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HOME and CDBG Guidebook - HUD Exchange

Foreword One of the major priorities of the Department of Housing and Urban development (HUD) is the creation of affordable housing. The Department administers several Federal programs that assist state and local governments, as well as nonprofits and other partners, to develop affordable homeownership and rental units for low-income households. Two of the most important programs are the home Investment Partnerships Program ( home ) and the community development block Grant ( cdbg ) Program. Both home and cdbg are important resources in the local development of homes and communities. While sharing similar goals related to improving the living conditions of low-income families, each program differs in its eligible activities and requirements.

Community Development Block Grant (CDBG) Program. Both HOME and CDBG are important resources in the local development of homes and communities. While sharing similar goals related to improving the living conditions of low-income families, each program differs in its eligible activities and requirements.

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  Development, Community, Home, Guidebook, Block, Grants, Cdbg, Community development block grant, Home and cdbg guidebook, Home and cdbg

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Transcription of HOME and CDBG Guidebook - HUD Exchange

1 Foreword One of the major priorities of the Department of Housing and Urban development (HUD) is the creation of affordable housing. The Department administers several Federal programs that assist state and local governments, as well as nonprofits and other partners, to develop affordable homeownership and rental units for low-income households. Two of the most important programs are the home Investment Partnerships Program ( home ) and the community development block Grant ( cdbg ) Program. Both home and cdbg are important resources in the local development of homes and communities. While sharing similar goals related to improving the living conditions of low-income families, each program differs in its eligible activities and requirements.

2 In addition, there is a tremendous need for affordable housing in many communities and these needs often exceed available resources. So, it is important that state and local governments make strategic decisions about how to spend their home and cdbg funds. HUD s Office of Affordable Housing Programs, in partnership with HUD s Office of block Grant Assistance, developed this Guidebook as a tool for community development practitioners to assist in making these strategic choices about home and cdbg resources for affordable housing. Its purpose is to provide practical guidance on how both home and cdbg requirements are interpreted and to provide examples of how the two funding sources might be used in tandem.

3 The Department encourages communities to seek strategic, effective, and innovative ways of using two of its most important affordable housing resources the home and cdbg Programs. home and cdbg Table of Contents Introduction .. 1 Making Effective Use of Program Resources .. 1 Selecting Suitable Activities .. 1 Complying with the Rules .. 2 Leveraging cdbg and home .. 3 Planning for cdbg and 3 Assessment of community Needs .. 3 community -Wide 3 Individual Project 4 How to Use this 4 About the Model Program Guides .. 5 Chapter 1: home and cdbg Basics .. 6 What is home ? .. 6 home Program Partners .. 6 home Program Activities.

4 7 Eligible Costs .. 7 Prohibited Activities and Costs .. 8 home Program Requirements .. 9 Income Eligibility and Verification .. 9 Subsidy Limits .. 10 Affordability Periods .. 10 Maximum Value .. 10 Property 11 home Administrative 11 Administrative and Planning Costs .. 11 Match .. 11 Commitment and Expenditure Deadlines .. 12 Program Income .. 12 Pre-Award Costs .. 12 What is cdbg ? .. 13 cdbg Program Partners .. 13 cdbg Program Activities .. 14 Eligible cdbg Activities .. 14 Ineligible cdbg 15 cdbg National Objectives .. 15 Benefit Low- and Moderate-Income Persons .. 16 Elimination of Slum and Blight .. 17 Urgent Need.

5 17 cdbg Administrative Requirements and Caps .. 18 Administrative Cap .. 18 Low- and Moderate-Income Benefit Expenditures .. 18 Public Services 19 Program Income .. 19 Timely Use of Funds .. 20 Pre-Award Costs .. 20 home and cdbg i Chapter 2: Using home and cdbg for Rental Housing .. 26 Approaches to Creating Rental Housing .. 26 Acquisition .. 26 Tenant-Based Rental 27 28 New 28 Financing and Developing Rental 29 30 Forms of Assistance .. 33 Eligible 35 Assisted Units .. 36 Eligible Costs .. 37 Property and Neighborhood Standards .. 38 Other Federal Requirements .. 38 Ongoing Compliance .. 38 Affordability Period.

6 38 Rent Requirements .. 39 Income 40 Ongoing Property Quality .. 41 Chapter 3: Using home and cdbg for Homeownership .. 42 Approaches to Creating Homebuyer Units .. 42 development 42 Direct Homebuyer Subsidy Approach .. 43 Financing and Developing Homebuyer Housing .. 46 Eligible Property 49 Property 50 Other Federal Requirements .. 50 Ongoing Requirements .. 50 Affordability Period .. 50 Recapture Option .. 51 Resale Option .. 51 Enforcing Resale and Recapture 53 Low-Income Targeting .. 53 3-1: American Dream Downpayment Initiative (ADDI) Side-By-Side Comparison of Downpayment Assistance Requirements By Source of Funds.

7 55 Chapter 4: Using home and cdbg for Homeowner 57 Approaches to Homeowner Rehabilitation .. 57 Minor 57 Moderate/Substantial Rehabilitation .. 57 Reconstruction .. 58 Historic 59 Lead-based Paint Hazard Evaluation and Reduction .. 59 Code Enforcement .. 60 home -based Business Rehabilitation .. 61 Financing and Undertaking Homeowner 61 61 Forms of Financial Assistance .. 61 Eligible Costs .. 64 Property and Rehabilitation Standards .. 65 home and cdbg Initial Owner Incomes .. 66 Other Federal Requirements .. 67 Chapter 5: Using home and cdbg for Comprehensive Neighborhood Revitalization ..68 Approaches to Neighborhood 68 Planning Models for Urban 68 Housing 69 Property Inspections and Code Enforcement.

8 69 Infrastructure development and Improvement .. 70 Economic 70 community Facilities and Public Services .. 71 Financing and Requirements for Neighborhood Revitalization .. 71 71 Approaches to 72 Eligible Costs .. 74 Chapter 6: Making Strategic Investment Decisions .. 75 Step 1: Evaluate community needs and preferences .. 76 Step 2: Determine program types based upon needs and preferences .. 77 Step 3: State intended program outcomes .. 78 Step 4: Evaluate the strengths of home and cdbg v. intended 78 Step 5: Assess cdbg and home constraints .. 80 Step 6: Determine whether program should be co-funded with home and cdbg .

9 81 Step 7: If co-funded program, evaluate each project to determine appropriate uses of funds .. 82 Administering Programs .. 83 Choosing Projects and Partners .. 83 Setting Up Adequate Financial Systems .. 85 Developing Efficient Reporting and Record Keeping Systems .. 86 Reviewing Program Performance and Compliance .. 87 Endnotes .. 90 iii home and cdbg Introduction Two programs form the cornerstone of the Department of Housing and Urban development s (HUD s) community development efforts the home Investment Partnerships Program and the community development block Grant ( cdbg ). Across the country, home and cdbg funds are helping communities develop new affordable housing for both renters and homebuyers, rehabilitate existing homes, and turn around troubled neighborhoods.

10 While home and cdbg share the same goals the growth and improvement of America s communities the programs differ in important ways. For example, home and cdbg have different eligible activities, different approaches to meeting the needs of low- and moderate-income families, and different rules regarding matching funds. By using home and cdbg funds strategically, communities can optimize their use of both funding sources, while working within the limitations and regulations of both programs. home and cdbg : Working Together to Create Affordable Housing is the community development professional s guide to using home and cdbg funds for affordable housing activities as strategically as possible.


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