Description
Congress first authorized the HOME program in the 1990 at $2 billion annually, but has failed to ever reach that amount. Participating Jurisdictions (PJs), which are states, localities, and in some cases a consortia of local governments, can use HOME funds for a variety of programs, including down-payment assistance, rehabilitation projects, new construction, and even rental assistance. HOME funds can be used for rental housing however those projects are required to follow a number of guidelines and restriction.

View the HUD Guidebook by clicking here.

While state housing agencies and localities are given wide latitude to develop innovative programs to meet their affordable housing goals, HOME funds are targeted to families with income of less than 80 percent of the area median income (AMI) or less, with even further targeting requirements in rental assistance programs.

States receive 40 percent of HOME funding and local governments 60 percent annually using a needs-based formula developed by HUD.

The allocation formula is based on a number of criteria, including an area’s relative inadequacy of housing supply, supply of substandard rental housing, number of low-income families in rental housing units likely to be in need of rehabilitation, cost of producing housing, poverty incidence, fiscal incapacity to carry out housing production and needs without help.

State HFAs awarded nearly 50 percent of their HOME funds to non-profits in 2000. HOME funds can also be used in conjunction with other programs, like tax credit and mortgage revenue bond programs.

Eligible Activities

HOME funds can be used in a variety of ways to assist purchasers of manufactured homes. Eligible activities for manufactured housing include:

Acquisition of land for a homesite or a manufactured home;

Replacement of a manufactured home;

Assistance to low-income buyers through direct loan, downpayment or closing cost assistance, or loan guarantees or other forms of credit enhancement;

Moderate or substantial rehabilitation project;

Demolition of dilapidated housing;

Site improvements for HOME-assisted projects;

Payment of relocation expenses;

Other reasonable and necessary expenses related to the development of non-luxury housing.


Compliance Issues

Eligible activities regarding manufactured homes must follow certain conditions as set out by the program:

The home must be anchored and placed on a site-built permanent foundation except in situations where the owner of the home rents the lot on which the home is placed;

The home must be connected to utilities;

The home must be built in accordance to the standards set forth by 24 CFR 2480 as evidenced by the HUD label affixed to the home. If produced prior to June 15, 1976, the home must have met applicable state and local building codes;

The acquisition or rehabilitation of a manufactured home must meet the appraised value standards;

A manufactured home being acquired or rehabilitated must meet the housing quality standards of 24 CFR 882.109.

Other items to be aware of is that displacement as a result of the rehabilitation, acquisition, and demolition of a manufactured home for a HOME-assisted project is subject to Uniform Relocation Assistance and Real Property Acquisitions Policies Act (URA) of 1970. The acquisition of a manufactured home that is considered to be real property under State law and/or the home site is subject to the URA.

The term “permanent foundation” and its requirements are specifically described in the HUD Handbook 4930.3 Permanent Foundations Guide for Manufactured Housing. The creation of such a foundation or the improvement to a foundation are both eligible HOME activities.

HOME funds must be committed within 2 years, and spent within 5 years.

PJs must set aside 15 percent of their funds annually for use by Community Housing Development Organizations (CHDOs), which are special non-profit housing organizations.

PJs must also match every HOME dollar they receive with 25 cents of state, local or private funds. Many exceed this requirement.

HOME-assisted homeownership properties must remain the principal residence of the owner for a period of up to 15 years, or the owner may be required to repay all or a portion of the HOME subsidy, or resell the home to another low-income household.

Application Process

The application process for HOME funds occurs through your state or local administering agency. The requirements and timeframe vary from agency to agency. Access your state housing finance agency by visiting the National Council of State Housing Agencies