slide 1
HOME PROGRAM BASICS
www.hud.gov/homeprogram/Kathleen M. Bialas
OGC/HHQ/HUD
slide 2
HISTORY AND GOALS
Housing block grant program created by the Cranston-Gonzalez National Affordable Housing Act of 1990
FY 2007 appropriation -- $1.73 billion
slide 3
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
slide 4
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
slide 5
ELIGIBLE ACTIVITIES
Homeowner Rehabilitation Homebuyer Programs Rental Housing TBRA
slide 6
HOME FUNDING FY ‘92- ‘05
TBRA4%
Rental47%
Owner Rehab22%
Homebuyer27%
Rental
Homebuyer
Owner Rehab
TBRA
slide 7
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
slide 8
LONG-TERM AFFORDABILITY
HOME Investmentper Unit
Length ofAffordability
less than $15,000 5 yrs
$15,000 - $40,000 10 yrs
more than $40,000 15 yrs
new constructionof rental housing
20 yrs
refinancing of rentalhousing
15 yrs
slide 9
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
INCOMEDEFINE
D
slide 10
LONG-TERM OCCUPANCY
Rental: vacated units must be rented to income-eligible households
Homebuyer: resale/recapture provisions
Homeowner rehab: no requirements
slide 11
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
24 CFR 92.250slide 12
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 92.206slide 13
ELIGIBLE COSTS
Hard costs Soft costs Acquisition costs Relocation costs Refinancing costs
24 CFR 92.251slide 14
PROPERTY STANDARDS
Apply to all HOME-assisted units Vary by activity PJ choice
Activity Minimum Property Standards
TBRA Section 8 HQS.
ACQUISITION ONLY State or local housing standards and codes. If no local standards/code applies, Section 8 HQS.
REHAB Local written rehabilitation standards. AND
State and local code requirements. If no state/local code applies: International Building Code OR Council of American Building Officials 1 or 2
family code OR FHA Minimum Property Standards
NEW CONSTRUCTION
State and local code requirements. If no state/local code applies: SAME AS ABOVE
Model Energy Code.
24 CFR 92.219 - 92.221; CPD Notice 97-03 slide 16
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
slide 17
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
slide 18
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
24 CFR 92.222slide 19
MATCH REDUCTION
Fiscal distress/Severe fiscal distress HQ publishes notice annually
Presidentially-declared disaster areas
slide 20
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
24 CFR 92.216slide 21
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 92.252(a)slide 22
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]
slide 23
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
24 CFR 92.205(d); CPD Notice 98-02 slide 24
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 92.254(b)slide 25
HOMEOWNER REHAB: ELIGIBLE ACTIVITIES
Assist low-income owner-occupants with Rehabilitation Reconstruction
24 CFR 92.254(a)slide 26
HOMEBUYERS: THE APPLICANT
The applicant must: be low-income occupy the property as principal
residence
slide 27
ELIGIBLE ACTIVITIES
HOME can be used for a number of homeownership activities Acquisition Acquisition/rehabilitation New construction
slide 28
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
slide 29
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
slide 30
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
slide 31
OTHER REQUIREMENTS
Labor standards [Davis-Bacon wages] Environmental review Nondiscrimination/affirmative marketing Relocation benefits and replacement of
housing converted or demolished Lead-based paint
24 CFR 92.600slide 32
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
slide 33
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
slide 34
ADDI
Forms of Assistance Downpayment assistance Rehabilitation financing for units
purchased with ADDI funds Costs
Acquisition costs Rehabilitation costs (20% cap) Related soft costs
slide 35
INELIGIBLE COSTS
Administrative costs Development hard and soft costs
for new construction Costs related to rental housing Rental assistance
slide 36
ADDI Rules
Maximum ADDI assistance per unit: Greater of 6% of sales price or
$10,000 HOME funds can be used in ADDI
units
slide 37
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
slide 38
HOME Resources
www.hud.gov/homeprogram/ Final Rule (24 CFR Part 92) CPD Notices HOMEfires Model Guides