HUD Term Limits and Work Requirements Proposed Rule Published

By: Andrew Van Horn, Policy and Research Advisor

Comments Due April 29 pending final publication of the official proposed rule in the Federal Register.

This is a limited summary. Find a more detailed summary of the proposed rule in the March 3 edition of NAHRO’s Direct News.

February 27, 2026—On February 27, HUD pre-published a proposed rule titled “Establishing Flexibility for Implementation of Work Requirements and Term Limits” in the Federal Register. The proposed rule would provide agencies the flexibility to implement term limits, work requirements, both, or neither. The rule creates limits that agencies who choose to implement these policies must comply with. These limits are the strictest an agency or owner may be, but the policies agencies and owners adopt may be more forgiving. In short, the rule would allow PHAs and PBRA owners to implement a work requirement of up to 40 hours per week per individual and a term limit for assisted households not shorter than two years.

The rule would apply to public housing, Housing Choice Vouchers (HCVs), Project-Based Vouchers (PBVs), and Project-Based Rental Assistance (PBRA). The rule also proposes definitions and indicates policy decisions PHAs must make. Only PHAs and PBRA owners and agents (O/As) in good standing would be allowed to implement work requirements. For both work requirements and term limits, PHAs and owners would be responsible for creating policies specifying all necessary decisions left open to them and then tracking and enforcing those policies.

Work Requirements

This rule would incorporate significant flexibilities for PHAs and PBRA O/As.

• Generally, this section would apply to “work-eligible adults” between the ages of 18 and 61or a more selective definition. The rule would allow flexibility in setting work requirements, letting PHAs establish higher minimum ages than 18 or lower maximum ages than 61. It also proposes other exemptions, including students, those caring for a family member, and other situations.
• PHAs and owners would have the ability to create different requirements for different programs and different projects within the same program. Importantly, all residents in the same public housing development, project, or form of special-purpose voucher must have the rule applied to them equally. The HUD-VASH program is exempted from this rule, and agencies could exempt other special purpose vouchers as well.
• Policies could not require an individual member of a household to work more than 40 hours per week.
• PHAs and owners would also need to stipulate whether the requirement would apply to the family—where a family must work a certain number of hours—or each individual subject to the rule, though no individual would be required to work more than 40 hours per week.
• In order to implement work requirements, PHAs and O/As must offer supportive services to help residents engage in work activities. This could include partnering with other organizations to provide these services. Housing Choice Voucher Administrative Fees cannot be used to fund supportive services.
• PHAs and O/As could also create specific language regarding what counts as a work activity and how they would handle specific circumstances arising from self-employment.
• Like term limits, those opting to implement work requirements would need to add these policies to their plans (and public housing leases, if applicable). They would also need to notify tenants, in compliance with the rule, implement a hardship waiver policy, and offer supportive services in response to local needs.
• PHAs and O/As would be responsible for tracking, enforcing, and documenting resident compliance with their new policies.

Term Limits

The term limit option described in this rule would be prospective, meaning the term limit would begin for current residents only when the policy goes into effect. Any time a family previously spent receiving assistance would not count toward the term limit once the policy is implemented. As with work requirements, this section of the rule would incorporate significant flexibilities for PHAs and PBRA owners.

• Generally, this section applies to “non-elderly, non-disabled families.” The rule specifically notes that owners and agents can apply term limits “within and between” the different programs, so requirements could vary between projects and programs as well.
• PHAs could not set a term limit shorter than two years but would have the ability to implement a limit longer than two years.
• In order to implement term limits, PHAs and O/As must offer supportive services to help residents engage in work activities. Housing Choice Voucher Administrative Fees cannot be used to fund supportive services.
• Like the work requirements section, PHAs would need to add these policies to their plans (and public housing leases, if applicable), implement a hardship waiver policy, and offer supportive services in response to local needs.
• The policies and tenant notifications would need to state how the PHA or owner would enforce time limits. Tenants would need to be notified in writing three months before policies are implemented, 12 months before a family hits a term limit, six months before the term limit, and 30 days before the term limit.  
• HUD proposes exempting HUD-VASH, FUP, and FYI, and agencies could exempt other special purpose vouchers as well.
• MTW agencies would be unaffected by the rule.

Find the proposed rule here and a detailed summary of the rule in the March 3 edition of NAHRO’s Direct News.