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HOME PROGRAM BASICS. www.hud.gov/homeprogram/ Kathleen M. Bialas OGC/HHQ/HUD . HISTORY AND GOALS. Housing block grant program created by the Cranston-Gonzalez National Affordable Housing Act of 1990 FY 2007 appropriation -- $1.73 billion. ALLOCATION OF FUNDS.

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home program basics

HOME PROGRAM BASICS

www.hud.gov/homeprogram/

Kathleen M. Bialas

OGC/HHQ/HUD

history and goals
HISTORY AND GOALS
  • Housing block grant program created by the Cranston-Gonzalez National Affordable Housing Act of 1990
  • FY 2007 appropriation -- $1.73 billion
allocation of funds
ALLOCATION OF FUNDS
  • HOME funds allocated by formula
    • 40% to states/60% to local governments (participating jurisdictions – PJs)

Allocations for each PJ posted on HUD website

  • Minimum qualification thresholds
  • PJs must have a Consolidated Plan that describes needs and sets forth a 5 year strategy & annual action plan describing the use of funds --citizen participation in the development of the Con plan
allocation of funds4
ALLOCATION OF FUNDS
  • Planning and admin limited to 10%
  • 15% set-aside for housing that is owned, developed, or sponsored by community housing development organizations (CHDOs)
  • Additional 5% may be used for CHDO operations

Timeframe

    • 24 months to commit funds
    • 5 years to expend funds
eligible activities
ELIGIBLE ACTIVITIES
  • Homeowner Rehabilitation
  • Homebuyer Programs
  • Rental Housing
  • TBRA
program targeting
PROGRAM TARGETING
  • 100% of HOME funds must go to assist families <80% Median Family Income
  • TBRA and rental -- 90% of each grant to <60% MFI
  • Additional targeting for rental project with five or more units: 20% of units rented to families <50% MFI
applicant eligibility

INCOME

DEFINED

APPLICANT ELIGIBILITY
  • Must use one of three income definitions:
    • Section 8 annual income [also used for LIHTC]
    • IRS Adjusted gross income
    • Census long form annual income
long term occupancy
LONG-TERM OCCUPANCY
  • Rental: vacated units must be rented to income-eligible households
  • Homebuyer: resale/recapture provisions
  • Homeowner rehab: no requirements
the subsidy
THE SUBSIDY
  • Flexibility/PJ choice
  • Can provide funds as:
    • Interest bearing or non-interest bearing loans or advances
    • Deferred loans
    • Grants
    • Interest subsidies
    • Equity investments
    • Loan guarantees
subsidy limits
SUBSIDY LIMITS
  • Minimum HOME investment = $1,000 per unit
  • Maximum HOME subsidy amount = 221(d)(3) limit, which varies by PJ
  • Limits do not apply to TBRA

24 CFR 92.250

eligible costs
ELIGIBLE COSTS
  • Hard costs
  • Soft costs
  • Acquisition costs
  • Relocation costs
  • Refinancing costs

24 CFR 92.206

property standards
PROPERTY STANDARDS
  • Apply to all HOME-assisted units
  • Vary by activity
  • PJ choice

24 CFR 92.251

match basics
MATCH BASICS
  • PJs must provide 25% match of HOME funds
    • Match must be a permanent contribution to the HOME Program
    • Based on expenditure of funds
    • Measured on a Federal fiscal year basis – program match, not project

24 CFR 92.219 - 92.221; CPD Notice 97-03

sources of match
SOURCES OF MATCH
  • Cash or “cash equivalents”
  • Value of waived taxes, fees or charges
  • Value of donated land/real property
  • Cost of infrastructure improvements
  • Percentage of proceeds of housing bonds
sources of match18
SOURCES OF MATCH
  • Value of donated materials and labor
  • Sweat equity
  • Direct costs of supportive services to residents of HOME projects
  • Direct costs of counseling to HOME-assisted households
match reduction
MATCH REDUCTION
  • Fiscal distress/Severe fiscal distress
    • HQ publishes notice annually
  • Presidentially-declared disaster areas

24 CFR 92.222

rental housing eligible properties
RENTAL HOUSING: ELIGIBLE PROPERTIES
  • No requirements on type or style of property
  • Eligible types include:
    • Single family and multifamily
    • Transitional and permanent housing
    • SROs and group homes
rental housing the program rule
RENTAL HOUSING: THE PROGRAM RULE
  • 90% Of households assisted with HOME rental and TBRA must have incomes at/below 60% of MFI
    • Applies when funds are spent -- initial occupancy

24 CFR 92.216

rental housing the project rule
RENTAL HOUSING: THE PROJECT RULE
  • Projects with 5 or more units must have at least 20% of units occupied by families at/below 50% of MFI
    • Rents must be at Low HOME rent level
    • Balance of units may be at/below 80% of median [but limited by overall program targeting for rental housing]

24 CFR 92.252(a)

home rents
HOME RENTS
  • For projects with 5 or more units, there are two rent levels:
    • High HOME rent (80% of units)
    • Low HOME rent (20% of units)
  • HUD annually calculates and distributes HOME rents
  • PJ must disseminate maximum rents and utility allowances annually to project owners
determining home assisted units
DETERMINING HOME-ASSISTED UNITS

Assist all or some of the units

  • Method : Actual Costs
  • Proration
    • If units are comparable in terms of BR size, sq. ft. and amenities, the number of HOME-assisted units determined by:
      • HOME investment : total HOME-eligible project costs

24 CFR 92.205(d); CPD Notice 98-02

homeowner rehab eligible activities
HOMEOWNER REHAB: ELIGIBLE ACTIVITIES
  • Assist low-income owner-occupants with
    • Rehabilitation
    • Reconstruction

24 CFR 92.254(b)

homebuyers the applicant
HOMEBUYERS: THE APPLICANT
  • The applicant must:
    • be low-income
    • occupy the property as principal residence

24 CFR 92.254(a)

eligible activities27
ELIGIBLE ACTIVITIES
  • HOME can be used for a number of homeownership activities
    • Acquisition
    • Acquisition/rehabilitation
    • New construction
eligible properties
ELIGIBLE PROPERTIES
  • Eligible property types:
    • Single-family home
    • Two-to-four unit property
    • Condominium unit
    • Coop or mutual housing unit (if recognized as ownership by state)
    • Manufactured home
financial assistance
FINANCIAL ASSISTANCE
  • Assistance can be used
    • To assist the homebuyer to buy the housing--downpayment/closing costs
    • To assist the developer to construct or acquire & rehab housing to be sold to homebuyer
recapture resale
RECAPTURE/RESALE
  • PJs have two options for ensuring affordability of the housing during the affordability period:
    • Recapture the HOME subsidy
    • Resale restrictions – resale to another low-income homebuyer
other requirements
OTHER REQUIREMENTS
  • Labor standards [Davis-Bacon wages]
  • Environmental review
  • Nondiscrimination/affirmative marketing
  • Relocation benefits and replacement of housing converted or demolished
  • Lead-based paint
slide32
ADDI
  • American Dream Downpayment Initiative
    • Initially funded in 2003
    • “Piggy-backed” on HOME
    • PJs that have population of 150,000 or qualify for $50,000 under the formula are eligible to receive ADDI

24 CFR 92.600

slide33
ADDI
  • Similar to homebuyer assistance under HOME
  • Assistance is limited to first-time homebuyers
    • Individual and his/her spouse who has not owned a home during the most recent 3-year period
  • Exceptions for:
    • Displaced homemakers
    • Single parents
slide34
ADDI
  • Forms of Assistance
    • Downpayment assistance
    • Rehabilitation financing for units purchased with ADDI funds
  • Costs
    • Acquisition costs
    • Rehabilitation costs (20% cap)
    • Related soft costs
ineligible costs
INELIGIBLE COSTS
  • Administrative costs
  • Development hard and soft costs for new construction
  • Costs related to rental housing
  • Rental assistance
addi rules
ADDI Rules
  • Maximum ADDI assistance per unit:
    • Greater of 6% of sales price or $10,000
  • HOME funds can be used in ADDI units
addi rules37
ADDI Rules
  • HOME rules apply to ADDI
    • Income requirements
    • Principal residence requirements
    • Resale/Recapture
    • Property standards
    • Minimum/Maximum per unit subsidy
    • Cross-cutting Federal requirements
home resources
HOME Resources
  • www.hud.gov/homeprogram/
  • Final Rule (24 CFR Part 92)
  • CPD Notices
  • HOMEfires
  • Model Guides