HUD Publishes Revised FAQs on HOME
When developers seek financial resources for affordable rental housing development, many combine funds generated through the LIHTC program offered by the IRS with housing block grant funds provided through the HOME Investment Partnerships (HOME) program administered by HUD. For example, to establish affordable rents in many markets, a site’s rents may not adequately support sufficient conventional mortgage debt. The equity raised from the LIHTC may not be sufficient to provide all of the additional capital required by the project. Often, HOME funds can be used to finance the remaining gap.
When combining these two sources of funds, the sites must comply with the requirements of both programs. Generally, this can be achieved by complying with the most restrictive requirement. To help educate owners on HOME requirements, HUD recently published new HOME Frequently Asked Questions (FAQs). The new FAQs address questions such as income determinations (passbook savings rate) and Community Land Trusts (fees). It can be found at www.hudexchange.info/resource/3318/home-faqs.