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| ![](media/image1.                 | [\_\_\_\_\_\_                     |
| png){width="2.6972222222222224in" | \_\_\_\_\_\_\_\_\_\_]{.underline} |
| height="0.61875in"}2025 M St. NW, |                                   |
| Suite 800                         | # NACCED                          |
|                                   |                                   |
| Washington, DC 20036              | *National Association for County  |
|                                   | Community and Economic            |
| 202-367-1197                      | Development*                      |
|                                   |                                   |
|                                   | 2025 M St. NW, Suite 800          |
|                                   |                                   |
|                                   | Washington, DC 20036              |
|                                   |                                   |
|                                   | 202-367-1149                      |
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January 21, 2005

Regulations Division

Office of General Counsel

U.S. Department of Housing and Urban Development

Room 10276

451 7^th^ Street, S.W.

Washington, DC 20410-0500

Re: Docket No. FR-4940-1-01

Dear Sir/Madam:

On behalf of the National Association of Local Housing Finance Agencies
(NALHFA) and the National Association for County Community and Economic
Development (NACCED), I am pleased to submit comments on the Interim
Rule -- HOME Investment Partnerships Program; Amendments to
Homeownership Affordability Requirements. NALHFA is a non-profit
national association of city and county governments that finance
affordable housing using a variety of sources including federal tax code
incentives, as well as HOME and CDBG funds. NACCED's members are largely
the urban counties that administer HOME and CDBG funds.

NALHFA and NACCED strongly support the interim rule, which revises the
affordability requirements for homeownership housing assisted under the
HOME program. The interim rule explicitly provides that when the
recapture requirement is triggered by a voluntary or involuntary sale of
the assisted housing and there are no, or insufficient, proceeds to
repay the HOME investment, the participating jurisdiction may recapture
an amount less than or equal to the net proceeds. This change overturns
the previous regulatory provision, which required a participating
jurisdiction, in the case of a foreclosure, to repay the entire HOME
investment regardless of whether it was fully recaptured. This policy
had the effect of putting a participating jurisdiction's own funds at
risk if it could not recapture the complete HOME investment. Such a
policy could discourage participating jurisdictions from making
investments that may be of a higher risk, but nonetheless are the
participating jurisdiction's priority need.

NALHFA and NACCED also strongly support the interim rule's provision
allowing the investment of additional HOME funds to preserve homebuyer
housing previously assisted with HOME funds. This provision will provide
participating jurisdictions with an additional tool to acquire and
preserve foreclosed, affordable housing and make it available to other
qualified homebuyers subject to the maximum per unit subsidy limit.

Thank you for this opportunity to comment on a positive interim rule.

Sincerely,

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John C. Murphy

Executive Director