HOME FAQ's

The HOME program was created the National Affordable Housing Act of 1990 (NAHA). The intent of the HOME program is to provide decent affordable housing to lower-income households, expand the capacity of nonprofit housing providers, strengthen the ability of state and local governments to provide housing, and leverage private-sector participation.

A PJ is a Participating Jurisdiction that receives HOME funds to operate the program.

Community Housing Development Organizations (CHDOs) are defined in the HOME rule (92.2). A CHDO must have a demonstrated capacity for carrying out activities to be assisted with HOME funds. An organization may satisfy this requirement by hiring experienced key staff members who have successfully completed similar projects, or a consultant with the same type of experience. When using a consultant, there must be a plan to train appropriate key staff members of the organization on development activities that the consultant is undertaking. CHDO must also have at least one-year of history serving the community within which the HOME-assisted housing is to be located. The HUD HOME website for “How to Become a CHDO” is here.

The PJ must reserve a minimum of 15 percent of its annual allocation for activities undertaken by qualified CHDOs.

IFA’s process for CHDO certification and recertification can be found here.

The Section 504 regulations at 24 CFR 8.29 require any for-sale housing rehabilitation or newly constructed with federal funds to be made accessible upon the request of the prospective buyer if an expected occupant has a disability that requires accessibility features.

First time homebuyer activities, development subsidy for rental housing and single family homes, and tenant-based rental assistance (TBRA).

Each PJ incurs a 25 percent matching obligation for HOME funds it expends. Matching contribution must be:

o        A permanent contribution to affordable housing;

o        From non-Federal sources; and

o        Provided by any of a broad array of public and private donors.

A project or program must keep records for five years AFTER the affordability period is completed.

IFA uses the Section 8 definition for calculating annual income for the HOME program.

A project means a site or sites together with any building or buildings located on the site(s) under common ownership, management and financing, to be assisted with HOME funds as a single undertaking.

The HOME program distinguishes between the units in a project that have been assisted with HOME funds and those that have not – hence the term HOME-assisted unit. This distinction between HOME-assisted and unassisted units allows HOME funds to be spent on mixed-income projects while still targeting HOME dollars only to income-eligible households.

The minimum HOME investment is $1,000 per unit, but this does not apply to TBRA.

The maximum HOME investment is the 221(d)(3) limits that are calculated by the HUD field office each year.

Utility allowance must be updated annually during the affordability period. A PJ may either adopt the utility allowance used by the public housing agency operating in the area in which the project is located or develop it’s own utility allowance. A PJ-established utility allowance must be based upon a survey of actual utility costs in the area for units of various sizes and the documentation maintained in the PJ’s files. When calculating HOME rents, HUD includes utility costs. Consequently, for project in which tenants pay utility costs directly, owners must deduct the amount of applicable utility allowance from the maximum HOME rents to determine the maximum amount that the tenant may pay for rent. PJs should ensure that project owners have correctly calculated tenants’ rent as part of their annual review and approval of project rents (92.252(f)(2). Currently IFA uses the utility allowance established by the public housing agency. 

HOME rents should be adjusted at lease renewal unless the existing lease makes some other provision for rent adjustments.

Pursuant to 92.214(a)(6) of the HOME rules, HOME funds cannot be provided to a project previously assisted with HOME funds during the period of affordability. However, the rules does permit additional HOME funds to be committed to a project up to one year after project completion as long as the total HOME investment does not exceed the maximum per-unit subsidy amount established under 92.250. The purpose of this provision is to enable PJs to deal with construction deficiencies or other construction-related issues that may arise in the first year, while ensuring that HOME is not used to fund ongoing maintenance and repairs.

The purpose of the HOME Program is to increase the stock of affordable, standard housing available to low-income families. Consequently, the final rule requires that all housing assisted with HOME and/or being rehabilitated with HOME funds to comply with the applicable property standards or one of the model codes specified in 24 CFR 92.251(a).

The total outstanding HOME investment is owed back to HOME account.

The subrecipient must attempt to bring unit into compliance and enforce the HOME written agreement. First the subrecipient should try to get the owner to re-occupy the unit. Second, if re-occupancy does not occur, the subrecipient must try to recoup the amount owed back by the owner. The subrecipient must have a clause in its HOME written agreement with the homebuyer that states repayment is triggered if the principal residency requirement is not met. 

Recapture requirements will be secured through receding forgivable loans due upon sale or transfer within the period of affordability, reducing the HOME investment amount to be recaptured on a prorata basis for the time the homeowner has owned and occupied the housing measured against the required affordability period (example: 1/5 of the amount of the HOME subsidy to the homeowner will be forgiven for each year of a 5-year affordability period.)  When the recapture requirement is triggered by a sale (voluntary or involuntary) of the housing unit, the amount recaptured cannot exceed the net proceeds, if any. The net proceeds are the sales price minus superior loan repayment (other than HOME funds) and any closing costs.

HOME recipients will be encouraged to counsel homebuyers, to maximize their ability to maintain the property and pay the mortgage.  The Iowa land sales recording and abstracting processes will assist IFA and subrecipients in ensuring long–term affordability of HOME funded projects.

Recapture requirements will be secured through receding forgivable loans due upon sale or transfer within the period of affordability, reducing the HOME investment amount to be recaptured on a prorata basis for the time the homeowner has owned and occupied the housing measured against the required affordability period (example: 1/5 of the amount of the HOME subsidy to the homeowner will be forgiven for each year of a 5-year affordability period.)  When the recapture requirement is triggered by a sale (voluntary or involuntary) of the housing unit, the amount recaptured cannot exceed the net proceeds, if any. The net proceeds are the sales price minus superior loan repayment (other than HOME funds) and any closing costs.

HOME recipients will be encouraged to counsel homebuyers, to maximize their ability to maintain the property and pay the mortgage.  The Iowa land sales recording and abstracting processes will assist IFA and subrecipients in ensuring long–term affordability of HOME funded projects.

Cedar Falls, Waterloo, Sioux City, Ames, Council Bluffs, Des Moines, Iowa City, Cedar Rapids, and Davenport.

If any property has asbestos, the project will need to in compliance with the EPA standards for asbestos. The Department of Natural Resources is the responsible agency for asbestos regulation for the State of Iowa.

Title 42, Chapter 130, Subchapter II, Part A HOME Investment Partnership, Section 219, Repayment of Investment: Each participating jurisdiction shall enter into an agreement with the Secretary ensuring that funds invested in affordable housing under this part are repayable when the housing no longer qualifies as affordable housing. Section 92.503, any HOME funds invested in housing that does not meet the affordability requirements for the period specified in Section 92.252 or Section 92.254, as applicable, must be repaid by the participating jurisdiction in accordance with paragraph (b)(3) of this section.   

The term of affordability is dependent on the amount of HOME funds invested in a rental project:

            $1,000 to $15,000                      5 years of affordability

              $+15,000 to $40,000                  10 years of affordability

            $+40,000                                  15 years of affordability

            New construction                       20 years of affordability

IFA has 24 months to commit the HOME funds from the date that the HOME funds contract is signed by HUD, and 5 years to close out the project. IFA expects that a HOME project will be completed within a 24-36 month period. If a project stalls, this allows IFA to reallocate the funds to another project and retain the affordable housing units for Iowa.

At recertification time if a tenant’s income has increased over 80% area median income (AMI) then they must be given 30-day notice that their rent will be increased to 30% of their income. The new rent within the lease would be the 30% of the income. That is why after the first year lease expires, the management company may want to go to a month-by-month lease so rent can be adjusted as income changes. 

If the resident was a “low HOME rent” unit and their income went from under 50% AMI to above 50% AMI, but below 80% AMI, their rent would only increase if there was a “high HOME rent” unit available. If not, then rental management would wait until the next available unit would become available (next “high HOME” unit) then the “low HOME” rent would become “high HOME” and their rent would be increased accordingly. The next available unit would have to be a “low HOME rent” unit and would have to be rented to a household with income at or below 50% AMI. Again, this is why after the first year lease expires, the rental management, may want to go to a month-by-month lease, so rent can be adjusted as income changes.

They have to meet their long term affordability, depending on the amount of HOME funds they receive. But they also have to maintain their home as principal place of residency and have insurance on the property. Principal place of residency and insurance documentation must be submitted to IFA for proof of compliance during the affordability period.