# Presentation: 191212

## HOPE VI Main Street Grants	

- Contact
- Lawrence Gnessin
- Office of Public Housing Investments,
- Washington, DC
- lawrence.gnessin@hud.gov  (202) 402-2676
- Visit HUD’s Main Street Website at
- http://www.hud.gov/offices/pih/programs/ph/hope6/grants/mainstreet/

## Purposes

- To provide needed funds for Main Street rejuvenation efforts;
- To provide affordable housing within the Main Street rejuvenation effort;
- As initial funding or gap financing to reconfigure obsolete office/commercial space into income producing rental housing.
- As gap financing or initial funding of affordable housing development, etc.

## Amount and Eligibility

** ****Up to ****$1,000,000**
**Limited to smaller communities.**
- A smaller community must have a population of 50,000 or fewer; and
- Must have 100 or less physical public housing units within its jurisdiction.
- Only local governments may apply. Any other organization or property owner interested has to team with their local town, city, county\parish, etc.

## Application for Grant

- Applications are being funded via the competitive Notice of Funding Availability (“NOFA”) process. This year’s NOFA was published in the Federal Register on June 29, 2007.
- Applications are submitted electronically and must be received and verified as received at Grants.gov by August 29, 2007, 11:59:59 pm.
- Visit HUD’s Grants page, which has links to documents that explain how to register and submit an application through Grants.gov, at: _[http://www.hud.gov/grants/](http://www.hud.gov/grants/)_

## NOT Public Housing

- Main Street units are **NOT** public housing.
- HUD’s public housing regulations do NOT apply to Main Street units.
- HUD’s public housing regulations and HOPE VI guidance may be used as resource materials.
- Examples: HOPE VI allows unique rent structures and mixed-income development. Public housing shows the adjustments to determine **Adjusted** Gross Income

## Affordable Housing

**Initial** residents must be low-income.
- Low-income is defined as a resident (or family) having an adjusted gross income of 80% or less of the Area Median Income (HUD has published income limits), and:
- Residents must contribute no more than 30% of their Adjusted Gross Income to rent, and must generally have the same lease rights as public housing residents, e.g., eviction; pets; decent, safe, and sanitary housing, etc.

## Limit to Affordable Housing

- For HUD’s Main Street program, the term `affordable housing’ applies only to the **initial** residents of the new housing units.
- Initial rental or homeownership is limited to low-income residents with a portion of units reserved for very low-income residents.
- The grantee (town, city, county/parish) determines if there will be any affordability requirements beyond the initial residency.
- Units may become market rate after the initial resident moves out.

## Use of Grant Funds

- Grant funds and a mandatory 5% Applicant Match (in cash or in-kind services) MUST be used only on **eligible affordable housing activities** in connection with an eligible Main Street rejuvenation effort, i.e., the housing units presented in the application.* *
- Leverage funds do not have this restriction and may be attributable to any Main Street project activities.
- Visit HUD’s Main Street page at: http://www.hud.gov/offices/pih/programs/ph/hope6/grants/mainstreet/ for further Main Street program information.

## Property Ownership

- Main Street Affordable Housing Projects may belong to private owners, partnerships, corporations, local governments, Main Street organizations, non-profits, etc.
- Property cannot be sold during the grant term. Donation for $1, long-term leases and other exceptions are allowed by the NOFA.

## Eligible Main Street Rejuvenation Effort (Main Street Project)

- There must be an **existing*** *Main Street rejuvenation effort;
- HUD determines whether a described rejuvenation effort can be considered an eligible Main Street rejuvenation effort based on the following:

## Main Street Project Cont’

- A Main Street project:
- Is carried out within the jurisdiction of smaller community receiving the grant;
- Has as its purpose the revitalization or redevelopment of a historic or traditional commercial area;
- Involves investment, or other participation, by the community government **and** private entities in the community;
- Involves the development of affordable housing that is located in the commercial area that is the subject of the project.

## Main Street Project Cont’

- Complies with The National Historic Preservation Act (NHPA), Section 106 to preserve significant historic or traditional architectural and design features in the structures or area involved in the project.
- The site of the affordable housing units that will be developed (Housing Site) must be approved by the State Housing Preservation Officer (SHPO).
- HUD’s Environmental Review must be completed before breaking ground.
- HUD will contact the SHPO and do a Section 106 review as a part of the required Environmental Review.

## Match

- Grantee contribution of funds must match at least 5% of the amount of requested funds.
-  This 5% Match is statutory and mandatory.
- The Match must be expended on the affordable housing project in the rejuvenation effort (housing site).
- The Match must not come from other Section 24 (HOPE VI) funds.
- The match may be cash or in-kind services with documented value.

## Eligible Activities

- Leveraging other resources, cash or in-kind services.
- The amount of Leverage for both the housing site and for the Main Street project as a whole assists in demonstrating public/private support for the Main Street effort.
- Match and Leverage could include a wide variety of sources, e.g., other government or private funds, a private loan, a long term lease on the housing site, new infrastructure or improvements made after the Main Street Effort began, building materials or volunteer labor from local people or institutions, etc.

## Other Eligible Activities

- Construction
- Architectural and engineering work;
- Providing reasonable moving expenses for residents displaced as a result of the revitalization of the project;
- Economic development activities that promote the economic self-sufficiency of residents under the rejuvenation effort;

## Other Eligible Activities

- Necessary management improvements for the Grantee that will enable it to complete the grant, e.g., automating some bookkeeping if funds will flow through the Grantee to a private property owner;
- Necessary supportive services, e.g., if homeownership units are developed Homeownership Training must be provided.
- Supportive Services cannot exceed 15% of the grant amount.

## Limits on Activities

- Grant funds must not be expended on:
- Public housing activities;
- Replacement housing units for demolished or disposed of public housing units;
- Housing Choice Vouchers (Section 8);
- Homeownership downpayment for displaced public housing residents
- Administrative costs of the Grantee;
- Legal fees; and
- Transitional Security activities.

## Cost Limits

- There are Total Development Cost (TDC) limits per new housing unit. These limits will be used to determine the grant amount.
- There are also Safe Harbor limits on overhead and profit.
- Links to these sites are in the NOFA. Limits are available on HUD’s HOPE VI website at http://www.hud.gov/offices/pih/programs/ph/hope6/ and in the NOFA.

## Summary

- The city is the official applicant. So, any other organization or property owner has to team with the city;
- If the city has 100 or more HUD financed physical public housing units in its jurisdiction, it is not eligible to apply;
- If the city has a population of more than 50,000, it is not eligible to apply

## Authorization

- Section 24 (of the U.S. Housing Act) authorizes the development, reconfiguration and major rehabilitation of affordable housing that is related to **existing** Main Street rejuvenation efforts in smaller communities.