECT
C. The PHA must increase the heating allowance to cover AC costs.
D. The family may deduct excess utility costs from rent if they exceed 10% of income.
RATIONALE: HUD regulations require PHAs to provide a utility allowance that covers reasonable
consumption, and for families with medical needs, an additional allowance must be considered.
The PHA must add a reasonable amount for AC when medically necessary. Option A ignores the
requirement; C is inappropriate; D misstates the utility reimbursement rule.
Page 4
PARTICIPANTS
Under HOTMA, which of the following is the correct method for calculating annual
income for a family with a net business loss from a sole proprietorship?
A. Add the loss to other income to reduce total income.
B. Disallow the loss entirely and use zero as the business income. CORRECT
C. Subtract the loss from the family's aggregate income, but not below zero.
D. Use the gross business receipts without deducting expenses.
RATIONALE: HOTMA requires that net business losses be disregarded; the family's annual
income cannot be reduced below zero by business losses. Losses are not allowed to offset other
income. Options A and C incorrectly allow offsets, and D ignores expense deductions entirely.
Q2 APPLY HOTMA REGULATIONS TO DETERMINE ELIGIBILITY AND RENT FOR HCV
PARTICIPANTS
A family receives a one-time retroactive Social Security lump-sum payment. For
HCV annual income, the payment should be:
A. Counted as an asset in the month received, then as income if retained.
B. Counted as income in the year received, regardless of the period it covers.
C. Excluded from income but counted as an asset if not spent within 6 months. CORRECT
D. Prorated over the number of months it covers and added to monthly income.
RATIONALE: HOTMA and HUD guidelines treat retroactive lump-sum payments (e.g., Social
Security) as assets, not income, because they are not recurring. If retained past the exclusion
period (typically 6 months), they are counted as assets. Options A and D incorrectly treat as
income; B misapplies the annual income definition.
Page 2
,Q3 APPLY HOTMA REGULATIONS TO DETERMINE ELIGIBILITY AND RENT FOR HCV
PARTICIPANTS
When a family portability moves to a new PHA, which entity is responsible for
issuing the voucher and determining the family's initial rent, and which for final
rent determination?
A. Initial PHA issues voucher; receiving PHA determines initial rent and final rent.
B. Initial PHA issues voucher and determines initial rent; receiving PHA determines final rent.
CORRECT
C. Receiving PHA issues voucher; initial PHA determines initial rent and final rent.
D. Initial PHA issues voucher and determines final rent; receiving PHA determines initial rent.
RATIONALE: Under portability, the initial PHA issues the voucher and calculates the initial rent
(based on the receiving PHA's payment standard). The receiving PHA conducts the final rent
determination at the first annual reexamination. Options A and C reverse responsibilities; D
misassigns final rent.
Q4 APPLY HOTMA REGULATIONS TO DETERMINE ELIGIBILITY AND RENT FOR HCV
PARTICIPANTS
A PHA discovers that a voucher holder committed fraud in the previous year.
Under HOTMA, what is the minimum period of ineligibility for admission?
A. One year from the date of discovery
B. Two years from the date of discovery CORRECT
C. Three years from the date of discovery
D. Five years from the date of discovery
RATIONALE: HOTMA mandates a minimum two-year ineligibility period for families who commit
fraud or program abuse. This is a stricter federal requirement than the previous discretionary
policy. Options A, C, and D are incorrect because they do not match the statutory minimum.
Page 3
, Q5 APPLY HOTMA REGULATIONS TO DETERMINE ELIGIBILITY AND RENT FOR HCV
PARTICIPANTS
In a mixed family, how is the income of a noncitizen spouse treated for the
purposes of determining the family's income eligibility and rent?
A. Only the income of eligible family members is counted.
B. All income, regardless of eligibility, is counted for rent but not for eligibility. CORRECT
C. The noncitizen's income is counted only if they have a Social Security Number.
D. The noncitizen's income is prorated based on the number of eligible members.
RATIONALE: HOTMA and HUD rules require that in mixed families, the income of all family
members (including ineligible noncitizens) is counted for determining rent and the family share.
However, for income eligibility (income limits), only the income of eligible family members is
considered. Options A and D are incorrect; C adds an irrelevant condition.
Q6 APPLY HOTMA REGULATIONS TO DETERMINE ELIGIBILITY AND RENT FOR HCV
PARTICIPANTS
A PHA is calculating the utility allowance for a unit with electric heating and a
water heater. The PHA uses a utility schedule that includes a base allowance for a
2-bedroom unit. The family has a medical need for air conditioning. What
adjustment is required?
A. No adjustment is made; the family must pay for AC themselves.
B. The PHA must add a reasonable allowance for the AC if medically necessary. CORRECT
C. The PHA must increase the heating allowance to cover AC costs.
D. The family may deduct excess utility costs from rent if they exceed 10% of income.
RATIONALE: HUD regulations require PHAs to provide a utility allowance that covers reasonable
consumption, and for families with medical needs, an additional allowance must be considered.
The PHA must add a reasonable amount for AC when medically necessary. Option A ignores the
requirement; C is inappropriate; D misstates the utility reimbursement rule.
Page 4
