# Presentation: 304120

## BUILDING HOME

**Match**

## Match

- This chapter covers:
- Basic facts about match
- Eligible and ineligible forms of match
- How to meet the match obligation

## Match Basics 

- PJs must match 25% of HOME funds drawn down for project costs
- Match must be a *permanent contribution *to the HOME Program
- Match liability must be satisfied by end of federal fiscal year

## Match Requirements

- No match required for:
- FY 1992 funds
- Admin and planning costs
- Funds to CHDOs for:
- Operating expenses
- Capacity building
- Pre-development loans for projects that don’t go forward
- Shortfall funds

## Eligible Sources of Match

- Cash or “cash equivalents”
- Value of waived taxes (HOME projects only), fees or charges
- Value of donated land/real property
- Cost of infrastructure improvements related to HOME projects
- Percentage of proceeds of housing bonds

## Eligible Sources of Match

- Value of donated materials and labor
- Sweat equity
- Direct costs of supportive services to residents of HOME projects
- Direct costs of homebuyer counseling to HOME-assisted households

## Cash and Cash Equivalents

- Cash must be:
- From a non-federal source
- Permanent contribution
- Cash equivalents means the value of grants and below-market interest rate loans
- Match notice includes guidance on calculations

## Forbearance of Fees

- Two kinds of waived fees may be counted as match:
- State and local taxes, fees and charges
- Only on HOME-assisted projects
- Value of foregone real estate taxes must be based on after-rehab value
- Other charges and fees
- Fees associated with property transfer or development

## Donated Land/Real Property 

- Can be donated or sold at below-market value
- Can be for a HOME-assisted or HOME-eligible
- Property acquired with non-federal funds counted at 100% of its value
- Match credited when ownership is transferred

## Property Acquired with Federal Funds

- To get match credit:
- Property must have been acquired for HOME-assisted or HOME-eligible project
- Property must have been acquired at or below the appraised value
- Seller must acknowledge the sale at or below market value as a donation to HOME
- Amount of credit varies according to different circumstances

## Infrastructure

- To get credit, infrastructure must be:
- Directly facilitate the occupancy of HOME-_assisted _project
- Completed with the HOME project or within 12 months prior to HOME funding commitment
- Paid for with non-federal funds
- In HOME and non-HOME housing, investment must be prorated

## Infrastructure

- Investment in infrastructure credited:
- When funds are expended OR
- If improvements made prior to HOME commitment, when HOME funds are committed
- HOME projects only

## Housing Bond Proceeds

- No more than 25% of a PJ’s total match obligation can be met through loans made with bond proceeds
- To be eligible, proceeds must be provided to either HOME-assisted or HOME-eligible units

## Housing Bond Proceeds

- Limitations on the amount of match credit that can be counted:
- 50% of loans to multi-family projects
- 25% of loans to single family projects
- Loans from bond proceeds credited at loan closing

## Donated Labor, Services, Equipment and Materials

- To count donated material, PJs must use normal cost estimating procedures to determine value
- To get credit for donated or reduced-rate equipment,
- Calculate normal rental rate
- Document with letter from equipment owner

## Donated Labor, Services, Equipment and Materials

- For donated or reduced-rate labor or services,
- HUD publishes rates for donated unskilled labor
- Skilled labor valued at rate normally charged for the service
- Donations credited at time they are used/contributed to the project

## Sweat Equity

- Must be contributed as part of an established program of the PJ
- Calculate at rate of unskilled labor (provided by HUD)
- Can be contributed up until project completion report submitted

## Supportive Services

- Services must be provided to residents of HOME-assisted units
- Services must be:
- Paid for with non-federal funds
- Provided during affordability period
- Necessary for independent living OR required in self-sufficiency program
- Match credited when services are provided

## Homebuyer Counseling

- Value of counseling credited only for HOME-assisted homebuyer families
- Ongoing counseling during the affordability period is eligible as match
- Match credited when counseling provided

## Ineligible Match Sources

- Contributions from federal sources
- Interest rate subsidy from tax-exempt financing or tax credits
- Owner equity/investment in a project (except sweat equity)
- Cash/contributions from applicants or recipients
- PJ’s administrative cost
- Match for any other federal program

## Meeting the Match Obligation 

- Plan ahead
- Consider timing
- Be creative
- Set up a system
- Have a long-term strategy