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Homeownership - Housing CounselingHOME provides formula grants to States and localities that communities use to fund a wide range of activities that build, buy, and/or rehabilitate affordable housing for rent or homeownership or provide direct rental assistance to low-income people. The housing is often developed in partnership with non-profit organizations. HOME is the largest Federal block grant to State and local governments designed exclusively to create affordable housing for low-income households. Each year it allocates more than $1 billion among the States and hundreds of localities nationwide. HOME's flexibility empowers communities to design and implement affordable housing strategies tailored to their own needs and priorities. HOME's emphasis on the consolidated planning expands and strengthens partnerships among all levels of government and the private sector in the development of affordable housing. Requirements The HOME program requires that participating jurisdictions (PJs) match 25 cents of every dollar with non-federal dollars leverages other resources for affordable housing. Participating jurisdictions must have a current and approved Consolidated Plan, which will include an action plan that describes how the jurisdiction will use its HOME funds. A newly eligible jurisdiction also must formally notify HUD of its intent to participate in the program. Descriptions of planned and recently implemented activities undertaken by individual grantees with HOME funds are described in summaries of each community's Consolidated Plan. Eligible Grantees States are automatically eligible for HOME funds and receive either a formula allocation or $3 million, whichever is greater. Local jurisdictions are eligible to receive a formula allocation if they score at $500,000 under the formula calculations ($335,000 in years when Congress appropriates less than $1.5 billion for HOME). Communities that do not qualify for an individual allocation under the formula can join with one or more neighboring localities in a legally binding consortium whose members' combined allocation would meet the threshold for direct funding. Localities not eligible for formula allocations may apply for HOME program funds made available by their State. Congress sets aside a pool of funding, equivalent to the greater of $750,000 or 0.2 percent of appropriated funds, which HUD distributes among insular areas. Eligible Participants The eligible households for HOME assistance varies with the type of funded activity. For rental housing and rental assistance, at least 90 percent of benefiting families must have incomes that are no more than 60 percent of the HUD-adjusted median family income for the area. In rental projects with five or more assisted units, at least 20% of the units must be occupied by families with incomes that do not exceed 50% of the HUD-adjusted median. The incomes of households receiving homeownership assistance must not exceed 80 percent of the area median. HOME income limits are published each year by HUD. Eligible Activities How Can HOME Be Used? HOME funds can be used to
HOME funds can be used to create or assist eligible units in a mixed income or mixed use project. HOME funds cannot be used to-
HOME-assisted rental housing must comply with certain rent limitations. HOME rental income limits are published each year by HUD. The program also establishes maximum per unit subsidy limits and maximum purchase-price limits. Matching Funds Required Some special conditions apply to the use of HOME funds. PJs must match every dollar of HOME funds used (except for administrative costs) with 25 cents from nonfederal sources, which may include donated materials or labor, the value of donated property, proceeds from bond financing, and other resources. The match requirement may be reduced if the PJ is financially distressed or has suffered a disaster. Community Housing Development Organizations (CHDOs) In addition, PJs must reserve at least 15 percent of their allocations to fund housing to be owned, developed, or sponsored by experienced, community-driven nonprofit groups designated as Community Housing Development Organizations (CHDOs). Affordability Terms PJs must ensure that HOME-funded housing units remain affordable in the long term (20 years for new construction of rental housing; 5-15 years for construction of homeownership housing and housing rehabilitation, depending on the amount of HOME subsidy). NAHRO Policy Position NAHRO opposes all set-asides within the HOME program, including
any related to homebuyer assistance programs.
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