1. slide 1 HOME PROGRAM BASICS www.hud.gov/homeprogram/ Kathleen M. Bialas OGC/HHQ/HUD

2. 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

3. 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

4. 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

5. slide 5 ELIGIBLE ACTIVITIES Homeowner Rehabilitation Homebuyer Programs Rental Housing TBRA

6. slide 6 HOME FUNDING FY 92- 05

7. 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

8. slide 8 LONG-TERM AFFORDABILITY

9. 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 INCOME DEFINED

10. slide 10 LONG-TERM OCCUPANCY Rental: vacated units must be rented to income-eligible households Homebuyer: resale/recapture provisions Homeowner rehab: no requirements

11. 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

12. slide 12 24 CFR 92.250 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

13. slide 13 24 CFR 92.206 ELIGIBLE COSTS Hard costs Soft costs Acquisition costs Relocation costs Refinancing costs

14. slide 14 24 CFR 92.251 PROPERTY STANDARDS Apply to all HOME-assisted units Vary by activity PJ choice

16. slide 16 24 CFR 92.219 - 92.221; CPD Notice 97-03 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

17. 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

18. 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

19. slide 19 24 CFR 92.222 MATCH REDUCTION Fiscal distress/Severe fiscal distress HQ publishes notice annually Presidentially-declared disaster areas

20. 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

21. slide 21 24 CFR 92.216 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

22. slide 22 24 CFR 92.252(a) 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]

23. 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. slide 24 24 CFR 92.205(d); CPD Notice 98-02 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: 3HOME investment : total HOME-eligible project costs

25. slide 25 24 CFR 92.254(b) HOMEOWNER REHAB: ELIGIBLE ACTIVITIES Assist low-income owner-occupants with Rehabilitation Reconstruction

26. slide 26 24 CFR 92.254(a) HOMEBUYERS: THE APPLICANT The applicant must: be low-income occupy the property as principal residence

27. slide 27 ELIGIBLE ACTIVITIES HOME can be used for a number of homeownership activities Acquisition Acquisition/rehabilitation New construction

28. 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

29. 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

30. 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

31. slide 31 OTHER REQUIREMENTS q Labor standards [Davis-Bacon wages] q Environmental review q Nondiscrimination/affirmative marketing q Relocation benefits and replacement of housing converted or demolished q Lead-based paint

32. slide 32 24 CFR 92.600 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

33. 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

34. 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

35. slide 35 INELIGIBLE COSTS Administrative costs Development hard and soft costs for new construction Costs related to rental housing Rental assistance

36. 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

37. 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

38. slide 38 HOME Resources www.hud.gov/homeprogram/ Final Rule (24 CFR Part 92) CPD Notices HOMEfires Model Guides