Program Update

◦ Recovery Act authorized $2.25 billion for grants to State housing credit agencies under HOME heading  “Capital investment” in projects that received LIHTC award in Federal FYs 2007, 2008, 2009  Funds to replace lost equity and private financing  Federal crosscutting requirements apply  Davis-Bacon  Section 504  NEPA and LBP  URA and Section 3 waived by Secretary

◦ TCAP projects must retain LIHTC awards  Credits must be sold or claimed by the developer ◦ Applications were due 6/4 ◦ Grants expected to be made in July ◦ All funds must be expended by February 16, 2012

 Authorized by HERA  Provides Grants to States for:  Development and operating costs of rental housing for very low-income and extremely low-income families  Up to 10% of grants may be used for homeownership assistance for extremely low-income families  Funding originally to be % of GSE new originations ◦ Now is a part of the President’s 2010 Budget  $1 Billion Request

◦ HUD will publish:  Proposed rule on how formula allocations will be determined  Target date: July  Proposed rule outlining all program requirements:  Target date: Late summer

 Proposed HOME Rule is on hold ◦ Awaiting new CPD Leadership ◦ May be broken out into proposed changes and interim changes for effect

Rental Compliance Guides – Two guides on maintaining long-term compliance with HOME requirements have been issued: PJ Project Owners Guide – Guides explain rent, occupancy, and property condition requirements at project completion and during affordability period – Available on HOME webpage and from Community Connections ( )

 HUD OIG has been conducting both national and individual audits of the HOME Program  Major Findings have been made that will result in more OIG audits, increased focus during monitoring and additional HUD oversight

◦ Program Income  Not being expended before program funds  Many PJs have huge balances of PI  Not being reported in IDIS  Some PJs do not receipt program income  Some PJ’s IDIS data do not match own records  Not being properly accounted for in local accounts  Some PJs’ accounting systems are deficient – cannot distingush between HOME PI and HOME appropriated funds that are drawn down and deposited in local account before disbursement

Program Income – What to Expect: – Increasing number of individual PJ audits assessing use of PI and sufficiency of financial systems – HOME Financial Training for PJs in every CPD Field Office (training design underway) – Increased CPD monitoring of Program Income, including reconciliation of CAPER PI reporting and IDIS entries – HOME regulatory changes strengthening requirements

 Commitments ◦ PJs entering commitments in IDIS for projects:  Before written agreement executed  For which there is no written agreement at all  Without reasonable expectation of construction beginning within 12 months  Which are allowed to sit for years with no draws All four situations overstate HOME commitments, unfairly allowing some PJs to avoid deobligation of funds for failure to meet 24- month deadline

 As a result of the IG findings, OAHP did an analysis of projects committed in IDIS for >1 year with 0 draws: There are 2,162 HOME projects committed in IDIS for more than 1 year with 0 draws The amount committed to these projects exceeds $341 million

Commitments – What to Expect: – Increasing number of individual PJ audits sufficiency and timing of written agreements committing HOME fund – CPD monitoring to include assessing sufficiency of agreements and comparing dates on agreements and IDIS entries – HQ will automatically begin cancelling project committed for 1+ years with 0 draws Will start the month after PJ’s 24 month deadline