U.S. Department of Housing and Urban Development

Office of Community Planning and Development

Establishing and Managing a

Successful HOME Consortium

Establishing and Managing a 

Successful HOME Consortium 

2006 

Prepared by 

U.S. Department of Housing and Urban Development 

Community Planning and Development



i 

Table of Contents 

Page

Introduction ........................................................................................................................................... 1 

Purposes of the Guidebook................................................................................................................................1 

Organization of the Guidebook.........................................................................................................................1 

Who Benefits from Reading this Guidebook?.................................................................................................2 

About the HOME Model Program Guides.....................................................................................................2 

Chapter 1: Forming a Consortium .........................................................................................................3 

What is a Consortium? ........................................................................................................................................3 

Why Form a Consortium? ...................................................................................................................3 

Who is Eligible to be a Consortium? .................................................................................................4 

What Conditions Must Proposed Consortia Meet?.........................................................................5 

What Work is Involved in Forming a Consortium?.......................................................................................5 

Key Considerations Before Forming a Consortium.......................................................................................6 

Who Should be Included in the Consortium?..................................................................................6 

What is the Consortium’s HOME Funding Level? .........................................................................7 

What Is the Impact of a Consortium on HOME Funding Levels in the State?.........................8 

Do the Jurisdictions Have the Capacity to Meet HOME Requirements? ...................................9 

Can the Consortium Members Establish and Maintain Good Working Relationships?.........11 

Chapter 2: Obtaining and Renewing Consortium Status .................................................................... 13 

The Process for Designation of a Consortium as a HOME PJ..................................................................13 

Step 1: Designation as a Consortium..............................................................................................13 

Step 2: Designation as a HOME PJ ................................................................................................14 

Step 3: Execution of the HOME Investment Partnership Agreement.....................................15 

Executing a Consortium Agreement...............................................................................................................16 

Purpose and Contents of the Consortium Agreement..................................................................16 

Developing the Consortium Agreement .........................................................................................16 

Signing the Consortium Agreement.................................................................................................16 

Amending a Consortium Agreement ...............................................................................................17 

Renewing Consortium Status ...........................................................................................................................17 

Term of a Consortium........................................................................................................................17 

Renewals ...............................................................................................................................................17 

Making Changes to the Consortium Membership.........................................................................18 

Disbanding a Consortium..................................................................................................................19 

Chapter 3: Key HOME Regulatory Requirements.............................................................................. 21 

HOME Program Purpose and Activities .......................................................................................................21 

HOME Administrative Requirements............................................................................................................21 

Administrative Costs...........................................................................................................................21 

Consolidated Plan................................................................................................................................22 

Written Agreements............................................................................................................................23 

Commitments and Disbursements...................................................................................................23 

Record-keeping and Reporting .........................................................................................................24 

Monitoring............................................................................................................................................25 

Program Requirements......................................................................................................................................25 

Eligible Activities.................................................................................................................................25 

Match Requirements...........................................................................................................................25 
ii 

CHDO Set-aside..................................................................................................................................26 

Income Targeting ................................................................................................................................26 

Other Federal Requirements .............................................................................................................27 

Project Requirements.........................................................................................................................................27 

Eligible Costs .......................................................................................................................................28 

Rental Housing Affordability ............................................................................................................28 

Homeownership Housing Affordability..........................................................................................29

Eligible Types and Levels of Assistance..........................................................................................29 

Eligible Properties ...............................................................................................................................30 

Property Standards..............................................................................................................................30 

Affordability Period ............................................................................................................................30 

Chapter 4: Responsibilities of the Lead Entity................................................................................... 33 

Accountability of the Lead Entity....................................................................................................................33 

Executing Written Agreements........................................................................................................................33 

Consortium Agreements ....................................................................................................................34 

Subrecipient Agreements ...................................................................................................................34 

Written Agreements with Developers and Owners.......................................................................35 

Enforcing Written Agreements........................................................................................................................35 

Managing HOME Funds ..................................................................................................................................36 

Prior to Funding Commitment .........................................................................................................36 

Monitoring Commitment and Expenditure Timeframes..............................................................37 

Disbursing HOME Funds .................................................................................................................37 

Tracking Match....................................................................................................................................37 

Managing Program Income ...............................................................................................................38 

Managing Recaptured Funds.............................................................................................................39 

Managing HOME Repayments.........................................................................................................40 

Monitoring and Long-Term Compliance.......................................................................................................40 

Compliance Monitoring During Implementation..........................................................................41 

Long-term Compliance.......................................................................................................................41 

Record-keeping and Reporting ........................................................................................................................43 

Record-keeping....................................................................................................................................43 

Reporting ..............................................................................................................................................44 

Communicating with Consortium Members .................................................................................................46 

Acting as a Liaison with HUD .........................................................................................................................47 

Lead Entity Responsibilities After Member Withdrawal or Termination of a Consortium ..................48 

Chapter 5: Critical Decisions for Consortium Operations................................................................... 49 

Introduction ........................................................................................................................................................49 

Determine Governance Structure and Member Roles.................................................................................50 

Governing Board with Far-reaching Authority..............................................................................51 

Lead Entity with Far-reaching Authority ........................................................................................51 

Shared Authority Between a Governing Board and Lead Entity ................................................51 

Governance Questions.......................................................................................................................51 

Coordinate Planning Efforts ............................................................................................................................53 

Make Financial Decisions Related to HOME Funds...................................................................................54 

How Should Consortium Share HOME Administrative Funds Among Members? ...............54 

Who is Responsible for Securing Matching Funds?......................................................................55 

How Will the Consortium Satisfy Its CHDO Set-aside Requirement?......................................56 

Is Program Income Retained by Jurisdictions or Returned to Consortium?.............................59 

Select Specific Projects ......................................................................................................................................59 

Oversee Projects During Implementation .....................................................................................................63 
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Ensure Ongoing and Long-term Compliance ...............................................................................................64 

Chapter 6: The Seven Habits of Highly Effective Consortia............................................................... 65 

The Lead Entity Has the Staff and Resources to Meet Its Responsibilities .............................................66 

Members’ Responsibilities are Clear and Consistent with Members’ Capacity........................................67 

The Consortium Has Explicit Rules and Procedures...................................................................................67 

The Consortium Has a Detailed Consortium Agreement...........................................................................68

There is Regular Communication Among Consortium Members .............................................................68 

HOME Administrative Funds Supplement Existing Capacity ...................................................................68 

The Consortium Thinks Across Jurisdictional Boundaries.........................................................................69 

Attachment 1: Elements of an Effective Consortium Agreement........................................................ 71 

Attachment 2: Required Provisions in HOME Written Agreements .................................................. 75 

Attachment 3: Elements of a Subrecipient Agreement........................................................................ 77 

Attachment 4: Sample Procedures for Managing Expenditure Deadlines.......................................... 79 

Endnotes.............................................................................................................................................. 81 
iv 
1 

Introduction 

Under the HOME Program of the U.S. 

Department of Housing and Urban Development 

(HUD), local governments are able to join 

together to form a “consortium” in order to 

receive HOME funding for affordable housing. 

Forming a consortium enables local governments 

that would not otherwise qualify for HOME 

Program funding under the formula criteria to join 

with other units of local government to receive a 

direct allocation of funds. This creates an 

opportunity for these jurisdictions to take a more 

regional, collaborative approach to meeting their 

affordable housing needs. In Federal Fiscal Year 

2006, there were 130 approved consortia 

participating jurisdictions (PJs). 

Although a consortium is subject to the same 

requirements as a local government PJ for 

purposes of the HOME Program, a consortium 

faces a number of challenges that other local PJs 

do not face. By definition, a consortium is a 

collaboration of local government entities—each 

with its own bureaucratic structure, elected 

leadership, and legal requirements. In order to 

carry out HOME activities and meet all HOME 

requirements, the consortium must create and 

operate as one new entity that is able to operate 

efficiently and effectively to assess affordable 

housing needs, develop a plan to address those 

needs, make funding decisions, carry out complex 

housing activities, self-monitor progress, account 

for expenditures, and report to HUD. 

Purposes of the Guidebook 

The primary purpose of this guidebook, 

Establishing and Managing a Successful HOME 

Consortium, is to provide technical and operational 

advice to new and prospective HOME consortia 

and to answer critical questions about the 

management and implementation of HOME 

Program activities. At the same time, this 

guidebook provides guidance to existing HOME 

consortia on governance and renewal, and 

suggests alternative models for governance and 

administration for those consortia that want to 

enhance their program operations. 

Organization of the Guidebook 

The guidebook is organized into six chapters: 

Chapter 1, Forming a Consortium, discusses the 

basics of HOME consortia. It defines a 

consortium, identifies eligibility criteria, and 

describes common motivations for forming 

consortia. This chapter reviews a number of key 

issues that local jurisdictions should consider prior 

to forming a consortium, including how to 

determine the group’s potential HOME allocation, 

assess its capacity to meet HOME requirements, 

and evaluate its ability to work together as a 

group. 

Chapter 2, Obtaining and Renewing Consortium Status, 

describes the HOME requirements associated 

with requesting, maintaining, and renewing 

consortium status. It also reviews HUD 

requirements for adding and/or dropping 

members or disbanding. 

Chapter 3, Key HOME Regulatory Requirements, 

provides a brief overview of the key HOME 

administrative, program, and project requirements 

that apply to all PJs, including consortia. The 

chapter identifies other resources that provide 

more detailed information on these requirements. 

Chapter 4, Responsibilities of the Lead Entity, outlines 

the specific responsibilities of the lead entity, the 

consortium’s representative jurisdiction that has 

responsibility for interacting with HUD. 

Ultimately, HUD holds the lead entity responsible 

for the consortium’s compliance with HOME 

requirements. This chapter highlights required 

and recommended practices that will help the lead 

entity succeed in seeing that the consortium 

operates in compliance with HOME 

requirements, including executing and enforcing 

agreements, managing HOME funds, monitoring 

member jurisdictions, and reporting to HUD. 

Chapter 5, Strategic Decisions of a Consortium, 

reviews the decisions that prospective and existing 

consortia must make regarding the governance 

and operations of their HOME activities. This 

chapter will assist existing consortia in assessing, 

identifying gaps in, and improving their current 

operational systems. This chapter will help new 

and prospective consortia foresee problems that 
2 

can arise, and develop systems to help them avoid 

common problems. 

Chapter 6, The Seven Habits of Highly Effective 

Consortia, summarizes key information from this 

guide by drawing on lessons learned from a highly 

successful consortium. It reinforces many of the 

requirements and decisions discussed in earlier 

chapters, and makes recommendations about what 

systems, procedures, and rules have been found 

most helpful to existing consortia. 

The experiences of successful consortia are shared 

throughout the guidebook. 

Who Benefits from Reading this 

Guidebook? 

Both prospective consortia and existing consortia 

should benefit from this guidebook. This 

guidebook is organized sequentially to address the 

range of issues that prospective and existing 

consortia must consider. Prospective consortia 

will want to review every chapter to gain a 

complete understanding of what obligations they 

will assume, and decisions they will need to make, 

when they form a consortium. Existing consortia 

are able to focus on areas of need—such as the 

responsibilities of the lead entity (Chapter 4), or 

strategic decisions of the consortium (Chapter 5). 

All consortia will benefit from the final chapter’s 

lessons of a successful consortium. 

About the HOME Model Program 

Guides 

Establishing and Managing a Successful HOME 

Consortium is one of a number of model program 

guides that has been issued by HUD to provide 

technical assistance to state and local government 

participating jurisdictions implementing the 

HOME Program. These model program guides 

cover a range of topics related to HOME Program 

administration and activities, and are available at 

no cost through Community Connections at 1-

800-998-9999. For a complete list of all the model 

program guides, see the HOME Program’s 

website, Model Program Guides, at 

http://www.hud.gov/offices/cpd/affordable 

housing/library/modelguides/index.cfm. 
3 

Chapter 1:

Forming a Consortium 

This chapter is a must-read for all members of any prospective consortium. The chapter provides general background on consortia, 

describing what consortia are and why they are typically formed. It highlights specific considerations for jurisdictions that are 

thinking of creating a new consortium, including community needs, the consortium’s potential resources and technical capacity to 

implement housing programs, and the proposed members’ ability to work together. Using guidance in this chapter, prospective 

consortia can assess the commitment required to succeed as a HOME consortium and their own potential for success. 

What is a Consortium? 

A consortium consists of contiguous units of 

general local governments that come together to 

qualify for a direct allocation of HOME funds 

from HUD. Generally, local governments 

choose to form a consortium when the members 

are not eligible to receive HOME funds 

individually because they do not meet the HOME 

Program’s initial thresholds for participation 

(described below). The consortium as a whole 

must initially qualify for the minimum HOME 

formula allocation. This requirement is discussed 

in Chapter 2. 

The consortium functions as a HOME PJ with all 

of the responsibilities of a PJ to meet the HOME 

Program requirements. A consortium must, 

therefore, be able to demonstrate to HUD that it 

has sufficient legal and administrative capabilities 

to carry out these responsibilities, which are 

described in Chapter 3. 

Consortia can organize and govern themselves as 

they choose; however, they must designate one 

jurisdiction as the “lead entity” and must execute a 

legally binding consortium agreement that 

formally organizes the consortium. The 

consortium agreement is described more fully in 

Chapter 2. The lead entity retains primary 

responsibility for ensuring consortium compliance 

with all HOME Program rules and reporting to 

HUD. The responsibilities of the lead entity are 

described in Chapter 4. 

For more information about 

HOME Consortia 

HUD’s Office of Affordable Housing Programs 

administers the HOME Program and maintains 

accurate and up-to-date information about the 

HOME Program, at 

http://www.hud.gov/homeprogram/. 

For information specifically on HOME consortia, 

see http://www.hud.gov/offices/cpd/affordablehousing/ 

programs/home/consortia/index.cfm.

Why Form a Consortium? 

Generally, units of local government form 

consortia to access direct formula allocations of 

HOME funds to support housing activities and 

programs. Without a direct formula allocation, 

local jurisdictions can participate in the HOME 

Program only by receiving an allocation from their 

state as state recipients. In some states, funding is 

offered through competitive processes, and some 

localities may not be able to access state funding 

for the housing activities they wish to conduct. 

Forming a consortium enables local governments 

to work together to develop collaborative 

approaches to local and regional housing needs 

that cross town and county lines. Successful 

consortia find that joining together improves 

cooperation between local governments, fosters 

regional planning, and provides a vehicle for 

assisting small jurisdictions to meet housing needs. 
4 

Who is Eligible to be a Consortium? 

To be eligible to form a consortium, the proposed 

members must all be legal entities that are units of 

general local government, and these members 

must be geographically contiguous. The HOME 

regulations also impose additional requirements 

for certain types of jurisdictions. 

Definition of Unit of General Local 

Government 

Consortium member jurisdictions must be units of 

general local government. A wide variety of local 

governmental entities qualify as a unit of general 

local government, including a city, town, 

township, county, parish, village, or other general 

purpose political subdivision of a state. In 

addition, a unit of general local government can 

be an agency or instrumentality of any state or 

local governmental entity that is established by 

legislation and designated by the chief executive of 

the jurisdiction to act on behalf of the jurisdiction 

with regard to the HOME Program. Examples of 

such agencies include designated public housing 

authorities or mortgage finance authorities. An 

urban county under the Community Development 

Block Grant (CDBG) program is also considered 

a unit of general local government for the HOME 

Program. (A unit of general local government is 

defined in the HOME Program regulations at 24 

CFR 92.2.) 

Contiguous Jurisdictions 

The units of general local government that 

comprise a consortium must be geographically 

contiguous according to the U.S. Census Bureau 

or other authoritative maps. A river or other body 

of water may separate these jurisdictions if there is 

a road or a bridge that makes them contiguous. 

As long as they are contiguous, jurisdictions from 

different states can join together to form a 

consortium. 

Requirements for Some Types of Local 

Governments 

A consortium may be comprised of a range of 

jurisdictions as described above, however HUD 

has identified several requirements for specific 

types of jurisdictions. In general, these 

requirements are imposed to ensure that the 

jurisdictions in a consortium are participating in 

the preparation and implementation of one single 

consortium-wide housing plan as part of the 

consolidated planning process. The consolidated 

planning process is discussed in Chapters 3 and 5. 

The following entities may be a HOME 

consortium member, as follows: 

• Urban county, as defined by CDBG statute. 

As a practical matter, an urban county is a 

county that is receiving a CDBG entitlement 

grant and includes units of general local 

government that sign cooperation agreements 

with the county. When units of general local 

government sign up to be part of an urban 

county for the CDBG program, they also 

agree to participate in the HOME Program if 

the urban county joins a consortium. 

Accordingly, when an urban county joins a 

HOME consortium, a unit of local 

government that is a member of the county 

cannot join the consortium except through 

participation in the urban county (except a 

metropolitan city with a joint agreement with 

an urban county, as explained below). The 

authorized official of the urban county signs 

the consortium agreement on behalf of the 

entire urban county. 

While an included unit of general local 

government may only receive a formula 

allocation under the HOME Program as part 

of the urban county, this does not preclude 

the urban county or a unit of general local 

government participating with the urban 

county from applying for state HOME funds. 

In many urban counties, there are units of 

general local government that have chosen 

not to participate in the CDBG urban county. 

These units of general local government can 

choose to join the HOME consortium, but 

they must sign the HOME consortium 

agreement to do so. By signing the 

consortium agreement, the unit of general 

local government within the urban county, 

but not participating in the urban county, 

becomes a member of the consortium. 

• Non-urban county. This is a county that is 

not receiving a CDBG entitlement grant. 

A non-urban county may join a HOME 

consortium. However, the county on its own 
5 

cannot include the whole county in the 

consortium, only the unincorporated area of 

the county. A unit of local government 

within the non-urban county that wishes to 

participate as a member of the consortium 

must sign the HOME consortium agreement. 

By signing the consortium agreement, the unit 

of general local government within the nonurban county becomes a member of the 

consortium. 

• Metropolitan city, as defined by CDBG 

statute. As a practical matter, a metropolitan 

city is a city that is receiving a CDBG 

entitlement grant. 

A metropolitan city may be a HOME 

consortium member. If a metropolitan city 

has a Joint Grant Agreement with an urban 

county for the CDBG program and wishes to 

receive HOME funding with the urban 

county, it must form a HOME consortium 

with the urban county. Both programs must 

establish the same program year in order to 

receive funding. 

Note: The CDBG program regulations allow 

a metropolitan city located, in whole or in 

part, within an urban county to be included as 

part of that county for the purposes of 

planning and implementing a joint community 

development and housing program. (See 24 

CFR 570.308.) This request is approved by 

HUD through the submission of a “Joint 

Grant Agreement.” 

For guidance during the formation process 

If a jurisdiction is unclear about whether or not it 

is eligible to participate in a consortium, and/or 

about who must sign a consortia agreement, it 

should consult with its HUD Field Office. The 

Field Office is able to provide guidance about the 

technical requirements related to forming a 

consortium as well as the HOME Program 

regulations. 

What Conditions Must Proposed 

Consortia Meet? 

In addition to the eligibility criteria defined above, 

the proposed consortium is required to 

demonstrate to HUD that it meets a number of 

additional conditions: 

• All of the member jurisdictions must operate 

on the same program year for HOME, 

CDBG, Emergency Shelter Grants (ESG), 

and Housing Opportunities for Persons with 

AIDS (HOPWA), if these program funds are 

received by any member jurisdiction(s); 

• The group must have sufficient 

administrative capacity and legal authority to 

administer the consortium’s activities; 

• The lead entity must assume full 

responsibility on behalf of the consortium for 

compliance with HOME and other applicable 

Federal requirements; 

• The consortium must be able to operate for a 

three-year qualification period, during which 

time jurisdictions can be added as members, 

but none can drop out. Note, the consortium 

may elect a shorter qualification period than 

three years to synchronize with the urban 

county qualification period. [See 24 CFR 

92.101(e).]; 

• The state must certify that the consortium 

will carry out activities to alleviate housing 

problems within the state; and 

• The group must execute a legally binding 

consortium agreement. 

The process and documentation necessary to 

demonstrate compliance with these requirements, 

as well as the bases for HUD’s review and 

approval, are described in Chapter 2. 

What Work is Involved in Forming a 

Consortium? 

Forming a consortium requires a significant effort 

on the part of participating members, especially 

the lead entity. Before forming a consortium, 

every member jurisdiction should review this 

guidebook to ensure that it understands its 

obligations as a consortium member. There are a 

series of steps involved in getting HUD’s approval 

as a PJ (discussed in Chapter 2), a number of 

HOME and other Federal requirements that must 
6 

be met in implementing HOME activities 

(discussed in Chapters 3 and 4), and numerous 

decisions that the consortium needs to make in 

order to carry out its program effectively 

(discussed in Chapter 5). A number of the tasks 

involved require a higher level of coordination 

among members to satisfy the HUD requirements 

than are required of other HOME PJs, because of 

the nature of the consortium as an entity 

comprised of a number of distinct jurisdictions. 

Key among these tasks are: 

• Negotiating the consortium agreement. 

The consortium agreement is the legally 

binding document that addresses who is in the 

consortium, what each jurisdiction’s roles and 

responsibilities are, how funds will be 

allocated to projects and HOME activities, 

and what operational and communication 

responsibilities each member will have. 

• Preparing a joint Consolidated Plan. Once 

HUD has designated a consortium, the group 

must develop a three- to five-year plan that 

describes community needs, available 

resources, housing priorities, and decisions 

about proposed housing activities to be 

undertaken with HUD HOME, CDBG, ESG, 

and HOPWA funding. This is discussed in 

Chapter 3. 

• Undertaking HOME activities in 

compliance with HOME requirements. 

Once designated a PJ, the consortium will 

need to organize itself and develop systems to 

identify and select specific projects and/or 

activities it will undertake to implement its 

Consolidated Plan (Conplan). It will need to 

execute legal agreements that address how the 

activities will be undertaken to ensure 

effective performance and HOME 

compliance. Chapter 3 discusses the HOME 

requirements and identifies additional 

resources. 

• Reporting, monitoring, and recordkeeping. Throughout the administration of 

HOME funds, there are a number of 

reporting and record-keeping requirements 

that are the responsibility of the lead entity, 

but which cannot be carried out without 

considerable communication with, and 

cooperation from, member jurisdictions, 

developers, and owners that are carrying out 

HOME activities. The lead entity is 

accountable to HUD for HOME compliance 

for all activities of the consortium, including 

those carried out by member jurisdictions, and 

it must monitor member jurisdictions’ 

implementation of activities, as well as their 

record-keeping to document compliance. 

Key Considerations Before Forming 

a Consortium 

All prospective consortia are encouraged to 

contact the HUD Field Office before they begin 

any significant level of effort to form a 

consortium. The prospective consortium must 

weigh a number of critical factors before deciding 

to pursue a consortium designation and the HUD 

Field Office can assist in this assessment, 

evaluating its potential for success and weighing 

the benefits against the costs and challenges of 

administering a new entity. The HUD Field 

Office can also provide technical assistance and 

guidance about the HOME Program and its 

requirements. 

The experiences of existing consortia suggest that 

there are number of factors that a group should 

consider early on to predict its likely success as a 

consortium: 

• Who should be included in the consortium? 

• What level of HOME funding is the 

consortium likely to receive? 

• How does the creation of a new consortium 

in the state affect the state’s HOME allocation 

and the allocation to other local PJs? 

• Does the proposed group have the capacity to 

carry out the functions of the HOME 

Program? 

• Will the group work well together? 

Who Should be Included in the 

Consortium? 

Determining which local entities are included in 

the consortium’s membership is, perhaps, one of 

the biggest decisions for a new consortium. 
7 

Consortium membership determines the capacity, 

resources, and needs of the consortium, as well as 

the size of the HOME allocation. In addition to 

the regulatory requirements described in the 

preceding section, a consortium should think 

strategically about its formation. The number of 

jurisdictions, and their populations, will impact 

how many jurisdictions must join in order to form 

a consortium that will draw a sufficient HOME 

allocation to address regional housing needs. 

What is the Consortium’s HOME 

Funding Level? 

Since the primary reason that many groups form a 

HOME consortium is to receive a direct HOME 

allocation in order to carry out affordable housing 

activities, one of the first things a prospective 

consortium should consider is the group’s likely 

HOME allocation. 

HOME Formula Allocations 

HOME funds are distributed to states and local 

governments according to a formula that is 

established and applied by HUD annually. In 

order for a jurisdiction to be eligible to receive 

HOME funds, its proposed allocation must reach 

or exceed a certain threshold. In years in which 

the HOME appropriation is $1.5 billion or more, 

the minimum allocation required for new 

jurisdictions is $500,000. In years in which the 

HOME appropriation is less than $1.5 billion, the 

minimum allocation required for new jurisdictions 

is $335,000. (See 24 CFR 92.102.) 

In addition, when a proposed jurisdiction’s 

formula allocation is equal to or less than 

$750,000 (or $500,000 in fiscal years where 

Congress appropriates less than $1.5 billion), 

HUD must find: 

• The unit of general local government has a 

local public housing authority (PHA) that has 

demonstrated a capacity to carry out HOME 

activities, as evidenced by satisfactory 

performance under one or more HUDadministered programs that provide assistance 

for activities comparable to the eligible 

activities. 

• The state has authorized HUD to transfer to 

the unit of general local government a portion 

of the state’s allocation, or the state, the unit 

of general local government, or both, has 

made available its own resources such that the 

sum of the amounts transferred or made 

available are equal to or greater than the 

difference between the unit of general local 

government’s formula allocation and $750,000 

(or $500,000 in fiscal years where Congress 

appropriates less than $1.5 billion). 

Once HUD designates the consortium as a PJ, the 

consortium remains a PJ for subsequent fiscal 

years and these threshold requirements no longer 

apply. (See 24 CFR 92.106.) 

Determining the Consortium’s Allocation 

HUD has developed an online tool, the Consortium 

Builder, to enable a prospective consortium to 

estimate its likely HOME allocation. The Consortia 

Builder uses Census information and the HOME 

formula to estimate, based on population, the 

amount of funds available to a prospective 

consortium. 

Using the Consortium Builder, a prospective 

consortium can determine whether or not it might 

meet the $500,000 and $750,000 minimum 

formula allocation thresholds that are required in 

order to receive HOME funds. When the 

projected allocation is below the thresholds, the 

prospective consortium should consider:

• Increasing the number of member 

governments involved in the consortium in 

order to increase its HOME formula 

allocation. The consortium should weigh this 

option against additional administrative and 

project costs that might be incurred as a result 

of such a change. 

• Whether the allocation will be sufficient to 

undertake the desired housing activities, 

considering both project, administrative, and 

coordination costs. Note, the HOME 

Program caps a PJ’s administrative costs at 

ten percent of the annual HOME allocation 

plus ten percent of program income 

generated. If the consortium expects to 

receive $750,000 in HOME funds, only 

$75,000 of this amount can be used for 

administrative funds. Without additional 

administrative funding from other sources, 
8 

this is not sufficient for most jurisdictions to 

administer a successful and compliant HOME 

Program. This administrative requirement is 

discussed in Chapter 3. 

• Whether or not one or more of the member 

jurisdictions might be able to pursue and be 

eligible for a comparable amount of HOME 

funds through an award of funds from the 

state’s HOME allocation. 

• For a consortium with an estimated allocation 

between the $500,000 and the $750,000 

thresholds, it should consider whether it 

meets the additional HUD requirements that 

it has a local housing authority or 

administrative capacity to carry out HOME 

activities, and whether it will be able to secure 

additional funds up to $750,000. 

The Consortium Builder 

The Consortium Builder is an online tool that 

provides guidance on how to combine the 

demographics of proposed member governments 

for the purpose of qualifying for a HOME 

formula allocation. It can be found at 

http://www.hud.gov/offices/cpd/affordable 

housing/programs/home/consortia/builder/map# 

map.

What Is the Impact of a Consortium on 

HOME Funding Levels in the State? 

Since HOME funds are a Congressional 

appropriation that must be distributed to all 

eligible jurisdictions annually, the creation of a 

new consortium results in a redistribution of 

HOME funds to the state and to other local 

jurisdictions in the state. 

Exhibit 1-1 shows how the HOME formula 

distribution to states and local governments 

works. The amount of HOME funds provided to 

local jurisdictions is fixed at 60 percent of the 

annual allocation. It is easy to see that the 

creation of a consortium results in a decrease of 

funds to other local participating jurisdictions 

nationwide since this 60 percent is distributed to a 

larger number of jurisdictions. 

Exhibit 1-1: Understanding State 

HOME Allocations 

HOME funds are distributed (after set-asides) by 

formula: 

• 40% of the funds are distributed to states 

• 60% of the funds are distributed to local units 

of government 

State allocations are based on two calculations and 

a minimum threshold: 

• 80% of the state’s funds are based on the 

demographic profile of the non-entitlement 

areas of the state 

• 20% of the state’s funds are based on the 

demographic profile of the whole state 

• If a state receives less than $3 million by 

formula, HUD increases the state’s allocation 

to a minimum allocation of $3 million. 

The creation of a consortium also impacts the 

state’s allocation, and the redistribution of funds 

to a new consortium also results in a loss of 

HOME funds to the state or states in which the 

consortium is located. The 40 percent of the 

HOME funds that are allocated across states is 

distributed based on a formula that weights 

heavily the population of the state’s nonentitlement communities. When a new 

consortium is formed, HUD excludes the 

demographic profile for the consortium’s member 

jurisdictions in the state’s formula. This results in 

a smaller allocation for the state. 

As local jurisdictions pursue the consortium 

designation, they should understand that their 

plans affect the state allocations. As discussed in 

Chapter 2, as part of the consortium’s approval 

process, the consortium must provide a 

certification by the state that the consortium will 

help alleviate housing problems in the state. 

When seeking this certification from the state, the 

consortium members should consider that the 

state may not want to support the creation of new 

consortia, because this results in a decrease of the 
9 

state’s own allocation. Prospective consortium 

members should consider the advantages and 

disadvantages of becoming a state recipient, rather 

than a consortium, prior to their discussion with 

the state. 

Do the Jurisdictions Have the Capacity to 

Meet HOME Requirements? 

When reviewing a consortium’s request for 

designation, one of the criteria HUD evaluates is 

whether or not the consortium has sufficient 

administrative capacity to carry out the HOME 

Program. While the HOME Program brings 

many benefits, it also carries significant 

responsibilities to ensure that the funds are 

expended in full compliance with the statute and 

regulations. The consortium should assess its own 

capacity before it takes on the legal obligations 

inherent in administering Federal funds. The 

consortium must determine that it will be able to 

undertake the desired housing activities, and also 

comply with numerous HOME and other Federal 

requirements regarding income targeting, longterm affordability, matching funds, meeting 

participation requirements for community housing 

development organizations, project eligibility, unit 

accessibility, the timely commitment of funds, and 

more. 

Effective program administration and regulatory 

compliance requires strong organizational systems, 

a staff skilled in housing programs, and active 

cooperation among the governments participating 

in the consortium. 

The prospective consortium should consider the 

capabilities of its proposed lead entity and its 

members. It should assess the availability of 

administrative funds and determine whether or 

not they will be sufficient to undertake requisite 

administration, including reporting and 

monitoring. Some consortia find that the HOME 

Program’s ten percent administrative fee is not 

sufficient to carry out the number of 

administrative tasks expected of them, and the 

lead entity or member jurisdictions contribute 

additional funds or staff and facilities to carry out 

their obligations. Consortia that undertake rental 

housing should also consider the implications of 

taking on activities that will carry monitoring 

obligations for as many as twenty years after 

project completion. 

Capacity of the Lead Entity 

Every consortium must designate a lead entity to 

take responsibility for meeting HOME 

requirements, coordinating member activities, and 

reporting to and communicating with HUD. The 

consortium’s lead entity must have sufficient legal 

authority and administrative capacity to carry out 

the purpose of the HOME Program on behalf of 

its members. HUD holds the lead entity 

accountable for all the consortium’s HOME 

activities. The full responsibilities of the lead 

entity are discussed in Chapter 4. 

HUD assumes that certain entities that have 

successfully administered CDBG or HOME meet 

this standard, including urban counties, 

metropolitan cities, and other existing public 

agencies that have served in the capacity of state 

recipient. If the consortium designates a newly 

created public agency to serve as lead entity, the 

agency must be able to demonstrate that it has 

staff with successful experience administering 

HOME, CDBG, or a similar program. 

If the lead entity does not have the systems and 

staff in place, the prospective consortium must 

take the necessary steps to put them in place. 

Once the consortium is designated a HOME PJ 

and receives HOME funding, these are eligible 

administrative costs. 

The consortium and its lead entity might consider 

the following options to enhance the lead entity’s 

capacity to manage the HOME Program: 

• Hire experienced staff. Depending on the 

size of the HOME allocation, the experience 

of the other consortia members, and the 

capacity of existing staff, a lead entity may 

find that one or two additional staff persons is 

sufficient to handle the additional workload 

associated with the consortium. Ideally, the 

lead entity should seek staff that already has 

experience in the HOME or CDBG program. 

• Collaborate with other consortium 

members. It may be possible to share certain 

responsibilities with other consortium 

members. For example, if one member has a 
10 

strong financial staff and another has an active 

monitoring program, perhaps those functions 

can be divided accordingly. If responsibilities 

are shared among the members, the lead 

entity must hold member jurisdictions 

accountable for performance, as ultimately the 

lead entity will be held accountable by HUD 

for the consortium’s activities. 

• Use another existing entity by written 

contract/agreement. Sometimes an existing 

entity, other than a local government, can 

carry out many of the responsibilities of a lead 

entity. For example, a Council of 

Governments or a public housing authority 

may have the capacity or technical expertise 

needed to administer HOME responsibilities 

that small local governments do not have. 

For example, a Council of Governments can 

convene meetings, track projects, enter 

information into the Integrated Disbursement 

and Information System (IDIS), monitor 

projects, and conduct most HOME 

responsibilities on behalf of its member 

governments. There must be a written 

agreement with the other entity when HOME 

funds are being used. [See 24 CFR 92.504(a) 

and (b).] 

• Hire a contractor. A contractor can also 

carry out HOME Program activities. 

Contractors should be selected carefully to 

ensure they have direct experience with the 

HOME Program or similar programs. 

Capacity of the Member Entities 

In addition to analyzing the lead entity’s capacity 

to administer program requirements, a prospective 

consortium must consider the staff, resources, and 

experience of its proposed member entities to 

carry out housing activities. The consortium must 

define the role to be played by each local 

government. Early in the process, the consortium 

needs to determine if there are disparities between 

jurisdictions in terms of capacity, and if, in 

concept, the group can develop a strategy to 

address those disparities. Key questions are: 

• What activities does each member propose to 

undertake within its jurisdiction? 

• Does each member jurisdiction have the 

capacity to undertake or oversee each 

proposed activity? 

• If capacity does not exist within a member 

jurisdiction, do other members or the lead 

entity have the capacity to assist and carry out 

activities for that member; or can the member 

hire staff or contractors with capacity to carry 

out its HOME activities? 

While some members may be able to contribute to 

the overall functioning of the consortium, others 

may lack the basic systems to carry out any 

program responsibilities. Some small entities may 

play a very minor role in the consortium’s 

governance and the completion of projects while 

still benefiting from housing activities that might 

be undertaken within their geographic boundaries. 

The question for the other members of the 

consortium is whether they have the staff and 

resources to provide these services to the smaller 

or less participatory entities, or whether activities 

in these jurisdictions might be administered by a 

third party contractor. 

Resources – Administrative Funds and Match 

In assessing its capacity, the prospective 

consortium should also consider its access to 

resources. The prospective consortium must 

assess whether it will have sufficient 

administrative funds to coordinate, carry out, 

report on, and monitor its activities. It should 

also determine, even if approximately, whether or 

not it will have sufficient resources to meet the 

HOME match obligation. 

A maximum of ten percent of the consortium’s 

annual HOME allocation (plus ten percent of any 

program income it generates) can be used for 

administrative purposes. The consortium can 

estimate this amount based on the projected 

funding allocation it generated with the 

Consortium Builder tool (described above). 

Smaller consortia, in particular, should objectively 

assess their likely administrative costs and 

determine if the 10 percent administrative funds 

will be sufficient to meet the administrative 

obligations incurred by the HOME Program. If it 

is not, the consortium should consider the 

availability of other non-HOME resources to 

meet that shortfall. Without sufficient 
11 

administrative funds, the consortium will have 

difficulty administering the HOME Program 

effectively. 

The HOME Program requires participating 

jurisdictions to match HOME funds (minus 

administrative funds) with a 25 percent 

contribution from other sources. Match funds 

need to be from non-Federal sources permanently 

contributed to the HOME Program, so the lack of 

non-Federal resources might be a significant 

obstacle to the consortium being able to use 

HOME funds. When local governments assess 

their capacity to meet HOME Program 

requirements, they should also consider the 

resources they have at their disposal to meet the 

match obligation, and how these match 

obligations are distributed among participating 

members. The match requirement is discussed in 

greater detail in Chapter 3. 

Can the Consortium Members Establish 

and Maintain Good Working 

Relationships? 

Although difficult to 

measure and evaluate, 

one of the most 

important features of 

an effective 

consortium is a good 

working relationship 

among member 

jurisdictions. This 

type of relationship is 

built on shared 

housing goals, 

common 

expectations and 

working styles, and communication and 

accountability. One of the true advantages of 

consortia is that they allow local governments to 

work together towards common housing goals 

and take a broader, regional approach to housing 

development. However, to make this advantage a 

reality, the members of the consortia must have a 

strong, collaborative working relationship. 

Shared Housing Goals 

At this stage in the consortium-forming process, 

the consortium members need not have an entire 

housing strategy developed and adopted. 

Members should, however, have general 

agreement about what value HOME will bring to 

the area and the type of development necessary in 

the region. While each member jurisdiction may 

not have the same housing needs, the jurisdictions 

should have general agreement about the priorities 

for housing development activities. 

In addition to shared housing goals, there should 

be general agreement about the overarching 

question of resource allocation. The consortium 

members need to agree on a method or process 

for allocating HOME administrative funds, as well 

as funds among projects, programs, and activities 

in the various member jurisdictions. The process 

should reflect the shared vision of the group’s 

housing goals. If the group cannot come to 

general agreement on this fundamental issue, it 

should weigh how difficult the administration of 

the program will be. This is especially important 

when the HOME resources will be insufficient to 

meet all the needs of the area. 

Common Expectations and Working Styles 

Ideally members of a consortium will have an idea 

about how the staff of each member jurisdiction 

interacts and how the groups will make decisions 

together. Member jurisdictions will also 

understand points of agreement and be aware of 

any likely frictions. These common expectations 

and working styles are frequently the result of 

previous experience working together, but may 

also happen somewhat naturally if the 

jurisdictions’ political and bureaucratic structures 

are similar. If interactions with another local 

government have been unproductive in the past, 

this may indicate that working together in a 

consortium may be difficult. Governments that 

have worked well together have a strong basis for 

future collaboration as a consortium. 

Effective Communication for Maintaining 

Good Relations 

The consortium is positioned for success if its 

members enter this relationship with shared 

housing goals, a good track record on other 

projects, and general agreement on housing 

priorities and funding allocation methods. To 

sustain good working relations, the member 

jurisdictions should also have general agreement 

about their roles and responsibilities, how 

effective communications and reporting will be 

The most important 

variable to a HOME 

consortium’s success is 

the effectiveness of the 

relationship between and 

among the members. 

When consortium 

members share mutual 

housing goals, 

communicate effectively, 

and have a system to hold 

each other accountable 

for performance, they are 

best positioned to 

succeed. 
12 

assured, and how each jurisdiction will be held 

accountable to meet their obligations. By 

clarifying roles and processes up-front, the 

consortium can avoid disagreements that result 

from lack of communication, or lack of 

understanding about performance expectations. 

These communication systems should remain in 

effect, and be improved upon, throughout the life 

of the consortium. 
13 

Chapter 2:

Obtaining and Renewing Consortium Status 

This chapter reviews the process for becoming a consortium and the actions necessary to maintain and renew consortium status. It 

also covers the HOME requirements that remain in place even if a consortium chooses to disband. This chapter is appropriate 

for new consortia going through the designation process for the first time as well as existing consortia with questions about changes 

in their membership or renewing their status as consortia. 

The Process for Designation of a 

Consortium as a HOME PJ 

To gain access to HOME funds, the proposed 

consortium must go through a three-step process: 

1. Approval and designation as a consortium; 

2. Approval and designation as a PJ to receive a 

HOME allocation; and 

3. Execution of HOME Investment Partnership 

Agreement and receipt of funds. 

Consortium designation must be the first step in 

the process because HUD cannot include a 

consortium in the formula allocation process until 

it has formally approved the consortium. Further, 

before a consortium can become a HOME PJ and 

receive HOME funds, it must meet the threshold 

requirements in the formula allocation process, 

and meet certain “application” requirements. 

Step 1: Designation as a Consortium 

To obtain HUD approval to form a new 

consortium, the proposed members must submit a 

number of documents to HUD. Key submissions 

to the HUD Field Office include: 

• Notice of intent. The local governments 

must submit a written notice of their intent to 

form a consortium by March 1 of the Federal 

fiscal year prior to funding in order to be 

included in the formula allocation that year.1 

• State certification. By June 30, the 

prospective consortium must submit a 

written certification from the state that the 

consortium will direct its activity to alleviate 

housing problems within the state. The 

Governor or his/her designee must sign this 

certification. Note, if the member 

jurisdictions are located in more than one 

state, a certification from each affected state is 

required. The state certification is a statutory 

requirement found in section 216(2)(b) of the 

Cranston-Gonzalez National Affordable 

Housing Act. It is codified in the HOME 

Program regulations at 24 CFR 92.101. 

• Consortium agreement. Also by June 30, 

the prospective consortium must submit a 

legally binding cooperation agreement signed 

by all participating members of the 

consortium. This agreement must address 

eleven required elements. These are identified 

in Attachment 1, Elements of an Effective 

Consortium Agreement. The importance of this 

agreement and the process for drafting it are 

discussed in the next section of this chapter. 

• Legal opinion. Also by June 30, the 

prospective consortium must submit a legal 

opinion in which the lead entity’s legal 

counsel cites applicable law to conclude that 

the terms and provisions of the agreement are 

fully authorized under state and local law. 

The HUD Field Office reviews all submissions for 

compliance with the eligibility requirements 

described above and provides necessary 

information to HUD Headquarters. HUD 

reviews the consortium’s submission to ensure 

that: 

• The submission is complete and accurate; 

• The documentation is sufficient to conclude 

that the consortium has legal standing; and 

• The consortium has administrative capacity to 

carry out the HOME Program. 

Consortia that designate as lead entity any of the 

following entities will be presumed to have 

capacity: an urban county or metropolitan city in 

good standing with HUD, or a jurisdiction or 
14 

existing public agency that has relevant experience 

successfully administering HOME or Community 

Development Block Grant (CDBG). Other 

entities must provide documentation to 

demonstrate their capacity. Such documentation 

should be in sufficient detail to demonstrate to 

HUD that the entity has relevant experience and 

current staff capacity to successfully administer a 

Federal program, in compliance with all Federal 

program, reporting, and record-keeping 

requirements. 

All approved consortia must be designated by 

September 10th each year.

For more information about the consortium 

application process 

HUD has outlined the consortium application 

process in great detail in HUD Notice CPD 06-04, 

Notice of Procedures for Designation of Consortia as a 

Participating Jurisdiction for the HOME Program, 

issued April 11, 2006. Jurisdictions should refer to 

this Notice when preparing an application to 

HUD for consortium status. This Notice and any 

new information for consortia about the HOME 

Program are available on the HOME website at 

http://www.hud.gov/offices/cpd/affordable 

housing/programs/home/consortia/index.cfm. 

A copy of the HUD Notice is also available from 

the HUD Field Office. 

Step 2: Designation as a HOME PJ 

Once HUD has approved new consortia, it can 

include those consortia in its formula to distribute 

HOME funds during the next fiscal year. Once 

these calculations are completed, HUD notifies 

each consortium of its formula allocation. The 

date of notification varies year to year based upon 

the timing of Congressional appropriations. 

Before it can become a HOME PJ and access 

these HOME funds, the newly designated 

consortia must submit information that, in 

essence, constitutes an application to HUD for 

participation in the HOME Program. The new 

consortium must: 

1. Submit a written notification to HUD that it 

intends to participate in the HOME Program. 

This written notification is due no later than 

30 days after the Field Office formally notifies 

a consortium of its allocation amount. Note, 

the notice of intent to participate is required 

of all new consortia, even if one or more of its 

members was a PJ on its own (such as an 

urban county or a city) in a prior fiscal year. 

2. If the new consortium’s formula allocation is 

more than $500,000 and less than $750,000, it 

must provide HUD with evidence that will 

meet the $750,000 threshold. In years where 

the Congressional appropriation to the 

HOME Program is less than $1.5 billion, 

these amounts are lowered to $335,000 and 

$500,000 respectively. This evidence must be 

either: 

a. Authorization from the state to transfer a 

portion of its HOME allocation to the 

consortium; 

b. A letter form the Governor or designee 

indicating that the required state funds 

have been approved and budgeted for the 

consortium; or 
15 

c. A letter from the chief executive officer 

of the lead entity indicating that the 

required local funds have been approved 

and budgeted. 

3. Prepare and submit a Consolidated Plan for 

HUD approval. The Conplan is due within 

90 days of providing HUD the written 

notification of the consortium’s intent to be a 

PJ. 

For a first-time consortium, the preparation of a 

Conplan is an enormous undertaking, and includes 

time-consuming tasks such as undertaking a 

housing market analysis, determining an action 

plan for investing HUD funds, and implementing 

a citizen participation process to enable residents 

to comment on proposed activities. A new 

consortium must develop a citizen participation 

plan that establishes policies and procedures for 

making the Conplan, activities, and performance 

reports available to the public. (See 24 CFR 

91.401 and 91.105.) The citizen participation 

process must include a public comment period of 

at least thirty days, and at least one public hearing 

during the development phase of the Conplan. 

For entitlement communities that have a citizen 

participation planning process in place, the 

consortium should consult with the HUD Field 

Office about whether that process is sufficient. If 

the entitlement community’s existing citizen 

participation plan needs to be changed, note that 

the amendments are also subject to the citizen 

participation process (including public hearing and 

public comment period). 

For a new PJ, the Conplan deadline is triggered by 

HUD’s notice to the consortium of its allocation 

amount and the consortium’s notice of intent to 

participate. Therefore, new consortia should 

consult with their HUD Field Offices to plan and 

discuss when this official notice should be given, 

in order to ensure the consortium has ample time 

to complete a viable Conplan. Some new 

consortia will choose to begin their consolidated 

planning process before receiving official notice of 

their formula allocation and deadlines have been 

triggered. The deadlines and the consolidated 

planning process are described in more detail in 

Chapter 3. 

HUD must review the Conplan within 45 days of 

receipt to determine if the proposed plan is 

consistent with the purposes of HOME and if it is 

complete. To be deemed complete, the plan must 

have been developed with the required citizen 

participation process and consultation, must have 

addressed all of the required elements, and must 

have the required certifications. 

When the consortium has complied with all the 

requirements of this section, it will be designated 

as a PJ upon approval of its Conplan by the Field 

Office. Once the consortium is designated a PJ, it 

remains a PJ for subsequent fiscal years, and need 

not meet threshold allocation requirements 

annually. 

Step 3: Execution of the HOME 

Investment Partnership Agreement 

HUD makes funds available to a consortium (and 

all HOME PJs) through the execution of a 

HOME Investment Partnership Agreement. This 

agreement is executed between HUD and the lead 

entity. Through its execution, HUD makes funds 

available to the lead entity by establishing a 

HOME Investment Trust Fund at the U.S. 

Treasury. (Note, the lead entity must also 

establish a local HOME Investment Trust Fund.) 

It further obligates the lead entity to undertake 

affordable housing in accordance with HOME 

requirements. It establishes that the housing 

assisted with HOME funds must qualify as 

affordable housing throughout the affordability 

period. 

The HOME Investment Partnership Agreement is 

important for another reason. It is the date from 

which the “clock starts ticking” on the 

commitment and expenditure of HOME funds. 

HOME regulations impose deadlines to commit 

and expend funds for affordable housing, and to 

reserve funds for housing that is owned, 

developed, or sponsored by community housing 

development organizations (CHDOs), as follows: 

• Funds must be committed to affordable 

housing projects within 24 months after the 

last day of the month in which HUD notifies 

the PJ of the execution of the Agreement. 

[See 24 CFR 92.500(d)(1)(B).] 
16 

• Funds must be reserved for CHDOs within 

24 months after the last day of the month in 

which HUD notifies the PJ of the execution 

of the Agreement. [See 24 CFR 92.300(a) and 

92.500(d)(1)(A).] 

• Funds must be expended within five years 

after the last day of the month in which HUD 

notifies the PJ of HUD's execution of the 

HOME Investment Partnerships Agreement. 

[See 24 CFR 92.500(d)(1)(C).] 

Information on commitment and disbursement 

reservations is tracked by IDIS as discussed in 

Chapters 3 and 4. 

Executing a Consortium Agreement 

As mentioned above, the proposed consortium 

must submit a consortium agreement to HUD 

before a consortium can be approved. [See 24 

CFR 92.101(a)(2)(ii).] The development of a 

consortium agreement that both meets HUD’s 

requirements and codifies members’ expectations 

for consortium goals and operations can help 

create a solid foundation for the consortium. 

Purpose and Contents of the Consortium 

Agreement 

The consortium agreement is a legally binding 

cooperation agreement that is executed by all 

members of the consortium. This agreement 

formalizes the relationship among all consortium 

members. It establishes the consortium’s threeyear qualification period, commits each member 

to participate for the duration of the qualification 

period, and describes member jurisdictions’ roles 

and responsibilities—particularly those of the lead 

entity. 

Attachment 1, Elements of an Effective Consortium 

Agreement, enumerates the elements that are 

required and recommended to be included in a 

consortium agreement. The consortium 

agreement must include authorizing resolutions 

from each member’s governing body. 

Developing the Consortium Agreement 

To develop the consortium agreement, the 

proposed members must consider a number of 

specific elements that HUD requires in the 

consortium agreement. In addition, there are a 

number of additional considerations a consortium 

should codify in this agreement. 

The consortium agreement is the ideal place to 

address issues related to the governance, 

organization, and management of the 

consortium. The clarification of roles, 

responsibilities, and expectations of consortium 

members will help the administration of 

consortium activities to run more smoothly, and 

will minimize problems that often occur as the 

result of misunderstandings or 

miscommunication. Ideally, the consortium 

agreement will describe the obligations of each 

member jurisdiction to the consortium. These 

obligations include contributing to the 

development of the Conplan, identifying eligible 

CHDO partners, securing sources of match, 

reporting to the lead entity, and more. 

The consortium also faces a number of strategic

decisions about how it will operate and meet its 

HOME obligations, where it will invest HOME 

funds, and what will happen to assets and 

program income that result from HOME 

investments. These strategic decisions are 

discussed in Chapter 5. The consortium should 

have resolved these issues in the development of 

the Conplan. It is highly recommended that the 

consortium codify these decisions (either 

specifically or by reference to the Conplan) in the 

consortium agreement as well. 

Signing the Consortium Agreement 

Once the content is established, an authorized 

official from each jurisdiction member must sign 

the consortium agreement. 

• Signatures of all member jurisdictions must 

appear on the same page, or the agreement must 

contain language permitting the agreement to be 

executed in counterparts, each of which shall be 

an original and all of which together constitute 

one and the same agreement. 

• Whenever the consortium adds a member 

during the qualification period, the lead entity 

must execute an amendment to the 

consortium agreement, signed by the 
17 

authorized representatives for the lead entity 

and the new member. Other members are 

not required to sign this amendment unless 

the consortium agreement requires it. If a 

new member is being added when the 

qualification period is being renewed, and the 

previous agreement contained a provision for 

automatic renewal, the consortium can either 

execute an amendment or execute a new 

consortium agreement. 

Amending a Consortium Agreement 

A consortium agreement can and should be 

amended if important issues have been omitted, or 

as circumstances change and new information 

warrants. The agreement should specify the 

consortium’s process for amendments. The 

consortium may choose to permit the lead entity 

to amend certain elements of the agreement with 

notice to other members, such as the addition of 

member jurisdictions during the qualification 

period, or changes to monitoring or reporting 

requirements. Amending other clauses might be 

reserved for the full consortium body. The 

consortium must submit an amended consortium 

agreement to the HUD Field Office. The HUD 

Field Office provides copies of the amended 

consortium agreement to HUD Headquarters 

whenever the amendment can affect the formula 

allocation: membership changes, fiscal year date 

changes, or qualification period changes. 

Renewing Consortium Status 

Many consortia will choose to renew their 

consortium agreement in order to continue to 

receive annual formula allocations of HOME 

funds. In addition, many consortia may find that 

they need to make changes to their membership at 

times. This section discusses HUD’s procedures 

related to the renewal of the consortium: the term 

of the consortium, how to renew or make changes 

to consortium membership, and what to do in the 

event that the consortium disbands. 

Term of a Consortium 

HUD’s initial consortium designation lasts for a 

three-year period called the “qualification period.” 

The three-year period is based on the Federal 

fiscal year, and for each year during this period a 

consortium is eligible to receive HOME funds 

through the annual formula allocation. At the end 

of the qualification period, if the consortium 

wishes to be eligible to continue receiving annual 

allocations of HOME funds, the consortium must 

renew its status with HUD as a consortium. 

Subsequent renewals are also for three-year terms. 

At the option of the consortium, the consortium can 

have an automatic renewal clause in its consortium 

agreement to facilitate the renewal process. 

Renewals 

An existing consortium must submit a letter of 

intent to the HUD Field Office by March 1 

specifying that it plans to continue participation as 

a consortium. Although the submission 

requirements are far fewer than for initial 

designation, the renewal process follows the same 

general timeline. 

Term of a Consortium 

A consortium is formed for a three-year period, during 

which time the consortium receives an annual HOME 

allocation. The consortium agreement must also be 

renewed every three years in order for the consortium to 

continue to receive HOME funding annually. The term 

of the consortium agreement can expire, or the 

consortium can choose not to renew it. 

Whether or not the consortium chooses to renew its 

agreement for the purposes of qualifying for a new 

formula allocation, the consortium may have obligations 

that extend beyond the life of the agreement. HUD holds 

the lead entity responsible for meeting these 

responsibilities, including: 

• Expending and reporting remaining HOME funds 

on eligible activities; 

• Accounting for, and appropriately spending, program 

income; and 

• Monitoring long-term affordability requirements, as 

applicable, for rental and homebuyer projects funded 

with HOME.
18 

Consortia should codify their approach to 

renewals in the consortium agreement. Consortia 

can choose to renew through an automatic 

renewal clause that is included in the consortium 

agreement, or they may re-negotiate and reexecute a consortium agreement every three years. 

Automatic renewal. The consortium must 

specify that it will use an automatic renewal option 

in the consortium agreement. In June, when it is 

time for renewal, a new consortium agreement is 

not needed but the lead entity is responsible for 

confirming that each member wishes to continue 

to participate in the consortium. 

• On about June 1, the lead entity must provide 

a written notice to each consortium member 

notifying it of its right not to participate for 

another successive three-year period. The 

lead entity must provide a copy of these 

notices to the HUD Field Office. 

• The lead entity must also notify each consortium 

member if there are any amendments that will be 

required to the agreement. These changes vary 

based on the consortium’s need, and might 

include changes to the management process, 

voting, distribution of funds, or other 

administrative matters. Failure of the lead entity 

to provide these notifications will void the 

automatic renewal provisions in the agreement. 

• The consortium must secure a new state 

certification that its activities will alleviate 

housing problems in the state. 

• The lead entity must submit to HUD, by 

about June 30, the state certification and 

notice if there are no membership changes. 

In the event a new consortium agreement is 

executed, the HUD Field Office is to receive 

a copy at this time. 

Renegotiated renewal. If the consortium does 

not establish automatic renewal in the consortium 

agreement, then the consortium must negotiate a 

new consortium agreement and have it signed by 

all participating members. Note, in general, if a 

consortium wishes to continue to receive HOME 

funds for as long as it is eligible, an automatic 

renewal is the easiest way to do this. 

The new consortium agreement must be 

submitted to HUD by June 30. 

Making Changes to the Consortium 

Membership 

During the qualification period, existing members 

may not leave the consortium but new members 

may be added through an amendment. At the end 

of the three-year term, members may be added or 

removed from the consortium, but a new 

consortium agreement is required. 

Changing the Lead Entity 

Under some circumstances, a consortium may 

need to change its lead entity. This can be done 

only when the consortium renews its consortium 

status with HUD. A change in the lead entity will 

result in a change in the consortium’s name in 

IDIS, and its grant number. (Note, the 

consortium can legally form and operate under 
19 

any name of its choice, but in IDIS it will always 

be referred to by the name of the lead entity.) 

HUD will expect the exiting lead entity and the 

new lead entity to develop a plan for transferring 

responsibilities, to ensure that any outstanding 

long-term obligations are met. HUD will hold the 

outgoing lead entity responsible for projects that 

were initiated under its consortium agreement. 

The new lead entity assumes responsibilities for all 

activities moving forward. 

Adding New Members 

A consortium agreement can be amended to add 

new members during a consortium’s three-year 

qualification period. Once added, the member’s 

geography is considered for the allocation of 

HOME funds in the remaining fiscal years of the 

qualification period. 

To add a new member, the consortium must 

notify HUD in the year prior to when the 

additional membership goes into effect. The 

schedule and submission documentation are 

similar to those established for new consortia. By 

March 1, the consortium must submit a letter of 

intent to the HUD Field Office, describing its 

intention to add a new member. Then, by June 

30, the consortium must provide the Field Office 

with a copy of the authorizing resolution from the 

new member’s governing body and an amendment 

to the consortium agreement signed by the Chief 

Executive Officer or authorized official of the 

lead entity and the Chief Executive Officer or 

authorized official of the new member. The 

HUD Field Office will notify HUD Headquarters 

of the change. 

Unless the consortium agreement specifies 

otherwise, HUD considers the lead entity to be 

authorized to amend the agreement, including 

adding new members on behalf of the entire 

consortium. 

Dropping a Member 

A jurisdiction within a consortium may decide that 

it no longer wishes to be part of a consortium, or 

a lead entity may wish to drop a member due to 

nonperformance. A consortium can drop 

members only once the initial qualification period 

is over, at renewal time. Dropping a member 

means that the jurisdiction is dropped for 

purposes of receiving additional HOME funds. 

Once dropped, this jurisdiction’s geography will 

not be included in the formula distribution of 

HOME funds and that the jurisdiction will no 

longer be a party to the consortium agreement.2

The lead entity remains responsible for projects 

for the entire period of affordability even in the 

areas where the member dropped out. Depending 

on the terms of the subrecipient agreement 

executed with the lead entity, the departing 

jurisdiction may also have some trailing 

obligation(s) to the lead entity. Terms and 

procedures for dropping a member for 

nonperformance should be clearly detailed in the 

consortium agreement. 

If the consortium uses an automatic renewal 

clause to effectuate renewals, the lead entity must

notify each member jurisdiction of their right to 

withdraw from the consortium prior to the end of 

the term (by June 1). Within two weeks (by June 

15), the jurisdiction must provide written notice to 

the lead entity of its intention to withdraw. If the 

consortium uses an automatic renewal, the 

consortium agreement must be amended to 

exclude the jurisdiction. 

If there are any changes in the composition of the 

consortium, the consortium must submit a new 

consortium agreement, or an amended consortium 

agreement to the HUD Field Office by June 30. 

Disbanding a Consortium 

A consortium’s full “natural” life cycle lasts until 

all of its allocated HOME funds have been 

expended for HOME-eligible activities. Even 

after the funds have been expended, the lead 

entity retains certain obligations throughout the 

entire period of affordability—for monitoring, 

program income, and in the event there is a need 

for repayment or recapture of HOME funds. See 

Chapter 4 for these ongoing obligations of the 

lead entity. 

In some circumstances, however, a consortium 

may desire or seek to disband prior to this time. 

For instance, the consortium may choose to 

disband if one or more members become eligible 

for a direct HOME allocation in their own right, 

or if the working relationship between members is 

not productive. 
20 

Under some circumstances, HUD may revoke the 

consortium’s status because HUD determines that 

the consortium is either unable or unwilling to 

carry out the HOME requirements in compliance 

with program regulations. For example, if a 

consortium fails to carry out any housing activities 

in accordance with its Conplan, HUD might take 

such action. When HUD intends to revoke a 

consortium’s status, it must provide reasonable 

notice and an opportunity for a hearing. 

If a consortium chooses to disband prior to the 

satisfaction of its obligations to carry out HOME 

activities, it must notify the HUD Field Office, 

and develop a plan for how its obligations will be 

met. The HUD Field Office can assist the 

consortium with understanding the extent of its 

outstanding obligations. 

When a consortium disbands, all HOME 

requirements remain in place. The lead entity is 

legally bound to meet HOME Program rules until 

the end of the affordability period on any project 

developed during the consortium qualification 

period. Specifically, this means that the lead entity 

must observe requirements regarding program 

income, repayments of HOME funds, recaptured 

funds and long-term monitoring. These 

requirements are discussed in detail in Chapters 4 

and 5. 

Because these obligations remain in place, the 

consortium should address in its consortium 

agreement how such long-term obligations are 

addressed irrespective of the consortium’s status. 

This will be discussed in more detail in Chapter 4. 
21 

Chapter 3:

Key HOME Regulatory Requirements 

When consortia choose program activities to meet local needs, they must ensure that their projects are carried out in compliance 

with all HOME requirements. This chapter provides an overview of the key administrative, program, and project requirements 

of the HOME Program. The descriptions are brief; therefore, additional resources for detailed information have been identified 

throughout the chapter. This guidance does not substitute for a full review of the HOME Program regulation. 

HOME Program Purpose and 

Activities 

The primary purpose of the HOME Program is to 

increase the supply of affordable housing for lowincome households. The most fundamental of all 

HOME requirements are designed to ensure that 

HOME investments meet this purpose: 

• Income targeting requirements ensure that 

low-income people are served; 

• Rent restrictions and maximum property 

value requirements ensure that HOMEassisted housing is affordable; and 

• The requirements for income targeting and 

housing affordability are imposed for an 

affordability period to ensure that HOMEassisted housing increases the PJ’s supply of 

affordable housing for a period of five to 

twenty years. 

Within the scope of these fundamental rules, 

HOME PJs have the opportunity to identify and 

choose the housing activities that will best meet 

local housing needs. Eligible activities under 

HOME include homeowner rehabilitation, 

homebuyer assistance, rental housing, and tenantbased rental assistance (TBRA). PJs develop a 

Conplan to help target their activities towards 

their communities’ needs and priorities. 

The rest of this chapter discusses HOME 

requirements as they apply to administration, 

program design, and project implementation. 

Consortia should consider their capacity and 

willingness to abide by and enforce these 

requirements over the long-term. 

Resources on the HOME Program 

For more information about the HOME Program 

and its requirements: 

• HOME Program Final Regulation at 24 CFR 

Part 92, and 

• HUD Office of Affordable Housing 

Programs’ website at 

www.hud.gov/homeprogram/.

HOME Administrative 

Requirements 

A number of administrative requirements apply 

across all HOME-eligible activities. This section 

reviews the administrative requirements that may 

have special implications or present special 

challenges for a HOME consortium. These 

include using HOME administrative funds, 

consolidated planning, written agreements, the 

commitment and disbursement of HOME funds, 

monitoring, and record-keeping and reporting.3 

Administrative Costs 

HOME rules allow PJs, including consortia, to use 

ten percent of their HOME funds for 

administrative costs. (This includes ten percent of 

their annual allocation plus ten percent of any 

program income generated by their HOME 

investments.) Eligible uses for administrative 

funds include salaries, wages, and related costs for 

staff persons responsible for the HOME Program. 

They also include other planning and 

administrative costs such as supplies, legal 

services, preparing the Conplan, implementing fair 

housing activities, and more. 
22 

A consortium can choose how to allocate 

administrative funds. It can provide all the 

administrative funds to the lead entity in 

recognition of the additional administrative costs 

borne by the lead, or it may allocate some portion 

of the funds to individual members to cover their 

administrative costs. No matter how the funds are 

allocated, they are limited to ten percent of the 

total allocation – i.e., the consortium is not

permitted to allocate ten percent of the funds to 

members for administrative costs and an 

additional ten percent for the lead entity. Chapter 

5 of this guide discusses the consortium’s strategic 

decisions about how to allocate and use a 

consortium’s administrative funds effectively. 

Resources on HOME Administrative Costs 

Requirements related to eligible administrative and 

planning costs are found in the HOME Program 

regulation at 24 CFR 92.207. 

For additional guidance on defining and allocating 

administrative costs, see HUD Notice CPD 96-09, 

Administrative Costs, Project-Related Soft Costs, and 

Community Development Housing Organization 

(CHDO) Operating Expenses Under the HOME 

Program, issued December 20, 1996. This Notice 

is available from the HUD Field Office or online 

at the HOME Program website CPD Notices, at 

http://www.hud.gov/offices/cpd/lawsregs/ 

notices/1996/96-9.pdf. 

Consolidated Plan 

HOME stresses a coordinated approach to 

affordable housing. Therefore, prior to receiving 

any HOME funds, every PJ— including every 

HOME consortium-- must develop a Conplan to 

explain how the PJ will use its Federal housing 

and community development funds. Completing 

the Conplan can help the consortium determine 

what activities and organizations to fund in each 

coming year. The Conplan is the consortium’s 

application for Federal funds under HUD’s 

formula grant programs as well as its strategy to 

pursue its housing and community development 

programs based on its program year. 

The Conplan is a three- to five-year plan that 

describes community needs, resources, priorities, 

and proposed activities to be undertaken with 

HUD programs including HOME, Community 

Development Block Grant (CDBG), Emergency 

Shelter Grant (ESG), and Housing Opportunities 

for Persons with AIDS (HOPWA). The Conplan 

must include five main components including 

(1) a description of the lead agency or entity 

responsible for the development of the Conplan 

and the process undertaken to develop the Plan, 

(2) a housing and homeless needs assessment, 

(3) a housing market analysis, (4) a strategic plan 

(three- to five- years in length), and (5) a one-year 

Action Plan. 

A new consortium must submit a complete 

Conplan. After the first year, generally, the 

consortium need only submit the Action Plan and 

Certifications. The Action Plan is an annual 

update to the Conplan that describes the specific 

planned uses of the covered HUD programs. 

Both the Conplan and the Action Plan are subject 

to the citizen participation requirements to 

provide each jurisdiction’s citizenry an 

opportunity to review and comment on the 

consortium’s plans. 

For a new consortium and other PJs that have not 

previously submitted a Conplan, the timeline for 

submitting the Conplan is as follows: 

• Within 30 days of receiving notice of its 

formula allocation, the consortium must

submit a written notification to the HUD 

Field Office of its intent to be a PJ. 

• Within 90 days of providing notification of 

intent, the consortium must submit the 

Conplan to the Field Office. 

• The Conplan must be submitted at least 45 

days before the start of the consortium’s 

program year. 

Therefore, if the HUD Field Office and the new 

consortium provide their respective notices at the 

last possible date, the maximum amount of time a 

new consortium has to prepare a Conplan is 120 

days. It is important that the jurisdiction have 

sufficient time to develop its housing market 

analysis and meet the citizen participation 

requirements. Developing a Conplan is more 

complicated for a consortium than it is for other 

local PJs because it requires the consolidation of 
23 

data and demographic information and the 

development of a housing plan across 

jurisdictions. In addition, some member 

jurisdictions may have their own planning 

requirements associated with participation in other 

covered HUD programs. Consortia should work 

informally with the HUD Field Office to identify 

the start of the program year and determine the 

amount of time they will need to develop the 

Conplan. With good communication with the 

consortium, the Field Office will be better able to 

time its formal notice of the consortium’s 

allocation amount so that the Conplan deadlines 

are attainable. It is important for consortia to 

work collaboratively with the Field Offices in this 

regard, because once the Field Office issues 

formal notice of the allocations, the deadlines will 

be in effect. These deadlines are statutory and 

cannot be waived by HUD. 

The Conplan or Annual Action Plan must be 

submitted to the HUD Field Office for review 

and approval at least 45 days before the start of 

the consortium’s program year. Therefore, if the 

new consortium uses the maximum 120 days to 

develop its Conplan, the HUD Field Office has an 

additional 45-day review period before approval of 

the consortium’s Conplan and the beginning of its 

program year. 

Chapter 5 identifies the choices consortia must 

make to organize the consolidated planning 

process, and describes how to prepare a Conplan. 

Resources on the Conplan 

The Conplan requirements for consortia are 

found in 24 CFR Part 91 Subpart E. This is 

available online at 

http://www.access.gpo.gov/nara/cfr/waisdx_03/24cfr91

_03.html.

For more information about consolidated 

planning and recent updates and clarifications 

about HUD consolidated planning requirements, 

see HUD’s website at 

http://www.hud.gov/offices/cpd/about/conplan/index.cf

m.

Written Agreements 

When a HOME PJ forms a partnership with 

another entity, its primary enforcement and 

monitoring tool available is the written agreement. 

Jurisdictions joining to form a consortium must 

have an executed consortium agreement before 

the consortium will be eligible to receive HOME 

funds. The lead entity must execute a subrecipient 

agreement with a member jurisdiction before that 

jurisdiction can receive HOME funds. In fact, 

before any HOME funds can be disbursed to any 

entity (including subrecipients, state recipients, 

homeowners, homebuyers, contractors, CHDOs, 

and other nonprofit or for-profit developers), the 

PJ must execute a written agreement that ensures 

compliance with all HOME requirements. 

In a consortium, the development, execution, and 

enforcement of written agreements are key 

responsibilities of the lead entity. As such, these 

are discussed more fully in Chapter 4. 

Resources on Written Agreements 

The HOME regulation at 24 CFR 92.504 outlines 

the requirements related to written agreements. 

Attachment 2 of this guide, Required Provisions in 

HOME Written Agreements, identifies specific 

requirements that must be included in HOME 

written agreements 

Commitments and Disbursements 

The HOME Program has required timeframes for 

activities to be completed, which are written into 

the program’s statute and regulations. These 

timeframes help to ensure that the Federal funds 

allocated to this program are drawn down and set 

to work rapidly. 

• PJs have 24 months from the end of the 

month that HUD signs the HOME 

Investment Partnership Agreement to enter 

into a legally binding agreement with a 

subrecipient or contractor to use a specific 

amount of HOME funds to produce 

affordable housing or tenant-based rental 

assistance; or to execute a written agreement 

to reserve a specific amount of funds for a 

CHDO. 
24 

• PJs have five years total from the Agreement 

to expend the funds. 

• PJs have 24 months to reserve funds for 

housing that is owned, developed or 

sponsored by CHDOs. 

When a PJ is unable to meet these timeframes, 

HUD recaptures and reallocates funds to other 

PJs. It is, therefore, extremely important to track 

the commitment and disbursement of funds. 

To meet this responsibility, it is critical for the 

consortium to enter project data into IDIS for 

project set-up, draw downs from the U.S. 

Treasury, and disbursements and completions to 

the project, called activities in IDIS. The 

consortium must therefore have clearly defined 

procedures and responsibilities for reporting 

necessary information and entering it into IDIS in 

a timely fashion. 

Depending on the governing structure of the 

consortium or the capacity of the consortium 

members and the relationships between them, 

some consortia may encounter challenges in 

committing and disbursing funds. These 

challenges will be discussed in more detail in 

Chapter 5 of this guide. 

Resources on Commitments and 

Disbursements 

The HOME regulation establishes specific 

deadlines related to commitment of HOME 

funds, reservation of CHDO funds, and 

disbursement of HOME funds at 24 CFR 

92.500(d). 

For more information on the requirements related 

to project commitments and disbursements, see 

HUD Notice CPD 01-13, Commitment, CHDO 

Reservation, and Expenditure Deadline Requirements for 

the HOME Program, issued October 12, 2001. 

This notice is available online at 

http://www.hud.gov/utilities/intercept.cfm?/ 

offices/cpd/lawsregs/notices/2001/01-13.pdf. 

Record-keeping and Reporting 

To ensure compliance with HOME requirements, 

the HOME Program requires that PJs, including 

consortia, keep records of their activities and 

report activities to HUD. 

Consortia must establish and maintain sufficient 

documentation to demonstrate compliance with 

program requirements for all their programs and 

projects. Consortia must retain this 

documentation for five years after 

program/project completion. For projects that 

are subject to an affordability period, the retention 

period extends to five years until the expiration of 

that period. 

In addition to record-keeping, consortia must 

report to HUD. Reporting requirements include: 

• IDIS. Consortia must report to HUD on an 

ongoing basis through the IDIS system. In 

IDIS, consortia must set up each activity to be 

undertaken with HOME funds, report on 

progress with each draw down of funds, 

report on beneficiary data, and then close out 

the activity when it is complete. It allows 

HUD to report on the use of HOME funds 

nationally, but it also serves as a useful tool 

for PJs to track their own performance. 

Consortia must enter project information into 

IDIS as it carries out its projects and activities. 

Consortia must enter completion information 

into IDIS and change the activity status to 

“complete” within 120 days of the final draw 

given to a project/activity. 

• Consolidated Annual Performance and 

Evaluation Reporting (CAPER). The 

CAPER is a summary of program 

accomplishments and an assessment of 

progress toward the needs and objectives set 

out in the consortium’s Conplan. 

The lead entity has primary responsibility for 

ensuring that the appropriate documentation is 

maintained. It will find that imposing reporting 

requirements upon its subrecipients will facilitate 

its monitoring responsibility. Chapter 4 provides 

guidance to lead entities on making this 

requirement operational. 
25 

Resources on Record-keeping and Reporting 

The HOME regulation at 24 CFR 92.508 

describes record-keeping and reporting 

requirements. 

Monitoring 

Consortia must monitor all recipients of HOME 

funds. This means the lead entity must monitor 

member entities, other subrecipients, and CHDOs 

that are carrying out project activities. Monitoring 

responsibilities last the duration of the project, 

including the affordability period. If a member 

leaves the consortium before a project within its 

geographic boundaries is complete or the 

affordability period has expired, the consortium 

remains responsible for monitoring that project. 

Since the lead entity is held accountable to HUD 

for compliance with HOME rules, the monitoring 

responsibility is discussed in greater detail in 

Chapter 4. 

Resources on Monitoring 

For more information on monitoring, see: 

• Office of Affordable Housing Program’s 

website entitled HOME Monitoring Tools, 

http://www.hud.gov/offices/cpd/affordablehousing/t

raining/web/checkup/performance/monitoringtools.cf

m. From this site, there are many useful links 

that will assist PJs in developing monitoring 

plans, assessing risks, and checklists to 

facilitate the monitoring process; and 

Community Planning and Development Monitoring 

Handbook, available online at 

http://www.hud.gov/offices/cpd/library/ 

monitoring/handbook.cfm. This handbook is used by 

HUD monitors to monitor all CPD programs. 

Chapter 7 covers the HOME Program. 

Program Requirements 

HOME has a number of requirements that apply 

to the consortium’s programs, regardless of 

activity (homebuyer, homeowner rehabilitation, 

tenant-based rental assistance, or rental 

development). These requirements cover eligible 

activities, match, the CHDO set-aside, income 

targeting, and other Federal requirements. 

Eligible Activities 

Eligible activities under HOME include 

homeowner rehabilitation, homebuyer activities, 

rental housing, and tenant-based rental assistance. 

HOME funds must be used for eligible housing 

expenditures; other non-housing activities are not 

eligible for HOME funds, such as commercial 

development and supportive services. 

See the HOME rule at 24 CFR 92.205 for a full 

description of HOME-eligible activities. 

Match Requirements 

The HOME Program requires PJs to make a 

contribution to HOME-funded affordable 

housing in the form of contributions from nonFederal sources—that is, private, local and 

nonprofit sources. Specifically, every PJ4 incurs a 

25 percent matching obligation for all nonadministrative HOME funds that it expends. The 

match can be in cash or non-cash form, but it 

must be a permanent contribution to affordable 

housing, from a non-federal source. It can come 

from a public or private source including local 

public agencies, state agencies, charitable 

organizations, lending institutions, corporate 

donors, or others. 

Consortia have choices in how they address 

match. They can require a project-by-project 

match, require each member to provide a certain 

match, provide all match through the lead entity, 

or allow any other arrangement that ensures they 

reach their match requirements. These options are 

discussed in more detail in Chapter 5 of this guide. 

Resources on Match 

See the HOME regulation at 24 CFR 92.218 

through 92.222 for the match requirements. 

For additional information on match 

requirements, see HUD Notice CPD 97-03, 

HOME Program Match Guidance, issued March 27, 

1997. This Notice is available online at 

http://www.hud.gov/offices/cpd/affordable 

housing/programs/home/topical/admin.cfm. 
26 

CHDO Set-aside 

To encourage the development and growth of 

nonprofits dedicated to affordable housing 

development, HOME established a new type of 

housing nonprofit called a community housing 

development organization (CHDO). A CHDO is 

a private, nonprofit organization that meets a 

series of qualifications described in the HOME 

regulations. All PJs, including consortia, must use 

a minimum of 15 percent of their annual 

allocation for housing that is owned, developed, 

or sponsored by CHDOs. 

As with match, some consortia find it easier to 

have the lead entity handle all allocations to 

CHDOS, while others ask each member to 

allocate 15 percent of its funds to CHDOs. 

Either way, the lead entity remains ultimately 

responsible for meeting the set-aside 

requirements. Chapter 5 of this guide will discuss 

these options in more detail. 

Resources on Working with CHDOs 

See the HOME regulation at 24 CFR Part 92 

Subpart G for requirements related to community 

housing development organizations. 

HUD Notice CPD 97-11, Guidance on Community 

Housing Development Organizations (CHDOs) Under 

the HOME Program, issued October 8, 1997 

provides guidance on working with CHDOs. This 

Notice is available online at 

http://www.hud.gov/offices/cpd/affordable 

housing/lawsandregs/notices/index.cfm; and 

CHDO Toolbox for HOME PJs is a model program 

guide issued by HUD that provides tools and tips 

for CHDOs. This publication, HUD-20004-08-

OAHP, was issued in July 2004 and is available 

through Community Connections at 1-800-998-

9999, or online at 

http://www.hud.gov/offices/cpd/affordable 

housing/library/modelguides/index.cfm. 

Income Targeting 

The mission of the HOME Program is to provide 

housing opportunities for low-income households. 

Consequently, the HOME Program has certain 

income targeting requirements that apply to the 

program. Specifically: 

• All HOME funds must be used to assist lowincome households, that is, households with 

incomes at or below 80 percent of the area 

median income. 

• For rental housing and tenant-based rental 

assistance, initially 90 percent of the 

beneficiaries must be households that have 

incomes that are at or below 60 percent of the 

area median income. 

• For rental housing with five or more HOMEassisted units, 20 percent of the units must 

also be occupied by tenant families with 

incomes at or below 50 percent of the area 

median income. 

For owner-occupied housing, income must be 

determined and verified at the time assistance is 

delivered. The low-income occupancy 

requirements for rental and homebuyer activities 

apply for a certain affordability period (described 

below under Project Requirements). The 

household’s annual income must be verified with 

source documentation prior to occupancy. For 

rental housing, it can be certified by the tenant 

annually, and must be re-verified by the PJ every 

six years. 

The consortium must document that these 

income targeting requirements are met. This 

means collecting project information from 

members throughout the reporting process as 

discussed above and monitoring projects for 

income eligibility, as discussed below. 

Resources on Income Targeting 

See the HOME regulation for the requirements 

related to qualification as affordable housing, for 

rental housing at 24 CFR 92.252 and for 

homeownership housing at 24 CFR 92.254. 

The income limits for each market area, as 

determined by HUD, are available online at 

http://www.hud.gov/offices/cpd/affordable 

housing/programs/home/limits/income/ 

index.cfm.
27 

HUD’s publication, Technical Guide for Determining 

Income and Allowances for the HOME Program, Third 

Edition, provides step-by-step guidance on how to 

determine a household’s eligibility for the HOME 

Program. It describes the technical requirements 

of each of the three definitions a PJ can use to 

define annual income, and provides ample 

examples of how each is applied and affects the 

eligibility determination. It contains sample forms 

that can be used by the PJ. This publication 

(HUD 1780-CPD, issued January 2005) is 

available through Community Connections at 

1-800-998-9999, or through HUD’s website at 

http://www.hud.gov/offices/cpd/affordable 

housing/library/modelguides/index.cfm. 

HUD has an online income calculator that enables 

PJs to enter income data from their clients and 

determine income eligibility. This tool is available 

at http://www.hud.gov/offices/cpd/affordable 

housing/training/web/calculator/calculator.cfm. 

Other Federal Requirements 

In addition to the HOME Program rules, there are 

a number of other Federal requirements that apply 

across most Federal programs, including the 

HOME Program. These requirements are 

incorporated into the HOME rule by reference 

and apply to HOME activities. These include 

rules and regulations on nondiscrimination and 

equal access (fair housing and equal opportunity 

and handicapped accessibility); employment and 

contracting (equal economic opportunity, labor 

practices, and contracting and procurement 

practices); environmental reviews; lead-based 

paint; and acquisition, relocation, and 

displacement rules. 

Resources on Other Federal Requirements 

The HOME Program regulation covers the 

requirements related to other Federal 

requirements at 24 CFR Part 92 Subpart H. 

For more information on other Federal 

requirements: 

• Overview to cross-cutting Federal 

requirements is provided in an interactive 

web-based training, Crosscutting Federal 

Requirements. This online training is available 

at http://www.hud.gov/offices/ 

cpd/affordablehousing/training/web/ 

crosscutting/.

• Lead-based paint requirements are 

reviewed in an interactive web-based training, 

Lead-Safe Housing Rule. This training is 

available online at 

http://www.hud.gov/offices/cpd/affordablehousing/t

raining/web/leadsafe/. 

• Fair housing requirements, including 

accessibility and employment and 

contracting issues are discussed in Fair 

Housing for HOME Program Participants, a series 

of model program guides issued by HUD in 

May, 2005. This publication series, HUD2005-10-CPD, is available from Community 

Connections at 1-800-998-9999 or online at 

http://www.hud.gov/offices/cpd/affordablehousing/li

brary/modelguides/index.cfm. 

• Relocation requirements are discussed in 

HUD Notice CPD 05-02, Notice of 

Implementation of Uniform Relocation Assistance and 

Real Property Acquisition Policies Act of 1970, as 

amended, (URA) Final Rule Effective February 3, 

2005. Issued April 13, 2005. This Notice is 

available online at 

http://www.hud.gov/offices/cpd/affordablehousing/l

awsandregs/notices/index.cfm. 

• Environmental review requirements are 

covered in HUD Notice CPD 01-11, 

Environmental Review and the HOME Investment 

Partnerships Program. Issued July 17, 2001. 

This Notice is available online at 

http://www.hud.gov/offices/cpd/affordablehousing/l

awsandregs/notices/index.cfm.

• Prevailing wage requirements are discussed 

in HUD Letter LR-96-04, “Application of 

Federal Labor Standards to HOME Projects,” 

issued August 21, 1996. 

Project Requirements 

In addition to administrative and program 

requirements, HOME also has a number of 

requirements that apply to specific project-related 

activities. The following is a brief description of 

the types and nature of the HOME project 

requirements. Consortia must have systems in 
28 

place to implement and document compliance 

with all of these requirements. 

Eligible Costs 

Within the eligible activities, most project costs 

are allowable under HOME. These include hard 

and soft costs for new construction, rehabilitation, 

reconstruction, or conversion; site improvements; 

acquisition of land or property; demolition; 

relocation; refinancing; capitalization of project 

reserves; direct housing payments for tenants; and 

direct assistance to homebuyers.5 Note, HOME 

funds cannot be used to aid the same project twice 

during its affordability period, except in certain 

circumstances. 

Resources on Eligible Costs 

See the HOME rule at 24 CFR 92.206 through 

92.212 for a more detailed discussion of eligible 

costs. 

Rental Housing Affordability 

To ensure that HOME-assisted rental housing is 

affordable to low- and very low-income tenants, 

HOME restricts the rents that can be charged for 

assisted units. On an annual basis, HUD 

determines and issues to each PJ, the maximum 

rents (High HOME Rents and Low HOME 

Rents) that tenants can be charged for rent and 

utilities in a HOME-assisted unit in that area. The 

rent limits are issued for a variety of bedroom 

sizes. At least 20 percent of the units must be 

rented at no more than the Low HOME Rents, to 

households whose incomes are at or below 50 

percent of annual area median income. The 

remaining HOME-assisted units must be rented at 

or below the High HOME Rents. 

Rents of HOME-assisted units are controlled 

throughout the affordability period, as identified 

in Exhibit 3-1. These restrictions must be secured 

by a deed restriction or covenant running with the 

land. 

Resources on Rental Housing 

See the HOME regulation at 24 CFR 92.252 for 

requirements related to qualification as affordable 

housing for rental housing. 

The rent limits for each market area are available 

online at http://www.hud.gov/offices/cpd/ 

affordablehousing/programs/home/limits/rent/ 

index.cfm. 

Guidance and relevant information for PJs 

undertaking rental housing development is 

available online at http://www.hud.gov/offices/ 

cpd/affordablehousing/programs/home/topical/rental.cfm. 

Guidance and relevant information for PJs 

undertaking tenant-based rental assistance 

programs is available online at 

http://www.hud.gov/offices/cpd/affordable 

housing/programs/home/topical/tenant.cfm. 

An online training related to combining HOME 

with low-income housing tax credits is available at 

the HOME Program’s website, HOME and Low 

Income Housing Tax Credits (LIHTC), at 

http://www.hud.gov/offices/cpd/affordable 

housing/training/web/lihtc/. 

HUD has issued a number of HOME model 

program guides for PJs on various aspects of 

developing rental housing programs with HOME 

funds, including: 

• Asset Management: Strategies for the Successful 

Operation of Affordable Rental Housing. HUD 

2018-CPD, May 2000. 

• Financing Rental Housing Under the HOME 

Program: Second Edition. HUD 1414-CPD, 

September 1994. 

• Using HOME with Low-Income Housing Tax 

Credits. November 1998. 

• Tenant Based Rental Assistance: A HOME 

Program Mode. HUD 1658-CPD, January 

1997. 

• Rental Housing Development and HOME: Four 

Case Studies. HUD 1584-CPD, April 1996. 

These model program guides are available through 

Community Connections at 1-800-998-9999, or 

through HUD’s website at 

http://www.hud.gov/offices/cpd/affordable 

housing/library/modelguides/index.cfm. 
29 

Homeownership Housing Affordability 

HOME funds can be used in a variety of ways to 

support a consortium’s homeownership activities: 

homeowner-occupied rehabilitation programs, 

direct homebuyer assistance (including direct 

loans to homebuyers, as well as downpayment 

and/or closing cost assistance), and/or 

development of for-sale housing. As previously 

noted, all households assisted with HOME in any 

homeownership program must be low-income. 

In order to ensure that HOME-assisted housing is 

affordable to low-income households, the value of 

any property assisted with HOME funds may not 

exceed 95 percent of the median purchase price 

for that type of housing for the area. For 

properties requiring rehabilitation, the PJ must 

secure an after-rehabilitation value estimate to 

determine value. For HOME-assisted for-sale 

properties that do not require rehabilitation, the 

sales price may not exceed this limit. Note, the 

HOME Program does not define what is 

affordable to a homeowner in terms of monthly 

housing costs (that is, as a percentage of the 

principal, interest, property taxes, and insurance, 

or “PITI”). 

For homebuyer programs (not including 

homeowner-occupied rehabilitation programs), 

long-term affordability is ensured by either (1) 

restricting the resale of the property to a 

subsequent low-income buyer at an affordable 

price, or (2) recapturing the HOME investment 

and reinvesting those funds in other HOMEeligible activities. The PJ must determine how it 

will implement each of these options, and must 

identify in its Conplan the option it chooses and 

how it will be implemented. 

Resources on Homeownership Housing 

See the HOME Program regulation at 24 CFR 

92.254 for requirements related to the 

qualification of homeownership housing as 

affordable housing, including requirements related 

to resale and recapture provisions. 

Guidance and relevant information for PJs 

undertaking homeowner rehabilitation programs is 

available online at 

http://www.hud.gov/offices/cpd/affordable 

housing/programs/home/topical/rehab.cfm. 

Guidance and relevant information for PJs 

undertaking homebuyer assistance programs is 

available online at http://www.hud.gov/offices/ 

cpd/affordablehousing/programs/home/topical/homebuyer

.cfm. 

HUD has issued a number of publications to 

assist PJs in the development of homebuyer 

programs, including the following model program 

guides: 

• Fitting the Pieces Together: Using Private and Public 

Financing Tools with HOME-Assisted Homebuyer 

Programs. HUD-2003-14-CPD, February 

2004. 

• HOME Program Rehabilitation Tune-up. HUD2003-13-CPD, January 2004. 

• Using HOME to Develop a Homebuyer Assistance 

Program. HUD 1782-CPD, June 1999. 

• Using HOME Funds for Homebuyer Programs: 

Structuring Recapture and Resale Provisions. HUD 

1674-CPD, May 1997. 

These model program guides are available through 

Community Connections at 1-800-998-9999, or 

through HUD’s website at 

http://www.hud.gov/offices/cpd/affordable 

housing/library/modelguides/index.cfm. 

Eligible Types and Levels of Assistance 

HOME allows many forms of financial assistance 

or subsidy including interest bearing loans, noninterest bearing loans, deferred loans, grants, 

interest subsidies, equity investments, loan 

guarantee and loan guarantee accounts, and other 

forms of assistance approved by HUD. HOME 

does place a minimum and maximum amount of 

subsidy on the assistance. The minimum amount 

of HOME funds is $1000 per housing unit in a 

project. This does not apply to TBRA. The 

maximum per-unit subsidy is the 221(d)(3) limit, 

with some exceptions. These limits are available 

through the HUD Field Office or online at 

http://www.hud.gov/offices/cpd/affordable 

housing/programs/home/limits/subsidylimits. 

cfm. 
30 

HOME also requires a subsidy layering analysis to 

confirm that no project receives more HOME and 

other governmental funds than necessary to 

provide affordable housing. The consortium must 

adopt written layering guidelines and evaluate each 

project in accordance with them. 

Resources on Levels of Assistance 

See the HOME Program regulation at 24 CFR 

92.250(a) for the requirements related to 

maximum levels of assistance, and at 24 CFR 

92.250(b) for subsidy layering requirements. 

For more guidance on subsidy layering, see HUD 

Notice CPD 98-01, Layering Guidance for HOME 

Participating Jurisdictions When Combining HOME 

Funds With Other Government Subsidies. Issued 

January 22, 1998. This Notice is available online 

at http://www.hud.gov/offices/cpd/ 

affordablehousing/lawsandregs/notices/ 

index.cfm. 

Eligible Properties 

Properties receiving HOME funds must meet 

certain criteria concerning ownership, title, 

maximum value, and the geographic area in which 

they are located. Specifically, proper 

documentation must be in place indicating clear 

ownership of the property. The property must not 

exceed the established maximum property value 

for the given area. And, the property must be 

located within the geographic boundaries of a 

member jurisdiction of the consortium. For 

homeownership housing, properties must be the 

beneficiary’s primary residence. 

Resources on Eligible Properties 

See the HOME Program regulation at 24 CFR 

92.254 for more information on these 

requirements. 

Property Standards 

HOME-funded properties must also meet 

established minimum property standards. 

Depending on the nature of the activity being 

undertaken, these standards might be state and 

local standards, model building or energy codes, 

local rehabilitation standards, or the Section 8 

Housing Quality Standards. Handicapped 

accessibility and site and neighborhood standards 

may also apply. 

Resources on Applicable Property Standards 

For more information on applicable property 

standards, see 24 CFR 92.251. 

Affordability Period 

To ensure that the HOME goal of providing 

affordable housing over a period of time is met, 

most HOME projects are subject to an 

affordability period as shown in Exhibit 3-1 

During the affordability period for rental projects, 

the PJ must ensure income targeting, housing 

affordability, and property standard requirements 

are met. For homeownership properties, the PJ 

must enforce applicable resale or recapture 

provisions. HUD holds the lead entity 

accountable for long-term monitoring and 

compliance of HOME-assisted projects. These 

long-term compliance requirements are discussed 

in greater depth in Chapter 4. 

The periods of affordability are addressed in the 

HOME Program regulation at 24 CFR 

92.254(a)(4) for homeownership housing, and at 

24 CFR 92.252(e) for rental housing. 
31 

Exhibit 3-1: HOME Affordability Periods 

Activity Average HOME 

 investment per unit 

Minimum 

Affordability Period 

Less than $15,000 5 years 

$15,000 - $40,000 10 years Rental housing rehabilitation or 

acquisition Greater than $40,000 per unit 15 years 

Rental housing rehabilitation – 

Refinance 

Any $ amount 15 years 

Rental Housing – New construction 

or acquisition of new housing 

Any $ amount 20 years 

Less than $15,000 5 years 

$15,000 - $40,000 10 years Homeownership housing assistance 

– all forms Greater than $40,000 per unit 15 years 
32 
33 

Chapter 4: 

 Responsibilities of the Lead Entity 

This chapter discusses the lead entity’s responsibility for maintaining compliance with HOME Program rules. It lists these 

specific responsibilities and identifies the steps a lead entity can take to ensure its obligations are fulfilled. 

This chapter is a “must –read” for any jurisdiction considering becoming a lead entity or for an existing lead entity that wishes to 

assess its performance in meeting its responsibilities. However, all member jurisdictions of consortia should read and understand 

the administrative responsibilities accepted by the lead entity so that they can support the lead entity and help to ensure full 

compliance. 

The specific topics covered in this chapter include: executing written agreements with all consortium members; managing the 

HOME allocation, commitment, and disbursement of HOME funds; monitoring projects; ensuring long-term affordability in 

projects; and reporting to HUD on consortium activities. 

Accountability of the Lead Entity 

Although a consortium is a partnership of several 

local government jurisdictions, the lead entity of 

the consortium takes full responsibility for fiscal 

management of HOME and compliance with 

HOME rules and other applicable Federal 

regulations. Member jurisdictions may carry out 

HOME activities in their jurisdictions under a 

subrecipient agreement, but the lead entity retains 

ultimate accountability to HUD. This means that 

if HUD finds evidence of noncompliance on the 

part of the consortium or one of its member 

jurisdictions, HUD will hold the lead entity 

accountable for corrective action. 

Noncompliance might include the inappropriate 

expenditure of HOME funds; the failure of the 

consortium to commit HOME funds in a timely 

manner; or failure to meet HOME Program 

requirements (listed and discussed in Chapter 3). 

Since HUD holds the lead entity accountable, the 

lead entity should take steps to ensure that the 

consortium has developed sufficient systems to 

allocate, commit, disburse, and monitor HOME 

funds. The lead entity must also be able to hold 

consortium members accountable for compliance 

with HOME requirements. The lead entity will 

need to institute systems for its members to report 

on their activities, conduct regular monitoring, and 

establish a framework for taking corrective actions 

in the event of noncompliance. Before problems 

occur, the lead entity should be clear with member 

jurisdictions about how it will carry out its 

monitoring obligations and what actions it will 

take to address any noncompliance by member 

jurisdictions. 

Executing Written Agreements 

Written agreements are the primary enforcement 

and monitoring tool for lead entities to use when 

working with members, subrecipients, community 

housing development organizations (CHDOs), 

developers, and other partners. Written 

agreements allow the consortium to codify roles 

and responsibilities, specify HOME Program and 

other requirements, provide guidance on expected 

program performance and outcomes, and provide 

enforcement mechanisms that can be used to 

ensure that funds are spent in accordance with 

HOME rules. 

A lead entity will be able to hold a member 

jurisdiction accountable only for what it has 

agreed to in its written agreement. It is critical for 

a lead entity to see that its written agreements are 

sufficient to protect its own interests in the event 

things go wrong. 

The lead entity should play a key role in the 

development and execution of the two most 

important agreements required by a consortium—

the consortium agreement and the subrecipient 

agreement. The consortium agreement formalizes 

the membership and governance of the 

consortium. Every member of the consortium 

must sign this agreement. Each member 

jurisdiction that carries out HOME-funded 

programs or activities on behalf of the consortium 
34 

is a subrecipient to the lead entity. A subrecipient 

agreement must be executed between the lead 

entity and a member jurisdiction before any 

HOME funds can be disbursed to that 

jurisdiction. Each of these agreements is 

described in more detail below. 

Consortium Agreements 

As discussed in Chapter 2, the consortium 

agreement is a legally binding cooperation 

agreement that is executed by all members of the 

consortium. This agreement formalizes the 

relationship among all consortium members. It 

establishes the consortium’s three-year 

qualification period, commits each member to 

participate for the duration of the qualification 

period, and describes member jurisdictions’ roles 

and responsibilities—particularly those of the lead 

entity. The consortium agreement must include 

authorizing resolutions from each member’s 

governing body and a legal opinion from the lead 

entity affirming that the agreement is authorized 

under state and local law. 

The lead entity plays a key role in developing the 

consortium’s agreement and is responsible for 

submitting it to HUD. It is also responsible for 

renewals. These procedures are described in 

Chapter 2. 

The lead entity should be sure that the consortium 

agreement clearly defines the responsibilities of 

the member jurisdictions in implementing HOME 

activities and holds them accountable for 

compliance with HOME requirements. Also, the 

lead entity should make certain that the agreement 

specifies how it will enforce HOME requirements 

if a jurisdiction leaves the consortium, particularly 

during any project’s period of affordability. 

The lead entity has administrative responsibility to 

maintain the consortium agreement and manage 

any changes -- for example, executing an 

amendment whenever the consortium adds a 

member with signatures by the authorized 

representatives for the lead entity and the new 

member. (Other members are not required to 

sign this amendment unless the consortium 

agreement requires it.) 

Subrecipient Agreements 

Members of the consortium that carry out HOME 

activities on behalf of the consortium are 

considered subrecipients to the lead entity. Any 

member jurisdiction administering its own 

programs or projects in its jurisdiction must

execute a subrecipient agreement with the lead 

entity before HOME funds can be disbursed to 

that jurisdiction. The subrecipient agreement 

must incorporate a number of required elements, 

including the scope of activities and all HOME 

requirements that are applicable to the activities. 

However, consortia subrecipient agreements also 

need to address the sensitive issues surrounding 

when a lead agency must enforce requirements in 

a peer jurisdiction. Lead entities need to be 

careful to spell out how it will ensure that these 

requirements are being carried out, and the 

consequences to the member jurisdiction in the 

event of nonperformance or noncompliance. The 

written agreement must identify specific remedies 

for any breach of any provision of the agreement. 

In identifying these remedies, the lead entity 

should consider the need for remedies both 

during project implementation and during the 

period of affordability. [See 92.504(c)(2)(ix).] 

The subrecipient 

agreement must 

remain in place until 

all projects subject 

to the agreement are 

completed. If the 

agreement involves a 

rental or 

homeownership 

project that is 

subject to a period of affordability, the lead entity 

must retain the ability to monitor the project 

throughout its affordability period. 

While the consortium agreement describes the 

consortium’s governing principles, the 

subrecipient agreement is activity-specific and 

focuses on the specific issues and decisions that 

are required to carry out the consortium’s HOME 

activities. The two agreements should be 

consistent and complement one another. For 

instance, the consortium agreement may state, in 

general terms, that each member jurisdiction that 

See 24 CFR 92.504(c)(2) 

for a list of the required 

elements of a subrecipient 

agreement. The required 

elements, as well as 

recommended elements, 

are also reviewed in 

Attachment 3, Elements of 

a Subrecipient Agreement. 
35 

participates in the consortium must contribute 

matching funds on a project-by-project basis. The 

subrecipient agreement then delineates for the 

project(s) it covers, what, how much, and on what 

schedule the match must be contributed; the form 

of match that will be contributed; and the 

consequences in the event the match is not 

contributed. 

The subrecipient agreement must describe how 

the HOME activity or project will be carried out, 

and specify the levels of authority that the 

member jurisdiction (the subrecipient) has to carry 

out the activities. For each HOME 

activity/project, the agreement should specify: 

• Who has the authority to execute contracts 

with developers, contractors, nonprofit 

partners, or beneficiaries; 

• Who retains program income; 

• What reporting requirements are imposed by 

the lead entity; 

• Who enters data into, and draws funds down 

from, IDIS; and 

• How assets will be treated during the 

affordability period. 

It should also clearly state what happens when 

things go wrong, such as treatment of assets 

should the consortium disband or a member leave 

the consortium; and failure to comply with 

HOME requirements. For a full list of topics to 

be covered in a subrecipient agreement, see 

Attachment 3, Elements of a Subrecipient Agreement. 

The subrecipient agreement can and should be 

amended if any change in activities occurs. 

Note, in addition to member jurisdictions, a 

consortium may choose to use other subrecipients 

to administer a portion or all of its HOME 

Program activities. The lead entity or a member 

jurisdiction must execute a subrecipient 

agreement with each of these entities as well. No 

HOME funds may be disbursed to any 

subrecipient without a subrecipient agreement. 

Written Agreements with Developers and 

Owners 

Once the lead entity has executed a contract with 

the jurisdiction as a subrecipient (or another 

subrecipient), there may be other partners that 

carry out the HOME activities. These partners 

might include developers, CHDOs, or other 

nonprofit or for-profit contractors. Before a lead 

entity or one of its subrecipients can disburse any 

HOME funds to any other partner, there must be 

a written agreement with that partner. 

The subrecipient agreement between the lead 

entity and the member jurisdiction should specify 

who has the authority to execute agreements with 

developers and owners, whether or not the lead 

entity is a party to these agreements, and what 

reporting to the lead entity about the activities of 

other partners is required. 

Although each member jurisdiction may have its 

own local contract formats, it is prudent for the 

lead entity to provide a standard written 

agreement for all its subrecipients to use. Locallyrequired terms and conditions can be included as 

an attachment to, or at the end of, the lead entity’s 

agreement. This will ensure that necessary 

HOME requirements are specified and it will 

facilitate monitoring for the lead entity. See 

Attachment 2, Required Provisions in the HOME 

Written Agreements. 

Enforcing Written Agreements 

The lead entity is responsible for compliance with 

the HOME rules, but its ability to hold its 

member jurisdictions accountable for compliance 

with the HOME requirements is only as effective 

as its written agreements. 

An effective lead entity addresses any issues of 

nonperformance as they come up and before onetime instances of nonperformance become 

habitual or persistent issues of noncompliance. 

For example, if a member entity fails to provide a 

required report to the lead entity, the lead entity 

should take pro-active steps to secure the report 

through reminders or site visits. A missing report 
36 

may reflect a simple oversight, lack of progress on 

a project, or general organizational issues. 

Without following up, the lead entity will not 

know the nature of the problem. With active and 

consistent progress report analysis, site visits, and 

consortium meetings, a lead entity will have a 

fairly accurate sense of how a jurisdiction is doing. 

The subrecipient agreement must include 

information about the how HOME funds will be 

used, including tasks to be performed, a schedule 

for completing the tasks, and a budget. This 

agreement must provide enough specificity so that 

the lead entity can monitor progress against 

specific interim milestones in the agreement. [See 

24 CFR 92.504(c)(2)(i).] Without this specificity, 

performance problems are far more difficult to 

address. 

In the event of performance problems or potential 

issues with a member jurisdiction, the lead entity 

should relay concerns to the member jurisdiction 

early in the process, work with member 

jurisdictions to solve problems, and provide or 

secure technical assistance as needed and 

appropriate. The lead entity should consider a 

range of actions that it might take to keep a 

subrecipient jurisdiction in compliance, and these 

actions should be included in the subrecipient 

agreement, and any other applicable written 

agreement, including: 

• The lead entity should retain the authority to 

withhold any remaining undisbursed project 

or program funds for noncompliance with a 

consortium agreement or subrecipient 

agreement. 

• The lead entity should specifically reserve the 

right to require a member jurisdiction or 

subrecipient to repay HOME funds for 

noncompliance with HOME requirements, 

particularly those related to maintaining the 

affordability of HOME-assisted housing. 

This is only prudent, since HUD holds the 

lead entity accountable for repayment of 

funds in the event the activities it administers 

fail to meet HOME requirements, or in the 

event that housing that is assisted with 

HOME funds fails to meet the affordability 

requirements. 

• The lead entity should also reserve the right to 

withhold approvals of new funds, programs, 

or projects for any member jurisdiction that is 

not in compliance with HOME requirements. 

Managing HOME Funds 

The lead entity is responsible for seeing that 

HOME funds are spent in accordance with 

HOME requirements and in a way that is 

consistent with the consortium’s Consolidated 

Plan and Annual Action Plan. Lead entities are 

also responsible for managing HOME funds to 

ensure that they are used appropriately and 

safeguarded against fraud and abuse. This 

responsibility starts with ensuring that 

environmental reviews are conducted prior to any 

commitment of HOME funds. The lead entity 

should have systems in place to commit funds to 

eligible projects, track project progress, and make 

timely payments to contractors and vendors. 

Generally the lead entity commits funds in the 

IDIS system, and draws down funds as 

appropriate, but these functions can be delegated 

to a member jurisdiction. In either case, the lead 

entity must track disbursements to make sure that 

HOME funds are spent within the timeframes 

required by HUD. 

Prior to Funding Commitment 

Under the HOME Program, completion of the 

environmental review process in accordance with 

24 CFR Part 58 is mandatory before a PJ or any of 

its partners may take any physical action on a site, 

or make a commitment or expenditure of HOME 

or other HUD or non-HUD funds for property 

acquisition, rehabilitation, conversion, lease, 

repair, or construction activities. (Note, nonHUD funds include any other Federal, state, local, 

private or other funds.) Local HOME PJs and 

their partners may not commit HOME funds until 

HUD has approved the Request for Release of 

Funds and related certification (RROF) unless the 

activity has been determined exempt in 

accordance with 24 CFR 58.34 and 58.35(b). 

For consortia, the lead entity is the Responsible 

Entity for the environmental review. The 

responsibility to conduct environmental reviews 

and make determinations cannot be assumed by a 
37 

subrecipient member jurisdiction. However, the 

member jurisdiction may assist the lead entity in 

gathering information used in completing the 

environmental review process. 

For more information on the environmental 

review requirements, see: 

HUD website on Part 58 at 

www.hud.gov/cpd/envregul.html, and 

HUD Notice CPD-01-11, Environmental Review and 

the HOME Investment Partnerships Program, issued 

July 17, 2001. 

Monitoring Commitment and 

Expenditure Timeframes 

HOME rules require that funds be committed to 

projects in two years [24 CFR 92.500(d)(1)(B)]; 

reserved for housing that is owned, developed, or 

sponsored by CHDOS in two years [24 CFR 

92.300(a) and 92.500(d)(1)(A)]; and expended in 

five years [24 CFR 92.500(d)(1)(c)] . When these 

deadlines are missed, the consortium’s funds are 

subject to recapture by HUD. Therefore, 

consortia must have internal procedures and rules 

to assure that these deadlines are met. If member 

jurisdictions are expected to identify and commit 

funds to projects or CHDOs, then the 

subrecipient agreement should specify the 

deadlines for commitment or reservation that will 

give the consortium ample time to find alternative 

HOME-eligible activities in the event a member 

jurisdiction does not secure project 

commitment(s) in a timely manner. The lead 

entity should develop procedures for managing 

the funding deadlines, and monitor its 

subrecipients to see that they are making steady 

progress to meet these deadlines. For an example 

of such procedures, see Attachment 4, Sample 

Procedures for Managing Expenditure Deadlines. 

Disbursing HOME Funds 

HOME funds drawn from the U.S. Treasury 

account must be expended for eligible costs 

within fifteen days. [See 24 CFR 92.502(c)(2).] 

For many PJs, including many consortia, this 

deadline is met by using general fund money for 

expenditures, and then drawing down funds from 

U.S. Treasury to reimburse the general fund. For 

consortia, it may be the consortium member that 

makes expenditures from its general fund in order 

to carry out HOME projects. The jurisdiction 

requests reimbursement of HOME funds from 

the lead entity. The lead entity then reviews the 

expenditure documentation, draws down the 

appropriate amount of HOME funds from the 

U.S. Treasury, and releases funds to the 

jurisdiction. This option requires either the lead 

entity or its subrecipient have access to working 

capital from its general fund. It has the advantage 

of providing the lead entity ample time to review 

payment requests and release funds. 

Alternatively, the lead entity can establish a system 

whereby the subrecipient jurisdiction submits 

invoices for payment directly to the lead entity. 

This type of system is preferable for small 

municipalities that may not have the working 

capital required in a reimbursement system. 

However, this system requires the lead entity to 

work quickly to review payment requests, draw 

funds from the U.S. Treasury, and disburse funds 

to the vendor. 

Regardless of which system is employed, the 

option should be identified in the consortium 

agreement or the subrecipient agreement.6 It is 

essential that the lead entity require that all 

requests for payment by a member jurisdiction be 

accompanied by documentation that describes the 

work to be completed, demonstrates that the work 

is in compliance with HOME requirements, and 

verifies that any required match has been 

contributed. Before making any payments or 

reimbursements out of HOME funds, the lead 

entity must ensure that all applicable HOME 

Program requirements have been met by the entity 

requesting the funds. Ideally, for construction 

activities, a representative of the lead entity will 

also physically inspect all work. 

Tracking Match 

As discussed in Chapter 3, HOME requires that 

PJs contribute match as a permanent contribution 

to affordable housing. (See 24 CFR 92.218.) 

Chapter 5 discusses some of decisions that a 

consortium must consider in order to see that its 

match obligations are met. This obligation applies 

to the consortium’s HOME Program overall, and 
38 

HUD holds the lead entity accountable for 

meeting the consortium’s match obligations. The 

consortium can choose to have member 

jurisdictions share in the burden of contributing 

match, but this does not relieve the lead entity of 

its obligation. 

Match liability is incurred every time HOME 

funds subject to match are drawn down from the 

jurisdiction’s HOME Investment Trust Fund 

Treasury account. The liability must be satisfied 

at the end of the Federal Fiscal Year (ending 

September 30) in which it occurred. The lead 

entity must track the match contributions for the 

consortium to be sure that its obligations have 

been met. To do this, the lead entity will need 

accurate and timely tracking systems so that it 

knows when the match obligation is incurred, and 

when it is met. A sample match log is provided at 

the HOME Program website at 

http://www.hud.gov/offices/cpd/affordable 

housing/library/forms/index.cfm. 

For more information about meeting the match 

requirements, see HUD Notice CPD 97-03, 

HOME Program Match Guidance, issued on March 

27, 1997 and HUD Notice CPD 04-06, Notice of 

Procedures for HOME Program - Match Reductions for 

Fiscal and Severe Fiscal Distress, and for Major 

Presidentially Declared Disasters Under the Stafford Act,

issued June 4, 2004. 

Managing Program Income 

The lead entity is responsible for tracking program 

income. Program income is the gross income 

received by the consortium generated from the 

use of HOME funds or matching contributions. 

Program income includes proceeds for the sale or 

long-term lease of property, income from rental 

properties, payments on loans, interest on 

program income, and other interest or return on 

investments of HOME funds. (See definition of 

program income at 24 CFR 92.2.) 

A consortium must decide who retains program 

income and how it will be used-- the jurisdiction 

whose project generated the program income can 

retain it for subsequent activities to be carried out 

by the jurisdiction, or it can be returned to the 

lead entity for use by the lead entity or another 

consortium member. Decisions related to the 

receipt, deposit, and expenditure of program 

income should be codified in the subrecipient 

agreement and any other applicable written 

agreements. This is discussed in more detail 

discussed in Chapter 5. 

Regardless of who retains the program income, 

however, HUD always holds the lead entity 

responsible for tracking the receipt and use of 

program income. The lead entity must establish 

an effective method for tracking program income 

as it is generated and disbursed so that HOME 

requirements for the timely disbursal of program 

income are met. [See 24 CFR 92.503(a).] 

Specifically, the lead entity must monitor its 

program income funds to ensure that the program 

income is expended before additional HOME 

funds are drawn from the U.S. Treasury. 

The lead entity should develop its own system for 

tracking program income. Whether the funds are 

physically returned to the lead entity for deposit 

into the local HOME account, or if the funds are 

retained by a member jurisdiction, the lead entity 

must have a system for knowing when program 

income has been generated, how much has been 

generated, where it is (local HOME account or 

member jurisdiction account), and when it is used. 

The lead entity should rely primarily on its own 

tracking system to account for its program 

income. This information is all subject to HUD 

review and monitoring. 

In addition to its local tracking system, however, 

the lead entity must track its program income in 

IDIS so that HUD can also monitor the receipt 

and use of program income, and accurately report 

on projects funded with program income. 

Currently, the IDIS system does not have a 

program income module to automatically track 

program income receipts and draws. As a result, 

in IDIS, the lead entity should receipt program 

income only when it is also ready to draw funds 

for a HOME-eligible expense. In other words, 

the lead entity should receipt and draw the 

program income at the same time. 
39 

When to Track Program Income in IDIS 

Scenario: The lead entity of ABC Consortium 

receives $500/month as repayment of a HOME 

loan after the period of affordability has expired. 

These funds are considered program income. The 

lead entity deposits these funds in its local HOME 

Investment Trust Fund account. It maintains an 

accounting of these funds for its own records. As 

of the end of March, the lead entity’s records 

showed that the consortium had $2,500 of 

program income on hand. The consortium 

schedules settlement with a homeowner for the 

last week of May. It plans to make a HOME loan 

for $20,000 for its homeowner rehabilitation 

program. In the first week of May, the lead entity 

will have $3,000 in program income in its local 

account. It receipts these funds in IDIS and 

draws them in anticipation of the May settlement. 

In addition, it draws an additional $17,000 in 

entitlement funds (EN) from IDIS. 

To receipt program income, the lead entity must 

create a program income (PI) subfund in the IDIS 

system. The PI subfund needs to be created for 

each program year if the consortium wants to 

track its program income by program year/annual 

allocation as recommended by HUD. IDIS tracks 

the draws made from PI, but the draws are not a 

transfer of funds from the Treasury account 

because the funds remain in the local account. 

Up to ten percent of a consortium’s program 

income can be used for administrative costs, and 

up to five percent may be used for CHDO 

operating expenses. Program income used for 

these purposes must be for eligible administrative 

costs in accordance with 24 CFR 92.207 and 

eligible CHDO operating expenses, in accordance 

with 24 CFR 92.208. Program income that is used 

for administrative costs or CHDO operating 

expenses should only be tracked locally, however. 

These funds should not be receipted in IDIS at 

any time. If the consortium chooses to use 

program income for eligible administrative or 

CHDO operating costs, it should only receipt the 

balance of the funds that are used for eligible 

activity expenses. For instance, if the consortium 

chooses to use five percent of its program income 

for administrative costs, and none of its program 

income for CHDO operating expenses, then it 

would locally track and account for the five 

percent, and receipt the balance in IDIS, or 95 

percent of the funds. Further, it only receipts the 

balance of funds when it is ready to draw them for 

another eligible HOME activity. 

Note, recaptured funds from homebuyer 

recapture notes, repayment funds from projects 

that did not meet the affordability requirements, 

and CHDO proceeds that a CHDO is allowed to 

retain are not program income and must be 

treated separately. Recapture and repayment 

funds are discussed below. 

See HUD Notice CPD-97-09, HOME Program 

Income, Recaptured Funds, Repayments, and CHDO 

Proceeds, issued September 12, 1997 for further 

information on program income. 

Contact the HUD Field Office for additional 

guidance on when and how to track program 

income in IDIS. 

Managing Recaptured Funds 

Lead entities must also track recaptured funds. 

Recaptured funds are funds generated by a 

homebuyer program that uses a recapture 

provision. There are no recaptured funds if the 

initial homebuyer resides in the property for the 

duration of the affordability period, or if the 

homebuyer program is administered with a resale 

provision. The recaptured funds are the funds 

that are repaid to the PJ upon the sale of the 

property during the period of affordability, in 

accordance with the recapture provisions in use by 

the PJ. [See 92.503(c).] Note, loan repayments, or 

other returns on investment in a homebuyer 

program are considered program income, not 

recaptured funds. 

Recaptured funds are similar to program income 

in that they can be retained by the consortium or 

the subrecipient jurisdiction, but they are subject 

to slightly different rules. All recaptured funds 

must be used for HOME eligible activities. None 

can be used for administrative costs. 

Recaptured funds are deposited in the PJ’s local 

HOME account and must be used for the next 

eligible HOME project. The PJ must receipt 

recaptured funds in IDIS the same way it receipts 
40 

program income. That is, the funds are tracked 

locally, and when the consortium has an eligible 

HOME expense it receipts the funds in IDIS and 

draws them. Note, however, that the PJ is not 

entitled to a percentage of the recaptured funds 

for administrative and planning costs, or CHDO 

operating expenses. Once the amount subject to 

recapture is repaid during the affordability period, 

the project remains an eligible HOME project and 

the units and beneficiaries are counted as 

completions in IDIS. This is new guidance. At 

this writing, these projects are not to be cancelled, 

nor should draws be revised, because cancelling 

these project(s) in IDIS results in an underrepresentation of the HOME production data. 

Managing HOME Repayments 

Repayments are funds that the PJ repays to the 

HOME account because housing that was assisted 

with HOME funds fails to meet the affordability 

requirements, or a project that has received a 

HOME investment was terminated before 

completion. [See 24 CFR 92.503(b).] Repayments 

are made to whichever HOME account they were 

drawn from (that is, the local account or the 

Treasury account). 

When HOME funds must be repaid to the PJ’s 

U.S. Treasury account, the PJ can return funds in 

the form of a check or wire transfer of funds, as 

follows: 

• Any sums greater than $2,000 must be wired. 

Wired funds must be sent using Department 

of Treasury’s Financial Communications 

System (TFCS). There are specific procedures 

that must be followed to effectuate a wire 

transfer of funds. The consortium should 

consult with the HUD Field Office for 

guidance. 

• Remittance to the account for less than $2,000 

can be sent by check. The check should be 

sent to HUD’s Miscellaneous Lockbox at 

Bank of America, Attn: HUD CPD/HOME 

IDIS, P.O. Box 27703, Atlanta, GA 30384-

7303. The memo field of the check should 

clearly indicate the consortium’s Grant 

Number and Account Number. 

Monitoring and Long-Term 

Compliance 

The lead entity is responsible for managing the 

day-to-day operations of the consortium’s HOME 

Program activities and ensuring that HOME 

funds are used in accordance with HOME 

requirements. [See 24 CFR 92.504(a) for a 

description of the PJ’s responsibilities.] 

Implementation of HOME Program activities by 

other entities, including other members, does not 

relieve the lead entity of this responsibility. 

Consequently, the lead entity or its member 

jurisdictions must monitor HOME-funded 

programs and projects, from inception through 

the end of each project’s affordability period. For 

rental housing, this monitoring must include 

ongoing annual reports and periodic on-site file 

and unit inspections. [See 24 CFR 92.504(d).] 

Since HUD holds the lead entity accountable for 

compliance, it is generally most effective for the 

lead entity to rely on its own staff to conduct 

monitoring. The lead entity may delegate 

monitoring, or portions of monitoring, to 

consortium members, or even contract out its 

monitoring function. However, the lead entity 

should only delegate or contract out monitoring 

functions when it has confidence in the third party 

monitor and its monitoring processes and systems. 

Even then, the lead entity should carefully review 

monitoring reports and follow up on any findings, 

and periodically monitor the third party’s 

monitoring system. The lead entity must always 

retain the right to access member files and records 

and retain its own documentation of compliance. 

The lead entity must retain sufficient 

documentation to demonstrate to a potential 

HUD monitor that all of the consortium’s 

programs and projects are compliant with HOME 

rules. See 24 CFR 92.508 for the record-keeping 

requirements under the HOME Program. For 

more information on monitoring, see: 

• HOME Program website, HOME Monitoring 

Tools, at 

http://www.hud.gov/offices/cpd/affordablehousing/t

raining/checkup/performance/monitoringtools.cfm. 
41 

• Monitoring HOME Program Performance, HUD2030-CPD, issued October 2000. This guide 

is available through Community Connections 

at 1-800-998-9999 or online at 

http://www.hud.gov/offices/cpd/affordablehousing/li

brary/modelguides/index.cfm.7

For new lead entities or those unfamiliar with 

monitoring, HUD offers a monitoring training 

course entitled, Monitoring HOME: Ensuring 

Program Compliance. For information about 

scheduled training sessions, see 

http://www.icfhosting.com/icfhosting/hcd/cpd/hcdcpd.nsf/webp

ages/MonitoringHOMElad.html or contact the local 

HUD Field Office. 

Compliance Monitoring During 

Implementation 

HUD regulations require the PJ to monitor all 

subrecipients, project developers and owners, and 

contractors at least annually during 

implementation of the project. [See 24 CFR 

92.504(a).] The lead agency may assign the 

member jurisdictions to oversee implementation 

as discussed above, except that the lead agency 

must oversee the member subrecipients, and must 

ensure that their monitoring meets regulatory 

requirements. 

Long-term Compliance 

The long-term nature of some HOME 

requirements poses challenges for many PJs, but 

these challenges are magnified for consortia. 

Rental and homeownership housing that is 

acquired, developed, or constructed with HOME 

funds must remain affordable to income-eligible 

households for some period of time and the lead 

entity must ensure that there is compliance 

throughout the affordability period of five to 

twenty years. 

For rental housing developed with HOME funds, 

lead entities remain responsible for periodic 

monitoring during the period of affordability. The 

lead entity must monitor all HOME-funded rental 

projects on at least an annual basis to verify that 

the projects remain in compliance with HOME 

requirements related to tenant income, rent 

restrictions, unit mix and occupancy, lease 

provisions, and affirmative marketing. On-site 

inspections of units must also be made on a 

periodic basis to ensure that property standards 

continue to be met. While the lead entity can 

delegate the day-to-day management of these 

projects, it retains ultimate accountability of the 

project and therefore must maintain its own 

evidence of rental project compliance. 

Homeownership housing also carries HOME 

requirements during an affordability period. 

Whether the consortium enforces income 

targeting and affordability requirements through a 

resale provision or a recapture provision, the lead 

entity must ensure that the terms of those 

provisions are met. [See 24 CFR 92.254.] If the 

required deed restriction or covenant running with 

the land is properly executed and recorded, the 

resale or recapture provisions should be somewhat 

self-enforcing. However, there should also be 

some procedure for checking for compliance with 

the ongoing principal residency requirement, such 

as a “do not forward” letter, phone call, or other 

intermittent method to follow up. 

The lead entity must consider how it will monitor 

these projects in the event of a sale to ensure that 

the terms established by the consortium are met. 

If the consortium uses a recapture provision in its 

homeownership projects, the lead entity must 

ensure that the appropriate amount of HOME 

funds is recaptured, particularly in the event net 

proceeds are insufficient to recover the full 

HOME investment and the buyer’s investment. 

See 24 CFR 92.254(a)(5)(ii) for a fuller discussion 

of these requirements. 

The lead entity must also ensure that these funds 

are invested in additional HOME-eligible activities 

whether they are retained by the member 

jurisdiction or returned to the lead entity for 

deposit in the U.S. Treasury account. The lead 

entity must also consider what happens and how it 

will intervene in the event a property forecloses 

during the affordability period. In the event of a 

foreclosure, HUD permits the affordability 

restrictions to be dropped for the purposes of 

clearing title to the property. However, it does 

not relieve the PJ of the responsibility of 

providing affordability in the unit. 
42 

As previously discussed in this chapter, if a project 

goes out of compliance during the period of 

affordability, and other corrective action is 

insufficient, HUD may require the lead entity to 

repay the HOME funds for the project. Lead 

entities should consider how they will keep their 

subrecipients responsible for this ongoing 

compliance, and specify these conditions in their 

subrecipient agreements with members.

Team Monitoring to Ensure Compliance 

Developing effective monitoring systems can be a challenging endeavor for any HOME PJ. 

For HOME consortia, however, this task is made more daunting by the fact that the lead entity 

needs to monitor both the member jurisdictions and the consortium’s subrecipients and 

developers. Maricopa County, AZ, the lead entity for the eight-member Maricopa HOME 

Consortium, has met this challenge by developing an innovative two-tiered monitoring system: 

the Consortium uses peer monitoring review to monitor member activities; and standard 

monitoring procedures to monitor its other housing partners. 

In addition to providing the lead entity necessary feedback to ensure HOME compliance, 

Maricopa’s monitoring approach has added benefits: it promotes cooperation among 

Consortium members, CHDOs, and subrecipients; it results in more efficient use of 

administrative funds; it eliminates duplicate monitoring activities; and it ensures a more 

consistent approach to monitoring throughout the County. All member jurisdictions 

participate in the process, and reap the benefits—opportunities for networking, education, and 

technical assistance among participants. 

Monitoring teams generally consist of at least one program compliance specialist and at least 

one financial specialist. For peer review, each Consortium member is reviewed annually by a 

team consisting of rotating personnel from the other members of the Consortium. 

Subrecipients and CHDOs are also monitored annually, typically by the Consortium member(s) 

who is responsible for administering the specific HOME agreement with that entity. Often, 

when Consortium members use the same CHDOs or subrecipients for different activities in 

their respective jurisdictions, the members work together to monitor these partners, for 

efficiency and consistency in the monitoring process. 

The monitoring teams use experienced HOME staff from the member jurisdictions. If there is 

new staff or a new member jurisdiction, they join the team as an extra member. This provides 

them training in both the program and in the monitoring process. 

Peer reviews and monitoring visits are used to generate findings, concerns, and suggestions for 

improvements to program/financial systems. The monitoring team documents the issues 

identified during the monitoring visit in a letter to the entity being monitored. The results are 

also shared in summary fashion with all member jurisdictions. This monitoring approach 

provides for an atmosphere of continuous improvement within the Consortium. Member 

jurisdictions benefit from using the monitoring process as a learning opportunity to find best 

practices and more effective program tools (e.g., procedures, applications, etc.). 

The Maricopa HOME Consortium is made up of eight member jurisdictions 

including Maricopa County and the cities/town of Chandler, Gilbert, Glendale, Mesa, Peoria, 

Scottsdale, and Tempe. On July 1, 2006, the cities of Avondale and Surprise will also join the 

Consortium. Maricopa County is lead agency of the Consortium, and takes the lead in 

coordinating monitoring efforts. 
43 

Record-keeping and Reporting 

A lead entity needs strong systems for recordkeeping and reporting, and must require that its 

subrecipient jurisdictions have the same. [See 24 

CFR 92.508.] Without accurate record-keeping 

and reporting, it is difficult to enforce program 

rules and to demonstrate to HUD, as well as other 

local stakeholders, that the job was well done and 

the public funds were invested for a sound and 

appropriate purpose. These records also help 

managers make day-to-day decisions that enhance 

program performance and improve program 

delivery systems. 

Record-keeping 

As discussed in Chapter 3, consortia must 

establish and maintain sufficient records to 

document compliance with all HOME Program 

rules and related Federal requirements. In the 

subrecipient agreement, the lead entity must 

specify those records that the member jurisdiction 

must retain. [See 24 CFR 92.504(c)(2).] Some of 

the key records are listed here: 

• The lead entity should retain the following 

records: 

3⁄4 PJ designation (i.e., the consortium 

agreement and records documenting 

where the consortium secured funds to 

fill an allocation gap to reach threshold 

for participating in HOME, if applicable); 

3⁄4 Program records that describe and 

codify the consortium’s decisions about 

how it will implement HOME Program 

activities; 

3⁄4 Financial records that describe the 

source and application of funds and 

document transactions of the U.S. 

Treasury and local HOME accounts; 

3⁄4 Program administration records to 

demonstrate compliance with programwide rules, such as written agreements, 

CHDO set-aside requirement, uniform 

administrative requirements, inspections, 

and monitoring; and 

3⁄4 Records that reflect any policies or 

decisions adopted by the consortium

as they relate to HOME Program 

requirements (such as match or CHDO 

set-asides), and the other Federal 

requirements should be retained by the 

lead entity (such as an affirmative 

marketing policy or a relocation policy). 

• The lead entity should determine, and specify 

in the subrecipient agreement, which 

entity/jurisdiction should retain the following 

types of records that relate to program 

activity. In general, these records should be 

retained by the entity that generates the 

documentation in the course of implementing 

HOME activities. If these records are 

retained by the subrecipient, the lead entity 

must monitor the subrecipient to ensure that 

the records are, in fact, retained. 

3⁄4 Project records that identify the specific 

HOME-funded projects that have been 

funded. Project records must include all 

documentation needed to demonstrate 

that project requirements have been met. 

For example, this might include 

documentation confirming income 

verifications to demonstrate that all 

beneficiaries are income-eligible, or rent 

determinations to demonstrate that 

HOME-assisted units are affordable. For 

a complete listing of the elements 

included in project files, by activity type, 

see the model program guide Monitoring 

HOME Program Performance, HUD-2030-

CPD, issued October, 2000. This guide is 

available from Community Connections 

at 1-800-998-9999, or on the HOME 

website, HOME Model Program Guides, at 

http://www.hud.gov/offices/cpd/affordablehousi

ng/library/modelguides/index.cfm. 

3⁄4 CHDO records that include a 

determination of CHDO eligibility, 

written agreement for reservation of 

CHDO funds, use of CHDO funds and 

eligibility to qualify as part of set-aside, or 

use of operating funds. 

3⁄4 Records to document compliance with 

other Federal requirements that are 
44 

specific to projects or program activities. 

These will include records related to 

affirmative marketing and minority and 

women business outreach; compliance 

with rules related to acquisition, 

relocation, displacement, and replacement 

of housing; environmental review; labor 

standards; lead-based paint activities; 

conflict of interest provisions; debarment 

and suspension. 

• The subrecipient should retain program 

administration records that document the 

subrecipient’s compliance with written 

agreements and uniform administrative 

requirements. 

HUD monitoring checklists identify specific 

documents and records that must be retained by a 

PJ (including a consortium) to demonstrate 

compliance with program, project, general 

administrative, and other Federal requirements. 

These checklists are available online at 

http://www.hud.gov/offices/cpd/affordable 

housing/training/checkup/performance/ 

monitoringtools.cfm.

Reporting 

In addition to keeping records, the lead entity is 

responsible to report to HUD on the activities of 

the consortia. Since the consortium’s activities 

may be carried out by the lead entity and a 

number of different subrecipients, the lead entity 

will need to establish reporting systems for its 

subrecipients to ensure that it has timely and 

accurate information about the progress of 

projects and programs. 

Through IDIS, the lead entity reports to HUD on 

an ongoing basis, throughout project 

implementation until project completion. HUD 

uses IDIS to report the progress of HOME 

nationally, and to assess how well HOME PJs are 

undertaking their activities. IDIS generates a 

number of reports for PJs to help them identify 

projects in the system that may be lagging behind 

schedule; track commitment and expenditure 

rates; assess the status of CHDO reservation of 

funds, and more. In addition, the HOME 

website, HOME Reports, provides quarterly reports 

on the status of the HOME Program by PJ in the 

form of production reports and “SNAPSHOTS” 

of program accomplishments. The SNAPSHOTS 

have the added value of enabling the PJ to assess 

its progress relative to other similarly situated PJs. 

These are available at 

http://www.hud.gov/offices/cpd/affordablehousing/report

s/index.cfm. These reports provide valuable 

information for PJs in assessing their own 

program progress. To use these tools to the 

maximum benefit, it is very important that PJs 

ensure that the data entered into IDIS is complete 

and accurate. 

Many lead entities retain the responsibility for 

entering data into IDIS for their subrecipients as a 

key means for ensuring that the subrecipients 

provide information on the progress of projects. 

In such a system, the member jurisdiction would 

submit a progress report of its project activities 

along with its requests for funding draws from 

IDIS. These reports would include information 

on program income received and/or expended; 

match liability incurred and match contributions 

made. In the event the progress is not in 

accordance with the timeline established with the 

lead entity, the lead entity is in a position to 

intervene immediately to remedy the situation. 

Most PJs also use set-up and completion forms as 

part of processing. These forms are available in 

Appendix F of the IDIS reference manual, 

available on the IDIS website, IDIS Reference 

Manual, at: 

http://www.hud.gov/offices/cpd/systems/idis/ 

library/refmanual/index.cfm.

On an annual basis, the lead entity must also 

report to HUD on a number of specific elements 

related to the administration and accomplishments 

of the consortium’s HOME activities. The 

Consolidated Annual Performance Report (Form 

HUD-40107), also known as the “CAPER,” 

includes the following components: 

• Narrative and self-assessment of program 

progress; 

• Program income; 

• HOME match report; 
45 

• Minority and women business enterprise 

participation; 

• Minority owners of rental property; and 

• Relocation and real property acquisition. 

The lead entity is only able to meet these reporting 

requirements if those carrying out project 

activities report to the lead entity. The written 

agreement should specify how often the lead 

entity should receive this information. It is highly 

recommended that the lead entity request this 

information from its partners on a quarterly basis. 

This will give the lead entity ample time to review 

and consolidate the information and identify and 

address any related problems prior to submitting 

it to HUD.

Communicating, Reporting, and Performance Measurement 

The lead entity of the Salt Lake County HOME Consortium, Salt Lake County, UT, 

has fostered strong lines of communication among its member jurisdictions and other 

funded entities. On a regular basis (often weekly but at least monthly), developers and 

others convene at the county’s offices to brief county staff on the status of projects, 

funding concerns, and other issues. The county staff encourages collaboration and 

partnership, stemming from the collaborative culture of the small community of Salt 

Lake County, where generally it is agreed that “working together solves more than 

working apart.” 

The lead entity also requires monthly reports from every funded entity such as member 

jurisdictions, CHDOs, for-profit developers, and other funded entities. The monthly 

report consists of information on the status of the project during development, 

occupancy status upon completion, and beneficiary information during lease up. 

The lead entity has encouraged dialogue among Consortium members to articulate how it 

defines “success” in each project or program. Defining success has been an effective 

exercise in helping the Consortium think through its intended program outcomes. This 

is a part of Salt Lake County’s overall performance measurement initiative, targeted at all 

housing and service providers to determine a common set of performance measurement 

criteria. The Consortium’s efforts in this area are likely to be of benefit as it implements 

the new CPD Performance Measurement System. 

While the lead entity plays a strong role in the operations of the Consortium, the 

Consortium as a whole retains certain types of policy and planning decision-making 

responsibilities. For instance, the Salt Lake County HOME Consortium has developed a 

housing committee that reviews applications that are submitted to the county for HOME 

funding. The committee represents a broad array of practitioners: member jurisdictions, 

realtors, financial experts, and others with experience in affordable housing development. 

A committee with such a wide range of expertise and perspectives has been important to 

the Consortium’s success in participating in a regional planning effort for affordable 

housing in Salt Lake County. 
46 

Communicating with Consortium 

Members 

In a well-functioning consortium, the lead entity 

retains an accurate picture of its members’ 

activities. This can be achieved through formal or 

informal means—ideally, it is done with a 

combination of both. Formal communication 

might include regular reporting activities like those 

described above, or specified notification 

processes (such as when the lead entity notifies 

members of their right to withdraw at the end of 

the qualification period, described in Chapter 2). 

The quarterly production reports and 

SNAPSHOTs give the lead agency an opportunity 

to distribute this information and engage members 

in a discussion of how to correct or update 

information reported into IDIS and how to 

improve overall performance. These reports 

should not be viewed only by the lead agency. 

The lead entity also gains valuable information 

through informal means of communication, as 

well. A considerable amount of information 

about projects, progress, and problems can be 

gleaned from regular meeting updates, or simple 

e-mail exchanges. It is recommended that lead 

entities encourage an informal exchange of 

information as often as possible, and impose a 

more formal reporting structure on its members 

on at least a quarterly basis. Reporting should be 

done more frequently as the scale and complexity 

of projects increases. 

To some extent, the communication among 

consortium members is dictated by the 

organizational structure of the consortium. If a 

consortium operates with a board or committee 

structure, then communications can be facilitated 

through regular meetings of that board or 

committee. Consideration of how the structure 

influences or enhances communication should be 

among the considerations when designing the 

consortium structure.

Managing Organizational Growth through Effective Communication

As an entity made up of many distinct jurisdictions, consortia must organize in a way that 

ensures effective communication and reporting. As the number of jurisdictions in a consortium 

increase, the more important this function becomes. The Newton HOME Consortium in 

Massachusetts has had to work consciously to ensure an effective communications and 

reporting system. It started as a four-member consortium and quickly grew to its current 

membership of eight jurisdictions. Four additional jurisdictions plan to join the Consortium as 

of July 2006. 

The lead entity, the City of Newton, MA, has consciously organized some formal and informal 

reporting structures to develop an environment of collegiality, and to ensure that members 

receive and provide needed information so that the Consortium runs smoothly. All member 

jurisdictions participate in a Consortium Council meeting every two months. These meetings 

serve many purposes. The primary goal of the meetings is to share ideas and best practices 

within the membership. The lead entity and other members are able to share policy and 

administrative matters, such as any new or revised HOME Program information. In addition, 

jurisdictions provide project updates and progress reports for existing activities of the 

Consortium. One of the most useful features of the meetings, however, is as an opportunity to 

showcase recently-completed HOME activities. While any completed project deserves 

celebration, the presenters are asked to emphasize not only their successes, but information 

about how and why the program was designed as it was, and detailed information about 

development challenges and how they were resolved. 

This emphasis on sharing information about problem-solving has led to a collaborative spirit 

among Consortium members. As a group, the Consortium has found a number of creative 
47 

solutions to shared problems. For instance, as a team, the Consortium members help each 

other meet the lead entity’s requirement that Consortium members must have project that is 

ready-to-go within one year of a HOME annual allocation, in order to get HOME funds from 

that year’s allocation. This requirement is important to ensure that the Consortium as a whole 

is on track to meeting HOME Program commitment and expenditure deadlines. Informally, 

the members work together and share information about delays (such as site control issues or 

environmental concerns) so that they can identify and support those projects that are truly 

ready–to-go. Members have even gone so far as to lend one another funds to meet short-term 

cash flow crises to ensure projects keep moving, and to ensure that commitment and/or 

CHDO reservation requirements are met. This collaboration is essential to make the 

Consortium work successfully in committing and spending its HOME funds. 

To date, the member jurisdictions of the Newton Consortium include: Bedford, Belmont, 

Brookline, Framingham, Lexington, Lincoln, Natick, Needham, Newton, Sudbury, Waltham, 

and Watertown. 

Acting as a Liaison with HUD 

HUD considers the lead entity as the PJ. HUD 

conducts all communications with the consortium 

through the lead entity, and the lead entity is 

responsible to HUD for all submissions to HUD, 

distribution of HOME materials, and the 

enforcement of all HOME requirements. 

The lead entity is responsible for all submissions 

to, and communications with, HUD. This 

includes all required submissions such as the 

Conplan (Strategic Plan and Annual Action Plan) 

and the CAPER. 

The lead entity is responsible for tracking all 

HOME communications and guidance, and for 

providing the appropriate information to all 

member jurisdictions, other subrecipients, and 

developers. This includes distribution of the 

annual HOME Program limits (e.g., incomes, 

rents, and price/value), as well as any new notices, 

guidance, or other HOME documents that are 

issued. The lead entity should monitor the 

HOME website at http://www.hud.gov/homeprogram/

to stay up-to-date on policy and operational 

guidance that is issued. A convenient way to keep 

track of changing requirements, limits, and 

guidance is by subscription to the HOME mailing 

list, which can be accessed at the HOME website 

under the tabbed heading called “Contact Us,” 

found on the right-hand side of the page. (Note 

that the “Contact Us” tab on the left-hand side of 

the page accesses HUD-wide information and 

departments.) 

When HUD monitors the consortium’s activities 

and programs, it schedules and conducts the 

monitoring through the consortium’s lead entity 

and its offices. By reviewing HUD’s Community 

Planning and Development monitoring guide, the 

lead entity can become familiar with the elements 

and required provisions that HUD will review. 

This guide is available at 

http://www.hud.gov/offices/cpd/library/ 

monitoring/index.cfm. Chapter 7 of the guide 

contains the checklists that HUD uses to monitor 

a HOME Program. HUD will issue any findings 

to the lead entity, and hold the lead entity 

responsible for responses to findings. 

In addition, the lead entity is responsible for 

providing its member jurisdictions with any 

technical assistance that they might need in order 

to participate in HOME. HUD also offers help in 

this regard. At this writing, HUD Field Offices 

each have an allocation of technical assistance 

resources that are available to PJs and their 

CHDOs (or nonprofits interested in becoming 

CHDOs) through Community Development 

Technical Assistance (CDTA). 
48 

Lead Entity Responsibilities After 

Member Withdrawal or Termination 

of a Consortium 

Chapter 2 discusses the withdrawal of a member 

of the consortium at the end of consortium 

agreement term. The lead entity is responsible 

for executing a closeout agreement to ensure that 

projects started within the departing jurisdiction 

continue to meet all HOME requirements 

throughout implementation as well as any 

applicable period of affordability. If a member 

entity withdraws from the consortium while 

projects are still open or under compliance 

agreements, the lead entity should consider 

provisions in the closeout agreement addressing 

the following: 

• Identification of active HOME projects. 

The agreement should identify any 

uncompleted project(s) and the 

responsibilities of the withdrawing jurisdiction 

and the lead entity for ensuring completion of 

the project(s) in compliance with HOME 

requirements. The agreement should also 

identify any HOME projects that are 

completed but are still under compliance 

agreements. 

• Program income. Once a member 

jurisdiction withdraws from the consortium, 

any program income derived from consortium 

activities undertaken by or within that 

jurisdiction continues to be the consortium’s 

program income. The closeout agreement 

should provide for the return of any program 

income the jurisdiction may receive after 

closeout. These funds continue to be subject 

to HOME rules and oversight by the 

consortium. [See 24 CFR 92.503(a).] 

Program income is also discussed earlier in 

this chapter. 

• Repayments. Any HOME funds invested in 

housing that does not meet HOME 

affordability requirements during the 

affordability period is terminated before 

completion, lost as affordable housing 

through foreclosure or deed in lieu of 

foreclosure, or determined to be ineligible 

must be repaid by the PJ. The lead entity is 

directly responsible for repayments to HUD, 

but it may wish to ensure that the closeout 

agreement allows it to collect unrecovered 

funds from a departing member jurisdiction. 

[See 24 CFR 92.503(b).] Repayments are also 

discussed earlier in this chapter. 

• Recaptured funds. The closeout agreement 

should provide that recaptured funds received 

from a homebuyer program during the period 

of affordability should be deposited into the 

local HOME Investment Trust Fund account, 

although the agreement could permit a 

member that no longer participates in the 

consortium to retain the recaptured funds as a 

HOME subrecipient, subject to all HOME 

rules and oversight by the lead entity for the 

expenditure of the recaptured funds. [See 24 

CFR 92.503(c).] Recaptured funds are also 

discussed earlier in this chapter. 

• Records retention and disposition. Even 

upon dissolution of the consortium, the lead 

entity is responsible for seeing that HOME’s 

record-keeping requirements are met, as 

discussed earlier in this chapter. 

• Monitoring. The lead entity has continuing 

monitoring responsibilities during the period 

of affordability for all activities funded by the 

consortium, even after a member withdraws. 

The closeout agreement should ensure project 

access to the lead entity and the cooperation 

of the withdrawing member in enforcing 

monitoring and compliance. 

Chapter 2 discusses the disbanding of a 

consortium. As noted, the consortium cannot 

disband until all funds awarded under the 

consortium agreement have been expended. 

However, after the consortium has been 

disbanded, HUD will continue to hold the lead 

entity responsible for monitoring and 

enforcement for all projects for the life of the 

minimum period of affordability. The 

requirements for project monitoring, program 

income, repayment, and recapture apply as noted 

above. 
49 

Chapter 5:

 Critical Decisions for Consortium Operations 

This chapter highlights the key operational decisions that a consortium must make to function successfully. A new consortium 

should make these decisions before executing a consortium agreement. Existing consortia can gain from this chapter by using it to 

assess their current systems and operations and identify which of these critical decisions they want to revisit or change. 

Introduction 

As indicated in the previous chapters of this guide, 

all HOME PJs are subject to a wide range of 

HOME Program requirements, such as 

affordability, income eligibility, and unit quality. 

The PJ’s responsibilities do not end with 

compliance, however. It must also ensure that its 

programs are well managed and successful in 

meeting the needs of low-income households. 

In state and locality-based PJs, HOME funds are 

allocated to a single recipient agency. This agency 

distributes funds, manages the program, and 

ensures regulatory compliance. In implementing 

its HOME Program activities, the agency’s 

executive staff is able to make operational 

decisions about how the HOME Program funds 

will be managed and how projects and activities 

will be funded. Consortia, however, must discuss 

and negotiate many of these operational decisions 

to take into consideration each member 

jurisdiction’s community needs, resources, and 

priorities. 

Both new and existing consortia must make a 

number of decisions regarding their operations. 

For purposes of this discussion, the operational 

decisions have been broken down into six key 

areas, as indicated in Exhibit 5-1. 

At the first decision point, the consortium 

members must choose an organizational structure 

for the consortium and determine which 

organization will act as the lead entity. This 

process includes determining the roles of each 

member and the means of communication 

between the members. 

The consortium must also decide how it will 

coordinate its planning efforts and the roles that 

individual members will play in the planning 

process needed to develop the required 

Consolidated Plan. The process of collecting the 

necessary data and citizen input can be 

significantly more complex for a consortium than 

other PJs because of the need to collect and 

analyze information across jurisdictions. As part 

of the planning process, and on an annual basis, 

the consortium must make programmatic choices 

about how it will invest its HOME funds, and 

how it will distribute funds among its members. 

The consortium must decide how it will meet 

certain financial requirements, related to 

administrative funds, the CHDO set-aside, 

program income, and match. 

The consortium will also need a process for 

soliciting, reviewing, and selecting specific 

projects. This process may be centralized in the 

lead entity or other single agency or it may be 

decentralized and shared among jurisdictions, but 

in either case, it must ensure that each project is 

eligible and within the spirit of the consortium’s 

Conplan. 
50 

Exhibit 5-1: Operational Decisions Framework 

Determine Governance Structure and Member Roles 

↓

Coordinate Planning Activities 

↓

Make Financial Decisions Related to HOME Funds

↓

Select Specific Projects 

↓

Oversee Projects During Implementation 

↓

Ensure Ongoing Compliance 

The consortium must decide who will oversee 

project implementation. The lead entity, 

individual members, contractors, nonprofit 

organizations, and other partners may all play a 

role in this oversight; however, ultimately, they 

must be responsible to the lead entity and to the 

overall program goals and rules. Consequently, 

the consortium must establish expectations for 

program implementation. These decisions must be 

codified in subrecipient agreements. 

Finally, the consortium needs to make operational 

decisions related to how it will ensure compliance 

over the long-term. This includes making choices 

about who will conduct compliance and 

monitoring tasks such as rental unit inspections 

and tracking of resale/recapture provisions. If the 

consortium or its members act as a lender, the 

consortium will need to decide how loan servicing 

will be conducted. Finally, consortia will need to 

develop procedures around responsibilities for 

reporting and record-keeping. 

The following sections of this chapter discuss 

each of these key decision points and some 

possible models for approaching these choices. 

The consortium’s approach to key operational and 

strategic decisions should be reflected in its 

Conplan, and should also be codified in the 

consortium agreement. 

Determine Governance Structure 

and Member Roles 

Ideally, a HOME consortium acts as a unified 

body using HOME funds in a coordinated effort 

to address an area’s housing needs. One of the 

most important issues for the consortium is to 

determine how its key decisions will be made. 

Consortia have used a variety of models to reach 

this end: 

• The consortium establishes a governing board 

or board of directors to make all or most of 

the key decisions on behalf of the consortium; 

• The consortium empowers the lead entity to 

make all or most of the key decisions on 

behalf of the consortium; or 

• The consortium is governed by a combination 

approach. Typically, this model empowers 
51 

the lead entity with the authority to make 

most operational decisions, with a governing 

board empowered to make funding allocation 

decisions, or a limited number of other key 

operational decisions. 

Governing Board with Far-reaching 

Authority 

The use of a governing board with primary 

authority to address program design and 

implementation issues throughout the consortia 

jurisdictions can be an effective method for 

jurisdictions of generally equal size, authority, and 

capacity. This type of governing structure 

empowers each jurisdiction equally. By 

approaching key decisions as a team, the 

consortium is in a reasonably good position to 

stay focused on the regional housing needs, rather 

than the specific needs of any one jurisdiction 

over another. 

From an implementation perspective, however, 

there are some challenges to this approach. 

Operationally, it is difficult to make timely 

decisions through a board that meets only 

periodically. Further, it will be important for the 

governing board to consider that some issues may 

arise that divide the board, and a mechanism for 

resolving difficult issues should be in place. For 

the lead entity, it may be difficult to relinquish 

considerable control to a governing board when 

HUD holds the lead entity itself accountable for 

compliance with HOME rules. Finally, the 

consortium will need to address the question of 

who best represents the interests of the group, 

and what combination of these interests should be 

reflected in the governing board’s membership— 

is it staff, elected officials, citizens or private 

business interests, or some combination of these? 

For each jurisdiction, the answer might vary. 

Lead Entity with Far-reaching Authority 

For some consortia, empowering the lead entity to 

make most key decisions on behalf of the 

consortium is a logical decision. For consortia 

where one jurisdiction is larger, has more technical 

capacity, and has organized information and 

record-keeping systems in place, using the 

capability of the lead entity is an effective option. 

The disadvantages of a powerful governing board 

are the key advantages of using the lead entity as 

the key decision-maker for a consortium. By 

consolidating the power and authority of the 

consortium within one entity, decisions can be 

made in a timely manner, the lead entity can 

enforce its written agreements to ensure 

compliance with appropriate authority, and while 

not eliminated completely, the likelihood of a 

division on the board over operational issues is 

minimized. 

Shared Authority Between a Governing 

Board and Lead Entity 

For some consortia, it makes sense to establish a 

governing board that makes key decisions about 

HOME activities and specific funding allocations, 

while enabling the lead entity to retain authority to 

make decisions about other key operational issues. 

In this way, the governing board can control the 

impact of the HOME funds on the region, 

without holding up day-to-day decision-making, 

reporting, and financial management. Sharing 

authority can be effective when there is a range of 

capabilities represented by the jurisdictions in the 

consortium. This option is also particularly 

effective when the governing board has a regional 

perspective on the housing issues and needs; it can 

be more difficult when each jurisdiction comes to 

the group with strictly a locally-based perspective. 

Sharing authority requires more planning and 

thought in the development stage of forming a 

consortium, in order to foresee the types of issues 

that might arise and determine how they will be 

addressed. 

Governance Questions 

Many consortia will fit one of the described 

models, but for any group of jurisdictions, there 

may be any number of ways to share responsibility 

that will be influenced by the technical and 

leadership capacity of various members, the 

housing needs the group chooses to address, and 

the history and existing relationships of the 

members. Regardless of the specific structure the 

consortium chooses to follow, it should 

consciously address several key questions: 
52 

• What are the distinct roles of each different 

member? 

• Who coordinates the consortium’s planning 

activities and what are the responsibilities of 

each member? 

• What are each member’s responsibilities with 

regard to HOME administrative funds, match, 

CHDO set-aside, and program income? 

• Who participates in project selection 

decisions? 

• Who participates in project implementation 

and in what capacity? 

• How is long-term compliance achieved? 

The remaining sections discuss these questions 

and their implications.

Consortia Governance Varies Around the Country 

HOME consortia governance varies among jurisdictions due to staff capacity, program 

experience (typically prior HOME and CDBG administration), and decision-making across a 

range of jurisdictions. 

Often, consortia have a strong local government with prior experience that is able to take on the 

role of lead entity; but other consortia rely upon different entities to function as the lead entity 

or administer part of their responsibility. Consortia draw from a variety of entities to meet this 

purpose: regional planning commissions, councils of government, nonprofit organizations such 

as development districts who function as subrecipients, or for-profit consulting firms. 

Regardless of the type of entity, the consortium must identify its best source of expertise and 

experience in order to ensure its HOME requirements are met. 

Consortia must then adopt a model of governance that is compatible with the group’s expertise, 

experience, and administrative or political style. These consortia exemplify the range of choices 

available:

• Strong lead entity. Many consortia use a strong lead entity approach to governance. For 

instance, the City of Asheville, NC is the lead entity for the Asheville HOME Consortium, 

and it carries out all oversight of the Consortium’s activities. Member jurisdictions are able 

to apply for and receive HOME funds from the Consortium to carry out specific HOME 

activities in their jurisdictions. The lead entity provides technical assistance and oversight to 

be sure these activities are carried out appropriately. The City of Asheville was the 

community with the most experience in managing housing and community development 

programs prior to establishing the HOME Consortium, so its designation as lead entity was 

a logical step. 

• Governing body. Maricopa County, AZ HOME Consortium has a governing body 

that meets monthly to make decisions on funding and to share information on projects. 

Communication is highly important during the monthly meeting process. Consortium 

members share certain administrative responsibilities, such as tracking match and program 

income, monitoring funding partners such as CHDOs and subrecipients, and administering 

their own programs funded by the governing body. The lead entity, Maricopa County, is 

responsible for preparing the Consolidated Plan, data entry into IDIS, and overall financial 

management of the HOME activities. Consortium governance by a governing body of 

relatively equal and similarly situated entities, with shared administrative responsibilities 

among members can be successful, as Maricopa County illustrates.

• Subrecipient or contractor. A Council of Governments (COG) administers HOME 

program activities on behalf of the Lenoir HOME Consortium. The COG is a 

contractor of the City of Lenoir, the lead entity. The Consortium chose the COG because 
53 

it had administered state HOME activities previously and also had experience in CDBG 

and economic development administration (EDA) programs. Currently, the COG has 36 

contracts with small cities in the area that participate in the state’s program. Also, the COG 

has operated successful homeownership programs and has developed relationships with 

productive neighborhood-based nonprofit organizations. The Consortium’s member 

jurisdictions include 24 cities and four counties which represent a largely rural area. The City 

of Lenoir manages the Consortium’s finances, and the COG administers all other aspects of 

the program. 

Coordinate Planning Efforts 

To focus the PJ’s approach to affordable housing, 

HOME requires a Conplan. As discussed in 

Chapter 3, the Conplan explains how the 

consortium will use its HOME, Community 

Development Block Grant (CDBG), and other 

Federal housing and development funds. The 

document serves as part of the consortium’s 

application to HUD to become a HOME PJ and 

articulates the consortium’s strategy for affordable 

housing. The plan’s development helps the 

consortium determine its needs and priorities and 

serves as the basis for decisions about the projects 

and activities to fund. Every HOME PJ must 

develop a Conplan but consortia face special 

challenges in this regard because they need to 

collect information across jurisdictions and 

develop a broad strategy that meets more diverse 

needs. 

In its Conplan, the consortium must address the 

housing needs and goals for the entire geographic 

area that it covers. Each CDBG entitlement 

jurisdiction can submit its own non-housing plan, 

but the housing plan must be consolidated for the 

consortium. Generally, the lead entity takes the 

lead in preparing the consortium’s Conplan, but it 

needs support from member jurisdictions to 

provide data and assist in the citizen participation 

process. Specifically, the consortium should 

consider the following issues, when it decides how 

to organize its planning efforts: 

• Relationship with other Conplans. The 

Conplan covers HOME, CDBG, HOPWA, 

and ESG. While the consortium receives 

HOME funds jointly, individual jurisdictions 

may receive other funds individually and thus 

have their own Conplan requirements. The 

consortium must determine how to 

consolidate all housing program planning into 

one Conplan for the consortium. 

• Citizen participation. The Conplan process 

requires citizen participation in the form of 

community meetings and public comment 

periods. The consortium must, therefore, 

have a citizen participation plan to ensure that 

community participation takes place and 

involves citizens from member jurisdictions. 

The consortium may rely on individual 

members to conduct citizen meetings or the 

consortium may choose to have one member 

or agency responsible for the entire citizen 

participation process. 

• Data collection and analysis. The 

Conplan requires a Housing and Homeless 

Needs Assessment as well as a Housing 

Market Analysis. These studies must describe 

these needs and conditions for all individual 

communities that are members of the 

consortium. The consortium may ask 

individual jurisdictions to supply data or it 

may engage one member, or perhaps a 

contractor, to conduct a consortium-wide 

analysis. 

• Action Plan. The Action Plan must describe 

the resources to be used and activities to be 

undertaken to pursue its strategic plan. The 

Conplan must provide this description for all 

resources and activities within the entire 

consortium as a whole, as well as a description 

for each individual community that is a 

member of the consortium. 

• Conplan timeline. For a new consortium or 

PJ, the Conplan is due to HUD 90 days after 

providing HUD the notice of intent to 

become a PJ. The 90-day deadline can be 

particularly challenging to consortia, which 
54 

have to collect housing needs and market data 

and obtain citizen input across multiple 

jurisdictions. The consortium, should 

therefore, develop a strong understanding 

among members about the process and each 

member’s role in providing necessary 

information. As discussed in Chapter 3, the 

consortium’s timeline for developing the plan 

may in fact begin prior to the submission of 

the notice of intent. 

In making decisions on how to complete its 

Conplan, the consortium should keep in mind the 

diversity of consortium jurisdictions and their 

housing markets, their past experience with 

planning activities, and its own need for 

consolidated planning. The goal is to implement 

an efficient and inclusive process that provides a 

useful plan. 

Make Financial Decisions Related 

to HOME Funds 

Choosing how to invest HOME funds is the most 

important decision any PJ makes. Careful 

investments of HOME funds result in high levels 

of production to address housing needs efficiently 

and effectively. The Conplan process helps the 

consortium identify the key types of activities that 

it will support, but there are a number of other 

financial decisions in HOME that consortia 

should consider up-front: 

• Which jurisdictions will receive a share of 

HOME administrative funds? 

• How will the consortium’s match obligation 

be met? 

• How will the consortium meet its obligation 

to reserve funds for CHDOs? 

• If programs generate program income, who 

will retain those funds, and for what purpose? 

How Should a Consortium Share HOME 

Administrative Funds Among Members? 

Most PJs want to maximize their resources so that 

as many funds as possible are invested in housing 

activities, not administrative and operating costs. 

Nonetheless, there are a number of administrative 

responsibilities that must be carried out in order 

to run housing programs effectively. Most 

consortia find that the administration of the 

HOME Program requires most, if not all or more, 

of the maximum allowable allocation for 

administrative costs under the HOME Program 

(ten percent of the annual allocation plus ten 

percent of any program income generated). 

Some consortia determine that they will require 

additional administrative funds, and they 

supplement the HOME administrative costs with 

contributions from each member jurisdiction or 

the lead entity. Consortia whose HOME 

allocations are relatively limited should consider 

this option seriously. It is difficult to administer 

the HOME Program and meet its requirements 

without sufficient staffing, and without technically 

knowledgeable professional staff. In HUD’s 

experience, consortia that do not spend sufficient 

administrative funds to staff appropriately are not 

able to perform under the HOME Program. 

Presuming that the full ten percent or more is 

needed to effectively plan, administer, and 

monitor HOME Program activities, the 

consortium must determine if or which 

jurisdictions will receive HOME administrative 

funds. Some consortia decide to allocate 

administrative funds based on a proportional 

share, so that each jurisdiction receives ten percent 

of the consortium’s allocation to administer its 

projects or programs. Some consortia provide 

administrative funds as a percentage of the project 

costs that are allocated to each jurisdiction. Still 

other consortia allocate the maximum allowable 

HOME administrative funds to the lead entity. 

Since the lead entity holds accountability to HUD, 

it is typically the jurisdiction that incurs the most 

administrative cost. 

There are a number of things the consortium 

should consider when making decisions about the 

allocation of administrative funds: 

• If the HOME administrative funds are not 

sufficient, which member jurisdictions will be 

able, and/or required, to contribute additional 

funds? 

• If the administrative funds are shared, how 

much will each jurisdiction be allocated, and 
55 

will that amount be sufficient for the 

consortium to carry out its necessary 

administrative responsibilities? 

• Are there administrative needs that the 

consortium may want to secure to build its 

capacity, such as hiring technical staff, 

contracting out certain aspects of program 

administration, or training needs? If so, are 

the administrative funds sufficient to cover 

these additional costs? 

• How are the administrative responsibilities 

shared, and should the administrative funds 

be shared accordingly? If some jurisdictions 

(such as the lead entity) have a larger 

administrative burden to carry out aspects of 

the consortium’s planning, program 

administration, reporting, and monitoring, the 

consortium should make sure these entities 

have sufficient administrative funds to carry 

out their responsibilities. 

In the long run, equitable distribution that is based 

on actual administrative burden and needs will 

support smooth consortium operations and 

bolster the longevity of the consortium.

Sharing Administrative Responsibilities in Stark County, OH 

In Stark County, OH, HOME administrative responsibilities are shared between the lead 

entity, Stark County, OH, and the two member jurisdictions: Alliance and Massillon. Each 

member is responsible to participate equally in the consolidated planning process, oversee 

projects in their jurisdictions, report program income, find CHDO projects, secure appropriate 

match for HOME projects, and approve projects. The Consortium generally uses nearly ten 

percent of its allocation on administrative costs. These funds are shared between all the 

members to cover costs related to undertaking the HOME administrative responsibilities. 

Each member jurisdiction also assumes responsibility for monitoring HOME projects and 

activities that are funded in its boundaries. This includes responsibility for the collection and 

review of monthly status reports, as well as on-site monitoring visits on at least an annual basis. 

The monthly status reports provide financial progress and project progress for that period of 

time. The reporting form also requires information about any concerns or issues with the 

project that might indicate an issue with it moving forward toward completion. 

Unlike other jurisdictions with housing and/or community development departments, the Stark 

County Regional Planning Commission (RPC) is the administering department for the lead 

entity of the Stark County/Alliance/Massillon HOME. The RPC not only administers HOME, 

it oversees the Community Development Block Grant (CDBG) program and 

transportation/regional planning efforts. The RPC is also involved in much of the 

comprehensive planning efforts that are undertaken that are funded with CDBG and HOME. 

As a result, the RPC has centralized community development and affordable housing 

production on a countywide basis. 

Who is Responsible for Securing 

Matching Funds? 

For each dollar of HOME Program funds 

expended, the consortium must generate $.25 in 

non-federal match in the form of cash, assets, 

services, labor, or other resources valuable to the 

HOME Program. (See 24 CFR 92.218.)8 The 

consortium must consider how this obligation will 

be met, how the satisfaction of this obligation will 

be tracked, documented, and reported, and 

who/how non-cash sources of match will be 

valued. 

Although the match obligation is a program-wide 

requirement and match obligations need not be 
56 

met on a project-by-project basis, many consortia 

choose to meet their matching obligations this 

way. This means that for each project or program 

that the consortium chooses to fund, the project 

must generate its own match. If projects and 

program activities are carried out by a number of 

member jurisdictions, each jurisdiction is 

responsible for identifying and securing matching 

funds. 

Notwithstanding this popular approach to match, 

the consortium can also choose to pool its 

matching funds (typically through the lead entity). 

Since match does not have to be invested in the 

same project that generates it, and can be invested 

in either HOME-assisted or HOME-eligible 

projects,9 pooling match can provide the 

consortium with some additional flexibility for 

meeting the match requirement. It also supports 

decision-making about projects that is based on 

strategic need, rather than potential to meet 

match. 

Pooling matching funds requires more conscious 

planning about match from the consortium as a 

whole, and may require an up-front review of all 

the proposed program activities, in order to assure 

match funds will be sufficient. Pooled matching 

funds enable the consortium to realize the full 

potential of match to be generated and invested 

across programs, projects, and activities. Pooling 

funds is a good option for consortia whose 

jurisdictions have a variety of housing needs, and 

who are planning a variety of activities. Some 

HOME Program activities are likely to generate 

outside resources (for match), such as rental 

housing development and some types of special 

needs housing. Other activities are not likely to 

generate match, such as homeowner-occupied 

rehabilitation projects or tenant-based rental 

assistance programs. For instance, if the 

consortium is planning the rehabilitation of a large 

public property that has already received funding 

commitments from a local foundation, it may 

have excess match that may be needed to offset 

the match obligation incurred by a homeowner 

rehabilitation program that does not generate any 

match. 

Regardless of how the consortium decides to 

share the burden of match, there are some related 

decisions that should be considered: 

• The consortium must identify who is 

responsible for tracking and reporting match 

obligations and match “credits.” HUD 

requires that the PJ satisfy its match by the 

end of the Federal fiscal year in which the 

match “debt” was incurred. This requirement 

can only be met if the consortium keeps track 

of how much match obligation is incurred and 

how much match has been contributed to 

projects. It should also make some effort to 

project what match will be incurred in the 

near future, particularly toward the end of the 

fiscal year. As discussed in Chapter 4, 

typically, the job of tracking match falls to the 

lead entity, since it is usually charged with the 

related task of setting up projects and drawing 

down of funds. The lead entity must keep the 

match log, or have it when monitored. 

Related to tracking match, the lead entity (or 

another designated jurisdiction) should be 

controlling the timing of funding draw-downs, 

in relationship to the matching requirements. 

• When the match function is disbursed across 

a number of different entities, the consortium 

should consider how to ensure that the 

jurisdictions understand what the eligible 

forms of match are, and how to determine the 

value of non-cash contributions. 

If possible, the jurisdiction should develop a 

strategy for finding match and addressing 

unexpected match shortfalls. 

How Will the Consortium Satisfy Its 

CHDO Set-aside Requirement? 

The consortium must develop a strategy for how 

it will meet the CHDO set-aside requirement that 

a minimum of 15 percent of each annual HOME 

allocation must be reserved for housing that is 

owned, developed, or sponsored by eligible 

CHDOs. (Note, a consortium may also choose to 

invest more than the minimum 15 percent.) The 

consortium must consider a number of factors 

regarding its approach to meeting this CHDO setaside obligation. 
57 

The first decision concerns selection of 

participating CHDOs. The selection can be 

centralized with the lead entity or the board, or it 

can be done by each member jurisdiction. This 

decision should be influenced by how many 

jurisdictions are involved relative to the number of 

eligible CHDOs that are represented in each 

jurisdiction or in the area as a whole, and in the 

context of the consortium’s overall project 

selection process. Consortia with limited funds 

should also consider whether or not there are 

sufficient funds to distribute to more than one 

CHDO. 

Many consortia choose to centralize the function 

of identifying eligible CHDOs to participate in the 

consortium’s HOME Program. Centralizing 

decision-making about CHDOs with the 

consortium governing body or the lead entity 

gives the consortium the opportunity to plan the 

use of CHDO funds from a coordinated and 

broad-based perspective. This approach works 

well in the context of a centralized project 

selection process because the CHDO activities 

can be planned in the context of other projects 

and programs of the consortium. 

Delegating the responsibility for identifying 

CHDOs to member jurisdictions provides 

member jurisdictions with shared responsibilities 

in this regard. Where there are a limited number 

of CHDOs, sharing this obligation may be result 

in those CHDOs becoming over-extended, 

however. 

Where there are not a sufficient number of 

qualified CHDO partners, the consortium has a 

number of choices about how to build the 

capacity of area nonprofit organizations or 

CHDOs, so that they might become eligible, or 

more qualified, to undertake set-aside activities. 

The consortium might choose to invest HOME 

funds in developing the capacity of CHDOs 

through the use of HOME funds for operating 

expenses, seed money grants, or other technical 

assistance. (See 24 CFR 92.301.) In addition, in 

the consortium’s first 24 months as a PJ, it has the 

added option of investing up to 20 percent of its 

required 15 percent of the CHDO set-aside, but 

not more than $150,000 during the first 24 month 

period, for developing the capacity of CHDOs in 

the area. [See 24 CFR 92.300(b).] 

While addressing how CHDO projects will be 

selected, there are some other operational issues 

the consortium should consider: 

• Is there a sufficient number of CHDOs, with 

sufficient capacity, to meet the consortium’s 

set-aside obligation for a number of years? If 

not, who will have the authority to determine 

whether or not the consortium will use its 

HOME funds for CHDO capacity-building, 

and in which nonprofit organizations will 

these funds be invested? 

• Who will determine whether or not a 

nonprofit organization meets the CHDO 

definition in accordance with HOME 

requirements, including an assessment of the 

organization’s capacity to carry out the 

planned project? 

• How will lead entity be made aware of 

CHDO selections, in order to track the 

consortium’s progress toward meeting the 24-

month reservation deadline? 

• Once selected, who will execute a written 

agreement with the CHDO for the project? 
58 

Building CHDO Capacity to Address Housing Needs 

Addressing housing problems in a large, sparsely populated geographic area that has 

few capable affordable housing providers is a big challenge. However, the Northeast 

Minnesota HOME Consortium is tackling this challenge head-on, with the 

assistance of two well-established nonprofit organizations. The Consortium consists of 

St. Louis County, an urban county entitlement jurisdiction and the lead entity of the 

Consortium, and four non-urban counties: Cook, Itasca, Koochiching, and Lake. The 

Consortium, which excludes the city of Duluth, a Metropolitan City under the CDBG 

program, is characterized as primarily rural. Spanning over 16,000 square miles, this 

Consortium represents one of the largest geographic areas of HOME consortia 

nationwide. 

Due to the limited housing development capacity in the four non-urban counties, one 

of the key goals of the Consortium when it formed was to develop the technical 

capacity in the region. Specifically, it targeted two community action program (CAP) 

agencies that serve the region: Arrowhead Economic Opportunity Agency (AEOA) 

and Koostaca Community Action. Together, these two agencies serve the five counties 

that participate in the Consortium-- AEOA serves three of the five counties and 

Kootasca serves the other two counties. 

Initially, the Consortium’s primary focus was to qualify the agencies as CHDOs. Once 

that was accomplished, it provided, and continues to provide operating funds to 

support these organizations, and help them secure and retain qualified housing staff. 

The Consortium envisioned creating opportunities for these two CHDOs to develop 

their technical capacity and develop "model programs" that could be delivered 

throughout the five counties and shared between the two CHDOs. Kootasca focused 

its initial efforts on developing a purchase/rehabilitation program for single family 

housing, and AEOA focused its initial efforts on developing a downpayment assistance 

program. The two agencies have trained one another and now both programs are 

offered in all five counties, with the two CAP agencies serving as the Consortium’s 

subrecipient to administer them. 

In addition to these two programs, the Consortium provides roughly 25 percent of its 

annual HOME allocation to the CHDOs to undertake rental or homeownership 

housing development activities. These activities satisfy the Consortium’s CHDO setaside requirement. The Consortium itself also administers a small Housing 

Development Fund, a pool of HOME funds that can be accessed competitively by 

nonprofit entities (including the CHDOs) for housing development activities. 

Specifically, this funding can be used for rental housing or other forms of permanent 

supportive or transitional housing that serve the homeless population in the region. 

By collaborating and sharing best practices, these two organizations have been able to 

achieve more, and strengthen this Consortium’s ability to build regional capacity and 

provide affordable housing opportunities throughout the region. 
59 

Is Program Income Retained by 

Jurisdictions or Returned to Consortium? 

Before executing a subrecipient agreement with 

any jurisdiction member, the lead entity must 

know whether the program income generated by 

the project activities will be returned to the 

consortium, or if the subrecipient jurisdiction will 

be allowed to retain the program income. 

Retention of program income must be addressed 

in the subrecipient agreement, as discussed in 

Chapter 4. 

In deciding who retains program income, the 

consortium may wish to consider what the 

subsequent use of these funds will be, and assess 

how the subsequent use fits into its housing 

strategy and overall project selection process. For 

instance, if a member jurisdiction is administering 

a homeowner rehabilitation program and is 

making repayable low-interest loans to lowincome buyers, the program will generate program 

income as the loans are repaid. If the consortium 

wants to continue to support this program 

activity, it would be logical to enable the 

jurisdiction to retain these funds to reinvest in this 

program. 

Program income need not be reinvested in the 

same HOME-eligible activities, however. Should 

the consortium have additional activities it wishes 

to fund, or should the homeowner rehabilitation 

program no longer be a priority of the 

consortium, the consortium may choose to have 

the jurisdiction return the program income so that 

the consortium can choose which additional 

activities will be supported, in the context of the 

overall housing strategy. 

As discussed in Chapter 4, regardless of who 

retains program income, the lead entity must track 

the consortium’s receipt and re-use of program 

income in IDIS, in order to document 

compliance, and to enable HUD to capture the 

production data that results from the reinvestment 

of these funds. 

The consortium must remember to consider: 

• How the program income will be reported 

and re-used. Remember, program income 

must be spent prior to drawing down funds 

from the U.S. Treasury. In addition, program 

income must be reported to HUD on an 

annual basis. This cannot be proven unless 

the PJ receipts the program income in IDIS. 

• If jurisdictions retain the program income, 

how will the consortium (or lead entity) 

ensure that those funds are being used for 

HOME-eligible purposes? Further, how will 

the consortium continue to monitor these 

new HOME activities? 

Select Specific Projects 

While the Conplan process will result in decisions 

about the general types of housing activities the 

consortium will undertake, and the amount of 

HOME funds that will be invested in each 

activity, the consortium still needs to establish a 

method for soliciting, reviewing, and selecting 

specific projects. Project selection is a critical 

decision for any PJ, and the consortium is welladvised to think through the most effective 

process to meet its needs. 

A number of consortia distribute a lump sum of 

funds to member jurisdictions, and each 

jurisdiction is empowered to make project 

selection decisions within its geographic 

boundaries. Many other consortia, however, 

reserve this critical decision for its governing 

board, or sometimes its lead entity. 

Empowering jurisdictions to make their own 

project selection decisions supports the concept 

that each jurisdiction understands its own housing 

needs best. This system also seems to assure that 

each jurisdiction “gets its fair share.” This type of 

system, however, has some distinct disadvantages. 

Foremost, project selection decisions are made in 

an isolated and uncoordinated fashion; there is 

generally no attempt to assure that projects are 

consistent with the Conplan, as required. Further, 

for most consortia, not all member jurisdictions 

have sufficient capacity to evaluate and underwrite 

projects effectively—many less experienced 

jurisdictions cannot evaluate the viability of a 

project; sometimes a less experienced jurisdiction 

is unable to evaluate whether or not a project is 

eligible for HOME funds. Selecting projects that 

are not viable HOME projects wastes time for the 
60 

consortium, and sometimes results in project setup costs and expenditures that must be repaid. 

A governing board is typically in a good position 

to establish project selection criteria—that is, it 

establishes standards for evaluating projects that 

consider the desirability and appropriateness of a 

project, including its eligibility and consistency 

with the Conplan; the likelihood of site control; 

the capacity of the developer and property 

manager (if applicable); the project timeline; the 

number of units to be developed; the overall cost 

and per unit cost of the project; and the project 

underwriting. The selection of viable projects upfront helps the consortium meet HOME 

requirements, including those related to timely 

commitment and expenditure of funds. 

In considering the appropriate process for project 

selection, the consortium must ensure, at a 

minimum, that each project is eligible and 

consistent with the consortium’s Conplan. It 

must identify who will make that determination 

and how. In addition, the consortium should 

consider: 

• What are the criteria for selecting projects? 

Who has the authority to establish these 

criteria? Are all jurisdictions subject to the 

same criteria and rules? 

• If projects are solicited through a competitive 

process, such as a Request for Proposal (RFP) 

process, who will issue the RFPs, review and 

analyze proposal submissions, and select 

projects? 

• How will the consortium ensure equity or a 

sense of fairness about the selection process? 

• Does the lead entity have final approval for 

projects, since it is held responsible? 

Related to the project selection process, the 

consortium should also determine who makes key 

program design decisions for the HOME activities 

it will undertake. Some of these decisions may be 

written into RFPs, or otherwise established as 

across-the-board decisions for all projects of the 

consortium. Some decisions may vary project-byproject. Either way, the consortium should 

identify key project or program design issues and 

establish a process for making these decisions. 

Some of these issues might include, for instance: 

• How much subsidy will be provided for a 

project, and in what form (such as a loan or 

grant)? 

• What definition of income will be used to 

determine the income eligibility of 

beneficiaries? Will different definitions be 

used for different activities? Will all 

jurisdictions be required to use the same 

definitions? 

• Who determines the number and designation 

(fixed or floating) of HOME-assisted units in 

rental properties? 

• Who determines whether a homebuyer 

program uses a recapture or resale provision? 

• Who determines if the consortium wants to 

impose stricter requirements than those of the 

HOME Program (such as extending the 

affordability period or increasing income 

targeting)? 

• If a member jurisdiction administers a 

housing program (such as a homeowner or 

rental rehabilitation program), must it change 

its program to conform to the consortium’s 

criteria, or can it continue to administer its 

program as it has? 
61 

Emphasizing Fair and Strategic Decisions 

in Project Selection Process 

For most communities, project selection is difficult because there are many more needs 

than resources available. This may result in political pressures on the project selection 

process. Nonetheless, most PJs seek to fund projects that are ready-to-go, undertaken 

by experienced development teams, and have strategic importance because they are 

likely to meet the community’s housing needs. Consortia also seek these types of 

projects, but they have an added pressure in that members often desire that funds be 

invested in their jurisdictions. Often, there are not sufficient HOME funds to 

undertake projects in every consortium jurisdiction. 

The experiences of Contra Costa County, CA and Morris County, NJ highlight two of 

the many ways that consortia can seek to implement fair project selection procedures. 

Collaborative Application Processes in Contra Costa County, CA 

Many consortia struggle with the decision to provide “equal” funding for all member 

jurisdictions or to fund the projects that have the most strategic importance in the 

region and are ripe for development by an experienced team. An urban county right 

outside of San Francisco, the Contra Costa County HOME Consortium, has 

created a project selection process that strives to balance these two competing needs. 

The Consortium’s application process is completely competitive, The Consortium has 

found, however, that its process of focusing project selection based on the strategic 

need and developer capacity has, in the long-term, also worked toward geographic 

allocation of assisted units. 

Contra Costa County has several member jurisdictions: Concord, Antioch, Pittsburg, 

and Walnut Creek. Each of these communities receives CDBG funds. In order to 

secure additional funding for housing, they worked collaboratively to create a 

Consortium and secure HOME funds to ensure specific housing needs were met in 

their communities. 

This Consortium issues an annual notice of funding availability (NOFA) in the fall of 

each year. The NOFA encourages projects that are ready for development and have 

secured other funding sources. Developers work with the member jurisdiction in 

which the project will be located. These members generally provide their own 

redevelopment funds for these projects through a California program that enables 

communities to form a redevelopment agency and develop a plan for implementation. 

The redevelopment funds typically provide the HOME match obligation toward a 

specific project. 

After the applications are received, a citizen-based committee reviews the submissions. 

The committee represents all the different geographic areas of the HOME 

Consortium. While each jurisdiction has interest in seeing that the Consortium’s 

investments are distributed geographically, this is not a stated preference in the NOFA. 

The Consortium members are able to implement the NOFA preferences, and have 

found that over time there has been relative equity in the distribution of investments. 
62 

Building on the success of the Consortium, the member jurisdictions have recently 

adopted one single application for CDBG funds that is used by all the member 

jurisdictions. Applicants indicate on the application from which jurisdiction it is 

requesting CDBG funds. 

This type of collaboration has led to increased production and has minimized the 

administrative time needed to develop housing and community projects throughout 

Contra Costa County. 

Ranking Projects in Morris County, NJ 

The Morris County Community Development Division is under the county’s Planning 

Department and is the lead entity of the Morris County HOME Consortium in New 

Jersey. The HOME Consortium is made up of all thirty-nine (39) municipalities in 

Morris County including two Community Development Block Grant (CDBG) 

entitlement cities: Dover Township and Parsippany-Troyhills Township. All the 

members are part of Morris County’s jurisdictional boundaries. The County allocates 

funds on a competitive basis in an annual application process. Applicants include the 

member jurisdictions as well as nonprofit developers of affordable housing, including 

CHDOs. 

The County staff reviews the applications for HOME-eligible elements, ensures 

financial capacity of the project, and works with applicants to review outstanding 

questions on the status of the project to ensure it is “ready” for funding. 

Funds are awarded through an interesting ranking system. The County has a regional 

planning body called Community Development Revenue Sharing (CDRS) that is made 

up of the seven regions of the County. Directly under CDRS is a housing 

subcommittee that has seven representatives who rotate on a bi-yearly basis. The 

housing subcommittee works with county staff to review and approve the HOME 

applications. The subcommittee listens to applicant presentations, discusses each 

application, ranks applications, and approves proposed funding amounts. 

The ranking process is a little different than in other communities. Rather than ranking 

projects as a group, Morris County has developed a system where individual members 

of the subcommittee use a “silent voting process.” Each member ranks projects 

individually on their own voting sheet. This voting sheet is handed in anonymously to 

county staff who compiles the results to generate the subcommittee’s overall ranking of 

projects. Once the overall ranking is established, subcommittee members discuss the 

rankings, and explore whether or not any revisions to the ranking would be 

appropriate. Based on that discussion, the subcommittee establishes and approves a 

final list. The individual rankings help the county minimize bias and “group think” in 

the project rankings. The discussion is important, however, to clarify project issues. 

Sometimes it results in revisions to the rankings. For example, in one instance, the 

subcommittee members increased a CHDO’s ranking based on its relative project 

readiness, because administrators were able to point out that there were impending 

HOME CHDO reservation deadlines. Not all individual reviewers were aware of this 

information. 
63 

Oversee Projects During 

Implementation 

Housing program and project implementation is 

complex. It involves a large number of people 

from different disciplines making decisions based 

on practical and technical information related to 

construction, environmental concerns, 

engineering, marketing, management, and 

regulatory requirements. The consortium must 

consider how to ensure that the best possible 

decisions are made during project implementation. 

A consortium can establish operating systems in a 

number of ways. It can delegate project oversight 

to each member jurisdiction that carries out a 

project or program in its boundaries; the lead 

entity or a member jurisdiction with appropriate 

capacity can carry out project implementation on 

behalf of member entities; or the lead entity can 

share the job with member jurisdictions. 

Regardless of how and by whom project oversight 

is carried out, the lead entity is obligated to 

monitor progress and performance, and to 

conduct annual on-site monitoring visits. 

Project oversight by an experienced member 

jurisdiction can be an effective method for project 

implementation. As described in Chapter 4, the 

jurisdiction should report regularly to the lead 

entity and the lead entity should monitor its 

activities. Where the member jurisdiction might 

lack some area of technical expertise, such as in 

establishing a system for determining and 

monitoring prevailing wage rates, or determining 

income eligibility of applicants, the lead entity 

might choose to assist or provide technical 

assistance to its partner in this regard. 

Project oversight by a member jurisdiction carries 

serious risks, however, when the member 

jurisdiction is relatively small and inexperienced in 

housing program implementation. A lead entity 

might consider a number of ways to bolster the 

expertise of member jurisdictions, such as hiring 

competent staff and contractors, carefully 

reviewing roles and responsibilities with the 

member jurisdiction, or providing or securing 

technical assistance related to project oversight. 

However, all of these options have a cost in terms 

of time and money to the lead entity. This 

investment should be weighed against the lead 

entity’s other obligations, and the likelihood that 

the jurisdiction will have ongoing responsibility 

under the consortium’s HOME Program. If the 

project is likely to be a one-time opportunity, 

investing in building the jurisdiction’s capacity 

may not make sense. Regardless of any efforts to 

build the capacity of an inexperienced partner, the 

lead entity’s best tactic for keeping these projects 

on track and in compliance with HOME rules is 

to remain actively engaged in the project. 

Some consortia are organized so that the lead 

entity undertakes all the project implementation 

on behalf of its member jurisdictions. This 

approach works well in areas where the lead entity 

is larger and experienced in housing program 

implementation, its member jurisdictions are not. 

This is the case for many urban county consortia. 

With this approach, the lead entity must be willing 

to undertake a large volume of work on behalf of 

a number of jurisdictions. 

Although not common, a consortium can also 

choose to implement projects using a mixture of 

these approaches. The consortium or lead entity 

can assess the capacity of each jurisdiction and 

enter into subrecipient agreements that clearly 

identify the key pieces of the project 

implementation process that the member 

jurisdiction and lead entity would be responsible 

for. Further, the consortium might choose to 

build the capacity of one or two member 

jurisdictions for some piece(s) of project 

implementation, such as income eligibility 

determinations, plans and specifications or work 

write-up reviews, or construction oversight. 

Those components of the program could then be 

delegated to the “expert” jurisdiction for all of the 

consortium’s projects. This approach has 

potential to slowly help member jurisdictions 

build capacity over the long-term. 

By implementing projects with a combination 

method, the consortium has the advantage of 

capitalizing on the strengths of each of the 

consortium members. However, it means that 

each project must be evaluated and structured 

individually. Lack of consistency in roles and 

responsibilities might result in confusion or 

frustration in staff, and could leave the project at 
64 

risk of mistakes. Further, the consortium should 

be clear about its established standards and 

processes, to ensure that projects are carried out 

with some level of consistency. Too much 

variation project-by-project can also be difficult to 

monitor. 

In deciding the best course for project 

implementation, the consortium needs to honestly 

assess the capacity of individual members, and 

their ability to administer projects or programs in 

accordance with HOME rules. The consortium 

may find one approach that works for all its 

projects, or it may decide that some jurisdictions 

have the capacity to administer their own projects 

while others do not. 

Ensure Ongoing and Long-term 

Compliance 

As discussed in earlier chapters, HOME Program 

compliance does not end upon project 

completion. The consortium must make 

operational decisions related to how it will ensure 

compliance for the long term. Since compliance is 

the primary responsibility of the lead entity, this 

topic is explored in detail in Chapter 4. As 

Chapter 4 points out, a prudent lead entity will 

develop subrecipient agreements and written 

agreements that hold member jurisdictions 

accountable throughout the affordability period. 

For most consortia, the lead entity undertakes a 

certain level of monitoring during project 

implementation and throughout the period of 

affordability. It may wish to share this burden 

with member jurisdictions. For rental housing, 

the consortium must consider property and asset 

management issues and tasks. At a minimum, the 

consortium must conduct long-term monitoring 

and annual site visits to verify compliance with 

tenant income restrictions, rent restrictions, to 

determine that prohibited lease provisions are not 

used and affirmative marketing is carried out. In 

addition, based on the size of the property, 

periodic rental unit inspections are required. For 

homebuyer housing, the consortium must 

monitor/track resale and recapture provisions, 

and principal residency requirements. 

Sharing the monitoring burden over the long-term 

may be an attractive option for a lead entity, 

particularly as the inventory of HOME-assisted 

units grows and available HOME administrative 

funds do not. As with delegating other aspects of 

project implementation, the lead entity must 

ensure that its member jurisdictions are capable of 

carrying out the required monitoring. The lead 

entity should review monitoring reports, and 

conduct periodic site visits to check on the level 

of accuracy of its jurisdiction monitors. 
65 

Chapter 6:

The Seven Habits of Highly Effective Consortia 

This chapter highlights lessons learned from successful consortia and provides an in-depth study of the Asheville, NC Consortium 

to exemplify these lessons. Successful consortia stress the importance of strong systems, clear communication, and the internal 

capacity to carry out the responsibilities of the HOME Program. This chapter is useful to both new and existing consortia as 

they consider the rules and decisions discussed in previous chapters. 

Administering HOME Activities for Success 

The Asheville Regional Housing Consortium in Asheville, NC began as a citycounty partnership between the City of Asheville and Buncombe County because 

Asheville lacked the population base to meet the HOME threshold for funding. The 

local council of governments, Land of Sky Regional Council, sought to make it a 

regional effort of four counties and the local governments within them. 

The Land of Sky Regional Council covers this area, so these jurisdictions had already 

worked together on various planning issues. Since the Consortium formed, the only 

change has been adding smaller towns. Residents of the unincorporated areas of 

member counties already counted toward the Consortium population. However, in 

order to count the populations of the incorporated jurisdictions within these counties, 

each unit of general local government had to sign the consortium agreement. 

These small towns were reluctant to join initially because they feared that joining would 

bring financial liabilities in the form of match requirements. However, they were 

convinced to join once they understood that there would be no financial liability unless 

they applied for and received funds. As a result, the Consortium has 14 member 

jurisdictions, including four counties, which participate in the HOME Program. A 

fifteenth member government is expected to join in the near future. 

The City of Asheville is the lead entity and provides all the oversight and technical 

assistance to its member jurisdictions. Since it was an entitlement jurisdiction under 

the CDBG program, the City had several years of experience in housing and 

community development programs prior to the establishment of the HOME 

Consortium. As a result, Asheville staff has the capacity to undertake the 

responsibilities as lead entity. 

In the beginning, the Consortium felt it was important to develop a set of by-laws in 

addition to the required consortium agreement with its member jurisdictions. The bylaws include board of director composition (depends on population), voting, 

attendance, and other rules and requirements of the Consortium. These by-laws 

helped to establish expectations for board of directors. The Consortium also knew 

that a consortium agreement must include not only the required provisions, but also 

other important information such as roles, responsibilities, and performance 

requirements. 

The Asheville Regional Housing Consortium meets at least every two months and 

more often as necessary (e.g., during project selection and funding allocation), as 

dictated by the by-laws. The members also communicate regularly by telephone and 

email. 
66 

The Consortium has a unique competitive project selection process. Asheville staff 

calculates a "planning level of funding" for each member jurisdiction based upon the 

HOME formula and four other Census indicators. This number represents a ballpark 

for "need" within that community similar to the "pro rata share" in homeless 

programs. The Consortium feels that this calculation helps its member jurisdictions 

plan more successfully for their projects. In order to receive funding, a member 

government must submit a funding application to the City of Asheville. The Board of 

Directors, at its discretion, may choose to fund the member government for more or 

less than its application amount, but not less than its "planning level," unless the actual 

project has little or no merit. 

The Consortium uses an evaluation criteria form to review projects that are submitted 

through its competitive project selection process. The criteria are based upon the fiveyear consolidated strategic plan goals for each of the four counties. The project is 

scored based upon these goals. This tool has been helpful to ensure that consolidated 

plan goals are met and projects meet the housing needs in their community. 

The Asheville Regional Housing Consortium funds a variety of HOME projects that 

cover all four eligible activities: homeowner rehabilitation, homeownership, rental, and 

tenant based rental assistance (TBRA). They have four active CHDOs that work 

across their Consortium. Typically, the CHDOs receive more than the minimum 15 

percent set-aside. 

Overall, the success of the Consortium has been dependent upon an initial planning 

process, the development of thorough documentation, clearly stated goals and 

objectives, and by an effective project selection process. 

The Lead Entity Has the Staff and 

Resources to Meet Its 

Responsibilities 

The lead entity must have the staff, systems, and 

resources to use HOME administrative funds 

effectively to oversee all consortium activities and 

ensure HOME compliance. 

The lead entity and member jurisdictions of the 

consortium have sufficient funds to effectively 

administer the program. The consortium must 

also have staff with the technical and professional 

experience and expertise to carry out the HOME 

Program. Sometimes, the lead entity has prior 

experience working with HOME, CDBG, or a 

similar program. However, sometimes the lead 

entity staff may not have this experience, and the 

consortium may need to secure this expertise from 

outside sources. 

• Typically, consortia find expertise by hiring 

staff or a contractor with appropriate 

expertise. The consortium can hire an 

experienced manager as staff to the group, or 

it can hire a contractor as a third party to 

perform administrative duties, without 

becoming a full-time employee of the lead 

entity. Most successful consortia conduct a 

broad search to secure staff or contractors, in 

order to find qualified persons with 

demonstrated experience working with 

HOME or a similar Federal housing program. 

The costs related to hiring staff or contractors 

are eligible HOME administrative costs. 

• Consortia can also secure expertise by using 

another government entity or a nonprofit 

organization as a subrecipient to administer all 

or a portion of the HOME Program activities. 

The most common examples of this are the 

use of a council of governments or a public 

housing authority. 
67 

• Finally, the consortia can choose to train its 

existing staff, in order to increase its own 

capacity. There is an up-front administrative 

cost to this option; however, the consortia 

should be able to reap some long-term benefit 

with this approach. 

All staff and contractors involved in the 

administration of HOME must have an 

appropriate understanding of the HOME 

Program rules and their impact on how the 

consortium works. Training may be necessary for 

consortium members as well. 

Members’ Responsibilities are Clear 

and Consistent with Members’ 

Capacity 

Consortia are made up of units of local 

government with a range of capacities. Some 

larger entities may have been running entitlement 

programs for years and know how to select, 

manage, and monitor projects, document 

compliance, and compile and submit reports. 

Others may be small counties or cities with little 

or no housing or community development 

department. These jurisdictions may lack the 

experience and capacity to take part in any project 

management activities. The role of each member 

must, therefore, be tailored to what it can 

reasonably accomplish. 

If a small entity does not have the capacity to take 

on the responsibilities, the consortium should 

assign these responsibilities to a different member 

jurisdiction. For example, it is common for lead 

entities to supervise HOME-funded projects, 

from initiation to completion, on behalf of and 

inside the geographic boundaries of, a member 

jurisdiction. Alternatively, a contractor, nonprofit 

organization, or other public agency may assume 

the responsibility for such activities. It is critical 

that consortium member entities are not tasked 

with activities that they are not capable of carrying 

out. 

If members of the consortium have the experience 

and resources to oversee HOME-funded projects, 

they should take on these responsibilities, in their 

own jurisdictions or even across jurisdictional 

lines. These jurisdictions may also take on some 

of the consortium management tasks identified as 

lead entity responsibilities (and discussed in 

Chapter 4) as long as the lead entity remains 

informed and understands it is still accountable to 

HUD. As the consortium assigns these 

responsibilities, it must articulate clear lines of 

responsibility and reporting requirements. Ideally 

these are codified in the consortium agreement. 

Consortia should consider past experience in 

assigning responsibilities. For example, if a city is 

already having trouble spending its housing dollars 

in a timely manner, it is a poor candidate for lead 

entity, unless it has a solid plan for improving 

performance and a method for being held 

accountable for executing that plan. Other 

members should take into account the costs of 

working with a jurisdiction that has performance 

problems before committing to working in 

partnership as a consortium. 

The Consortium Has Explicit Rules 

and Procedures 

A well functioning consortium usually has explicit 

rules and procedures for addressing the common 

issues identified below. As discussed in the 

previous chapters, an effective consortium 

considers and plans for critical decisions before it 

reaches a “point of no return.” Some specific 

decisions the consortium will make include, how 

to: 

• Establish a common program year; 

• Allocate funds to jurisdictions and projects; 

• Select and underwrite projects; 

• Meet match obligations; 

• Manage the CHDO set-aside; 

• Oversee project implementation; 

• Maintain appropriate records and reporting; 

• Use administrative funds; 

• Monitor projects; and 

• Track and disburse program income. 

All consortium members should understand how 

these items are dealt with and what their 

responsibilities are with regard to each item. For 

example, there must be a clear, common 

understanding of the project selection process. 

Similarly, each member must be aware of its 
68 

responsibilities with regard to match and CHDOs. 

Ideally, these rules are codified in the consortium 

agreement. If not, the consortium should develop 

written procedures that document the approach 

and responsibilities or amend its existing 

consortium agreement. 

The Consortium Has a Detailed 

Consortium Agreement 

The consortium agreement, as discussed in 

Chapter 2, represents the foundation of a well 

functioning consortium. While it may be tempting 

to limit the agreement to the few provisions 

required by HUD, successful consortia use the 

agreement to clarify and make explicit the 

consortium’s basic operating principles and the 

responsibilities of each participating member. 

A detailed consortium agreement clearly delineates 

responsibilities and also manages member 

expectations. Attachment 1, Elements of an Effective 

Consortium Agreement, provides guidance on the 

specific provisions that strengthen a consortium 

agreement. 

There is Regular Communication 

Among Consortium Members 

Well functioning consortia have a governing body 

that meets regularly to make key decisions (such as 

project selection and fund allocation decisions), 

monitors progress, and addresses nonperformance 

in a timely manner. 

To act as a unified body, the consortium must 

have regular communication among members. 

The lead entity, in particular, should have an 

accurate picture of what each member is doing, 

their progress towards spending allotted funds, 

and the need for any assistance or interventions. 

Such communication is not hard to coordinate. It 

can take the form of: 

• Regular meetings. Consortia should meet 

regularly – at least quarterly, in most cases. 

Meetings are important to: 

3⁄4 Make key decisions. These might include 

decisions about project selection and 

funding allocations. 

3⁄4 Monitor progress. Informal discussions 

augment written reports for the lead 

entity to better understand the progress 

of projects, the cause of delays or 

problems, and nonperformance. In the 

context of a meeting, these issues can be 

approached as a team. 

• Listserv/email communication. The lead 

entity can handle day-to-day communication 

through emails and listservs to ensure that 

members are receiving timely and accurate 

information, and to solicit information from 

them. This is a good way to remind members 

to submit reports and share information. 

• Regular reporting. There is no substitute 

for timely and accurate reporting by members. 

The lead entity must be clear with members 

on their reporting obligations, and should 

contact them immediately if reports are late or 

incomplete. The lead entity should review the 

reports in a timely manner and follow up on 

any questions raised by the reports. (For 

instance, if a project is behind schedule, the 

lead entity should contact the administering 

jurisdiction and find out why, and how the 

project will be brought back on schedule.) 

HOME Administrative Funds 

Supplement Existing Capacity 

Administrative funds must pay for staff, training, 

office space and supplies, and information systems 

for the consortium. With a cap on HOME 

administrative funds, for many consortia 

(particularly smaller consortia whose allocations 

hover at or near the minimum threshold of 

$750,000), HOME administrative funds are used 

most effectively when they supplement existing 

capacity. 

The consortium must assess its projected 

administrative costs realistically. The 10 percent 

cap on HOME administrative funds may be 

insufficient if the consortium needs to develop 

new information systems, and/or hire multiple 

new staff people with strong technical expertise. 

Where the consortium (or one of its members) 

has a well-trained staff and strong financial and 

operational systems, the ten percent allocation 
69 

should be more than sufficient to cover the 

additional staff time needed to implement and 

monitor HOME requirements and may still allow 

for additional capacity. 

One lesson learned from experienced consortia is 

that HOME administrative funds should not be 

shared equally and broadly across too many 

jurisdictions. If each participating member 

receives a proportional share of the administrative 

funds, it is not likely to be sufficient for any one 

jurisdiction to fund the staff and systems 

necessary for effective HOME administration. By 

consolidating the funds with the lead, or another 

jurisdictional entity, the funds can be more 

effectively used for systems development and 

program administration. 

Most experienced consortia recommend that a 

consortium keep administrative funds pooled with 

the lead entity, as the lead entity has the most 

responsibilities. With an adequately sized and 

skilled staff, it can often take over responsibilities 

from members and obtain some economies of 

scale. In some cases, it is appropriate to allocate a 

smaller percentage of the administrative funds to 

members in proportion to their contribution to 

the administration of the program (but not in 

proportion to the dollars received). For example, 

in some consortia, the lead entity retains half the 

administrative funds and members that perform 

administrative functions for their projects receive 

some fraction of the remaining administrative 

funds. 

Some consortia have found that they can use 

administrative funds for additional administrative 

projects that benefit the entire consortium, such as 

market studies, technical studies (for example, on 

local barriers to affordable housing), program 

design initiatives, consultants, and other such 

common projects. 

The Consortium Thinks Across 

Jurisdictional Boundaries 

Some consortia manage HOME funds and their 

associated requirements by simply dividing up the 

funds among members, according to a formula, 

and entrusting each member to meet its own 

jurisdiction’s housing needs. Experience has found 

that this approach does not always result in the 

most effective distribution of funds and projects, 

from a regional perspective. 

Consortia who truly meet the HOME Program 

goal to address the most pressing affordable 

housing needs look less at geographic boundaries 

in their operations and allocate funds according to 

local needs, the capacity to use funds, and a 

regional strategy that addresses the broader 

housing needs of the consortium as a whole. 
70 
71 

Attachment 1 

Elements of an Effective Consortium Agreement 

The consortium agreement must include certain provisions in accordance with HUD requirements. There 

are a number of additional elements that are recommended in order to strengthen the consortium agreement 

as a management tool for the consortium. 

Required Elements1

The following elements must be included in the consortium agreement, in accordance with HUD 

requirements: 

• Program activity. The consortium members must agree to cooperate to undertake or assist in housing 

assistance activities for the HOME Program. 

• Representative appointment (i.e., designation of lead entity). The consortium must authorize one 

member unit of general local government to act in a representative capacity for all member units for the 

purposes of the HOME Program. 

• Representative (lead entity) responsibilities. The agreement must specify that the lead entity will 

assume overall responsibility for ensuring that the consortium’s HOME Program activities are carried out 

in compliance with HOME rules, including requirements related to the Consolidated Plan. The 

agreement must not include any provision that would allow a consortium member to obstruct the 

implementation of the consortium’s approved Consolidated Plan. 

• Fair housing. The agreement must include a provision that specifies that each consortium member will 

agree to affirmatively further fair housing. 

• Term. The agreement must specify the three-year qualification period2 of the consortium, and must 

remain in effect until all the HOME allocations the consortium receives in these three years are 

expended. The agreement must also expressly prohibit any member from withdrawing from the 

agreement while it is in effect. Note, the qualification period is the consecutive three-year Federal Fiscal 

Year period during which the consortium is to qualify to receive HOME funds. 

• Program year. The agreement must state the program year start date for the consortium. All units of 

general local government in a consortium approved after February 6, 1995 must be on the same program 

year for CDBG, HOME, Emergency Shelter Grants (ESG), and Housing Opportunities for Persons with 

AIDS (HOPWA) programs. Members of a prospective consortium may shorten their program years in 

order to effectuate this requirement. 

 

1 The elements that are identified as required are excerpted from Notice of Procedures for Designation of Consortia as a 

Participating Jurisdiction for the HOME Program, Notice HUD CPD 06-04, issued April 11, 2006. This Notice is available at 

the HOME Program’s website, HOME CPD Notices and Attachments, at 

http://www.hud.gov/offices/cpd/affordablehousing/lawsandregs/notices/. 

2 The agreement may specify a lesser number of fiscal years if one or more urban counties are members of the 

consortium. A shorter qualification period might be needed in order to coincide with the number of years remaining in 

the urban county’s qualification period. If an urban county consortium member fails to re-qualify as an urban county 

during the qualification period included in the consortium agreement, the consortium agreement terminates with the last 

fiscal year for which the urban county qualified. A new consortium agreement must be executed for the succeeding 

qualification period. 
72 

• Authority to amend the agreement. The agreement should specify whether the lead entity has the 

authority to amend the consortium agreement on behalf of all members to add new members to the 

consortium, or if all consortium members must sign and approve all amendments. 

• Required signatures. The chief executive officer or an authorized official of each member unit of local 

government must sign the agreement. The authorized urban county official can sign the agreement on 

behalf of its participating units of general local government. 

• Authorizing resolutions. The agreement must include as attachments the authorizing resolutions from 

the governing body of each member unit of local government that is included in the consortium, or other 

evidence acceptable to HUD must be submitted saying that the Chief Executive Officer or authorized 

official has the authority to sign the agreement. 

Note, the consortium is required to submit to HUD a legal opinion from the lead entity’s counsel citing 

applicable law to conclude that the terms and provisions of the agreement are fully authorized under state and 

local law and that the agreement provides full legal authority to undertake housing assistance activities for the 

HOME Program. HUD highly recommends that this legal opinion be incorporated as an attachment to the 

consortium agreement. 

Recommended Elements 

The consortium agreement is the ideal place to codify decisions that the consortium has made in regards to its 

governance and management. The consortium agreement should state the consortium’s general policy, and 

each subrecipient agreement should clarify any details related to specific projects. It is recommended that the 

consortium include the following elements in the agreement: 

• Effect of consortium formation on existing program design and implementation. The agreement 

should indicate that some members’ existing programs may need to be modified if they are to be carried 

out with HOME funds, but that the consortium’s activities do not impact CDBG-funded programs. 

• Roles and responsibilities of each member jurisdiction. The agreement should codify the roles and 

responsibilities of each member jurisdiction. It should specify what each jurisdiction must contribute in 

order to meet Consolidated Planning requirements and reporting requirements. 

• Decision making process for the consortium/lead entity role. The agreement should state how 

decisions will be made, and by whom. It should specify the types of decisions that the lead entity will be 

able to make, and the types of decisions that must be made by all members of the consortium (either 

through individual sign-off or governing body). 

• Term and duration of each member’s obligation for compliance. Although the qualification period 

for the consortium is three years, the consortium agreement should specify that members have an 

obligation to abide by HOME requirements throughout the period of affordability for funded projects. 

• Consolidated Plan and CAPER. The members should agree at the outset how the consolidated 

planning and reporting processes will be funded and carried out. 

• Allocation of administrative and project funds. The agreement should specify how these funds will 

be allocated for administrative and project costs. 

• Communications. Because the form, timing, and type of communications among members is critical, 

the agreement should spell out the specifications for notices of meetings, funding awards, monitoring 

visits, and other important activities. 
73 

• Management of activities. The agreement should indicate if members will be managing programs in 

their own jurisdictions, or if the lead entity will administer activities on behalf of its members. 

• Meeting the CHDO set-aside requirement. The agreement should address how the consortium will 

meet its HOME obligation to spend 15 percent of each annual HOME allocation on projects that are 

owned, developed, or sponsored by CHDOs. It should specify who will review and determine CHDO 

eligibility, who will have the authority to select CHDO partners, and who will oversee CHDO projects. 

• Property Standards. The agreement should make it clear that members will continue to abide by their 

own local codes and standards, but acknowledge that in Federally funded projects they are subject to the 

regulations for addressing lead-based paint hazards. 

• Match. The agreement should specify in general terms how the consortium expects to meet its match 

obligations, particularly if it expects each member jurisdiction to contribute matching funds. 

• Program income. The agreement should specify how the consortium will handle program income that 

is generated by the investment of HOME funds. 

• Monitoring. The agreement should clearly state that the lead entity has the right and responsibility to 

monitor and assure compliance with all HOME requirements during the project implementation and the 

affordability period. It should specify how the lead entity plans to enforce the provisions of the 

agreement, including reserving the right for the lead entity to reallocate funds from the member 

jurisdictions for nonperformance or noncompliance. 
74 
75 

Attachment 2 

Required Provisions in HOME Written Agreements 

PJ Agreement With... 

Required Provisions 

(§92.504) State 

Recipients 

Subrecipients 

(e.g. 

Consortia 

members) 

Owners, 

Sponsors, 

Developers 

(e.g. 

CHDOs) 

Contractors Homebuyers 

Homeowners 

Tenants 

(Receiving 

TBRA) 

Use of HOME Funds 9 9 9 9 9 9

Affordability (§92.252 or 

§92.254) 9 9 9 

Program Income 9 9 

Uniform Administration 

Requirements (§92.505) 9 9 

Project Requirements (as 

applicable in Subpart F) 9 9

9 

§92.254 

(a) only 

9

§92.254 

(b) only 

9

§92.209 

and 

§92.253 

only 

Property Standards (§92.251 

and §92.355) 9 

Other Program 

Requirements (Subpart H 

except §92.352 and §92.357) 

9 9 9

9except 

§92.505, 

§92.506, 

and 

§92.352

 

Affirmative Marketing 

(§92.351) 9 9 9 

Requests for Disbursement 

of Funds 9 9 9 

Reversion of Assets 9 

Records and Reports 9 9 9 

Enforcement of the 

Agreement (§92.252 and 24 

CFR Part 85 as applicable) 

9 9 9 9 

Duration of the Agreement 9 9 9 

CHDO Provisions (§92.300 

and §92.301) 9 

Suggested Provisions (not HOME requirements) 

Roles and Responsibilities 9 9 9 9 

Description of the Project 9 9 9 

Performance Standards 9 9 9 9 

Conflict of Interest 9 9 9 

Monitoring 9 9 9 9 9 

Close-out Requirements 9 9 9 

Non-compliance 9 9 9 9 9 
76 
77 

Attachment 3 

Elements of a Subrecipient Agreement 

Before disbursing funds to any member jurisdiction, the lead entity must execute a subrecipient agreement 

with that member. In addition, either the lead entity or a member jurisdiction must execute a subrecipient 

agreement with any other subrecipient that carries out all or a portion of the consortium’s HOME program. 

The subrecipient agreement should specify HOME requirements that apply to the program or project that is 

being funded. 

The following elements must be included in a subrecipient agreement: 

• Use of HOME funds. The agreement must describe how HOME funds will be used, including tasks to 

be performed, a schedule for completing the tasks, a budget, and the term of the agreement. It should 

specifically indicate that the proposed uses comply with HOME regulations. 

• Program income. The agreement must specify if program income is to be remitted to the lead entity, or 

if it will be retained by the subrecipient jurisdiction. Although not required, the agreement should state 

what program income is likely to be generated by the project. The agreement should also state that 

program income must be spent before the consortium can draw down additional funds from the U.S. 

Treasury. 

• Uniform administrative requirements. The agreement must specify that the subrecipient is subject to, 

and must comply with, the uniform administrative requirements governing Federal funds. For 

governmental entities, these include the requirements of OMB Circular No. A-87 and the following 

provisions of 24 CFR Part 85: sections 85.6, 85.12, 85.20, 85.22, 85.26, 85.32-85.34, 85.44, 85.51, and 

85.52. For nonprofit organizations, this includes the requirements of OMB Circular No. A-122 and the 

following provisions of 24 CFR Part 84: sections 84.2, 84.5, 84.13-84.16, 84.21, 84.22, 84.26-84.28, 

84.30, 84.31, 84.34-84.37, 84.40-84.48, 84.51, 84.60-84.62, 84.72, and 84.73. 

• Other program requirements. The agreement must require the subrecipient to carry out each activity 

in compliance with cross-cutting Federal regulations, including requirements related to affirmative 

marketing and minority outreach; displacement, relocation, and acquisition; labor; lead-based paint; and 

conflict of interest. 

• Affirmative marketing. The agreement must specify if the program or project is subject to any 

affirmative marketing requirements. All HOME-funded rental projects with five or more units are 

subject to an affirmative marketing plan that is developed by the PJ. 

• Fund disbursements. The agreement must specify that the subrecipient may not request disbursement 

of funds until the funds are needed for payment of eligible costs, and the amount of the request must not 

exceed the amount needed. Program income must be disbursed before the subrecipient requests funds 

from the PJ. Although not required, it is strongly recommended that the agreement also address how 

requests for disbursements of funds will be handled, i.e., whether members will disburse local funds and 

then request reimbursement; what documentation will be required; and what timeframes are expected. 

• Reversion of assets. The agreement must state that, upon expiration of the agreement, any HOME 

funds or accounts receivable that can be attributed to the use of HOME funds will revert to the 

consortium or the lead entity. For consortia, the agreement should also specify that should the 

jurisdiction member stop participating in consortium programs or fail to perform in compliance with 

program requirements, assets are subject to reversion to the consortium or lead entity. 
78 

• Records and reports. The agreement must specify what records must be kept by member jurisdictions 

and what information or reports that must be submitted to the lead entity in order for the lead entity to 

meet its record-keeping and reporting obligations to HUD. 

• Enforcement. The agreement must specify how the lead entity will enforce its terms of the agreement. 

The agreement must specify that suspension or termination may occur if the subrecipient materially fails 

to comply with any term(s) of the agreement. The agreement should include how and when the 

members will be monitored by the lead entity, and what steps will be taken in cases of nonperformance 

or noncompliance. 

• Written agreements with other housing partners. In order to ensure compliance with HOME 

requirements by other housing partners, if the subrecipient provides HOME funds to for-profit owners 

or developers, nonprofit owners or developers, subrecipients, homeowners, homebuyers, tenants 

receiving tenant-based rental assistance or contractors, the subrecipient must execute a written 

agreement. 
79 

Attachment 4 

Sample: Procedures for Managing Expenditure Deadlines 

• Annually and within 15 days of receiving information from HUD about the probable HOME funding 

level, the lead entity will inform each member jurisdiction of the availability of funds. 

• Each member that has projects will respond within 60 days to the lead entity with a formal request that 

these HOME funds, or a larger amount if desired, be expended in their locality. The request must be 

accompanied by a pledge of HOME match contributions sufficient to cover their requested HOME 

allocation. 

• The lead entity will convene a meeting of all consortium members to review and prioritize the proposed 

projects. Projects will be reviewed based on criteria previously established by the consortium, to ensure 

that those that best meet the housing needs as identified in the Consolidated Plan receive priority 

consideration. 

• Each member’s match obligations must be met or exceeded prior to or in tandem with each expenditure 

of HOME funds in their locality. Appropriate documentation of match or actual match funds must be 

submitted to the lead entity along with any requests for reimbursement from HOME funds. 

• Should a member be unwilling or unable to make a match pledge, they may request that the lead entity 

use excess match generated by the activities of other members to cover demonstration projects in their 

community when possible. 

• All requests for funding or demonstration projects must include the following: 

3⁄4 Indication of whether the member or lead entity will identify projects and qualify program 

participants 

3⁄4 Identification of the specific housing and building codes to be applied in the jurisdiction 

3⁄4 An agreement that an identified code official from the member jurisdiction will participate in 

meetings with staff of the lead entity and oversee all HOME projects in that jurisdiction directly. 

• After 60 days, the lead entity reserves HOME funds for member jurisdictions based upon the requests 

and match pledges submitted. 

• Fifteen (15) months after the execution of the HUD HOME funding agreement for any given fiscal year, 

any locality in which 70% of the allocation has not been formally committed to projects, will have its 

remaining uncommitted allocation redistributed among the remaining projects in other jurisdictions that 

have requested additional funds and pledged match. In addition, any locality in which 30% of its 

allocation has not been expended and properly matched will have its remaining allocation redistributed to 

other members who have requested funds and pledged match. 
80 
81 

ENDNOTES 

 

1 HUD is subject to a statutory deadline to complete the designation process (in order to run the formula) by 

September 30. Shortly thereafter, and based upon Congressional appropriation, HUD can make HOME 

funds available to the consortium at the outset of its next program year. The consortium can determine its 

program year. However, as noted previously, all member jurisdictions must operate on the same program 

year for HOME, CDBG, HOPWA, and ESG if any member jurisdiction(s) participates in these programs. 

2 Note, the jurisdiction is still eligible to receive HOME funds from the state as a state recipient. In addition, 

the consortium is able to choose to spend HOME funds in that jurisdiction’s boundaries through a joint 

project that serves residents of the consortium and the local jurisdiction. See 24 CFR 92.201(a)(2). 

3 Note, there are a number of additional HOME administrative requirements that are not reviewed in this 

chapter. These include provisions related to conflict of interest, uniform administrative requirements, and 

restrictions on using HOME funds for religious activities. While important, these do not carry special 

significance for the administration of HOME consortia. Chapter 4 reviews the lead entity’s responsibilities 

related to fiscal administration of the HOME trust fund. Chapter 5 reviews the choices a consortium faces 

related to the program income. Consortia that need additional information about administrative requirements 

that are not discussed in this guidebook are encouraged to refer to Chapter 2 of Building HOME: A HOME 

Program Primer. This training manual can be found at the HOME Program’s website, Building HOME: A 

HOME Program Primer at http://www.hud.gov/offices/cpd/affordablehousing/library/building/index.cfm. Information 

about the training course, Building HOME is available at the Community Planning and Development Training Website

at http://www.icfhosting.com/hcd/cpd/hcdcpd.nsf/webpages/Welcome.html. 

4 PJs that are in Presidentially declared disaster areas or meet HUD distress criteria may be eligible for partial 

or full match reductions. For more information on this topic, see HUD Notice CPD 04-06, Notice of Procedures 

for HOME Program - Match Reductions for Fiscal and Severe Fiscal Distress, and for Major Presidentially Declared 

Disasters under the Stafford Act, issued June 4, 2004. 

5 Specific ineligible costs include project reserve accounts, match for other programs, public housing 

operations or modernization, acquisition of PJ-owned property, project-based rental assistance, and tenantbased rental assistance in cases where other assistance, such as Section 8 or Section 17 is mandated. 

6 The agreement must specify that the subrecipient may not request disbursement of funds until funds are 

needed to pay eligible costs. The amount of the request is limited to the amount that is needed. See 24 CFR 

92.504(c)(2)(iv). 

7 At this writing, an updated version of this model program guide is forthcoming. 

8 For additional guidance on the matching requirements, see HUD Notice CPD 97-03, HOME Program Match 

Guidance, issued March 27, 1997. HUD provides for a match reduction in some circumstances. For more 

information, see HUD Notice CPD 94-06, Notice of Procedures for HOME Program - Match Reductions for Fiscal and 

Severe Fiscal Distress, and for Major Presidentially-Declared Disasters under the Stafford Act, issued June 4, 2004. 

9 Match can be invested in affordable housing that meets the income targeting and long-term affordability 

requirements of HOME (i.e., it is “HOME-eligible”), whether or not there are HOME funds in it. 

Cover photos

By Tiger Productions, provided by the Office of Housing and Community Development, Philadelphia, PA

Provided by Kentucky Housing Corporation
HUD-2006-08-CPD

September 2006